Feb 10 (Reuters) - Lyft said on Tuesday its board approved a $1 billion share repurchase program, displaying renewed confidence in its growth trajectory as the ride-hailing company expands across the globe and adds autonomous vehicles to its platform.

The move comes after Lyft capped a year of improving bookings growth, higher margins, and expansion into new regions, supporting confidence in its longer-term growth prospects.

The buyback represents roughly 15% of Lyft's current market capitalization and comes on top of an earlier $750 million share repurchase program announced early last year.

The fourth quarter marked Lyft's most profitable on record, supported by stronger rider engagement and a growing mix of higher-value ride modes, even as severe winter weather across parts of the United States weighs on its forecast.

Lyft generated $1.12 billion in free cash flow in 2025, higher than estimates of $993.4 million, according to Visible Alpha data.

It reported adjusted core earnings of $154.1 million for the fourth quarter, above expectations of $147.1 million, according to estimates compiled by LSEG.

Gross bookings in the quarter rose 19% to $5.07 billion, in line with expectations.

Growth last year was driven by an expansion into Europe, premium and larger-vehicle offerings, as well as partnerships. About 25% of Lyft's rides in the fourth quarter were linked to a partnership, including strong momentum from its tie-up with DoorDash.

Revenue in the December quarter stood at $1.59 billion, below estimates of $1.76 billion. Fourth-quarter revenue included a $168 million impact from legal, tax and regulatory reserve changes and settlements, without which revenue would have been about $1.8 billion, the company said.

Lyft forecast current-quarter gross bookings of $4.86 billion to $5 billion, with a midpoint largely in line with the average estimate of $4.95 billion.

It expects adjusted core profit of $120 million to $140 million for the quarter, compared with estimates of $139.4 million.

The weaker first-quarter forecast shows the effects of Winter Storm Fern, which brought heavy snow, icy conditions and prolonged extreme cold to large parts of the United States, particularly on the East Coast, disrupting travel and dampening ride demand during the quarter.

(Reporting by Akash Sriram in Bengaluru; Editing by Alan Barona)