Earnings call transcript: Lyft Q1 2025 sees strong aftermarket stock rise

Lyft’s Q1 2025 earnings report revealed a mixed financial performance, with the company missing both earnings per share (EPS) and revenue forecasts. Despite this, the stock rose 7.69% in aftermarket trading, closing at $14. According to InvestingPro data, Lyft has shown strong momentum with a 4.33% gain in the past week, though the stock remains significantly below its 52-week high of $19.07. Investors appeared to respond positively to Lyft’s strategic initiatives and future growth potential, overshadowing the immediate financial misses.

Key Takeaways

• Lyft reported its strongest Q1 ever, with records in gross bookings and free cash flow.
• The company missed EPS expectations by $0.18 and revenue by $20 million.
• Stock surged 7.69% in aftermarket trading, indicating positive investor sentiment.
• Lyft expanded its driver base and entered new markets, including Europe and Canada.
• The company’s share repurchase program increased to $750 million.

Company Performance

Lyft demonstrated robust performance in Q1 2025, marking its strongest first quarter to date. The company achieved its 16th consecutive quarter of double-digit year-on-year growth in gross bookings. Lyft’s strategic focus on expanding its driver base and entering new markets, such as Europe and Canada, contributed to its growth momentum. Despite missing financial forecasts, the company’s operational achievements and strategic initiatives were well-received by the market.

Financial Highlights

• Revenue: $1.45 billion, missing the forecast by $20 million.
• Earnings per share: $0.01, falling short of the $0.19 forecast.
• Gross bookings and free cash flow reached record levels.
• Nearly $1 billion in cash generated over the past 12 months.

Earnings vs. Forecast

Lyft reported an EPS of $0.01, missing the forecasted $0.19 by $0.18. Revenue came in at $1.45 billion, $20 million below the expected $1.47 billion. This marks a deviation from the company’s historical trend of meeting or exceeding expectations, raising questions about future performance.

Market Reaction

Despite missing earnings and revenue forecasts, Lyft’s stock increased by 7.69% in aftermarket trading. This suggests that investors might be more focused on the company’s strategic initiatives and potential for future growth. The stock’s rise also indicates confidence in Lyft’s ability to navigate challenges and capitalize on new market opportunities.

Outlook & Guidance

Looking ahead, Lyft anticipates continued strong performance, particularly in the commute segment. The company is focusing on international expansion through its acquisition of Free Now and investing in autonomous vehicle technology. Forward guidance includes projected EPS and revenue growth in subsequent quarters, with InvestingPro analysts forecasting 13% revenue growth for FY2025. While analyst targets range from $10 to $26 per share, the consensus recommendation remains cautiously optimistic. For deeper insights into Lyft’s growth potential and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

CEO David Recher emphasized, "We’ve never been in a stronger position as we continue to deliver on our mission to serve and connect." He also highlighted the company’s momentum, stating, "We are positioning ourselves for sustained growth." CFO Erinn Brewer added, "Rideshare is a great option across multiple markets," underscoring Lyft’s competitive edge.

Risks and Challenges

• Potential impact from the end of the Delta partnership, affecting rides and bookings.
• Economic downturn resilience remains a concern for investors.
• Intensifying competition in the ride-hailing market could pressure margins.
• Regulatory challenges in new markets like Europe may pose hurdles.
• Continued investment in autonomous vehicle technology carries financial risks.

Q&A

During the earnings call, analysts focused on Lyft’s pricing environment and insurance dynamics. Questions also addressed the company’s autonomous vehicle partnership strategy and its resilience in the face of potential economic downturns. Lyft’s acquisition strategy for Free Now was another area of interest, with analysts probing its implications for international expansion.

Full transcript - LYFT Inc (LYFT) Q1 2025:

Conference Operator: As a reminder, this conference call is being recorded. I would now like to turn the conference over to Arlen Nolfe, VP, FP and A and Investor Relations.

Please go ahead.

Arlen Nolfe, VP, FP and A and Investor Relations, Lyft: Thank you. Welcome to the Lyft earnings call for the first quarter twenty twenty five. On the call today, we have our CEO, David Recher and our CFO, Erinn Brewer. Starting with this call and going forward, our full prepared remarks will be available on the IR website before the call, and we will use this time to answer more of your questions. We’ll make forward looking statements on today’s call relating to our business strategy and performance, partnerships, future financial and operating results, trends in our marketplace and guidance.

These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call. These factors and risks are described in our earnings materials and our recent SEC filings. All of the forward looking statements that we make on today’s call are based on our beliefs as of today, and we disclaim any obligation to update any forward looking statements except as required by law. Additionally, today we are going to discuss customers. For rideshare, there are two customers in every car.

The driver is Lyft’s customer and the rider is the driver’s customer. We care about both. Our discussion today will also include non GAAP financial measures, which are not a substitute for GAAP results. Reconciliations of our historical GAAP to non GAAP results can be found in our earnings materials, which are available on our IR website. And with that, I’ll pass the call to David.

David Recher, CEO, Lyft: Thank you, Orelium. Well, hi everyone and thank you as always for joining. Q1 twenty twenty five was our strongest Q1 ever. We’re innovating for drivers and riders. We’re expanding outside The U.

S. In a meaningful way and our partnership strategy continues to fuel our momentum. Lyft had year on year growth across regions, across modes and across use cases, resulting in a record Q1 for active riders, rides and driver hours. Looking at our financials, we delivered Q1 records in gross bookings, adjusted EBITDA and free cash flow. A note on gross bookings, this was Lyft’s sixteenth consecutive quarter of double digit year on year growth, demonstrating the resilience and momentum of our customer obsessed strategy.

