LIME earnings analysis
What we found in LIME's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Lime delivered strong operating growth in Q2, with revenue up 24% to $304.224 million and fleet and MAU each up 22%. However, gross margin compressed to 42.4%, operating profit declined to $12.810 million, and first-half free cash flow worsened to negative $83.325 million as fleet investment and working capital needs increased. Liquidity was materially improved by the IPO and repayment of the $115.0 million term loan, but the unresolved material weakness and ongoing cost, covenant, and supply-chain risks temper the outlook.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue and rider growth remained strong
- Second-quarter revenue was $304.224 million, up 24% from $246.068 million in the prior-year quarter. Growth was driven by a 22% increase in average operational fleet to 407,707 and a 22% increase in MAU to 5.024 million.
- Adjusted EBITDA expanded
- Second-quarter adjusted EBITDA increased 11% to $84.197 million from $76.179 million, despite adjusted gross margin declining to 52.1% from 55.7%.
- Net income benefited from tax release
- The company reported $295.379 million of second-quarter net income versus $20.505 million a year earlier, but the result included a $298.433 million income-tax benefit, including a $289.1 million discrete benefit from releasing the U.S. valuation allowance.
- IPO strengthened liquidity
- Liquidity improved following the IPO: cash and cash equivalents were $278.1 million at June 30, 2026, the company received approximately $141.7 million of IPO net proceeds, and it repaid the $115.0 million Senior Secured Term Loan on July 2, 2026.
- First-half operating scale increased
- Six-month revenue increased 26% to $474.374 million from $375.083 million, while average operational fleet rose 22% to 366,322 and MAU rose 22% to 4.080 million.
- Fleet expansion continued
- The company invested $132.616 million in capital expenditures during the first six months, including $122.6 million of vehicle purchases, supporting fleet growth to 407,707 average operational vehicles in the second quarter.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Negative free cash flow widened
- Six-month free cash flow deteriorated to negative $83.325 million from negative $19.883 million, as operating cash flow fell to $49.291 million from $66.652 million while capital expenditures increased to $132.616 million from $86.535 million.
- Margin and operating leverage weakened
- GAAP gross margin declined to 42.4% from 44.3% in the second quarter, while operating profit fell to $12.810 million from $41.542 million. SG&A increased 68% to $67.260 million and R&D increased 123% to $31.243 million.
- Material weakness remains unresolved
- Management disclosed that disclosure controls and procedures were not effective as of June 30, 2026 because of a material weakness tied to insufficient accounting and finance personnel; remediation remains ongoing and requires hiring personnel and third-party consultants.
- New debt covenants constrain flexibility
- The new $200.0 million revolving credit facility requires a maximum total net leverage ratio of 3.25 to 1.00 and a minimum fixed-charge coverage ratio of 1.25 to 1.00 beginning with the quarter ending September 30, 2026.
- Supply-chain component pressure increased
- Management identified higher demand and longer lead times for computer memory in 2026, a component of the central control unit, which could increase costs and reduce margins or delay vehicle deployment.
- Market and channel concentration
- The United Kingdom accounted for approximately 22% of first-half 2026 revenue, while approximately 13% of revenue was attributable to Pay-As-You-Go rides generated through the Uber partnership, creating concentration exposure to a market and channel.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $4.73
- Gross margin
- 42.4%
- Operating margin
- 4.0%
What they said about what is next.
The 10-Q does not provide new quantitative revenue or EPS guidance. The previously issued outlook was provided in the August 4, 2026 earnings release/8-K.
The filing reads about the same as the one before it.
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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