Lime (LIME) Q3 2026 earnings review
Lime expands its fleet fast, but cuts its profit outlook
Lime put more electric scooters and bikes on city streets to beat its sales target, but each vehicle earned less per day and profit missed the company's plan. Revenue rose 20% from a year ago as the fleet expanded 26%, which by our math means daily revenue per vehicle fell about 5%. Chief executive Wayne Ting said investments in the LimePrime subscription and newer cities weighed on near-term margins, and management cut the full-year Adjusted EBITDA outlook by $21 million at the middle of the range.
| Revenue | $360.6M +19.6% from a year ago |
|---|---|
| Average operational fleet | 447,184 +26% from a year ago |
| Adjusted EBITDA | $118.4M missed $120–130M outlook |
| Full-year Adjusted EBITDA outlook | Cut $21M middle of the range: $254M |
⚖️ Verdict: 🔴 Bearish
The story got worse because subscription discounts and city expansion are hurting profit enough to force a full-year outlook cut in Lime's second quarter as a public company. Daily revenue per vehicle turned negative by our math after barely growing in the spring, confirming that higher trip volume from subscribers is not yet covering the lower price per ride. The good news: summer cash collections and an $8 million trim to the vehicle spending budget pushed nine-month free cash flow into positive territory.
The question now is whether LimePrime's eight-fold jump in trips per rider eventually lifts revenue per vehicle and profit margins, or permanently locks in lower pricing across the fleet. Finance chief Ann Gugino says a subscriber generates twice the gross profit excluding depreciation of a casual rider, yet company-wide gross margin still dropped. Same-market revenue per vehicle in the quarterly filing and next spring's margins will show which side is right.
🐂 Bull Case
Fleet Expansion Accelerates Past Twenty-Five Percent
Lime wins city permits to place electric scooters and bikes on streets, making its vehicle count the foundation of its revenue. That expansion sped up during the summer peak, lifting total sales past $1 billion over the last twelve months for the first time. Monthly active users, a second growth metric the company tracks, did not get a number in the release.
- Average operational fleet: 447,184 vehicles, up 26% from a year ago and faster than the 22.1% pace in the second quarter
- Third-quarter revenue: $360.6 million, up 19.6% from a year ago and above the $340 million to $360 million outlook
- Asset acquisition cash paid: $7.3 million in the third quarter, following the purchase of Neuron Mobility's Canadian operations
Adding vehicles faster allowed the electric scooter and bike operator to beat its top-line plan even though revenue per vehicle fell. Because cities cap how many vehicles can operate, a larger fleet builds a physical lead that rivals cannot copy without winning permits of their own.
What to watch: monthly active user growth and organic fleet additions in the quarterly filing. A user growth rate near 26% would show rider demand is keeping up with the new vehicles.
Summer Rides Turn Free Cash Flow Positive
Lime buys most of its vehicles in the first half of the year ahead of summer riding, which left free cash flow at negative $83.3 million after the first six months. In the third quarter, the micromobility group generated $90.6 million in free cash flow, pushing the nine-month total to positive $7.3 million.
Finance chief Ann Gugino also trimmed the full-year capital expenditure plan by $8 million at the middle of the range, to between $172 million and $177 million. Because the company has already spent $156.6 million on vehicles and equipment over the first nine months, the new plan leaves only about $18 million of spending for the fourth quarter by our math, easing the risk of a full-year cash burn.
What to watch: fourth-quarter operating cash flow against the implied $18 million capital expenditure budget. Generating more than $11 million in operating cash flow will keep the full year free cash flow positive.
🐻 Bear Case
Subscription Growth Costs Lime Its Profit Target
Lime is pushing LimePrime, a monthly subscription that lowers the price of each ride, while expanding into newer cities. Chief executive Wayne Ting said the company is "prioritizing long-term value over short-term metrics" and noted that "targeted market investments and LimePrime’s growth may temporarily affect near-term margins." Gugino added that the average subscriber is "generating two times the adjusted gross profit per non-subscription rider."
Despite that per-rider profit claim, total margins dropped and the company missed its own third-quarter profit plan. Direct fleet operating costs (cost of revenue excluding depreciation and disposal losses) rose 3.5 percentage points of revenue from a year ago, pulling gross margin excluding depreciation down from 57.6% to 54.1%. As a result, Adjusted EBITDA (operating profit before depreciation, stock pay and one-offs) landed at $118.4 million, missing the $120 million to $130 million outlook, and management cut the full-year Adjusted EBITDA plan by $21 million at the middle of the range.
What to watch: fourth-quarter gross margin excluding depreciation and amortization. A drop of less than 3.5 percentage points from a year ago would show the subscription margin drag is starting to level off.
Each Vehicle Earns Less Per Day
Lime tracks revenue per vehicle per day (RVD), which measures how much money each scooter or e-bike brings in daily. The company stated in its release that "The average LimePrime rider took 8 times as many trips as the average Pay-As-You-Go rider," framing subscription adoption as a boost to vehicle use.
