Financial Performance - Total revenue for Q1 2025 was $151.2 million, a 27% increase from $119.1 million in Q1 2024[22]. - Net earned premium increased to $104.3 million in Q1 2025, up 24% from $84.4 million in Q1 2024[22]. - Net loss for Q1 2025 was $62.4 million, compared to a net loss of $47.3 million in Q1 2024, representing a 32% increase in losses[22]. - Total expenses for Q1 2025 were $212.6 million, a 29% increase from $164.3 million in Q1 2024[22]. - The adjusted gross profit for Q1 2025 was $46.0 million, compared to $36.7 million in Q1 2024, representing an increase of approximately 25.3%[140]. - The gross profit margin decreased to 26% in Q1 2025 from 29% in Q1 2024[140]. - The net loss for the three months ended March 31, 2025, was $(62.4) million, compared to $(47.3) million in the same period of 2024[140]. - The gross loss ratio improved slightly to 78% in Q1 2025 from 79% in Q1 2024[140]. Assets and Liabilities - Total assets as of March 31, 2025, were $1,856.6 million, slightly up from $1,849.1 million as of December 31, 2024[19]. - Total liabilities increased to $1,311.1 million as of March 31, 2025, compared to $1,255.7 million as of December 31, 2024[19]. - Stockholders' equity decreased to $545.5 million as of March 31, 2025, down from $593.4 million at the end of 2024[19]. - Cash, cash equivalents, and restricted cash decreased to $319.7 million from $385.7 million at the end of 2024, a decline of 17%[28]. - The company’s cash and cash equivalents as of March 31, 2025, were $309.2 million, down from $376.0 million as of December 31, 2024, a decrease of approximately 17.7%[36]. - As of March 31, 2025, the total fair value of financial assets was $676.1 million, an increase from $634.9 million as of December 31, 2024, representing a growth of approximately 6.5%[49]. Investment Performance - The company's net investment income for the three months ended March 31, 2025, was $9.5 million, an increase of 25% compared to $7.6 million for the same period in 2024[43]. - Investments in fixed maturities had a fair value of $655.6 million as of March 31, 2025, compared to $607.4 million as of December 31, 2024, representing an increase of approximately 7.9%[40]. - The company reported pre-tax net realized capital losses of less than $0.1 million for both the three months ended March 31, 2025, and March 31, 2024[44]. - The investment portfolio is primarily composed of fixed income securities issued by the U.S. government and government agencies, with a focus on short durations[204]. - As of March 31, 2025, none of the company's fixed maturity securities were unrated or rated below investment grade[206]. Customer and Market Growth - As of March 31, 2025, the company had 2,545,496 customers, an increase from 2,095,275 customers at the end of March 2024, representing a growth of approximately 21.5%[140]. - The in-force premium at the end of March 2025 was $1,007.8 million, up from $794.2 million in March 2024, indicating a growth of about 26.8%[140]. - Gross written premium for the U.S. market was $244.8 million in Q1 2025, representing 96.3% of total gross written premium, compared to $202.5 million or 98.5% in Q1 2024[99]. - The company operates in a single reportable segment, providing personal property and casualty insurance products primarily in the U.S. and Europe, including the UK[96]. Expenses and Costs - Sales and marketing expense increased by $12.8 million, or 42%, to $43.2 million for the three months ended March 31, 2025, primarily due to brand and performance advertising[168]. - General and administrative expense increased by $6.1 million, or 20%, to $35.9 million for the three months ended March 31, 2025, with interest expense related to borrowings increasing significantly[170]. - Other insurance expense rose by $8.8 million, or 51%, to $26.1 million for the three months ended March 31, 2025, driven by growth in earned premium and California FAIR Plan assessment charges[167]. Reinsurance and Risk Management - The overall share of proportional reinsurance under the Reinsurance Program is approximately 55% of premium, with a per risk cap of $750,000[61]. - The reinsurance program effective July 1, 2023, ceded approximately 55% of premium, with a limit of $5,000,000 per occurrence for non-hurricane catastrophe losses[114]. - The company aims to minimize volatility in its business model through reinsurance and a "Giveback" program, which donates excess premiums to nonprofits selected by customers[104]. Tax and Compliance - The consolidated effective tax rate was (1.7)% for the three months ended March 31, 2025, compared to (4.7)% for the same period in 2024[87]. - Unrecognized tax benefits related to tax positions decreased to $10.0 million as of March 31, 2025, from $14.3 million as of March 31, 2024, a decline of 30.4%[88]. - The company does not believe it is a party to any pending legal proceedings likely to have a material adverse effect on its business[213]. Future Outlook - The company expects to continue investing in technology development to enhance existing products and develop new ones, which will drive long-term profitability[133]. - The company expects existing cash and cash equivalents to be sufficient to meet working capital and liquidity needs over the next 12 months[187]. - The company does not have any current plans for material capital expenditures beyond current operating requirements[199].

