What happened

Shares of Uber Technologies (NYSE:UBER) jumped in the regular trading session on Thursday after a better-than-expected earnings report from rival Lyft (NASDAQ:LYFT). The numbers encouraged Uber investors ahead of the ridesharing giant's earnings report that came out after hours today. 

Uber finished today up 11.2%; Lyft finished up 21.7%.

The different smartphone showing different images of the Uber app

The Uber app. Image source: Uber.

So what

Lyft posted 23% revenue growth to $955.7 million, well ahead of analyst expectations at $897.9 million, and narrowed its adjusted EBITDA loss from $216 million in the quarter a year ago to $85 million, surpassing the company's own guidance, which was provided before the pandemic started. On the bottom line, it finished with an adjusted loss per share of $0.32, much better than estimates at $0.64. 

Lyft warned that rides had fallen by 70% to 75% in recent weeks, but expressed confidence in its ability to make it through the crisis.

The results and the commentary cast a positive light on Uber as they appeared to signal that the ride-hailing industry was doing better than expected.

In Uber's own report after hours on Thursday, the ridesharing leader said revenue rose 14%, or 16% in constant currency, to $3.54 billion, ahead of expectations at $3.51 billion. Uber also narrowed its adjusted EBITDA loss in the quarter by 30% to $612 million. The company had previously outlined a goal of generating an adjusted EBITDA profit by the end of the year, but that seems unlikely now, given the disruption from COVID-19. 

Adjusted for an asset impairment and share-based compensation, the company had a loss per share of $0.64, which was better than expectations for a loss of $0.83.

Now what

Commenting on the challenges in the ride-hailing business, CEO Dara Khosrowshahi said, "While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario." Indeed, revenue growth in rides, which is Uber's biggest business, slipped to just 2% in the quarter, while bookings in the category were actually down slightly, showing the business likely has taken a significant hit from the pandemic.

That bodes poorly for the second quarter. Nonetheless, Uber stock was up 6.8% after hours as of 5:54 p.m. EDT.