Lyft increases buyback to $750 million, prompting rise in shares

Lyft saw a 5% increase in its shares after announcing an expansion of its share buyback plan to $750 million in the first quarter earnings report. The stocks surged as much as 10% post-earnings, demonstrating investor confidence in the ridesharing company.

The company reported earnings of 1 cent per share and revenues of $1.45 billion, slightly below the $1.47 billion estimate from LSEG. Despite missing revenue estimates, revenues still managed to grow by 14% compared to the previous year. Lyft reported a net income of $2.57 million, an improvement from the $31.54 million net loss a year ago.

During the period, rides increased by 16% to reach 218.4 million, exceeding FactSet’s estimate of 215.1 million. The number of active riders also grew by 11% to 24.2 million, while gross bookings surged by 13% to $4.16 billion, slightly above the $4.15 billion estimate from StreetAccount.

Lyft CEO, David Risher, highlighted that this quarter marked the 16th consecutive period of double-digit year-over-year gross booking growth for the company. He expressed optimism about the future, mentioning Lyft’s recent acquisitions and expansions as key strategies for sustained performance in the market.

One of Lyft’s recent moves was the acquisition of Germany-based taxi app FreeNow for nearly $200 million, signaling the company’s expansion into Europe. This strategic acquisition is expected to further bolster Lyft’s position in the market and attract a more diverse range of users, including the introduction of Lyft Silver to new demographics.

Looking ahead to the second quarter, Lyft anticipates mid-teen growth in rides compared to last year, with gross bookings expected to range between $4.41 billion to $4.57 billion. The company reported $280.7 million in free cash flow for the first quarter, exceeding StreetAccount’s estimate of $136.3 million.

Despite facing challenges since its trading debut in 2019, Lyft remains focused on driving market-leading performance and capitalizing on growth opportunities. With a strong emphasis on sustained growth and expansion into new markets, Lyft is positioning itself for continued success and market competitiveness in the ridesharing industry.