Lyft Inc.
02/11/2026 | Press release | Distributed by Public on 02/11/2026 05:01
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. This Management's Discussion and Analysis of Financial Condition and Results of Operations focuses on a discussion of results for 2025 and 2024 and year-to-year comparisons between 2025 and 2024. For a discussion of results for 2023 and year-to-year comparisons between 2024 and 2023, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" within our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 14, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled "Risk Factors" and other parts of this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.
Financial and Operational Results for the Year Ended December 31, 2025
|
Year Ended December 31,
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|||||||||||||||||
| 2025 | 2024 |
% Change
|
|||||||||||||||
|
(in millions, except percentages)
|
|||||||||||||||||
| GAAP Financial Measures | |||||||||||||||||
| Revenue | $ | 6,316.3 | $ | 5,786.0 | 9% | ||||||||||||
|
Net income(1)
|
$ | 2,844.0 | $ | 22.8 | NM | ||||||||||||
| Net income as a percentage of revenue | 45.0 | % | 0.4 | % | |||||||||||||
|
Net cash provided by operating activities
|
$ | 1,168.4 | $ | 849.7 | 38% | ||||||||||||
| Key Metrics and Non-GAAP Financial Measures | |||||||||||||||||
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Active Riders for the fourth quarter
|
29.2 | 24.7 | 18% | ||||||||||||||
|
Rides
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945.5 | 828.3 | 14% | ||||||||||||||
| Gross Bookings | $ | 18,507.0 | $ | 16,099.4 | 15% | ||||||||||||
|
Adjusted EBITDA(2)
|
$ | 528.8 | $ | 382.4 | 38% | ||||||||||||
| Net income as a percentage of Gross Bookings | 15.4 | % | 0.1 | % | |||||||||||||
| Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) | 2.9 | % | 2.4 | % | |||||||||||||
|
Free cash flow(2)(3)
|
$ | 1,115.6 | $ | 766.3 | 46% | ||||||||||||
(1)Net income for the year ended December 31, 2025 includes a $2.9 billion benefit from the release of our valuation allowance of U.S. federal and certain state deferred tax assets in the fourth quarter of 2025.
(2)For more information regarding our use of our non-GAAP financial measures and reconciliations of these measures to the most comparable GAAP measures, see "Non-GAAP Financial Measures".
(3)Free cash flow is defined as net cash provided by (used in) operating activities less purchases of property and equipment and scooter fleet.
NMNot meaningful.
Recent Developments
Acquisition of Freenow
On July 31, 2025, we completed the previously announced acquisition of Freenow, a European multimodal application with a taxi offering at its core. The acquisition marked Lyft's first expansion outside of North America, beyond bikes and scooters. The Company paid approximately €205.9 million($236.8 million) in cash, inclusive of closing adjustments. Refer to Note 4 "Acquisitions" to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding the acquisition.
Acquisition of TBR
On October 14, 2025, we completed the acquisition of TBR, a global premium ground transportation and chauffeur service company, for a total purchase price of approximately £86.4 million ($115.2 million), inclusive of an immaterial amount of contingent consideration. Refer to Note 4 "Acquisitions" to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding the acquisition.
Definitions of Key Metrics
Active Riders
The number of Active Riders is a key indicator of the scale of our user community.
| Active Riders | |||||||||||
| 2025 | 2024 | ||||||||||
|
(in millions)
|
|||||||||||
| Three Months Ended March 31 | 24.2 | 21.9 | |||||||||
| Three Months Ended June 30 | 26.1 | 23.7 | |||||||||
| Three Months Ended September 30 | 28.7 | 24.4 | |||||||||
| Three Months Ended December 31 | 29.2 | 24.7 | |||||||||
We define Active Riders as all unique riders who have taken at least one ride during the quarter. If a ride is requested by another organization or person for the benefit of a rider, that rider is only included in the calculation of Active Riders if the ride is accessible in the rider's Lyft apps.
In the first quarter of 2025, we updated the definition of Active Riders to simplify the definition and better align the metric with future scaling of our business. Additionally, unique riders were previously identified by phone number and are now identified through a unique internal identifier. The change was adopted prospectively and periods prior to the first quarter of 2025 were not changed as the impact was not material.
In each of the three month periods ended March 31, June 30, September 30, and December 31, 2025, Active Riders increased compared to the same periods in 2024 primarily due to our focus on rider and driver engagement, improved retention, overall marketplace health and international expansion.
Rides
Rides represent the level of usage of our multimodal platform.
We define Rides as the total number of rides completed on our multimodal platform that contribute to our revenue. These include any Rides taken through our Lyft apps. If multiple riders take a private rideshare ride, including situations where one party picks up another party on the way to a destination, or splits the bill, we count this as a single rideshare ride. Each unique segment of a Shared Ride is considered a single Ride. For example, if two riders successfully match in Shared Ride mode and both complete their Rides, we count this as two Rides. We have largely shifted away from Shared Rides, and now only offer Shared Rides in limited markets. We include all Rides taken by riders via our Concierge offering, even though such riders may be excluded from the definition of Active Riders unless the ride is accessible in that rider's Lyft apps.
The increase in Rides in the year ended December 31, 2025 as compared to the year ended December 31, 2024 was due primarily to our improved marketplace health which also resulted in an increase in Active Riders.
