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Lyft’s IPO filing shows its surging revenue and widening losses

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SAN FRANCISCO: Lyft Inc inched closer to becoming the first ride-hailing company to make a stock market debut by releasing its filing for an initial public offering on Friday, revealing to the public a detailed look at its financial performance.


Fast-growing but money-losing Lyft expects to be valued at up to $25 billion in its IPO, sources have said. It is now all but certain to go public before larger but also unprofitable rival Uber Technologies Inc in a test of how investors value the ride-hailing industry.


The 220-page document provides a picture of a company with high growth and improving economics but widening losses.


Lyft now has nearly 40 per cent of the US ride-sharing market, but warned further growth could come at the expense of yet more losses for a company already deep in the red, according to the filing.


The company has managed to grab market share from better-funded Uber, but the filing failed to provide answers to how it will sustain growth or achieve profitability.


“We will see how they perform as they have to start filing quarterly and managing shareholder expectations,” said Alex Castelli, managing partner of emerging markets for advisory and accounting firm CohnReznick.


“Can you achieve the growth expectations? Can you continue to grow at the rate that you’ve been growing? That’s going to be the real measurement stick over time.”


Lyft’s revenue was $2.16 billion for 2018, double the previous year and up 528 per cent from $343 million in 2016.


Gross bookings, or the total value of the rides Lyft sells before driver pay is deducted, reached $8.05 billion last year, 76 per cent above the prior year and 323 per cent above 2016.


But Lyft posted a loss of $911 million for 2018, which climbed from $688 million in 2017 and $682 million in 2016, according to the filing.


Losses could mount, Lyft cautioned, as it continues to invest and eye a broader international expansion. And even now, seven years after it launched, Lyft subsidizes rides to attract passengers and offers bonuses to enlist drivers.


Still, Lyft has improved its contribution margin to 43 per cent in 2018 from 38 per cent in 2017, a sign the business is getting more efficient.


Uber in 2018 lost $1.8 billion before taxes, depreciation and other expenses. Its revenue for the year was $11.3 billion and ride bookings were $50 billion. Unlike Lyft, Uber for the last few quarters has shared selected financial data with the public. Lyft’s IPO is being led by JPMorgan Chase & Co., Credit Suisse Group AG and Jefferies Financial Group Inc. — Reuters


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