Lyft, Inc. (LYFT) FY 2024 MD&A

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 2024 and 2023 and year-to-year comparisons between 2024 and 2023. For a discussion of results for 2022 and year-to-year comparisons between 2023 and 2022, 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, 2023 filed with the SEC on February 20, 2024. 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, 2024

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(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)Beginning in the first quarter of 2025, we will no longer present Adjusted Net Income (Loss) as a non-GAAP financial measure.

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

Definitions of Key Metrics

Active Riders

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

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We define Active Riders as all riders who take at least one ride during a quarter where the Lyft Platform processes the transaction. An Active Rider is identified by a unique phone number. If a rider has two mobile phone numbers or changed their phone number and that rider took rides using both phone numbers during the quarter, that person would count as two Active Riders. If a rider has a personal and business profile tied to the same mobile phone number, that person would be considered a single Active Rider. If a ride has been requested by an organization using our Concierge offering for the benefit of a rider, we exclude this rider in the calculation of Active Riders unless the ride is accessible in that rider’s Lyft App.

In each of the three month periods ended March 31, June 30, September 30, and December 31, 2024, Active Riders increased compared to the same periods in 2023 primarily due to our focus on rider engagement, improved retention and overall marketplace health which resulted in Active Riders reaching an all-time high in the fourth quarter of 2024.

Rides

Rides represent the level of usage of our multimodal platform.

We define Rides as the total number of rides including rideshare and bike and scooter rides completed using 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 year ended December 31, 2024 as compared to the year ended December 31, 2023 was due primarily to our improved marketplace health which also resulted in both Rides and Active Riders reaching all-time highs in the fourth quarter of 2024.

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 invoiced to rideshare riders including any applicable taxes, tolls and fees, excluding tips to drivers. Gross Bookings also includes amounts invoiced for other offerings, including but not limited to: Express Drive vehicle rentals, bike and scooter rentals, and amounts recognized for subscriptions, bike and bike station hardware and software sales, media, sponsorships, partnerships, and licensing and data access agreements. 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, 2024 as compared to the year ended December 31, 2023 was due primarily to Rides growth which benefited from increased ride frequency, which is demonstrated by Rides growth exceeding Active Riders growth, and improvements in marketplace health. Gross Bookings can be impacted by marketplace health and competitive dynamics and near the end of the fourth quarter of 2024, we believe pricing pressure due to a dynamic competitive environment and softer ride volume had a moderate negative impact on Gross Bookings.

The improvements in net income (loss) as a percentage of Gross Bookings and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) in the year ended December 31, 2024 as compared to the year ended December 31, 2023 were due primarily to Rides growth due to competitive pricing and improved marketplace health. Additionally, our net income (loss) in the year ended December 31, 2024 included a $29.6 million gain related to a lease termination which positively impacted net income (loss) as a percentage of Gross Bookings in the year ended December 31, 2024, but did not have a similar impact in 2023.

Components of Results of Operations

Revenue

Revenue consists of revenue recognized from fees paid by drivers for use of our Lyft Platform offerings, Concierge platform fees from organizations that use our Concierge offering, subscription fees paid by riders to access transportation options through the Lyft Platform, revenue from bikes and bike station hardware and software sales, revenue from licensing and data access agreements and revenue from arrangements to provide advertising services to third parties that are interested in reaching users of our platform. Revenue derived from these offerings is recognized in accordance with ASC 606 as described in the Critical Accounting Policies and Estimates below and in Note 2 of the notes to our consolidated financial statements.

Revenue also consists of rental revenues recognized through leases or subleases primarily from Flexdrive and our network of Light Vehicles, which includes revenue generated from single-use ride fees paid by riders of Light Vehicles. Revenue derived from these offerings is recognized in accordance with ASC 842 as described in the Critical Accounting Policies and Estimates below and in Note 2 of the notes to our consolidated financial statements.

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We offer various incentive programs to drivers that are recorded as 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 revenue generating transactions through our multimodal platform which primarily includes insurance costs, payment processing charges, and other costs. Insurance costs consist of insurance generally required under TNC and city regulations for ridesharing and bike and scooter rentals and also include 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, Light Vehicle 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. Light Vehicle 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 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, driver incentives for referring new drivers or riders, advertising expenses, rider refunds and marketing partnerships with third parties. 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 and other corporate costs. General and administrative expenses are expensed as incurred.

Interest Expense

Interest expense consists primarily of interest incurred on our 2025 Notes and 2029 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 (Expense), Net

Other income (expense), net consists primarily of interest earned on our cash, cash equivalents and restricted and unrestricted short-term investments as well as sublease income.

Provision for (Benefit from) Income Taxes

Our provision for (benefit from) 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 have a valuation allowance for our U.S. deferred tax assets, including federal and state net operating loss carryforwards. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized. However, based on our current and anticipated future earnings, our management believes it is reasonably possible that sufficient positive evidence of sustained U.S. profitability may become available in the foreseeable future to reach a conclusion that the U.S. valuation allowance will no longer be needed. The timing and amount of the valuation allowance release could vary based on the level of profitability that we are actually able to achieve. A release of all or a portion of the valuation allowance would result in the recognition of certain deferred tax assets and a material income tax benefit for the period in which such release is recorded.

