Lyft, Inc. Q1 FY2026 Earnings Call

Good afternoon, and welcome to Lyft's First Quarter 2026 Earnings Call. As a reminder, this conference call is being recorded. On the call today, we have our CEO, David Risher; and our CFO, Erin Brewer. Our full prepared remarks are available on the IR website, and we'll use this time to answer your questions. We'll make forward-looking statements on today's call, including statements relating to our business strategy and performance, partnerships, future financial and operating results, trends in our marketplace and guidance. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those projected or implied during this call. These factors and risks are described in our earnings materials and in our recent SEC filings. All of the forward-looking statements that we make on today's call are based on beliefs as of today, and we disclaim any obligation to update any forward-looking statements, except as required by law. Additionally, today, we're going to discuss customers. For rideshare in North America, there are generally two customers in every car: the driver is Lyft's customer, and the rider is the driver's customer. We care about both. Our discussion today will also include non-GAAP financial measures, which are not a substitute for GAAP results. Reconciliation of our historical GAAP to non-GAAP results can be found in our earnings materials, which are available on our IR website. And with that, I'll pass the call to David.

Thank you, Erin. Hello, everyone. This Q1 represented another strong quarter for Lyft. We again delivered on our financial commitments and again had double-digit growth in active riders, gross bookings and adjusted EBITDA year-over-year, further setting ourselves up for a global hybrid AV future. Rideshare demand remained healthy. We saw double-digit rides growth around peak events like Valentine's Day, Super Bowl Sunday and St. Patrick's Day. Stepping back, our share of the U.S. rideshare market has grown from three years ago when I joined and has held above that point ever since, with an increase in Q1 over last quarter. And in March, we delivered our highest ever number of rides in a week. Taken together with our financial results, this continues to validate our thesis that customer obsession drives profitable growth. Looking globally, we're now operating in over 120 countries around the world and have further deepened our presence in London with our acquisition of Gett's U.K. business, which we just officially closed this week. And finally, we took significant steps forward with our partner, Waymo, in Nashville for the construction of a state-of-the-art AV depot. We continue to be extremely bullish about AV's ability to expand our market and about our own capacity to operate them at industry-leading utilization levels, the ultimate driver of profitability. And with that, let me turn it over to Erin to take you through a few financial highlights.

Thanks, David. The consistent execution David just described translated directly to strong financial results. In the first quarter, gross bookings were up 19% and adjusted EBITDA up 25% year-over-year. Over the last 12 months, we've generated a record $1.12 billion in free cash flow. And during Q1, we executed our largest quarterly share repurchase ever, totaling $300 million in the quarter. Looking forward, our guidance reflects continued momentum across the business. At the midpoint of our range, we expect gross bookings to accelerate to approximately 20% and adjusted EBITDA to expand by more than 30% year-over-year. And with that, we'll take your questions.

Let's dive into Q&A. First question comes from Eric Sheridan with Goldman Sachs.

Okay. Great. Hopefully, you can hear me okay. I wanted to dive into the partnerships and how they continue to evolve. What are the key learnings as these partnerships continue to build in momentum and build in their duration in terms of them as stimulants of increased frequency on your platform or stimulants of increased new rider growth on the platform more broadly. We'd love to get a better sense of color there. I appreciate it.

