Lemonade (LMND) Q4 2024 earnings summary

Executive summary

• Q4 2024 marked the strongest quarter and year to date, with accelerating topline growth, record financial performance, and positive adjusted free cash flow of $27M; full-year adjusted free cash flow reached $48M, marking the first full year of positive results.

• Achieved first-ever cash flow positive year, a year ahead of plan, with expense stability and margin expansion.

• Adjusted EBITDA loss improved to $24M, and net loss for Q4 was $30M ($0.42/share), both significantly better year-over-year.

• Gross profit doubled year-over-year to $167M, with gross profit margin expanding 14 points to 43%.

• Customer count increased 20% to 2.43M, and premium per customer rose 5% to $388; annual dollar retention was 86%.

Financial highlights

• In-Force Premium (IFP) grew 26% to $944M; Q4 revenue increased 29% year-over-year to $149M; gross earned premium up 25% to $226M.

• Adjusted gross profit for Q4 was $66.2M, up 88% year-over-year; adjusted gross profit margin reached 44%.

• Net loss for Q4 was $30M ($0.42/share), improved from $42M ($0.61/share) prior year; adjusted EBITDA loss was $24M, improved from $29M.

• Total cash, equivalents, and investments ended at $1B, up $76M for the year; insurance subsidiaries held $271.4M in regulatory surplus.

• Adjusted free cash flow for Q4 was $26.5M, compared to ($11.3M) in Q4 2023.

Outlook and guidance

• 2025 guidance: IFP growth of 28% to $1.20–$1.21B; revenue projected at $655M–$657M; adjusted EBITDA loss of $140M–$135M, including a $20M impact from California wildfires.

• Q1 2025: IFP $997M–$1B, gross earned premium $229M–$231M, revenue $143M–$145M, adjusted EBITDA loss $49M–$46M (includes $20M wildfire impact).

• Growth spend expected to total $165M in 2025, with increases in Q2 and Q3; on track to exit 2026 with positive adjusted EBITDA.

• Sustained positive adjusted free cash flow and sequential EBITDA improvement expected for 2025.