Lyft 2025 Q2 Earnings Net Income Surges 704%

Lyft (LYFT) reported its fiscal 2025 Q2 earnings on Aug 07th, 2025, delivering strong results that highlight continued growth in profitability. The company exceeded expectations with a 704% year-over-year increase in net income and raised its total addressable market through the acquisition of Freenow. However, the stock underperformed post-earnings, with a negative return on a 30-day buy-and-hold strategy.

Revenue
Lyft’s total revenue for the quarter reached $1.59 billion, a 10.6% increase from $1.44 billion in the same period in 2024, driven by a combination of higher demand and improved pricing.

Earnings/Net Income
The company’s earnings per share surged 900% to $0.10, up from $0.01 in the prior-year period, with net income jumping to $40.31 million, a 704% increase from $5.01 million in 2024 Q2. The results marked the highest net income for a fiscal Q2 in 8 years, reflecting the company's improved profitability and operational efficiency. This significant improvement in earnings indicates a strong performance in both top and bottom lines.

Price Action
Lyft’s stock edged up 1.86% during the latest trading day and 1.07% for the week, but it fell 13.62% month-to-date, reflecting ongoing market volatility and investor caution.

Post-Earnings Price Action Review
A strategy of buying LYFT following an earnings beat and holding for 30 days performed poorly, with a return of -72.53% and a Sharpe ratio of -0.39, significantly underperforming the benchmark by 122.33%. The high volatility and negative CAGR of -26.30% suggest the strategy was overly risky with limited reward.

CEO Commentary
Lyft CEO David Risher highlighted the company’s record Q2 performance and emphasized the expansion of its total addressable market post-Freenow acquisition. The company is also deepening strategic partnerships, including with Baidu and United Airlines. CFO Erin Brewer underscored strong Rides growth, record Gross Bookings, and robust cash flow, driven by operational excellence and customer-centric strategies.

Guidance
Lyft expects mid-teens year-over-year rides growth in Q3 2025, with Gross Bookings between $4.65 billion and $4.80 billion (up 13%–17% YoY). Adjusted EBITDA is forecasted at $125 million to $145 million, with a margin of 2.7%–3.0% of Gross Bookings. The company has not provided a full GAAP reconciliation due to uncertainties around stock-based compensation and taxes.

Additional News
On Aug 7, 2025, Lyft completed its $200 million acquisition of European mobility platform FreeNow, expanding its international footprint and positioning for future growth. The company also announced a partnership with Baidu to launch autonomous taxi services in Europe, signaling a strategic move into cutting-edge mobility solutions. In Q2, Lyft repurchased $200 million worth of shares, buying back 12.8 million shares under its stock repurchase program. This move underscores management’s confidence in the company’s long-term value. At the same time, the company reported $3.29 billion in free cash flow and $3.437 billion in cash from operations, reflecting strong liquidity and financial health. Despite positive fundamentals, the stock fell 3.58% on the day of the earnings report and continued to decline more than 3% in after-hours trading as the reported revenue slightly missed expectations.