Lemonade, Inc. LMND reported a fourth-quarter 2025 net loss of 29 cents per share, narrower than the Zacks Consensus Estimate of a loss of 41 cents. The figure improved from a loss of 42 cents in the prior-year quarter, primarily driven by higher revenues, partially offset by increased growth spending.
Total operating revenues rose 53.3% year over year to $228.1 million, supported by higher gross earned premiums and ceding commission income. The top line exceeded the Zacks Consensus Estimates by 5.3%.
The insurer’s results reflected expanded gross margin, growth in in-force premium, and improved underwriting performance, partially offset by higher expenses.
Lemonade, Inc. Price, Consensus and EPS Surprise
Lemonade, Inc. price-consensus-eps-surprise-chart | Lemonade, Inc. Quote
LMND’s Q4 Update
In force premium increased 31% year over year to $1,236.5 million. This marks the ninth consecutive quarter of growth acceleration. This metric beat the Zacks Consensus Estimates by 1.1%.
Net investment income declined 2.1% year over year to $9.2 million.
Customer count increased 23% year over year to nearly 3 million.
Premium per customer reached $414 at the end of the fourth quarter, increasing 7% year over year and exceeding the Zacks Consensus Estimate by 1.8%.
Gross earned premium increased 28% year over year to $290.2 million, primarily due to the increase in IFP earned during the quarter.
Gross profit climbed 73% year over year to $110.6 million, while adjusted gross profit rose 69% to $112 million. The increase was driven by a 53.3% surge in revenues and a nine-percentage-point improvement in the net loss ratio.
Total operating expense, excluding net loss and loss adjustment expense, increased 24% year over year to $154.2 million. This was primarily driven by higher growth spend for customer acquisition.
Adjusted EBITDA loss was $4.6 million compared with the year-ago adjusted EBITDA loss of $23.8 million. This year-over-year improvement was primarily due to revenue growth and improved underwriting results, partly offset by the increase in growth spend.
LMND’s Full-Year 2025 Update
Lemonade reported full-year operating revenues of $737.9 million, up 40.2% year over year. Net loss narrowed to $2.24 per share from $2.85 in the prior year.
Full-year adjusted EBITDA loss was $118.1 million compared with a loss of $149.7 million a year ago.
LMND’s Financial Update
Lemonade exited the fourth quarter with cash, cash equivalents, and investments of $1.1 billion, up 9.7% from 2024-end.
As of Dec. 31, 2025, approximately $250 million was carried by insurance subsidiaries as regulatory surplus.
As of Dec. 31, 2025, total assets increased 4.1% from the year-ago level of $1.9 billion. Stockholders' equity of $533.6 million decreased 10.1% from the 2024-end level.
Cash flow from operating activities surged 50% year over year to $20.7 million in the reported quarter.
Adjusted free cash flow surged 38.5% year over year to $36.7 million in the fourth quarter of 2025.
LMND’s Q1 2026 Guidance
Lemonade estimates in-force premium in the range of $1,321-$1,326 million.
The insurer expects gross earned premiums in the range of $299-$302 million.
LMND projects revenues in the range of $246-$251 million.
Lemonade estimates adjusted EBITDA loss in the band of $22-$25 million.
LMND projects stock-based compensation expense to be $19 million.
LMND’s 2026 Guidance
Lemonade estimates in force premium in the range of $1,625-$1,630 million.
The insurer expects gross earned premiums in the range of $1,362-$1,365 million.
LMND projects revenues in the range of $1,187-$1,192 million.
Lemonade estimates adjusted EBITDA loss in the range of $48-$52 million.
LMND projects stock-based compensation expense to be $75 million.
Zacks Rank
Lemonade currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Multi-Line Insurers
Everest Group, Ltd. EG reported a fourth-quarter 2025 operating income of $13.26 per share, which missed the Zacks Consensus Estimate by 0.8%. The figure marked an improvement from the year-ago loss of $18.39. Total operating revenues of nearly $4.4 billion declined 4.6% year over year, reflecting lower premiums. The top line beat the Zacks Consensus Estimate by 2.7%.
Everest’s gross written premiums fell 8.6% year over year to $4.3 billion, as strong double-digit growth in specialty lines was offset by targeted reductions in certain casualty lines. Our estimate was $4.8 billion. Net investment income rose 18.8% year over year to $562 million. The figure exceeded both our estimate of $330.6 million and the Zacks Consensus Estimate of $456.4 million.
Assurant, Inc. AIZ reported fourth-quarter 2025 net operating income of $5.61 per share, which beat the Zacks Consensus Estimate by 1.08%. The bottom line increased 17% year over year. Total revenues increased 7.5% year over year to $3.3 billion. The top line beat the Zacks Consensus Estimate by 2.7%.
Assurant’s adjusted EBITDA, excluding reportable catastrophes, increased 3% to $445.9 million, due to growth within Global Housing and Global Lifestyle. Total benefits, loss and expenses increased 7.4% to $3.1 billion. The figure was higher than our estimate of $2.8 billion.
Principal Financial Group, Inc.’s PFG fourth-quarter 2025 operating net income of $2.19 per share missed the Zacks Consensus Estimate by 1.8%. The bottom line increased 13% year over year. Total revenues jumped 9.2% year over year to $4.4 billion due to increased premiums and other considerations, fees, and other revenues and net investment income.
Principal Financial’s total expenses increased 8.2% year over year to $3.9 billion As of Dec. 31, 2025, PFG’s assets under management amounted to $781 billion, which is included in the assets under administration of $1.8 trillion.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include
Stock #1: A Disruptive Force with Notable Growth and Resilience
Stock #2: Bullish Signs Signaling to Buy the Dip
Stock #3: One of the Most Compelling Investments in the Market
Stock #4: Leader In a Red-Hot Industry Poised for Growth
Stock #5: Modern Omni-Channel Platform Coiled to Spring
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.
See Our Newest 5 Stocks Set to Double Picks >>Assurant, Inc. (AIZ) : Free Stock Analysis Report
Principal Financial Group, Inc. (PFG) : Free Stock Analysis Report
Lemonade, Inc. (LMND) : Free Stock Analysis Report
Everest Group, Ltd. (EG) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
