Lyft shares jumped as much as 66% in after-hours trading Tuesday after a typo in its latest earnings report suggested one measure of the company’s profitability could greatly increase this year—though the stock has since plateaued at around 16% above its closing price, after Lyft revealed the increase was exaggerated by a factor of 10.
Lyft reported an increase in revenue from the same quarter in 2022. (Photo by Mat Hayward/Getty Images)
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Key Facts
Lyft closed at $12.12 per share, but spiked to $20.04 around 4:40 p.m. ET after traders were led to believe Lyft’s adjusted EBITDA margin as a percentage of bookings could expand 500 basis points (which means 5%) in 2024.
In reality, the margin is forecasted to expand by 50 points, or 0.5%, according to Lyft’s fourth-quarter earnings report.
The typo was noted by Lyft’s chief financial officer in an earnings call with analysts, after which the stock fell to just over $14 a share—about a $2 increase from its closing price.
The mishap eclipsed an otherwise positive earnings report from Lyft, which reported $1.2 billion in revenue—a 4% year-over-year increase.
Lyft didn’t immediately respond to Forbes’ request for comment.
Key Background
Lyft hasn’t yet achieved profitability, though its fourth quarter and full-year earnings show the company is managing to slim its losses. The ride-hailing service reported a net loss of $26.3 million in the fourth quarter—a massive improvement from the $588 million it had in net losses in the fourth quarter of 2022. Lyft also reduced net losses to $340.3 million in 2023 compared to $1.6 billion in 2022. The company expects gross bookings to reach up to $3.6 billion in the first quarter, topping analysts’ expectations, according to CNBC. Lyft said in its earnings it anticipates it will be able to generate positive free cash flow in 2024, which would be a first for the company.
Tangent
Last week, Lyft’s archrival Uber announced it turned a profit last year for the first time since going public.