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Results of Operations

The following table summarizes our historical consolidated statements of operations data (in thousands):

The following table sets forth the components of our consolidated statements of operations data as a percentage of revenue:

Comparison of Years Ended December 31, 2024 and 2023

Revenue

Revenue increased $1.4 billion, or 31%, in 2024 as compared to the prior year, due primarily to growth in demand as we benefited from improvements in marketplace health which was reflected in the increases in Gross Bookings, Rides and Active Riders in 2024 as compared to 2023. Investments in driver supply, which are recorded as a reduction to revenue, decreased by $325.7 million in 2024 as compared to the prior year.

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We expect revenue will fluctuate based upon factors such as ride volume, driver supply, pricing, incentives and seasonality specifically related to our network of Light Vehicles.

Cost of Revenue

Cost of revenue increased $793.8 million, or 31%, in 2024 as compared to the prior year. The increase was primarily due to a $687.5 million increase in insurance costs driven by higher costs per mile paired with increased ride volume. There were also increases of $71.4 million in transaction fees due to higher ride volume, $19.6 million in depreciation and $16.8 million in Flexdrive related costs due to decreased gains from the sale of vehicles in 2024 as compared to 2023.

We expect to see cost of revenue increase in the near term on a year-over-year basis due to higher insurance costs driven by recent economic factors and the renewals of our third party insurance agreements.

Operations and Support

Operations and support expenses increased $16.6 million, or 4%, in 2024 as compared to the prior year. The increase was primarily due to increases of $18.9 million in driver onboarding costs and rider and driver support costs, $17.7 million in Light Vehicle fleet operations support costs and $10.6 million in Flexdrive related costs. These increases were partially offset by a $20.0 million decrease in facilities costs and a $7.1 million decrease in stock-based compensation driven by restructuring events initiated in prior years, which included the cease use of certain facilities and reductions in headcount.

Research and Development

Research and development expenses decreased $158.8 million, or 29%, in 2024 as compared to the prior year. The decrease was primarily due to decreases of $96.3 million in stock-based compensation and $62.9 million in personnel-related costs driven by a reduction in headcount after the restructuring events initiated in the third quarter of 2024 and in prior years.

Sales and Marketing

Sales and marketing expenses increased $308.0 million, or 64%, in 2024 as compared to the prior year. The increase was primarily due to increases of $280.7 million in rider, driver and Light Vehicle rider incentive programs due to investments in rider engagement, $23.3 million in rebates, $21.4 million in brand and other marketing and $11.0 million in marketing partnerships with third parties. These increases were partially offset by decreases of $13.9 million in personnel-related costs and $12.4 million in stock-based compensation driven by a reduction in headcount after the restructuring events initiated in the third quarter of 2024 and in prior years.

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General and Administrative

General and administrative expenses increased $66.3 million, or 8%, in 2024 as compared to the prior year. The increase was primarily due to increases of $69.4 million in certain loss contingencies including legal and tax accruals and settlements, $58.0 million in an accrual for self-retained general business liabilities, $16.0 million in consultant and advisory costs and $11.5 million in bad debt expense. These increases were partially offset by decreases of $32.5 million in stock-based compensation and $26.3 million in personnel-related costs driven by a reduction in headcount after the restructuring events initiated in the third quarter of 2024 and in prior years. There was also a decrease of $34.7 million in facilities costs primarily driven by a $29.6 million gain as a result of an amendment to the lease of our San Francisco headquarters which occurred during the fourth quarter of 2024 and impairment charges related to real estate lease right-of-use assets due to the restructuring events initiated in prior years.

Interest Expense

Interest expense increased $2.7 million, or 10%, in 2024 as compared to the prior year.

Other Income (Expense), Net

Other income (expense), net increased $3.1 million, or 2%, in 2024 as compared to the prior year. The increase was primarily due to a $20.6 million increase in interest income as compared to the prior year due to higher returns on investments and a $5.1 million gain on extinguishment related to the repurchase of 2025 Notes. These increases were partially offset by a prior year $12.9 million gain on an equity method investment incurred in the second quarter of 2023 and a $10.9 million decrease due to foreign currency exchange.

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Non-GAAP Financial Measures

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(1)Beginning in the first quarter of 2025, we will no longer present Adjusted Net Income (Loss) as a non-GAAP financial measure.

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

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

Adjusted EBITDA is a key performance measure and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) is a key metric, both of which our management uses to assess our operating performance and the operating leverage in our business. Because Adjusted EBITDA and Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) facilitate internal comparisons of our historical operating performance on a more consistent basis, we use these measures for business planning purposes. Net income (loss) is the most directly comparable financial measure to Adjusted EBITDA.

We calculate Adjusted EBITDA as net income (loss), adjusted for:

•interest expense;

•other income (expense), net;

•provision for (benefit from) income taxes;

•depreciation and amortization;

•stock-based compensation;

•payroll tax expense related to stock-based compensation;

•sublease income;

•gain from lease termination, if any;

•costs related to acquisitions and divestitures, if any; and

•restructuring charges, if any.

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.