Core Insights - Lemonade's fiscal Q1 2025 results exceeded Wall Street expectations for both revenue and earnings per share, indicating a positive trajectory for the company [3][8][10] Financial Performance - Revenue increased from $119.1 million in Q1 2024 to $151.2 million in Q1 2025, marking a 27% growth [2] - Earnings per share declined from -$0.67 to -$0.86, a 28% increase in losses, but still beat expectations [2] - In-force premiums rose by 26% year-over-year, surpassing $1 billion, reaching $1.0 billion [2][3] Customer Growth - The customer base grew by 21%, reaching 2.5 million, with premium per customer increasing by 4% to $396 [4] Underwriting and Loss Ratios - The gross loss ratio improved by 100 basis points to 78%, although it remains above the long-term goal of 75% [5][6] - The gross loss ratio for the trailing 12 months remained flat at 73% [6] Investment in Growth - Growth spending, including sales and marketing, nearly doubled to $38.1 million in the quarter [7] Market Reaction - Despite a year-to-date decline of 18% in shares, the positive earnings results led to an 8% increase in premarket trading [8] Future Outlook - The company maintains its guidance for positive adjusted free cash flow in 2025, despite challenges from natural disasters [10] - There is still a significant distance to achieve non-adjusted positive earnings and cash flow, but progress is being made [11]

Financial Data and Key Metrics Changes - The company reported a 27% year-on-year growth in Q1 2025, marking the sixth consecutive quarter of accelerating top-line growth [5][15] - In-force premium grew 27% to just above $1 billion, while customer count increased by 21% to 2.5 million [15][17] - Revenue in Q1 increased 27% from the prior year to $151 million, driven by gross earned premium growth and a 26% increase in investment income [17][21] - The gross loss ratio was 78% for Q1, compared to 79% in Q1 2024, with a trailing twelve-month gross loss ratio of about 73%, which is 10 points better year-on-year [17][18] - Adjusted gross profit increased by 25% year-on-year, while gross profit increased by 11% [18][21] - Net loss was $62 million in Q1, or a loss of $0.86 per share, compared to a net loss of $47 million or a $0.67 per share loss in the prior year [20][21] Business Line Data and Key Metrics Changes - The car business experienced quarter-over-quarter in-force premium growth that outpaced the rest of the business for the first time [9][10] - The company has seen a 60% increase in conversion rates from day zero telematics experiments and more than doubled cross-sell volume year-over-year [11][12] - The loss ratio for the car business remains elevated but is expected to improve as older cohorts renew [12][15] Market Data and Key Metrics Changes - The company is closely monitoring the evolving tariff environment, particularly for imported auto parts, which could increase loss trends by single-digit percentage points [8][17] - The company launched its car insurance product in Colorado, expanding its coverage to over 40% of the U.S. auto market [11][12] Company Strategy and Development Direction - The company is focused on leveraging AI to maintain flat or declining fixed costs while growing gross profit [6][25] - The strategy includes geographic expansion and product development to tap into a large pool of non-core customers spending over $3 billion annually on auto insurance [10][11] - The company aims to achieve EBITDA breakeven by the end of 2026, with a focus on generating positive adjusted free cash flow in 2025 [7][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite challenges such as the California wildfires, which impacted Q1 results [7][15] - The company reiterated its expectation of 30% plus growth in 2026 and beyond, citing the insurance sector's inherent resilience [31][32] - Management emphasized the importance of AI in driving operational efficiency and profitability, stating that the underlying business is already profitable without growth spending [25][26][76] Other Important Information - The company expects to invest approximately $45 million in growth spend for Q2 2025, with a total expected growth spend of around $170 million for the year [21][22] - The adjusted EBITDA loss for Q1 was $47 million, with expectations for Q2 adjusted EBITDA loss between $44 million and $41 million [23][21] Q&A Session Summary Question: What is the timeline for reaching EBITDA profitability? - Management reiterated the expectation to achieve adjusted EBITDA breakeven by Q4 2026, with confidence in the business's growth trajectory and cost management [24][25] Question: How will cross-sell rates evolve in the coming years? - The company aims to drive multiline customer rates, expecting to approach the teens in the next five