Lyft, Inc. (NASDAQ:LYFT) Morgan Stanley Technology, Media & Telecom Conference March 4, 2025 4:50 PM ET Company Participants David Risher - CEO Conference Call Participants Unidentified Analyst All right. Good afternoon, everyone. Welcome to our next fireside chat keynote here at the Morgan Stanley 2025 TMT Conference. It's great to see you all. We are really thrilled today to have David Risher, the CEO of Lyft with us. Thanks for joining us. David Risher Yeah, of course. Great to be here with you guys. Uni ...

Core Viewpoint - Lyft is positioning itself to become a leader in autonomous driving with the support of artificial intelligence, aiming to significantly expand its addressable market [1] Group 1 - Lyft is recognized as a sleeper in both the autonomy and AI sectors, indicating potential underestimation by the market [1] - The company has a clear vision for leadership in autonomous driving, which could lead to substantial growth opportunities [1] - The current market conditions present a favorable risk/reward scenario for investors considering Lyft's advancements in technology [1]

Group 1: Super Micro Computer (Supermicro) - Supermicro's stock has declined nearly 70% from its all-time high of $118.81 per share on March 13, 2024, due to accusations of inflating revenue, delayed 10-K filing, and being dropped by its auditor Ernst & Young [3] - The company faced regulatory scrutiny with its financial documents subpoenaed by the DOJ and SEC, which could lead to potential delisting [4] - Management has appointed a new independent auditor and submitted a compliance plan to Nasdaq, aiming to file its 10-K report by February 25, which could alleviate regulatory pressures [4] - If Supermicro resolves its issues, it is expected to see significant revenue growth, with projections of a 57% to 67% increase in fiscal 2025 and a 65% increase in fiscal 2026, reaching $40 billion [5][6] - Analysts predict earnings per share (EPS) growth of 17% in fiscal 2025 and 54% in fiscal 2026, with the stock trading at just 11 times next year's earnings, indicating potential undervaluation [6] Group 2: Lyft - Lyft's stock has dropped over 80% from its all-time high of $78.29 on March 29, 2019, primarily due to slowed sales during the pandemic and a sluggish recovery [7] - In 2024, Lyft surpassed its pre-pandemic peak with 24.7 million active riders, driven by new services and features such as Lyft Pass, Lyft Pink, Women+ Connect, and Price Lock [8] - The company has raised driver incentives and expanded its autonomous robotaxi program to address driver shortages and control long-term costs [9] - Lyft Media has been expanded to generate passive revenue through media content and ads, contributing to business stabilization [9] - Analysts expect revenue and adjusted EPS growth of 13% and 14%, respectively, for 2025, with the stock trading at 16 times forward earnings, suggesting it remains undervalued [10]

Core Insights - Lyft is demonstrating a strong position in the ride-share and autonomy markets [1] Financial Performance - Lyft has shown consistent improvement in its financials over the past few years, continuing this trend into the fourth quarter [1] Autonomy Potential - The company's potential in the autonomy sector is particularly noteworthy, indicating significant upside opportunities [1]

Not a lot of stocks can be bought for less than $20, and many sub-$20 stocks are best avoided by most investors. However, there are some good buys under $20 a share, if you know where to look and what to look for. One of these stocks is in the midst of an impressive turnaround. I'm talking about Lyft (LYFT -0.30%), the No. 2 ride-sharing operator in the country.While larger rival Uber Technologies (UBER -1.08%) has attracted much of the recent attention from investors in the space, Lyft is now profitable, g ...

