Lyft Stock Skyrockets Over 60% — Because of a Typo in an Earnings Release The company issued a correction that there was a mistake in its printed 2023 earnings release.
By Emily Rella •
A one-character typo is usually not a big deal, but when it comes to reporting financials, it can have serious implications on the market and the company's stock valuation.
Such was the case for rideshare giant Lyft, which reported in a 2023 earnings release on Wednesday that the company expected its gross margin to expand by 500 basis points or 5 percentage points.
However, the report should have said 50 basis points or 0.5 percentage points.
Related: Lyft Becomes First Rideshare Company to Implement Minimum Pay For Drivers
The errant "0" sent Lyft's stock soaring over 62% before the company clarified on an earnings call shortly after the release that there was an error in the report.
"This is actually a correction from the press release," said Lyft Chief Financial Officer Erin Brewer on the call, after being asked to clarify the EBITDA margin expansion estimate.
Brewer said 50 basis points earlier on the call, though the slide for the presentation said 500 basis points. "In my prepared remarks, I referenced 50 basis points of margin expansion," she said.
Almost immediately following Brewer's comments, Lyft's stock shot back down, hovering around a 17% increase from the prior day's market close. The company also issued a corrected release.
The rideshare company did report a total of $13.8 billion in bookings for 2023 (a 14% year-over-year increase), with gross bookings in Q4 2023 resulting in a 17% year-over-year increase of $3.7 billion.
Total revenue for the company in 2023 was up 8% from the same time last year at $4.4 billion though the company did still suffer a yearly net loss of $340.3 million.
"Lyft's outstanding Q4 performance demonstrates our team's incredible work to build a solid foundation for profitable growth," Brewer said in the company's release. "We've entered 2024 with a lot of momentum and a clear focus on operational excellence, which positions the company to drive meaningful margin expansion and our first full year of positive free cash flow."
Related: Lyft Will Now Charge Late Fees For Tardy Passengers
The company made history earlier this month after it instated a minimum pay standard, guaranteeing that drivers will now take home a minimum of 70% of what riders pay regardless of fees or extraneous costs.
"We think hopefully it will get more drivers driving for Lyft, but also just make the whole sector stronger," Lyft CEO David Risher told Reuters earlier this month. "We have more drivers now than we've had, I think, since the middle of 2019. It's strong and I tell you what, it's getting even stronger."
Just before noon EST on Wednesday, Lyft's stock was back up 31% in a 24-hour period.
