Neutron Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
August 4, 2026

Key Takeaways

  • Positive Sentiment: Lime reported record Q2 revenue of $304.2 million, up 23.6% year over year, with average fleet and monthly active users each growing approximately 22%.
  • Positive Sentiment: Management projected full-year revenue of $1.04 billion–$1.10 billion and adjusted EBITDA of $265 million–$285 million, implying the company’s first year above $1 billion in revenue and continued EBITDA growth.
  • Positive Sentiment: LimePrime adoption exceeded expectations, reaching a double-digit percentage of the user base and increasing rider engagement; management believes subscriptions can improve retention, lifetime value, vehicle utilization, and long-term cash flow.
  • Negative Sentiment: Adjusted gross margin fell to 52.1% from 55.7% a year earlier, while adjusted EBITDA margin declined to 27.7% from 31%, primarily due to investments in LimePrime and newer mega-city markets.
  • Positive Sentiment: Following the IPO, Lime repaid its $115 million senior secured term loan and converted its notes, leaving the company with no long-term debt; however, Q2 net income was boosted by a one-time $289.1 million deferred-tax benefit and affected by IPO-related share-based compensation.
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Earnings Conference Call
Neutron Q2 2026
00:00 / 00:00

There are 12 speakers on the call.

Operator

Good afternoon. My name is Josh, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Lime Q2 2026 earnings conference call. All lines have been placed in listen-only mode until the question and answer session, at which time instructions will follow. Please be advised that today's conference is being recorded. Now, I'll turn the call over to Mark May, Head of Investor Relations.

Speaker 1

Thank you, operator, and thank you all for joining us today. Welcome to Lime's Q2 2026 earnings presentation, our first as a public company. On the call today, we have Wayne Ting, Lime's CEO, Ann Gugino, CFO, and this is Mark May, Head of Investor Relations. Before we begin, I would like to remind everyone that today's discussion may contain forward-looking statements based on our current expectations, assumptions, and forecasts about future events. You should not place undue reliance on forward-looking statements. Actual results may differ materially from these forward-looking statements, and we do not undertake any obligation to update any forward-looking statements we make today, except as required by law. Please refer to our latest filings with the Securities and Exchange Commission for more information about factors that may cause actual results to differ materially from forward-looking statements. During today's call, we will refer to certain non-GAAP financial measures.

Speaker 1

A reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures can be found in our earnings press release, supplemental slides, and filings with the SEC, each of which is posted to our investor relations website at investors.li.me. Today's call is being webcast, and a replay will be available on our investor relations website following the call. After the prepared remarks, we will open the call to questions. With that, let me hand it over to Wayne.

Speaker 2

Thank you, Mark. Welcome everyone to our first earnings call as a public company. This is a moment our teams have been diligently working toward, and we're very excited and proud to be here. I would like to thank all the Limers across the organization and everybody who has contributed to Lime's success. Their tireless contributions have gotten us here and have made Lime the micro-mobility provider of choice for riders and cities globally. In Q2 2026, Lime delivered record revenue of $304 million. That's up 24% year-over-year and reflects consistent strength in the core components of our growth algorithm, namely fleet growth and rider engagement. In fact, the average operational fleet grew by 22% year-over-year to 408,000 average vehicles. Our monthly active users grew 22% to five million users. Revenue per vehicle per day, which is our primary utilization metric, grew to $8.20.

Speaker 2

It's important to note that Q2 and Q3 are the seasonally strongest quarters for Lime. Our 24% revenue growth this Q2 comes on top of a record Q2 last year as well. We are also proud to be a Rule 40+ company and continue to deliver on the bottom line in Q2, achieving adjusted EBITDA of $84 million, which reflects a 28% margin. Since this is our first earnings call as a public company, before getting into greater detail around the quarter, I'd like to take a few minutes to outline our business model, Lime's market position, and the secular trends shaping micro-mobility, as well as our strategic priorities to drive long-term growth. Lime was founded on a simple but ambitious idea that people and cities deserve transportation that is shared, affordable, and carbon-free.

Speaker 2

Going public on Nasdaq this July was an important milestone in that journey, but it's only one step. Our objective remains the same, to further grow and scale a business that creates value for riders, cities, and shareholders alike. We believe we are still in the early innings of building and unlocking a substantial global market opportunity. The tailwinds driving micro-mobility adoption are strong. Rising urban congestion, a generational shift away from car ownership, and sustainability ambitions at a global scale. Cities are eager for solutions to congestion and pollution, and people want more accessible and affordable ways to move around the cities they live and visit. The incredible thing is that Lime is a solution to all of these transportation challenges, from congestion to affordability to sustainability. We believe we are the clear market leader making this industry a reality.