years, with significant growth potential from existing customers [28][29] Question: What impact do tariffs have on growth expectations? - Management acknowledged the potential impact of tariffs but expressed confidence in maintaining growth expectations, citing the resilience of the business model [31][46] Question: Can you provide details on the impact of the California wildfires? - The wildfires had a gross impact of approximately $44 million, with a net operating loss impact of about $22 million [45][46] Question: What is the expected growth from the car product for the full year? - While specific numbers were not disclosed, management expects the car product to grow at a faster pace than the rest of the business [90]

Financial Data and Key Metrics Changes - The company reported a 27% year-on-year growth in Q1 2025, marking the sixth consecutive quarter of accelerating top-line growth [4] - In-force premium grew 27% to just above $1 billion, while customer count increased by 21% to 2.5 million [14] - Revenue in Q1 increased 27% from the prior year to $151 million, driven by gross earned premium growth and a 26% increase in investment income [16] - The gross loss ratio was 78% for Q1, compared to 79% in Q1 2024, with a trailing twelve-month gross loss ratio of about 73%, which is 10 points better year-on-year [16][18] - Adjusted gross profit increased 25% year-on-year, while operating expenses excluding loss and loss adjustment expenses increased 29% to $127 million [18] Business Line Data and Key Metrics Changes - The car business experienced significant momentum, with quarter-over-quarter in-force premium growth outpacing the rest of the business for the first time [9] - The company reported a doubling of cross-sell volume year-over-year, indicating improved bundling flows [11] - The car loss ratio remains elevated but is expected to improve as older cohorts renew, typically seeing a double-digit loss ratio improvement [12] Market Data and Key Metrics Changes - The company is closely monitoring the evolving tariff environment, particularly for imported auto parts, which could increase loss trends by single-digit percentages [7] - The impact of California wildfires contributed 16 percentage points to the gross loss ratio in Q1, but the trailing twelve-month gross loss ratio remained stable [6] Company Strategy and Development Direction - The company continues to leverage AI as a core part of its strategy, which has allowed for a significant increase in gross profit while keeping fixed costs stable [5] - The company reiterated its expectation of achieving EBITDA breakeven by the end of next year and generating positive adjusted free cash flow in 2025 [6][24] - The focus remains on geographic expansion and product development, particularly in the car insurance segment, with plans to increase coverage in profitable states [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to achieve EBITDA profitability, citing predictable growth dynamics and the effectiveness of AI in managing costs [24][25] - The company remains optimistic about maintaining a growth rate of over 30% despite potential macroeconomic challenges, emphasizing the resilience of the insurance sector [30][31] Other Important Information - The company has updated its investor website and changed the timing of its shareholder letter to align with common practices [8] - The total cash, cash equivalents, and investments at the end of the quarter were approximately $996 million, reflecting a $69 million increase year-on-year [21] Q&A Session Summary Question: What is the timeline for reaching EBITDA profitability? - Management reiterated the expectation to achieve adjusted EBITDA breakeven by Q4 of next year, with 2027 being the first full year of positive adjusted EBITDA [24] Question: How will cross-sell rates evolve in the coming years? - The company aims to drive multiline customer rates, expecting to approach the teens in the next five years, with significant growth potential from existing customers [27] Question: What is the impact of tariffs on the business? - Management indicated that while tariffs could present a modest headwind, the company remains confident in its growth metrics and will adjust as necessary [44] Question: How is the car business performing and what states are priorities for expansion? - The car business is expected to continue growing at a faster pace than the rest of the book, with geographic expansion planned but specific states not yet disclosed [46][48] Question: What is the impact of the California wildfires on gross profit? - The gross impact from the wildfires was estimated at $44 million, with a negative EBITDA impact of about $22 million [42]

