Key facts
- Lyft achieved record bookings in the second quarter, exceeding revenue expectations.
- Higher promotional spending to attract and retain customers resulted in a net income miss.
- In the fourth quarter, revenue of $1.59 billion fell short of $1.75 billion estimates.
- Fourth-quarter active riders grew 18% to 29.2 million, and total rides increased 11% to 243.5 million.
- A significant net income figure in the fourth quarter was primarily due to a one-time tax valuation allowance release.
- Lyft provided first-quarter 2026 adjusted EBITDA guidance below analyst expectations.
Lyft reported record bookings for the second quarter, surpassing revenue expectations due to increased rider activity. However, the company's net income fell short of analyst targets as it ramped up spending on promotions and loyalty programs to attract and retain customers.
In the fourth quarter, Lyft's revenue of approximately $1.59 billion to $1.6 billion did not meet the $1.75 billion anticipated by analysts. Despite this revenue shortfall, gross bookings grew 19% to $5.1 billion. Active riders increased 18% year over year to 29.2 million, while total rides rose 11% to 243.5 million, though both figures were slightly below projections.
The company reported a significant net income of $2.8 billion for the fourth quarter, largely attributed to a one-time tax valuation allowance release rather than recurring operating gains. Adjusted earnings per share came in at $0.37, exceeding estimates, and adjusted EBITDA of $154.1 million also surpassed expectations. However, investors focused on the revenue miss and a softer-than-expected outlook.
Lyft's operating margin was negative 11.6% in the fourth quarter, a decrease from the previous year. Management cited heightened promotional activity and competitive pricing as factors weighing on margins. The company also noted expansion into Europe through the acquisition of FreeNow and strengthened partnerships with DoorDash and United Airlines.
Looking ahead, Lyft guided for first-quarter 2026 adjusted EBITDA between $120 million and $140 million, a midpoint below the $139.9 million analysts had projected, contributing to a negative market reaction.