- Typo sees stock jump more than 60% after-hours
- CFO forced to admit profit margin growth error
- Sees free cash flow positive breakthrough in 2024
US ride-hailing platform Lyft (LYFT:NASDAQ) gave its shareholders a trip to remember overnight after its after-hours earnings release gave investors a bum steer on profit margin expansion, a typo that the firm’s chief financial officer was later forced to correct on an earnings call with analysts.
Shares in $5.5 billion Lyft initially surged more than 60% as investors jumped on news of a projected 500 basis points expansion this year for profits as a percentage of bookings. Within an hour, however, the stock had pared most of those gains as it became clear this would not be the case.
The embarrassing error saw Lyft CFO Erin Brewer confirm on the earnings call that the company had misstated its margin expansion in the press release. Rather than 500 basis points, or 5%, of growth for 2024, as the company initially indicated, the actual increase will be 50 basis points, or 0.5%, Brewer said.
‘This is actually a correction for the press release,’ Brewer said.
The adjusted profit margin as a percentage of bookings will be 2.1%, up from 1.6% in 2023, Brewer added.
CASH FLOW BREAKEVEN EYED
The tumultuous session may not have been all it seemed, but the earnings release was not uneventful. Lyft shares still ended after-market trading up more than 16% at a 2024 high of $14.10 thanks to the firm’s upbeat outlook which predicted that it will be free cash flow positive this year for the first time ever on cost cuts and rising ride demand.
Fourth-quarter 2023 earnings also topped Wall Street estimates.
Lyft reported adjusted earnings per share of $0.17, beating Wall Street estimates for earnings of $0.08 a share, on $1.22 billion revenue, in-line with estimates. Active riders on its platform jumped 10% to 22.4 million in the fourth quarter.
For Q1 2024, the ride-hailing company guided for gross bookings of about $3.5 billion to $3.6 billion, with adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) expected between $50 million to $55 million.
Looking ahead, the company forecast rides to grow in the mid-teens year-on-year, with gross bookings growth expected to be slightly faster than rides growth year-on-year.
