Lyft boosts buyback plan amid strong earnings report
- Lyft reported better-than-expected earnings, with a small net income for the first quarter of 2025.
- The company raised its share buyback plan due to positive growth in bookings and rides.
- These developments indicate strong consumer demand and strategic company initiatives in the face of economic uncertainty.
In the United States, Lyft, a prominent ride-sharing company, announced its first quarter earnings for 2025 on May 8. The company revealed significant financial improvements, including a net income of $2.57 million, translating to 1 cent per share. This marked a notable recovery from the previous year's net loss of $31.54 million. Lyft's revenue for the quarter was $1.45 billion, which, while showing a 14% growth year over year, fell slightly short of the $1.47 billion expectations from LSEG. Gross bookings rose 13% to reach $4.16 billion, surpassing a $4.15 billion estimate from StreetAccount. Rides surged by 16% to a total of 218.4 million, exceeding FactSet's estimate of 215.1 million. Active riders increased too, growing 11% to 24.2 million. This financial success contributed to the company's decision to boost its share buyback plan from $500 million to $750 million. This strategic move is seen as a response to positive earnings and a confidence boost in the ride-sharing market that has faced uncertainty due to economic factors. During an interview, Lyft's CEO David Risher expressed optimism about consumer demand, stating that the company does not perceive any issues concerning consumer behavior amidst economic fluctuations. Lyft's ability to maintain double-digit growth in gross bookings for the 16th consecutive quarter reinforces its strong market position. Furthermore, the company's expansion plans, including diversifying into new demographics and acquiring the German taxi app FreeNow, are expected to fuel future growth. Following the earnings report and stock buyback news, activist investor Engine Capital announced it would cease its campaign and withdraw board nominations, indicating a positive reception to management's initiatives. Amid this backdrop, Lyft's stock saw a significant increase, as shares jumped 20% following the enhanced buyback announcement and improved earnings results, showcasing market confidence in the company’s strategic direction.