Lyft Inc., traded on NASDAQ under the ticker LYFT, disclosed its financial performance for the fourth quarter, revealing a nuanced picture marked by operational growth, regulatory impacts, and strategic future initiatives. In the wake of the earnings announcement, shares of Lyft declined notably during post-market trading, reflecting investor reactions to the reported figures and outlook.
The company’s gross bookings for the quarter reached $5.1 billion, representing a year-over-year increase of 19%. This metric demonstrates Lyft's continuing traction in the ride-hailing marketplace, indicating expanded transaction volumes despite a competitive environment.
Revenue for the quarter stood at $1.6 billion, an increase of 3% compared to the same period in the previous year. However, this figure incorporated a negative impact of approximately $168 million stemming from certain legal, tax, and regulatory reserve changes and settlements. Factoring out this adjustment, Lyft's underlying revenue approaches $1.8 billion, suggesting stronger operational sales than the headline number conveys.
Net income registered a substantial increase for the period, amounting to $2.8 billion. This was significantly influenced by the release of a valuation allowance, a non-operational accounting benefit that elevated earnings compared to a net income of $61.7 million in the corresponding quarter of the prior year. When measured relative to gross bookings, net income represented 54.3% of bookings, a marked improvement over the 1.4% seen in the previous year’s quarter.
Adjusted EBITDA, a key indicator of operational profitability excluding certain expenses, rose 37% year-over-year to $154.1 million. Correspondingly, the adjusted EBITDA margin, expressed as a percentage of gross bookings, increased to 3.0% from 2.6% in the prior-year period, illustrating enhanced efficiency in generating earnings from ride volumes.
Complementing these financial results, Lyft announced it has increased its share repurchase authorization by an additional $1 billion. This move reflects management's confidence in the company’s valuation and capital allocation priorities.
In discussing Lyft’s trajectory, CEO David Risher characterized 2025 as a pivotal year in the company’s evolution. He emphasized a strategic transformation from a ridesharing-focused platform, traditionally associated with local and casual use cases, toward a broader, global hybrid transportation service encompassing diverse mobility options.
Looking forward, the company forecasted that 2026 will be defined by autonomous vehicle (AV) deployments, with plans to launch such services both within the United States and internationally. This signals Lyft’s intent to engage aggressively with next-generation transport technologies, aligning with industry trends toward automation and enhanced customer experiences.
For the upcoming first quarter, Lyft projects gross bookings to range between approximately $4.86 billion and $5 billion, representing growth of roughly 17% to 20% year-over-year. Adjusted EBITDA is anticipated in the range of $120 million to $140 million, suggesting efforts to maintain profitability amid expansion efforts.
Despite these optimistic operational outlines, Lyft's stock experienced a notable sell-off, declining by over 14% to a price near $14.43 in extended trading hours. This reaction may reflect investor concerns regarding the revenue shortfall relative to analyst consensus or apprehensions about legal and regulatory impacts and the timing of autonomous vehicle deployments.
In summary, Lyft’s fourth quarter results reveal a complex interplay of revenue growth tempered by regulatory costs, impressive gains in net income due to accounting adjustments, and a strategic pivot toward autonomous transportation offerings slated for significant deployments in 2026. The company’s increase in share repurchases underscores an effort to reinforce shareholder value. However, market response indicates cautious sentiment toward near-term financial clarity and execution risks associated with emerging mobility technologies.