[Q1 2025 Performance Highlights](index=2&type=section&id=Q1%202025%20Performance%20Highlights) This section provides an overview of Q1 2025 performance highlights [Letter to Shareholders & Executive Summary](index=3&type=section&id=Letter%20to%20Shareholders%20%26%20Executive%20Summary) The first quarter of 2025 demonstrated strong performance, characterized by accelerating growth in **In Force Premium** (**IFP**) and **Revenue**, alongside stable **loss ratios**. Despite a significant impact from the California Wildfires, the company's results were in line with guidance, and it remains on track to achieve positive **Adjusted EBITDA** before the end of 2026 | Metric | Q1 2025 Value | YoY Growth | Note | | :--- | :--- | :--- | :--- | | **In Force Premium** (**IFP**) | **$1,008 million** | **27%** | Sixth consecutive quarter of accelerating growth | | **Revenue** | - | **27%** | - | | **TTM Gross Loss Ratio** | **73%** | Stable | Within target range | | **Q1 Gross Loss Ratio** | **78%** | - | Includes a **16-point** impact from California Wildfires | | **Gross Profit** | **$39 million** | **11%** | Growth achieved despite wildfire impact | | **Adj. Gross Profit** | **$46 million** | **25%** | - | | **Adj. EBITDA Loss** | **($47) million** | - | In line with guidance, includes ~**$22M** wildfire impact | | **Net Loss** | **($62) million** | - | - | - The company surpassed the **$1 billion** **In Force Premium** (**IFP**) milestone in March, eight and a half years after its inception[7](index=7&type=chunk) - The business is projected to reach profitability, with positive **Adjusted EBITDA** expected before the end of 2026, consistent with previous guidance[6](index=6&type=chunk) [Strategic Execution Overview](index=4&type=section&id=Strategic%20Execution%20Overview) The company is successfully executing its strategy, evidenced by six consecutive quarters of accelerating **In Force Premium** (**IFP**) growth, a stable **Trailing Twelve Months (TTM)** **gross loss ratio** within the target range, and controlled **operating expenses** relative to **IFP** growth - **In Force Premium** (**IFP**) YoY growth has accelerated for the sixth consecutive quarter, reaching **27%** in Q1 2025[9](index=9&type=chunk) - The **Trailing Twelve Months (TTM)** **Gross Loss Ratio** has stabilized at **73%** for the last two quarters, remaining within the company's target range[9](index=9&type=chunk) - **Operating expenses** (excluding growth spend) have remained stable, showing a **Compound Annual Growth Rate (CAGR)** of only **1%** since Q3 2022, compared to a **21%** **CAGR** for **IFP** over the same period[9](index=9&type=chunk) [Product and Market Analysis](index=5&type=section&id=Product%20and%20Market%20Analysis) This section provides an overview of product and market analysis [Product Spotlight: Lemonade Car](index=5&type=section&id=Product%20Spotlight%3A%20Lemonade%20Car) **Lemonade Car** is showing signs of inflection, with its sequential **IFP** growth now outpacing other products. The strategy focuses on leveraging proprietary AI for pricing safe, young drivers and cross-selling to the existing customer base. Significant progress has been made in product optimization, geographic expansion, and pricing segmentation - Q1 marked the first quarter where **Car's** sequential **In Force Premium** (**IFP**) growth outpaced the rest of the company's product portfolio[11](index=11&type=chunk) - Strategic initiatives to optimize the cross-selling experience have resulted in a more than **100%** increase in **Car cross-sales** in Q1 2025 compared to Q1 2024[12](index=12&type=chunk) - The company is expanding its geographic footprint, with the recent launch in Colorado bringing coverage to over **40%** of the **U.S. car market** and nearly **60%** of **Lemonade's customer base**[12](index=12&type=chunk) - Pricing sophistication is accelerating, with **24 rate and coverage filings** made in Q1 2025 alone, nearly matching the **29 filings** made in all of 2024. The focus is on segmentation via telematics[12](index=12&type=chunk) [Macro Environment and Catastrophe Impact](index=6&type=section&id=Macro%20Environment%20and%20Catastrophe%20Impact) The company is monitoring **inflation risks** from U.S. tariff policies, which could impact **loss trends**. The financial impact of the Q1 California Wildfires was in line with previous estimates, with a net impact of **($22) million** on **Adjusted EBITDA** and **($29) million** on **Net Loss** | Impact Metric | Q1 2025 Favorable (Unfavorable) Impact | Note | | :--- | :--- | :--- | | **Gross loss & LAE** | **($36) million** | In line with **$45m** gross estimate | | **Net loss & LAE** | **($16) million** | In line with **$20m** net estimate | | **Adj. EBITDA** | **($22) million** | - | | **Net loss** | **($29) million** | Includes **CA FAIR Plan assessment** | | **CA FAIR Plan