Gross Bookings and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings)
Gross Bookings is a key indicator of the scale and impact of our overall platform.
We define Gross Bookings as the total dollar value of transactions including any applicable taxes, tolls and fees, for rides and other offerings provided by Lyft, excluding tips to drivers. In the fourth quarter of 2025, we simplified the definition of Gross Bookings to better align the metric with future scaling of our business. There was no impact to prior periods. Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) is calculated by dividing Adjusted EBITDA for a period by Gross Bookings for the same period. For the definition of Adjusted EBITDA, refer to "Non-GAAP Financial Measures".
The increase in Gross Bookings in the year ended December 31, 2025 as compared to the year ended December 31, 2024 was due to international expansion and growth in Active Riders and Rides which benefited from continued improvements in marketplace health.
The improvements in net income as a percentage of Gross Bookings and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) in the year ended December 31, 2025 as compared to the year ended December 31, 2024 were due primarily to a $2.9 billion benefit from the release of our valuation allowance of U.S. federal and certain state deferred tax assets in fourth quarter of 2025.
Components of Results of Operations
Revenue
Revenue consists of revenue recognized from fees paid by drivers for use of our Lyft Platform offerings, and gross amounts collected from riders in certain markets where we control the transportation services provided, Concierge platform fees from organizations that use our Concierge offering, subscription fees paid by riders to access transportation options through the Lyft
Platform, bikes and bike station hardware and software sales, licensing and data access agreements and arrangements to provide advertising services to third parties that are interested in reaching users of our platform. Revenue also consists of rental revenues recognized through leases or subleases of vehicles primarily from our wholly-owned subsidiary, Flexdrive Services, LLC ("Flexdrive"). Revenue derived from these offerings is recognized in accordance with Accounting Standards Codification Topic 606 ("ASC 606") and Accounting Standards Codification Topic 842 ("ASC 842") as described in the Critical Accounting Policies and Estimates below and in Note 2 "Summary of Significant Accounting Policies".
We offer various incentive programs to drivers that are recorded as a reduction to revenue if we do not receive a distinct good or service in consideration or if we cannot reasonably estimate the fair value of goods or services received.
Cost of Revenue
Cost of revenue primarily consists of costs directly related to generating revenue through our multimodal platform which primarily includes insurance costs, payment processing charges, payments to drivers or driver incentive costs in certain markets where we control the transportation services provided, and other costs. Insurance costs consist of insurance generally required under TNC and city regulations for ridesharing, and bike and scooter rentals and also includes occupational hazard insurance for drivers. Payment processing charges include merchant fees, chargebacks and failed charges. Other costs included in cost of revenue are hosting and platform-related technology costs, personnel-related compensation costs, depreciation, amortization of technology-related intangible assets, asset write-off charges, and costs related to Flexdrive, which include vehicle lease expenses and remarketing gains and losses related to the sale of vehicles.
Operations and Support
Operations and support expenses primarily consist of personnel-related compensation costs of local operations teams and teams who provide phone, email and chat support to users, bikes and scooters fleet operations support costs, driver background checks and onboarding costs, fees paid to third-parties providing operations support, facility costs and certain car rental fleet support costs. Bikes and scooters fleet operations support costs include general repairs and maintenance, and other customer support activities related to repositioning bikes and scooters for rider convenience, cleaning and safety checks.
Research and Development
Research and development ("R&D") expenses primarily consist of personnel-related compensation costs and facilities costs. Research and development costs are expensed as incurred.
Sales and Marketing
Sales and marketing expenses primarily consist of rider incentives, personnel-related compensation costs, certain driver incentives, advertising expenses, rider refunds, amortization of certain intangible assets and marketing partnerships with third parties. Sales and marketing costs are expensed as incurred. Incentive programs are intended to improve our marketplace. In the second quarter of 2025, we determined that certain components should be excluded from our disclosure of incentives. Accordingly, prior period amounts disclosed have been changed to conform to current period presentation.
General and Administrative
General and administrative expenses primarily consist of personnel-related compensation costs, professional services fees, certain insurance costs that are generally not required under TNC regulations, certain loss contingency expenses including legal accruals and settlements, insurance claims administrative fees, policy spend, depreciation, facility costs, amortization of certain intangible assets and other corporate costs. General and administrative expenses are expensed as incurred.
Interest Expense
Interest expense consists primarily of interest incurred on our convertible senior notes, as well as the related amortization of deferred debt issuance costs and debt discount. Interest expense also includes interest incurred on our Non-Revolving Loan and our Master Vehicle Loan.
Other Income, Net
Other income, net consists primarily of interest earned on our cash, cash equivalents and restricted and unrestricted investments and realized and unrealized gains and losses on foreign currency transactions and balances.
(Benefit from) Provision for Income Taxes
Our (benefit from) provision for income taxes consists of federal and state taxes in the U.S. and foreign taxes in jurisdictions in which we conduct business. As we expand the scale of our international business activities, any changes in the U.S. and foreign taxation of such activities may increase our overall (benefit from) provision for income taxes in the future.
For the year ended December 31, 2025, we recognized an income tax benefit of $2.9 billion, primarily due to the release of the valuation allowance on our U.S. federal and state net deferred tax assets.
