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LMND Q4 Loss Narrower Than Expected on Solid Underwriting
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Key Takeaways
LMND posted a narrower Q4 loss of 29 cents per share as revenues jumped 53% year over year.
LMND saw in-force premium rise 31% and gross profit surge 73% on stronger underwriting.
Lemonade guided 2026 revenues of $1.19B and expects further premium growth despite EBITDA loss.
Lemonade, Inc. (LMND - Free Report) reported a fourth-quarter 2025 net loss of 29 cents per share, narrower than the Zacks Consensus Estimate of a loss of 41 cents. The figure improved from a loss of 42 cents in the prior-year quarter, primarily driven by higher revenues, partially offset by increased growth spending.
Total operating revenues rose 53.3% year over year to $228.1 million, supported by higher gross earned premiums and ceding commission income. The top line exceeded the Zacks Consensus Estimates by 5.3%.
The insurer’s results reflected expanded gross margin, growth in in-force premium, and improved underwriting performance, partially offset by higher expenses.
In force premium increased 31% year over year to $1,236.5 million. This marks the ninth consecutive quarter of growth acceleration. This metric beat the Zacks Consensus Estimates by 1.1%.
Net investment income declined 2.1% year over year to $9.2 million.
Customer count increased 23% year over year to nearly 3 million.
Premium per customer reached $414 at the end of the fourth quarter, increasing 7% year over year and exceeding the Zacks Consensus Estimate by 1.8%.
Gross earned premium increased 28% year over year to $290.2 million, primarily due to the increase in IFP earned during the quarter.
Gross profit climbed 73% year over year to $110.6 million, while adjusted gross profit rose 69% to $112 million. The increase was driven by a 53.3% surge in revenues and a nine-percentage-point improvement in the net loss ratio.
Total operating expense, excluding net loss and loss adjustment expense, increased 24% year over year to $154.2 million. This was primarily driven by higher growth spend for customer acquisition.
Adjusted EBITDA loss was $4.6 million compared with the year-ago adjusted EBITDA loss of $23.8 million. This year-over-year improvement was primarily due to revenue growth and improved underwriting results, partly offset by the increase in growth spend.
LMND’s Full-Year 2025 Update
Lemonade reported full-year operating revenues of $737.9 million, up 40.2% year over year. Net loss narrowed to $2.24 per share from $2.85 in the prior year.
Full-year adjusted EBITDA loss was $118.1 million compared with a loss of $149.7 million a year ago.
LMND’s Financial Update
Lemonade exited the fourth quarter with cash, cash equivalents, and investments of $1.1 billion, up 9.7% from 2024-end.
As of Dec. 31, 2025, approximately $250 million was carried by insurance subsidiaries as regulatory surplus.
As of Dec. 31, 2025, total assets increased 4.1% from the year-ago level of $1.9 billion. Stockholders' equity of $533.6 million decreased 10.1% from the 2024-end level.
Cash flow from operating activities surged 50% year over year to $20.7 million in the reported quarter.
Adjusted free cash flow surged 38.5% year over year to $36.7 million in the fourth quarter of 2025.
LMND’s Q1 2026 Guidance
Lemonade estimates in-force premium in the range of $1,321-$1,326 million.
The insurer expects gross earned premiums in the range of $299-$302 million.
LMND projects revenues in the range of $246-$251 million.
Lemonade estimates adjusted EBITDA loss in the band of $22-$25 million.
LMND projects stock-based compensation expense to be $19 million.
LMND’s 2026 Guidance
Lemonade estimates in force premium in the range of $1,625-$1,630 million.
The insurer expects gross earned premiums in the range of $1,362-$1,365 million.
LMND projects revenues in the range of $1,187-$1,192 million.
Lemonade estimates adjusted EBITDA loss in the range of $48-$52 million.
LMND projects stock-based compensation expense to be $75 million.
Everest Group, Ltd. (EG - Free Report) reported a fourth-quarter 2025 operating income of $13.26 per share, which missed the Zacks Consensus Estimate by 0.8%. The figure marked an improvement from the year-ago loss of $18.39. Total operating revenues of nearly $4.4 billion declined 4.6% year over year, reflecting lower premiums. The top line beat the Zacks Consensus Estimate by 2.7%.
Everest’s gross written premiums fell 8.6% year over year to $4.3 billion, as strong double-digit growth in specialty lines was offset by targeted reductions in certain casualty lines. Our estimate was $4.8 billion. Net investment income rose 18.8% year over year to $562 million. The figure exceeded both our estimate of $330.6 million and the Zacks Consensus Estimate of $456.4 million.
Assurant, Inc. (AIZ - Free Report) reported fourth-quarter 2025 net operating income of $5.61 per share, which beat the Zacks Consensus Estimate by 1.08%. The bottom line increased 17% year over year. Total revenues increased 7.5% year over year to $3.3 billion. The top line beat the Zacks Consensus Estimate by 2.7%.
Assurant’s adjusted EBITDA, excluding reportable catastrophes, increased 3% to $445.9 million, due to growth within Global Housing and Global Lifestyle. Total benefits, loss and expenses increased 7.4% to $3.1 billion. The figure was higher than our estimate of $2.8 billion.
Principal Financial Group, Inc.’s (PFG - Free Report) fourth-quarter 2025 operating net income of $2.19 per share missed the Zacks Consensus Estimate by 1.8%. The bottom line increased 13% year over year. Total revenues jumped 9.2% year over year to $4.4 billion due to increased premiums and other considerations, fees, and other revenues and net investment income.
Principal Financial’s total expenses increased 8.2% year over year to $3.9 billion As of Dec. 31, 2025, PFG’s assets under management amounted to $781 billion, which is included in the assets under administration of $1.8 trillion.
