Lyft, Inc. (LYFT)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report”). As discussed in the section titled “Note About Forward-Looking Statements,” the following discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors” and other parts of this Quarterly Report on Form 10-Q and in our 2025 Annual Report. Our historical results are not necessarily indicative of the results that may be expected for any period in the future. Our fiscal year ends December 31.

Our Business

Lyft, Inc. (the “Company” or “Lyft”) operates as a global mobility platform offering a mix of rideshare, taxis, private hire vehicles, executive chauffeur services, car sharing, bikes and scooters. Our established, scaled network of users is brought together by our robust technology platforms (the “Lyft Platform”) that powers rides and connections every day. Our Lyft mobile applications (the “Lyft App”) connects riders with drivers for on-demand ride services and supports a variety of other multimodal solutions.

Substantially all of our revenue is generated from our ridesharing marketplace that connects drivers and riders. We collect service fees and commissions from drivers for their use of our ridesharing marketplace. We also generate revenue from licensing and data access agreements, the sale of bikes and bike station software and hardware, advertising services, riders renting through our network of shared bikes and scooters, drivers renting vehicles through Express Drive and by making our ridesharing marketplace available to organizations through our Lyft Business offerings.

Financial and Operational Results for the Three Months Ended June 30, 2026 and 2025

___________

(1)For more information regarding our use of our non-GAAP financial measures and reconciliations of these measures to the most comparable GAAP measures, see “Non-GAAP Financial Measures”.

(2)Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment and scooter fleet.

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Definitions of Key Metrics

Active Riders

The number of Active Riders is a key indicator of the scale of our user community.

We define Active Riders as all unique riders who have taken at least one ride during the quarter. If a ride is requested by another organization or person for the benefit of a rider, that rider is only included in the calculation of Active Riders if the ride is accessible in the rider’s Lyft App.

The increase in the number of Active Riders in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was due primarily to international expansion, improved retention and overall marketplace health.

Rides

Rides represent the level of usage of our multimodal platform.

We define Rides as the total number of rides completed on our multimodal platform that contribute to our revenue. These include any Rides taken through our Lyft App. If multiple riders take a private rideshare ride, including situations where one party picks up another party on the way to a destination, or splits the bill, we count this as a single rideshare ride. Each unique segment of a Shared Ride is considered a single Ride. For example, if two riders successfully match in Shared Ride mode and both complete their Rides, we count this as two Rides. We have largely shifted away from Shared Rides, and now only offer Shared Rides in limited markets. We include all Rides taken by riders via our Concierge offering, even though such riders may be excluded from the definition of Active Riders unless the ride is accessible in that rider’s Lyft App.

The increase in Rides in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was due primarily to international expansion and overall marketplace health.

Gross Bookings and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings)

Gross Bookings is a key indicator of the scale and impact of our overall platform.

We define Gross Bookings as the total dollar value of transactions including any applicable taxes, tolls and fees, for rides and other offerings provided by Lyft, excluding tips to drivers. Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) is calculated by dividing Adjusted EBITDA for a period by Gross Bookings for the same period. For the definition of Adjusted EBITDA, refer to “Non-GAAP Financial Measures”.

The increase in Gross Bookings in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was primarily due to international expansion, and Rides growth which benefited from overall marketplace health.

Net income as a percentage of Gross Bookings and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) in the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 were primarily due to our focus on cost discipline as growth in Gross Bookings outpaced growth in total costs and expenses, along with Rides growth and overall marketplace health. Net income as a percentage of Gross Bookings was partially offset by the increase in the provision for income taxes.

Components of Results of Operations

Revenue

Revenue consists of revenue recognized from fees paid by drivers for use of our Lyft Platform offerings, gross amounts collected from riders in certain markets where we control the transportation services provided, Concierge platform fees from organizations that use our Concierge offering, subscription fees paid by riders to access transportation options through the Lyft Platform, bikes and bike station hardware and software sales, licensing and data access agreements, and arrangements to provide advertising services to third parties that are interested in reaching users of our platform. Revenue also consists of rental revenues recognized through leases or subleases of vehicles primarily from our wholly-owned subsidiary, Flexdrive Services, LLC (“Flexdrive”). Revenue derived from our offerings is recognized in accordance with ASC 606 or ASC 842 as described in Note 3 “Revenue” to the condensed consolidated financial statements as well as the Critical Accounting Estimates and Note 2 of the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

We offer various incentive programs to drivers that are recorded as a reduction to revenue if we do not receive a distinct good or service in consideration or if we cannot reasonably estimate the fair value of goods or services received.

Cost of Revenue

Cost of revenue primarily consists of costs directly related to generating revenue through our multimodal platform which primarily includes insurance costs, payment processing charges, payments to drivers or driver incentive costs in certain

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markets where we control the transportation services provided, and other costs. Insurance costs consist of insurance generally required under transportation network company (“TNC”) and city regulations for ridesharing, and bike and scooter rentals and also includes occupational hazard insurance for drivers. Payment processing charges include merchant fees, chargebacks and failed charges. Other costs included in cost of revenue are hosting and platform-related technology costs, personnel-related compensation costs, depreciation, amortization of technology-related intangible assets, asset write-off charges and costs related to Flexdrive, which include vehicle lease expenses and remarketing gains and losses related to the sale of vehicles.