We record a valuation allowance to reduce deferred tax assets to the net amount that we believe is more-likely-than-not to be realized. In assessing the need for a valuation allowance, we consider all available evidence, both positive and negative, including historical profitability, expectations and risks associated with future taxable income, and ongoing tax planning strategies.
As of December 31, 2025, we have demonstrated sustained profitability in the U.S. based on pre-tax book income adjusted for permanent book-to-tax differences. After weighing all available positive and negative evidence, including the objective and verifiable evidence described above and anticipated future earnings, we concluded that it is more-likely-than-not that all of our U.S. federal and the majority of our state deferred tax assets will be realizable. We continue to maintain a valuation allowance against our California R&D credits as we do not believe their realization is more-likely-than-not, as we expect R&D tax credit generation to exceed our ability to use these credits in future periods.
Results of Operations
The following table summarizes our historical consolidated statements of operations data (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Revenue | $ | 6,316,261 | $ | 5,786,016 | |||||||
| Costs and expenses | |||||||||||
| Cost of revenue | 3,697,653 | 3,337,714 | |||||||||
| Operations and support | 478,332 | 443,821 | |||||||||
| Research and development | 451,419 | 397,073 | |||||||||
| Sales and marketing | 875,101 | 788,972 | |||||||||
| General and administrative | 1,002,130 | 937,348 | |||||||||
| Total costs and expenses | 6,504,635 | 5,904,928 | |||||||||
| Loss from operations | (188,374) | (118,912) | |||||||||
| Interest expense | (20,755) | (28,921) | |||||||||
|
Other income, net
|
155,882 | 173,183 | |||||||||
| (Loss) income before income taxes | (53,247) | 25,350 | |||||||||
|
(Benefit from) provision for income taxes
|
(2,897,255) | 2,566 | |||||||||
| Net income | $ | 2,844,008 | $ | 22,784 | |||||||
The following table sets forth the components of our consolidated statements of operations data as a percentage of revenue:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Revenue | 100.0 | % | 100.0 | % | |||||||
| Costs and expenses | |||||||||||
| Cost of revenue | 58.5 | 57.7 | |||||||||
| Operations and support | 7.6 | 7.7 | |||||||||
| Research and development | 7.1 | 6.9 | |||||||||
| Sales and marketing | 13.9 | 13.6 | |||||||||
| General and administrative | 15.9 | 16.2 | |||||||||
| Total costs and expenses | 103.0 | 102.1 | |||||||||
| Loss from operations | (3.0) | (2.1) | |||||||||
| Interest expense | (0.3) | (0.5) | |||||||||
|
Other income, net
|
2.5 | 3.0 | |||||||||
| (Loss) income before income taxes | (0.8) | 0.4 | |||||||||
|
(Benefit from) provision for income taxes
|
(45.9) | - | |||||||||
| Net income | 45.0 | % | 0.4 | % | |||||||
Comparison of Years Ended December 31, 2025 and 2024
Revenue
| Year Ended December 31, |
% Change
|
||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
| Revenue | $ | 6,316,261 | $ | 5,786,016 | 9 | % | |||||||||||
Revenue increased $530.2 million, or 9%, in 2025 as compared to the prior year, primarily due to an increase of 14% in Rides as we benefited from improvements in marketplace health and international expansion which was reflected in the increases in Gross Bookings, Rides and Active Riders in 2025 as compared to 2024. Investments in driver supply, which are recorded as a reduction to revenue, decreased by $121.4 million in 2025 as compared to the prior year as driver supply on the platform benefited from organic growth. The increase was also offset by a $168 million impact from certain legal, tax, and regulatory reserve changes and settlements, which were recorded as a reduction to revenue.
We expect revenue will fluctuate based upon factors such as ride volume, driver supply, pricing, incentives and seasonality specifically related to our network of shared bikes and scooters.
Cost of Revenue
| Year Ended December 31, |
% Change
|
||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
| Cost of revenue | $ | 3,697,653 | $ | 3,337,714 | 11 | % | |||||||||||
Cost of revenue increased $359.9 million, or 11%, in 2025 as compared to the prior year. The increase was primarily due to a $337.8 million increase in insurance costs driven by increased ride volume paired with higher costs per mile. There were also increases of $29.6 million in transaction fees due to higher ride volume. These increases were partially offset by a $35.0 million decrease in restructuring costs in 2025 compared to 2024.
We expect to see cost of revenue increase in the near term on a year-over-year basis due to higher insurance costs driven by recent economic factors and the renewals of our third party insurance agreements, but we expect total insurance costs will increase at a lower rate than they have historically as a result of a recently passed rideshare insurance reform bill, SB 371, which is expected to reduce our insurance rate in California.
Operations and Support
| Year Ended December 31, | % Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
| Operations and support | $ | 478,332 | $ | 443,821 | 8 | % | |||||||||||
Operations and support expenses increased $34.5 million, or 8%, in 2025 as compared to the prior year. The increase was primarily due to increases of $17.0 million in driver onboarding costs and rider, driver and car rental fleet support costs and $8.6 million in personnel-related costs driven by increased headcount.
Research and Development
| Year Ended December 31, | % Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
| Research and development | $ | 451,419 | $ | 397,073 | 14 | % | |||||||||||
Research and development expenses increased $54.3 million, or 14%, in 2025 as compared to the prior year. The increase was primarily due to increases of $32.5 million in personnel-related costs and $17.9 million in stock-based compensation driven by increased headcount.