And we approached nearly $1,000,000,000 in cash generation over the last twelve months. That demonstrates our winning formula of growth with discipline. It’s this financial strength that has enabled us to increase our share repurchase program to $750,000,000 while maintaining the ability to invest in our most promising growth initiatives. With our expansion into new demographics by LiftSilver and into Europe with our Free Now acquisition, we are positioning ourselves for sustained growth to build on our incredible momentum. I am so impressed and proud of the work our team has done over the last two years to build a strong foundation fueled by customer obsession and operational excellence.

I am very confident we are well positioned for 2025 and beyond. And now with that, let’s get to your questions.

Conference Operator: Your first question comes from the line of Brad Erickson of RBC Capital Markets. Please go ahead.

Brad Erickson, Analyst, RBC Capital Markets: Hey, thanks for taking my questions. First, just talk about the pricing environment, what are you seeing and maybe just the puts and takes between sort of things within your control versus things out of your control. And then second, just on insurance, I know it’s a little early to talk about this, but maybe any update you can give on how you’re thinking about that adding into the pricing formula through the year? Thanks.

Erinn Brewer, CFO, Lyft: Hi, Brad. It’s Erin. Why don’t we start with pricing? I’ll start there and turn it over to David, and then he can come back, and I’ll chat about insurance. So let me just start with some facts around pricing.

Obviously, we talked about it last quarter about some dynamics in the market, generally resulting in lower prices in The U. S, which we started to see late in the fourth quarter and as of our last earnings call, were persistent at that time. So here we are today. Average prices in Q1 were still lower than average prices in the fourth quarter, although they were up modestly year over year. David?

David Recher, CEO, Lyft: Yeah. I’ll just say to remind everyone on the call that our pricing strategy remains the same. It’s always to be competitive, for sure, and then to be reliable. And, of course, we’ve talked in the past about how we’re trying to sort of get prime time out of the system, introduce features like price lock and so forth to sort of even further increase that reliability. But really no change.

And as Erin has said, you know, modest differences from what we’ve seen in the past, but, but we feel good about where things are.

Erinn Brewer, CFO, Lyft: And then, Brad, back to your second question around insurance. You know, we continue to move forward with our, our programs. Everything that we work on across our risk team here at Lyft. We highlighted a whole bunch of that at Investor Day and and have talked about it since, but it’s just continuing that momentum. We have unique industry leading capabilities.

We are continuously innovating to make our platform safer through technology, products, partnerships. You know, we innovated things like the Smooth Cruiser score, which gives drivers feedback on on how they’re doing and how to provide better rides, we will continue that. We are recognized by our partners, our long standing partners, you know, for all of those advancements. And so we feel we feel really good about our program. You heard us talk about our renewal, our ten one renewal.

As you know, we’ve got a six month cycle. No new updates there. You know, it’s reflected in how you see our our guide in the second quarter, so I don’t have anything specific to to call out there. We continue to make great progress. We’ve got a great team, and we’ve got great long term partnerships.

Brad Erickson, Analyst, RBC Capital Markets: Thanks.

Erinn Brewer, CFO, Lyft: I think we’ll take the next question.

Conference Operator: Your next line comes from the line of Ken Goralski of Wells Fargo. Please go ahead.

Ken Goralski, Analyst, Wells Fargo: Hi, thank you for the question. Really appreciate it. I’m curious, just a couple of things. One is the other guys, I think as you refer to them, has talked a lot about affordability initiatives in The U. S.

I’m just curious as just as you think about the go forward and the many innovations you’ve rolled out on the product side, how you’re thinking about just the go forward there and your positioning in the market? And kind of from a pricing standpoint, how you what the pricing outlook is for the remainder of the year? And and the second, if I may, please. You made an announcement to enter Europe. Could you just talk to us a little bit more and you’re expanding in Canada.

Could you just talk a little bit about your broader international ambitions? Should we think of this as the extent of it for the next, you know, a select period of time or there’s or or could we see more? Thank you.

David Recher, CEO, Lyft: Sure. Yeah. Good questions, both. So on pricing, I don’t have much more

Analyst: to say

David Recher, CEO, Lyft: than what than what Aaron said. But maybe zooming out just a little bit. I mean, look, you in a marketplace like this, you know, you all let me actually step way, way back. You always wanna be able to provide the best price you possibly can. I mean, let’s be clear.

That’s always important. But I feel, you know, good about where our pricing is, and and I don’t see it being a a major, you know, sort of area of focus or or competition. And really all I mean by that is, you know, like our as you mentioned, innovation is kind of our big thing. Right? And at a certain level, there’s only so much you can do with pricing.

The market, you know, sets up clearing price, you know, millions of times a day, and and we sort of follow the market’s lead on that. As they say, we’re competitive and reliable. So once you sort of have that and you kind of take that a little bit off the table, then it becomes much more interesting to think about things like with Silver or Price Lock or the earnings guarantee for drivers or whatever you can do to really drive preference for for your platform. And I think it’s really because we’ve been so focused on that customer obsession and the operational excellence required to continue to execute on that, that we’ve seen our growth be powered sort of independent of pricing sort of bouncing around a little bit. So, maybe not much, more to say about that.