We announced restructuring plans in the fourth quarter of 2022, second quarter of 2023 and third quarter of 2024 to reduce operating expenses and align strategic priorities. We believe the costs associated with the restructurings are distinguishable from ongoing operating costs and do not reflect current or expected performance of our ongoing operations. We believe the adjustment to exclude the costs related to restructuring from Adjusted EBITDA and Adjusted Net Income (Loss) is useful to investors by enabling them to better assess our ongoing operating performance and provide for better comparability with our historically disclosed Adjusted

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EBITDA and Adjusted Net Income (Loss) amounts. Refer to Note 15 “Restructuring” to the consolidated financial statements for information regarding these restructuring plans.

We sublease certain office space and earn sublease income. Sublease income is included within other income, net on our consolidated statement of operations, while the related lease expense is included within operating expenses and loss from operations. We believe the adjustment to include sublease income in Adjusted EBITDA is useful to investors by enabling them to better assess our operating performance, including the benefits of recent transactions, by presenting sublease income as a contra-expense to the related lease charges within our operating expenses.

In the fourth quarter of 2024, we terminated a portion of the lease for our San Francisco headquarters. The right-of-use asset associated with the portion of this lease was previously impaired as part of our restructuring plans in the fourth quarter of 2022 and second quarter of 2023, and the extinguishment of the remaining lease liability resulted in the recorded gain within operating lease costs. We believe this does not reflect the current period performance of our ongoing operations and that the adjustment to exclude this gain from lease termination from Adjusted EBITDA and Adjusted Net Income (Loss) is useful to investors by enabling them to better assess Lyft’s ongoing operating performance and provide for better comparability with Lyft’s historically disclosed Adjusted EBITDA and Adjusted Net Income (Loss) amounts. Refer to Note 9 “Leases” to the consolidated financial statements for information regarding this gain from lease termination.

For more information regarding the limitations of Adjusted EBITDA, Adjusted EBITDA margin (calculated as a percentage of Gross Bookings) and a reconciliation of net income (loss) to Adjusted EBITDA, see the section titled “Reconciliation of Non-GAAP Financial Measures”.

Adjusted Net Income (Loss)

Adjusted Net Income (Loss) is a measure used by our management to understand and evaluate our operating performance and trends. Net income (loss) is the most directly comparable financial measure to Adjusted Net Income (Loss).

We define Adjusted Net Income (Loss) as net income (loss) adjusted for:

•amortization of intangible assets;

•stock-based compensation;

•payroll tax expense related to stock-based compensation;

•gain from lease termination, if any;

•costs related to acquisitions and divestitures, if any;

•impairment charges, if any; and

•restructuring charges, if any.

Beginning in the first quarter of 2025, we will no longer present Adjusted Net Income (Loss) as our management no longer uses this metric for purposes of understanding and evaluating our operating performance.

Free Cash Flow

Free cash flow is a measure used by our management to understand and evaluate our operating performance and trends. We believe free cash flow is a useful indicator of liquidity that provides our management, board of directors, and investors with information about our ability to generate or use cash to enhance the strength of our balance sheet, further invest in our business and pursue potential strategic initiatives.

We define free cash flow as net cash provided by (used in) operating activities less purchases of property and equipment and scooter fleet.

Free cash flow has certain limitations, including that it does not reflect our future contractual commitments and it does not represent the total increase or decrease in our cash balance for a given period. Free cash flow does not necessarily represent funds available for discretionary use and is not necessarily a measure of our ability to fund our cash needs. For more information regarding the limitations of free cash flow and a reconciliation of net cash provided by (used in) operating activities to free cash flow, see the section titled “Reconciliation of Non-GAAP Financial Measures”.

Reconciliation of Non-GAAP Financial Measures

We use our non-GAAP financial measures in conjunction with GAAP measures as part of our overall assessment of our performance, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. Our definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies may not publish these or similar metrics. Furthermore, these measures have certain limitations in that they do not include the impact of certain

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expenses that are reflected in our consolidated statements of operations that are necessary to run our business. Thus, our non-GAAP financial measures should be considered in addition to, not as substitutes for, or in isolation from, measures prepared in accordance with GAAP.

We compensate for these limitations by providing a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measure. We encourage investors and others to review our financial information in its entirety, not to rely on any single financial measure and to view our non-GAAP financial measures in conjunction with the respective most directly comparable GAAP financial measures.

Beginning in the first quarter of 2025, we will no longer present Adjusted Net Income (Loss) as our management no longer uses this metric for purposes of understanding and evaluating our operating performance.

Net income (loss) is the most directly comparable financial measure to Adjusted EBITDA. The following table provides a reconciliation of net income (loss) to Adjusted EBITDA (in millions):

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(1)Includes $5.8 million and $3.4 million related to the interest component of vehicle related finance leases in the year ended December 31, 2024 and 2023. Refer to Note 9 “Leases” to the consolidated financial statements for information regarding the interest component of vehicle-related finance leases.

(2)In the fourth quarter of 2024, we recorded a $29.6 million gain as a result of a lease termination. Refer to Note 9 “Leases” to the consolidated financial statements for information regarding this lease termination.