Sales and Marketing
| Year Ended December 31, | % Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
| Sales and marketing | $ | 875,101 | $ | 788,972 | 11 | % | |||||||||||
Sales and marketing expenses increased $86.1 million, or 11%, in 2025 as compared to the prior year. The increase was primarily due to investments in rider engagement including (i) a $43.0 million increase of costs related to our incentive programs from $402.8 million to $445.8 million and (ii) a $32.9 million increase in marketing partnerships with third parties. There was also a $14.0 million increase in brand and other marketing. These increases were partially offset by a $22.6 million decrease in advertising expenses related to riders and drivers.
General and Administrative
| Year Ended December 31, | % Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
| General and administrative | $ | 1,002,130 | $ | 937,348 | 7 | % | |||||||||||
General and administrative expenses increased $64.8 million, or 7%, in 2025 as compared to the prior year. The increase was primarily due to a $45.2 million increase in consultant and advisory costs, a $35.5 million increase due to higher self-retained general business liabilities and the impact of a $29.6 million gain from lease termination related to our San Francisco headquarters recorded in 2024 for which there was no equivalent impact in 2025. These increases were partially offset by decreases of $27.0 million related to stock-based compensation and $23.3 million in certain loss contingencies including legal and tax accruals and settlements.
Interest Expense
| Year Ended December 31, | % Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
| Interest expense | $ | (20,755) | $ | (28,921) | (28) | % | |||||||||||
Interest expense decreased $8.2 million, or 28%, in 2025 as compared to the prior year.
Other Income, Net
| Year Ended December 31, | % Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
|
Other income, net
|
$ | 155,882 | $ | 173,183 | (10) | % | |||||||||||
Other income, net decreased $17.3 million, or 10%, in 2025 as compared to the prior year. The decrease was primarily due to a $19.1 million decrease in interest income and a $5.1 million gain on extinguishment recognized in the first quarter of 2024 related to the partial repurchase of 2025 Notes. The decrease was partially offset by a $12.6 million increase due to foreign currency exchange.
(Benefit from) Provision for Income Taxes
| Year Ended December 31, | % Change | ||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| (in thousands, except for percentages) | |||||||||||||||||
|
(Benefit from) provision for income taxes
|
$ | (2,897,255) | $ | 2,566 | NM | ||||||||||||
NMNot meaningful.
(Benefit from) provision for income taxes decreased $2.9 billion in 2025 as compared to the prior year primarily due to the release of our valuation allowance of U.S. federal and certain state deferred tax assets in the fourth quarter of 2025.
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings)
Adjusted EBITDA is a key performance measure and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) is a key metric, both of which our management uses to assess our operating performance and the operating leverage in our business. Because Adjusted EBITDA and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. Net income (loss) is the most directly comparable financial measure to Adjusted EBITDA.
We calculate Adjusted EBITDA as net income (loss), adjusted for:
•interest expense;
•other income, net;
•provision for (benefit from) income taxes;
•depreciation and amortization;
•stock-based compensation;
•payroll tax expense related to stock-based compensation;
•sublease income;
•gain from lease termination, if any;
•costs related to acquisitions, divestitures and other corporate matters, if any;
•certain legal, tax, and regulatory reserve changes and settlements, if any; and
•restructuring charges, if any.
Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) is calculated by dividing Adjusted EBITDA for a period by Gross Bookings for the same period.
We announced restructuring plans in the second quarter of 2023 and third quarter of 2024 to reduce operating expenses and align strategic priorities. We believe the costs associated with the restructurings are distinguishable from ongoing operating costs and do not reflect current or expected performance of our ongoing operations. We believe the adjustment to exclude the costs related to restructuring from Adjusted EBITDA is useful to investors by enabling them to better assess our ongoing operating performance and provide for better comparability with our historically disclosed Adjusted EBITDA amounts. Refer to Note 15 "Restructuring" to the consolidated financial statements for information regarding these restructuring plans.
We sublease certain office space and earn sublease income. Sublease income is included within other income, net on our consolidated statement of operations, while the related lease expense is included within operating expenses and loss from operations. We believe the adjustment to include sublease income in Adjusted EBITDA is useful to investors by enabling them to better assess our operating performance, including the benefits of recent transactions, by presenting sublease income as a contra-expense to the related lease charges within our operating expenses.
In the fourth quarter of 2024, we terminated a portion of the lease for our San Francisco headquarters. The right-of-use asset associated with the portion of this lease was previously impaired as part of our restructuring plans in the fourth quarter of 2022 and second quarter of 2023, and the extinguishment of the remaining lease liability resulted in the recorded gain within operating lease costs. We believe this does not reflect the current period performance of our ongoing operations and that the adjustment to exclude this gain from lease termination from Adjusted EBITDA is useful to investors by enabling them to better assess Lyft's ongoing operating performance and provide for better comparability with Lyft's historically disclosed Adjusted EBITDA amounts. Refer to Note 9 "Leases" to the consolidated financial statements for information regarding this gain from lease termination.
