Lemonade, Inc.

Good morning and welcome to Lemonade second quarter 2025 earnings call. Joining us on our call today, we have Daniel Schreiber, CEO and co-founder, Shai Winninger, president and co-founder, Tim Bixby, chief financial officer, and Nick Stead, SVP Finance. A letter to shareholders covering the company's second quarter 2025 financial results is available on our investor relations website at lemonade.com slash investor. I would like to remind you that management's remarks made on this call may contain forward looking statements within the meaning of the private securities litigation reform act of 1995. Actual results may differ materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the risk factor section of our form 10 K filed with the SEC on February 26th, 2025, and our other filing with the SEC. Any forward looking statements made on this call represent our views only as of today, and we undertake no obligation to update them. We will be referring to certain non-GAAP financial measures on today's call, including adjusted EBITDA, adjusted free cash flow and adjusted gross profit, which we believe may be important to investors to assess our operating performance. Reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our letter to shareholders. Our letter to shareholders also includes information about our key performance indicators, including customers, imports premium, premium per customer, annual dollar retention, gross earned premium, gross loss ratio, gross loss ratio XCAT, trailing 12 month loss ratio and net loss ratio, and a definition of each metric, why each is useful to investors and how we use each to monitor and manage our business. With that, I'll turn the call over to Daniel for some opening remarks.

Good morning and thank you for joining us to discuss Lemon Age results for the second quarter of 2025. And it's a pleasure to report that really across all of our key metrics, our financial performance in the quarter was excellent. On the top line, we delivered our seventh consecutive quarter of IFP growth acceleration with 29% year on year growth and concurrently, our gross loss ratio for the second quarter was 67%. 12 points improved relative to Q2 of last year. And this brings our trailing 12 month gross loss ratio to 70%, our best results ever and squarely within the healthy range of our business model. It is worth noting that just one year ago, IFP was growing at 22% and our trailing 12 month gross loss ratio was 79%. And while neither metric was too shabby, 12 months on both have improved dramatically. This, I believe, is a clear testament to our ability to leverage AI to pinpoint target risks with accuracy and deliver profitable growth concurrently. As a result of these dynamics, our gross profit grew by over 100% in the second quarter. And our gross margin at 39% is among the highest we've ever recorded. And what's more, the growth of our top line eclipsed any growth in our underlying expense structure. And as a result, we saw strong adjusted free cash flow generation of $25 million, more than a tenfold increase relative to the second quarter of 2024. In recent quarters, we have been highlighting lemonade cars progress and in Q2, we continue to see that momentum build. Through the first half of the year, cars growth has significantly exceeded our original financial plan. It has now crossed $150 million of in-force premium and continuing to grow. Product enhancements have fueled conversion rate gains and geographic expansion has been another tailwind. Concurrent with that, it's important to note that our car gross loss ratio has improved dramatically, with Q2 result of 82% marking a 13-point improvement relative to last year. Switching gears, we recently announced the renewal of our reinsurance program at similar terms to the expiring program, with one important exception, which is that we reduced the scope of our Quartershare program from 55% to 20%. It is worth underscoring. This decision was solely of our making. The confidence to make such a move directly stems from a multi-year track record of improving loss ratios as key products in geographies have become more mature and predictable. In his remarks a bit later on this call, Tim will walk you through a couple of important related nuances on the capital efficiency and accounting. Before that, let me hand off to Shai for an update on our European business.

Thanks, Daniel. Before I get to Europe, I wanted to highlight a couple of updates to our new Investor Relations website, which can be valuable for those new to the Lemonade story. This morning, we've added an investor presentation as well as a handy spreadsheet with key financial metrics. We hope you'll find these helpful. We first launched Lemonade in Europe, in Germany in 2019, and now service over 250,000 customers across four key European markets, the UK, Netherlands, France, and Germany, and two products, renters and homeowners. Europe is of growing importance for a few reasons. It yields a diversification benefit to our growth with notably lower cap exposure and a flexible regulatory environment. In the past few quarters, we've really seen our European business come into its own and is now a meaningful driver of growth for the organization. We concluded Q2 with 43 million dollars Europe IFP, which represents over 200 percent growth, our eighth consecutive quarter of triple digit growth, and our fourth consecutive quarter of growth rate acceleration. I'm pleased to report that the story in Europe is very similar to what Daniel highlighted in our car business. Growth acceleration has been paired with improvement in underwriting performance. We saw an 83 percent gross loss ratio in the second quarter, 15 percent improved relative to last year, and roughly 20 points better than where our US business was at a similar scale. This performance is powered by structural cost advantages driven by our average of over 100,000 per mengaining abusedие CPU and all the A.I. platform. One great example of this is a technology we call Logoc. Our Fuckt 싶 Exırccieirio Lam First, no code insurance application builder with Loco we can rapidly build new products, launch new regions, iterate on pricing and handwriting, and experiment with various dynamic experiences, all in hours instead of weeks, and without touching any code. Loco is a powerful platform that enables us to manage our multi-continent insurance company with unmatched efficiency. Where our competitors have large local teams on the ground in the regions they operate, and with each region having its own specific legacy infrastructure, our proprietary technology enables us to expand our geographical footprint with unmatched velocity, and limited incremental overhead. We are clearly in the early innings of our European journey at lemonade, but believe Europe is positioned to remain a key engine of rapid profitable growth for years to come. With that, I'll hand it off to team who will cover our financial performance and outlook. Great. Thanks, Shai.