assessment** | **($7) million** | - | - The company is closely monitoring **inflation risk** driven by **U.S. tariff policy**. A hypothetical **25%** tariff on cars or parts could increase the **loss trend** by single-digit percentage points, which would be incorporated into future pricing[14](index=14&type=chunk) [Financial Outlook](index=7&type=section&id=Financial%20Outlook) This section provides an overview of financial outlook [Q2 and Full Year 2025 Guidance](index=7&type=section&id=Q2%20and%20Full%20Year%202025%20Guidance) Lemonade reiterates its full-year 2025 **IFP** growth guidance of **28%** and its **Adjusted EBITDA** guidance. It is raising expectations for **Gross Earned Premium (GEP)** and **Revenue** for the full year. The company also maintains its guidance for positive **Adjusted Free Cash Flow** in 2025 | Metric ($ in millions) | Q2 2025 Guidance (Low - High) | Full Year 2025 Guidance (Low - High) | | :--- | :--- | :--- | | **In force premium** (**IFP**) | **$1,061 - $1,064** | **$1,203 - $1,208** | | **Gross earned premium** (**GEP**) | **$246 - $248** | **$1,028 - $1,031** | | **Revenue** | **$157 - $159** | **$661 - $663** | | **Adjusted EBITDA loss** | **($44) - ($41)** | **($140) - ($135)** | - The company reiterates its guidance for achieving positive **Adjusted Free Cash Flow (Adj. FCF)** in 2025, despite the negative impact from the California Wildfires in Q1[17](index=17&type=chunk) - Full-year **IFP** guidance implies a growth rate of **28%**, sustaining acceleration towards the company's target 'cruising velocity' of **30%** expected in 2026[17](index=17&type=chunk) [Detailed Q1 2025 Financial Results](index=8&type=section&id=Detailed%20Q1%202025%20Financial%20Results) This section provides an overview of detailed Q1 2025 financial results [Key Performance Indicators (KPIs)](index=8&type=section&id=Key%20Performance%20Indicators%20(KPIs)) In Q1 2025, the company saw strong growth in **key metrics**, with **In Force Premium** (**IFP**) up **27%** YoY to over **$1 billion** and **customer count** increasing by **21%**. **Premium per customer** also rose by **4%**, while **Annual Dollar Retention (ADR)** decreased to **84%**, primarily due to the non-renewal of policies not meeting underwriting criteria | **KPI** | Q1 2025 | YoY Change | | :--- | :--- | :--- | | **In Force Premium** (**IFP**) | **$1,007.8 million** | **+27%** | | **Customers** | **2,545,496** | **+21%** | | **Premium per Customer** | **$396** | **+4%** | | **Annual Dollar Retention** (**ADR**) | **84%** | **-4 p.p.** | - The decline in **Annual Dollar Retention (ADR)** is largely attributed to the intentional non-renewal of policies that failed to meet certain underwriting criteria[23](index=23&type=chunk) [Profitability and Expense Analysis](index=9&type=section&id=Profitability%20and%20Expense%20Analysis) **Gross Profit** grew **11%** YoY to **$38.6 million**, while **Adjusted Gross Profit** increased **25%** to **$46.0 million**. The **Net Loss** widened to **($62.4) million** and the **Adjusted EBITDA loss** increased to **($47.0) million**, primarily driven by higher growth spend for customer acquisition and the impact of the California Wildfires | Metric | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | **$151.2M** | **$119.1M** | **+27%** | | **Gross Profit** | **$38.6M** | **$34.7M** | **+11%** | | **Adjusted Gross Profit** | **$46.0M** | **$36.7M** | **+25%** | | **Net Loss** | **($62.4M)** | **($47.3M)** | Increased Loss | | **Adjusted EBITDA Loss** | **($47.0M)** | **($33.9M)** | Increased Loss | - **Operating expenses** increased by **29%** YoY, primarily driven by higher growth spend for customer acquisition, which rose to **$38.1 million** from **$19.8 million** in Q1 2024, and a one-time **$6.9 million** **California FAIR Plan assessment**[28](index=28&type=chunk) [Cash Flow and Capital Position](index=10&type=section&id=Cash%20Flow%20and%20Capital%20Position) The company ended Q1 with approximately **$1 billion** in **cash, cash equivalents, and investments**. **Adjusted Free Cash Flow** was **($31.0) million**, a decline from the prior year, attributed to the California Wildfires. Without this event, **Adjusted FCF** would have been positive - As of March 31, 2025, the company's **cash, cash equivalents, and investments** totaled approximately **$1 billion**[31](index=31&type=chunk) - **Adjusted Free Cash Flow** was **($31.0) million** in Q1 2025, compared to **($18.9) million** in Q1 2024. The company states that this metric would have been positive if not for the impact of the California Wildfires and the **FAIR Plan assessment**[32](index=32&type=chunk) [Financial Statements and Reconciliations](index=21&type=section&id=Financial%20Statements%20and%20Reconciliations) This section provides an overview of financial statements