We exclude certain costs related to acquisitions including due diligence costs, professional fees in connection with an acquisition, certain financing costs, and certain integration-related expenses. These expenses are unpredictable, and depend on factors that may be outside of our control and are not reflective of our ongoing core operations. In addition, the size and complexity of an acquisition, which often drives the magnitude of costs related to acquisitions, may not be indicative of such future costs. We believe excluding costs related to acquisitions, divestitures and other corporate matters facilitates the comparison of our financial results to our historical operating results and to other companies in our industry.
Certain legal, tax, and regulatory reserve changes and settlements are primarily related to certain reserves and/or settlements for significant legal proceedings or governmental investigations and the associated fees. These matters have limited precedent, cover extended historical periods and are unpredictable in both magnitude and timing, therefore are distinct from normal, recurring legal, tax and regulatory matters and related expenses incurred in our ongoing operating performance.
For more information regarding the limitations of Adjusted EBITDA, Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) and a reconciliation of net income (loss) to Adjusted EBITDA, see the section titled "Reconciliation of Non-GAAP Financial Measures".
Free Cash Flow
Free cash flow is a measure used by our management to understand and evaluate our operating performance and trends. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors, and investors with information about our ability to generate or use cash to enhance the strength of our balance sheet, further invest in our business and pursue potential strategic initiatives.
We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment and scooter fleet.
Free cash flow has certain limitations, including that it does not reflect our future contractual commitments and it does not represent the total increase or decrease in our cash balance for a given period. Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. For more information regarding
the limitations of free cash flow and a reconciliation of net cash provided by (used in) operating activities to free cash flow, see the section titled "Reconciliation of Non-GAAP Financial Measures".
Reconciliation of Non-GAAP Financial Measures
We use our non-GAAP financial measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Furthermore, these measures have certain limitations in that they do not include the impact of certain expenses that are reflected in our consolidated statements of operations that are necessary to run our business. Thus, our non-GAAP financial measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.
We compensate for these limitations by providing a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measure. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view our non-GAAP financial measures in conjunction with the respective most directly comparable GAAP financial measures.
Net income is the most directly comparable financial measure to Adjusted EBITDA. The following table provides a reconciliation of net income to Adjusted EBITDA (in millions):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
|
Net income
|
$ | 2,844.0 | $ | 22.8 | |||||||
| Adjusted to exclude the following: | |||||||||||
|
Interest expense(1)
|
25.5 | 34.7 | |||||||||
| Other income, net | (155.9) | (173.2) | |||||||||
|
(Benefit from) provision for income taxes(2)
|
(2,897.3) | 2.6 | |||||||||
| Depreciation and amortization | 135.2 | 148.9 | |||||||||
| Stock-based compensation | 322.3 | 330.9 | |||||||||
| Payroll tax expense related to stock-based compensation | 13.0 | 14.8 | |||||||||
| Sublease income | 0.9 | 3.5 | |||||||||
| Costs related to acquisitions, divestitures and other corporate matters | 29.4 | - | |||||||||
| Certain legal, tax, and regulatory reserve changes and settlements | 211.6 | - | |||||||||
| Gain from lease termination | - | (29.6) | |||||||||
|
Restructuring charges(3)
|
- | 26.9 | |||||||||
|
Adjusted EBITDA(4)
|
$ | 528.8 | $ | 382.4 | |||||||
|
Gross Bookings
|
$ | 18,507.0 | $ | 16,099.4 | |||||||
| Net income as a percentage of Gross Bookings | 15.4 | % | 0.1 | % | |||||||
| Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) | 2.9 | % | 2.4 | % | |||||||
_______________
(1)Includes $4.7 million and $5.8 million related to the interest component of vehicle related finance leases in the year ended December 31, 2025 and 2024. Refer to Note 9 "Leases" to the consolidated financial statements for information regarding the interest component of vehicle-related finance leases.
(2)Includes a $2.9 billion benefit from the release of our valuation allowance of U.S. federal and certain state deferred tax assets in fourth quarter of 2025.
(3)In the year ended December 31, 2024, we incurred restructuring charges of $14.1 million of fixed asset disposals, $11.1 million of other current assets disposals and other costs and $1.8 million of severance and other employee costs. Restructuring related charges for accelerated depreciation of fixed assets of $10.6 million are included on its respective line item. Refer to Note 15 "Restructuring" to the consolidated financial statements for information regarding the restructuring plan announced in September 2024.
(4)Due to rounding, numbers presented may not add up precisely to the totals provided.
Net cash provided by (used in) operating activities is the most directly comparable financial measure to free cash flow. The following table provides a reconciliation of net cash provided by (used in) operating activities to free cash flow (in millions):
|
Year Ended December 31,
|
|||||||||||
| 2025 | 2024 | ||||||||||
| Net cash provided by operating activities | $ | 1,168.4 | $ | 849.7 | |||||||
|
Less: purchases of property and equipment and scooter fleet
|
(52.8) | (83.5) | |||||||||
|
Free cash flow(1)
|
$ | 1,115.6 | $ | 766.3 | |||||||
(1)Due to rounding, numbers presented may not calculate precisely to the totals provided.
