Lemonade Beats Q2 Revenue Forecast, Shares Fall in Pre-Market Trading

Digital insurance company Lemonade beat analysts' revenue forecasts and its own guidance in the second quarter, reporting revenue of $294 million. Under GAAP, the net loss remained nearly unchanged compared to the same quarter last year, totaling $43.4 million, while net loss per share met analysts' expectations at 56 cents. The stock is currently falling by over 10% in pre-market trading on Wall Street.

Adjusted EBITDA continued its improving trend but remained negative at $19 million, compared to a negative $43 million in the same quarter last year. Looking ahead, Lemonade has slightly raised its revenue guidance: the midpoint of the forecast range now reflects annual revenue of $1.217 billion, up from $1.2 billion previously. The annual adjusted EBITDA forecast remains unchanged at a loss of $47–51 million. Lemonade continues to expect a transition to positive EBITDA during the fourth quarter of this year, reaching approximately $8 million. For the third quarter, EBITDA is still expected to be negative at $20–23 million, with revenue projected at $323–326 million, exceeding analysts' estimates.

During the second quarter, Lemonade's free cash flow was positive at $18.8 million, while cash flow from operating activities was negative at $4 million.

In a letter to investors, the company stated:

"The second quarter results were excellent and were again characterized by high top-line growth. We are consistently moving towards our first positive EBITDA quarter."

At the same time, the company announced a change in CFO: Tim Bixby, who has held the position since 2017, will step down to become a director, and Nick Stad will be promoted to the position in his place.

Lemonade, founded by CEO Daniel Schreiber and President Shai Wininger, trades on the New York Stock Exchange with a market capitalization of $4.8 billion. Over the past year, the stock has risen by approximately 70%, trading within a range of $36–97 this year. According to The Wall Street Journal, 12 analysts currently cover Lemonade stock, with three positive, six neutral, and three negative ratings. The average target price reflects a modest premium of 3.4% over the stock price prior to the earnings release.