Lemonade's First Quarter 2026 Results: Strong Growth and Profitability Path
Lemonade released its first-quarter results for 2026, moving closer to its profitability goals initially outlined in 2022. The company reaffirmed its expectation that adjusted EBITDA will turn positive by the fourth quarter. In Force Premium (IFP) increased by 32% from the previous year, reaching $1.33 billion, marking the tenth consecutive quarter of accelerating growth. Revenue surged by 71% to $258 million, driven by stronger gross earned premium and improved retention following a reinsurance transition last summer.
The customer base expanded by 23% to 3.14 million, with premium per customer rising by 7% to $424. The company's net loss decreased to $35.8 million, or $0.47 per share, showing significant improvement from the $62.4 million loss the prior year. This result exceeded analyst predictions compiled by TipRanks, which anticipated a loss of $0.57 per share. The adjusted EBITDA loss narrowed to $17.1 million, a 64% improvement due to increased revenue and stronger underwriting performance.
Gross profit increased substantially by 159% to $100.1 million, with profit margins widening from 26% to 39%. This improvement was primarily due to a reduction in the net loss ratio by 19 points, benefiting from underwriting gains and the absence of California wildfire losses impacting the same quarter last year.
Strong Performance in Pet Insurance and Emerging Markets
In the pet insurance sector, Lemonade's IFP exceeded $500 million early in the second quarter, marking it as the first product in their portfolio to reach this milestone. The company reported a 55% growth in pet IFP for 2025, surpassing the industry average of 17%. Lemonade holds the fourth position in pet insurance by written premium, positioned as a more affordable option with premiums approximately 17% below the national average.
Lemonade Car saw its most rapid growth yet, with IFP increasing by 60% from 9% the previous year and a 74% gross loss ratio. The launch in Colorado in 2025 placed it as the company’s fourth-largest state by Car IFP share. Their autonomous car product attracted new customers 70% more than its non-autonomous counterpart.
By the end of the quarter, Lemonade reported over $1 million of IFP per employee, a significant accomplishment despite reducing its workforce by 6% since late 2022. For the full year 2026, Lemonade projects IFP between $1.63 billion and $1.64 billion, revenue at $1.20 billion, and an adjusted EBITDA loss between $47 million to $51 million. An Investor Day is scheduled in New York on November 17.