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In the wake of Uber's (UBER) solid Q2 earnings report from yesterday morning, hopes were high that Lyft (LYFT) would follow suit and deliver its own strong Q2 results, further solidifying the notion that the rideshare market isn't feeling the effects of softening travel demand or a slowdown in consumer spending. Like its larger rival, LYFT did surpass EPS and revenue estimates, while also posting its first ever net profit on a GAAP basis. However, the stock is still skidding sharply lower because, unlike UBER, the company missed expectations on another key metric -- namely, Gross Bookings -- and its guidance for Q3 also missed the mark.

• For the quarter, Gross Bookings grew by 17% yr/yr to $4.0 bln, coming in at the low end of its $4.0-$4.1 bln guidance range and slightly missing analysts' expectations. Seemingly a minor blemish, the small Q2 Gross Bookings miss looks more problematic when coupled with its Q3 Gross Bookings forecast of $4.0-$4.1 bln, signaling flat qtr/qtr growth, while also falling short of estimates.
• It's worth point out that the midpoint of UBER's Q3 gross bookings outlook of $40.25-$41.75 bln was also modestly below expectations. Altogether, these data points indicate that the rideshare market isn't completely immune to the intensifying macro-related headwinds.
• Although UBER and LYFT both gave tepid Q3 Gross Bookings forecasts, investors clearly have more confidence that UBER's more diversified business model will better weather a rideshare slowdown. Thanks to UBER's massive scale and multiple revenue streams -- such as food delivery, advertising, and logistics -- its adjusted EBITDA dwarfs that of LYFT's. In Q2, UBER's adjusted EBITDA jumped by 71% to $1.570 bln, compared to $102.9 mln (+151% yr/yr) for LYFT.
• The adjusted EBITDA growth for LYFT is still impressive and has been buoyed by a steady increase in its driver supply, as well as some cost-cutting actions. Driver hours reached an all-time record in Q2, and the company gained the most drivers in any quarter since 2019. As a result, LYFT is able to keep fares down, improve its pick-up times, and reduce driver incentives.
• As the rideshare market decelerates a bit, it appears that LYFT is leaning on lower prices even more to maintain its Active Rider growth (+10% in Q2). This is reflected in the company's Q3 adjusted EBITDA guidance of $90-$95 mln, which missed expectations. In contrast, UBER's Q3 adjusted EBITDA forecast of $1.58-$1.68 bln slightly beat estimates at the midpoint of the range.

Overall, LYFT's Q2 results were fairly solid given the tough macro conditions, but it's disappointing Q3 guidance relative to UBER's outlook is reminding investors that it's much more exposed to a rideshare slowdown due to its singular focus on that market.