Cash Flows
The following table summarizes our cash flows for the periods indicated (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Net cash provided by operating activities | $ | 1,168,438 | $ | 849,737 | |||||||
|
Net cash provided by (used in) investing activities
|
406,738 | (517,978) | |||||||||
|
Net cash used in financing activities
|
(685,528) | (155,869) | |||||||||
| Effect of foreign exchange on cash, cash equivalents and restricted cash and cash equivalents | 1,682 | (1,636) | |||||||||
|
Net increase in cash, cash equivalents and restricted cash and cash equivalents
|
$ | 891,330 | $ | 174,254 | |||||||
Operating Activities
Cash provided by operating activities was $1.2 billion for the year ended December 31, 2025, which consisted of net income of $2.8 billion adjusted for $2.5 billion of non-cash items, and changes in working capital of $829.0 million. The year over year improvement in net income was $2.8 billion, from a net income of $22.8 million for the year ended December 31, 2024 to a net income of $2.8 billion for the year ended December 31, 2025 primarily due to the release of our valuation allowance on U.S. federal and certain state deferred tax assets in the fourth quarter of 2025.Non-cash adjustments primarily consisted of deferred income tax of $2.9 billion due to the valuation allowance release, stock-based compensation expense of $322.3 million, and depreciation and amortization expense of $135.2 million. The changes in working capital were primarily driven by insurance, which saw (i) an increase in our insurance reserves due to a rise in commercial auto insurance rates on a per mile basis compared to the prior year, paired with an increase in ride volume in 2025 compared to the previous periods and(ii) an increase in insurance-related accruals. There was also an increase in certain loss contingencies, including legal accruals. These were partially offset by (i) an increase in accounts receivable due to growth in certain initiatives and (ii) ordinary payments for our real estate operating leases.
Cash provided by operating activities was $849.7 million for the year ended December 31, 2024, which consisted of a net income of $22.8 million adjusted for $375.1 million of non-cash items, and changes in working capital of $451.9 million. The year over year improvement in net income (loss) was $363.1 million, from a net loss of $340.3 million for the year ended December 31, 2023 to a net income of $22.8 million for the year ended December 31, 2024. Non-cash adjustments included stock-based compensation expense of $330.9 million, which decreased year over year due to a reduction in headcount driven by the restructuring activities initiated in prior years, and depreciation and amortization expense of $148.9 million. The changes in working capital were primarily driven by insurance, which saw (i) an increase in our insurance reserves due to a rise in commercial auto insurance rates on a per mile basis compared to the prior year, an increase in ride volume in 2024 compared to the previous period and strategic risk management decisions to retain additional risk in certain markets, and (ii) an increase in insurance-related accruals. There was also an increase in certain loss contingencies, including legal accruals. These were partially offset by (i) increases to prepaid expenses for cash outflows related to our insurance activities, including insurance premium payments and (ii) ordinary payments for our real estate operating leases. The timing of our scheduled driver payments also impacted prepaid and other current assets and accrued liabilities.
Investing Activities
Cash provided by investing activities was $406.7 million for the year ended December 31, 2025, which primarily consisted of purchases of marketable securities of $3.3 billion, cash paid for the acquisition of Freenow and TBR of $307.3 million, net of cash acquired and purchases of property and equipment of $52.8 million, partially offset by proceeds from sales and maturities of marketable securities of $4.1 billion and the sale of property and equipment of $52.9 million.
Cash used in investing activities was $518.0 million for the year ended December 31, 2024, which primarily consisted of purchases of marketable securities of $4.2 billion and purchases of property and equipment of $83.5 million, partially offset by proceeds from sales and maturities of marketable securities of $3.6 billion and the sale of property and equipment of $92.0 million.
Financing Activities
Cash used in financing activities was $685.5 million for the year ended December 31, 2025, which primarily consisted of repurchase of Class A common stock of $500.0 million, repayment of our 2025 Notes of $390.7 million, taxes paid related to net share settlement of equity awards of $151.3 million, repayment of loans of $62.4 million and principal payments on finance lease obligations of $41.3 million. This was partially offset by $500.0 million in proceeds from the issuance of our 2030 Notes, reduced by expenditures of $42.0 million related to the purchase of capped calls and $12.2 million in payments of debt issuance costs.
Cash used in financing activities was $155.9 million for the year ended December 31, 2024. This included a net cash inflow of $0.2 million for transactions related to the issuance of our 2029 Notes which included $460.0 million in proceeds from the issuance of the 2029 Notes and expenditures of $350.0 million related to the settlement of the 2025 Notes, $50.0 million related to the repurchase of Class A common stock, $47.9 million related to the purchase of capped calls and $11.9 million in payments of debt issuance costs. Additionally, our financing activities included a repayment of loans of $84.1 million, principal payments on finance lease obligations of $46.7 million and taxes paid related to net share settlement of equity awards of $40.3 million.
Liquidity and Capital Resources
As of December 31, 2025, our principal sources of liquidity were cash and cash equivalents of approximately $1.1 billion and short-term investments of approximately $705.2 million, exclusive of restricted cash and cash equivalents and restricted investments of $1.9 billion, and $420.0 million available to draw under our revolving credit facility, as described below. We believe our existing cash, cash equivalents, and short term investments, along with the available borrowings under our revolving credit facility will provide sufficient liquidity to meet our working capital needs, inclusive of short-term commitments such as capital expenditure needs, for at least the next 12 months.
The portion of our cash and cash equivalents that is not invested is held at several large financial institutions and our investments are focused on the preservation of capital, fulfillment of our liquidity needs, and maximization of investment performance within the parameters set forth in our investment policy and subject to market conditions. The investment policy sets forth credit rating minimums, permissible allocations, and limits our exposure to specific investment types. We believe these policies mitigate our exposure to any risk concentrations.