(3)In the year ended December 31, 2024, we incurred restructuring charges of $14.1 million of fixed asset disposals, $11.1 million of other current assets disposals and other costs and $1.8 million of severance and other employee costs. Restructuring related charges for accelerated depreciation of fixed assets of $10.6 million are included on its respective line item. Refer to Note 15 “Restructuring” to the consolidated financial statements for information regarding the restructuring plan announced in September 2024.

(4)In the year ended December 31, 2023, we incurred restructuring charges of $50.9 million of severance and other employee costs and $25.3 million related to right-of-use-asset impairments and other costs related to the restructuring plans announced in April 2023 and November 2022. Restructuring related charges for stock-based compensation of $9.9 million, accelerated depreciation of $1.0 million and payroll tax expense related to stock-based compensation of $0.6 million incurred in the year ended December 31, 2023 are included on their respective line items. Refer to Note 15 “Restructuring” to the consolidated financial statements for information regarding the restructuring plan announced in April 2023.

(5)Due to rounding, numbers presented may not add up precisely to the totals provided.

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Net income (loss) is the most directly comparable financial measure to Adjusted Net Income (Loss). The following table provides a reconciliation of net income (loss) to Adjusted Net Income (in millions):

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(1)In the fourth quarter of 2024, we recorded a $29.6 million gain as a result of a lease termination. Refer to Note 9 “Leases” to the consolidated financial statements for information regarding this lease termination.

(2)In the year ended December 31, 2024, we incurred restructuring charges of $14.1 million of fixed asset disposals, $11.1 million of other current assets disposals and other costs, $10.6 million of accelerated depreciation of fixed assets and $1.8 million of severance and other employee costs. Refer to Note 15 “Restructuring” to the consolidated financial statements for information regarding the restructuring plan announced in September 2024.

(3)In the year ended December 31, 2023, we incurred restructuring charges of $50.9 million of severance and other employee costs, $25.3 million related to right-of-use-asset impairments and other costs and $1.0 million of accelerated depreciation related to the restructuring plans announced in April 2023 and November 2022. In addition, restructuring related charges for stock-based compensation of $9.9 million and payroll tax expense related to stock-based compensation of $0.6 million incurred in the year ended December 31, 2023 are included on their respective line items. Refer to Note 15 “Restructuring” to the consolidated financial statements for information regarding the restructuring plan announced in April 2023.

(4)Beginning in the first quarter of 2025, we will no longer present Adjusted Net Income (Loss) as a non-GAAP financial measure.

(5)Due to rounding, numbers presented may not calculate precisely to the totals provided.

Net cash provided by (used in) operating activities is the most directly comparable financial measure to free cash flow. The following table provides a reconciliation of net cash provided by (used in) operating activities to free cash flow (in millions):

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(1)Due to rounding, numbers presented may not calculate precisely to the totals provided.

Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):

Operating Activities

Cash provided by operating activities was $849.7 million for the year ended December 31, 2024, which consisted of net income of $22.8 million adjusted for $375.1 million of non-cash items, and changes in working capital of $451.9 million. The year over year improvement in net income (loss) was $363.1 million, from a net loss of $340.3 million for the year ended December 31, 2023 to a net income of $22.8 million for the year ended December 31, 2024. Non-cash adjustments included stock-based compensation expense of $330.9 million, which decreased year over year due to a reduction in headcount driven by the restructuring activities initiated in prior years, and depreciation and amortization expense of $148.9 million. The changes in working capital were primarily driven by insurance, which saw (i) an increase in our insurance reserves due to a rise in commercial auto insurance rates on a per mile basis compared to the prior year, an increase in ride volume in 2024 compared to the previous period and strategic risk

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management decisions to retain additional risk in certain markets, and (ii) an increase in insurance-related accruals. There was also an increase in certain loss contingencies, including legal accruals. These were partially offset by (i) increases to prepaid expenses for cash outflows related to our insurance activities, including insurance premium payments and (ii) ordinary payments for our real estate operating leases. The timing of our scheduled driver payments also impacted prepaid and other current assets and accrued liabilities.

Cash used in operating activities was $98.2 million for the year ended December 31, 2023, which consisted of a net loss of $340.3 million (which has a positive contribution to cash for the year as it was impacted by significant non-cash items, such as depreciation, amortization, and stock-based compensations) which was primarily offset by changes in working capital of $(278.3) million. The year over year decrease in net loss from $1.6 billion to $340.3 million was a result of an increase in our revenue and the actions we have taken to reduce our operating expenses. Net loss was also offset by non-cash adjustments for stock-based compensation expense of $484.5 million and depreciation and amortization expense of $116.5 million. The changes in working capital were primarily driven by insurance, which saw (i) an increase in cash paid related to prepaid expenses and other assets driven by increases in premiums year over year due to higher rates and increased ride volumes, (ii) a decrease in our insurance reserves as insurance payments outpaced accruals in the period and (iii) an increase in our cash outflow related to accounts payable due to the timing of insurance claims payments. There was also an increase in our cash outflow related to accrued and other liabilities primarily due to settlement of historical legal and tax related liabilities.

