Lyft shares curb gains after CFO corrects major typo in earnings release

Investing.com -- Shares of ride-sharing firm Lyft severely curbed their aftermarket gains on Tuesday after its CFO said that the company had erroneously overstated a key margin in its fourth quarter earnings release.

Shares still traded positive on Lyft's upbeat outlook- particularly that it will be free cash flow positive this year for the first time ever on cost cuts and rising ride demand. Its fourth-quarter earnings also topped Wall Street estimates.

But shares of the firm severely slashed their aftermarket gains after CFO Erin Brewer said on the earnings call that the the firm had overstated its margin expansion for 2024 in its earnings press release. Instead of the 500 basis points expansion for 2024, Brewer said growth was actually a more modest 50 basis points.

The ride-sharing app's shares (NASDAQ:LYFT) were now trading up about 16% at $14.10 in aftermarket trade, after having initially surged as much as 60% after the earnings release.

The drop in the shares represented a market capital swing of about $2 billion.

Still, the ride-sharing company said its start to 2024 paves the way for a "meaningful margin expansion and our first full-year of positive free cash flow," Lyft said in its Q4 report on Tuesday. 

Lyft reported adjusted earnings per share of $0.18, beating Wall Street estimates for earnings of $0.08 a share, while revenue of $1.22 billion was in-line with estimates.

Active riders on its platform jumped 10% to 22.4 million in the fourth quarter. 

For Q1 2024, the ride-hailing company guided gross bookings of about $3.5 billion to $3.6 billion, with adjusted earnings before interest, tax, depreciation and amortization (EBITDA) expected between $50 million to $55 million.

Looking ahead, the company forecasts rides to grow in the mid-teens year-over-year, with gross Bookings growth expected to be slightly faster than rides growth year-over-year.

Yasin Ebrahim contributed to this report