 Lyft published strong 2Q24 results, reporting a record number of active riders at 23.7mn, up 10.2% YoY. Revenue per active rider reached $60.58, a 27.5% YoY increase, and the company achieved a record 205mn of rides, up 15.4% YoY. Driver hours reached an all-time high, according to the company. Gross bookings rose by 16.6% YoY and 8.8% QoQ to $4,019mn, driven by an increase in both the number of riders and ride frequency. Lyft highlighted that Pride was a major celebration for Lyft riders in 2Q, with riders in San Francisco, Denver, and Seattle taking c.50% more rides than usual. In top college towns, rides during spring graduation weekends increased by 23%. The summer travel season led to a 13% growth in rides to and from airports and hotels compared to 1Q24. Rides in Canada doubled YoY, with Toronto ranking as Lyft’s 8th largest market; however, Lyft did not confirm any change in market share compared to its peers. Lyft’s revenue increased by 40.6% YoY to $1,436mn in 2Q24. The company managed to keep the cost of revenue growth below the revenue growth rate, with costs raising by 35.1% YoY to $819.5mn and total expenses growing by 25.4% to $1,463.1mn in 2Q. Among operating expenses, S&M costs grew 61.6% YoY to $176.4mn, G&A expenses rose 25.4% YoY to $252.6mn, operations and support costs increased by 7.5% YoY to $157mn, and R&D costs decreased by 36.1% YoY to $98.8mn in 2Q24. The company reduced its loss from operations to $27.2mn and reported a pre-tax profit of $6.9mn after gaining $41.9mn in other income. Adjusted EBITDA was $102.9mn compared to $59.4mn in 1Q24 and $41mn in 2Q23. Adjusted EBITDA as a percentage of Gross Bookings was 2.6%, exceeding previous guidance. Lyft reported a record $256.4mn in free cash flow for the quarter and net income reached $5mn. Stock-based compensation declined by 24.7% YoY to $85.7mn, though it was still 7% higher QoQ. The company’s number of shares increased by 6.4% YoY. These results aligned with Lyft’s 2Q24 guidance for gross bookings ($4.0-4.1bn, up 16-19% YoY, driven by c.15% YoY growth in rides), and exceeded the $95-100mn range for Adjusted EBITDA. As of June 30, 2024, the company held $1.7bn in total unrestricted cash equivalents and short-term investments, and $1.3bn in total restricted cash equivalents and investments. Interest income amounted to $40mn in 2Q24.  Lyft provides an outlook for 3Q24, expecting Gross Bookings between $4.0bn and $4.1bn, and Adjusted EBITDA of $90-95mn. For FY24, Lyft maintains its guidance for total ride growth in the mid-teens YoY, and Adj EBITDA as % of gross bookings at 2.1%, along with positive FCF. The company previously indicated that Adj EBITDA would be weighted more towards 1H24, as the insurance expenses are expected to increase in 2H24. We have adjusted our revenue and cost of revenue expenses, as both exceeded expectations. Lyft demonstrated good control over other operating expenses and reduced its stock-based compensation. However, YoY share dilution has resulted in a higher projected number of shares. While the revenue as a percentage of gross bookings was higher in 2Q24 compared to 1Q24, we expect it to decline going forward. We have adjusted our 12-month DCF-based target price to $14.9 from $18.4 per share and maintain our Buy rating for the stock.