Speaker 2

Since our founding, riders have taken more than 1 billion trips on Lime vehicles across five continents. Today, we operate in approximately 230 cities in 29 countries through close partnerships with local governments. Those partnerships are earned one permit and city at a time through reliable service and consistent execution. We have built a strong track record of winning, renewing, and expanding these local partnerships. One example of that strength in government relations is that we renewed the London-wide scooter RSP permit recently, extending our leadership in micro-mobility in one of the top-tier global cities. Our competitive advantage is based on the fact that we've built a vertically integrated platform that includes software, hardware, tech-enabled operations, and government relations expertise. We believe this integrated model is differentiated in the industry and has been a key contributor to our leading position.

Speaker 2

At the heart of everything we do is data. The more than 1 billion trips that have been completed on our platform means we have a massive amount of real-world data, which informs the hardware and software we build, the operations we run, and the government relationships we grow. Importantly, this data advantage compounds over time. It improves our vehicle design, it sharpens our demand forecasting, it increases fleet utilization, and it's the reason why Lime innovates faster, operates more efficiently, and is better at meeting the needs of our riders and city partners. As we continue to scale, those advantages reinforce one another, creating positive feedback loops that we believe becomes increasingly difficult to replicate. The deep vertical integration has been driving our growth and keeping Lime in the lead in an industry where operational excellence is critical.

Speaker 2

In short, scale begets scale, and Lime is the only scaled operator in our industry. Let's now turn to the powerful growth algorithm that's fueling our success. The first and most important lever driving our growth is the expansion of our operational fleet. Because cities tend to award permits and fleet increases to the most trusted operators, having strong compliant operations on the ground has enabled Lime to win a disproportionate share of the permits and fleet growth awarded by our city partners. Notably, while fleet growth comes from both existing markets and new cities, over the past few years, the majority of our growth has come from existing markets, and we continue to see significant opportunities to deepen our deployment. When we grow our fleet in existing markets, we also improve the reliability of our service to riders.

Speaker 2

Because reliability is the most important purchase criteria for riders, winning with cities also means winning with riders. Another key growth lever in our business is the utilization of our fleet. The primary utilization metric is revenue per vehicle per day, or RVD. As we add more vehicles to our cities, we increase density. Density drives reliability, and in transportation, reliability is what gets riders to adopt and engage with the platform. When we couple density with industry-leading supply positioning software, that means there is typically a Lime vehicle available exactly when and where riders need it. Another tailwind to utilization has been the success of our LimePrime and LimePass engagement products. When riders become a subscriber to our membership programs, we typically see them do multiple times more trips on the platform relative to a pay-as-you-go rider.

Speaker 2

This is also why in cities all over the world, we have seen utilization grow even as we expand our fleet, which tells us we are far from saturation anywhere in our network. In fact, we see significant room to grow in almost every market we serve, and this is why we believe existing markets will remain our biggest growth driver in the coming years. The third lever in our growth algorithm is monthly active users, or MAU, which has grown consistently at double-digit rates over the past few years. This reflects the strength of our service and the presence of our vehicles in-market, which acts as outdoor advertisement, driving customer acquisition while keeping our marketing spend extremely low. In Q2, MAU growth accelerated to 22%, demonstrating our strong execution and highlighting how early we are in our growth journey.

Speaker 2

Looking ahead, we expect future growth to come from multiple proven drivers. This includes deepening our presence in existing markets, introducing enhancements that drive rider engagement, opening up new cities and countries, continuing to innovate around our software and fleet, and selectively pursuing strategic acquisitions and partnerships. Importantly, our track record demonstrates that when we invest for growth, we generate strong, predictable economics and long-term benefits. Two key areas of focus include new markets and rider engagement. We've highlighted countries like Australia, where cities like Sydney delivered triple-digit growth rates in Q2 as examples of newer markets with significant opportunity to drive growth and scale. Canada is another example where we recently made the strategic decision to expand on what was already a strong presence in the country, extending Lime's footprint with the acquisition of Neuron Mobility's Canadian operations.

Speaker 2

This should bring Lime to 12 new cities and regions throughout Canada, positioning us for further expansion into cities like Montreal and the greater Toronto area, and importantly, marking our return to Calgary. Just as importantly, the Neuron transaction also reflects our disciplined approach to capital allocation. We pursue acquisitions selectively, focusing on strategic fit, strong unit economics, and opportunities where we have the potential to deliver a substantial value add to a market and generate a compelling return on investment for our shareholders. The recent World Cup Games are an example of how we use major sporting events to drive user trial and engagement, and also how Lime can uniquely deliver value to our city partners.

