Lemonade (NYSE: LMND) is reporting a strong fourth quarter and an upbeat outlook for 2024.
Digital insurance tech firm Lemonade reports the following:
- Top line: At $747 million, in-force premium (IFP) grew by 20% year on year, while revenue grew 31%.
- Loss Ratio: At 77%, gross loss ratio showed a 12 point year on year improvement.
- Gross Profit: climbed 165% year on year, while Gross Profit Margin more than doubled to 29%.
- Operating Expense: contracted 5% year on year.
- Cash & Investments: At $945 million, cash and investments rose
during H2 2023, marking our first organic foray into net cash flow positive territory. - Bottom line: At $29 million, Adjusted EBITDA loss improved 44% year on year, while net loss, at $42 million, improved by a third.
- Outlook: Expecting accelerating top line growth and an improving
bottom line in 2024. On track to turn cash flow positive during 2025, and Adjusted EBITDA positive during 2026.
Lemonade also mentioned that Q4 delivered “more topline growth than they had anticipated, and the outperformance of the bottom line was more significant yet.”
Zooming out, Lemonade says they can say much the same about 2023 writ large: relative to their expectations at the outset of the year, they saw “materially higher top line growth (~$50m better), and even more significant improvements in our bottom line (~$70m better).”
Stepping back further, an 18 month panoramic view shows that – for the first time since their founding – their top and bottom lines have “been moving in unison: up and to the right.”
Lemonade pointed out that “nothing, perhaps, better illustrates our progress in recent quarters along their path to profitability – and beyond.”
This growing profitability is also reflected in their Adjusted Gross Profit, which jumped nearly 170% over the same period.”
Looking forward, Lemonade expect to “grow faster this year, and to see Adjusted EBITDA continue its upward progression.”
Importantly, though, they do “not expect that progression to be entirely smooth.”