Lyft Inc.'s (LYFT, Financial) ridership has returned as the U.S. economy continues to reopen, but the company has a long way to go before it becomes profitable.
On Tuesday, the ride-hailing company said it had 13.5 million active riders in the first quarter, topping estimates of 12.8 million. But it still reported an adjusted loss of 35 cents a share on revenue of $609 million, up from the adjusted loss of 60 cents per share on revenue of $558.2 million analysts had expected.
Management was quick to cheer the results and provide an upbeat outlook for the future.
"The improvements we've made over the last year are paying off - we've built a much stronger business. As the recovery continues, we are confident that we will be able to deliver strong financial results," co-founder and CEO Logan Green said. "We expect to build a significantly larger company by attacking the trillion-dollar-plus market opportunity in front of us."
Chief Financial Officer Brian Roberts said, "We had an exceptionally strong Q1 as more people started moving again. Our results meaningfully exceeded our outlook driven by elevated demand across our network."
Wall Street liked Lyft's financial results, too. The company's shares gained 3.3% to nearly $57.80 during after-hours trading.
But investors' enthusiasm for Lyft may not last long. The company has poor financials, as is the case with its main competitor, Uber Technologies Inc. (UBER, Financial).
Over the last three years, Uber's revenue has dropped 4.4%, while Lyft's revenue grew at a rate of 19.4%.
Meanwhile, earnings before interest, taxes, depreciation and amortization have moved the other direction, with both companies running at negative operating incomes.
| Company | Uber | Lyft |
| Three-year Revenue Growth (%) | -4.4 | 19.4 |
| Three-year EBITDA Growth (%) | -0.9 | -20.7 |
| Current Operating Income Growth (%) | -43.9 | -76.47 |
Uber and Lyft are young companies, so Wall Street should focus on revenue growth, not earnings.
Still, the divergence between earnings growth and revenue is more a matter of the two companies' failure to monetize their business models than a consequence of their age, as discussed in a previous piece.
Disclosure: I have no positions in Uber or Lyft.
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