Lyft shares experienced a significant drop on Tuesday night after seeing a tremendous surge of over 60% during after-hours trading. Interestingly, this drastic movement was primarily caused by a typographical error.
As of Wednesday morning at 9 a.m. Eastern time, the stock had risen by 21%. This increase occurred after the company's analysts disclosed during a conference call that the previous day's earnings release contained an error that had unintentionally improved the company's 2024 forecast.
The initial press release had mentioned a 500 basis point expansion for adjusted EBITDA margin in 2024. However, it was later clarified that this figure should have been 50 basis points. (It's important to note that a basis point represents one one-hundredth of a percentage point.)
When questioned about the typo during the earnings conference call, management acknowledged the mistake. A company spokesperson confirmed the correction, stating that updates would be made to the press release and an SEC filing to rectify this clerical error.
Fortunately, Lyft has promptly released a corrected version of the press release.
Aside from this error, the company's fourth-quarter earnings were actually quite solid. Lyft reported a 17% increase in gross bookings, totaling $3.7 billion compared to the previous year. Additionally, revenue rose by 4% to reach $1.2 billion. Gross bookings encompass the total value of customer transactions, which includes taxes, tolls, and fees (excluding tips).
In terms of net loss, Lyft reported a quarterly figure of $26.3 million, a significant improvement compared to the net loss of $588.1 million recorded in the fourth quarter of 2022.
Furthermore, Lyft's adjusted earnings for the fourth quarter amounted to 18 cents per share, surpassing analysts' expectations of 8 cents per share, according to FactSet data.
CEO David Risher commented on the company's achievements in 2023, highlighting the attainment of its most substantial annual ridership, with over 700 million rides completed and a total income for drivers exceeding $8 billion.
Interestingly, Lyft's robust fourth-quarter performance mirrored that of its competitor, Uber Technologies. Uber's earnings, which revealed a surge of 22% in gross bookings, far surpassed expectations. With earnings of 66 cents per share on revenue of $9.94 billion, Uber outperformed predictions of 16 cents per share on revenue of $9.76 billion.
Uber's bookings also exceeded forecasts, totaling $37.6 billion and exhibiting a growth rate of 22% compared to the previous fourth quarter.
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