Operations and Support

Operations and support expenses primarily consist of personnel-related compensation costs of local operations teams and teams who provide phone, email and chat support to users, bikes and scooters fleet operations support costs, driver background checks and onboarding costs, fees paid to third-parties providing operations support, facility costs and certain car rental fleet support costs. Bikes and scooters fleet operations support costs include general repairs and maintenance, and other customer support activities related to repositioning bikes and scooters for rider convenience, cleaning and safety checks.

Research and Development

Research and development (“R&D”) expenses primarily consist of personnel-related compensation costs and facilities costs. Research and development costs are expensed as incurred.

Sales and Marketing

Sales and marketing expenses primarily consist of rider incentives, personnel-related compensation costs, certain driver incentives, advertising expenses, rider refunds, amortization of certain intangible assets and marketing partnerships with third parties. Incentive programs are intended to improve our marketplace. Sales and marketing costs are expensed as incurred.

General and Administrative

General and administrative expenses primarily consist of personnel-related compensation costs, professional services fees, certain insurance costs that are generally not required under TNC regulations, certain loss contingency expenses including legal accruals and settlements, insurance claims administrative fees, policy spend, depreciation, facility costs, amortization of certain intangible assets and other corporate costs. General and administrative expenses are expensed as incurred.

Interest Expense

Interest expense consists primarily of interest incurred on our convertible senior notes, as well as the related amortization of deferred debt issuance costs and debt discount. Interest expense also includes interest incurred on our Non-Revolving Loan and our Master Vehicle Loan.

Other Income, Net

Other income, net consists primarily of interest earned on our cash, cash equivalents and restricted and unrestricted investments and realized and unrealized gains and losses on foreign currency transactions and balances.

Provision for Income Taxes

Our provision for income taxes consists of federal and state taxes in the U.S. and foreign taxes in jurisdictions in which we conduct business. As we expand the scale of our international business activities, any changes in the U.S. and foreign taxation of such activities may increase our overall provision for income taxes in the future.

We record a valuation allowance to reduce deferred tax assets to the net amount that we believe is more-likely-than-not to be realized. In assessing

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. This Management’s Discussion and Analysis of Financial Condition and Results of Operations focuses on a discussion of results for 2025 and 2024 and year-to-year comparisons between 2025 and 2024. For a discussion of results for 2023 and year-to-year comparisons between 2024 and 2023, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” within our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 14, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such differences include those identified below and those discussed in the section titled “Risk Factors” and other parts of this Annual Report on Form 10-K. Our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Financial and Operational Results for the Year Ended December 31, 2025

_______________

(1)Net income for the year ended December 31, 2025 includes a $2.9 billion benefit from the release of our valuation allowance of U.S. federal and certain state deferred tax assets in the fourth quarter of 2025.

(2)For more information regarding our use of our non-GAAP financial measures and reconciliations of these measures to the most comparable GAAP measures, see “Non-GAAP Financial Measures”.

(3)Free cash flow is defined as net cash provided by (used in) operating activities less purchases of property and equipment and scooter fleet.

NMNot meaningful.

Recent Developments

Acquisition of Freenow

On July 31, 2025, we completed the previously announced acquisition of Freenow, a European multimodal application with a taxi offering at its core. The acquisition marked Lyft’s first expansion outside of North America, beyond bikes and scooters. The Company paid approximately €205.9 million ($236.8 million) in cash, inclusive of closing adjustments. Refer to Note 4 “Acquisitions” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding the acquisition.

Acquisition of TBR

On October 14, 2025, we completed the acquisition of TBR, a global premium ground transportation and chauffeur service company, for a total purchase price of approximately £86.4 million ($115.2 million), inclusive of an immaterial amount of contingent consideration. Refer to Note 4 “Acquisitions” to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K for information regarding the acquisition.

Definitions of Key Metrics

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Active Riders

The number of Active Riders is a key indicator of the scale of our user community.

We define Active Riders as all unique riders who have taken at least one ride during the quarter. If a ride is requested by another organization or person for the benefit of a rider, that rider is only included in the calculation of Active Riders if the ride is accessible in the rider’s Lyft apps.

In the first quarter of 2025, we updated the definition of Active Riders to simplify the definition and better align the metric with future scaling of our business. Additionally, unique riders were previously identified by phone number and are now identified through a unique internal identifier. The change was adopted prospectively and periods prior to the first quarter of 2025 were not changed as the impact was not material.

In each of the three month periods ended March 31, June 30, September 30, and December 31, 2025, Active Riders increased compared to the same periods in 2024 primarily due to our focus on rider and driver engagement, improved retention, overall marketplace health and international expansion.

