Lemonade, Inc. Q4 FY2025 earnings call

• Q4 was the strongest quarter ever, capping a year of excellent financial execution. - Daniel Schreiber mentioned all-time strong growth, gross profit compounding in triple digits, adjusted EBITDA loss narrowing, and positive adjusted free cash flow. - Shai Wininger discussed autonomous insurance, specifically Lemonade autonomous car, pricing based on driving modes, and how it represents a fundamental shift. - Timothy Bixby covered Q4 scorecard, financial metrics, expense breakdown, and guidance for Q1 and full year 2026. - Investments in AI technologies to enhance go-to-market, pricing, and cross-selling capabilities. - Upcoming Investor Day in November.

In Q4, in-force premium grew 31% year on year to $1,240,000,000, driven by 23% customer growth and ~7% premium per customer growth. Revenue grew 53% to $228,000,000. Gross profit increased 73% to a record $111,000,000. Adjusted EBITDA loss narrowed to $5,000,000. Adjusted free cash flow was $37,000,000. Pet, car, and Europe are all growth drivers with hyper growth and improving underwriting performance.

• Q1 and full year 2026 top line growth year on year at ~32%. - Roughly 60% full year revenue growth. - Expect Q4 2026 to be fully adjusted EBITDA profitable and full year 2027 to be fully adjusted EBITDA positive. - Growth spend expected to be similar to Q4 in Q1 and total growth spend of about $225,000,000 for the year.

• Q: Question about marketing efficiency and 2026 EBITDA guide, A: Timothy Bixby and Daniel Schreiber discussed growth, LTV to CAC, and investments in R&D. - Q: Question about adjusted EBITDA profitable in 2027 and premiums to surplus, A: Timothy Bixby talked about EBITDA expectations, surplus leverage, and capital light structure. - Q: Question about ChatGPT integration and autonomous vehicle insurance pricing, A: Daniel Schreiber and Timothy Bixby discussed AI use, ChatGPT integration plans, and autonomous vehicle insurance pricing models. - Q: Question about strategic initiatives and home insurance mix, A: Timothy Bixby discussed cross-selling, underwriting, and growth spend. - Q: Question about Tesla FSD initiative and contribution to business, A: Timothy Bixby and Shai Wininger talked about partnership with Tesla and optimism about autonomous vehicle insurance