Lemonade Q2 Loss Narrower Than Expected, Revenues Rise Y/Y

Core Insights - Lemonade, Inc. (LMND) reported a narrower net loss of $0.60 per share for Q2 2025, compared to a loss of $0.81 per share in the same quarter last year, driven by increased revenues despite higher growth spending [1][8] Financial Performance - Total operating revenues reached $164.1 million, reflecting a 35% year-over-year increase, surpassing the Zacks Consensus Estimate by 1.2% [3][8] - In-force premium grew by 29% year-over-year to $1,083.4 million, marking the seventh consecutive quarter of growth acceleration [3] - Net investment income increased by 16% year-over-year to $9.4 million [3] - Customer count rose by 24% year-over-year to 2,693,107 [3] Profitability Metrics - Premium per customer was $402, a 4% increase year-over-year [4] - Gross earned premium increased by 26% year-over-year to $252.3 million [4] - Gross profit doubled year-over-year to $64.3 million, attributed to a 35% revenue increase and a 10-point improvement in the net loss ratio [4] - Adjusted gross profit surged 96% year-over-year to $65.6 million [5] Expenses and Cash Flow - Total operating expenses, excluding net loss and loss adjustment expense, rose by 21% year-over-year to $129.2 million, mainly due to higher customer acquisition costs [5] - Adjusted EBITDA loss improved to $40.9 million from a loss of $43 million in the previous year [6] - Adjusted free cash flow increased more than tenfold year-over-year to $25 million in Q2 2025 [7] Balance Sheet and Guidance - As of June 30, 2025, Lemonade had cash, cash equivalents, and investments totaling $1.03 billion, a 1% increase from the end of 2024 [7] - The company projects Q3 revenues between $183 million and $186 million, with a full-year revenue outlook of $710 million to $715 million [8][11]