Lime Reports Second Consecutive Profitable Quarter

Lime Anticipates Continued Profitability

Lime, a shared micromobility company, is projecting adjusted EBITDA profitability for the third quarter, representing its second profitable quarter in its operational history. This positive outlook was communicated by CEO Wayne Ting during the Wall Street Journal Tech Live event.

Ting indicated that the impact of COVID-19 has transitioned from a hindering factor to a supportive one, suggesting improved financial prospects for the coming year.

Past Projections and Challenges

Interestingly, a similar optimistic forecast was made around the same time last year at the WSJ Future of Everything event. At that time, Ting also expressed confidence in the company’s recovery from pandemic-related financial difficulties and anticipated Q3 profitability.

Lime initially reported operating with positive cash flow and free cash flow, with expectations of achieving full-year profitability in 2021. However, subsequent developments related to the pandemic disrupted these projections.

Russell Murphy, senior director of corporate communications at Lime, explained to TechCrunch that the emergence of the delta variant led to renewed lockdowns and delays in city reopenings globally, negatively impacting projected revenue.

Despite the absence of a full return to pre-pandemic levels of tourism and commuting, demand rebounded, and a continued increase in ridership was anticipated throughout 2022.

Focus on Efficiency and Cost Management

According to Ting, the key driver of this year’s success is improved bottom-line performance. Q3 revenue remained comparable to the same period in 2019, varying by only 1% to 2%, a quarter that was not profitable.

This indicates that while Lime didn’t necessarily increase sales or revenue, it significantly improved its financial management and operating cost control.

Adjusted EBITDA, a commonly used non-GAAP metric among startups, provides a standardized view of financial performance. It often excludes items like stock-based compensation, potentially obscuring a company’s true cash flow position without official SEC filings. Ting did not address cash-flow positivity during the event.

Strategic Improvements and Fleet Enhancements

Over the past year, Lime has implemented several strategic initiatives. These include the deployment of Gen4 scooters equipped with swappable batteries, which streamlines the charging process.

Investing in higher-quality scooters and bicycles with extended lifespans reduces vehicle depreciation costs and improves unit economics.

The company also leveraged insights gained from managing a large, global micromobility fleet to enhance operational efficiencies, though specific details were not disclosed.

Shifting Market Dynamics and Future Growth

Ting noted that the business is recovering even with ongoing limitations in key areas like commuting and tourism. A significant increase has been observed in “intercity travel.”

Customers are choosing Lime over alternative transportation options due to its open-air nature, single-passenger capacity, and environmentally friendly appeal.

Looking ahead to 2022, Ting anticipates a resurgence in commuting and tourism, further bolstered by the recent expansion of services into Europe.

Leveraging Environmental Consciousness

Lime is also capitalizing on evolving consumer preferences, particularly among younger demographics and their growing concern for climate change.

“Transportation is the leading contributor to carbon pollution in the United States,” Ting stated. “Addressing carbon emissions from transportation requires a shift towards lighter-weight alternatives like scooters and bikes, alongside investments in public transportation.”

He emphasized that young people are increasingly aware of these issues and are actively modifying their behavior to align with sustainable practices.

This is a developing story and will be updated as more information becomes available.