and reconciliations [Condensed Consolidated Financial Statements](index=21&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited **GAAP** financial statements for Q1 2025 compared to Q1 2024, including the Statements of Operations, Balance Sheets, and Statements of Cash Flows [Statements of Operations](index=21&type=section&id=Statements%20of%20Operations) This section presents statements of operations | ($ in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Total revenue** | **$151.2** | **$119.1** | | **Total expense** | **$212.6** | **$164.3** | | **Net loss** | **($62.4)** | **($47.3)** | | **Net loss per share** | **($0.86)** | **($0.67)** | [Balance Sheets](index=22&type=section&id=Balance%20Sheets) This section presents balance sheets | ($ in millions) | As of March 31, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | **Total investments** | **$676.1** | **$634.9** | | **Cash, cash equivalents and restricted cash** | **$319.7** | **$385.7** | | **Total assets** | **$1,856.6** | **$1,849.1** | | **Total liabilities** | **$1,311.1** | **$1,255.7** | | **Total stockholders' equity** | **$545.5** | **$593.4** | [Statements of Cash Flows](index=23&type=section&id=Statements%20of%20Cash%20Flows) This section presents statements of cash flows | ($ in millions) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | **($47.2)** | **($29.8)** | | **Net cash (used in) provided by investing activities** | **($40.3)** | **$30.9** | | **Net cash provided by financing activities** | **$20.0** | **$13.5** | | **Net (decrease) increase in cash** | **($66.0)** | **$13.7** | [Reconciliation of Non-GAAP Measures](index=24&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) This section provides detailed reconciliations of **non-GAAP** financial measures, such as **Adjusted Gross Profit**, **Adjusted EBITDA**, and **Adjusted Free Cash Flow**, to their most directly comparable **GAAP** counterparts - Q1 2025 **Gross Profit** of **$38.6 million** reconciles to an **Adjusted Gross Profit** of **$46.0 million** after adjustments for items like net investment income and certain employee-related expenses[68](index=68&type=chunk) - Q1 2025 **Net Loss** of **($62.4) million** reconciles to an **Adjusted EBITDA loss** of **($47.0) million**. Key adjustments include adding back stock-based compensation (**$10.3M**), depreciation & amortization (**$4.5M**), and a **$6.9M** adjustment for the **CA FAIR Plan assessment**, while subtracting net investment income (**$9.5M**)[71](index=71&type=chunk) - Q1 2025 **Cash Flow from Operating Activities** of **($47.2) million** reconciles to an **Adjusted Free Cash Flow** of **($31.0) million** after subtracting capital expenditures (**$2.3M**) and adding net borrowings under a financing agreement (**$18.5M**)[74](index=74&type=chunk) [Supplemental and Historical Data](index=27&type=section&id=Supplemental%20and%20Historical%20Data) This section provides supplemental details on stock-based compensation allocation, a breakdown of written and earned premiums, and a comprehensive table of historical operating metrics for the past nine quarters | Premium ($ in millions) | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Gross written premium** | **$254.2** | **$205.6** | **24%** | | **Gross earned premium** | **$233.6** | **$187.9** | **24%** | | **Net written premium** | **$115.4** | **$93.9** | **23%** | | **Net earned premium** | **$104.3** | **$84.4** | **24%** | - Historical data shows a consistent upward trend in key metrics such as **Customers** (from **1.86M** in Q1'23 to **2.55M** in Q1'25) and **In Force Premium** (from **$653.3M** in Q1'23 to **$1,007.8M** in Q1'25)[80](index=80&type=chunk) [Insurance Supplement](index=34&type=section&id=Insurance%20Supplement) This section provides an overview of insurance supplement [Loss Ratio Analysis](index=35&type=section&id=Loss%20Ratio%20Analysis) The **Gross Loss Ratio** for Q1 2025 was **78%**, impacted by **catastrophe events** which contributed **19 percentage points**. Excluding catastrophes, the ratio was **59%**. The **Trailing Twelve Month (TTM)** **gross loss ratio** remained stable at **73%**. The report provides a detailed breakdown of **loss ratios** by catastrophe impact, prior period development, and product type | Loss Ratio | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | **Gross loss ratio** | **78%** | **63%** | **79%** | | **Gross loss ratio ex-CAT** | **59%** | **62%** | **63%** | | **TTM gross loss ratio** | **73%** | **73%** | **83%** | | **Net loss ratio** | **82%** | **62%** | **78%** | - In Q1 2025, **catastrophe events (CAT)** contributed **19 percentage points** to the **gross loss ratio**, a significant increase from **1%** in the **prior quarter** and **14%** in the **prior year quarter**[98](index=98&type=chunk) [Product