Lemonade Revenue Jumps 73% To $336.1 Million, Raises Full-Year Forecast As Net Loss Widens
The insurer still expects its first positive adjusted EBITDA quarter in the fourth quarter, with an investor day set for November 17.
Lemonade, which sells renters, homeowners, pet, car and life insurance through its website and apps, said third-quarter revenue jumped 73% to $336.1 million, and it raised its full-year revenue forecast. Net loss still widened to $43.7 million from $37.5 million a year earlier, according to its shareholder letter furnished with an 8-K.
Revenue outruns the loss
Revenue was $194.5 million a year earlier. The company credited growth in gross earned premium and a higher share of premium kept after it cut its quota share reinsurance rates, meaning it passes less business to reinsurers.
The net loss was $0.56 per share, against $0.51 a year earlier, and the company attributed the wider loss mainly to higher stock-based pay and interest expense. Adjusted EBITDA, a non-GAAP measure that strips out items such as stock pay and interest, showed a loss of $20.4 million, narrower than $25.6 million a year ago. Gross profit rose 48% to $118.1 million.
In force premium, the annualized premium on customers' policies, grew 34% to $1.55 billion. Customers rose 23% to 3,520,555. Adjusted free cash flow was $27.0 million, against $18.1 million.
Guidance and the path to profit
Lemonade now forecasts fourth-quarter adjusted EBITDA of $5 million to $9 million and full-year revenue of $1,231 million to $1,235 million. It raised its gross earned premium and revenue guidance and left its in-force premium outlook at $1,632 million to $1,639 million.
The company reiterated that it expects its first positive adjusted EBITDA quarter in the fourth quarter of 2026, and its first full year of positive adjusted EBITDA in 2027. Operating expense excluding losses rose 36% to $191.9 million, with growth spend and interest expense up $28.0 million. Management said it expects premium growth to notably outpace growth spend from the fourth quarter on.
Fewer employees, bigger book
Lemonade ended the quarter with 1,321 employees, 1% fewer than in the second quarter and fewer than the 1,371 it had in the third quarter of 2022. Over the same span in-force premium rose from $609 million to $1,551 million.
The letter also highlighted nationwide renters availability, a car product now in 14 states, and an autonomous car offering for Tesla vehicles in six states. Cash and investments totaled about $1.2 billion at September 30.
The gross loss ratio was 65%, against 62% a year earlier; in Europe it reached 104%.
Lemonade holds an investor day in New York on November 17 at 9:00 a.m. ET.
Sources
- 8-K Filing — Lemonade, Inc. (LMND) — SEC EDGAR
- Exhibit lmndshareholderletterq32.htm — Lemonade, Inc. 8-K exhibit — SEC EDGAR
- Lemonade Falls 42% YTD, Lags Industry: What Should Investors Know? — Yahoo Finance
- Lemonade Announces Third Quarter 2026 Financial Results — prnewswire.com