The press release did not print the third-quarter RVD table, which lives in the quarterly filing, but the revenue and fleet figures reveal the drop. Average operational vehicles grew 26% from a year ago while revenue rose 19.6%. By our math, that means daily revenue per vehicle fell about 5.1% from a year ago to $8.77, worsening from a 1.2% gain in the second quarter and an 8% gain in the first. Discounted subscription rides and lower-earning new cities are diluting what each vehicle makes.
What to watch: reported RVD and same-market RVD commentary in the third-quarter filing. A widening gap between new cities and mature markets would show whether the 5.1% decline comes from city mix rather than subscription discounts.
Risks this quarter didn't answer
Three standing risks from the second-quarter filing received no new numbers in the earnings release and await the third-quarter 10-Q.
- City permit renewals: growth depends on winning municipal fleet caps, and the release gives no city retention or permit loss figures.
- Uber channel concentration: Uber brought in 13.0% of revenue in the first half while growing slower than the rest of the business; the release does not split out third-quarter related-party sales.
- Personal-injury claims reserves: liability reserves rose from $52.4 million to $60.7 million in the first half, and the release does not break out the third-quarter reserve balance.
👓 Other Themes
IPO Proceeds Wipe Out Remaining Debt
Lime collected $155.3 million in net proceeds from its initial public offering in July and used $115.0 million to pay off its remaining term loan. Along with the second-quarter conversion of its 2020 and 2021 notes into stock, that repayment reduced total debt from $982.1 million at the end of 2025 to zero, leaving $453.2 million in total cash and restricted cash.
💲 Other KPIs
More than doubled from 32.2 million a year ago, up 116.9%, and rose from 62.9 million in the second quarter. The jump reflects the conversion of the 2020 and 2021 convertible notes into common stock at the end of June and the July initial public offering, which caused diluted profit per share to fall 37.6% even as net income rose 41.5%.
Money owed by customers and payment partners fell from $27.9 million at the end of June as peak-season collections came in, generating $7.8 million of operating cash flow in the quarter. Compared with $8.1 million at the end of December 2025, receivables remain 122.9% higher on larger seasonal riding volume.
🔮 Guidance
New. The fourth-quarter plan calls for $245 million at the middle of the range, down 32.1% from the third quarter as winter weather slows riding across North America and Europe. Against the implied fourth quarter of 2025, by our math that represents about 18.0% growth from a year ago, down slightly from 19.6% in the third quarter.
Unchanged. Management kept the full-year sales range at $1.07 billion in the middle, or about 21% growth from a year ago. With $835.0 million already booked in the first nine months and $245 million planned for the fourth quarter, the four quarters sum to $1.08 billion, $10 million above the middle of the unchanged annual range.
Cut against what the prior annual plan implied. At the $44 million middle of the range, fourth-quarter Adjusted EBITDA sits $14.3 million below the $53.3 million to $63.3 million remainder that the old full-year outlook pointed to by our math. That puts the fourth-quarter margin at 18.0%, down from 32.8% in the third quarter on winter seasonality and ongoing city and subscription investments.
Cut. Gugino lowered the full-year Adjusted EBITDA outlook by $21 million at the middle of the range, taking the implied full-year margin down to 23.7% from 25.7% under the prior plan. About $6.6 million of the reduction comes from the third-quarter miss against the old midpoint, and the other $14.3 million comes from the lower fourth-quarter plan.
Cut. The company reduced its full-year spending budget for vehicles and equipment by $8 million at the middle of the range to $174.5 million. Because Lime already spent $156.6 million in the first nine months, the revised budget leaves about $17.9 million of capital spending for the fourth quarter by our math.
❓ Key Questions
Why did higher subscriber gross profit lower overall margins?
Finance chief Ann Gugino said the average LimePrime subscriber generates twice the gross profit excluding depreciation of a non-subscriber, yet company-wide gross margin excluding depreciation fell 3.5 percentage points and Adjusted EBITDA missed the outlook. How much of the margin drop came from LimePrime versus new cities?
What were third-quarter RVD and monthly active users?
The earnings release defines revenue per vehicle per day and monthly active users as key operating metrics but did not print their third-quarter figures. By our math, daily revenue per vehicle fell about 5.1% from a year ago; what was same-market RVD growth?
How many riders subscribe to LimePrime today?
Management said LimePrime riders take eight times as many trips as pay-as-you-go users, but has not disclosed total subscriber counts, monthly subscription prices, or what share of third-quarter revenue came from subscriptions and passes.
Did the Uber channel keep slowing in the third quarter?
In the first half of 2026, revenue booked through Uber made up 13% of sales but grew only 7.9%, trailing the rest of the platform. What share of third-quarter revenue came from Uber, and is the LimePrime push moving riders onto Lime's own app?