![]() ![]() Nevertheless, if incentives are only dropping a bit from their highest levels in year, I expect driver costs to continue to prevent Lyft from being profitable. ![]() Lyft expects low driver supply and attendant cost pressure will persist through 2Q21. Gridwise, which helps delivery drivers maximize earnings on ridesharing platforms, notes that both Uber and Lyft are offering the largest driver incentives in years. The stubbornly low supply of drivers, the backbone of Lyft’s ridesharing network, continues to pressure costs higher for ridesharing and delivery businesses and has forced Lyft to offer higher incentives to entice drivers back to the platform. If Alphabet’s (GOOGL) Waymo, General Motors’ (GM) Cruise, or another platform successfully develops self-driving, they could easily launch their own ride-hailing and delivery service rather than licensing the technology to the likes of Lyft and Uber. The sale of Level 5 also means Lyft is now dependent on outside firms to develop self-driving, which eliminates any competitive advantage Lyft might gained from owning that technology. Lyft notes the sale will remove $100 million in “annualized non-GAAP operating expenses”, which is a rather small drop in the bucket considering Lyft’s Core Earnings in 2020 were -$1.7 billion. Lyft agreed to sell its self-driving unit, Level 5, to Toyota subsidiary Woven Planet for $550 million. In fact, costs look far more likely to rise, and I expect margins will get worse, not better. What’s Not Working for the Firm: Despite top-line growth, Lyft remains highly unprofitable, and it’s (unlikely) path to profitability (autonomous driving and/or lower labor costs) isn’t looking any more likely. Going forward, management guided for 2Q21 revenues to increase 12-15% QoQ, which would also be >100% above 2Q20. ![]() At the time, Spiegel said Snap would focus on three priorities: “community growth, revenue growth and augmented reality.” The third-quarter restructuring costs amounted to $155 million in the third quarter and $34 million in the fourth, the latter of which was reflected in the $288 million net loss figure.The firm’s adjusted EBITDA (which provides a misleading picture of the firm’s true losses) improved both QoQ and YoY but remains negative. Ahead of the major layoffs more recently impacting tech giants like Alphabet, Amazon and Meta, Snap cut roughly 20 percent of its employee base last August as part of a major restructuring that included the ending of its original programming, called Snap Originals. Snap has frequently been likened to the canary in the coal mine for Wall Street’s tech and digital ad–dependent companies. Revenue has thus far seen a 7 percent year-to-date decline in the current quarter. The product offers subscribers early access to new features for $3.99 a month.īut the economic outlook for Q1 is not expected to brighten, as Snap said it expects revenue to be down between 2 to 10 percent, according to a letter to investors. Snap also saw its subscription product, Snapchat+, grow to 2 million paying subscribers roughly six months after launch. ITV Posts Ad Revenue Drop of 10 Percent in First Quarter, Sees Second Quarter Down 12 Percent (Snap last said more than 125 million Snapchatters used Spotlight as of March 2021.) The company also said users’ total time spent watching content on Spotlight, the company’s short-form video competitor to TikTok, grew by 100 percent year-over-year but did not disclose any specific viewership numbers. Daily active users grew 17 percent year-over-year to 375 million during the quarter, with grow taking place across North America, Europe and what Snap classifies as the rest of the world. The fourth-quarter revenue results were essentially flat year over year, while the Q4 losses are a marked decline from the previous year, when Snap reported its first-ever quarterly profit of $22.5 million since going public in 2017. “We continue to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community,” Snap CEO Evan Spiegel, who described 2022 as a “challenging” year, said in announcing the results. brought in $1.3 billion revenue and reported net losses amounting to $288 million to close out 2022 as it prepares for a worsening economy impacting its business. ![]()
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