On international, you’re right to point out that we’ve seen great, great growth in Canada, roughly doubled year on year and now up I think another 50%. In fact, I think literally just today we opened up the funnel for driver onboarding in Quebec, the province of Quebec, just gave us authorization to expand there later this year. So super excited about that. And then looking at that, which obviously gave us a certain amount of confidence that our kind of customer obsessed formula can work outside The United States. We acquired FreeNow and I can talk more about that if you’re interested.

But I don’t think I’m going be able to say much beyond that just now. Obviously that deal hasn’t even closed. It won’t until the second half of the year. So a bit premature to think about further international expansion. I will say more likely than not, the near term focus will be kind of infill in the nine countries where FreeNow is operating rather than thinking about further expansion.

But that’s not a never say never. It’s simply a the focus right now is on making sure the FreeNow acquisition, you know, exceeds its already great potential.

Conference Operator: Next question comes from the line of Eric Sheridan of Goldman Sachs.

Eric Sheridan, Analyst, Goldman Sachs: Maybe I’ll just ask one. You obviously made the announcement with May Mobility and we’re seeing a lot of different announcements in the broader AV landscape. Would love to continue to sort of click down on how your views are evolving in terms of going to market with partners and what do you think that might do in terms of the supply and demand dynamic in these cities where you bring that type of supply into your ecosystem? Yes,

David Recher, CEO, Lyft: sure. I’ll take this one, Eric. Good to hear from you. So yeah, let’s let’s start exactly where you started with May Mobility. So we’re we’re super excited about that partnership.

It’s scheduled and on track to launch this summer in Atlanta, which is which is wonderful. And and I think it’s gonna be very interesting and very instructive for us, of course, because it’ll help us get, you know, feedback on on what happens in markets when we, you know, when we do this. And then next up, of course, is the partnerships that we’ve announced, in Texas, coming next year, And that’ll also involve a financing partner, Marubeni, which sort of maybe allows me to talk a little bit about the whole value chain for just a second and then get back specifically to your question. I feel maybe I’ll just start by saying, again, AVs are an absolute extraordinary opportunity for us. Absolute extraordinary opportunity.

And it’s because it brings, you know, a whole new supply as you’re mentioning and and frankly broadens the portfolio. Right? You now have use cases that maybe people aren’t excited about before on rideshare that now they get very excited about whatever those might look like. And it’s a good product and it’s a safe product and so on and so forth. So super, super excited about how it can expand the market and open us up to new opportunities.

There’s a whole set of activities that has to happen all the way from, you know, the equipment manufacturers have to be on board, the OEMs have to be on board, financing has to be lined up. Again, I’ll mention Mara Beni, our partner who’s in the business of fleet financing and fleet ownership. That ownership piece is quite important. Someone’s gotta own these things, and, it’s someone with a good capital structure and and so on and so on. So that’s where they come in.

Then there’s the whole fleet management piece, which we’ve talked about several times. And, again, since we’re on the topic, I would encourage anyone who hasn’t read about this, the post we published a couple weeks ago on FlexDrive, our subsidiary, that does fleet management. I’d highly recommend you read it because it gives you a strong sense of why fleet management matters so much. I mean anyone can have, you know, a couple of cars, you know, maybe even 50 cars and and and sort of keep them, utilized. But, man, you start talking about thousands of cars and you’re talking about a lot of maintenance, a lot of repair, a lot of uptime, you know, monitoring, a lot of cost control and so on and so forth.

And that’s what FlexDrive provides us. We do that, you know, to the tune of 10 to 20,000 cars every year on a platform already. And we’re super excited about welcoming AVs to that. And then, of course, you have the marketplace piece, that’s supply demand management, ETA estimation, and so on and so forth, and then pricing and all the outbound marketing to generate demand. Okay.

So that’s the whole value chain. Again, we’ve written about this. I recommend you read that paper as well just for education. Then back to the center of your question. I mean, general view is the more supply the better.

Right? And we think it’ll come from a lot of different partners. You know, May is an early one. Mobileye, of course, is another tech provider. They’re the ones that are providing the tech in Texas for us.

You know, there are there are companies that, frankly, we’ve never even heard of yet that’ll be providing this technology over the coming years. And then you have the current market leaders as well. And and our strategy, you know, through all of this is is the same, which is we wanna be the absolute best way for an a b supplier of any type to monetize those assets on the platform, to monetize those assets on the platform. And that’s what we’re setting up for, and we feel very confident in our position.

Conference Operator: Next question comes from the line of Ben Black of Deutsche Bank.

Jeff, Analyst, Deutsche Bank: Hi, thanks. This is Jeff on for Ben. Thanks for taking our questions. Just as a follow-up to that on AVs, kind of looking beyond getting the supply on the platform, what do you think the impact will be to pricing and frequency membership as AV scale longer term? And also, it would be great to hear your thoughts on the Waymo Toyota partnership for personally owned vehicles.

Would be great to get your perspective if this could impact Lyft and, I guess, the transportation market more broadly. Thank you.

David Recher, CEO, Lyft: Yeah. Great questions both. I’m sorry. The second one, I’m very clear on. The first one again, say that one more time, Jeff.

Jeff, Analyst, Deutsche Bank: It just kind of beyond Oh, gross. Yeah. Yeah. Yeah. Frequency membership.

Yeah.

David Recher, CEO, Lyft: Of course. Yeah. Of course. So, I mean, you know, we can give you our views, but I will tell you that probably the the dominant thing to take away on that is a little too early to tell. And and the reason I say that is because if you look at the markets where AVs are operational right now, you know, you see a San Francisco, you see a Phoenix, you see an LA, you see an Austin as an example.