Debt
On November 3, 2022, we entered into a Revolving Credit Agreement with certain lenders which provides for a $420 million senior secured revolving credit facility, with a sublimit of $168 million for the issuance of letters of credit (as amended to date, the "Revolving Credit Facility"), maturing on November 3, 2027. As of December 31, 2025, no amounts have been drawn under the Revolving Credit Facility. Our available credit under the Revolving Credit Facility is reduced by $61.3 million in letters of credit issued under the Revolving Credit Facility as of December 31, 2025. Refer to Note 11 "Debt" to the consolidated financial statements for further discussion on the Revolving Credit Facility, including covenant requirements.
In February 2024, we issued $460 million aggregate principal amount of the 2029 Notes and in September 2025, we issued $500 million aggregate principal amount of the 2030 Notes, maturing in March 2029 and September 2030, respectively, unless earlier converted, redeemed or repurchased. Refer to Note 11 "Debt" and Note 12 "Common Stock and Employee Stock Plans" to the consolidated financial statements for information regarding these transactions.
Restricted Assets
We collect the fare and related charges from riders on behalf of drivers at the time the ride is delivered using the rider's authorized payment method, and we retain any fees owed to us before making the remaining disbursement to drivers. Accordingly, we maintain no accounts receivable from drivers. Our contracts with insurance providers require reinsurance premiums to be deposited into trust accounts with a third-party financial institution from which the insurance providers are reimbursed for claims payments. Our restricted reinsurance trust assets as of December 31, 2025 and 2024 were $1.9 billion and $1.5 billion, respectively.
Share Repurchase
In February 2025, we announced that our board of directors had authorized a program for the repurchase of up to $500.0 million of our Class A common stock. In May 2025, our board of directors authorized an increase to this initial share repurchase program of an additional $250.0 million of our Class A common stock, for a total overall authorization of up to $750.0 million, and we announced our intent to utilize $500.0 million of this authorization before the end of the second quarter of 2026. As of December 31, 2025, we had repurchased an aggregate amount of $500.0 million of our Class A common stock, and $250.0 million remained available under the initial repurchase authorization. In February 2026, our board of directors authorized a new share repurchase program for the repurchase of up to $1.0 billion of our Class A common stock, in addition to amounts remaining available under our initial repurchase program. We have entered into, and from time to time expect to enter into, Rule 10b5-1 trading plans to facilitate the repurchase of shares under the authorization. Repurchases may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. Refer to Note
12 "Common Stock and Employee Stock Plans" and Note 16 "Subsequent Events" to the consolidated financial statements for information regarding these programs.
We plan to continue to focus on and actively manage our cash balances and liquidity, capital expenditures, working capital and operating expenses. In particular, we continue to actively monitor the impact of the uncertain macroeconomic environment, including credit markets, inflation and interest rates, and have made adjustments to our expenses and cash flow. Our future capital requirements will depend on many factors, including, but not limited to, our growth, the effectiveness of our efforts to align our expenses with our current operating needs and short-term commitments, our ability to attract and retain drivers and riders on our platform, the continuing market acceptance of our offerings, the timing and extent of spending to support our efforts to develop our platform, actual insurance payments for which we have made reserves, and the expansion of sales and marketing activities, as well as satisfaction of our obligations with respect to indebtedness. See the section titled "Risk Factors" including the subsection titled "Risk Factors-Risks Related to Financing and Transactional Factors" included in Part 1, Item 1A of this Annual Report on Form 10-K for additional discussion of risks that our business faces.
Contractual Obligations and Commitments
The following table summarizes our contractual obligations and commitments as of December 31, 2025 (in millions):
|
Payments Due by Period
|
|||||||||||||||||
|
Total(2)
|
12 months or less | Thereafter | |||||||||||||||
| Operating lease commitments | $ | 232.9 | $ | 38.2 | $ | 194.7 | |||||||||||
| Financing lease commitments | 81.2 | 38.8 | 42.4 | ||||||||||||||
|
Long-term debt, including current maturities(1)
|
1,053.0 | 50.6 | 1,002.4 | ||||||||||||||
|
Purchase commitments
|
672.6 | 146.4 | 526.2 | ||||||||||||||
_______________
(1)Includes the 2029 Notes and 2030 Notes with outstanding principal amounts of $460.0 million and $500.0 million, respectively, as of December 31, 2025. The 2029 Notes and 2030 Notes mature on March 1, 2029 and September 15, 2030, respectively, unless earlier converted, redeemed or repurchased. Refer to Note 11 "Debt" to the consolidated financial statements for information regarding the 2029 Notes and 2030 Notes.
(2)Due to rounding, numbers presented may not add up precisely to the totals provided.
Critical Accounting Policies and Estimates
Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.
We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2 "Summary of Significant Accounting Policies" included elsewhere in this Annual Report on Form 10-K.
Revenue Recognition
We generate substantially all our revenue from our ridesharing marketplace that connects drivers and riders. We recognize revenue from fees paid by drivers for use of our Lyft Platform offerings in accordance with ASC 606 as described in Note 2 "Summary of Significant Accounting Policies".
