Lemonade(US:LMND)2025-11-05 16:31Financial Performance - Net earned premium for the three months ended September 30, 2025, was $140.0 million, a 46.1% increase from $95.7 million in the same period of 2024[22]. - Total revenue for the nine months ended September 30, 2025, reached $509.8 million, up 35.0% from $377.7 million in the prior year[22]. - Total revenue for the three months ended September 30, 2025, was $194.5 million, an increase from $136.6 million in the same period of 2024, representing a growth of 42.4%[104]. - The net loss for the three months ended September 30, 2025, was $(37.5) million, an improvement from $(67.7) million in the same period of 2024[148]. - Net loss for the nine months ended September 30, 2025, was $143.8 million, an improvement from a net loss of $172.2 million in the same period of 2024[29]. - Total expense rose by $28.4 million, or 14%, to $230.8 million for the three months ended September 30, 2025[165]. - General and administrative expense increased by $3.6 million, or 11%, to $35.0 million for the three months ended September 30, 2025[179]. - Net loss decreased by $28.4 million, or 16%, to $143.8 million for the nine months ended September 30, 2025, due to the factors described above[199]. Assets and Liabilities - Total assets increased to $1,918.8 million as of September 30, 2025, up from $1,849.1 million as of December 31, 2024, representing a growth of 3.8%[19]. - Total liabilities increased to $1,402.6 million as of September 30, 2025, from $1,255.7 million as of December 31, 2024, marking an increase of 11.7%[19]. - Cash, cash equivalents, and restricted cash decreased to $355.5 million as of September 30, 2025, down from $385.7 million as of December 31, 2024[19]. - Stockholders' equity decreased to $516.2 million as of September 30, 2025, from $593.4 million as of December 31, 2024, a decline of 13.0%[19]. - The company had outstanding borrowings of $139.0 million as of September 30, 2025, compared to $83.4 million as of December 31, 2024, reflecting a significant increase in financing[69]. Investment and Income - Net investment income for the nine months ended September 30, 2025, was $28.6 million, an increase from $24.6 million in the same period of 2024[44]. - The company reported pre-tax net realized capital gains of $0.3 million for the nine months ended September 30, 2025, compared to less than $0.1 million in the same period of 2024[45]. - Net investment income rose by $0.8 million, or 9%, to $9.7 million for the three months ended September 30, 2025, primarily due to a diversified investment portfolio[173]. Premiums and Claims - Gross written premium for Q3 2025 was $333.3 million, a 24% increase from $268.9 million in Q3 2024[106]. - The company ceded approximately 55% of premium to reinsurers under the Whole Account Quota Share Reinsurance Contracts effective July 1, 2024, through June 30, 2025[61]. - The total unpaid loss and LAE, gross of reinsurance recoverable, at the end of September 30, 2025, was $312.1 million, compared to $294.2 million at the end of September 30, 2024[53]. - Loss and loss adjustment expense, net increased by $11.7 million, or 15%, to $89.6 million for the three months ended September 30, 2025[175]. - The incurred loss and LAE for the current year was $271.4 million for the nine months ended September 30, 2025, compared to $220.6 million for the same period in 2024[53]. Customer Metrics - As of September 30, 2025, the company had 2,869,900 customers, an increase from 2,313,113 customers as of September 30, 2024[148]. - The in-force premium at the end of the period was $1,157.9 million, up from $889.1 million in the previous year, reflecting strong growth[148]. - The annual dollar retention rate was 85% as of September 30, 2025, down from 87% in the previous year, indicating a slight decline in customer retention[148]. Operational Expenses - Sales and marketing expense increased by $41.6 million, or 35%, to $160.2 million for the nine months ended September 30, 2025, mainly due to brand and performance advertising[195]. - General and administrative expense increased by $5.7 million, or 6%, to $96.7 million for the nine months ended September 30, 2025, with interest expense rising significantly due to increased borrowings[197]. Future Outlook - The company expects to see greater demand for insurance coverage in Q3 due to seasonal patterns, which historically show increased customer acquisition[114]. - The company plans to continue investing in technology development to enhance existing products and develop new offerings, which is expected to drive long-term profitability[141]. - The company anticipates incurring significant additional general and administrative expenses due to operating as a public company, including compliance and investor relations costs[144].