Lyft stock plunges nearly 15% on weaker than expected revenue forecast

CNN

Lyft's road to recovery may be bumpy.

The ride-hailing service reported revenue of $1 Billion for the March quarter, a 14% increase over last year and a better than expected result by Wall Street. The company's forecast for revenue was lower than expected, and this caused investors to be a bit jittery.

After-hours trading on Thursday, shares of Lyft fell nearly 15% following earnings results.

Lyft's latest earnings report follows its shake-up of the C suite and plans to reduce 26% of employees in its fight for market share.

David Risher who worked previously at Amazon and Microsoft has recently taken over as CEO at Lyft. The company's co-founders have resigned from their management roles at the company. Risher is a Lyft board member since 2021.

Risher, in a Thursday conference call with analysts to discuss the results said that Lyft was currently at an 'inflection point' because people are returning to their pre-pandemic habits.

Risher, in his first call as CEO, said: 'I'm very aware that our current levels are growth and profitability is not acceptable.' 'I'm committed to growing Lyft to a large, sustainable, profitable business that our drivers, riders and shareholders will love. I look forward in keeping you updated on our progress.

Lyft, compared to its main rival Uber has struggled so far to recover from the pandemic’s impact on its business. Uber expanded its business by offering grocery and meal delivery during the recent health crisis, but Lyft did not. Uber was also able to bring back drivers to its platform more effectively than Lyft, as pandemic restrictions in the U.S. eased.

Uber reported in its quarterly earnings earlier this week that its revenue had increased by 29% as the demand for its delivery and rideshare services remained steady despite persistent recession fears.