Lemonade beats expectations, but profit concerns send shares tumbling
The Israeli insurtech company reported 79% revenue growth and its 11th consecutive quarter of expansion, but rising customer acquisition costs and continued losses overshadowed another strong performance.
Insurtech company Lemonade reported better-than-expected second-quarter financial results, but its outlook for the remainder of the year failed to satisfy investors. The company's stock fell more than 20% at the opening of trading on Wall Street, although it remains one of the best-performing Israeli technology stocks over the past year, rising 60% in the last 12 months and reaching a market value of nearly $5 billion.
Lemonade, which primarily sells homeowners and renters insurance, as well as pet and auto insurance products in the U.S., reported its 11th consecutive quarter of growth. Revenue in the second quarter jumped 79% year-over-year to $294 million, while total in-force premium reached $1.4 billion, up 32%.
For the third quarter, Lemonade expects revenue of approximately $325 million, representing continued growth both compared with the corresponding quarter last year and sequentially from the second quarter. Adjusted operating loss is expected to rise slightly, from $19 million in the second quarter to between $20 million and $23 million.
For the full year, Lemonade expects revenue of approximately $1.2 billion, representing growth of around 9% compared with 2025. Adjusted operating loss, excluding certain accounting items, is expected to reach approximately $50 million.
Lemonade's main challenge remains the path to profitability. Despite rapid growth and annual revenue exceeding $1 billion, the company has yet to generate a profit. In the second quarter, operating expenses jumped 41%, or $53 million, primarily due to higher customer acquisition costs. These expenses increased to $64.4 million, compared with $50 million in the corresponding quarter.
As a result, Lemonade reported a quarterly net loss of $43 million, roughly unchanged from the same period last year.