Sure. Eric, it's David. I'll take it. Maybe Erin will tag team on me a little bit here as well. So super good question. And I think I'm just going to maybe reset the table for one second because I think the role of partnerships continues to be incredibly important to our current business and will be incredibly important in our AV business. So how we perform as a partner, I think it's actually a good predictor and how our partners perform is a good predictor of the future. Okay. So to your question, we got a record number of partnership-tagged ride requests this quarter, so about 27%. And that's a big deal. I think when we first started talking about this, we were at 20%, then 22%, then 25% and now 27%. Why? Two reasons. Number one, we partner with great organizations that have huge TAMs. So if you look at some of our most recent ones, DoorDash is still only about 1.5 years old. United is more recent. Even Southwest Airlines through their credit card program—these are enormous programs. And so they represent a huge opportunity for us to acquire new customers. Now those—I'll come back to frequency in a second—those customers are different. For example, DoorDash customers tend to be very heavy users. And you can understand this: people eat three times a day, and they tend to take rides relatively more often than others. So you saw us obviously complete—double down on that partnership by expanding that to Canada. If you look at United Airlines, United tends to be more business customers. We out-index in some of United's big hubs, Chicago being a good example where we had great growth this past year. They tend to be airport rides, not surprisingly, which means higher bookings per ride, which tends to mean higher profits. So that's wonderful. How do we reward United customers? Well, we give them miles, which they've done for years now. I think we've awarded roughly 350 million miles—right around there. That's a big deal. And then a couple of weeks ago, we announced Pay with Miles, which is amazing. That allows United MileagePlus customers to pay with their miles on Lyft. That's an industry first and it deepens that relationship. So you put all these things together and you get sort of a portfolio. Some tend to drive frequency and new-customer acquisition a little bit more. Some tend to drive other behaviors that we like, such as airport rides. But they're all super, super important. Maybe I'll talk about AV partners another time. I don't think that was the core of your question, but we remain very committed to the concept of really developing the ecosystem and going deeper and deeper into a very large TAM.

Great. Next question will be Doug from JPMorgan.

This is Neeraj on for Doug. So a couple of questions. One is on the SF commentary. I think you guys mentioned that you have continued to gain share and also saw a ride increase by 20% in the ODD. So just curious, given Uber has said they have gained share in the last six months as well. So just trying to understand the share dynamics there. Are you gaining share from Waymo? Or how do the share dynamics work there? And the next one was, have you started seeing any elasticity from the California insurance mandate?

Sure. Why don't I take the first half and then Erin you can take the second half. So broadly speaking, as we've said before, we think AVs are an incredible positive for rideshare. It's a great product, and therefore, over time, it's going to bring new people into the rideshare ecosystem. When we look across the regions where AVs are in the marketplace, we've effectively held share pretty steady. That's a good theme because it means as new riders are coming on, the whole pie is growing. San Francisco is doing great. As we said, we actually had an increase—we've had nice growth in San Francisco. These things are always multi-variable. We're also doing some marketing in San Francisco, so that is a maybe confounding factor. But we like what we see in San Francisco. I will say, when I look at what the other guys say, they may pick a six-month period for a particular reason; I'm not sure. But broadly speaking, I feel pretty good about our position in San Francisco.

Yes. I'm happy to comment on California. On our previous earnings conference call, we talked about the insurance reform in California that we expected to deliver great value to riders and to drivers. We further talked about how we expected that to translate into increasing demand over time and gaining momentum in the back half of the year. I can tell you that as we got into February, March and into the second quarter, we are seeing that growth begin in California. That growth in the first quarter outpaced other top regions. So we're starting to see those effects, and we look forward to that momentum continuing for the balance of the year.

Our next question will be Nikhil from Bernstein.

I wanted to ask about the rides growth and appreciate the call out in the letter. That's helpful. So the mid-single-digit North America volume—if I'm reading it right, it looks like Canada is growing much faster, almost 50%. So it would be helpful if you could maybe just outline what you saw in the U.S. business on a ride volume basis. And I guess the big picture factors that maybe weighed on that in the quarter. It seems like it's decelerated over the last few quarters. So just your perspective on what's happening there would be really helpful.