Speaker 2

As host cities welcome millions of visitors, our teams work closely with local government officials and partners to expand fleet availability, optimize vehicle distribution, and help move riders efficiently between transit hubs, fan zones, stadiums, and surrounding neighborhoods. The results validated the model we've built at prior global events like the Paris and Milan Olympics. These moments demonstrate the flexibility of our operating model and reinforce why cities increasingly view shared micro-mobility as an essential part of their transportation system during major events. They also represent great opportunities for Lime to attract new riders to our platform cost-effectively, as every Lime vehicle is a rolling billboard for our service. We are always looking for ways to drive incremental adoption and utilization. Earlier this year, we completed the global rollout of our upgraded Lime Prime subscription program, which we have previously been piloting in select cities in 2025.

Speaker 2

This new recurring monthly subscription program provides unlimited vehicle unlock, flat-rate pricing, and extended vehicle reservations. It's a great way for frequent riders to get a more reliable sense of their trip cost through upfront pricing, and it's designed to maximize the value they get from Lime. This rewards our most loyal customers and also create a great opportunity to adopt and retain even more of those high-quality users. Riders have responded positively to Lime Prime's global launch, and the program continues to gain traction. In fact, it exceeded our expectations in Q2. The offering is proving to be an effective lever for both attracting riders and increasing how often they use the platform. We were surprised to see the number of new riders who became subscribers early in their life cycle.

Speaker 2

This means more riders see the value of Lime Prime and can imagine incorporating Lime into their transportation habit earlier than we anticipated. We already know that when we invest in our subscription products, over time, they can drive more engagement, higher retention rates, and greater lifetime value of our riders. While Lime Prime is still early, we're pleased with the data we're seeing around engagement and retention. This gives us confidence in this investment, and we believe Lime Prime can become a meaningful long-term contributor to our business. Anne will now walk through the financial results in more detail. The quarter reflected exactly what we spent the last decade building, strong growth combined with solid bottom-line performance. This has resulted in a strong competitive position in key markets globally.

Speaker 2

We believe that combination is one of Lime's defining characteristics and a key differentiator in an industry where scale and profitability matters, and that we are still very early in our growth cycle. Let me turn it over to Ann.

Speaker 3

Thank you, Wayne. Good afternoon, everyone. Lime delivered another strong quarter in Q2 with broad-based growth across our business. These results reflect the underlying strength of our operating model and our continued focus on disciplined execution. Q2 revenue of $304.2 million represented a year-over-year increase of 23.6%, reflecting continued fleet expansion and strong rider engagement. This strength is notable as we comp against last year's highest growth quarter. Fleet growth is our most important operating metric as it underpins vehicle availability, the top priority for our riders. In Q2, average operational fleet grew to 408,000 vehicles. That's up 22.1% year-over-year and compares to 22.2% growth in Q1 and 18.6% growth in Q4. Revenue per vehicle per day, or RVD, remains strong, coming in at $8.20 in Q2 and grew 1.2% year-over-year on a reported basis. As anticipated, RVD was impacted by growth in newer markets that are still scaling.

Speaker 3

Normalizing for this geographic shift, RVD grew in the mid-single digits on a city-by-city or same-market basis. Monthly active users, or MAUs, totaled 5 million in the quarter, up 22.1% versus the prior year. That compares to increases of 21.7% in Q1 and 21% in Q4. Growth in MAU was supported by the strength of our core cities, where our years of operating presence continues to drive adoption, rider engagement, and repeat usage. Growth was also driven by the early success of Lime Prime, our new subscription offering that launched in February, which outperformed our expectations in the quarter and already represents a double-digit percentage of our user base. Q2 gross profit was $129.1 million. Adjusted gross profit, which excludes depreciation and amortization and is used to evaluate unit economics at both the vehicle and city level, improved to $158.4 million versus $137 million a year ago.

Speaker 3

Q2 adjusted gross margin came in at 52.1% compared to 55.7% in the second quarter last year. A key factor impacting near-term margins is the early success of our new Lime Prime subscription product. Which, as I mentioned, has exceeded our expectations. The program rolled out mid Q1, but the trend in new rider adoption didn't become clear until June, the start of our peak season. We were pleasantly surprised to see the number of new riders who became subscribers early in their life cycle. This means more users are seeing the value of Lime Prime and incorporating Lime into their transportation habits sooner than we anticipated. While scaling Lime Prime is an investment that pressures near-term growth margin, the early data is very encouraging. We believe Lime Prime is on track to deliver its intended payoff, higher rider engagement, which drives greater lifetime value and better asset utilization.

