Lyft Shares Slide After Weak Q1 Profit Forecast and Surprise 2025 Operating Loss

Lyft shares fell sharply in after-hours trading after the ride-hailing company forecast first-quarter adjusted core profit below Wall Street expectations, citing severe U.S. winter weather, seasonal cost pressures, and a surprise operating loss outlook for 2025. The disappointing guidance overshadowed signs of operational progress and a newly announced $1 billion share repurchase program.

The weaker outlook reflects disruptions caused by Winter Storm Fern, which significantly impacted travel demand across large parts of the United States, especially the East Coast. Lyft also pointed to seasonal factors that typically weigh on first-quarter performance, including fewer rider trips and slower adoption of pricing improvements early in the year. While California implemented regulatory changes on January 1 to lower rideshare insurance costs statewide, Lyft’s leadership expects the financial benefits to materialize gradually rather than immediately.

For the first quarter, Lyft projected adjusted core profit in the range of $120 million to $140 million, falling short of analyst estimates near $139 million. The company also reported an operating loss of $188.4 million for 2025, a stark contrast to expectations for a modest profit. This guidance raised concerns about the pace of Lyft’s recovery, particularly as competitors continue to post faster earnings growth.

Despite the near-term setback, Lyft’s underlying business showed strength in recent quarters. The company delivered its most profitable fourth quarter on record, supported by higher rider engagement and an increased mix of premium and higher-value ride options. Fourth-quarter revenue reached $1.59 billion, even after absorbing a sizable impact from legal, tax, and regulatory settlements.

Lyft generated $1.12 billion in free cash flow in 2025, exceeding analyst forecasts, and posted adjusted core earnings that beat expectations. Growth was fueled by expansion into Europe, larger and premium vehicle offerings, and strategic partnerships. Notably, partnerships accounted for roughly a quarter of all rides in the fourth quarter, with strong momentum from Lyft’s collaboration with DoorDash.

While short-term pressures remain, Lyft continues to invest in partnerships, geographic expansion, and operational efficiency as it works to strengthen its long-term growth outlook.