Rides

Rides represent the level of usage of our multimodal platform.

We define Rides as the total number of rides completed on our multimodal platform that contribute to our revenue. These include any Rides taken through our Lyft apps. If multiple riders take a private rideshare ride, including situations where one party picks up another party on the way to a destination, or splits the bill, we count this as a single rideshare ride. Each unique segment of a Shared Ride is considered a single Ride. For example, if two riders successfully match in Shared Ride mode and both complete their Rides, we count this as two Rides. We have largely shifted away from Shared Rides, and now only offer Shared Rides in limited markets. We include all Rides taken by riders via our Concierge offering, even though such riders may be excluded from the definition of Active Riders unless the ride is accessible in that rider’s Lyft apps.

The increase in Rides in the year ended December 31, 2025 as compared to the year ended December 31, 2024 was due primarily to our improved marketplace health which also resulted in an increase in Active Riders.

Gross Bookings and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings)

Gross Bookings is a key indicator of the scale and impact of our overall platform.

We define Gross Bookings as the total dollar value of transactions including any applicable taxes, tolls and fees, for rides and other offerings provided by Lyft, excluding tips to drivers. In the fourth quarter of 2025, we simplified the definition of Gross Bookings to better align the metric with future scaling of our business. There was no impact to prior periods. Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) is calculated by dividing Adjusted EBITDA for a period by Gross Bookings for the same period. For the definition of Adjusted EBITDA, refer to “Non-GAAP Financial Measures”.

The increase in Gross Bookings in the year ended December 31, 2025 as compared to the year ended December 31, 2024 was due to international expansion and growth in Active Riders and Rides which benefited from continued improvements in marketplace health.

The improvements in net income as a percentage of Gross Bookings and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) in the year ended December 31, 2025 as compared to the year ended December 31, 2024 were due primarily to a $2.9 billion benefit from the release of our valuation allowance of U.S. federal and certain state deferred tax assets in fourth quarter of 2025.

Components of Results of Operations

Revenue

Revenue consists of revenue recognized from fees paid by drivers for use of our Lyft Platform offerings, and gross amounts collected from riders in certain markets where we control the transportation services provided, Concierge platform fees from organizations that use our Concierge offering, subscription fees paid by riders to access transportation options through the Lyft

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Platform, bikes and bike station hardware and software sales, licensing and data access agreements and arrangements to provide advertising services to third parties that are interested in reaching users of our platform. Revenue also consists of rental revenues recognized through leases or subleases of vehicles primarily from our wholly-owned subsidiary, Flexdrive Services, LLC (“Flexdrive”). Revenue derived from these offerings is recognized in accordance with Accounting Standards Codification Topic 606 (“ASC 606”) and Accounting Standards Codification Topic 842 (“ASC 842”) as described in the Critical Accounting Policies and Estimates below and in Note 2 “Summary of Significant Accounting Policies”.

We offer various incentive programs to drivers that are recorded as a reduction to revenue if we do not receive a distinct good or service in consideration or if we cannot reasonably estimate the fair value of goods or services received.

Cost of Revenue

Cost of revenue primarily consists of costs directly related to generating revenue through our multimodal platform which primarily includes insurance costs, payment processing charges, payments to drivers or driver incentive costs in certain markets where we control the transportation services provided, and other costs. Insurance costs consist of insurance generally required under TNC and city regulations for ridesharing, and bike and scooter rentals and also includes occupational hazard insurance for drivers. Payment processing charges include merchant fees, chargebacks and failed charges. Other costs included in cost of revenue are hosting and platform-related technology costs, personnel-related compensation costs, depreciation, amortization of technology-related intangible assets, asset write-off charges, and costs related to Flexdrive, which include vehicle lease expenses and remarketing gains and losses related to the sale of vehicles.

Operations and Support

Operations and support expenses primarily consist of personnel-related compensation costs of local operations teams and teams who provide phone, email and chat support to users, bikes and scooters fleet operations support costs, driver background checks and onboarding costs, fees paid to third-parties providing operations support, facility costs and certain car rental fleet support costs. Bikes and scooters fleet operations support costs include general repairs and maintenance, and other customer support activities related to repositioning bikes and scooters for rider convenience, cleaning and safety checks.

Research and Development

Research and development (“R&D”) expenses primarily consist of personnel-related compensation costs and facilities costs. Research and development costs are expensed as incurred.

Sales and Marketing

Sales and marketing expenses primarily consist of rider incentives, personnel-related compensation costs, certain driver incentives, advertising expenses, rider refunds, amortization of certain intangible assets and marketing partnerships with third parties. Sales and marketing costs are expensed as incurred. Incentive programs are intended to improve our marketplace. In the second quarter of 2025, we determined that certain components should be excluded from our disclosure of incentives. Accordingly, prior period amounts disclosed have been changed to conform to current period presentation.

General and Administrative

General and administrative expenses primarily consist of personnel-related compensation costs, professional services fees, certain insurance costs that are generally not r

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