Portfolio Performance](index=35&type=section&id=Product%20Portfolio%20Performance) The **In Force Premium** (**IFP**) breakdown shows continued growth across all product lines, with **Pet** and **Europe** showing the highest percentage growth. **Homeowners multi-peril** remains the largest segment at **$513 million**. **Premium per customer** also increased across all product lines, notably in **Car** and **Pet** insurance | **IFP** Breakdown ($ in millions) | Q1 2025 | Q1 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | **Homeowners multi-peril** | **$513** | **$449** | **14%** | | **Pet** | **$314** | **$201** | **56%** | | **Car** | **$134** | **$123** | **9%** | | **Europe** | **$33** | **$12** | **175%** | | **Total** | **$1,008** | **$794** | **27%** | | Premium Per Customer | Q1 2025 | Q1 2024 | YoY Growth | | :--- | :--- | :--- | :--- | | **Homeowners multi-peril** | **$265** | **$266** | **(0.4%)** | | **Pet** | **$742** | **$664** | **12%** | | **Car** | **$1,853** | **$1,544** | **20%** | | **Total Average** | **$396** | **$379** | **4%** | [Definitions and Disclosures](index=12&type=section&id=Definitions%20and%20Disclosures) This section provides an overview of definitions and disclosures [Definitions of Non-GAAP Measures and KPIs](index=12&type=section&id=Definitions%20of%20Non-GAAP%20Measures%20and%20KPIs) This section provides formal definitions for all **non-GAAP** financial measures (e.g., **Adjusted EBITDA**, **Adjusted Gross Profit**) and **key performance indicators** (e.g., **In Force Premium**, **Annual Dollar Retention**) used throughout the report, explaining their calculation and management's rationale for their use - **Adjusted EBITDA:** Defined as **net loss** excluding items like income tax, depreciation, stock-based compensation, interest, and other unique or non-cash adjustments[36](index=36&type=chunk) - **In Force Premium** (**IFP**): The aggregate annualized premium for all customers as of the period end date. It is not a forecast of future revenues[45](index=45&type=chunk) - **Annual Dollar Retention (ADR)**: The percentage of **IFP** retained over a twelve-month period, inclusive of changes in policy value, number of policies, policy type, and churn[48](index=48&type=chunk) [Forward-Looking Statements and Risk Factors](index=18&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section contains the standard "safe harbor" statement, cautioning that the report includes forward-looking statements subject to various risks and uncertainties. It directs investors to the company's SEC filings, such as the Form 10-K, for a detailed discussion of risk factors - The letter contains forward-looking statements regarding financial guidance, future profitability, growth in the car insurance segment, and the efficacy of AI models[59](index=59&type=chunk) - These statements are not guarantees and involve risks and uncertainties. Key risks mentioned include a history of losses, competition, reinsurance availability, regulatory risks, and the cyclical nature of the insurance industry[60](index=60&type=chunk)[61](index=61&type=chunk) - Investors are directed to the "Risk Factors" section of the company's Form 10-K and other SEC filings for a more comprehensive discussion of potential risks[62](index=62&type=chunk)

Group 1 - Bert Hochfeld has a strong educational background with a degree in economics from the University of Pennsylvania and an MBA from Harvard [1] - Hochfeld has extensive experience in the tech industry, having worked for notable companies such as IBM, Raytheon Data Systems, and BMC Software [1] - He transitioned to a sell-side analyst role in the 1990s and received awards from the Wall Street Journal for his software coverage [1] - In 2001, Hochfeld founded Hochfeld Independent Research Group, providing research services to major institutions like Fidelity and SAC Capital [1] - The Hepplewhite Fund, operated by Hochfeld, was recognized as the best performing small-cap fund for the five years ending in 2011 by Hedge Fund Research [1] - Despite his achievements, Hochfeld was convicted in 2012 for misappropriating funds from his hedge fund [1] - He has published over 500 articles on Seeking Alpha, focusing on information technology companies [1] - Hochfeld ranks in the top 0.1% of Tip Ranks analysts for his successful selection of information technology stocks [1]

Wall Street analysts forecast that Lemonade (LMND) will report quarterly loss of $0.94 per share in its upcoming release, pointing to a year-over-year decline of 40.3%. It is anticipated that revenues will amount to $143.93 million, exhibiting an increase of 20.9% compared to the year-ago quarter.The current level reflects no revision in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projecti ...

