(Bloomberg) -- Shares of Lyft Inc. plunged after the company gave a disappointing outlook for first-quarter gross bookings, warning that cold weather has hurt demand for ride hails and bike rentals.
Gross bookings — a closely watched benchmark — will be $4.05 billion to $4.2 billion in the first three months of 2025, Lyft said in a statement Tuesday. Wall Street was expecting $4.23 billion, according to Bloomberg-compiled estimates. Adjusted earnings before interest, taxes, depreciation and amortization will be $90 million to $95 million, the midpoint of which also came in below projections.
The company announced its first share buyback program, pledging to purchase as much as $500 million. But investors sent the stock down as much as 16% after markets opened in New York on Wednesday, the biggest same-day decline in six months.
The forecast follows a similarly muted outlook from Uber Technologies Inc., which reported results last week. Lyft’s fourth-quarter bookings also landed slightly below expectations, despite setting a quarterly record.
The first quarter is “traditionally our slowest quarter as everyone is recovering from the holidays, and weather across many parts of North America encourages staying in or at the very least discourages taking a bike ride,” Chief Financial Officer Erin Brewer told analysts on an earnings call. “Rides in general tend to be shorter in duration and more local,” she said.
There also is one fewer day in the current quarter compared with a year earlier, which was a leap year.
Further out, the company expects bookings growth to take a hit of 2 percentage points in the second quarter because Delta Air Lines Inc. is ending its partnership with the company in April. The airline is pursuing an exclusive, multiyear deal with Uber instead. Brewer said the company aims to eventually offset that impact by expanding existing partnerships and making new ones.
The San Francisco-based company has been making efforts to deepen user loyalty and reported a record 24.7 million active riders in the fourth quarter. It attributed the usage increase to scheduled airport rides during the holiday season, as well as a popular Price Lock feature launched last fall. That option helps commuters fix rates ahead of time for a designated route. Lyft has since expanded the feature beyond weekday 9-to-5 trips to include late-night hours.
Uber is also working on a price-guarantee feature with the same name, Bloomberg reported last month.
“Since launching last fall, we’re seeing approximately 70% of Price Lock riders continue to purchase passes month after month,” Lyft Chief Executive Officer David Risher said in a statement to Bloomberg. “Many of them are high-frequency riders who are now loyal to Lyft, thanks to this feature.”
The company also made more improvements to its bottom-line metrics, as promised during its investor day last June. In 2024, the firm notched its first annual profit under generally accepted accounting principles, or GAAP, as well as its first full-year positive cash flow.
The improving profit picture stemmed in part from an expansion of the premium Lyft Black and Lyft Black SUV services to more markets in 2024. Those kinds of rides grew 41% from 2023.
(Updates with share move in the third paragraph.)
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