Speaker 3

This allows us to grow the business without requiring incremental capital expenditures. We saw this dynamic play out successfully with LimePass, and we are confident in LimePrime's long-term potential. Another important factor affecting gross margins are investments in newer mega city markets. We know from experience that our investments in these markets result in lower RVD and margin in the early days, but they have the potential to drive durable and compelling unit economics over time. This proven playbook gives us confidence in the returns we can achieve as we reach greater fleet density, and thus reliability, and continue to scale in these markets. Turning now to operating expenses, which in Q2 came in at $116.2 million, the year-over-year increase is attributable to investments in software and hardware innovation and the ongoing cost of being a public company.

Speaker 3

Moving to the bottom line, in Q2, we delivered $295.4 million of net income and diluted earnings per share of $4.73. These results include one-time extraordinary items related to the IPO. First, we recorded a one-time non-cash benefit of $289.1 million from the release of a valuation allowance against our deferred tax asset related to our net operating losses. This change was made because we now expect to generate enough taxable income, supported mainly by the elimination of our convertible debt costs, to realize the value of these NOLs. Second, we incurred a one-time non-cash charge of $35.8 million related to the vesting of outstanding RSUs triggered by the IPO. It's also worth noting that our share count and earnings per share in Q2 do not include the impact of the shares issued in the IPO, which will be reflected at the beginning of Q3.

Speaker 3

Adjusted EBITDA increased to $84.2 million in the quarter and represented a 27.7% margin. This compares to 31% a year ago, reflecting primarily the gross margin investments I just discussed. Looking ahead, we continue to be focused on delivering long-term operating leverage given our attractive returns on fleet investments, our ability to leverage fixed investments, and our confidence in the long-term outlook of new offerings like LimePrime and of newer markets that are still scaling. CapEx was $75.7 million, up from $35 million a year ago. The increase funded fleet expansion in existing markets, scaling in new markets, and pre-investment for our peak season. Combined with a timing-related working capital investment for seasonal parts inventory, this resulted in negative free cash flow for the quarter of $4.1 million. We continue to expect to be free cash flow positive for the full year.

Speaker 3

It's important to note that we have a highly disciplined and returns-focused capital allocation philosophy. First, we invest in our fleet, where we continue to see compelling returns. Second, we invest in our technology platform, where software and data continue to improve our operational efficiency and strengthen our long-term competitive advantages. Third, we pursue selective strategic acquisitions, such as Neuron Canada, when there is a clear opportunity to accelerate our strategy and meet our disciplined return thresholds. Finally, we maintain the financial flexibility to capitalize on future opportunities while preserving a strong balance sheet. Now, turning to our 2026 guidance. For the third quarter, we expect total revenue to be between $340 million and $360 million, which represents growth of 16% at the midpoint. While we expect the near-term margin impact from our long-term growth investments to continue through peak season, we anticipate achieving operating leverage in Q3.

Speaker 3

We are forecasting adjusted EBITDA of $120 million-$130 million in Q3, reflecting the positive underlying unit economics of our model. For modeling purposes, we expect our fully diluted share count to be in the low 70 million range in Q3, which largely reflects the new shares issued in our IPO. On a full year basis, we expect revenue to be in the range of $1.04 billion-$1.1 billion, which represents a 21% year-over-year growth at the midpoint and marks an important milestone of exceeding $1 billion in revenue for the first time in the company's history. Full year 2026 adjusted EBITDA is expected to be between $265 million and $285 million, which represents 27% year-over-year growth at the midpoint. Full-year capital expenditures are expected to be between $180 million and $185 million.

Speaker 3

Stepping back, our outlook assumes ongoing strength in our core markets, growing our overall fleet, contributions from newer cities and regions, continued investments in growth opportunities like LimePrime and newer mega cities, and continued increases in fleet productivity consistent with the trends that we've seen throughout the first half of the year. Importantly, following the IPO, our balance sheet is stronger than at any point in the company's history. Net proceeds from the offering were $155 million, and we used a portion of that to repay our $115 million senior secured term loan in full. Combined with the conversion of our convertible notes, we now have no long-term debt. We have the financial strength to continue executing against our growth initiatives, and you can expect us to deploy capital opportunistically while maintaining the same type of discipline that we've demonstrated for many years.

Speaker 3

I'd like to now hand it back to Wayne for some closing thoughts.

Speaker 2

Thanks, Yan. Our Q2 results and outlook reinforce what we've been building for nearly a decade, a business with strong unit economics, durable competitive advantages, and significant room for continued disciplined growth. Our strategy remains straightforward: build the best product, operate it more efficiently than anyone else, and partner with cities to expand access to shared transportation. We believe those advantages continue to strengthen as we scale. Importantly, we believe we are proving that growth and attractive unit economics can go hand in hand. The investments we made in our fleet technology and operations are enabling us to grow while continuing to improve our economics. Our story is a simple but compelling one. Cities are running out of room for cars.

