TLDR
- Lyft reported Q4 EPS of $6.72, beating estimates by $6.59, but revenue of $1.59 billion missed expectations of $1.76 billion
- Stock dropped 16% in after-hours trading Tuesday as the company posted a surprise operating loss of $188.4 million for 2025
- Active riders hit 29.2 million and total rides reached 243.5 million, both falling short of analyst estimates
- CEO David Risher cited “unexpected” competitor price promotions that pressured quarterly results and forced defensive pricing
- Company approved $1 billion share buyback program and expects Q1 adjusted EBITDA between $120-$140 million, below Street consensus
Lyft stock tumbled 16% in after-hours trading Tuesday after the ride-hailing company reported fourth-quarter results that painted a troubling picture for its turnaround efforts.
The company posted earnings per share of $6.72, crushing analyst estimates of $0.13 by $6.59. But the headline number included a massive $2.9 billion tax benefit from releasing valuation allowances. Strip that out, and adjusted EPS came to just 16 cents, slightly ahead of the 12-cent estimate.
Revenue told a different story. Lyft brought in $1.59 billion for the quarter, up just 3% year-over-year and well below the $1.76 billion Wall Street expected.
The miss extended beyond the top line. Active riders totaled 29.2 million, short of the 29.5 million estimate. Total rides hit 243.5 million compared to expectations of 256.6 million.
CEO David Risher pointed to increased competitive pressure during the earnings call. The company faced “unexpected” price promotions from rivals that forced Lyft to respond defensively.
Price Wars Squeeze Margins
“During a season of heightened competitive promotions, we prioritized the most durable, profitable demand in the marketplace,” the company said in its earnings release.
The competitive dynamics weighed heavily on Lyft’s performance. The company also disclosed a surprise operating loss of $188.4 million for the full year 2025.
Bookings grew 19% year-over-year to $5.07 billion, meeting analyst estimates. But the growth couldn’t offset the revenue shortfall and margin pressure.
Lyft’s first-quarter guidance added to investor concerns. The company expects adjusted EBITDA between $120 million and $140 million, below the $139.8 million consensus.
The company blamed recent California legislation that cut insurance costs for rideshare drivers. While lower prices should eventually boost demand, Lyft said consumer adoption “will take time to materialize” and expects the benefit to hit mainly in the second half of 2026.
Expansion Plans Face Obstacles
Risher outlined growth initiatives including Black car service and a teen-specific offering, both features rival Uber already provides. The company also plans to expand its Waymo robotaxi partnership to Nashville later this year.
But Risher acknowledged challenges in the autonomous vehicle space. When asked why Lyft hasn’t secured more robotaxi partnerships, he admitted “there just aren’t that many suppliers” operating at the required scale.
He said more supply should come online by 2030.
The disappointing quarter complicates Lyft’s comeback narrative. Since Risher took over as CEO in 2023, the company has focused on cost cuts and new rider features like a price-lock option for commuters.
The stock had climbed about 11% over the past year before Tuesday’s after-hours drop.
Net income totaled $2.76 billion for the quarter, or $6.72 per share, driven almost entirely by the tax benefit. Without that one-time gain, the underlying business showed weakness.
Lyft’s board approved a $1 billion share repurchase program, signaling confidence despite the disappointing results. The company closed regular trading Tuesday at $16.87, down 27% over the past three months.
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