Lyft Inc. reported fewer riders than expected in the fourth quarter as omicron damped travel, sending the shares down about 7 percent in extended trading.
But the riders that did hop in a Lyft generated higher revenue, due to a shortage of drivers and trips that were longer and had higher fares.
"We have great momentum but still have lots more to do with one last turn to navigate with omicron," co-founder and President John Zimmer said in an interview.
Adjusted earnings before tax and depreciation were $74.7 million in the quarter. Lyft reported its net loss narrowed to $258.6 million, or 75 cents a share, from a loss of $458.2 million, or $1.43 a share, a year earlier. It was still wider than the $171.2 million loss analysts forecast.
Lyft closed the year with its first annual profit on an adjusted EBITDA basis. For fiscal 2021 that measure was $92.9 million, compared with a loss of $755.2 million in fiscal 2020.
Lyft said it saw a significant jump in revenue per active rider, reaching an all-time high of $51.79. The increase stems largely from an improvement in the mix of shorter rides and generally pricier airport trips, which doubled from last year, Zimmer said.
The boost in rider revenue helped push revenue in the fourth quarter up 70 percent from a year earlier to $969.9 million, the San Francisco-based company said. That surpassed the $940.4 million analysts were expecting, according to data Bloomberg compiled.
"It's hard to gauge the impact, large or small, from omicron, and the fourth and first quarter are typically seasonally unique because of weather and holidays," Zimmer said, adding that the majority of omicron's effect on ridership is "being felt in the first quarter."
The company reported 18.7 million active riders in the quarter, up 49 percent from a year earlier, though well short of the 22.9 million in 2019.
The ride-hailing giant has been buffeted by the effects of Covid and has struggled to match drivers with demand. When the pandemic first seized the U.S. and cities were under lockdowns, demand for rides ground nearly to a halt. Then as restrictions eased, riders were looking for cars, but many drivers stayed on the sidelines, forcing Lyft and Uber Technologies Inc. to offer costly incentives.
While Uber has been able to pivot into food delivery during the pandemic with Uber Eats, Lyft's core business is ride sharing. Even as demand has rebounded, a persistent driver shortage has loomed over the companies' recovery and has left customers waiting longer and paying more for rides. Zimmer said the number of drivers increased 34 percent from the previous year, with new driver activations jumping 50 percent in the same period.
"Investors want to see balance," said D.A. Davidson analyst Tom White. "You can't raise prices forever and not start to expect rider demand and volumes impact. More driver onboarding can help stem price increases."
The shares are down about 3.6 percent so far this year, a better performance than Uber (down 8.6 percent) or DoorDash Inc. (down 32 percent).