Speaker 2

Riders want cheaper and greener ways to get around. Lime has spent nearly a decade building the fleet, the technology, and most importantly, the trust of city partners to meet that demand with compelling economics. We are the largest global shared micromobility operator. We believe our operational excellence and scale create a durable competitive advantage. As a newly public company, our priorities remain unchanged. We will continue to make disciplined decisions, invest where we see compelling returns, and focus on creating long-term value for our riders, our city partners, and our shareholders. We believe we're still in the very early innings of shared micromobility. We're excited about the opportunity ahead. With that, operator, we're ready to take questions.

Operator

Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please limit yourself to one question initially. We will come back around for follow-ups. One moment for questions. Our first question comes from Eric Sheridan with Goldman Sachs. He may proceed.

Speaker 4

Thanks so much for taking the question and thanks for all the details in the prepared remarks. Building on some of those comments in the prepared remarks with respect to the user base and how it continues to evolve, just go a little bit deeper for us on what you've learned over the last six to 12 months around driving the user funnel across an array of infrequent users to more frequent users. As you think about the payback periods improving as people move up the funnel, down the funnel, I mean, and in terms of more frequent usage and into some of these monetization layers like Pass and Prime, talk to us about the balance between making sure you capture that growth while you have it, and leaning into some of those growth investments against the goals of also managing margin trajectory over the next couple of years.

Speaker 4

Thanks so much.

Speaker 2

Thanks, Eric, and appreciate the question. I do think you're exactly right. That's the balance we're trying to strike. I would say the goal is to grow our dollar profitability. The reason why we're so bullish on LimePrime and LimePass is that we have seen with the example of LimePass, that when a customer buys a LimePass, historically, they did over 6 times as many trips. The overall lifetime value per rider and the total dollar profits is growing even though the margin or the average price per trip and the margin per trip could be declining. We believe that is the right long-term investment. The other thing I'll note is that we have seen in adjacent industries like rideshare and food delivery, that subscription products benefits the market leader.

Speaker 2

It enhances this winner-takes-most dynamic because consumers don't want to buy an unlimited number of subscriptions. They're going to buy one. If they're going to buy one, they're going to buy it from the market leader. Once they go on a subscription, what we see is that they're far more likely to put more of their trips onto Lime. When I think about balancing the two is I want to make sure over the long run, we are driving up lifetime value of each rider. We are improving retention. We're growing profits on a dollar basis. That may mean we invest a bit on the margin side to drive the biggest membership subscription product we have.

Speaker 4

So much.

Operator

Thank you. Our next question comes from Mark Mahaney with Evercore ISI. You may proceed.

Speaker 5

Thanks. I'm going to try to throw in 2 questions, please. There's a slide in here on the World Cup and how many of the cities you served, and there's a data point in here on Atlanta. Sometimes these events can really expand the platform. It can have a sustainable impact on your growth, maybe it's too early to know, but anything else you'd disclose about the impact of World Cup in terms of the awareness in some of these cities? Maybe that had some sort of impact on LimePrime. Secondly, Ann, could you just talk about the gross margin trends from here? You explained why the gross margins were down year-over-year, a little under pressure and largely because of the LimePrime shift.

Speaker 5

Is this something that gets back to par over a 2- to 3- to 4-quarter period? How should we think about the gross margin trajectory from here? Thank you.

Speaker 2

Thanks so much for that question. I would say the World Cup was a great moment for Lime because in these big sporting events, this is also where traditional transportation really doesn't work well. There's a lot of congestion. You can't find parking. It's incredibly expensive. What I love about these big sporting events is that all the magic of Lime, the fact that we are cheaper, we are faster, we are more efficient, comes into play. Because Lime is in 200-plus markets, any event, even one as big as the World Cup, isn't materially moving our global monthly active users. As you point out, in Atlanta, I believe our MAU grew by over 60% in June.

Speaker 2

Our hope is that a lot of these riders who discover us during an event like World Cup are going to find other uses for why they engage with Lime over the long run. It's still too early to tell in terms of what's going to happen with the users that we acquire during the World Cup, but our intention is to engage with them, move them up the adoption funnel, and help them integrate Lime into their everyday lives, regardless of where they live.