Investing Activities

Cash used in investing activities was $518.0 million for the year ended December 31, 2024, which primarily consisted of purchases of marketable securities of $4.2 billion and purchases of property and equipment of $83.5 million, partially offset by proceeds from sales and maturities of marketable securities of $3.6 billion and the sale of property and equipment of $92.0 million.

Cash provided by investing activities was $599.8 million for the year ended December 31, 2023, which primarily consisted of proceeds from sales and maturities of marketable securities of $3.9 billion and the sale of property and equipment of $92.6 million, partially offset by purchases of marketable securities of $3.3 billion and purchases of property and equipment of $149.8 million.

Financing Activities

Cash used in financing activities was $155.9 million for the year ended December 31, 2024. This included a net cash inflow of $0.2 million for transactions related to the issuance of our 2029 Notes which included $460.0 million in proceeds from the issuance of the 2029 Notes and expenditures of $350.0 million related to the settlement of the 2025 Notes, $50.0 million related to the repurchase of Class A common stock, $47.9 million related to the purchase of capped calls and $11.9 million in payments of debt issuance costs. Additionally, our financing activities included a repayment of loans of $84.1 million, principal payments on finance lease obligations of $46.7 million and taxes paid related to net share settlement of equity awards of $40.3 million.

Cash used in financing activities was $122.1 million for the year ended December 31, 2023, which primarily consisted of repayment of loans of $72.5 million and principal payments on finance lease obligations for $43.5 million.

Liquidity and Capital Resources

As of December 31, 2024, our principal sources of liquidity were cash and cash equivalents of approximately $759.3 million and short-term investments of approximately $1.2 billion, exclusive of restricted cash, cash equivalents and investments of $1.5 billion, and a revolving credit facility in an aggregate principal amount of $420.0 million as described below. The portion of our cash and cash equivalents that is not invested is held at several large financial institutions and our investments are focused on the preservation of capital, fulfillment of our liquidity needs, and maximization of investment performance within the parameters set forth in our investment policy and subject to market conditions. The investment policy sets forth credit rating minimums, permissible allocations, and limits our exposure to specific investment types. We believe these policies mitigate our exposure to any risk concentrations.

On November 3, 2022, we entered into a Revolving Credit Agreement with certain lenders which provides for a $420 million senior secured revolving credit facility (as amended to date, the “Revolving Credit Facility”) maturing on November 3, 2027 or February 13, 2025, if, as of February 13, 2025, our Liquidity (as defined in the Revolving Credit Agreement) minus the aggregate principal amount of the 2025 Notes outstanding on such date is less than $1.25 billion. We are obligated to pay interest on loans under the Revolving Credit Facility and other customary fees for a credit facility of this size and type, including an unused commitment fee. The interest rate for the Revolving Credit Facility is determined based on calculations using certain market rates as set forth in the Revolving Credit Agreement. In addition, the Revolving Credit Facility contains customary covenants, including restrictions on payments such as cash payments of dividends. The Revolving Credit Facility provides for borrowings up to the amount of the facility, with a sublimit of $168 million for the issuance of letters of credit. We entered into Amendment No. 1 to the Revolving Credit Agreement on December 12, 2023 and Amendment No. 2 on February 21, 2024 and such amendments amended the existing agreement to, among other things: (a) solely for the purposes of the financial covenant test, replace total leverage with total net leverage, which allows us to subtract the lesser of (i)(x) to the extent free cash flow for the most recently ended trailing four quarters is greater than $100.0 million, $300.0 million and (y) otherwise, $200.0 million and (ii) the amount of unrestricted cash and cash equivalents (as defined in the Amended Agreement) on our consolidated balance sheets as of the calculation date and (b) permit us to

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repurchase up to a specified amount of our common stock with the proceeds of a convertible note offering. The Revolving Credit Facility also contains certain customary events of default.

In February 2024, we completed an offering of $460 million aggregate principal amount of the 2029 Notes in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. We used (1) approximately $350 million of the net proceeds to repurchase approximately $356.8 million in aggregate principal amount of our 2025 Notes in separate and privately negotiated transactions entered into concurrently with the pricing of the offering with certain holders of the 2025 Notes effected through one of the initial purchasers of the 2029 Notes or its affiliate, acting as our agent, (2) approximately $47.9 million of the net proceeds to pay the cost of the 2029 Capped Calls and (3) approximately $50 million of the net proceeds to purchase Class A common stock from institutional investors through one of the initial purchasers of the 2029 Notes or its affiliate, acting as Lyft’s agent, at a price per share equal to the last reported sale price of the Class A common stock on the Nasdaq Global Select Market on the date of the pricing of the 2029 Notes. Refer to Note 11 “Debt” and Note 12 "Common Stock and Employee Stock Plans" to the consolidated financial statements for information regarding these transactions.

We collect the fare and related charges from riders on behalf of drivers at the time the ride is delivered using the rider’s authorized payment method, and we retain any fees owed to us before making the remaining disbursement to drivers. Accordingly, we maintain no accounts receivable from drivers. Our contracts with insurance providers require reinsurance premiums to be deposited into trust accounts with a third-party financial institution from which the insurance providers are reimbursed for claims payments. Our restricted reinsurance trust investments as of December 31, 2024 and 2023 were $1.4 billion and $837.3 million, respectively.

