The $1 billion buyback is hard to hide the decline: Lyft (LYFT.US) Q4 revenue fell short of expectations, Q1 guidance was weak, and the autonomous driving vision was voted on by the market

The Zhitong Finance App learned that Lyft Inc (LYFT.US) released financial results for the fourth quarter and full year of 2025 on February 10, 2026, showing a very dramatic financial picture. Although the company recorded a record net profit of $2.76 billion during the quarter, this huge figure was mainly due to the release of a tax asset assessment reserve of up to $2.9 billion rather than pure operating growth. At the core business level, Lyft's fourth-quarter revenue of $1.59 billion was up 2.6% year over year but fell short of analysts' expectations of $176 million. As revenue fell short of expectations and weak performance guidance for the first quarter of 2026, the company's stock price plummeted by about 15% during after-hours trading.

In terms of operational data, Lyft showed strong market penetration in 2025. The number of active passengers increased 18% year over year to a record 29.2 million in the fourth quarter; total bookings for the whole year reached US$18.5 billion, up 15% year over year. Despite a surge in activity, revenue was directly hampered by $168 million in legal and regulatory reserve expenses. Furthermore, the company achieved free cash flow of $1.12 billion in 2025, which provided sufficient motivation for its board to approve a new $1 billion share repurchase plan, aimed at conveying management's confidence in the company's long-term value to the market.

Looking ahead to 2026, Lyft CEO David Risher positions it as a “year of transformation,” focusing on the deep deployment of autonomous driving (AV) technology. The company plans to work with partners such as Waymo to build a “hybrid network” of human drivers and autonomous vehicles, with the goal of reducing the cost per mile by about 20% by 2030. However, in the short term, the company still faces serious challenges, including the disruption of orders due to the eastern US winter storm and a surge in insurance costs due to California driver-related laws. These pressures left the company's adjusted EBITDA guidance for Q1 2026 at only $120 million to $140 million, slightly lower than market expectations.

Lyft stock closed at $16.85 on Tuesday. As of press time, after-hours trading was down more than 17%. It is worth noting that by the close of trading on Tuesday, the stock had a cumulative decline of 13% this year. Despite short-term stock pressure, Lyft executives remain optimistic about future developments.

“2025 was an incredible year in Lyft's recovery journey,” the company's CEO David Richer said in a statement. He added, “Looking ahead, we are entering Lyft's transformation phase — 2026 will be the year of autonomous vehicles (AV), which will be deployed in the US and overseas.” He was referring to autonomous vehicle partnerships planned with Waymo in Nashville and other places with other companies in the UK.

Uber Technologies (UBER.US), a competitor much larger than Lyft's, released a similarly mixed performance report last week, which shows that online car-hailing companies' efforts to achieve growth outside of their core business in the US have yet to bring the profits Wall Street expects. For some bearers, the positive expansion of the Waymo network continues to present uncertainty for Uber and Lyft, as it will take years for the two companies to grow and become profitable with autonomous taxi companies.

Lyft's performance may also disappoint some investors, who are always looking for clues to determine whether lower California insurance premiums will translate into lower prices, thereby driving demand growth. The company added on Tuesday that “widespread consumer adoption will take time to materialize, and we now expect this to be achieved mainly in the second half of the year.”

The company's chief financial officer, Erin Brewer, said that the company's “rigorous operational excellence” has laid the foundation for its “further development” and that the company is “on track” to achieve its long-term financial goals.

This lackluster guideline overshadows healthier booking performance during the holidays.

Lyft's total bookings for the fourth quarter rose 19% to $5.1 billion, exceeding analysts' expectations of $50.6 billion. This is the biggest increase since early 2024. This is also Lyft's first full quarter after counting the European ride-hailing app Freenow business acquired last year.

During this time, Lyft's senior passenger base almost doubled with the promotion of Lyft Silver products. Lyft Silver is a simplified version of its app aimed at older users. According to Lyft, the product now serves hundreds of thousands of trips. The company is also launching a new service that allows young people to ride unaccompanied by an adult.

The company is also further deepening its cooperation strategy to attract more customers. In November, the company began allowing United Airlines (UAL.US) passengers to earn mileage points by flying Lyft. Lyft also said that it will launch higher-value travel types such as black cars and chauffeured services through the recently acquired TBR Global Chauffeuring. The company said in a statement that it is expected that the increase in total bookings in the first half of this year will continue to exceed the increase in the number of trips.