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Jun 30, 2025
Lemonade Q2 2025 Earnings Report
Lemonade reported accelerating growth, improved margins, and a narrower net loss in Q2 2025.
Key Takeaways
Lemonade delivered strong top-line growth in Q2 2025, with in-force premium rising to $1.08 billion and revenue increasing 35% YoY. The company achieved a substantial improvement in gross profit and narrowed its net loss, driven by improved underwriting and expense efficiency. Europe and Car segments were key growth contributors.
Revenue rose 35% YoY to $164.1 million, driven by higher gross earned premium and investment income.
In-force premium reached $1.08 billion, a 29% YoY increase and the 7th straight quarter of acceleration.
Gross profit more than doubled YoY to $64.3 million with a 14-point improvement in gross margin.
Net loss narrowed by 23% YoY to $43.9 million, while adjusted free cash flow turned positive.
Revenue by Geographic Location
Forward Guidance
Lemonade raised full-year guidance for IFP, GEP, and revenue, while maintaining EBITDA targets. Management expects continued growth and improving profitability driven by better retention, lower reinsurance cessions, and strong performance from Car and European operations.
Positive Outlook
- Raised FY 2025 guidance for in-force premium to $1.213B–$1.218B
- Raised FY 2025 revenue guidance to $710M–$715M
- Positive adjusted free cash flow expected for full year 2025
- Reinsurance structure change will increase revenue retention
- Adjusted EBITDA expected to turn positive before end of FY 2026
Challenges Ahead
- Annual dollar retention declined to 84%, down 4 points YoY
- Q2 adjusted EBITDA remained negative at -$40.9M
- Marketing spend nearly doubled YoY, adding pressure to expenses
- Continued net losses with no firm date for profitability
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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