Core Insights - Sun Cruiser Iced Tea & Vodka, a brand from The Boston Beer Company, is expanding its product line with the introduction of Sun Cruiser Lemonade & Vodka, featuring four flavors aimed at the growing premium ready-to-drink (RTD) market [1][2][3] Product Overview - The new Sun Cruiser Lemonade & Vodka lineup includes four flavors designed for easy drinking and enjoyment, aligning with consumer demand for flavorful, spirits-based beverages [2][3] - Each 12 oz. serving contains 100 calories, 1g of sugar, and has an alcohol by volume (ABV) of 4.5%, making it a light option for summer activities [3] Market Position - Sun Cruiser has quickly established itself as the 1 new RTD brand family of 2024 and holds the title of the fastest-moving vodka iced tea 8-pack in its Classic Iced Tea style [2][3] - The brand has received recognition, including the Best Alcoholic Beverage award at the Bar & Restaurant Expo in Las Vegas, indicating strong market acceptance [2] Brand Strategy - The Boston Beer Company aims to position Sun Cruiser as a go-to choice for consumers seeking high-quality, spirits-based options for outdoor and social occasions [3][5] - The product is currently available in 45 states and sold in an 8-count variety pack, facilitating consumer sampling of all flavors [3]

Lemonade TodayLMNDLemonade$26.82 -0.08 (-0.28%) 52-Week Range$14.03▼$53.85Price Target$28.00Add to WatchlistAmid the tariff-induced market volatility, some stocks in the finance sector are directly untouchable by tariffs. Artificial intelligence (AI) powered digital insurance fintech Lemonade Inc. NYSE: LMND stands out as one of them with its disruptive model, solid growth metrics and technological edge. The company leverages sophisticated AI models and machine learning (ML) algorithms to analyze oceans of ...

Core Insights - InsurTech companies like ROOT Inc. and Lemonade are facing challenges such as lowered interest rates, increased competition, inflation, and higher repair costs, while also striving for profitability amidst regulatory scrutiny [1][2] ROOT Inc. Overview - ROOT focuses on auto insurance, employing telematics and data-driven pricing models, with a growth strategy centered on geographic expansion and increased distribution channels [3] - The company is expanding across automotive, financial services, and agent sub-channels, which is driving growth in new writings [4] - ROOT expects to refinance its debt facility with Blackrock in October 2024, potentially lowering interest expenses by 50% in 2025, and has shown improvement in its net margin over time [5] - The net margin has improved by 15,350 basis points over the last three years, marking 2024 as the first year of profitability, although high debt levels pose a financial risk [6] Lemonade Overview - Lemonade's growth strategy includes acquiring profitable businesses and focusing on car insurance, which it sees as a major growth engine [7] - The company aims for a tenfold business growth, targeting a 28% increase in in-force premium by 2025, and plans to achieve positive EBITDA by 2026 and net profit by 2027 [8] - Lemonade is exposed to catastrophe losses but has implemented strategic initiatives to manage this risk, contributing to improvements in its gross loss ratio [9][10] Financial Estimates - The Zacks Consensus Estimate for ROOT's 2025 revenues indicates a year-over-year decrease of 89.6%, while EPS is expected to increase by 5.1% [11] - For Lemonade, the 2025 revenue and EPS estimates imply a year-over-year increase of 1.1% and 24.8%, respectively [12] Valuation Metrics - ROOT is trading at a price-to-book multiple of 8.86X, significantly above its five-year median of 0.92X, while Lemonade's price-to-book multiple is at 3.2X, also above its median of 1.77X [13] Conclusion - ROOT aims to be the largest and most profitable company in the industry, leveraging technology for operational efficiency and growth [16] - Lemonade's focus on growth and technology is promising, but it has yet to achieve profitability, with ROOT outperforming in return on equity [17] - Over the past year, ROOT shares have surged by 77.8%, while Lemonade shares have gained 55.6%, indicating that ROOT is currently a more attractive investment option [18]