NEW YORK - Lemonade Inc. (NYSE:LMND), the insurance technology company, reported its second-quarter earnings, revealing a narrower-than-expected loss per share but a slight revenue beat.
The company posted an adjusted EPS of -$0.81, which was $0.07 better than the analyst consensus of -$0.88. Revenue for the quarter was $122 million, marginally surpassing the consensus estimate of $121.77 million.
Despite the modest beat on revenue expectations, Lemonade's stock plunged 15% as the company's third-quarter and full-year guidance fell short of Wall Street's forecasts. For the third quarter of 2024, Lemonade expects revenue to range between $124 million and $126 million, which is below the analyst consensus of $134.92 million.
The projected adjusted EBITDA loss is between -$58 million and -$56 million. The company anticipates in-force premium at September 30, 2024, to be $875 million to $879 million, marking approximately 22% growth YoY, and a gross earned premium of $208 million to $210 million, reflecting around 21% growth YoY.
Looking ahead to the full year 2024, Lemonade reaffirmed its guidance, expecting in-force premium at December 31, 2024, to reach $940 million to $944 million, which would represent approximately 26% growth YoY.
Gross earned premium is forecasted to be $818 million to $822 million, around 22% growth YoY, and revenue is projected to be $511 million to $515 million, nearly 20% growth YoY.
Investors reacted negatively to the earnings release and guidance, sending Lemonade's shares down 15% as they digested the company's near-term outlook.
This full-year revenue guidance is in line with the consensus estimate of $515.05 million. The company is also preparing for an adjusted EBITDA loss of between -$155 million and -$151 million for the year.
Lemonade's management noted the expected seasonal patterns, with a significant increase in growth spend for the third quarter, anticipated to be three times the amount of the previous year, and lower loss ratios in the fourth quarter.
The company's CEO stated, "We remain confident in our strategic direction and the investments we're making for long-term growth. Our reaffirmed guidance reflects our commitment to scaling our business responsibly while navigating macroeconomic challenges."
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