$1 Billion Buyback Can't Hide Slump: Lyft(LYFT.US)Q4 Revenue Misses Expectations, Weak Q1 Guidance, Market Votes with Its Feet on Autonomous Driving Vision

Lyft Inc (LYFT.US) released its Q4 and full-year 2025 financial results on February 10, 2026, showcasing a highly dramatic financial profile. Despite recording a record $2.76 billion in net profit for the quarter, this massive figure primarily stemmed from a $2.9 billion tax asset valuation reserve release rather than pure operational growth. On the core business front, Lyft’s Q4 revenue was $1.59 billion, up 2.6% year-over-year but falling short of analysts’ expectations of $1.76 billion. Due to the revenue miss and weak guidance for Q1 2026, the company’s stock plunged about 15% in after-hours trading.

In terms of operational data, Lyft demonstrated strong market penetration in 2025. Active riders in Q4 increased by 18% year-over-year to a record 29.2 million; total bookings for the year reached $18.5 billion, up 15%. Despite the surge in active users, revenue was directly impacted by $168 million in legal and regulatory reserve expenses. Additionally, the company achieved $1.12 billion in free cash flow in 2025, providing sufficient confidence for its board to approve a new $1 billion share repurchase plan, signaling management’s confidence in the company’s long-term value.

Looking ahead to 2026, Lyft CEO David Risher described the year as a “transformation year,” focusing on deep deployment of autonomous vehicle (AV) technology. The company plans to build a “hybrid network” of human drivers and autonomous vehicles in partnership with companies like Waymo, aiming to reduce per-mile costs by approximately 20% by 2030. However, in the short term, the company faces significant challenges, including disruptions from winter storms in the Eastern U.S. and increased insurance costs due to California driver-related legislation. These pressures led the company to project an adjusted EBITDA guidance of only $120 million to $140 million for Q1 2026, slightly below market expectations.

Lyft’s stock closed Tuesday at $16.85, and as of press time, it declined over 17% in after-hours trading. Notably, the stock has fallen 13% year-to-date as of Tuesday’s close. Despite the short-term pressure on the stock price, Lyft executives remain optimistic about future growth.

CEO David Risher stated in a release, “2025 has been an incredible year in Lyft’s comeback journey.” He added, “Looking ahead, we are entering Lyft’s transformation phase — 2026 will be the year of autonomous vehicles (AV), with deployments in the U.S. and abroad.” He referred to collaborations with Waymo in Nashville and plans with other companies in the UK for autonomous vehicle projects.

Much larger competitor Uber Technologies (UBER.US) also reported mixed results last week, indicating that efforts to grow beyond core U.S. ride-hailing operations have yet to deliver the profits Wall Street expects. For some skeptics, the active expansion of the Waymo network continues to introduce uncertainty for Uber and Lyft, as partnerships with autonomous taxi companies will take years to develop and become profitable.

Lyft’s performance may also disappoint some investors who have been looking for signs that lower insurance costs in California will translate into lower prices and increased demand. The company added on Tuesday that “broad consumer adoption will take time to materialize, and we now expect this to occur mainly in the second half of the year.”

CFO Aileen Bruller stated that the company’s “rigorous operational excellence” lays the foundation for its “further development,” and that the company is “on track” with its long-term financial goals.

This modest guidance masks a healthier booking performance during the holiday season.

Lyft’s total bookings in Q4 grew 19% to $5.1 billion, surpassing analysts’ expectations of $5.06 billion. This was the largest increase since early 2024. It also marked Lyft’s first full quarter after including the European ride-hailing app Freenow, acquired last year.

During this period, Lyft’s promotion of its Lyft Silver product nearly doubled its senior rider base. Lyft Silver is a simplified version of its app aimed at older users. According to Lyft, the product has now served hundreds of thousands of trips. The company is also launching a new service allowing teenagers to ride without adult supervision.

Furthermore, Lyft is deepening its partnership strategies to attract more customers. In November, the company began allowing United Airlines (UAL.US) passengers to earn mileage points by riding Lyft. Lyft also announced plans to introduce higher-value ride options such as black car and chauffeur services through its recent acquisition of TBR Global Chauffeuring. The company stated that it expects total bookings to continue growing faster than ride volume in the first half of the year.