Lemonade(LMND)2024-10-30 20:38Revenue and Premium Growth - In Force Premium (IFP) increased by 24% YoY to $889 million[1][21] - Total customers grew by 17% YoY to 2,313,113[1][22] - Premium per customer rose 6% YoY to $384[1][23] - Gross earned premium increased by 23% YoY to $213.1 million[25] - In Force Premium (IFP) for Q4 2024 is $940 million, with a range of $940 million to $944 million[41] - Gross Earned Premium (GEP) for Q4 2024 is $222 million, with a range of $222 million to $225 million[41] - Revenue for Q4 2024 is $144 million, with a range of $144 million to $146 million[41] - Total revenue for the nine months ended September 30, 2024, was $377.7 million, compared to $314.3 million in the same period in 2023, representing a 20.2% increase[76] - Total revenue for Q3 2024 increased to $136.6 million, up from $114.5 million in Q3 2023, representing a 19.3% growth[83] - Gross written premium for Q3 2024 increased to $268.9 million, up from $212.8 million in Q3 2023, a 26.4% growth[90] - Net written premium for Q3 2024 rose to $115.5 million, compared to $94.8 million in Q3 2023, reflecting a 21.8% increase[90] - Gross earned premium for Q3 2024 increased to $213.1 million, up from $173.2 million in Q3 2023, a 23% growth[90] - Net earned premium for Q3 2024 rose to $95.7 million, compared to $86.6 million in Q3 2023, reflecting a 10.5% increase[90] - Customers increased from 1,775,824 in Q3 2022 to 2,313,113 in Q3 2024, a growth of 30%[92][94] - In force premium grew from $609.2 million in Q3 2022 to $889.1 million in Q3 2024, a 46% increase[92][95] - Premium per customer rose from $343 in Q3 2022 to $384 in Q3 2024, up 12%[92][95] - Total revenue increased from $74.0 million in Q3 2022 to $136.6 million in Q3 2024, an 85% growth[92][96] - Gross earned premium grew from $136.4 million in Q3 2022 to $213.1 million in Q3 2024, up 56%[92][96] Profitability and Margins - Gross loss ratio improved by 10 points YoY to 73%[1][13] - Gross profit increased by 71% YoY to $37.5 million[28] - Adjusted EBITDA loss widened by 22% YoY to ($49) million[4][32] - Adjusted EBITDA Loss for Q4 2024 is ($29) million, with a range of ($29) million to ($25) million[41] - Gross profit margin for Q3 2024 improved to 27%, up from 19% in Q3 2023[83] - Ratio of Adjusted Gross Profit to Gross Earned Premium for Q3 2024 increased to 18%, up from 14% in Q3 2023[85] - Gross profit margin improved from 11% in Q3 2022 to 27% in Q3 2024[92][99] - Adjusted gross profit margin increased from 18% in Q3 2022 to 28% in Q3 2024[92][101] - Gross loss ratio improved from 94% in Q3 2022 to 73% in Q3 2024[92][110] - Net loss decreased from $91.4 million in Q3 2022 to $67.7 million in Q3 2024[92][105] - Adjusted EBITDA improved from $(65.7) million in Q3 2022 to $(49.0) million in Q3 2024[92][106] Expenses and Costs - Operating expenses increased by 27% YoY to $124.5 million, driven by higher growth spend[30] - Stock-based compensation expense for Q4 2024 is $16 million, totaling $64 million for the full year 2024[41] - Capital expenditures for Q4 2024 are $3 million, totaling $10 million for the full year 2024[41] - Sales and marketing expenses for the nine months ended September 30, 2024, were $118.6 million, a 53.2% increase from $77.4 million in the same period in 2023[76] - Technology development expenses for the nine months ended September 30, 2024, were $64.0 million, a 5.5% decrease from $67.7 million in the same period in 2023[76] Cash Flow and Financial Position - Net cash flow (NCF) was $48 million, compared to $3 million in Q3 2023[2][36] - Net cash used in operating activities for the nine months ended September 30, 2024, was $25.2 million, a significant improvement from $103.0 million in the same period in 2023[81] - Cash, cash equivalents, and restricted cash at the end of the period were $337.8 million, up 41.8% from $238.1 million at the end of the same period in 2023[81] - Total assets as of September 30, 2024, were $1,823.0 million, compared to $1,633.3 million as of December 31, 2023, reflecting an 11.6% increase[78] Definitions and Metrics - The company defines Adjusted EBITDA as net loss excluding income tax expense, depreciation, stock-based compensation, and other non-cash adjustments[44] - The company defines Adjusted Gross Profit as gross profit excluding net investment income and other income, plus fixed costs and overhead associated with underwriting operations[45] - The company defines Ratio of Adjusted Gross Profit to Gross Earned Premium as the ratio of adjusted gross profit to gross earned premium, providing insight into underlying profitability trends[46] - Gross loss ratio is defined as the ratio of losses and loss adjustment expense to gross earned premium, expressed as a percentage[112] - Gross loss ratio ex-CAT excludes catastrophe losses and is calculated as the ratio of gross losses and loss adjustment expense to gross earned premium, expressed as a percentage[112] - Trailing twelve month (TTM) gross loss ratio is the ratio of losses and loss adjustment expense to gross earned premium over the past twelve months, expressed as a percentage[112] - Net loss ratio is the ratio of losses and loss adjustment expense, less amounts ceded to reinsurers, to net earned premium, expressed as a percentage[112] - Attritional gross loss ratio excludes catastrophe losses and is the ratio of losses to gross earned premium, expressed as a percentage[112] - Prior period development (PPD) is the change in ultimate loss and loss adjustment expense for claims that occurred in prior quarters[112] - Homeowners multi-peril includes all coverages offered under home, condo, and renters policies[112] - In force premium (IFP) is the aggregate annualized premium for customers as of the period end date, calculated as the sum of in force written premium and in force placed premium[112] - Premium per customer is the average annualized premium customers pay for products underwritten or placed by the company, calculated by dividing IFP by the number of customers[112] Financial Results and Outlook - The company will discuss its Q3 2024 financial results and business outlook during a teleconference on October 31, 2024[64] - Net loss for the nine months ended September 30, 2024, was $172.2 million, compared to $194.5 million in the same period in 2023, showing a 11.5% improvement[76] - Net earned premium for the nine months ended September 30, 2024, was $269.4 million, up 16.5% from $231.3 million in the same period in 2023[76] - Net investment income for the nine months ended September 30, 2024, was $24.6 million, a 39.8% increase from $17.6 million in the same period in 2023[76] - Weighted average common shares outstanding for the nine months ended September 30, 2024, were 70,716,140, a 1.7% increase from 69,542,342 in the same period in 2023[76] - Adjusted gross profit for Q3 2024 rose to $38.6 million, compared to $24.9 million in Q3 2023, reflecting a 55% increase[83] - Net loss for Q3 2024 was $67.7 million, compared to $61.5 million in Q3 2023[86] - Adjusted EBITDA for Q3 2024 was $(49.0) million, compared to $(40.2) million in Q3 2023[86]