Lemonade, Inc. (NYSE: LMND) has released its second quarter 2024 financial results.
Lemonade notes in its Letter to Shareholders that it remains focused on offering renters, homeowners, car, pet, and life insurance.
Powered by artificial intelligence and social impact, Lemonade’s full stack insurance carriers in the US and the EU aim to “replace brokers and bureaucracy with bots and machine learning, aiming for zero paperwork and instant everything.”
A Certified B-Corp, Lemonade gives “unused premiums to nonprofits selected by its community, during its annual Giveback.”
Lemonade is currently available in the United States, Germany, the Netherlands, France, and the UK, and continues to expand globally
Lemonade revealed that their second quarter results were headlined by “robust topline growth, relative stability in expenses, and they were net cash flow (NCF) positive.”
Lemonade provided an overview ofits operating metrics:
- Net Cash Flow:They were NCF positive in Q2 2024 and expect to remain NCF positive with the exception of Q4 2024.
- Top Line: At $839 million, In Force Premium grew 22% YoY, while revenue grew 17%.
- Gross Loss Ratio: At 79%, gross loss ratio improved a notable 15 points year on year, while trailing twelve months (TTM) gross loss ratio was also 79%, 12 points improved vs prior year, and 4 points improved sequentially.
- Gross Profit: Increased by 155% year on year, while Gross Profit Margin doubled year on year to 25%.
- Operating Expense: Increased 13% or $12 million year on year, primarily driven by a $13 million increase in growth spend, while all other operating expense was stable as compared to prior year.
- Bottom line: At ($43) million, Adjusted EBITDA loss improved 18% year on year, while Net Loss, at ($57) million, improved 15%.
Lemonade further reported a Cash Flow Positive Q2 2024 which was was NCF1 positive, and they now “expect to remain NCF positive moving forward, with the exception of Q4 2024, due to seasonal cash flow patterns.”
From their current balance of $931m, Lemonade expect their cash and investments balance to “dip by approximately 1-2% before consistently climbing.”
Lemonade also mentioned that the second quarter gross earned premium of $199.9 million “increased by $36.0 million or 22% as compared to the second quarter of 2023, primarily due to the increase of IFP earned during the quarter.”
Lemonade further noted that the Revenue Second quarter of $122.0 million “increased by $17.4 million or 17% as compared to the second quarter of 2023, primarily due to the increase of gross earned premium and net investment income.”
And second quarter gross profit “of $30.8 million increased by $18.7 million or 155% as compared to the second quarter of 2023, primarily due to higher earned premium and improved loss ratio in the second quarter this year.”
And second quarter adjusted gross profit “of $33.4 million increased by $16.8 million or 101% as compared to the second quarter of 2023, primarily due to higher earned premium and improved loss ratio in the second quarter this year.”
