Core Viewpoint - Defiance ETFs has launched the Defiance Daily Target 2X Long LMND ETF (Ticker: LMNX), aimed at providing active traders with leveraged exposure to Lemonade, Inc. (NYSE: LMND), a company known for its innovative insurance technology solutions [1][2]. Group 1: Fund Overview - The LMNX ETF seeks to deliver 200% of the daily percentage change in the share price of Lemonade, Inc., allowing investors to express short-term bullish views on the stock [2][3]. - The fund is designed for knowledgeable investors who understand the risks associated with leveraged investments and are willing to actively monitor their portfolios [6]. Group 2: Underlying Company - Lemonade, Inc. operates as a fully digital insurance company, offering various insurance products including renters, homeowners, car, pet, and life insurance through licensed carriers in the U.S. and Europe [4]. - The company utilizes proprietary AI-driven software and automation to enhance efficiency in policy issuance, claims management, and customer interaction, thereby redefining the traditional insurance experience [4]. Group 3: Investment Strategy - The fund employs a fixed-fee business model and relies on reinsurance agreements to manage underwriting risk and stabilize financial results [4]. - The LMNX ETF is not an investment in Lemonade, Inc. itself, but rather a financial instrument that seeks to leverage the performance of LMND [5].

Core Thesis - Lemonade, Inc. has achieved a historic milestone of $1 billion in-force premium (IFP) in just 8.5 years, making it the fastest insurer to reach this scale [2] - The company's Q2 2025 results show a 29% year-over-year IFP growth to $1.08 billion and a 35% increase in revenue, marking its seventh consecutive quarter of accelerating momentum [2] Financial Performance - Gross loss ratios improved by 12 points to 67% overall and by 13 points in auto to 82%, indicating effective underwriting and risk selection through its AI-driven model [3] - Management has reaffirmed a 2025 adjusted EBITDA loss guidance of $135–$140 million, with expectations of sequential improvement each quarter [3] Competitive Advantage - Lemonade's AI-first platform allows for rapid claims processing, sometimes in under three seconds, and provides compounding data advantages [2] - The company's integrated architecture facilitates cross-selling synergies, margin expansion, and global scalability, distinguishing it from traditional insurers [4] Market Dynamics - The shift towards AI-first platforms in the insurance market positions Lemonade for accelerated growth and improving fundamentals, suggesting potential for durable market leadership [4] - The European business is scaling more efficiently than early U.S. operations, generating twice the new business per growth dollar [3] Historical Context - The stock price of Lemonade has appreciated approximately 90.07% since previous bullish coverage, reflecting the successful execution of its diversification strategy [5] - The current bullish thesis emphasizes the company's AI-driven scale and profitability trajectory, aligning with earlier positive assessments [5]

Core Insights - Lemonade is rapidly transforming the insurance industry by leveraging artificial intelligence to enhance customer experience and operational efficiency [2][5][6] - The company reported a significant increase in customer base and in-force premium, indicating strong business momentum [6][7] - Despite recent stock gains, Lemonade's stock price remains significantly below its peak, suggesting potential for future growth [3][14] Customer Growth - Lemonade's customer base reached a record 2.7 million by the end of Q2 2025, reflecting a 24% year-over-year increase, up from 21% in the previous quarter [6] - The company operates in various insurance markets, including renters, homeowners, pet, life, and car insurance, utilizing AI chatbots for quick quotes and claims processing [5][6] Financial Performance - In Q2 2025, Lemonade's in-force premium (IFP) hit a record $1.08 billion, representing a 29% year-over-year increase, marking the seventh consecutive quarter of accelerated IFP growth [7] - Revenue for Q2 reached $164.1 million, a 35% increase year-over-year, surpassing management's forecast of $158 million [11] - The company raised its full-year revenue guidance for 2025 by $50.5 million, from $662 million to $712.5 million, following strong Q2 results [11] Profitability and Losses - Lemonade reported an adjusted EBITDA loss of $40.9 million in Q2, an improvement from the $43 million loss in the same period last year, indicating progress towards profitability [12] - The company maintains over $1 billion in liquidity, providing ample resources for continued investment in growth initiatives [13] Valuation and Future Outlook - Lemonade's price-to-sales (P/S) ratio has decreased to 6.1, making the stock appear attractive compared to its peak of 90 during the tech frenzy in 2021 [14] - The company aims to grow its IFP to $10 billion over the next decade, suggesting significant long-term growth potential for investors [16]