Lemonade, Inc. Reports 27% Revenue Growth to $151.2 Million in Q1 2025

Lemonade, Inc. reported its financial results for the first quarter of 2025, revealing a total revenue of $151.2 million, a 27% increase from $119.1 million in the same period last year. The growth was primarily driven by a 24% rise in net earned premium, which reached $104.3 million, up from $84.4 million in Q1 2024. Ceding commission income also saw a significant increase of 28%, totaling $26.9 million, while net investment income rose by 25% to $9.5 million. Despite the revenue growth, the company recorded a net loss of $62.4 million, compared to a loss of $47.3 million in the prior year, reflecting a 32% increase in losses.

The company's expenses also rose, totaling $212.6 million, a 29% increase from $164.3 million in Q1 2024. The rise in expenses was attributed to higher loss and loss adjustment expenses, which increased by 30% to $85.4 million, and a 42% increase in sales and marketing expenses, which reached $43.2 million. Other insurance expenses rose by 51% to $26.1 million, largely due to a $6.9 million assessment charge related to the January 2025 California wildfires. The increase in expenses outpaced revenue growth, contributing to the larger net loss.

Lemonade's customer base grew significantly, with the number of customers reaching 2.55 million by the end of March 2025, up from 2.10 million a year earlier, marking a 21% increase. The company also reported a 4% increase in premium per customer, reflecting a shift towards higher-value policies and an increase in the number of policies held by customers. The gross written premium for the quarter was $254.2 million, a 24% increase from $205.6 million in Q1 2024, driven by the expansion of geographic footprint and product offerings.

In terms of strategic developments, Lemonade has continued to leverage its Customer Investment Agreement with General Catalyst, which has been amended to provide up to $200 million in financing for sales and marketing growth efforts through 2026. As of March 31, 2025, the company had $101.9 million in outstanding borrowings under this agreement. The company also reported a total of $676.1 million in investments, reflecting a diversified portfolio primarily in fixed maturity securities.

Looking ahead, Lemonade anticipates continued growth in its customer base and revenue, although it acknowledges the potential impact of macroeconomic factors, including inflation and market volatility. The company remains focused on expanding its product offerings and geographic reach while managing its operational costs effectively. Despite the current losses, Lemonade's management believes that its innovative business model and technology-driven approach will position the company for long-term success in the insurance market.