Speaker 3

Thanks, Mark. I'll take the question on margins. Maybe one thing I'd add on World Cup is, as the CFO, we don't pay for any of the great brand recognition we get in terms of having our vehicles roaming all around the city and acting as billboards during these huge events. That would be one thing I would add on. As we turn to the Q3 margin outlook, I would start by reiterating that our strategic investments in scaling both LimePrime and the early-stage mega cities will continue for the balance of the year. That said, if you look at the guidance that we provided, we are guiding to a sequential step-up in both gross margins and EBITDA margins from Q2 to Q3 quite meaningfully. This is driven by a couple of factors. The first and most significant is our strong seasonal uplift.

Speaker 3

We typically see an improvement of 300 to 400 basis points between Q2 and Q3, just due to peak summer demand, which drives much higher utilization. This structural benefit is the largest contributor. Further, on the operational side, we do expect to see better leverage flowing from that seasonal strength in Q3, alongside a meaningful reduction in share-based compensation expense. We had a significant step-up in Q2 that we don't expect to repeat, which will provide a sequential benefit of about $20 million in Q3. I would say if you look to Q3 specifically, we're going to continue to invest for the future, but our Q3 guide reflects the combination of normal seasonality, the removal of one-time costs, and improved operating leverage. If you look for the full year, you'll see our guide does suggest that we will, on a full-year basis, show EBITDA margin expansion.

Speaker 3

I would expect us to return to more normalized margin expansion in 2027 and beyond.

Speaker 5

Thank you, Ann. Thank you, Wayne.

Operator

Thank you. Our next question comes from John Colantuoni with Jefferies. You may proceed.

Speaker 6

Great. Thanks for taking my questions. Just wanted to ask a little bit about the contribution from new versus existing markets and how you see that trending throughout the year. Second, as you think about the roadmap for geographic expansion, can you compare those markets in terms of population size, consumer interest in micromobility, and competitive dynamics compared to where you operate today? Thanks.

Speaker 2

Sure. I would say historically, the majority of our growth has come from existing markets, growing fleet to drive greater density and reliability. When we reach that reliability, this is when we see new riders engage more heavily with the platform. When I look at our Q2 results, I think the main metric I would look at is our total operational fleet, which grew by 22% year-over-year in the quarter. Because we're in hundreds of cities, so any given period, you may have some markets that grow faster, some markets that grow slower, but the overall operational fleet really is our net ability to expand into new cities and to grow fleet in our existing markets.

Speaker 2

On your second question on some of the places where we're investing in, I'll say the couple of places that I'm most excited where we have invested in new mega cities include places like Sydney in Australia and Tokyo in Japan. It takes time to build up that reliability to get users to adopt a product. What we see is that early days of a market, even a mega market like Tokyo and Sydney, the utilization is typically lower. Over time, I think what we have seen historically is that our markets perform and deliver great results all over the world, regardless of their size. Our expectation is as we continue to invest in these major mega cities, that their economics are going to start to look like the rest of the platform.

Speaker 3

Maybe just a couple of points that I will add. Wayne touched on this. When you were asking what do the cities look like, both current and new cities, they're very similar in terms of the demographics. All of our growth is coming mostly from the countries that we're already operating in and their more adjacent cities. The other thing that I would point out is that the great thing about Lime is you naturally think of it as a big city platform and play like the ones that Wayne mentioned, but it actually works in big and small cities alike. I'm from Minneapolis.

Speaker 3

We have a great Lime business in Minneapolis. That's why we are not as focused on cities and more focused on fleet because adding a 1 fleet count of Minneapolis to your I'm sorry, a 1 city count to your Minneapolis versus a 1 city count of Sydney is kind of apples and pears. That's why looking at fleet, we think is a much better metric than city count. We are seeing great growth across the fleet and are quite bullish about the road ahead.

Speaker 6

Great. Thanks so much.

Operator

Thank you. Our next question comes from Doug Anmuth with J.P. Morgan. You may proceed.

Speaker 7

Thanks for taking the question. This is Maggie on for Doug. I was wondering if you could just update us on the competitive landscape, any notable wins you saw in Q2, and what gives you confidence in continuing to scale in some of your more mature markets. Thank you.

Speaker 2

Yep. When I look at market share on a global basis, Lime remains the clear global leader in micromobility. We believe we are at least three times bigger than our nearest competitor. We continue to win our disproportionate share of the RFPs that come up and the fleet increases that are awarded. We feel very good about our current position and our competitive position to continue to gain share over time.

Speaker 3

Yeah. I think the only thing I would add when you were asking about what gives us confidence that we can continue to drive growth in our most mature markets, or in our mature markets. I think the first is the visibility momentum in our fleet growth. We have to win those fleet increases through compliance. We have strong line of sight into fleet growth, which has been tracking ahead of schedule. Second is the high engagement that we continue to see from our core rider base, which demonstrates the strength and retention of our service. We just talked about the early success and accelerating traction of LimePrime, and the fact that subscription product is exceeding our adoption and engagement targets.

