Operating cash flow turned negative at -$3.4M in 2026Q2, while claims payments surged to $154.0M, suggesting that premium growth has not yet translated into sustainable cash generation.
Lemonade, Inc. (LMND) cash flow statement — 9-year operating, investing & financing cash flows
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Cash from Operations | 24M | -16.5M | -11.4M | -119.1M | -163M | -144.6M | -91.7M | -78.1M | -40.8M | -19.1M |
| Operating CF Growth % | 49.13% | -44.74% | 90.43% | 26.93% | -12.72% | -57.69% | -17.41% | -91.42% | -113.61% | - |
| Operating CF / Revenue % | 2.24% | -2.24% | -2.17% | -27.71% | -63.5% | -112.62% | -97.14% | -116.05% | -181.33% | -795.83% |
| Net Income | -144.6M | -165.5M | -202.2M | -236.9M | -297.8M | -241.3M | -122.3M | -108.5M | -52.9M | -28.1M |
| Depreciation & Amortization | 10.3M | 15.2M | 20M | 20M | 12.2M | 3.7M | 1.7M | 600K | 100K | 0 |
| Stock-Based Compensation | 87.4M | 61.3M | 64.5M | 59.9M | 59.3M | 44.1M | 10.6M | 4.3M | 2.1M | 8.4M |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | -4.2M | -300K | 0 | 0 | 0 |
| Other Non-Cash Items | 25.2M | 14M | 5.2M | 9.2M | 15.4M | 6.2M | 14.4M | 400K | 200K | 8.4M |
| Working Capital Changes | 45.7M | 58.5M | 101.1M | 28.7M | 47.9M | 46.9M | 4.2M | 25.1M | 9.7M | 600K |
| Cash from Investing | -115M | -89.1M | 40.6M | 88.7M | 181.1M | -804.8M | 50.1M | -54M | 6.4M | -12.7M |
| Capital Expenditures | -16.6M | -9.4M | -9.4M | -9.2M | -10.1M | -9.4M | -4.4M | -2.7M | -700K | -300K |
| Acquisitions | 0 | 0 | 0 | 0 | 98.8M | 795.4M | -54.5M | 0 | 0 | 0 |
| Purchase of Investments | -781.2M | -504.4M | -363.8M | -395.2M | -270.1M | -842.8M | -17.8M | -72.7M | -13.8M | -28M |
| Sale/Maturity of Investments | 654.2M | 424.7M | 413.8M | 493.1M | 362.5M | 47.4M | 72.3M | 22M | 20.9M | 15.6M |
| Other Investing | 28.6M | 0 | 0 | 0 | 0 | -795.4M | 54.5M | -600K | 7.1M | -12.4M |
| Cash from Financing | 120.9M | 106.6M | 87.7M | 15.4M | 3.6M | 649.6M | 341.1M | 300.1M | 119.9M | 800K |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Stock Issued | 28.4M | 31.9M | 19.3M | 0 | 0 | 640.3M | 339.3M | 0 | 119.9M | 800K |
| Debt Issuance (Net) | 4M | 1000K | 1000K | 1000K | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 0 | 0 | 0 | 500K | 3.6M | 9.3M | 1.8M | 700K | 100K | 800K |
| Net Change in Cash | 29.7M | 11.1M | 114.2M | -15M | 15.9M | -300.8M | 301.1M | 167.9M | 85.5M | -31M |
| Exchange Rate Effect | -200K | 10.1M | -2.7M | 0 | -5.8M | -1M | 1.6M | -100K | 0 | 0 |
| Cash at Beginning | 380.3M | 385.7M | 271.5M | 286.5M | 270.6M | 571.4M | 270.3M | 102.4M | 16.9M | 47.9M |
| Cash at End | 385.2M | 396.8M | 385.7M | 271.5M | 286.5M | 270.6M | 571.4M | 270.3M | 102.4M | 16.9M |
| Free Cash Flow | 7.4M | -25.9M | -20.8M | -128.3M | -173.1M | -154M | -96.1M | -81.4M | -41.5M | -19.4M |
| FCF Growth % | 122.49% | -24.52% | 83.79% | 25.88% | -12.4% | -60.25% | -18.06% | -96.14% | -113.92% | - |
| FCF Margin % | 0.69% | -3.51% | -3.95% | -29.85% | -67.43% | -119.94% | -101.8% | -120.95% | -184.44% | -808.33% |
| FCF per Share | 0.1 | -0.36 | -0.29 | -1.84 | -2.67 | -2.52 | -1.74 | -1.87 | -0.95 | -1.78 |
Quick answers to the most common questions about buying LMND stock.
