Tue, May 6, 8:55 PM (9 days ago)
**Lemonade, Inc. (LMND) Q1 2025 Financial Summary** **Financial Health & Performance:** - **Revenue:** Total revenue increased by 27% to $151.2 million, driven by a 24% increase in net earned premium to $104.3 million and a 28% increase in ceding commission income to $26.9 million. - **Profit Margins:** Gross profit margin was 26%, while the adjusted gross profit margin was 30%. The gross loss ratio was 78%, and the net loss ratio was 82%. - **Cash Flow:** Net cash used in operating activities was $47.2 million, an increase of $17.4 million from the previous year, primarily due to claim payments and growth spend. **Key Metrics:** - **Customers:** Increased by 21% to 2,545,496. - **In Force Premium:** Grew by 27% to $1,007.8 million. - **Premium per Customer:** Increased by 4% to $396. - **Annual Dollar Retention:** Decreased to 84% from 88%. **Expenses:** - **Loss and LAE, Net:** Increased by 30% to $85.4 million, primarily due to growth in premium and increased claim costs. - **Sales and Marketing:** Increased by 42% to $43.2 million, driven by brand and performance advertising. - **Technology Development:** Increased by 5% to $22.0 million. - **General and Administrative:** Increased by 20% to $35.9 million, including a significant increase in interest expense. **Trends & Uncertainties:** - **Seasonality:** Lemonade experiences seasonal patterns in customer acquisition and claim incurrence. - **Macroeconomic Environment:** Inflation and global economic conditions may impact claims costs, product pricing, and investment yield. - **Reinsurance:** Lemonade relies on reinsurance to manage exposure to property and casualty insurance risks, with a proportional reinsurance program covering approximately 55% of premium. - **Regulatory Environment:** Lemonade operates in a highly regulated industry, subject to state insurance regulations and risk-based capital requirements. **Future Operations Impact:** - Lemonade plans to continue investing in sales and marketing to attract new customers and increase brand awareness. - The company expects to maintain its valuation allowance for U.S. deferred tax assets until it becomes more likely that the benefit will be realized. - Lemonade may seek to raise additional capital through third-party borrowings, sales of equity, issuance of debt securities, or entrance into new reinsurance arrangements if necessary. **Ticker:** LMND