And the dynamics in each of these is slightly different. You know, in some markets, AVs are actually priced as a premium product. In some markets, they’re priced at a little bit of a discount. In most markets, the service levels are actually not as good as traditional rideshare, which, you know, you can understand why that might be that the ODDs are somewhat limited. And even when there’s dense supply, you know, those companies don’t necessarily or truly that company doesn’t necessarily have the same sophistication with supply demand balancing and so forth.

So so it’s very hard to know, you know, over the long term what’s what’s gonna happen. Obviously, the bet that generally people are making is that over time this will increase supply overall and decrease cost to operating a network like this. And that seems like a reasonable assumption for obvious reasons, but that could be quite a long ways away. It really could. For example, insurance, people think a lot about insurance, gosh, AVs are safe, that’s true.

But on the other hand, they’re very expensive to repair, that’s also true. They still do get into accidents because other people cause those accidents sometimes. The utilization rates are very unknown. You know, the profitability of these on a unit basis per car basis will have a lot to do with whether they’re utilized, you know, fourteen hours a day or eighteen hours a day. So, and then sorry.

Back to insurance. I neglected to mention that insurance companies tend to be quite conservative when it comes to pricing insurance, particularly early on. They say they like to have five to seven years of data, which means sort of I’d say their incentive is maybe even to overprice at the beginning so they don’t get caught upside down. So might not be a very satisfying answer, I think that’s kind of the truth. Long term, would expect again that it’ll be very sort of expansionary, and maybe bring prices down.

But I don’t bet on that in the super short term. I think more interesting in the short term is just how differentiated they are from the existing offering and therefore market expanding. On the issue of individual ownership and the particular Waymo Toyota thing I won’t probably mention or talk about too much.

Erinn Brewer, CFO, Lyft: But I

David Recher, CEO, Lyft: think what it does is it validates that there are going be a couple of phases of AV adoption. The first of course is very pilot and trial and that’s obviously where we are now. Over time there will be owners of fleets. Right? And and today, those owners typically are the people who are designing or building the tech, you know, you know, being obviously exhibit a, they, you know, design the tech, they buy the cars from Jaguar, and then they own them themselves.

But over time, you wouldn’t expect that necessarily. You would expect new companies like Marubeni and others and even companies like Lyft at a small scale to actually wanna own the assets and and manage the assets and and so forth. But then I think in the medium and long term, you get to a very different and next level where individuals or maybe very small fleet owners of, you know, small groups of cars, own cars. And we’re already planning for that very, very directly. So this is why I think our Mobileye partnership is so important.

Again Mobileye, they’re the driver assistance technology that’s in 800 different car models right now. So they have very good relationships with OEMs, but it’s level two kind of lane assist and so forth. But they have a very clear strategy and a very clear roadmap. And again, we’re dependent on that roadmap as we roll out in Texas with them to get to level four and level five. The idea there is that that technology won’t just be in bespoke cars, you know, one or two OEM OEMs or even one or two platforms within one or two OEMs, but rather ultimately universally available.

And as I’ve said before, think there’ll come a time, you know, call it the next ten years, probably not much sooner than that, but ten years, where buying a car without an AV will be like buying a car without a radio. You know? It’d be or may actually, I think a better analogy is is buying a stick shift car. I think that’s a better analogy. You could buy a stick shift today.

I happen to have one. They’re awesome. And they’re super fun to drive, but they’re definitely the thing that you drive because you like to, not because you, you know, not it may not be your, you know, best best commuter option, you know, every single day. So so I think it’ll be kinda like that. You know, there will be there will be manual cars just as there are today, but increasingly, AB will be everywhere.

And in that world, you know, this idea of Lyft ready, every car being Lyft ready so that when you buy it, you can put it on the Lyft platform and have it generate, you know, revenue, have it sort of self monetize, you might say, becomes very appealing. So that’s the world we’re already building to. We know it’s a long way away, but we also we have a very long term view on a b. So I think you have to. Again, for all the sort of short term buzz there is and the flurry of press releases and so forth, that’s that’s one thing.

But I think sort of, you have to have your eyes on the long term on this.

Conference Operator: The next question comes from the line of Michael Martin of MoffettNathanson. Please go ahead.

Analyst: Hi. Good evening. Thank you for the question. To the extent you can talk about it, I know it’s just announced, but I wanted to hear your thoughts on the ability to invest behind Free Now And then maybe how you’re thinking about the business mix between taxis and rideshare for FreeNow going forward versus where that mix shift stands today? And then just quickly, David, as pricing increases subside, I’d love to hear about any changes you’re seeing in consumer behavior that might lead them to spend more per month just because there’s less sticker shock.

Right? If you open you look at your morning commute, you’re like, wow. It’s too much. But then you start opening it, it’s not going up as much, and they actually end up using it more than they would have in their prior budget. So if you’re maybe seeing more shopping engagement at this point maybe they haven’t, like, transitioned into actual conversion yet, but anything there would be very helpful.

Thank you.

David Recher, CEO, Lyft: Super perceptive questions, Michael. So why don’t I do this? Maybe I’ll talk just super briefly about kinda how we see free now and sort of that mixed question you talked about. Maybe I can pass it to Aaron to talk about investing behind it to the extent we can say anything, which, to be honest, won’t be much. She’s smiling at me right now, which is fair.