Financial Performance - The company achieved net income on a GAAP basis for the year ended December 31, 2024, but incurred net losses in every other year since inception [78]. - The company expects fluctuations in financial performance, including net income and Adjusted EBITDA, in future periods [78]. - The company has $160.4 million of unrecognized stock-based compensation expense related to unvested awards as of December 31, 2024 [79]. - The company anticipates increased expenses due to the development and launch of new offerings and platform features, as well as market expansion [79]. - The company’s results of operations are difficult to predict and may vary significantly from period to period, impacting stock price [87]. - The ridesharing market is still in early stages of growth, and its future development is uncertain, which could adversely affect the company's financial condition and results of operations [88]. - Rising costs in the automotive insurance industry due to inflation and supply chain challenges have negatively impacted the company's financial results and are expected to continue doing so [101][103]. - The company has had to increase insurance reserves in the past due to adverse developments, which could negatively impact its financial condition if reserves are deemed inadequate [99]. - The company incurred a total impairment charge of $135.7 million due to the wind-down of an autonomous vehicle partner [122]. - The company has incurred substantial costs associated with being a public entity, including legal and accounting expenses, which were not present as a private company [237]. Competition and Market Dynamics - The company faces intense competition in the TaaS market, particularly from Uber and other transportation network companies [81]. - The company has experienced significant revenue fluctuations due to COVID-19, with uncertainty regarding the full recovery of rideshare demand and driver supply [78]. - The company experienced a shortage of available drivers relative to rider demand during and after the COVID-19 pandemic, leading to increased incentives to improve driver supply [89]. - Following the passage of Proposition 22 in California, drivers gained access to new earning opportunities, which may increase operational costs for the company [89]. - The company’s ability to attract and retain qualified drivers and riders is critical for maintaining its market position [71]. - The company’s ability to attract new riders and retain existing ones is essential for growth, and negative publicity could hinder this effort [93]. - Negative publicity, safety concerns, and competitive pricing strategies could adversely affect the company's ability to retain drivers and riders, impacting its financial condition and operational results [107]. Regulatory and Legal Risks - The company may incur additional costs related to compliance with new regulations and operational changes in various jurisdictions [79]. - The company may face increased expenses due to potential litigation regarding the classification of drivers as employees rather than independent contractors [91]. - The company is subject to various laws and regulations regarding background checks, and non-compliance could adversely affect its reputation and financial condition [111]. - Legal proceedings regarding driver classification could necessitate changes in pricing and operational strategies, potentially reducing the supply of drivers [115]. - The company is involved in numerous legal proceedings related to driver classification, including several putative class actions and thousands of individual claims [203]. - The company faces potential significant alterations to its business model and operations due to ongoing legal proceedings, which could adversely affect its ability to grow and maintain profitability [202]. - The company is subject to significant legal and regulatory risks, which could adversely affect its business and financial condition [217]. Operational Challenges - The company has faced challenges in expanding its network of Light Vehicles, with potential legal disputes and public skepticism affecting its operations and market acceptance [116]. - Seasonal fluctuations in demand for bike and scooter rentals can impact revenue generation, with a noted decline during winter months [118]. - The company has discontinued operations in certain markets due to various challenges, including theft and lack of public investment, which could affect overall business performance [118]. - The company has faced challenges related to compliance with healthcare-related laws and regulations, which may increase operational costs [222]. - The company may face increased operational demands as it continues to grow, potentially affecting management and infrastructure [132]. Technology and Cybersecurity - Cybersecurity threats pose risks to user data and operational integrity, with potential for significant legal and financial repercussions [134]. - Any breaches or incidents could disrupt operations and harm the company's reputation, leading to decreased user confidence [136]. - The company relies on third-party payment processors for transactions, and any disruption in these relationships could adversely affect its operations [148]. - The company’s reliance on AI and machine-learning technologies for pricing optimization carries risks of errors that could adversely affect financial results [170]. - System failures or service interruptions could lead to revenue losses and harm the company's reputation, necessitating significant resources to address such issues [183]. Strategic Initiatives - The company has expanded its business to include licensing technology and sales of bikes and stations through the acquisition of PBSC Urban Solutions Inc. in May 2022 [76]. - The company launched Women+ Connect in September 2023, allowing women and nonbinary users to prioritize matches, and extended it nationwide in 2024 [159]. - A new Price Lock product was introduced in July 2024, enabling riders to purchase a subscription that caps prices for specific routes [159]. - Lyft has shut down its vehicle services and parking offerings, which were launched in 2021, indicating a reevaluation of its service portfolio [162]. - The company is investing in expanding its AI capabilities, which may involve significant costs and regulatory compliance risks [158]. Financial Structure and Debt - The company entered into a $420.0 million revolving credit agreement in November 2022 and has issued $850.7 million in convertible notes since May 2020 [242]. - As of December 31, 2024, the company had $995.0 million of indebtedness for borrowed money outstanding [249]. - The company’s ability to service its debt depends on future performance, which is subject to various economic and competitive factors [250]. - The company’s revolving credit facility includes financial covenants that may limit operational flexibility and affect future financing [253]. - The company may seek additional equity or debt financing, which could lead to dilution for existing stockholders [242]. Governance and Ownership - Logan Green, co-founder and Chair of the board, holds approximately 18.81% of the voting power, while John Zimmer, co-founder and Vice Chair, holds approximately 10.80% [259]. - The dual class structure of the common stock concentrates voting power with co-founders, limiting stockholder influence on important transactions [258]. - Future transfers of Class B common stock will generally convert those shares into Class A common stock, affecting voting power dynamics [260]. - Delaware law and the company's bylaws may make mergers or proxy contests difficult, potentially depressing the market price of Class A common stock [264]. - Exclusive forum provisions in the company's bylaws may limit stockholders' ability to bring claims in preferred judicial forums, potentially increasing costs associated with disputes [268].

