Lyft stock jumps as adjusted earnings top estimates and ride volumes surge – News

Shares in Lyft Inc. jumped more than 7% in late trading today after the ride-hailing firm beat earnings expectations, posted record ride volumes and announced a major stock buyback plan that boosted investor confidence.

For the first quarter ended March 31, Lyft reported adjusted earnings per share of 24 cents, up from seven cents per share in the first quarter of 2024, on revenue of $1.45 billion, up 14% year-over-year. Earnings per share beat the 19 cents expected by analysts, but revenue fell just short of an expected $1.47 billion.

What impressed investors in the release was Lyft’s strong rise in gross bookings, with the company seeing a 13% year-over-year increase, to $42 billion, and rides up 16%, to 218.4 million. The number of active riders, a user who has taken at least one ride in the quarter, also grew, by 11%, 24.2 million.

Business highlights in the quarter included Lyft launching Lyft Silver, a service designed to help older people with improved accessibility and support. The service features a simplified interface, live phone assistance and options to share trip details, reflecting a push by Lyft to serve a growing demographic that is often underserved in ride-hailing.

Lyft also began piloting an artificial intelligence-powered Earnings Assistant aimed at helping drivers boost their income. The tool provides personalized guidance on where and when to drive, using real-time data to optimize earnings and improve driver efficiency.

“Q1 marked Lyft’s 16th consecutive quarter of double-digit year-on-year gross bookings growth, demonstrating the resilience and momentum of our customer-obsessed strategy,” Chief Executive David Risher said in the company’s earnings release. “In the last week of March, rides reached the highest weekly levels in our history and dual-app drivers reported a 23-percentage-point preference for Lyft. With our expansion into new demographics via Lyft Silver and into Europe with our planned FreeNow acquisition, we’re putting all the pieces in place for sustained, market-leading performance.”

Although coming after the end of the quarter, Lyft announced in April that it had entered an agreement to acquire mobility app FreeNow for $197 million. The acquisition will see Lyft expand its services into Europe for the first time.

Along with its earnings, Lyft also announced an expansion of its stock buyback program to $750 million, with plans to repurchase $500 million worth of shares within the next 12 months, including $200 million in the next three months. The move follows pressure from activist investor Engine Capital LP, which advocated for an accelerated buyback and strategic alternatives to enhance shareholder value.

The mostly strong results, expansion into Europe and the share buyback were complemented by a decent outlook from the company as well. For its second quarter, Lyft expects gross bookings to range between $4.41 billion and $4.57 billion, a 10% to 14% increase year-over-year, with underlying operating income of between $115 million and $130 million.

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