Insurer Lemonade Inc's Q2 revenue rises on premium growth

Overview

• US digital insurer's Q2 revenue rose 79% yr/yr, driven by premium growth and retention

• Q2 adjusted EBITDA loss narrowed and beat analyst expectations

• Company cites improved underwriting and claims efficiency as key drivers of results

Outlook

• Lemonade sees Q3 2026 revenue between $323 mln and $326 mln

• Company expects full-year 2026 revenue of $1,214 mln to $1,220 mln

• Lemonade expects positive adjusted EBITDA in Q4 2026

Result Drivers

• PREMIUM GROWTH & RETENTION - Revenue rose 79% yr/yr, primarily driven by a 32% increase in in force premium and higher premium retention following reduced quota share cession rates

• CLAIMS HANDLING EFFICIENCY - Record-low 5% LAE ratio attributed to advances in AI and automation in claims operations

• UNDERWRITING IMPROVEMENT - Gross profit rose 76% yr/yr, reflecting premium growth acceleration and expanding gross margins

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 6 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the property & casualty insurance peer group is "buy."

• Wall Street's median 12-month price target for Lemonade Inc is $72.50, about 16.7% above its July 28 closing price of $62.11

Reuters Recommended Reads

• July 28 - Slide Insurance Q2 net income nearly doubles on premium growth

• July 28 - Hanover Insurance Q2 net income rises on lower catastrophe losses

• July 28 - Arch Capital's quarterly profit hit by softer underwriting, higher catastrophe losses

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)