Speaker 3

I think those are a couple of reasons that give me great confidence in our ability to continue to drive durable growth in our mature markets.

Speaker 7

Thank you.

Operator

Thank you. Our next question goes to Andrew Boone with Citizens. You may proceed.

Speaker 8

Thanks so much for taking the question. I wanted to ask about the Canadian acquisition. Can you speak to what you expect that to add? Then stepping back more broadly, how should we be thinking about M&A? What is the right type of assets that you guys can unlock, and how do we think about you guys pursuing consolidation given your market leadership?

Speaker 3

Sure. I'll start with the most recent acquisition, and then I'll let Wayne take the more strategic question of where we want to take M&A more broadly and how we discern it. I would say, the acquisition of Neuron Canada's operations was targeted, and it was an opportunistic transaction. Canada has a high potential market with an estimated addressable opportunity well over $100 million in the coming years. We're quite excited about the market potential. The purchase price of the transaction was under $10 million. We see a very clear path to a very attractive payback on this investment. What we are really doing here is purchasing the strategic permits and licenses. What this does is it allows us to enter and scale in these markets immediately and more efficiently than building from scratch.

Speaker 3

What I would say in terms of near-term financial impact is, given the size of the transaction, we don't expect it to be a material contributor to overall top-line growth. It would probably add over the long term, a percentage point or two to our revenue growth. With respect to 2026 specifically, we're entering, we bought the asset during peak season, and we do have a limited operational window because there is winter in Canada. But as I mentioned, we're confident in the ability of the investment of this established footprint to pay for itself in a short timeframe and contribute positively to our unit economics. Importantly, our long-term market position in North America.

Speaker 2

Yep. In terms of the M&A strategy, I would say we want to be very disciplined in terms of acquisitions, but if there's good markets that we can buy at an attractive price, that we have high confidence we can operate at a good unit economics, and that there's a good payback for investors, you're going to see us opportunistically look at these acquisitions. I think generally, we would be more inclined to do a permit-only purchase, like the one we did in Neuron, because that means we are operating our proprietary hardware, software, we are applying our operational knowhow.

Speaker 2

Because Lime gets consistent economics and great returns in markets big and small, what we can do is we can potentially pick up some of these permits at a relatively attractive pricing, then apply our capabilities and turn a low margin, if not money-losing market, into a market that has Lime's economics over time. I think that could be very accretive to our shareholders. But you will see us continue to be very disciplined and focus on return on invested capital for shareholders as the main metric for acquisitions.

Speaker 8

Thank you.

Operator

Thank you. Our next question comes from Justin Patterson with KeyBank. You may proceed.

Speaker 9

Great. Thank you very much. Good afternoon. It sounds like you've had a lot of progress with LimePrime right out of the gate. As you look ahead, what do you see as some of the key levers to drive further adoption? Are you thinking about things like credit card partnerships that we've seen ride-sharing and delivery companies have a lot of success with? Thank you.

Speaker 2

Yep. You're absolutely right. I think we've seen great progress on LimePrime, I still think we have a lot more to go. We're very early on LimePrime. As Ann mentioned, we only launched it globally in February, so it's only a few months in, there are many ways I think we can continue to grow, starting with marketing to our existing riders. A credit card partnership is, I think, as we've learned from Uber and DoorDash, a very effective way to grow the number of members. I do think before we are in a good position to negotiate a deal that is great for Lime, we want to focus on growing the number of users organically.

Speaker 2

I think by growing the number of users, by improving the offering, and by making a sticky, highly retentive product, that is the best time for us to then go approach credit card companies and think about, is that an additional distribution channel for us? It is something that we will absolutely take a hard look at.

Operator

Thank you. Our next question comes from Bernie McTernan with Needham. You may proceed.

Speaker 10

Great. Thanks for taking the question. Just wanted to continue on the thread on LimePass, I understand the 6x uplift you see versus the pay-as-you-go. When you see a LimePrime subscriber come, are they generally coming from LimePass? Then maybe discuss the relative unit economics of those two products. Thank you.

Speaker 2

Yep. I think when we talk about LimePrime doing better than we expected, it was that the number of users who are earlier in their adoption cycle buying LimePrime, those users are typically pay-as-you-go users. I think our expectation was that most of the users would be coming from LimePass to LimePrime. Because of the higher revenue per minute and a larger monthly recurring subscription fee, when a user goes from LimePass to LimePrime, we believe that would be margin accretive. I would say this, which is that it is a great sign that new users who joined Lime recently are buying LimePrime earlier in their life cycle, because that means that they see Lime as part of their everyday transportation habit. I do think once they buy LimePrime, they are much more committed to the platform.

