Ride sharing service Lyft (NASDAQ: LYFT) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 13.5% year on year to $1.45 billion. Its non-GAAP profit of $0.11 per share was 46.7% below analysts’ consensus estimates.
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Lyft (LYFT) Q1 CY2025 Highlights:
- Revenue: $1.45 billion vs analyst estimates of $1.47 billion (13.5% year-on-year growth, 1.3% miss)
- Adjusted EBITDA: $106.5 million vs analyst estimates of $92.39 million (7.3% margin, 15.3% beat)
- EBITDA guidance for Q2 CY2025 is $122.5 million at the midpoint, in line with analyst expectations
- Operating Margin: -2%, up from -4.9% in the same quarter last year
- Active Riders: 24.2 million, up 2.3 million year on year
- Market Capitalization: $6.57 billion
StockStory’s Take
Lyft’s first quarter results reflected management’s ongoing focus on expanding its rider base, including both new demographic segments and geographic markets. CEO David Risher pointed to the successful launch of products like Lyft Silver and the company’s entrance into Europe through the FREENOW acquisition as key factors supporting active rider growth. On the call, management highlighted that the commute segment now represents a significant share of rides, underscoring a shift in use cases. CFO Erin Brewer referenced operational discipline in cost management and continued product innovation, such as Wait & Save and Price Lock, as contributors to the company’s operating margin improvement from last year.
Looking ahead, Lyft’s outlook is shaped by its ability to integrate international operations, scale new products, and execute on partnerships in autonomous vehicles (AVs). Management emphasized that the FREENOW acquisition will double Lyft’s addressable market, although CEO David Risher acknowledged the need for careful integration. The company is also positioning itself to benefit from the expansion of fleet management and AV supply, with Risher noting, “AVs are an absolutely extraordinary opportunity for us,” while cautioning that large-scale adoption remains a longer-term prospect. Brewer added that Lyft’s insurance and risk programs are expected to support safe platform growth, but acknowledged that macroeconomic factors and evolving competitive dynamics will continue to influence near-term performance.
Key Insights from Management’s Remarks
Management attributed first quarter trends to product diversification, operational focus, and early progress in international and AV initiatives, while noting that competitive pricing and insurance costs remained ongoing challenges.
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Product portfolio expansion: Lyft’s management highlighted the growing impact of products like Wait & Save and Price Lock, with Price Lock membership retention rising to approximately 75%. These offerings are designed to address rider preferences for price predictability and affordability, particularly in the commute segment, which now accounts for about a third of all rides.
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International and demographic growth: The company’s rider base expanded through the launch of Lyft Silver and significant progress in Canada, where rider activity nearly doubled over the past year. The FREENOW acquisition, pending closing in the second half of the year, is expected to provide access to nine new European countries and strengthen Lyft’s presence in premium taxi markets.
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Autonomous vehicle partnerships: Management underscored partnerships with May Mobility and Mobileye as steps toward integrating AVs into Lyft’s network. Initial pilots, such as the upcoming Atlanta launch, are intended to generate operational insights. However, CEO David Risher emphasized that the pace and economics of AV adoption remain uncertain due to insurance, utilization rates, and supply constraints.
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Advertising and media platform development: Lyft Media is tracking toward a $100 million annualized revenue run rate, supported by new ad formats and “sponsored rides” experiments. Management sees opportunities to attract both brand and performance advertisers as the platform’s scale and engagement improve.
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Pricing and insurance dynamics: The average ride price was modestly higher year-over-year but declined compared to the previous quarter. Management cited increased competition and broader market dynamics as factors, while noting that improvements in risk management and insurance partnerships are ongoing but have not yet fully translated into pricing stability.
Drivers of Future Performance
Lyft’s forward outlook is anchored by international expansion, deeper product adoption, and the execution of partnerships in AV technology and advertising.
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FREENOW integration and international focus: Management expects the FREENOW acquisition to be a primary catalyst for growth, effectively doubling Lyft’s total addressable market. Early integration efforts will focus on operational alignment and leveraging FREENOW’s fleet management expertise in European premium taxi markets, though management stressed that the deal must first close and that further expansion will be considered only after initial integration.
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AV partnerships and supply diversification: Lyft aims to broaden its supply base through partnerships with both AV technology providers and traditional fleet operators. Management believes these partnerships will diversify service offerings and enhance platform reliability, but cautioned that the impact on margins and pricing from large-scale AV deployments is difficult to predict given current market constraints and insurance complexities.
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Media and monetization initiatives: The development of Lyft Media and continued innovation in ad formats are expected to contribute incremental revenue. Management stated that successful advertiser adoption—particularly for location-based and “sponsored ride” campaigns—will be a key determinant of media platform growth, while investments in marketing and technology to support these initiatives may pressure near-term margins.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will monitor (1) the closing and early integration of the FREENOW acquisition, (2) the performance of new product offerings like Price Lock and Lyft Silver in driving rider engagement and retention, and (3) operational milestones in AV partnerships, including pilot launches and fleet management scalability. The continued ramp of Lyft Media and expansion into new geographic markets will serve as additional indicators of strategic execution.
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