Lyft’s fourth quarter was met with a strong negative market reaction, as the company’s revenue growth fell short of Wall Street’s expectations despite non-GAAP profit exceeding analyst forecasts. Management attributed the quarter’s underperformance to intensified promotional activity in the latter part of the quarter and the temporary impact of regulatory and legal reserve adjustments. CEO David Risher pointed to record active rider growth and the resilience of the core platform, emphasizing, "We are a very disciplined operator... focused on our top line and bottom line."
Is now the time to buy LYFT? Find out in our full research report (it’s free for active Edge members).
Lyft (LYFT) Q4 CY2025 Highlights:
- Revenue: $1.59 billion vs analyst estimates of $1.75 billion (2.7% year-on-year growth, 9.1% miss)
- Adjusted EPS: $0.37 vs analyst estimates of $0.32 (16% beat)
- Adjusted EBITDA: $154.1 million vs analyst estimates of $147.5 million (9.7% margin, 4.5% beat)
- EBITDA guidance for Q1 CY2026 is $130 million at the midpoint, below analyst estimates of $139.9 million
- Operating Margin: -11.6%, down from 1.8% in the same quarter last year
- Active Riders: 29.2 million, up 4.5 million year on year
- Market Capitalization: $5.28 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Lyft’s Q4 Earnings Call
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Eric Sheridan (Goldman Sachs): Asked what product changes drove rider and volume growth. CEO David Risher cited "customer obsession," expanded partnerships, and operational excellence as key drivers behind record rider gains.
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Doug Anmuth (JPMorgan): Inquired about Q1 margin dynamics and FlexDrive cost savings. CFO Erin Brewer explained that nonrecurring items benefited last year’s Q1, and detailed how FlexDrive and hybrid AV networks could yield 20% or more in long-run cost efficiencies.
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John Blackledge (TD Cowen): Pressed on rides growth and promotional activity. Risher described the company as "a very disciplined operator" focused on balancing top-line and bottom-line results, noting promotions were temporary and did not weaken core demand.
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Ben Black (Deutsche Bank): Asked about the impact of insurance reforms in California and rider loyalty. Brewer outlined gradual pass-through of insurance savings and a lag in demand response, while Risher discussed growth in loyalty programs and new rider retention strategies.
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Michael Morton (MoffettNathanson): Questioned the hybrid AV model and recent revenue margin shifts. Risher defended a deep, selective AV partnership strategy, and Brewer clarified the revenue margin was affected by a one-time regulatory adjustment.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace at which insurance cost savings in California translate to increased ride demand, (2) progress in scaling high-value ride modes and partnership-driven growth, and (3) early indicators of margin expansion—particularly as Lyft invests in hybrid AV networks and FlexDrive facility upgrades. Execution in integrating FreeNow and expanding loyalty initiatives will also be important signposts.
Lyft currently trades at $13.29, down from $16.85 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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