Speaker 2

They are much more likely to single app and put more of their transportation instance on Lime. Even though if they go from pay-as-you-go to LimePrime, it can be a lower margin. We believe and we have confidence that because of the increment talent, because of the higher volumes that these riders are likely to do, that it will increase the lifetime value of the riders, even though it could be a lower margin on a per trip basis.

Speaker 3

I think you were asking about the unit economics, I'm not sure if you were asking about the rider economics or the actual vehicle unit economics. I'm going to take the opportunity to talk about both. What really excites us about LimePrime and LimePass products is as we see riders trade up from pay-as-you-go to Pass and then Pass to Prime or even go straight from pay-as-you-go to Prime, we see a higher utilization rate. I think we've talked about many times that we have a fixed asset that we're trying to generate a return on. It's sunk CapEx, and it's relatively underutilized. We are leveraging some fixed costs. That additional utilization is the best way over the long term to drive incremental cash flow. We're very excited about what this program does to cash flow generation for the business.

Speaker 3

As it relates to the profit per user, certainly when you're trading from a pay-as-you-go ride in the first month to a subscription ride, that's what you're seeing in our numbers this quarter. There's a bit of investment upfront. What we're betting on with LimePrime and what we've seen hold true with LimePass is that over the lifetime, and it doesn't even have to be that long. When Wayne was talking about 6x more trips, you're looking at the 6 to 12 months following that trade, that you're more than making up that discount in increased utilization over time, such that the profit per rider is much higher on Prime than it would be over time on pay-as-you-go or Pass.

Operator

Thank you. We'll take our last question from Ralph Schackart with William Blair. You may proceed.

Speaker 11

Good evening. Thanks for taking the question. Just on LimePrime, obviously, a lot of excitement on the call on the product, can you just give us a sense where this sits in terms of your strategic growth priorities? Is it getting moved up the stack given the strong adoption you're seeing that it's having since you rolled it out? Then you shared some penetration stats. We're just curious, where do you think those could trend to by the end of the year? Then maybe just one quick one for Ann. As we think about growth for the rest of the year, how should we think about the growth of both Fleet as well as RVD growth? I know there's definitely some seasonality in the business, just love your thoughts on that as well. Thanks so much.

Speaker 2

Yep, great question. For both Lime Pass and Lime Prime, as a percentage of our revenue, it was about 40% in Q2 and a year ago it was about low 30%. We are seeing both of these products drive a greater percentage of our total revenue. I think I lost track of some of your other questions.

Speaker 11

Sorry, I asked them in one. Just kind of curious, where do you think that could sort of, I guess, trend to longer term?

Speaker 2

Oh, investments on growth, yeah.

Speaker 11

Yeah.

Speaker 2

When I think about our growth algorithm, it starts with growing fleet and then the utilization per fleet as probably our second biggest growth driver, and Lime Prime is absolutely a contributor to the utilization of our vehicles. In fact, because our users who are on Lime Prime and Lime Pass end up doing more trips, some of those trips are in hours where our vehicles are relatively lightly utilized. If we want to grow RVD, our primary utilization metric, it is about getting more users to use Lime more frequently. It doesn't change the prioritization. I think for me, it's still fleet utilization, monthly active users and their engagement. User engagement, again, is being driven up by Lime Prime, but it doesn't change my priority list.

Speaker 3

Maybe, Ralph, I'll come back with kind of the outlook and how to think about the top line and where we're taking it. I think you can see from Q3 the relative contribution from Fleet versus RVD to the overall top-line growth, which is an outsized contribution coming from Fleet and then a smaller contribution coming from RVD in total because of the market mix that I talked about in my prepared remarks. I would expect that to continue into Q3 and Q4. I think in terms of the seasonal trend that you're seeing from quarter to quarter, I think that would be pretty consistent with what you've seen in 2025 and 2024 in terms of the shape of the curve.

Speaker 11

Okay, great. Thanks, Wayne. Thanks, Anne.

Speaker 3

I guess what I would leave you with, Ralph, and what I'm most excited about is I think we're really setting ourselves up here for another record year of really strong growth and profitability. As I mentioned in my remarks, we intend to generate meaningful cash flow.

Speaker 11

Okay, great. Thanks again.

Operator

Thank you. That concludes the Q&A portion of the call. I will now turn it back to management for closing remarks.

Speaker 2

Yep. I'll just say thank you to everybody who joined the call today. Really appreciate all the thoughtful questions, and we're looking forward to talking to everyone again very soon. Thank you for joining.

Operator

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

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