We have $2.0 billion in unrestricted cash and cash equivalents and short-term investments as of December 31, 2024. We also have the ability to borrow an aggregate principal amount of up to $420.0 million under the Revolving Credit Facility, none of which has been drawn as of December 31, 2024, and $72.6 million in letters of credit were issued under the Revolving Credit Facility as of December 31, 2024. We believe that this provides sufficient liquidity to meet our working capital, inclusive of short-term commitments such as the current portion of our convertible senior notes which we plan to settle with cash in early 2025, and capital expenditures needs for at least the next 12 months. In the year ended December 31, 2024, we achieved annual net income for the first time in our operating history. We plan to continue to focus on and actively manage our cash balances and liquidity, capital expenditures, working capital and operating expenses. In particular, we continue to actively monitor the impact of the uncertain macroeconomic environment, including tightening credit markets, inflation and changing interest rates and have made adjustments to our expenses and cash flow which include headcount reductions announced in the third quarter of 2024, second quarter of 2023 and fourth quarter of 2022. We have also incurred restructuring charges related to the exit and sublease or cease use of certain facilities to align with our anticipated operating needs in the fourth quarter of 2022 and the first quarter of 2023. Refer to Note 15 “Restructuring” to the consolidated financial statements for information regarding these reductions in workforce.

Our future capital requirements will depend on many factors, including, but not limited to our growth, the effectiveness of our efforts to align our expenses with our current operating needs and short-term commitments, our ability to attract and retain drivers and riders on our platform, the continuing market acceptance of our offerings, the timing and extent of spending to support our efforts to develop our platform, actual insurance payments for which we have made reserves, and the expansion of sales and marketing activities, as well as satisfaction of our obligations with respect to any indebtedness. Further, we may in the future enter into arrangements to acquire or invest in businesses, products, services and technologies. For example, we intend to invest further in EVs in order to achieve compliance with the California Clean Miles Standard which sets the target that 90% of rideshare miles in California must be in EVs by the end of 2030; the Massachusetts’ Climate Bill; New York City's goal to get to 100% of rideshare rides in EVs or wheelchair accessible vehicles by 2030, and the City of Toronto’s push to bring the industry to 100% electric by 2030. In addition, in February 2025, we announced that our board of directors had authorized a program for the repurchase of up to $500 million of our Class A common stock. Repurchases may be made from time to time through open market purchases or through privately negotiated transactions subject to market conditions, applicable legal requirements and other relevant factors. Refer to Note 17 “Subsequent Events” to the consolidated financial statements for additional information regarding this repurchase program. From time to time, we have and we may in the future seek additional equity or debt financing to fund capital expenditures, strategic initiatives or investments and our ongoing operations, or to refinance our existing or future indebtedness. In the event that we decide, or are required, to seek additional financing from outside sources, we may not be able to raise it on terms acceptable to us or at all. The terms of any additional financings or refinancings may place limits on our financial and operating flexibility. If we raise additional funds through further issuances of equity or equity-linked securities, our existing stockholders could suffer dilution in their percentage ownership of us, and any new securities we issue could have rights, preferences and privileges senior to those of holders of our common stock. If we are unable to raise additional capital when desired, our business, financial condition and results of operations could be adversely affected.

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Contractual Obligations and Commitments

The following table summarizes our contractual obligations and commitments as of December 31, 2024 (in millions):

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(1)Includes the convertible senior notes issued in May 2020 (the "2025 Notes") and February 2024 (the "2029 Notes") with outstanding principal amounts of $390.7 million and $460.0 million, respectively, as of December 31, 2024. The 2025 Notes and 2029 Notes mature on May 15, 2025 and March 1, 2029, respectively, unless earlier converted, redeemed or repurchased. Refer to Note 11 "Debt" to the consolidated financial statements for information regarding the 2025 Notes and 2029 Notes.

(2)Due to rounding, numbers presented may not add up precisely to the totals provided.

We did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

Our consolidated financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K are prepared in accordance with GAAP. The preparation of consolidated financial statements also requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ significantly from our estimates. To the extent that there are differences between our estimates and actual results, our future financial statement presentation, financial condition, results of operations and cash flows will be affected.

We believe that the accounting policies described below involve a significant degree of judgment and complexity. Accordingly, we believe these are the most critical to aid in fully understanding and evaluating our consolidated financial condition and results of operations. For further information, see Note 2 of the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Revenue Recognition

Revenues from Contracts with Customers (ASC 606)

We generate substantially all our revenue from our ridesharing marketplace that connects drivers and riders. We recognize revenue from fees paid by drivers for use of our Lyft Platform offerings in accordance with ASC 606 as described in Note 2 of the notes to our consolidated financial statements. Drivers enter into terms of service (“ToS”) with us in order to use our Lyft Driver App.

We provide a service to drivers to complete a successful transportation service for riders. This service includes on-demand lead generation that assists drivers to find, receive and fulfill on-demand requests from riders seeking transportation services and related collection activities using our Lyft Platform. As a result, our single performance obligation in the transaction is to connect drivers with riders to facilitate the completion of a successful transportation service for riders.

