Q2 Earnings: Is Lemonade Growing Fast Enough?

By Chris Lange Updated Feb 26, 11:53AM EST · Published Aug 12, 10:36AM EDT

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Lemonade Inc. (NYSE: LMND) reported its first results since coming public as one of the hot initial public offerings over the summer. On Wednesday morning, the insurance firm said that it had a net loss of $2.09 per share and $29.9 million in revenue. Analysts had expected a net loss of $0.95 per share on $29.31 million in revenue.

In the second quarter, Lemonade noted 814,160 customers, almost doubling from 442,752 customers at the end of the same period last year. Net earned premium for the quarter was $29.2 million, more than doubling from $13.3 million last year.

In Force Premium (IFP), which the company defines as the aggregate annualized premium for customers as of the period end date, increased 115% to $155.1 million from the second quarter of last year. This increase was due primarily to an 84% increase in the number of customers, as well as an increase in premium per customer.

Premium per customer, which is the IFP divided by number of customers, increased 17% year over year to $190, primarily due to a continued shift of product mix toward higher value homeowner policies, as well as growth in the overall average policy value.

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On the books, cash, cash equivalents and investments totaled $295.4 million at the end of the quarter, down from $330.9 million at the end of the previous fiscal year.

Looking ahead to the third quarter, the company expects to see revenue in the range of $14 million to $15 million, with an IFP of $170 million to $175 million. Analysts are calling for a net loss of $0.55 per share and $15.2 million in revenue for the coming quarter.

Lemonade stock traded down about 5% on Wednesday, at $59.56 in a post-IPO range of $49.02 to $96.51. The consensus price target is $80.75.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.