LMND · Lemonade, Inc.

Lemonade delivered a strong first quarter in 2026, characterized by accelerating topline growth and significantly improved operating leverage. In Force Premium (IFP) grew 32% year-over-year to $1.33 billion, extending the streak of growth rate acceleration to ten consecutive quarters. Revenue growth outpaced IFP growth, rising 71% to $258 million, primarily due to a reinsurance transition that increased premium retention. The company achieved a gross profit of $100 million, a 159% increase, with gross margin expanding 13 percentage points to 39%, driven by improved underwriting results and the absence of prior-year catastrophe impacts. The net loss ratio improved substantially to 63% from 82% in the prior year. Operating expenses increased 25% to $159.3 million, driven by a 43% increase in growth spend to $54.3 million, reflecting disciplined investment in customer acquisition. The company reported an Adjusted EBITDA loss of ($17.1) million, a marked improvement from ($47.0) million in the prior year. Management highlighted the scalability of its AI-driven operations, reaching approximately $1 million IFP per employee. The Pet product line crossed $500 million in IFP, becoming the largest product line, while the Car business accelerated to 60% IFP growth. Looking forward, management raised full-year 2026 guidance across key metrics and reiterated the expectation to achieve positive Adjusted EBITDA in the fourth quarter of 2026.