Shares in Lyft Inc. plunged in late trading after the ride-hailing company reported a low-than-expected outlook and forecast increasing costs for driver incentives and marketing.

For the quarter ended March 31, Lyft reported earnings before costs such as stock compensation of $24.6 million, or seven cents per share, up from an adjusted loss of 35 cents per share in the same quarter of last year. Revenue rose 44%, to $875.6 million, up 44%.

Analysts had expected an adjusted loss of seven cents per share on revenue of $846 million.

Active riders in the quarter came in at 17.8 million, up from 13.5 million in the first quarter of 2021 but down from 18.7 million in the previous quarter. Active revenue per active rider was $49.18 in the quarter, up from $45.13 year-over-year but down from $51.79 in the fourth quarter of last year. Analysts had been expecting 17.9 million active riders and average revenue per active ride of $47.07.

“Our Q1 results meaningfully exceeded our outlook,” Elaine Paul, chief financial officer of Lyft, said in a statement. “This outperformance was driven by increased demand and resilient driver levels.”

In the company’s earnings call, Lyft said it expected adjusted earnings before interest, taxes, depreciation and amortization of between $10 million and $20 million in the second quarter on revenue of $950 million to $1 billion. Analysts had been expecting forecasted adjusted earnings of $83 million on revenue of $1.02 billion.

The lower-than-expected outlook is in part the result of Lyft committing to spending more on driver incentives and marketing in the second quarter.

In the earnings call, Lyft Chief Executive Officer Logan Green said that despite having 40% more active drivers in the first quarter year over year, “we want to continue improving service levels in preparation for further growth.” Rides are only about 70% recovered compared with the fourth quarter of 2019, so Lyft is expecting to need more drivers as the post-COVID recovery continues.

MarketWatch also reported that in response to an analyst’s question as to whether Lyft is considering partnerships with the taxi industry similar to those being struck by Uber Technologies Inc. to help supply, Green said Lyft had no plans at this time.

Investors were not happy with the outlook and increased spending. Lyft shares were down almost 26% after the bell.

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