SEC Filing | Lyft, Inc.

View:

Download DOC

Download PDF

Download XLS

Download XBRL

lyft-10q_20190930.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38846

Lyft, Inc.

(Exact name of registrant as specified in its charter)

Delaware

20-8809830

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

185 Berry Street, Suite 5000

San Francisco, California 94107

(Address of registrant’s principal executive offices, including zip code)

(844) 250-2773

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A common stock,

par value of $0.00001 per share

LYFT

Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 30, 2019, the number of shares of the registrant’s Class A common stock outstanding was 286,463,787 and the number of shares of the registrant’s Class B common stock outstanding was 11,232,629.

Table of Contents

		Page
PART I	FINANCIAL INFORMATION	3
Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2019 and 2018	4
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2019 and 2018	5
	Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2019 and 2018	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36

PART II	OTHER INFORMATION	37
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3.	Defaults Upon Senior Securities	70
Item 4.	Mine Safety Disclosures	70
Item 5.	Other Information	70
Item 6.	Exhibits	71
	Signatures	72

Draft

NOTE ABOUT FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include statements about:

•

our future financial performance, including our expectations regarding our revenue, cost of revenue, operating expenses, including capital expenditures related to asset-intensive offerings, our ability to determine insurance, legal and other reserves and our ability to achieve and maintain future profitability;

•

the sufficiency of our cash, cash equivalents and short-term investments to meet our liquidity needs;

•

the demand for our platform or for Transportation-as-a-Service networks in general;

•

our ability to attract and retain drivers and riders;

•

our ability to develop new offerings and bring them to market in a timely manner and make enhancements to our platform;

•

our ability to compete with existing and new competitors in existing and new markets and offerings;

•

our expectations regarding outstanding litigation, including with respect to the classification of drivers on our platform;

•

our expectations regarding the effects of existing and developing laws and regulations, including with respect to the classification of drivers on our platform, taxation and privacy and data protection;

•

our ability to manage and insure auto-related and operations-related risks associated with our Transportation-as-a-Service network;

•

our expectations regarding new and evolving markets and our efforts to address these markets, including autonomous vehicles and bikes and scooters as well as Driver Centers and Lyft Rentals;

•

our ability to develop and protect our brand;

•

our ability to maintain the security and availability of our platform;

•

our expectations and management of future growth;

•

our expectations concerning relationships with third parties;

•

our ability to maintain, protect and enhance our intellectual property;

•

our ability to successfully acquire and integrate companies and assets; and

•

the increased expenses associated with being a public company.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors, including those described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Lyft, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except for share and per share data)

(unaudited)

	September 30, 2019			December 31, 2018
Assets
Current assets
Cash and cash equivalents	$	543,871		$	517,690
Short-term investments		2,572,568			1,520,180
Prepaid expenses and other current assets		426,384			282,572
Total current assets		3,542,823			2,320,442
Restricted cash and cash equivalents		139,440			187,374
Restricted investments		1,237,314			863,713
Property and equipment, net		159,986			109,257
Operating lease right of use assets		411,962			—
Intangible assets, net		90,218			117,733
Goodwill		150,781			152,085
Other assets		2,637			9,439
Total assets	$	5,735,161		$	3,760,043
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable	$	36,210		$	32,343
Insurance reserves		1,374,935			810,273
Accrued and other current liabilities		880,769			606,203
Operating lease liabilities — current		88,875			—
Total current liabilities		2,380,789			1,448,819
Operating lease liabilities		359,160			—
Other liabilities		5,698			30,458
Total liabilities		2,745,647			1,479,277
Commitments and contingencies (Note 6)
Redeemable convertible preferred stock, $0.00001 par value; no and 227,328,900 shares authorized as of September 30, 2019 and December 31, 2018, respectively; no and 219,175,709 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively		—			5,152,047
Stockholders’ equity (deficit)
Preferred stock, $0.00001 par value; 1,000,000,000 and no shares authorized as of September 30, 2019 and December 31, 2018, respectively; no shares issued and outstanding as of September 30, 2019 and December 31, 2018		—			—
Common stock, $0.00001 par value; 18,000,000,000 Class A shares and 340,000,000 shares authorized, 286,350,943 Class A shares and 22,438,472 shares issued and outstanding, as of September 30, 2019 and December 31, 2018, respectively; 100,000,000 and no Class B shares authorized, 11,232,629 and no Class B shares issued and outstanding, as of September 30, 2019 and December 31, 2018, respectively		3			—
Additional paid-in capital		8,176,401			73,916
Accumulated other comprehensive income		4,629			133
Accumulated deficit		(5,191,519	)		(2,945,330	)
Total stockholders’ equity (deficit)		2,989,514			(2,871,281	)
Total liabilities, redeemable convertible preferred stock and stockholders’ equity (deficit)	$	5,735,161		$	3,760,043

The accompanying notes are an integral part of these condensed consolidated financial statements.

