Lyft beat analysts' revenue estimates for the second quarter on Thursday as a surge in riders and trips lifted bookings to a record, though heavier spending on promotions left net income short of expectations.
The ride-hailing services provider has stepped up spending on incentives and loyalty programs to attract and retain customers and sustain growth.
"Marketing investments relate to traditional marketing at its core, but that's also the line in our P&L where we house rider incentives and so what you're seeing really is an increase on a year-over-year basis is rider incentives," Chief Financial Officer Erin Brewer told Reuters.
Lyft's second-quarter net income of $50.3 million missed Wall Street estimates of about $56 million, according to LSEG data. Marketing expenses surged 68%.
Revenue jumped 16% to $1.84 billion, topping estimates of $1.81 billion.
The FIFA soccer World Cup, held in the U.S., Canada and Mexico, lifted demand during the second quarter, especially for airport rides and in host cities.
For the third quarter, the company forecast gross bookings of $5.5 billion to $5.67 billion, compared with Wall Street expectations of $5.57 billion.
Lyft has sought to improve growth and profitability by steering riders toward higher-value services, including premium rides, airport trips and chauffeur offerings, while also expanding its European operations through FreeNow by Lyft.
A year after closing its acquisition of European ride-hailing app FreeNow, Lyft said the business is performing better on an organic basis amid integration into its global platform.
Gross bookings, which measure the total value of transactions on its platform, rose 23% to a record $5.50 billion in the three months ended June 30.
Partnerships drove about 30% of North American rideshare trips in the quarter, Lyft said, citing its alliances with DoorDash and United Airlines.