Core Viewpoint - The market's reaction to Lyft's latest earnings report is deemed incorrect, suggesting a potential mispricing of the stock [1] Summary by Relevant Sections - **Earnings Performance** - Lyft's latest earnings report was discussed, indicating that the financial results may not align with market expectations [1] - **Market Reaction** - The video argues that the market's response to the earnings report is misguided, implying that there are underlying factors that investors may be overlooking [1]

Group 1: Lyft - Lyft's stock decreased by 3.1% to $13.94 after fourth-quarter gross bookings of $4.28 billion fell short of the $4.32 billion estimate [2] - The company's first-quarter guidance of $4.05-$4.20 billion also missed analysts' forecast of $4.24 billion, raising concerns about growth amid increasing competition [2] - Options trading for Lyft is significantly active, with 141,000 calls and 85,000 puts traded, which is six times the intraday average [3] Group 2: Vertiv - Vertiv's stock dropped by 7.8% to $113.63 despite beating fourth-quarter expectations [4] - The company expects first-quarter adjusted earnings per share (EPS) between $0.57 and $0.63, which is below the $0.63 analyst estimate [4] - Vertiv's full-year EPS forecast of $3.50 to $3.60 also disappointed, with the midpoint falling below expectations [4] Group 3: Zillow - Zillow's stock fell by 10.3% to $77.42 after issuing disappointing first-quarter guidance, despite a revenue beat in Q4 [6] - The company expects first-quarter revenue between $575 million and $590 million, which is below the $599.8 million analyst estimate, raising concerns about future growth in a sluggish housing market [6] - Zillow's options market is seeing increased activity, with 14,000 calls and 13,000 puts traded, five times the intraday average [7]

Core Insights - Lyft Inc. reported fourth-quarter 2024 earnings of 30 cents per share, exceeding the Zacks Consensus Estimate of 23 cents and showing year-over-year improvement [1] - Revenues reached $1.55 billion, slightly missing the Zacks Consensus Estimate by 0.1%, but reflecting a 26.6% year-over-year growth [2] - Active riders increased by 10% year-over-year to 24.7 million, indicating growth in the rideshare market [2] Financial Performance - Gross bookings for the quarter were $4.27 billion, marking a year-over-year increase of 15% [2] - Adjusted EBITDA for the fourth quarter was $112.8 million, up 69.7% from the previous year, with an adjusted EBITDA margin of 2.6% compared to 1.8% in the prior-year quarter [3] - Cash and cash equivalents at the end of the fourth quarter were $759.32 million, down from $770.29 million in the prior quarter, while long-term debt decreased to $565.96 million from $574.47 million [4] Future Guidance - For Q1 2025, Lyft anticipates mid-teens year-over-year growth in rides, with gross bookings expected to be between $4.05 billion and $4.20 billion, implying a growth of 10-14% year-over-year [5] - Adjusted EBITDA is projected to be between $90 million and $95 million, with an adjusted EBITDA margin expected to be in the range of 2.2%-2.3% [6] Stock Buyback - Lyft's board of directors has authorized a repurchase of up to $500 million of the company's Class A common stock, indicating confidence in the company's financial health [4]

Core Insights - Lyft's stock experienced a significant drop of over 16% following the release of its fourth-quarter results, although the decline moderated to 3.4% later in the session due to concerns about competitive pressures and management's guidance for the upcoming quarter [1] Group 1: Financial Performance - Lyft reported record gross bookings of $4.3 billion for Q4, which is a 15% increase year over year, falling within the management's guided range of $4.28 billion to $4.35 billion [2] - The company ended Q4 with 24.7 million active riders, an increase from 24.4 million in the previous quarter, indicating a rise in both the number of riders and the frequency of rides [3] Group 2: Future Outlook - For Q1 2025, Lyft anticipates bookings growth of only 10% to 15%, which is slower than both its Q4 growth and the 21% growth seen in Q1 2024, raising investor concerns about competition [4] Group 3: Valuation and Cash Flow - Lyft's free cash flow reached a record $766 million in 2024, resulting in a valuation of just 7 times its free cash flow, which is considered very cheap for a company still experiencing double-digit growth [5] - The company has initiated its first stock buyback program with an authorization of $500 million, representing nearly 9% of its outstanding shares, which may enhance shareholder value [6]