And then I’ll come back to talk to about that communication and and what we’re seeing there. So briefly with with FreeNow, maybe a thing to remember is that it’s so it is a taxi first marketplace. And actually, I wanna talk about this for a second because I think people’s intuition can be a little bit sort of overweighted by by maybe what you see in the in the New York City when you think of taxis, for example. So in Europe, just to be super clear, a taxi tends to be a sort of a premium product in most parts of Europe. You might think of the London black tab.

You might think of taking a Mercedes from the airport in Frankfurt. You know, the the drivers oftentimes are long term drivers. Some of you might know, I lived in Barcelona for many years. Many of the taxi drivers I had have been doing it for years and years. And so it’s a it’s a very sort of stable, very important part of the of the landscape there.

And and an enormous part of the ride hailing industry in Europe, ride hailing got up broadly, including taxis and personal vehicles and, you know, everything else on the street, you know, raise your hand, all the things. It’s roughly, I think, a €40,000,000,000 market. But roughly half of that is still offline. And quite traditional. You know, it really is.

It’s it’s people picking up the phone and and calling a taxi and and literally it’s a second secret personal experience here. This is exactly what I did when I lived in Europe. As much as I like the tech, you know, there’s there are habits that are sort of hard to break. A part of that and the reason for that sort of stasis is there just hasn’t been a lot of innovation on the sort of taxi side in particular in part because there’s so many different individual fleet operators that don’t really have the scale or the capital to expand what they’re doing. So Freehout brings that and it’s why they’ve been so successful.

It’s why, you know, they really are the dominant player in that space. And we continue to believe that that’s gonna be the the interesting point. This is a sort of a higher when you ask people, maybe ask a friend Paris at some point, how they feel about rideshare versus taxis and often they’ll talk about how rideshare feels a little bit like a of a less than experience versus taxis feels like a more than experience. We really want to lean into that. Now country by country things differ.

There are some countries where personal vehicle kind of rideshare as we think of it in The United States is not legal. They’re somewhere anyway, so country by country and 3,009 countries, you know, each country has slightly different dynamics. But I wouldn’t expect the overall approach really to change very much. They’ve got a very good model, and we can bring a lot to that model. A lot, you know, there’s a lot we know about the way pricing works and market dynamics and so forth that because of our scale and our history we’ve we’ve got and vice versa.

They’ll bring a lot of fleet management expertise to us because of course every one of these taxi operations typically needs another fleet manager to work with. The last thing I’ll say there, as I kind of alluded to earlier, is I think to the extent that there’s work to do in investments and stuff, but I’m not going to speak much about this, but you know, there may be some infill opportunities within the markets we’re already working in. I think maybe I can turn it over to Erin at at at this point.

Erinn Brewer, CFO, Lyft: Yeah. So, yeah, you know what? I’d say, look. In free now, we found a partner, you know, to we see opportunities to immediately fuel growth, unlock potential for partners, you know, level the experience for drivers and riders alike. So we’re excited about it.

It obviously doubles our addressable market overall. So the strategic purpose of this acquisition is is fully aligned with the strategy that we outlined at investor day. You know, very specifically, we said we would as part of our capital strategy, you know, responsible investment and attractive growth and margin expansion opportunities was important to us. This fits that bill. The first step, however, is to close the deal.

So we expect that to happen sometime in the second half half of the year, and then, you know, we’ll start some foundational integration, and we’ll continue to evaluate opportunities for growth over time. So that’s what I would add there. Maybe I’ll start with the second part of the question, which is around affordability. And, you know, what I would say, Michael, is, you know, affordability is not something that’s new to Lyft. You know?

If you look at our overall product portfolio, this is something that we’ve emphasized in terms of, you know, a mode for every mood, so to speak, for a period of time. And so you think about things like wait and save, obviously, which has been a great feature overall for the company, and that’s certainly not a monolith if you think about the ridership. Right? Wait and save riders, you know, use the mode about a third of the time. They tend to 10 take about two x the rides.

So, you know, again, affordability is not new. And I think that the breadth of our portfolio and even the growth that we highlighted in some of our prepared remarks at the at the higher end of our portfolio is is a strength, and that’s where you’re seeing, you know, more than 16 rides growth in the quarter. Really proud of that. David mentioned some of the stats in his open opening remarks. So I don’t know.

David, do wanna add anything to the affordability question?

David Recher, CEO, Lyft: I’ll add and sort of and and maybe end exactly where, you know, kinda Michael was also going. I think what’s so interesting about this idea of affordability, and and you actually, you touched on this, Michael, is people think of it, I think, sort of in a maybe small way as, oh, well, you know, lower prices. Well, it’s sure. I mean, obviously, again, you know, you want a great cost position. You’ll remember we took $303,000,000 out of our cost position a couple years ago to to be able to afford to give great prices and great earnings to to drivers and so forth.

But at a certain point that becomes a little bit, you know, kind of just baseline. And then you have to start to innovate on top of that. And I do think Price Lock is such a good example and I’ll I’ll tell you why. So commute is now our largest use case. It’s our largest use case.

And and what that and remember ten years ago, commute was 0% of 0% of 0% rideshare. I mean, it didn’t exist right now. It’s a third of our of our rides roughly. So we’re talking about an enormous part of people’s daily lives. And then you think, well, why isn’t everybody doing it?

