© Reuters. An empty Lyft pick-up area is shown as rideshare drivers hold a rally as part of a statewide day of action to demand that ride-hailing companies Uber and Lyft follow California law and grant drivers “basic employee rights”, in Los Angeles, California, U.
By Akash Sriram
(Reuters) -Lyft reported third-quarter revenue and profit surpassing estimates on Wednesday, helped by workers returning to office, students going back to school and a higher number of airport rides.
Though Lyft (NASDAQ:) only commands about 29% of the ride-hailing market as of September, its share has increased this year from 27% in January after it said it will price its rides competitively with larger rival Uber (NYSE:).
“While operating from a more efficient cost structure is certainly part of our formula, it is by no means the only part of the margin expansion equation,” Chief Financial Officer Erin Brewer told Reuters.
Brewer added that an improved mix of airport rides, scheduled rides and priority pickups also helped margin expansion.
Lyft forecast current-quarter adjusted core profit, a key profitability metric closely watched by investors, of $50 million-$60 million, higher than expectations of $48.8 million, according to LSEG data.
Adjusted profit in the third quarter stood at 24 cents per share, compared with estimates of 13 cents.
Lower prices helped Lyft serve 22.4 million active riders, which jumped 10% compared with a year earlier.
“We remain cautious about Lyft’s ability to generate significant free cash flow as active riders scale while softening macro conditions will likely impact Lyft more than its larger peer, Uber,” said Angelo Zino, senior equity analyst at CFRA Research.
Shares of the ride-hailing platform fell less than 2% in extended trading.
Since CEO David Risher took the top job at Lyft, the company has looked to cut costs aggressively. It posted higher core earnings in the second quarter and forecast further profitability improvement.
Lyft said it expects fourth-quarter revenue to grow in mid-single-digits sequentially, compared with market expectation of 4.6% growth, according to Reuters calculations.
Revenue grew 10% to $1.16 billion in the quarter ended Sept. 30, surpassing analysts’ average estimate of $1.14 billion.
Lyft’s adjusted core earnings of $92 million in the third quarter topped expectations of $82.6 million.
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