We evaluate the presentation of revenue on a gross versus net basis based on whether we act as a principal by controlling the transportation service provided to the rider or whether we act as an agent by arranging for third parties to provide the service to the rider. We facilitate the provision of a transportation service by a driver to a rider (the driver’s customer) in order for the driver to fulfill their contractual promise to the rider. The driver fulfills their promise to provide a transportation service to their customer through use of the Lyft Platform. While we facilitate setting the price for transportation services, the drivers and riders have the discretion in accepting the transaction price through the platform. We do not control the transportation services being provided to the rider nor do we have inventory risk related to the transportation services. As a result, we act as an agent in facilitating the ability for a driver to provide a transportation service to a rider.

We report revenue on a net basis, reflecting the service fees and commissions owed to us from the drivers as revenue, and not the gross amount collected from the rider. We made this determination of not being primarily responsible for the services since we do not promise the transportation services, do not contract with drivers to provide transportation services on our behalf, do not control whether the driver accepts or declines the transportation request via the Lyft Platform, and do not control the provision of transportation services by drivers to riders at any point in time either before, during, or after, the trip.

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We consider the ToS and our customary business practices in identifying the contracts under ASC 606. As our customary business practice, a contract exists between the driver and us when the driver’s ability to cancel the trip lapses, which typically is upon pickup of the rider. We collect the fare and related charges from riders on behalf of drivers using the rider’s pre-authorized credit card or other payment mechanism and retain any fees owed to us before making the remaining disbursement to drivers; thus the driver’s ability and intent to pay is not subject to significant judgment.

We earn service fees and commissions from the drivers either as the difference between an amount paid by a rider based on an upfront quoted fare and the amount earned by a driver based on actual time and distance for the trip or as a fixed percentage of the fare charged to the rider. In an upfront quoted fare arrangement, as we do not control the driver’s actions at any point in the transaction to limit the time and distance for the trip, we take on risks related to the driver’s actions which may not be fully mitigated. We earn a variable amount from the drivers and may record a loss from a transaction, which is recorded as a reduction to revenue, in instances where an up-front quoted fare offered to a rider is less than the amount we are committed to pay the driver.

We recognize revenue upon completion of a ride as the single performance obligation is satisfied and we have the right to receive payment for the services rendered upon the completion of the ride.

We offer various incentive programs to drivers that are recorded as 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.

In some cases, we also earn Concierge platform fees from organizations that use our Concierge offering, which is a product that allows organizations to request rides for their customers and employees through our ridesharing marketplace. Concierge platform fees are earned as a fixed dollar amount per ride or a percentage of the ride price depending on the contract and such Concierge platform fee revenue is recognized on a gross basis.

We recognize revenue from subscription fees paid by users to access transportation options through the Lyft Platform and mobile-based applications over the applicable subscription period.

We also recognize revenue from bikes and bike station hardware and software sales when control is transferred to the customer. These revenues are not significant to the Company’s consolidated revenue.

We generate revenue from licensing and data access agreements. We are primarily responsible for fulfilling our promise to provide rideshare data and access to Flexdrive vehicles and bear the fulfillment risk, and the responsibility of providing the data, over the license period. We act as a principal in delivering the data and access licenses and present revenue on a gross basis. Consideration allocated to each performance obligation, the data delivery and vehicle access, are determined by assigning the relative fair value, which represents the stand alone selling price, to each of the performance obligations. Revenue is recorded ratably over the quarter for access to fleet vehicles as our respective performance obligation is satisfied upon the delivery of each. Revenue was recorded upon delivery of the rideshare data until expiration of the rideshare contract in the second quarter of 2024. These revenues are not significant to the Company’s consolidated revenue.

We have arrangements to provide advertising services to third parties that are interested in reaching users of our platform. These arrangements generally require us to provide advertising services over a fixed period of time for which revenue is recognized ratably over the contractual period. These revenues are not significant to the Company’s consolidated revenue.

Rental Revenue (ASC 842)

We generate rental revenues primarily from Flexdrive, an independently managed subsidiary, and our network of Light Vehicles. Under the Flexdrive program, we operate a fleet of rental vehicles comprised of both vehicles owned by us and vehicles leased from third-party leasing companies. We either lease or sublease vehicles to drivers and as a result, we are considered the accounting lessor or sublessor, as applicable, in these arrangements in accordance with ASC 842. For vehicles that are subleased, sublease income and head lease expense for these transactions are recognized on a gross basis on the consolidated financial statements. Drivers who rent vehicles are charged rental fees, which we collect from the driver by deducting such amounts from the driver’s earnings on the Lyft Platform.

Revenue generated from single-use ride fees paid by Light Vehicles riders are recognized upon completion of each related ride. Revenue generated from Flexdrive is recognized evenly over the rental period, which is typically seven days or less. Due to the short-term nature of the Flexdrive and Light Vehicle transactions, we classify these rentals as operating leases.

