During a conference call on February 11, Lyft Inc. confirmed that it had acquired rental-car startup partner Flexdrive. Official reports state that the deal is worth $20 million in addition to the assumption of debt and lease obligations.
Lyft closed the purchase on February 7, as elaborated by Brian Roberts, the Chief Financial Officer. Previously, Lyft had partnered with various rental-car companies, including Avis Budget Group Inc., Hertz Global Holdings Inc., and Flexdrive.
Through these partnerships, Lyft could rent out cars to prospective drivers on the Lyft platform. Roberts reached short of disclosing any changes in the program. He also did not clarify whether the other partners would continue being used for that purpose.
While discussing the accounting details and changes related to the acquisition, Roberts said:
“We estimate that Lyft’s assets and liabilities related to Flexdrive will grow by approximately $75 million to $80 million at the end of Q1 relative to year-end.”
The announcement of this acquisition was made during a conference call related to the company’s release of Q4 2019 financial results.
Stock Dips As Profit Dwindles
On February 11, Lyft reported quarterly revenue of over $1 billion. Still, shares plunged in late trading as the ride-hailing firm did not match its biggest competitor in increasing hopes for profits.
Lyft reported Q4 losses of $356 million, or $1.19 a share coming from revenue of $1.02 billion, an increase from sales of $669.6 million a year ago. The company reported losses of $121.4 million after adjusting for stock-based compensation and other effects.
However, YTD performance is overall very positive as per the chart below.
Commentators averagely expected adjusted losses of 53 cents a share on sales of $984 million, as explained by FactSet. During the first three quarters of 2019, Lyft reported losses of $2.25 billion. However, the company announced layoffs in January 2020 as it aims to minimize spending while aiming for profits.