Shares of Lyft (NASDAQ:LYFT) sank more than 17% in premarket trading on Wednesday after the ride-hailing company posted fourth-quarter results that fell short of revenue expectations.
Quarterly revenue totaled $1.6 billion, below the $1.76 billion consensus forecast. Lyft noted that results were impacted by a $168 million headwind tied to legal, tax, and regulatory reserve adjustments and settlements. Excluding that charge, revenue would have been approximately $1.8 billion. The company also unveiled a new $1 billion share repurchase program, following its first-ever buyback launched in 2025.
Net income surged to $2.8 billion from $61.7 million a year earlier, largely due to a one-time benefit from the release of a valuation allowance rather than improvements in core operations.
On an adjusted basis, EBITDA climbed 37% year over year to $154.1 million. Adjusted EBITDA margin edged up to 3.0% of gross bookings, compared with 2.6% in the same quarter last year.
Fourth-quarter gross bookings reached $5.07 billion, broadly in line with the $5.06 billion expected by analysts. Active riders totaled 29.2 million, matching forecasts. However, total rides came in at 244 million, below the 256 million anticipated, as the company focused on attracting higher-quality riders.
For the full year, Lyft reported gross bookings of $18.5 billion, up 15%, and revenue of $6.3 billion, an increase of 9%. Adjusted EBITDA rose to $528.8 million from $382.4 million in 2024, while free cash flow improved to $1.12 billion. The company said it generated more than $1.1 billion in cash flow during 2025 — a record level.
Bank of America analyst Justin Post said Lyft’s “mixed quarter underscores competitive environment.” He added that the negative stock reaction was “likely on 4Q rides miss, lower 1Q EBITDA outlook, and lack of insurance savings benefit in 1Q.”
Morgan Stanley analyst Brian Nowak said the slowdown in rides suggests Lyft’s U.S. business is expanding in the high-single-digit range, while Uber’s domestic segment continues to grow at a “mid-to-high teens” pace despite being “2.5X faster.”
“This speaks to LYFT’s challenge to drive durable growth in an increasingly competitive U.S. rideshare market,” he said.
Looking ahead, Lyft forecast first-quarter 2026 gross bookings between $4.86 billion and $5 billion, implying growth of 17% to 20%. Adjusted EBITDA is expected in the range of $120 million to $140 million, with margins projected to remain largely flat year over year.