Lemonade Inc. (NYSE:LMND) shares rose over 4% in premarket trading Wednesday after the AI-driven insurance platform reported third-quarter earnings and revenue that surpassed Wall Street expectations, while also raising its full-year guidance amid accelerating growth.
The company posted a loss of $0.51 per share, narrower than analysts’ forecasts for a $0.70 loss, and revenue surged 42% year over year to $194.5 million, beating the consensus estimate of $184.9 million. Lemonade’s in-force premium rose 30% YoY to $1.16 billion, marking its eighth straight quarter of accelerating growth.
Gross profit more than doubled from a year ago to $80 million, while gross profit margin improved by 14 percentage points to 41%. The gross loss ratio fell sharply by 11 percentage points to 62%, reaching its best-ever level.
“In Q3, we continued both our growth acceleration — crossing 30% IFP growth ahead of schedule — and our steady progress toward profitability,” said Daniel Schreiber, CEO and co-founder of Lemonade.
Lemonade generated $18 million in adjusted free cash flow and $5 million in operating cash flow for the quarter. Its customer base expanded 24% YoY to 2.87 million, with average premium per customer increasing 5% to $403.
Looking forward, the company raised its full-year 2025 revenue outlook to a range of $727–732 million, ahead of analyst expectations of $713.3 million. For the fourth quarter, revenue is projected between $217 million and $222 million, also topping the consensus forecast of $212.7 million.
Lemonade reaffirmed its goal of 30% in-force premium growth in fiscal 2026 and said it expects to deliver positive adjusted EBITDA for the full quarter in Q4 2026, underscoring continued progress toward sustainable profitability.