Technology

Lyft warns of growth weakness – stock plunges after hours

Lyft anticipates slower growth due to a price war with Uber and the end of the Delta partnership, but remains profitable.

Eulerpool News Feb 13, 2025, 1:47 PM

Lyft disappointed investors with a cautious forecast for the first quarter, causing the stock to plummet 9.7 percent to $13 in after-hours trading. While the ride-sharing company was able to record a revenue increase, the ongoing price war with Uber is weighing on business prospects.

For the current quarter, Lyft expects gross bookings between $4.05 billion and $4.20 billion, which corresponds to a growth of 10 to 14 percent. Analysts had expected $4.24 billion. CFO Erin Brewer stated that lower fares since the fourth quarter and a seasonally driven decline in rides after the holidays dampen growth. If the price level decreases sustainably, it could burden gross bookings by single-digit percentage points.

In addition, Lyft loses an important growth driver with the end of a long-standing exclusive partnership with Delta Air Lines. Delta recently signed a new deal with Uber, which is expected to reduce Lyft's gross bookings by 1 to 2 percent from the second quarter.

Despite the dampened forecast, the company reported a revenue jump to $1.55 billion in the fourth quarter, a 27 percent increase compared to the previous year. Net profit was $61.7 million, after a loss of $26.3 million in the same period last year. The number of active users rose by 10 percent to 24.7 million, while gross bookings increased by 15 percent to $4.3 billion.

Lyft also plans to launch around 1,000 Mobileye-supported robotaxis in Dallas in 2026, financed by the Japanese Marubeni Group. The company is thus following the example of Uber, whose robotaxi plans have recently caused skepticism in the markets.

Additionally, Lyft announced a $500 million stock buyback program but left a specific timeline open.

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