In This Article:
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Revenue: Increased 29% year-over-year to $149 million in Q4 2024.
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Gross Profit: Doubled year-over-year to $167 million in 2024.
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Adjusted Free Cash Flow: $27 million in Q4 2024, $48 million for the full year.
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Gross Loss Ratio: 63% in Q4 2024, improved from 77% in Q4 2023.
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Net Loss: $30 million in Q4 2024, or $0.42 per share.
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Adjusted EBITDA Loss: $24 million in Q4 2024.
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Enforced Premium: Grew 26% to $944 million in Q4 2024.
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Customer Count: Increased by 20% to 2.4 million.
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Premium per Customer: Increased 5% to $388.
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Annual Dollar Retention: 86%, down 1% point year-over-year.
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Gross Earned Premium: Increased 25% to $226 million in Q4 2024.
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Total Cash Equivalents and Investments: Approximately $1 billion at the end of Q4 2024.
Release Date: February 26, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Lemonade Inc (NYSE:LMND) achieved its first cash flow positive year in 2024, a year ahead of expectations, with a positive free cash flow of $48 million.
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The company reported a significant improvement in its gross loss ratio, ending the year at 73%, which is 12 points better year-over-year.
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Lemonade Inc (NYSE:LMND) experienced a 26% growth in enforced premium (IFP) and a 20% increase in customer count, reaching 2.4 million customers.
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Gross profits doubled year-over-year to $167 million, marking a record high for the company.
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The company plans to ramp up growth spending by approximately 40% year-over-year, indicating a strong commitment to future growth.
Negative Points
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The California wildfires had a significant impact, with an expected $20 million hit to the company's financials.
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Annual dollar retention (ADR) decreased by 1% point year-over-year, partly due to efforts to reduce less profitable portions of the home insurance book.
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Operating expenses, excluding loss and loss adjustment expenses, increased by 38% to $124 million in Q4, driven by increased growth spending.
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The company reported a net loss of $30 million in Q4, although this was an improvement from the previous year.
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Lemonade Inc (NYSE:LMND) is still in the process of expanding its car insurance product, which is currently only available in eight states, limiting its immediate growth potential in this segment.
Q & A Highlights
Q: Can you discuss Lemonade's path to GAAP net income profitability and how the guidance for 2025 fits into this? A: Daniel Schreiber, CEO, explained that Lemonade's path to profitability involves a shift in product mix, particularly with car insurance. The company aims to be EBITDA positive by the end of 2026, with GAAP profitability expected roughly a year thereafter. The mix of products can shift without fundamentally changing cash flow dynamics, providing confidence in these projections.