Lemonade, Inc. (LMND) generated $-16.5M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Lemonade, Inc. (LMND) reported negative free cash flow of $25.9M in 2025, indicating capital requirements exceeded cash from operations.
Lemonade, Inc. (LMND) spent $9.4M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
Key Metrics
Top Statement Risk
Persistent underwriting losses and cash burn
Metrics are mathematically derived from official filings.
Float Generation Remains Elusive
Despite a 40.2% revenue surge, operating cash flow turned negative in 2026Q2 at -$3.4M, as per recent SEC filings, indicating that premium growth has not yet translated into sustainable cash generation.
The company's core underwriting cash flow is still negative, with cumulative OCF over the last four quarters at approximately $21.2M, but the latest quarter's -$3.4M suggests a deterioration. This implies that while premiums are growing, claims and expenses are consuming the cash inflows, leaving little float to invest. The pattern of volatile OCF, swinging from -$47.2M in 2025Q1 to +$20.7M in 2025Q4, indicates that the underwriting cash cycle is not yet stable, and investors should monitor whether the company can achieve consistent positive OCF as it scales.
Claims Payments Outpace Premium Cash
Claims paid surged to $154.0M in 2026Q2, up from $84.5M in 2025Q4, as reported in financial statements, suggesting that loss costs are accelerating faster than premium collections, pressuring cash flow.
The sharp increase in claims paid in the latest quarter, despite a relatively stable loss ratio, may indicate that the company is experiencing higher severity or frequency in its newer auto and homeowners lines. This trend, if sustained, could erode the benefits of the improving combined ratio seen in prior quarters. The fact that claims payments have grown from $53.1M in 2024Q4 to $154.0M in 2026Q2, a 190% increase, while revenue grew only 40% over the same period, suggests that the company's cash conversion from premiums is being strained by rising loss costs, warranting close monitoring of reserve adequacy.
Portfolio Churn Masks Investment Strategy
Investment purchases and sales totaled $268.8M and $241.2M respectively in 2026Q2, as per financial statements, indicating active portfolio management but minimal net cash deployment, with no clear yield contribution.
The high volume of investment purchases and sales, with net sales of $27.6M in 2026Q2, suggests that the company is actively managing its $385M cash and investment portfolio, possibly to maintain liquidity or optimize returns. However, the lack of reported investment income implies that the portfolio is not yet generating material cash flow to offset underwriting losses. The net cash outflow from investments over the last four quarters was approximately -$60M, which, combined with negative OCF, indicates that the company is relying on external capital to fund operations, a trend that may not be sustainable without a path to profitability.
Non-Cash Charges Distort Cash Reality
Net income of -$43.4M in 2026Q2 was far worse than OCF of -$3.4M, as reported in SEC filings, suggesting significant non-cash charges such as stock-based compensation are inflating reported losses.
The wide gap between net income and operating cash flow, with OCF/NI ratios ranging from -0.95 to 0.76, indicates that a substantial portion of the company's losses are non-cash in nature, likely due to stock-based compensation and depreciation. This suggests that the actual cash burn is lower than the net loss implies, but the company is still consuming cash. The positive OCF in some quarters, such as 2025Q4, despite net losses, may reflect favorable working capital changes or reserve releases, but these are not sustainable sources of cash. Investors should adjust for these non-cash items to assess the true cash generation capability of the business.
What the Cash Flow Obscures
The cash flow statement may understate the true cash needs due to synthetic agents financing and reinsurance arrangements, as per reported figures, potentially masking the cost of customer acquisition.
The company's shift to synthetic agents financing for customer acquisition costs may be shifting cash outflows off the income statement, but these obligations will eventually require cash settlement. Additionally, the reliance on proportional reinsurance means that a significant portion of premiums are ceded, reducing the cash available for claims but also lowering the risk of catastrophic losses. However, the credit risk of reinsurance recoverables is not visible in the cash flow statement, and any deterioration in reinsurer solvency could impact cash flows. The lack of dividend or buyback activity is consistent with a company in a growth phase, but the persistent negative free cash flow suggests that the company will need to raise additional capital, which could dilute shareholders.