Lyft CEO David Risher took responsibility for the major error that appeared in the company’s fourth-quarter earnings release, telling CNBC’s “Squawk Box” that it’s “super frustrating” for everyone on the team.
Shares of the ride-hailing company soared more than 60% after the report came out late Tuesday because the press release said Lyft would see margin expansion of 500 basis points, or 5%, in 2024, a huge increase for a business that has long struggled to turn a profit.
During its quarterly call with investors, Lyft CFO Erin Brewer said the figure was incorrect and that the actual increase will be 50 basis points, or 0.5%. That means Lyft’s adjusted profit margin as a percentage of bookings will be 2.1% this year, up from 1.6% in 2023. The mistake also appeared in Lyft’s slide deck.
“Look, it was a bad error, and that’s on me,” Risher said Wednesday.
The stock was still up after the correction, because the numbers beat analysts’ estimates, but it lost much of its initial pop, equal to over $2 billion in market cap.
“We had thousands of eyes, we’ve got a process on this that is nuts,” Risher said. “It’s a terrible thing. It is an extra zero that slipped into a press release.”
Risher said the company discovered the error after it became clear on the earnings call that there was a lot of interest in the margin. When a team member identified the problem, Risher said he could see her “jaw drop.”
“Thank goodness we caught it pretty fast, and we issued an immediate correction,” he said.
Lyft shares jumped 33% on Wednesday to $16.09 and are on pace for their best day since the company’s IPO in 2019. However, the stock is still about 78% below its debut price.
Lyft reported $1.22 billion in revenue for the quarter, an increase of 4% from $1.175 billion a year earlier. The company posted adjusted earnings of 18 cents per share, which was above the 8 cents expected by analysts, according to LSEG, formerly known as Refinitiv.
Gross bookings for the year increased 14% to $13.8 billion, while bookings for the quarter rose 17% to $3.7 billion.
Risher called it a “great quarter.”
In a note titled, “Lyft: We all make mistakes,” analysts at MoffettNathanson raised their rating on the shares to neutral from sell. The firm said the company is seeing “better-than-expected take-rates” and improved “cost discipline.”
“Typos aside, we too are guilty of a mistake,” the analysts wrote, citing their downgrade on the stock in October.
— CNBC’s Ari Levy contributed to this report.