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Mar 31, 2024
Lemonade Q1 2024 Earnings Report
Lemonade's Q1 2024 results showcased strong growth and improved efficiency, with in-force premium and revenue increasing, gross loss ratio improving, and operating expenses well-managed.
Key Takeaways
Lemonade reported excellent Q1 2024 results, highlighted by a 25% increase in total revenue and an 8-point improvement in the gross loss ratio. The company has accelerated its timeline for achieving cash flow breakeven to year-end 2024, driven by sustained strength in unit economics and the impact of technology on expense management.
In-force premium (IFP) grew by 22% year-over-year to $794 million, and total revenue increased by 25%.
Gross loss ratio improved by 8 percentage points year-over-year, reaching 79%.
Gross profit climbed by 110% year-over-year, with the gross profit margin improving to 29%.
The company now expects cash flow breakeven by year-end 2024, an acceleration from previous expectations.
Forward Guidance
Lemonade provided guidance for Q2 2024 and full year 2024, expecting continued growth in in-force premium, gross earned premium, and revenue. The company also anticipates improvements in Adjusted EBITDA loss year-over-year.
Positive Outlook
- In force premium at June 30, 2024, is expected to be $839 - $841 million (~22% growth YoY).
- Gross earned premium for Q2 2024 is projected to be $197 - $199 million (~21% growth YoY).
- Revenue for Q2 2024 is anticipated to be $118 - $120 million (~15% growth YoY).
- Adjusted EBITDA loss for Q2 2024 is expected to improve to ($49) - ($47) million (~11% improvement YoY).
- The company expects to achieve positive net cash flow on a consistent basis by Q1 2025.
Challenges Ahead
- Adjusted EBITDA loss for the full year 2024 is expected to be ($155) - ($151) million.
- The company anticipates stock-based compensation expense of approximately $15 million for Q2 2024 and $62 million for the full year 2024.
- Capital expenditures are projected to be approximately $3 million for Q2 2024 and $10 million for the full year 2024.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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