Remember, a 50,000,000,000 rides a year of which some gigantic number of commuter rides and a fraction of a fraction of a fraction are still on rideshare. And so much of it is all the irritating things that rideshare sort of introduced over the years or didn’t quite get right, like search pricing being the single biggest one. So annoying. Right? You’re doing the same thing every day.

Why should you pay something different every day? No one wants that. That’s irritating. On the other hand, gosh, is it great to sit in the back seat and be able to text or start your work or make a phone call or, you know, whatever. Say goodbye to your spouse, you know, after you left because you didn’t get a chance to say goodbye.

Whatever it is you wanna do. So it’s a great service, but you gotta take away some of the funny stuff. Price Lock does that. And I can tell you that we’re the Price Lock membership, we’ve introduced it a couple quarters ago. It’s now up 21% compared to q four.

And very interestingly, the retention rate is super high. It’s up greater than 70%. I think we’ve said 70 in the past. It’s up to about 75% right now, which means that once people sign on, they do it again. And that’s a form of affordability.

Right? It’s sort of a normalization. It’s kind of like, okay, the price is not gonna bounce around. I kinda understand what it is. Maybe it’s a little higher than I want it to be.

I don’t know. Whatever. But at least I can understand what it is every day and I begin to understand the value. And little by little by little by little becomes part of more and more people’s lives. So that’s very much the way we think about these things, and we like when we see a a product like this have such product market fit because it shows that we’ve we’ve we’ve we’ve discovered something pretty important.

Analyst: Thank you.

Conference Operator: Your next question comes from the line of Nikhil Divani of Bernstein. Please go ahead.

Nikhil Divani, Analyst, Bernstein: Hi. Thank you for taking my questions. I had two, please. First, on the taxi initiative you’re rolling out in The U. S, do you think this can accelerate your growth in 2025 and 2026?

Just trying to get a sense for the scale of it. And is there a long process to bring more taxis online in more markets? Or do you think this is something where you can move fairly quickly with new cities beyond St. Louis? And then my second question is around AV partnerships.

Do the deals that Uber is striking today actually accelerate your ability to onboard partners because there is a playbook for these AV providers to rinse and repeat, so to speak? Or do you feel like you need to be the first one in the door because fleets are still really small and experimental, so there aren’t enough cars to go around just yet? Thank you.

David Recher, CEO, Lyft: Yeah. Hey, Nicole. Two good, good questions. Let me I’ll touch on both. I think, well and I’m sorry.

I took I I I know I’m thinking about your last question so much that I’ve already forgotten your first. The second time I’ve done today. Say that first one more time.

Nikhil Divani, Analyst, Bernstein: Just on the taxi initiative in The U. S. And the rollout of more cities.

Jeff, Analyst, Deutsche Bank: Yeah, yeah, of course. Sorry about that.

David Recher, CEO, Lyft: The two part question is always tricky. So on that, look, as you said, so just to sort of level set with everyone. Yeah, we started in St. Louis, and it’s great. You know, I know you asked specifically about is it gonna accelerate your growth.

I’m not gonna comment on that particularly. But what I will say is when we look at our strategic initiatives over the course of the year, and we set these at the end of last, expanding our our sort of access to to fleet was was quite important. And it’s important for a couple of reasons. Effectively, diversity of supply really matters. It matters at the at sort of one end, the taxes.

You know, we’re doing it also, when it comes to, what we call the high margin modes, particularly the black cars, which also tend to be fleet cars. They have good economics. Typically, they insure, in a different way from normal insurance with us, so so that’s all good. Yeah. I I’m not gonna we we’ve only talked about St.

Louis so far, so I won’t speculate beyond that. But I will say it is an important part of what we’re we’re doing in The US. And, when you hear the FreeNow acquisition, you understand that that, obviously, their expertise is gonna is gonna come in handy, for us. On the AV side, it absolutely is not the case that you have to be first. It just it just isn’t.

And and the reason I say that is because even if fleets are limited, which is sort of maybe the premise behind the the question, well, I guess you you sort of put it both ways. Right? You said either there’s a playbook or there’s a limitation. You know, I would say, first of all, every AV provider has a very strong incentive to have multiple partners. I mean, it’s just it’s just clear.

No one wants to be beholden. Right? So that’s why you don’t see anything that looks really exclusive. That would just be sort of self defeating. You know, there’ll be supply constraints from time to time, of course.

And so, you know, maybe one person will get a little ahead of the other, you know, for a certain period of time in a certain city, but but I I think that’s that’s very temporary. I think much more interesting if I’m a if I’m an AV supplier of of equipment or or what have you, is who is the partner who can better monetize? And and frankly, that I can, sort of work with better. You know, who brings more to the table, you know, maybe it it could be any number of things. I I won’t characterize it too much.

But, obviously, we’re very excited about the unique asset we have. We have the only, sort of integrated fleet management solution to rideshare that’s out there. So that’s obviously a huge advantage we have. So I think that that’s probably more important at this point simply because, you know, you’re but but I think it really at the end, just to be super honest, I think most suppliers have an incentive to bring on, you know, at least at least two partners. Right?

So that they can differentiate excuse me, so that they can sort of diversify and also not be beholden to to anyone. Thanks, David. Sure.

Conference Operator: Your next question comes from the line of Stephen Ju, UBS. Please go ahead.

Arlen Nolfe, VP, FP and A and Investor Relations, Lyft0: Okay. Thank you so much. So David, I think when you offered Lyft media targets back at the Investor Day, I think there was some amount of skepticism in the market as to whether you can actually hit those goals over the next few years. So but there was a a very interesting angle, I thought, where to offer retailers and merchants traffic based on the user’s destination, especially if they’re headed to your store. Right?

