Shares of Lemonade Inc. LMND,
were up more than 8% in after-hours trading Monday after the company, which provides renters’ insurance, car insurance, and more, posted a narrower loss than expected and signaled that it was slowing spending growth. The company generated a net loss of $67.9 million, or $1.10 a share, compared with a loss of $55.6 million, or 90 cents a share, in the year-before quarter. Analysts tracked by FactSet were expecting a $1.33 GAAP loss per share. Revenue increased to $50.0 million from $28.2 million, while analysts were anticipating $47.6 million. Executives said in a letter to shareholders that “fortunately” the company was “well capitalized entering the downturn, so [the] heightened cost of capital has not had a first-order impact on our business.” At the same time, they acknowledged that in recent months they “have made adjustments to our plan, with the goal of ensuring we are never forced to raise capital. “In doing so, the company has slowed the growth of spending and hiring, and executives consequently expect to perform better on the basis of adjusted earnings before interest, taxes, depreciation, and amortization (Ebitda) this year. Lemonade’s new forecast calls for a $240 million to $245 million loss on the basis of adjusted Ebitda, whereas its prior outlook was for a $265 million to $280 million loss. “The first thing to note is that we’re not changing course – we’re changing pace,” executives said. “We will continue to execute on our strategy, just at a moderate clip.” Shares have added 18% over the past three months as the S&P 500 SPX,
has advanced 0.4%.