Lemonade (LMND) Q2 2025 earnings summary

Executive summary

• Achieved seventh consecutive quarter of Inforce Premium (IFP) growth acceleration, with IFP up 29% year-over-year to $1.08B and customer count rising 24% to 2.69M.

• Q2 2025 revenue increased 35% year-over-year to $164.1M, gross profit more than doubled to $64.3M, and gross margin improved to 39%.

• Net loss improved 23% year-over-year to $(43.9)M ($(0.60)/share), and adjusted EBITDA loss was $(40.9)M, a 5% improvement.

• Car and European segments delivered significant growth and improved loss ratios, with European IFP up over 200% and car segment IFP surpassing $150M.

• Generated $25M in adjusted free cash flow, up $23M from prior year; cash flow from operations was $6M, up $17M year-over-year.

Financial highlights

• Gross earned premium rose 26% to $252.3M; net earned premium was $112.5M, up 26% year-over-year.

• Gross profit up 109% to $64.3M; adjusted gross profit up 96% to $65.6M; gross profit margin reached 39%.

• Net loss per share for Q2 2025 was $(0.60), improved from $(0.81) last year.

• Total cash, cash equivalents, and investments ended at $1.03B, with $277M held as regulatory surplus.

• Operating expenses (excluding growth spend) declined 2% year-over-year; total operating expense rose 21% due to higher growth spend.

Outlook and guidance

• Q3 2025: IFP expected $1.144–$1.147B, Gross Earned Premium $267–$269M, revenue $183–$186M, adjusted EBITDA loss $(37)–$(34)M.

• Full year 2025: IFP $1.213–$1.218B, GEP $1.036–$1.039B, revenue $710–$715M, adjusted EBITDA loss $(140)–$(135)M.

• Expect positive adjusted free cash flow for FY 2025 and positive adjusted EBITDA before end of FY 2026.

• Growth spend for 2025 expected at $173M, with Q3 at $47M.

• Revenue growth rates expected to outpace IFP growth due to reinsurance changes.