Lyft bets on global expansion, smaller cities focus to drive growth

By Akash Sriram

(Reuters) -Lyft's foray into global markets and smaller U.S. cities will help fuel growth, the ride-hailing firm said on Wednesday, as it forecast upbeat bookings for the all-important holiday travel season.

The company's shares, up about 56% this year, rose about 3% in extended trading.

Lyft said Freenow, its European operations, which it acquired earlier this year, is projected to add over six million riders to its platform in 2026. Its drive into underpenetrated U.S. markets, particularly college towns, accounted for roughly 70% of the growth in the third quarter.

"You should expect to see quite a bit of our growth come from there in the future," CEO David Risher said.

Lyft said it expects gross bookings between $5.01 billion and $5.13 billion for the fourth quarter, above analysts' average estimate of $4.98 billion, according to data compiled by LSEG.

"After two rough quarters, Lyft is growing year-over-year earnings and sales at a double-digit clip – evidence that the company's comeback strategy is working," said Andrew Rocco, stock strategist at Zacks Investment Research.

Larger rival Uber also forecast holiday-quarter bookings above estimates on Tuesday, with revenue growth in its ride-hailing division accelerating in the September quarter.

Lyft's third-quarter revenue hit a record high of $1.69 billion, but the 10.7% growth was slightly slower than analysts' estimates of an 11.5% rise.

Meanwhile, Lyft's upmarket strategy is also gaining traction at home, with high-margin premium rides up 50% in the reported quarter and a new partnership with United Airlines is expected to help capture lucrative corporate and airport travel.

Lyft recorded adjusted core earnings of $138.9 million during the third quarter, marginally below the estimate of $140 million.

(Reporting by Akash Sriram in Bengaluru; Editing by Sriraj Kalluvila)

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