Lemonade(LMND)2025-02-26 15:26Financial Data and Key Metrics Changes - Q4 2024 marked the best quarter ever for the company, with a 26% growth in in-force premium (IFP), marking the fifth consecutive quarter of accelerating topline growth [9][23] - Adjusted free cash flow for Q4 was 48 million for 2024, the first cash flow positive year [9][10] - The gross loss ratio for Q4 was 63%, improved from 77% in Q4 2023 and 73% in Q3 2024, with a trailing 12-month loss ratio of 73%, a 12-point improvement year-over-year [10][26] - Gross profit doubled year-over-year to 30 million, or a loss of 42 million or 944 million, while customer count increased by 20% to 2.4 million [23] - Premium per customer increased by 5% to 226 million, aligning with IFP growth [25] - Annual dollar retention (ADR) was 86%, down one percentage point year-over-year due to efforts to reduce less profitable portions of the home book [24] Market Data and Key Metrics Changes - The company experienced a notable impact from the California wildfires, with an expected 36 million, more than double the previous quarter [30] - The company has a total cash, cash equivalents, and investments of approximately $1 billion, showing a continuing positive net cash flow trend [34] Q&A Session Summary Question: What is the path to GAAP net income profitability going forward? - Management indicated that while GAAP profitability is harder to project, it is expected to follow within roughly a year after achieving EBITDA positivity, which is targeted for 2026 [52][54] Question: How does the business mix shift affect LTV to CAC? - Management noted that despite significant mix changes, the LTV to CAC ratio has remained stable, and they will continue to allocate growth spend to maintain this ratio [58][60] Question: Any developments since the Analyst Day? - Management confirmed that everything is on track with the long-term plan, and Q4 results were better than expected, with strong growth in European customers and pet insurance [70][72] Question: What is the expected timing of rate increases during 2025? - Management expects rate increases to be somewhat smooth throughout the year, nearing adequacy across the board [68] Question: How is growth spend expected to change beyond 2025? - Management anticipates growth spend to continue in absolute terms but not at the same growth rate as seen in previous years, allowing for balance as they approach EBITDA breakeven [76][78] Question: What is the breakdown of claims from the California wildfires? - Approximately 90% of claims were renters' claims, but the majority of the dollar impact was from homeowners' policies, with reinsurance significantly mitigating losses [117][118]