A Lyft sign inside a car in Vernon Hills, Ill., on April 2.Nam Y. Huh/The Associated Press
Lyft LYFT-Q is targeting a 15 per cent annual increase in gross bookings through 2027, the ride-hailing firm said at its inaugural investor day event, adding that its nascent advertising business is expected to grow eight-fold during the same period.
The company’s shares rose nearly 10 per cent to $17.03 on Thursday.
The forecast signals Lyft could maintain its position in the North American ride-sharing market, where it lags Uber UBER-N, even as both the companies seek to diversify their revenue streams through offerings such as advertising and user subscriptions.
Lyft expects $400-million in gross bookings from its advertising business in 2027, Zach Greenberger, executive vice president of Lyft’s Partnership Ecosystem, said in an interview ahead of Thursday’s event.
That compares with a forecast of $50-million from the business for this year, Greenberger added, providing details about the unit’s numbers for the first time.
The company, like Uber, allows advertisements within its app, as well as on tablets in vehicles and digital screens on top of cars. Lyft launched the business in 2022 and reported a 250 per cent growth in related revenue in the recent quarter ended March.
“Advertisers are looking for more targeted and measurable solutions,” Greenberger said, adding that the retail and hospitality industries are using Lyft’s advertising platforms.
Uber, with a larger global presence and more diversified business lines including food ordering and freight services, is targeting $1-billion in annual ad revenue.
Lyft is targeting gross bookings compound annual growth rate of about 15 per cent between 2024 and 2027 for the full company, and an adjusted core profit margin of about 4 per cent in 2027.
For 2023, the company reported 14 per cent growth in overall gross bookings, or the total dollar value of transactions billed to ride-share riders including taxes, tolls and fees, but excluding tips to drivers. Lyft’s adjusted core profit margin was 1.6 per cent.