Insurance Reserves and Insurance-related Accruals

We utilize both a wholly-owned captive insurance subsidiary and third-party insurance, which may include deductibles and self-insured retentions, to insure or reinsure costs including auto liability, uninsured and underinsured motorist, auto physical damage, first party injury coverages including personal injury protection under state law and general business liabilities up to certain limits. The recorded liabilities reflect the estimated cost for claims incurred but not paid and claims that have been incurred but not yet reported and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. Liabilities are determined on a quarterly basis by internal actuaries through an analysis of historical trends, changes in claims experience including consideration of new information and application of loss development factors for the insurance reserves and frequency and severity

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assumptions for the insurance-related accruals, among other inputs and assumptions. On an annual basis, an independent third-party actuary will evaluate the liabilities for appropriateness with claims reserve valuations.

Insurance claims may take years to completely settle, and we have limited historical loss experience. Because of the limited operational history, we make certain assumptions based on currently available information and industry statistics, with the loss development factors as the most significant assumptions related to the insurance reserves and the frequency and severity assumptions as the most significant assumptions related to insurance-related accruals, and utilize actuarial models and techniques to estimate the reserves. A number of factors can affect the actual cost of a claim, including the length of time the claim remains open, economic and healthcare cost trends and the results of related litigation. Furthermore, claims may emerge in future years for events that occurred in a prior year at a rate that differs from previous actuarial projections. The impact of these factors on ultimate costs for insurance is difficult to estimate and could be material. However, while we believe that the insurance reserve and insurance-related accrual amounts are adequate, the ultimate liabilities may be in excess of, or less than, the amounts provided. As a result, the net amounts that will ultimately be paid to settle the liabilities and when amounts will be paid may significantly vary from the estimated amounts provided for in the consolidated balance sheets. We continue to review our insurance reserve estimates in a regular, ongoing process as historical experience develops, additional claims are reported as settled, and the legal, regulatory and economic environment evolves.

Business Combinations

We account for our business combinations using the acquisition method of accounting, which requires, among other things, allocation of the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed at their estimated fair values on the acquisition date. The excess of the fair value of purchase consideration over the values of these identifiable assets and liabilities is recorded as goodwill. When determining the fair value of assets acquired and liabilities assumed, we make significant estimates and assumptions, especially with respect to intangible assets. Our estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, not to exceed one year from the date of acquisition, we may record adjustments to the assets acquired and liabilities assumed, with a corresponding offset to goodwill if new information is obtained related to facts and circumstances that existed as of the acquisition date. After the measurement period, any subsequent adjustments are reflected on the consolidated statements of operations. Acquisition costs, such as legal and consulting fees, are expensed as incurred.

Goodwill

Goodwill is not subject to amortization, but is tested for impairment on an annual basis during the fourth quarter or whenever events or changes in circumstances indicate the carrying amount of the goodwill may not be recoverable. As part of the annual goodwill impairment test, we first perform a qualitative assessment to determine whether further impairment testing is necessary. Judgment in the assessment of qualitative factors of impairment include, among other factors: financial performance; legal, regulatory, contractual, business, and other factors; entity specific factors; industry and market considerations, macroeconomic conditions, and other relevant events and factors affecting the reporting unit. To the extent we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying value, a quantitative test is then performed.

Loss Contingencies

We are involved in legal proceedings, claims, and regulatory and governmental inquiries and investigations in the ordinary course of business. Certain matters include speculative claims for substantial or indeterminate amounts of damages. We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. If we determine that a loss is reasonably possible and the loss or range of loss can be reasonably estimated, we disclose the possible loss in the accompanying notes to the consolidated financial statements.

We review the developments in our contingencies that could affect the amount of the provisions that have been previously recorded, and the matters and related reasonably possible losses disclosed. We make adjustments to our provisions and changes to our disclosures accordingly to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Significant judgment is required to determine both the probability and the estimated amount of loss. These estimates have been based on our assessment of the facts and circumstances at each balance sheet date and are subject to change based on new information and future events.

The outcomes of our legal proceedings are inherently unpredictable and subject to significant uncertainties. For matters where the Company has recorded a probable and estimable loss, until the final resolution of the matter, there may be exposure to a material loss in excess of the amount recorded.

Income Taxes

The Company records a valuation allowance to reduce its deferred tax assets to the net amount that it believes is more-likely-than-not to be realized. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income and ongoing tax planning strategies in assessing the need for a valuation allowance. We have a valuation allowance for our U.S. deferred tax assets, including federal and state net operating loss

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carryforwards. We expect to maintain this valuation allowance until it becomes more-likely-than-not that the benefit of our federal and state deferred tax assets will be realized. However, based on our current and anticipated future earnings, our management believes it is reasonably possible that sufficient positive evidence of sustained U.S. profitability may become available in the foreseeable future to reach a conclusion that the U.S. valuation allowance will no longer be needed. The timing and amount of the valuation allowance release could vary based on the level of profitability that the Company is able to actually achieve. A release of all or a portion of the valuation allowance would result in the recognition of certain deferred tax assets and a material income tax benefit for the period in which such release is recorded.

In recognizing tax benefits from uncertain tax `positions, the Company assesses whether it is more-likely-than-not that the tax position will be sustained upon examination by the taxing authorities based on its technical merits. Evaluating our tax positions and determining our provision for income taxes are inherently uncertain and requires judgement and use of assumptions and estimates.

Recent Accounting Pronouncements

See Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for recent accounting pronouncements as of the date of this report.