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LMND Q4 Loss Narrower Than Expected on Solid Underwriting
Key Takeaways
Lemonade, Inc. (LMND - Free Report) reported a fourth-quarter 2025 net loss of 29 cents per share, narrower than the Zacks Consensus Estimate of a loss of 41 cents. The figure improved from a loss of 42 cents in the prior-year quarter, primarily driven by higher revenues, partially offset by increased growth spending.
Total operating revenues rose 53.3% year over year to $228.1 million, supported by higher gross earned premiums and ceding commission income. The top line exceeded the Zacks Consensus Estimates by 5.3%.
The insurer’s results reflected expanded gross margin, growth in in-force premium, and improved underwriting performance, partially offset by higher expenses.
Lemonade, Inc. Price, Consensus and EPS Surprise
Lemonade, Inc. price-consensus-eps-surprise-chart | Lemonade, Inc. Quote
LMND’s Q4 Update
In force premium increased 31% year over year to $1,236.5 million. This marks the ninth consecutive quarter of growth acceleration. This metric beat the Zacks Consensus Estimates by 1.1%.
Net investment income declined 2.1% year over year to $9.2 million.
Customer count increased 23% year over year to nearly 3 million.
Premium per customer reached $414 at the end of the fourth quarter, increasing 7% year over year and exceeding the Zacks Consensus Estimate by 1.8%.
Gross earned premium increased 28% year over year to $290.2 million, primarily due to the increase in IFP earned during the quarter.
Gross profit climbed 73% year over year to $110.6 million, while adjusted gross profit rose 69% to $112 million. The increase was driven by a 53.3% surge in revenues and a nine-percentage-point improvement in the net loss ratio.
Total operating expense, excluding net loss and loss adjustment expense, increased 24% year over year to $154.2 million. This was primarily driven by higher growth spend for customer acquisition.
Adjusted EBITDA loss was $4.6 million compared with the year-ago adjusted EBITDA loss of $23.8 million. This year-over-year improvement was primarily due to revenue growth and improved underwriting results, partly offset by the increase in growth spend.
LMND’s Full-Year 2025 Update
Lemonade reported full-year operating revenues of $737.9 million, up 40.2% year over year. Net loss narrowed to $2.24 per share from $2.85 in the prior year.
Full-year adjusted EBITDA loss was $118.1 million compared with a loss of $149.7 million a year ago.
LMND’s Financial Update
Lemonade exited the fourth quarter with cash, cash equivalents, and investments of $1.1 billion, up 9.7% from 2024-end.
As of Dec. 31, 2025, approximately $250 million was carried by insurance subsidiaries as regulatory surplus.
As of Dec. 31, 2025, total assets increased 4.1% from the year-ago level of $1.9 billion. Stockholders' equity of $533.6 million decreased 10.1% from the 2024-end level.
Cash flow from operating activities surged 50% year over year to $20.7 million in the reported quarter.
Adjusted free cash flow surged 38.5% year over year to $36.7 million in the fourth quarter of 2025.
LMND’s Q1 2026 Guidance
Lemonade estimates in-force premium in the range of $1,321-$1,326 million.
The insurer expects gross earned premiums in the range of $299-$302 million.
LMND projects revenues in the range of $246-$251 million.
Lemonade estimates adjusted EBITDA loss in the band of $22-$25 million.
LMND projects stock-based compensation expense to be $19 million.
LMND’s 2026 Guidance
Lemonade estimates in force premium in the range of $1,625-$1,630 million.
The insurer expects gross earned premiums in the range of $1,362-$1,365 million.
LMND projects revenues in the range of $1,187-$1,192 million.
Lemonade estimates adjusted EBITDA loss in the range of $48-$52 million.
LMND projects stock-based compensation expense to be $75 million.
Zacks Rank
Lemonade currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Multi-Line Insurers
Everest Group, Ltd. (EG - Free Report) reported a fourth-quarter 2025 operating income of $13.26 per share, which missed the Zacks Consensus Estimate by 0.8%. The figure marked an improvement from the year-ago loss of $18.39. Total operating revenues of nearly $4.4 billion declined 4.6% year over year, reflecting lower premiums. The top line beat the Zacks Consensus Estimate by 2.7%.
Everest’s gross written premiums fell 8.6% year over year to $4.3 billion, as strong double-digit growth in specialty lines was offset by targeted reductions in certain casualty lines. Our estimate was $4.8 billion. Net investment income rose 18.8% year over year to $562 million. The figure exceeded both our estimate of $330.6 million and the Zacks Consensus Estimate of $456.4 million.
Assurant, Inc. (AIZ - Free Report) reported fourth-quarter 2025 net operating income of $5.61 per share, which beat the Zacks Consensus Estimate by 1.08%. The bottom line increased 17% year over year. Total revenues increased 7.5% year over year to $3.3 billion. The top line beat the Zacks Consensus Estimate by 2.7%.
Assurant’s adjusted EBITDA, excluding reportable catastrophes, increased 3% to $445.9 million, due to growth within Global Housing and Global Lifestyle. Total benefits, loss and expenses increased 7.4% to $3.1 billion. The figure was higher than our estimate of $2.8 billion.
Principal Financial Group, Inc.’s (PFG - Free Report) fourth-quarter 2025 operating net income of $2.19 per share missed the Zacks Consensus Estimate by 1.8%. The bottom line increased 13% year over year. Total revenues jumped 9.2% year over year to $4.4 billion due to increased premiums and other considerations, fees, and other revenues and net investment income.
Principal Financial’s total expenses increased 8.2% year over year to $3.9 billion As of Dec. 31, 2025, PFG’s assets under management amounted to $781 billion, which is included in the assets under administration of $1.8 trillion.