Yes, for sure. Nikhil—so a couple of things. The first thing is let's level set on the data and then talk about what we're seeing. So on the data, we grew both in the United States and in Canada. No question, Canada outgrew the U.S. I don't think it was quite to the degree you're describing, but it was very significant. I mean, we did grow something like 50% year-over-year in Canada; I might get that a little bit wrong. North America is a huge region—super diverse, a lot of geographies and segments. What we have seen is in Canada for sure, and also in low-scale markets that we've been talking about for six or seven quarters, that's where we are seeing outsized growth. Low-scale markets are maybe the Milwaukees or the Pittsburghs—second and third-tier cities or even more rural areas where there's a huge amount of TAM left and it's underpenetrated. In some of the largest cities where rideshare has been active the longest, the industry on average is seeing slightly lower rates of growth or at least did see that this past quarter. I think that's an industry thing, largely S-curves and being in markets for a long time. So once you look at that and ask how you'll reaccelerate growth in some of those markets, that's where some segments become interesting. You've heard us talk about Lyft Silver, which addresses older people who take a lot of rides. And on our platform, once they become Silver members, they take a lot more rides. Lyft Teen is still a very new product with huge opportunity. Look at partnerships: DoorDash, United—those have real impacts in major cities. We saw double-digit growth in both New York and San Francisco; part of that is marketing. We're leaning into Check Lyft. National studies show when people check both apps, they tend to save money. That's a powerful message and one that favors us because of our pricing strategy and because if you're not even looking at our app, you can't save money. So there's a lot of room to go. When I look across all of those, I see a lot of vectors for growth. That's why we're saying our rides are going to accelerate in Q2 and beyond. I'll turn it over to Erin to talk a bit about the weather and other factors.

Sure. I'll offer a little bit of color, Nikhil. In our prepared remarks, we quantified the impact that the weather in the first quarter had on our overall rides—roughly about 3 million rides. You can think about that as a little bit more than half of that being bike rides overall, given the severity of the weather in the Northeast. Beyond that, there are seasonal factors. We always have a deceleration naturally in the bikes business from Q4 to Q1, same with FREENOW. Those both seasonally accelerate into the second quarter. So that, in addition to a number of the areas David mentioned, including California, are underlying factors as we think about acceleration into Q2. Zooming out, nothing has changed about our trajectory for 2026 and our objective to deliver north of 1 billion rides for the full year.

Next question will be Ben from Deutsche.

So the theme this quarter has been AI productivity and sort of the investments companies are making into tokens, for instance. So I'm wondering how you think philosophically about balancing the need to maintain your improving margin trajectory today versus growing talent and investing in these tools to support productivity? And then secondly, I'd be curious to hear what you're seeing in the market this quarter that required you to increase incentives per ride by 17%. Can you touch on that as well, please?

Sure. Again, we'll tag team this. Maybe state the obvious: AI is amazing. It's rolling through our organization like every other org at a lightning pace. I was looking at AI adoption among our developers. With a new tool—we have a strategic relationship with Claude—and a new co-generation tool got to over 80% adoption over 35 to 45 days. Amazing. How we think about it is AI builds capacity and increases speed—capacity and velocity. We see examples across the organization. We've talked about becoming a more global org. When you become more global, you have to do things around data, privacy, security and systems integration. A lot of that isn't direct customer value-add, but it needs to be done. Our team has been crushing it, and much of the reason is we're relying on AI tools we've developed internally or codeveloped with others that allow us to get things done. Same with customer-facing things—another topic. Broadly speaking, we run a pretty lean ship. AI is allowing us to move faster and build capacity among our staff so they can be more productive or work on more things simultaneously.

Sure. I'll take the question on incentives and start with our usual line: incentives in this business fall in two places on our P&L—the contra revenue line and sales and marketing—and are used dynamically in the marketplace to balance and optimize overall. That's why we always say we are optimizing our P&L as we think about gross bookings and adjusted EBITDA. If you think about contra revenue incentives overall, on a year-over-year basis, that's actually been a source of leverage. In the first quarter, we had our highest driver hours ever in the first quarter—very strong engagement overall. We referenced our most recent driver preference survey with super strong results. So you see leverage in the contra revenue line. As for sales and marketing incentives, think about this from a P&L perspective. If you look at our performance in the quarter, you see strong revenue growth, gross margins expanding year-over-year—insurance being a point of leverage—and a disciplined fixed cost base. Those things allow us to invest when we see great return opportunities in rider incentives. We do it deliberately and focused on ROI over the long term. Some of that strong performance gave us the opportunity to take advantage of strong investment opportunities, especially when the marketplace is performing so well. We delivered across our financial commitments. Hopefully that gives you color on how we managed that piece in the quarter.

Next question is John Blackledge with TD Cowen. John, we're going to come back to you, okay? We're going to go to— I can hear somebody. Is that John?

