Lyft said on Tuesday that its adjusted core profit for the first quarter is expected to be below analysts' projections, a result the company attributed to severe winter weather across the United States and seasonal cost pressures. The announcement followed a surprising operating loss for the full year 2025 and prompted a steep drop in Lyft's shares, which fell 15% in after-hours trading.
The ride-hailing company placed blame for part of the earnings shortfall on Winter Storm Fern, which disrupted travel across wide sections of the country, particularly along the East Coast. Lyft also cited seasonal cost headwinds as additional pressure on its near-term profitability outlook.
For the first quarter, Lyft now expects adjusted core profit in a range of $120 million to $140 million, below the consensus estimate of $139.4 million. The guidance contrasts with an operating loss for 2025 of $188.4 million, a surprise when compared with Visible Alpha data showing analysts had expected an operating profit of $33.3 million for the year.
Management projected gross bookings between $4.86 billion and $5.00 billion for the quarter, with the midpoint effectively matching street expectations. Still, the weaker adjusted profit forecast clouded investor reaction and overshadowed the company’s plan to repurchase up to $1 billion of its shares.
Despite the profit warning and annual operating loss, Lyft reported a number of positive results from the December quarter and the full year. The December quarter was Lyft’s most profitable on record, supported by stronger rider engagement and a larger share of higher-value ride modes. Revenue for the December quarter totaled $1.59 billion, after taking a $168 million hit from legal, tax and regulatory reserve changes and settlements.
For 2025, Lyft generated $1.12 billion in free cash flow, outperforming estimates of $993.4 million. The company also reported adjusted core earnings of $154.1 million for the fourth quarter, beating LSEG expectations of $147.1 million.
Lyft attributed recent growth to several strategic moves: expansion into European markets, the rollout of premium and larger-vehicle ride options, and an increasing contribution from partnerships. Roughly one-quarter of Lyft’s rides in the December quarter were linked to a partner relationship, with the company noting particularly strong momentum from its tie-up with DoorDash.
The company faces other margin pressures highlighted by market analysts. Andrew Rocco, stock strategist at Zacks Investment Research, pointed to faster earnings growth at Lyft’s larger rival and rising ride insurance premiums in California tied to driver unionization laws - a factor that he said is squeezing Lyft’s margins.
The combination of weather-related disruption, seasonal cost increases, and regulatory-linked insurance cost pressures leaves Lyft navigating both short-term headwinds and areas of operational strength. The company’s record quarterly profitability and robust free cash flow contrast with the surprise annual operating loss and a downgraded near-term profit outlook that dented investor confidence in the stock.