So, you know, that sets you up to potentially onboard performance ad budget. So can you talk about how this progressing, and how the outreach efforts to these performance advertisers and undoubtedly also, to the awareness and brand upper funnel advertisers, how that’s been progressing? Thanks.

David Recher, CEO, Lyft: Sure. Yeah. Great question and a good memory. So, let’s start big picture first, then we’ll kinda dive in. So at the time yeah.

I remember the skepticism. That that was not lost by me. We’re on track, as we said before, to reach a hundred million dollar run rate at the end of the year and and very much on track and and and feel quite good about that. And and I and I will also say, by the way, quite good about the leader who’s getting us there, Susie. I’ve mentioned her in the past.

She really helped build, YouTube’s ad platform and then, Wave later. So, anyway, I can’t break and, actually, I’m actually as bragging on people, I’ll I’ll brag on the whole team there. It’s an extraordinary team, and we’re actually adding new folks. In fact, we just got a new person on yesterday. So super excited about how we’re building that out.

The results we’ve seen so far have been really strong. As I say, we’re on track for a hundred million, But I think part of it is because particularly, I’ll come back to your point in a second, particularly when we look at some of the big brand partnerships we have, we continue to see, and again this is third party data, we continue to see the third party measurement platforms telling us that we have this is their numbers, not ours, seven times the impact relative to the norm on brand perception. And, we still have about 10 times the standard click through rate. So super good there. We’re also expanding our formats.

So Erin mentioned wait and save a little while ago as a nice product for from a consumer so that they can, you know, choose to wait a little longer and and save some money. It’s also nice for us because it gives us a little bit more time to engage with riders, and we now have a new ad unit, which is sort of a vertical takeover kind of video unit that takes over while you’re waiting. Right? So you you’ve got time on your hands while you’re waiting and saving. Might as well use it, you know, checking out a movie trailer or a kind of a brand activation or whatever.

So seeing a you know, very excited about it. Still early days, of course, in a in a lot of ways, but I feel very, very good about the platform we’re we’re building and the opportunity there is. When it comes to what we internally called sponsored rides, yep, we’re still super excited about that. It’s very much an experimentation mode. I think I don’t actually have I just don’t know whether we can mention the partners, live now.

I’m not sure that we can. But we have a couple of partners that we’re working with to try that out, and encouraging results. But, you know, there’s certain things that you try at small scale and then you just don’t know yet. But I still have a lot of conviction around it. I know that any look.

Any store, any retailer, any, you know, restaurant, anyone who depends on, you know, that marginal person to walk in the door, you know, to to make the sort of make the week or make the night, you know, they become very interested when you when they start talking to partners who can literally deliver effectively foot traffic to their door. So anyway, good good memory. Nothing to share on it right now, but definitely an area where we still got real conviction based on what we see. Thank you. Your

Conference Operator: next question comes from the line of Doug Anmuth, JPMorgan. Please go ahead.

Brad Erickson, Analyst, RBC Capital Markets: Thanks for taking the questions. I have two. Just as you continue to see strength in Rides with the 200 basis points of acceleration, but pricing was down 3% year over year, can you just talk about what’s driving the lower gross bookings per ride, particularly as you continue to grow luxury modes? Are you seeing more discounts and promotions or just industry wide pricing dynamics tied to insurance easing? And then maybe on 2Q and just thinking about Delta, is there any shift or change from kind of how you were thinking about the 100 basis point impact to Rides and 200 basis point impact from gross bookings?

Thanks.

Erinn Brewer, CFO, Lyft: Thanks, Doug. This is Erin. I’ll take the question starting with gross bookings overall. So I’d start with framing that we remain very focused on penetrating that 161,000,000,000 private vehicle TAM that we’ve talked about that we highlighted at our investor day. We continue to grow in our top markets.

But one of the you know? And and commute, David mentioned earlier, commute 10 is particularly strong, which we’re really proud of. And then one of the biggest opportunities for us is to really penetrate and grow in what have been historically underrepresented markets. So you’ve heard us talk about Canada now for a while and our progress there. Right?

We we grew that market a % in 2024. We grew rides 55% in q one. We’re about to launch in Quebec and and a few cities, so we’ll continue our growth path there. In that market, overall gross bookings per ride is is lower than the average in The US. And then another area that we highlighted in our prepared remarks is underpenetrated markets in The US.

So we this is not new. We’ve been kind of taking our formula for operational excellence and customer obsession more broadly in The US, and we’ve seen fantastic results out of that. We highlighted, for example, in the prepared remarks, we talked about growth in Indianapolis, but it’s, you know, cities like Indianapolis, Charlotte, you know, where we grew, in both cases, more than 30% year over year in q one. And so, you know, that’s fantastic because we are continuing that really strong growth in active riders and frequency, and in rideshare really is a a great option across now multiple markets in addition to the growth of our top markets. But there is a mix impact, and that’s the way you should think about that as you as you see some of that gross bookings per ride dynamic overall.

And then your second question as it relates to Delta. So maybe just, you know, starting with the fact that the Delta partnership ended on April 7, so still pretty early days. And I think the right way to think about this is, you know, when you whether you’re entering or exiting a partnership like this, you know, it it tends to have an impact over time. So in this case, you know, that curve’s gonna depend on the offer, you know, that they’re getting. Also, frankly, our efforts around retention and and competitiveness, and we have amazing service levels, etcetera.