Yes. Sorry. First time on Zoom. Could you talk about the strength in the high-value modes and how much runway there is for further penetration of total rides? And then second question, would you expect this kind of divergence between gross bookings growth and rides volume growth to extend into the second half? Or will the gap close a bit as we get through the second half?

Let's tag team that one. There's a lot of runway—maybe a lot of headroom is a better way to say it. Lyft may have been underinvested in higher-value modes for a period of time and now has made up for lost time. We're focusing on improving the quality of the cars, the types of drivers—some drivers who drive for Black in high-value modes. We call this Black XL, even XXL, a new product for big families. We're shifting toward a more professional set of drivers. TBR also operates in the very high-end chauffeur service. Lots of growth and plenty of runway; it's been an area we've accelerated over the last few quarters and we have big ambitions because there's demand to fill with a high-quality product.

Yes. On the gross bookings and rides growth dynamics in the first quarter, there are a couple of components. Part of what you're seeing is the continuation of a shift toward higher-value modes—up over 35% year-over-year in the first quarter. Adding the FREENOW business, which carries a higher average gross bookings per ride, is also helpful. Separately, we continue to diversify the things that add to our gross bookings where there may not be a ride attached—things like ads and luxury. Those dynamics are driving the divergence. For the second quarter, I expect that delta between gross bookings growth and rides growth to narrow somewhat. The significant seasonal expansion of the bikes business is one of the main drivers for that narrowing from Q1 to Q2.

Okay. Now we really are going to take a question from Mike at MoffettNathanson.

Awesome. It was nice knowing that it was coming. Yes, I had time to prepare, but it was going to be the same questions anyways. Can we talk about pricing in the U.S. market? All intra-quarter, we get questions from clients about what third-party data shows for industry pricing kind of ramp. When we see this reported number, I know there's some FREENOW aspect, but can we maybe simplify what year-over-year pricing is for a Lyft standard ride? I know there's a premiumization aspect, but just to level set that and any nuance would be helpful. And then another question: I'd love to hear how you're feeling about your ad business. Maybe some updates on the run rate there and if anything has changed on your outlook for the future, if you're more optimistic or anything along those lines would be great.

Erin and I are chuckling here. Yes. On ads first: we've talked about ads for a while and have been pleased with the run rate and the exit rate from last year. Big picture, there's a lot of opportunity because advertisers are always looking for new ways to connect with customers. In an increasingly virtual world where people spend more time on their phones, the big open question is how to connect that to the physical world. Look at campaigns we've done: Sephora, Charles Schwab, and more recently McDonald's. You start to see interesting trends where people change behavior as a result of seeing ads in real time while in cars. Also bikes in San Francisco have advertising—Gemini is visible on the bike system here and in New York City. There's a lot of opportunity. We have an audience of roughly 50 million people plus, and we're doing audience extension to take some of that data off-platform through partners like Trade Desk. There's a lot of headroom. Suzie Reider runs our ad group—she joined us from YouTube where she ran ad operations. We have conviction that there's a lot of headroom ahead.

Mike, on pricing— I appreciate the simplicity of your question, and I may somewhat frustrate you because our business tends to be fairly complex. There are year-over-year changes in mix—top markets or certain geographies carry higher average pricing. We've been growing in low-scale markets, which contributes a mix effect, so it may not be straightforward to give a single number. Over a number of years, the industry generally sees some amount of price increases. Over the near term, sequentially from Q4 to Q1, pricing was pretty stable overall. The mix of higher-value modes, the addition of FREENOW, and things like ads and chauffeuring all evolve gross bookings without always being ride-attached. Sequentially from Q4 to Q1, overall pricing was pretty stable. Hope that's some helpful color.

Up next, we have Ken with Wells Fargo.

Can you hear me okay?

Yes.

All right. Can you help me strategically understand: you've made several acquisitions, some geographic diversification, but others not strictly in the rideshare business. Could you talk about how you see them coming together strategically? What are the key points of synergy beyond geographic expansion? Why are they better together?

