Premium Growth Accelerates

Gross earned premium increased 28% to $290.2 million, reflecting sustained policy growth and improving monetization across the portfolio.

Underwriting Improves Margins

Gross profit surged 73% to $110.6 million, with gross margin expanding to 48% from 43% a year earlier. The gross loss ratio improved to 52%, compared with 63% in the prior-year quarter, underscoring progress in pricing precision and risk segmentation.

Net loss narrowed to $21.7 million, or $0.29 per share, from $30.0 million, or $0.42 per share, in the fourth quarter of 2024. Adjusted EBITDA loss improved significantly to $4.6 million from $23.8 million a year earlier.

The company generated $36.7 million in adjusted free cash flow during the quarter and ended 2025 with $1.12 billion in cash, cash equivalents, and investments.

Full-Year Operating Leverage

For the full year 2025, revenue increased to $737.9 million from $526.5 million in 2024. Net loss totaled $165.5 million, compared with $202.2 million in the prior year. Adjusted EBITDA loss improved to $118.1 million from $149.7 million.

The company’s operating leverage continued to strengthen as growth outpaced expense expansion.

Growth Across Pet, Car and Europe

Pet insurance remained Lemonade’s largest business by IFP at $439 million. Car insurance reached $187 million in IFP, growing 53% year over year, while the European segment delivered 150% IFP growth and ended the year with a 74% trailing twelve-month gross loss ratio.

2026 Outlook

For 2026, Lemonade projects IFP between $1.625 billion and $1.630 billion, representing approximately 32% growth. Revenue is expected to range from $1.187 billion to $1.192 billion.

Adjusted EBITDA loss is forecast between $52 million and $48 million for the year, with management reiterating expectations of positive Adjusted EBITDA in the fourth quarter of 2026 and full-year Adjusted EBITDA profitability in 2027.

The company’s 2026 strategy centers on AI-driven pricing enhancements, cross-selling initiatives, and autonomous growth optimization to scale operations efficiently.