Shares in Lyft Inc. rose in after-hours trading today after the ride-hailing company beat analysts’ expectations for its third-quarter earnings and said it’s on track to be profitable by the end of 2021.

For the quarter ended Sept. 30, Lyft reported revenue fell 48% from a year ago, to $499.7 million, but that was up 47% from the second quarter. Analysts had been predicting $486.6 million.

The increased revenue came through an increase in riders as some states started to lift coronavirus restrictions. Lyft booked 12.5 million riders in the quarter, up from 8.7 million in the second quarter.

Lyft continues to bleed money, however, booking a net loss of $459.5 million versus $463.5 million in the third quarter of 2019. Although that doesn’t look good, it did include $170.7 million in stock-based compensation and related payroll expenses, meaning that without those costs, Lyft’s operating loss was significantly lower. Adjusted loss before interest, taxes, depreciation and amortization was $280.4 million.

“Our Q3 revenue grew by 47% quarter-over-quarter driven by a meaningful recovery in Active Riders and we successfully limited our Adjusted EBITDA loss, outperforming our most recent outlook by $25 million,” Lyft Chief Financial Officer Brian Roberts said in a statement. “These results reflect the ongoing recovery as well as our progress towards reducing costs and improving our underlying unit economics. We remain focused on achieving Adjusted EBITDA profitability by the fourth quarter of next year, even with a slower recovery.”

As with rival Uber Technologies Inc. in its earnings report last week, Lyft also once again declined to provide guidance for the following quarter.

Roberts addressed the lack of guidance for the fourth quarter in Lyft’s earning call. “We cannot provide formal guidance given the variability and reopenings among cities and fluidity associated with government orders and healthcare recommendations to contain the spread and resurgence of COVID-19,” he said. “In addition to COVID, the fourth quarter also has unique seasonal fluctuations that prevent us from using the first month as a growth benchmark.”

That said, Roberts added that Lyft currently estimates that its fourth-quarter revenue may grow 11% to 15% quarter-over-quarter.

Lyft’s earnings report comes a week after it and Uber had a huge win with California voters, who approved Proposition 22. The ballot measure exempts ride-hailing and food delivery companies from California law AB5, which required them to reclassify drivers as employees and provide them with various employment benefits. Shares in Lyft surged on the confirmation that the ballot measure had passed on Friday, Nov. 6.

Shares in Lyft were up more than 5% in after-hours trading.

Photo: skellysf/Flickr