Lyft (LYFT) Q2 Rides Jump 14% to Record

Key Points

• GAAP revenue for Q2 2025 was $1.60 billion, missing analyst estimates by 0.68% (GAAP), Revenue was $1.59 billion, missing analyst estimates by 0.68%, but rising approximately 10.6% year-over-year.

• Record GAAP net income of $40.3 million and record free cash flow of $329.4 million, reflecting strong year-over-year profitability gains.

• Rides surged 14% year over year to an all-time high, with nine consecutive quarters of double-digit ride growth.

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Lyft (NASDAQ:LYFT), a major player in the U.S. and Canadian ridesharing sector, released its earnings for the second quarter of fiscal 2025 on August 6, 2025. The company reported GAAP revenue of $1.60 billion, slightly below analyst expectations of $1.61 billion (GAAP), falling short by $11.0 million, or 0.68% (GAAP). Net income (GAAP) reached $40.3 million, a sharp rise from $5.0 million in GAAP net income in Q2 2024. Earnings per share (GAAP) came in at $0.10, short of the estimated $0.24. The quarter marked all-time records for rides, gross bookings, and free cash flow. While revenue growth was robust at 11% year-over-year (GAAP), the small shortfall highlights the competitive and evolving landscape in which Lyft operates.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Key Success Factors

Lyft offers a technology-based platform connecting riders with drivers for on-demand mobility. Its core business is facilitating car rides through its app, but it has expanded into areas like micromobility (e.g, bike and scooter rentals) and transportation partnerships. The company has increasingly invested in features that make rides safer, easier to book, and more accessible to a broad user base.

Recent company focus areas include developing user-friendly product features like Price Lock (which caps ride prices for members) and Women+ Connect, a matching option for women and nonbinary users. Additional key success factors involve advancing fleet electrification and competing effectively in an industry shaped by large-scale rivals and rapid innovation. Ongoing operational efficiency, regulatory compliance, and strong cash generation have also risen in importance as investors look for signs of sustained profitability.

Quarter Highlights and Underlying Drivers

The company achieved new highs in operational activity this quarter. Total rides climbed 14% year over year to 234.8 million, marking nine straight quarters of double-digit ride growth. The count of active riders hit 26.1 million, up 10% year over year. Gross bookings reached $4.5 billion, a 12% jump year over year—a result of increased share in lower-priced markets like Canada, as well as expanded adoption of discounted ride options.

Profitability metrics improved. Adjusted EBITDA (a measure of earnings before interest, taxes, depreciation, and amortization, often used to evaluate operational profitability) grew 26% year over year. Adjusted EBITDA margin (as a percentage of Gross Bookings) rose to 2.9%, up from 2.6% in Q2 2024, while net cash from operating activities (GAAP) was $343.7 million, lifting trailing twelve-month net operating cash flow (GAAP) close to $1.0 billion.

Operationally, product innovation remained a focus area. The Price Lock membership feature—designed to provide predictable fares—saw a 21% rise in adoption compared to Q4 2024, with a retention rate of about 75% as of Q1 2025. Lyft Silver, a program aimed at older adults, showed strong performance too, with nearly 20% of new activations from first-time users and a high retention rate of about 80%.

Platform expansion also advanced. The Freenow acquisition (completed July 31, 2025) expands Lyft’s European footprint and brings additional expertise in taxi market operations. Partnerships with Baidu on autonomous vehicles (self-driving cars) and with United Airlines and others have been announced, with plans for future expansion pending regulatory approval.

Looking Ahead: Guidance and Considerations

For the third quarter, management forecasts gross bookings between $4.65 billion and $4.80 billion (non-GAAP), implying growth of 13% to 17% year over year. Adjusted EBITDA (non-GAAP) guidance falls in the $125 million to $145 million range, with Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) expected between 2.7% and 3.0%. These projections now include two months of Freenow’s operating results, following the completion of the acquisition.

Management did not provide a detailed full-year outlook or guidance for net income, citing variability in certain recurring costs and integration-related events.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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JesterAI is a Foolish AI, based on a variety of Large Language Models (LLMs) and proprietary Motley Fool systems. All articles published by JesterAI are reviewed by our editorial team, and The Motley Fool takes ultimate responsibility for the content of this article. JesterAI cannot own stocks and so it has no positions in any stocks mentioned. The Motley Fool recommends Lyft. The Motley Fool has a disclosure policy.