LMND earnings analysis
What we found in LMND'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
Lemonade reported strong Q2 top-line growth, with revenue up 79% year over year to $294.4 million and gross written premium up 34% to $380.0 million, aided by customer growth, higher premium per customer, and a lower reinsurance cession rate. Profitability improved in dollar terms—net loss was $43.4 million versus $43.9 million and adjusted EBITDA loss narrowed to $18.7 million—but GAAP gross margin slipped to 38% from 39% as retained losses and operating investment increased. The balance sheet remains liquid at $1.0628 billion in cash, cash equivalents, and investments, though operating cash flow was negative $4.0 million for the first half and GC financing borrowings were $206.4 million.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue growth accelerated to $294.4M
- Q2 revenue rose $130.3 million, or 79% year over year, to $294.4 million. It also increased about $36.4 million from the implied Q1 2026 level of $258.0 million ($552.4 million six-month revenue less $294.4 million in Q2).
- Customer and premium base expanded
- Underlying customer metrics expanded: customers reached 3,308,666 versus 2,693,107 a year ago, in-force premium grew to $1.4343 billion from $1.0834 billion, and premium per customer increased to $433 from $402.
- Premium growth remained strong
- Gross written premium increased $95.5 million, or 34%, to $380.0 million, driven by a 23% increase in customers and an 8% increase in premium per customer. Gross earned premium rose 32% to $332.4 million.
- Losses and adjusted EBITDA improved
- Net loss narrowed modestly to $43.4 million from $43.9 million year over year, while adjusted EBITDA improved to a $18.7 million loss from a $40.9 million loss. For the first half, net loss improved $27.1 million, or 25%, to $79.2 million.
- Underwriting economics improved
- Adjusted gross profit rose to $114.4 million from $65.6 million, and adjusted gross profit as a share of gross earned premium improved to 34% from 26%. The net loss ratio improved to 61% from 69%.
- Liquidity and growth-financing capacity
- Liquidity remained substantial, with $367.6 million in cash and equivalents plus $695.2 million of investments, or $1.0628 billion combined. The company also signed a Hannover Re facility providing up to $250.0 million for growth financing during 2027-28.
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.
- Margin compression and cost growth
- GAAP gross margin declined to 38% from 39% a year ago, despite revenue rising 79% to $294.4 million. Sales and marketing rose $18.1 million, or 30%, to $77.7 million, while general and administrative expense rose $22.0 million, or 85%, to $47.8 million.
- Negative operating cash flow and leverage
- Cash flow from operations remained negative at $4.0 million used during the first six months of 2026. The company has generated negative operating cash flow since inception and funded growth partly through borrowings, which totaled $206.4 million under the GC agreement at June 30, 2026.
- More retained insurance risk
- The renewed whole-account reinsurance program reduced the effective cession rate to 18% of premiums from approximately 20%, while the property-per-risk contract that previously covered claims above $750,000 up to $2.25 million was not renewed. Lower reinsurance can increase retained underwriting volatility.
- Claims-cost inflation and rate-lag risk
- Management cites potential tariff-related increases in building-material, auto-parts and consumer-goods costs; rate increases may require regulatory approval and can lag claim-cost inflation. Net loss and LAE increased 99% to $154.0 million in Q2 as retained premium exposure expanded.
- No formal risk-factor updates
- Risk factors were unchanged: Item 1A states there were no material changes from the annual 10-K risk factors. The filing nevertheless notes $352.4 million of the $810.5 million held by insurance entities is regulatory surplus, limiting unrestricted holding-company access.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $-0.56
- Gross margin
- 38.0%
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS guidance. Management states that cash and equivalents of $367.6 million should meet working-capital, liquidity and capital-expenditure needs for at least the next 12 months, and that it has no current plans for material capital expenditures beyond operating requirements.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 30, 2026
- Lemonade reported Q1 2026 revenues of $258 million, exceeding estimates of $252.43 million, and an EPS loss of $0.47, beating expectations of a $0.57 loss. The company experienced a 32% growth in in-force premiums…
- 10-K · February 25, 2026
- Lemonade reports multi-quarter revenue acceleration and margin improvement as it scales its AI-driven platform: customers surpassed 3,000,000 and Q4 2025 revenue reached roughly $219M with operating margin improving to…
- 10-Q · November 5, 2025
- Lemonade reported Q3 revenue of $194.5 million (up from $136.6 million a year ago) and a narrower GAAP loss per share of $(0.51) versus $(0.95) in Q3 2024. Revenue and certain top-line insurance metrics (net earned…
- 10-K · February 26, 2025
- Lemonade positions itself as a technology-first, vertically integrated insurer that uses AI (AI Maya, AI Jim, CX.AI) and reinsurance plus a customer Giveback to reduce volatility and scale rapidly. The filing highlights…
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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