Lemonade (LMND) Q4 2025 earnings summary

Executive summary

• Achieved record Q4 results, capping a year of strong financial execution and operational performance.

• In-force premium reached $1.24 billion, up 31% year-over-year, with revenue up 53% and gross profit up 73% to $111 million.

• Adjusted EBITDA loss narrowed to $5 million, a $19 million improvement year-over-year, and positive adjusted free cash flow of $37 million was generated.

• Growth was broad-based, with Pet, Car, and Europe segments all contributing significantly.

• Launched Lemonade Autonomous Car insurance, leveraging telematics and AI for dynamic, risk-based pricing.

Financial highlights

• Revenue grew 53% year-over-year to $228 million in Q4.

• Gross profit increased 73% to $111 million; adjusted gross profit up 69% to $112 million.

• Gross margin was 48%, and adjusted gross margin was about 49%.

• Net loss was $22 million ($0.29 per share), improved from $30 million ($0.42 per share) year-over-year.

• Adjusted free cash flow positive for the third consecutive quarter at $37 million; operating cash flow $21 million.

• Ended Q4 with $1.1 billion in cash and investments, with $250 million held as regulatory surplus.

Outlook and guidance

• Expecting Q1 and full-year 2026 top-line growth of 32% year-over-year.

• Projecting roughly 60% full-year revenue growth for 2026.

• Positive full-quarter EBITDA expected in Q4 2026 and full-year EBITDA profitability in 2027.

• Growth spend for 2026 anticipated at about $225 million.