No doubt, it was a strong Income Report.
lift Inc. reported adjusted earnings 11% above analysts’ estimates, and bookings ahead of expectations. and then there was outlook As for profitability: In an early press release the ride-hailing provider said margins are on track to expand by 500 basis points this year. Shares surged 67% in after-hours trading, a move that could have nearly doubled if Lyft’s market value had remained intact.
But the launch was stopped. way off.
Less than an hour after releasing the statement, Lyft Chief Financial Officer Erin Brewer joined a call with analysts and said the company is actually expecting margins to expand by 50 basis points — not 500 — When asked by an analyst, the press release admitted it was wrong. A company spokesperson later described the mistake as a “clerical error” and said the figure would be corrected in the filing. It was unclear when the amendment would be filed, but shares began giving up gains almost immediately. As of 8 p.m. New York time, they were largely unchanged, raising the possibility of market complaints.
Dan Ives, an analyst at Wedbush Securities, said it was a “black-eye moment” for Lyft, a “debacle of epic proportions.” He said by email that he had “never seen one.” Mistake That’s what happened in my almost 25 years on the road.”

The mistake weighed heavily on profit and booking projections, signaling that a years-long effort to boost ridership and challenge Uber Technologies Inc. may be bearing fruit.
In fact, both Lyft and Uber reported strong earnings this quarter, suggesting continued growth in overall rider demand following a nationwide decline during the pandemic. Both have spent heavily to recruit and retain enough drivers to meet the surge in orders. Lyft Chief Executive Officer David Risher, who took over less than a year ago, has focused operations on customer satisfaction and a return to basics in an effort to close the gap with Uber. . Lyft has spent millions of dollars to lure drivers but is having trouble growing its rider base.
“Lyft clearly did one thing right – it corrected the error quickly and decisively,” said Brad Foster, a partner specializing in securities litigation at the corporate law firm Haynes Boone. “The reality is that people make mistakes, and mistakes are not securities fraud.”

gross booking

Lyft said gross bookings in the fourth quarter rose 17% from a year earlier to $3.72 billion, beating estimates of $3.67 billion. Revenue was $1.22 billion, up 4% from a year earlier and in line with estimates. And it forecast adjusted revenue of up to $55 million in the first three months of the year, beating analysts’ estimate of $49.5 million.
Lyft said the number of active riders on its platform rose 10% to 22.4 million in the fourth quarter from a year earlier. Last year, Lyft had more than 40 million riders, the highest annual ridership in its history.
“We enter 2024 with tremendous momentum and a clear focus on operational excellence,” CFO Brewer said, adding the company is poised to “drive our first full year of meaningful margin expansion and positive free cash flow.” .

But Lyft still lags behind Uber. The company has held about 30% of the U.S. rideshare market since the second quarter of 2022, compared with 70% for Uber, according to market research firm YepitData. Last week, Uber reported its full-year profit as a public company and said trips grew 24% in the quarter to 2.6 billion.
Stabilizing its market share is an important first step for Lyft to build investor confidence “in the long-term story,” analysts at Jefferies Capital Management LLC wrote ahead of the release of the company’s results.
Lyft said adjusted earnings before interest, taxes, depreciation and amortization were $66.6 million in the fourth quarter, more than the $56 million expected by analysts. It reported a net loss of $26.3 million.

Lyft is attempting to recruit more drivers and riders to its platform. One project that has gained popularity is the Women+Connect program, which matches women and non-binary drivers and riders. Lyft said that since the initiative launched in September, 67% of eligible drivers have opted in and the feature is turned on 99% of the time.
The company launched in-app video ads in the fourth quarter, and its media revenue in that period exceeded the level achieved in 2022, it said, without specifying the exact amount.
And, like many sectors of the American economy, Lyft also saw a Taylor Swift boom. Lyft said high-attended stadium events like Swift and Beyoncé’s concerts, the US Open and soccer games helped increase ridership by 35%.
As part of efforts to retain drivers and promote pay transparency, Lyft said earlier this month that drivers earn at least 70% of the amount paid by riders each week, excluding out-of-pocket fees. do.
But activists say it doesn’t go far enough. Drivers for Uber and Lyft are preparing to strike on Valentine’s Day on Wednesday to claim low pay and poor treatment by the app companies, according to a coalition representing drivers.
Both Uber and Lyft drivers are considered independent contractors rather than employees, which has drawn criticism from states like New York, Massachusetts and California. Last November, the two companies agreed to pay a total of $328 million to New York drivers to prevent further litigation over whether drivers should be classified as employees with traditional legal protections.