Lemonade, Inc. stock climbed 29% in Tuesday trading after Q2 earnings and revenue topped Wall Street consensus estimates, helped by "accelerating growth, healthy underwriting performance, and excellence in expense management," the company said.

The AI-powered P&C insurer still expects to exit 2026 with positive adjusted EBITDA.

The company now expects 2025 revenue to be $710M-$716M (midpoint $713M vs. $716M consensus.), up from its prior guidance of $661M-$663M. Meanwhile, it raised its guidance for in-force premium to $1.036B-$1.039B ($1.21B Visible Alpha estimate) from its prior view of $1.20B-$1.21B. The insurer reaffirmed its 2025 adjusted EBITDA guidance at -$135M to -$140M (Visible Alpha consensus -$135M).

For Q3, Lemonade expects adjusted EBITDA of -$34M to -$37M vs. the Visible Alpha consensus of -$36M. Revenue is anticipated to be $183M-$186M vs. $196M consensus. Guidance for in-force premium is $1.144B-$1.147B vs. Visible Alpha estimate of $1.14B.

Q2 GAAP EPS of -$0.60, beating the -$0.80 consensus, improved from -$0.86 in Q1 and -$0.81 in last year’s Q2.

Total revenue of $164.1M, topping the average analyst estimate of $160.8M, rose from $151.2M in the prior quarter and $122.0M a year ago. Gross earned premium of $252.3M increased from $233.6M in the prior quarter and $199.9M a year ago.

In-force premium was $1.08B at June 30, 2025, exceeding the Visible Alpha estimate of $1.07B and up from $1.01B at March 31, 2025, and $839M at June 30, 2024.

Momentum continued in its two high potential growth engines — Car and Europe, it said.

In car insurance, Lemonade experimented with adding telematics insights earlier into the customer lifecycle. "These and similar tests yielded a ~60% boost in conversion rates in Q1 as compared with its Q4 baseline," the company said. In Q2, the company began investing based on the learnings and increased its Car growth by 25%, compared with Q1, while maintaining marketing efficiency levels, it said.

Lemonade Customer count grew 24% Y/Y to 2.69M, compared with a 21% Y/Y increase in Q1. Premium per customer was $402 at the end of Q2 vs. $396 at the end of Q1 and $387 at the end of Q2 2024.

Net loss ratio of 69% compared with 82% in the previous quarter and 79% in the year-ago quarter.

Lemonade’s Q2 adjusted EBITDA of -$40.9M vs. the Visible Alpha estimate of -$41.8M, compared with -$47.0M in Q1 and -$43.0M in last year’s Q2.

Q2 adjusted free cash flow was $25.0M vs. -$31.0M in the prior quarter and $2.4M a year ago.