So so price and benefits are really just one part of the process, the decision making process on behalf of the rider. You know, the other thing is that our partnership, our past partnership with Delta, you know, offered more benefits than the one that there’s today that there is today with the other guys. So, you know, there’s a couple of different decision criteria, I think, that any that any rider is gonna go through. So still relatively early days. We do still believe that over time, this will have an impact of about 1% to our rides, about two percentage points to our gross bookings.

So that’s how I would highlight those.

Brad Erickson, Analyst, RBC Capital Markets: Great. Thank you, Erin.

Nikhil Divani, Analyst, Bernstein: Yep.

Conference Operator: Your next question comes from the line of Steven Fox of Fox Advisors. Please go ahead.

Arlen Nolfe, VP, FP and A and Investor Relations, Lyft1: Hi, good afternoon. Just one question, just following up on that last one. If we think more deeply about the Q2 guidance in terms of ride growth and monetizing per ride basis. Like what would be the sort of how you would directionally talk about it? Is there any consideration for any consumer spending risks?

And then where would be some of the things you’ve highlighted on this call about growth on different platforms? What would be the major drivers? Would it still be commute leading the way or something else? Thanks.

Erinn Brewer, CFO, Lyft: Yeah. Sure. So, you know, again, starting at a high level, we provide a range overall for our guide. Our intention is for that range to bracket, know, of course, for a number of different scenarios overall. We expect commute to continue to be strong.

You know, we think this mix of the results of our efforts in some of these underpenetrated markets, we continue to see great momentum there. So we think that will have an impact in the second quarter as well as growth in our top markets. So some of those similar dynamics that I just talked about for q one, I would expect to consider for q two. And maybe I’ll start with the consumer sentiment side. David, if you want to add anything.

I think the headline here is we are just not seeing anything in our data. As you know, we know we don’t have a lot of leading indicators, but we are not we are not seeing in our data signs of weakening. We see continued growth across across modes, across different use cases overall. So, David, you wanna add anything to that?

David Recher, CEO, Lyft: I mean, you you just said it’s it’s so interesting. You know, it’s we can all probably talk openly about this. We all read the same headlines, but at the same time when we look at the data, you know, we had our strongest ride week, I think the March ever. And then even as recent as this past week, when we look at Cinco de Mayo, is another area where people tend to take rideshare, super, super strong. So, again, everyone understands the uncertainty in the future.

And, of course, we’re you know, we have a business that’s sort of resilient to that. We can talk about that separately if you’re interested. But in terms of sentiment so far things look strong.

Arlen Nolfe, VP, FP and A and Investor Relations, Lyft1: Yes. Thank you. If you did want to follow-up I’d love to understand just the key headlines on how resilient the business could be in a downturn. Thanks.

David Recher, CEO, Lyft: Sure. I mean, I think just let’s talk about the sector first before Lyft. I do think this sector has a certain amount of resilience built into it. If you look at demand, well, let’s start with the basics, right? Is there demand there?

There’s definitely demand there, you know, and and we see it week on week. It’s again, we made this point in different ways now. This is part of people’s daily lives. And we’ve talked about commute a lot. You might talk about a much different part of the of the sort of spectrum, health care.

I think our health care rides, it’s called non emergency medical transportation, have grown something like 30% year on year. This is literally people going to doctors and medical appointments and stuff often paid for by somebody else. But the point being that rides just become very foundational for a lot of people. So demand is there. Then when you sort of look at the supply side well, actually, hold on.

Let’s talk more about demand. You you could imagine a world where, let’s say, tariffs increase the price of cars. You can imagine a world where, if that’s the case, the people become even more interested in rideshare because it’s lot more approachable to think of a, you know, ten or fifteen dollar ride than it is a, you know, a $30,000 car that just got more expensive. So, you know, that’s kind of interesting. And and I’ll point to sort of broad data that says in general, and of course, every economic downturn, if there is such a thing, is a little different.

But in general, services tend to be more reliant or reliable than durable goods. Durable goods flux a little, but services tend to be somewhat more reliable. So within that context, obviously, rideshare falls. And then when you look on the supply side, again, is not any new data, but remember, you know, we have 1,400,000 people who drive on the platform and and they and they like it. I’ll come back to that in a second.

But it’s that’s also quite an important part of a lot of people’s lives. And and remember, again, at almost a macroeconomic level, you know, it’s actually quite stabilizing for The US economy because what it sort of means is that if a person loses their job, which could happen, of course, in in economic downturn times, you know, forty eight hours later, literally forty eight hours later, they could be driving and and earning again. So, you know, just big picture again, it feels like a very, very stable place. You never say never. You don’t know exactly what the future holds, but certainly we believe that we’re very well positioned kinda come what may.

Conference Operator: With that, I will now turn the call to David Lischer, Chief Executive Officer, for closing remarks. Please go ahead.

David Recher, CEO, Lyft: Yes. Thank you, everyone. Thank you, Aurelien. Thank you, Erin. Thank you, everyone on the team who’s worked so hard to do all of the work we’ve done to put, together a great quarter.

So really appreciate everyone on the call, as always, and your support in Lyft. We’ve never been in a stronger position as we continue to deliver on our mission to serve and connect. Thank you all very much, and we will see you next time.

Conference Operator: Ladies and gentlemen, this concludes today’s conference call. We thank you for participating and ask that you please disconnect your lines.

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