Lemonade's Q2 Earnings Call: Our Top 5 Analyst Questions

Lemonade’s second quarter saw a significant positive market reaction, reflecting strong business momentum attributed by management to broad-based improvements across its insurance portfolio. CEO Daniel Schreiber highlighted the company’s seventh consecutive quarter of in-force premium growth acceleration and a marked improvement in gross loss ratios, noting, “Our gross loss ratio for the second quarter was 67%, 12 points improved relative to Q2 of last year.” Lemonade’s use of AI to refine risk selection was credited for these results, with gross profit more than doubling as operational efficiency outpaced expense growth. Management also cited the continued scaling of Lemonade Car and rapid expansion in Europe, both powered by proprietary technology that enables faster product launches and geographic coverage.

Is now the time to buy LMND? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Lemonade’s Q2 Earnings Call

• Jason Helfstein (Oppenheimer) pressed for details on Lemonade’s risk management structures following the quota share reduction. CEO Daniel Schreiber explained that quota share had been mainly a capital management tool, while risk is managed through other reinsurance policies and selective underwriting.

• Thomas McJoynt-Griffith (KBW) asked how capital surplus and leverage ratios would change under the new reinsurance arrangements. CFO Tim Bixby clarified that although the quota share shift reduces surplus benefit, captive reinsurers will offset this, keeping the company’s leverage targets unchanged.

• Jack Matten (BMO) inquired about the drivers behind improved car loss ratios and whether a mix shift between renewals and new business was at play. Bixby responded that both new and renewal business saw improvements, with renewals especially favorable by 20 percentage points.

• Andrew Andersen (Jefferies) questioned the impact of cross-selling on car insurance loss ratios and the competitive landscape. Bixby indicated that roughly half of overall growth comes from cross-selling, and that efficiency gains have allowed Lemonade to remain price competitive without sacrificing unit economics.

• Katie Sakys (Autonomous) pushed for clarity on why full-year EBITDA guidance remained unchanged despite better loss ratios, and whether the quota share change extended the timeline for non-renewal programs. Bixby said the guidance reflects timing of growth investments and that most of the non-renewal impact should subside by year-end.

Catalysts in Upcoming Quarters

Looking forward, our analysts will focus on (1) the pace and impact of further state launches for Lemonade Car, (2) continued margin improvement amid reduced quota share and increased regulatory capital needs, and (3) the sustainability of rapid growth in Europe as the company adds products and markets. Progress on AI-powered underwriting efficiency and successful execution of non-renewal programs in the home insurance segment will also be important indicators of future profitability.

Lemonade currently trades at $55.49, up from $37.04 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

Our Favorite Stocks Right Now

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.