By Yuvraj Malik
(Reuters) – Lyft is targeting 15% annual growth in gross bookings through 2027, the ride-hailing firm said at its inaugural investor day, adding that it expects gross bookings from its nascent advertising business to increase eight-fold in the same period.
The company’s shares were up more than 4% before the bell on Thursday.
The forecast signals Lyft could maintain its position in the North American ride-sharing market, where it lags Uber, even as both the companies seek to diversify their revenue streams through offerings such as advertising and user subscriptions.
Lyft expects $400 million in gross bookings from its advertising business in 2027, Zach Greenberger, executive vice president of Lyft’s Partnership Ecosystem, said, compared with $50 million forecast this year.
The company, like Uber, allows advertisements within its app, as well as on tablets in vehicles and digital screens on top of cars. Lyft launched the business in 2022 and reported a 250% growth in related revenue in the quarter ending March.
“Advertisers are looking for more targeted and measurable solutions,” Greenberger said, adding that the retail and hospitality industries are using Lyft’s advertising platforms.
Uber, with a larger global presence and more diversified business lines including food ordering and freight services, is targeting $1 billion in annual ad revenue.
Lyft is targeting gross bookings compound annual growth rate of about 15% between 2024 and 2027 for the full company, and an adjusted core profit margin of about 4% in 2027.
For 2023, the company reported 14% growth in gross bookings, or the total dollar value of transactions billed to ride-share riders including taxes, tolls and fees, but excluding tips to drivers. Lyft’s adjusted core profit margin was 1.6%.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Shounak Dasgupta)
