Lemonade Q1 2025 Results: Surpasses $1 Billion in Premiums, Eyes Positive EBITDA by End of 2026

Lemonade, the AI-driven digital insurance company, today (Tuesday) reported its results for Q1 2025:

• A 27% increase in In Force Premium (IFP), reaching a total of $1.008 billion — crossing the $1 billion milestone for the first time, 8.5 years after selling its first policy.

• Revenue grew 27% to $151.2 million.

• Gross profit rose 11% — despite the California wildfires — to $38.6 million, while adjusted gross profit grew 25% to $46 million.

• The loss ratio (claims paid vs. revenue) for the quarter stood at 78%, including wildfire impacts, while the trailing 12-month figure is 73%.

• An adjusted EBITDA loss of $47 million was in line with forecasts, factoring in about $22 million in wildfire-related costs. The net loss for the quarter was $62 million.

• As of the reporting period, Lemonade counted 2,545,496 customers.

Shai Wininger, Lemonade’s Co-Founder and President, said: “We are pleased with our Q1 results, which continue to reflect positive trends on our path to positive EBITDA by the end of 2026. This marks our sixth consecutive quarter of accelerated growth, aligned with our strategy to keep leveraging tech advantages to ensure profitable and balanced growth.”

Core Growth Engine: Car Insurance

Lemonade’s car insurance business is gaining momentum, marking the first quarter where its growth rate outpaced the company’s other product lines. Though still early-stage, clear signs point to positive traction.
Two key advantages are shaping this strategy:

• Proprietary AI capabilities (LTV and telematics) precisely target the ideal audience — young, safe drivers — and offer them market-disruptive pricing.

• Cross-sell potential to Lemonade’s 2.5 million existing customers, a group that collectively spends over $3 billion annually on car insurance elsewhere.

Lemonade is capitalizing on these strengths through ongoing product optimization and geographic expansion:

• Dynamic pricing: Integrating telematics insights at the point of sale — much earlier than traditional models. States where this tech has been implemented are showing a 60% improvement in conversion rates.

• Enhanced cross-sell experience: Projects underway at Lemonade have led to a surge of over 100% in car insurance sales compared to Q1 2024.

California Wildfires Impact

According to the report, wildfire-related losses in California were in line with forecasts. Leveraging advanced tech, including aerial imagery and AI, Lemonade delivered a unique customer service experience, resolving many claims within minutes — all while maintaining robust fraud detection and preserving its right to recover costs from liable parties.

Outlook

Lemonade maintains its forecast of 28% growth for 2025, progressing toward its 30% growth target for 2026. Its annual EBITDA guidance remains unchanged, while revenue and Gross Earned Premium (GEP) projections have been revised upward.

Lemonade Key Metrics Over Recent Quarters