Let me take a stab at that and offer a bit of history. We were not particularly acquisitive for a period of time because we were focused on building our base business. Last year we made a significant acquisition with FREENOW. That was rideshare-focused, expanding our footprint into nine new countries and importantly helping with government relations, which is important for AVs. Much of our acquisition activity in Europe is important for geographic diversity and for AV future. You can see that with Gett, which we closed this week—Gett is a respected, largely B2B taxi service in London. Between that and FREENOW's presence in London, we're on something north of 70% to 80% of taxis that have apps in their cars now having a Lyft app in the car. That gives us access to a very important market. Europe is an important rideshare market. In London, we want to build volume because that's part of what we bring to AVs and government relations. Gett works directly with governments. TBR is another acquisition—different, a chauffeur space and very high-end. We think of this as up and out: out is overseas expansion, up is strengthening our position in higher-end offerings. Having a top-tier service like TBR brings the company up and allows us to serve more of the market—including clients who need high-end services in many countries.

Next question is Ross with Barclays.

Great. This is a good follow-on from that last answer. Can we just get an update on whether the FREENOW like-for-like is growing? I think it was flat when you made that acquisition. I know you haven't fully anniversaried it, but is the business growing? And are there any early proof points of U.S. Lyft riders going to Europe and adding to the FREENOW business that way?

I'll start with performance, and then David can talk about what we've got coming on the rider side. Ross, to answer directly: yes, the business is growing. When we bought the business, it was about a $1 billion overall annual run rate, and that remains on track. As we closed last year, we anticipate growth as we look into 2026.

On the rider integration piece, today if you're a Lyft user and you open the FREENOW app in London, you'll get a notification. Our vision is that anywhere you are with the Lyft app and we have presence through FREENOW or others, you'll be able to open that app and get a ride. We're starting with basic integrations and doing other small things with partners like Chase. Our plan is that by 2027, anywhere you are, you'll be able to get a ride through the Lyft ecosystem. That's happening over 2027 and will make the business growth more significant once fully integrated.

Okay. Great. Next question is Chad with Oppenheimer.

Could you talk about the margin benefits of some of these higher-value rides as they become a larger share of overall rides and as well as taxi expansion into more cities?

Absolutely. As you think about the higher-value mode mix of rides, up to and including TBR and chauffeuring, they bring a higher overall margin profile to the business. So the mix is helpful financially and provides riders greater choice. When those options are offered, we are seeing trade-up behavior where riders choose the higher-value options. That both satisfies rider needs and increases the margin profile.

I'll give a shout-out to Lyft Black—it's our highest-rated ride product. We've improved the quality and it's seeing more uptake. If you haven't taken it, try it and you can pay with United miles. Regarding taxis, expanding the platform is a strategic priority. We've run small experiments—larger scale in L.A. and other cities. Taxis carry their own insurance, so they have a different financial profile than typical rideshare. In Europe, taxis are often a higher-end and predictable product, typically with higher bookings per ride. Overall, building out our platform across these different modes—Black, taxis, chauffeured services, and eventually AVs—gives us a very strong foundation.

Great. Next question will be Justin with KeyBanc.

This is Miles on for Justin. I wanted to ask about loyalty. Can you provide an update? I know it's early on Lyft Cash Rewards. And then more broadly, you mentioned wanting to do more in loyalty—how does that fit in with strategy and Lyft Pink and your existing offering? And then maybe just continuing on international expansion: you've been active in M&A in new geographies. Do you think this puts you in a position where you can start organically entering new markets now that you have more of a portfolio in places like Europe to bolster that expansion?

Sure. Miles, I'll start with loyalty. We made real inroads in loyalty. In August last year, we leaned into loyalty for our business riders—this was a product gap. We came out with a program we wanted to be the best for rideshare: it's free and offers 6% to 8% back depending on your load, with point multipliers for partners like United and Hilton. The free aspect is important. A competitor sells something that later starts charging; we don't do that. Our managed business rewards program has been quite successful and has interesting characteristics about increased rides once people sign up. On consumer-side cash rewards, we're experimenting—it's cool but relatively small and in experimentation mode. We're putting energy into this area and will have more to discuss in the future.

