Lemonade Inc ( (LMND) ) has released its Q2 earnings. Here is a breakdown of the information Lemonade Inc presented to its investors.
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Lemonade Inc., a tech-driven insurance company, leverages artificial intelligence to offer various insurance products across the US and Europe, focusing on renters, homeowners, pet, car, and life insurance. In its latest earnings report for Q2 2025, Lemonade Inc. showcased strong financial performance with significant growth in key areas. The company reported a 29% year-over-year increase in In Force Premium (IFP) to $1.08 billion, marking its seventh consecutive quarter of growth acceleration. Revenue also saw a substantial rise of 35%, reaching $164.1 million.
Key financial highlights include a gross profit increase of 109% year-over-year to $64.3 million and a gross margin improvement of 14 points to 39%. Lemonade’s net loss improved by 23% compared to the previous year, standing at $43.9 million. The company’s adjusted EBITDA loss also showed a 5% improvement. Lemonade’s strategic focus on growth was evident in its operating expenses, which increased by 21% due to higher growth spend, while excluding growth spend, operating expenses actually declined by 2%.
Lemonade’s car insurance segment and European operations were notable contributors to its growth. The car insurance segment experienced a 12% sequential growth in IFP, while the European business saw a remarkable IFP growth of over 200% year-over-year. These segments not only contributed to Lemonade’s expanding customer base but also demonstrated improvements in loss ratios, indicating effective risk management and pricing strategies.
Looking ahead, Lemonade’s management remains optimistic, raising its full-year 2025 guidance for IFP, Gross Earned Premium (GEP), and revenue. The company continues to focus on leveraging AI and automation to drive efficiency and growth, with expectations of achieving positive adjusted free cash flow for the full year 2025 and positive adjusted EBITDA before the end of 2026.