What happened

Shares of Lyft (LYFT 1.03%) were taking a dive today after the ridesharing company issued a disappointing third-quarter earnings report, posting a wide loss on the bottom line and showing signs that it was losing market share to larger rival Uber Technologies.

As of 10:35 a.m. ET, the stock was down 20.3%.

So what

Lyft reported solid revenue growth in the third quarter as the top line rose 22% to $1.05 billion, slightly below the consensus at $1.06 billion.   

Active riders grew just 7.6% to $20.3 million, showing that the tailwinds from the economic reopening may be fading. Uber's equivalent figure grew 22%, by contrast, though that includes the global market, rather than just North America, so it's difficult to make an accurate comparison.

On the bottom line, some of its key metrics were moving in the wrong direction. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) declined slightly from $67.3 million to $66.2 million, which was due in part to higher insurance costs, and its net loss per share under generally accepted accounting principles (GAAP) widened from $0.30 to $1.18. Adjusted net income, however, doubled to $36.7 million, or $0.10, ahead of estimates at $0.07.

In a press release, CFO Elaine Paul said:

We had a strong Q3. Adjusted EBITDA came in above the top-end of our outlook and revenues reached an all-time high. We also saw a higher number of Active Riders, rides and drivers than we've had since COVID began, reflecting strong organic tailwinds. We're focused on accelerating initiatives that will have the biggest impact for drivers, riders and the company.

Now what

Lyft's guidance called for similar revenue growth in the fourth quarter, forecasting a top-line increase of 18% to 20% to $1.145 billion to $1.165 billion, a bit shy of the consensus at $1.17 billion. 

On the bottom line, the company sees adjusted EBITDA of $80 million to $100 million, or a margin of 7% to 9%.

Overall, Lyft's results show the company delivering steady growth and making some progress on the bottom line. However, the slowdown in active rider growth is concerning. Additionally, after a strong report from Uber, the market seems to have expected more from the No. 2 ride-hailing player.