Adding stats on business rewards: first-time rides on rewards-eligible business profiles grew 59% year-over-year. Those rewards-eligible riders are taking 25% more Lyft rides per month. We're excited about these early phases and the value the product is delivering.

Okay. Next question, we have Shweta with Wolfe Research.

Two quick ones, please. First, did you quantify the impact of the fuel program on your P&L? If not, could we please get a sense of the impact? And then how should we think about partnership rides growth? The 27% data point is great. Any sense on how that cohort of partnership rides has grown versus non-partnership rides? How does that compare?

Shweta, on the fuel program: we talked in our prepared remarks that we're proud of the way we engage with drivers and the relief program we provided. We leaned in with our partners through our driver rewards program to provide relief. Drivers can get almost $1 in savings across all the programs. That benefit is co-funded with our partners. While meaningful and material to drivers, it's not material to our overall financial profile and we do not expect it to be material in the second quarter.

On partnerships: different partners provide different benefits. On average, partners tend to bring higher-booking rides. United, Alaska, Hilton, Chase—those drive higher-value, loyal riders who take rides regularly. DoorDash is more of a volume anchor because of its large program—people eat frequently, which drives ride frequency. Overall, as a portfolio, partnerships are a healthy part of our rider mix and are typically positive on booking and frequency.

And the last question is going to be with Rohit from ROTH Capital.

Can you hear me now? It said unmute. I hope you can hear me. I had two questions: one on pricing and one on AVs. You talked about the Check Lyft messaging campaign. Are you seeing any measurable changes in rider behavior since you launched it—perhaps improved conversion from price-sensitive shoppers? If it becomes a normalized consumer behavior, could that lead to structural pressure on industry pricing over time or perhaps more pricing power for both companies? Second, on AVs: it feels like the three cities closer to launch are Nashville, Hamburg, London. Can you level set how you are operating or offering your services—be it the orchestration layer, data operations, depot management—and talk through your capabilities across those three places?

Sure, Rohit. On pricing and Check Lyft: results are promising but still early. The campaign has been live in San Francisco and New York; we plan to turn up the volume, which indicates we like what we see. This is already a very price-competitive marketplace. I don't think either major company has a lot of room on price because we optimize price every day—millions of transactions. Our strategy is reliable competitive pricing. Customers who check both apps tend to do better; studies show savings. The more people who check both, the healthier the marketplace and it keeps both companies on our toes. We offer a competitive product—fast ETAs, good pricing in many cases—and if more people check us, we can impress them with quality of service, pickup times, driver cancellation improvements, and so on. On AVs across the cities: Nashville is exciting—Waymo is on the road now. Later this summer, we start to take over operations of that fleet. We'll open an 80,000-square-foot center, and you'll be able to order a Waymo on the Lyft app in our hybrid marketplace there. It's going great. We've had extensive experience operating fleets through our FlexDrive subsidiary—about 50,000 cars that have driven billions of miles—giving us deep expertise in maintenance and availability. We believe we're industry-leading in fleet operations, and marrying that with Waymo's AV tech is compelling. In London, our partner is Baidu. Baidu is highly advanced: their RT6 cars are rolling out and mapping is underway. It takes time with regulators and local street physics—narrow two-way streets and signaling dynamics—so London is a bit earlier in the process but on track. Hamburg is a different setup: we've established a partnership at the city level to be the AV provider there; we haven't given all the details today. In short, AV rollouts will proceed in different ways across the U.S. and Europe, and we're moving forward in those cities with operations, depot planning, mapping and regulatory work.

Rohit, maybe one clarification on Check Lyft: the campaign has been live in San Francisco and New York—two cities that have a heavy mix of premium modes. The observation in these early cities is not that price-sensitive riders are the only group; rather, the key behavior is simply to check the app instead of acting out of habit. So it's more about the habit of checking than a pure price-only shopper dynamic.

Okay. Listen, I think I'll wrap up. Thank you all. Really appreciate you joining the call today. Looking ahead, we're super excited about another strong year as we continue to track toward our 2027 targets. Thanks for coming along on the ride with us. Take care, and we'll see you next time.