We recognize revenue upon completion of a ride as the single performance obligation is satisfied and we have the right to receive payment for the services rendered upon the completion of the ride. We evaluate the presentation of revenue on a gross versus net basis based on whether we act as a principal by controlling the transportation service provided to the rider or whether we act as an agent by arranging for third parties to provide the service to the rider. Judgment is required in this assessment, and in most cases, we act as an agent in facilitating the ability of a driver to provide a transportation service to a rider. Revenue generated in these cases is reported on a net basis, reflecting the service fees and commissions owed to us from the drivers as revenue, and not the gross amount collected from the rider. In certain markets, we act as a principal for transportation services as we control the services provided. Revenue generated in these markets is reported on a gross basis reflecting the gross amount collected from the rider, with payments to the drivers recorded within cost of revenue.
We also offer various incentive programs to drivers and riders to encourage use of the Lyft Platform. Judgment is required to determine the appropriate classification of these incentives. Incentives provided to drivers and bikes and scooters riders are generally recorded as reduction to revenue if we do not receive a distinct good or service in consideration or if we cannot reasonably estimate the fair value of goods or services received. In markets where we control the transportation services provided, incentives provided to
drivers are recognized in cost of revenue. Incentives provided to riders are generally recognized as sales and marketing expense with the exception of market-wide marketing promotions.
Insurance Reserves and Insurance-related Accruals
We utilize both a wholly-owned captive insurance subsidiary and third-party insurance, which may include deductibles and self-insured retentions, to insure or reinsure costs including auto liability, uninsured and underinsured motorist, auto physical damage, first party injury coverages including personal injury protection under state law and general business liabilities up to certain limits. The recorded liabilities reflect the estimated cost for claims incurred but not paid and claims that have been incurred but not yet reported and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. Liabilities are determined on a quarterly basis using assumptions based on actuarial judgment through an analysis of historical trends, changes in claims experience including consideration of new information and application of loss development factors for the insurance reserves and frequency and severity assumptions for the insurance-related accruals, among other inputs and assumptions.
Insurance claims may take years to completely settle. Accordingly, we make certain assumptions based on currently available information and industry statistics, with the loss development factors as the most significant assumptions related to the insurance reserves and the frequency and severity assumptions as the most significant assumptions related to insurance-related accruals, and utilize actuarial models and techniques to estimate the reserves. A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, economic and healthcare cost trends and the results of related litigation. Furthermore, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. The impact of these factors on ultimate costs for insurance is difficult to estimate and could be material. However, while we believe that the insurance reserve and insurance-related accrual amounts are adequate, the ultimate liabilities may be in excess of, or less than, the amounts provided. As a result, the net amounts that will ultimately be paid to settle the liabilities and when amounts will be paid may significantly vary from the estimated amounts provided for in the consolidated balance sheets. We continue to review our insurance reserve estimates in a regular, ongoing process as historical experience develops, additional claims are reported as settled, and the legal, regulatory and economic environment evolves.
Business Combinations
We account for our business combinations using the acquisition method of accounting, which requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to intangible assets. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected on the consolidated statements of operations.
Goodwill
Goodwill is not subject to amortization, but is tested for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying amount of the goodwill may not be recoverable. We first perform a qualitative assessment to determine whether further impairment testing is necessary. Judgment in the assessment of qualitative factors of impairment include, among other factors: financial performance; legal, regulatory, contractual, business, and other factors; entity specific factors; industry and market considerations, macroeconomic conditions, and other relevant events and factors affecting the reporting unit. To the extent we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed.
Loss Contingencies
We are involved in legal proceedings, claims, and regulatory and governmental inquiries and investigations in the ordinary course of business. Certain matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, we disclose the possible loss in the accompanying notes to the consolidated financial statements.
We review the developments in our contingencies that could affect the amount of the provisions that have been previously recorded, and the matters and related reasonably possible losses disclosed. We make adjustments to our provisions and changes to our disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount of loss. These estimates have been based on our assessment of the facts and circumstances at each balance sheet date and are subject to change based on new information and future events.
The outcomes of our legal proceedings are inherently unpredictable and subject to significant uncertainties. For matters where we have recorded a probable and estimable loss, until the final resolution of the matter, there may be exposure to a material loss in excess of the amount recorded.
Income Taxes
We record a valuation allowance to reduce deferred tax assets to the net amount that we believe is more-likely-than-not to be realized. In assessing the need for a valuation allowance, we consider all available evidence, both positive and negative, including historical profitability, expectations and risks associated with future taxable income, and ongoing tax planning strategies. We weigh positive and negative evidence based on the extent to which it can be objectively verified. The assessment of the valuation allowance requires significant management judgment regarding future profitability, which may change due to many factors, including future market conditions and our ability to successfully execute business plans. Changes in our assessment of the realizability of deferred tax assets could result in adjustments to the valuation allowance and corresponding impacts to our income tax provision in future periods.
In recognizing tax benefits from uncertain tax positions, we assess whether it is more-likely-than-not that the tax position will be sustained upon examination by the taxing authorities based on its technical merits. Evaluating our tax positions and determining our provision for income taxes are inherently uncertain and requires judgment and use of assumptions and estimates.
Recent Accounting Pronouncements
See Note 2to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recent accounting pronouncements as of the date of this report.
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