Lyft, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except for per share data)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue	$	955,598		$	584,951		$	2,598,890		$	1,487,051
Costs and expenses
Cost of revenue		580,714			322,614			1,673,707			876,409
Operations and support		149,794			92,481			489,004			219,752
Research and development		288,272			77,168			1,229,065			204,775
Sales and marketing		163,858			241,015			619,938			584,829
General and administrative		263,820			120,348			907,842			308,974
Total costs and expenses		1,446,458			853,626			4,919,556			2,194,739
Loss from operations		(490,860	)		(268,675	)		(2,320,666	)		(707,688	)
Interest income		28,651			19,615			78,284			46,367
Other income, net		641			409			476			65
Loss before income taxes		(461,568	)		(248,651	)		(2,241,906	)		(661,256	)
Provision for income taxes		1,909			510			4,283			1,147
Net loss	$	(463,477	)	$	(249,161	)	$	(2,246,189	)	$	(662,403	)
Net loss per share, basic and diluted	$	(1.57	)	$	(11.58	)	$	(11.05	)	$	(31.72	)
Weighted-average number of shares outstanding used to compute net loss per share, basic and diluted		294,784			21,508			203,199			20,884
Stock-based compensation included in costs and expenses:
Cost of revenue	$	12,078		$	139		$	68,625		$	381
Operations and support		8,553			48			68,178			145
Research and development		153,830			1,110			842,954			2,353
Sales and marketing		7,969			63			65,213			237
General and administrative		59,746			1,486			349,930			3,227

The accompanying notes are an integral part of these condensed consolidated financial statements.

Lyft, Inc.

Condensed Consolidated Statements of Comprehensive Loss

(in thousands)

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net loss	$	(463,477	)	$	(249,161	)	$	(2,246,189	)	$	(662,403	)
Other comprehensive (loss) income
Foreign currency translation adjustment		431			(75	)		1,098			165
Unrealized gain (loss) on marketable securities, net of taxes		(1,295	)		(21	)		3,398			538
Other comprehensive (loss) income		(864	)		(96	)		4,496			703
Comprehensive loss	$	(464,341	)	$	(249,257	)	$	(2,241,693	)	$	(661,700	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Lyft, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands)

(unaudited)

	Redeemable Convertible Preferred Stock				Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Income (Loss)			Deficit
Balances as of December 31, 2017		199,815	$	4,284,049		19,916	$	—	$	55,568	$	(2,033,995	)	$	(1,011	)	$	(1,979,438	)
Issuance of Series H redeemable convertible preferred stock, net of issuance cost		1,364		54,193		—		—		—		—			—			—
Issuance of common stock upon exercise of stock options		—		—		335		—		1,169		—			—			1,169
Vesting of early exercised stock options		—		—		—		—		13		—			—			13
Stock-based compensation		—		—		—		—		1,996		—			—			1,996
Other comprehensive loss		—		—		—		—		—		—			(1,013	)		(1,013	)
Net loss		—		—		—		—		—		(234,339	)		—			(234,339	)
Balances as of March 31, 2018		201,179	$	4,338,242		20,251	$	—	$	58,746	$	(2,268,334	)	$	(2,024	)	$	(2,211,612	)
Issuance of Series H redeemable convertible preferred stock, net of issuance cost		5,032		199,969		—		—		—		—			—			—
Issuance of Series I redeemable convertible preferred stock, net of issuance cost		11,684		553,207		—		—		—		—			—			—
Issuance of common stock upon exercise of stock options		—		—		1,005		—		2,928		—			—			2,928
Issuance of restricted common stock upon early exercise of stock options		—		—		5		—		—		—			—			—
Vesting of early exercised stock options		—		—		—		—		19		—			—			19
Stock-based compensation		—		—		—		—		1,501		—			—			1,501
Other comprehensive income		—		—		—		—		—		—			1,812			1,812
Net loss		—		—		—		—		—		(178,903	)		—			(178,903	)
Balances as of June 30, 2018		217,895	$	5,091,418		21,261	$	—	$	63,194	$	(2,447,237	)	$	(212	)	$	(2,384,255	)
Issuance of Series I redeemable convertible preferred stock, net of issuance cost		745		35,289		—		—		—		—			—			—
Issuance of common stock upon exercise of stock options		—		—		625		—		3,994		—			—			3,994
Issuance of restricted common stock upon early exercise of stock options		—		—		21		—		—		—			—			—
Vesting of early exercised stock options				—		—		—		168		—			—			168
Stock-based compensation		—		—		—		—		2,846		—			—			2,846
Other comprehensive loss		—		—		—		—		—		—			(96	)		(96	)
Net loss		—		—		—		—		—		(249,161	)		—			(249,161	)
Balances as of September 30, 2018		218,640	$	5,126,707		21,907	$	—	$	70,202	$	(2,696,398	)	$	(308	)	$	(2,626,504	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Lyft, Inc.

Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(in thousands)

(unaudited)

	Redeemable Convertible Preferred Stock				Class A and Class B Common Stock				Additional Paid-in		Accumulated			Accumulated Other Comprehensive		Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital		Deficit			Income (Loss)		(Deficit)
Balances as of December 31, 2018		219,176	$	5,152,047		22,438	$	—	$	73,916	$	(2,945,330	)	$	133	$	(2,871,281	)
Issuance of common stock upon exercise of stock options		—		—		7,121		—		1,599		—			—		1,599
Issuance of common stock upon settlement of RSUs		—