Lemonade has reported gross profit of $39 million for the first quarter of 2025, up 11% from a year earlier, but that wasn’t enough to stop its net loss climbing.
The company reported about $1.01 billion in in-force premium (IFP) for the quarter, a 27% year-over-year increase and the sixth consecutive quarter of accelerating growth. Revenue also rose 27% to $151.2 million.
Meanwhile, the adjusted EBITDA loss for the quarter was $47 million, in line with company guidance, which included an estimated $22 million adverse impact from the California wildfires. Net loss was $62.4 million, or $0.86 per share, compared to $47.3 million, or $0.67 per share, in the first quarter of 2024.
The company said it surpassed the $1 billion IFP mark in March, approximately eight and a half years after issuing its first policy. The trailing 12-month gross loss ratio was 73%, consistent with the previous quarter and within the company’s target range.
Operating expenses, excluding loss and loss adjustment expense, totaled $127.2 million, up 29% year over year. The rise was driven by higher spending on customer acquisition and a one-time $6.9 million charge related to the California FAIR Plan. Growth-related spending in sales and marketing reached $38.1 million, up from $19.8 million in the same quarter last year.
The company highlighted progress in its auto insurance line, Lemonade Car, which recorded sequential IFP growth ahead of the broader portfolio for the first time. Lemonade attributed this to its use of proprietary AI and telematics to identify and price coverage for lower-risk drivers.
Lemonade also reported a more than 100% year-over-year increase in cross-sales for Car during Q1 2025. The company said cross-selling to its base of approximately 2.5 million non-auto customers represented a key growth lever. In markets where telematics data is incorporated early in the quoting process, Lemonade reported roughly 60% higher conversion rates.
It launched auto coverage in Colorado during the quarter, increasing its addressable car insurance market to over 40% of the US and nearly 60% of its existing customer base. Additional state launches are planned, prioritized by regulatory conditions, market size, and cross-sell potential.
Looking ahead, the company said it expects revenue for the second quarter to be $157 million to $159 million, with an adjusted EBITDA loss of between $41 million and $44 million. IFP for the quarter is projected to be about $1.061 billion to $1.064 billion.
For 2025, revenue is projected to be $661 million to $663 million, while the adjusted EBITDA loss is projected to be $135 million to $140 million. IFP for the full year is expected to about $1.203 billion to $1.208 billion.
The company said it remains on track to achieve positive adjusted EBITDA before the end of 2026, in line with prior guidance.
