Revenue growth accelerated to 67% year-over-year in 2026Q2, but the combined ratio of 115.3% indicates persistent underwriting losses, albeit improved from 145.2% in 2024Q2.
Lemonade, Inc. (LMND) annual income statement — 9-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 |
|---|
| Revenue | 1.07B | 737.9M | 526.5M | 429.8M | 256.7M | 128.4M | 94.4M | 67.3M | 22.5M | 2.4M |
| Revenue Growth % | 62.86% | 40.15% | 22.5% | 67.43% | 99.92% | 36.02% | 40.27% | 199.11% | 837.5% | - |
| Medical Costs & Claims | 559.2M | 440.7M | 353.8M | 339.6M | 228.3M | 105.5M | 74M | 55.4M | 19.4M | 0 |
| Medical Cost Ratio % | 52.13% | 59.72% | 67.2% | 79.01% | 88.94% | 82.17% | 78.39% | 82.32% | 86.22% | 0% |
| Gross Profit | 513.4M | 297.2M | 172.7M | 90.2M | 28.4M | 22.9M | 20.4M | 11.9M | 3.1M | 2.4M |
| Gross Margin % | 47.87% | 40.28% | 32.8% | 20.99% | 11.06% | 17.83% | 21.61% | 17.68% | 13.78% | 100% |
| Gross Profit Growth % | - | 72.09% | 91.46% | 217.61% | 24.02% | 12.25% | 71.43% | 283.87% | 29.17% | - |
| Operating Expenses | 653.6M | 458.1M | 376.6M | 320M | 323.2M | 256.5M | 141.2M | 119.8M | 55.7M | 28.7M |
| OpEx / Revenue % | 60.94% | 62.08% | 71.53% | 74.45% | 125.91% | 199.77% | 149.58% | 178.01% | 247.56% | 1195.83% |
| Depreciation & Amortization | 10.3M | 15.2M | 20M | 20M | 12.2M | 3.7M | 1.7M | 600K | 100K | 28M |
| Combined Ratio % | 113.07% | 121.81% | 138.73% | 153.47% | 214.84% | 281.93% | 227.97% | 260.33% | 333.78% | 1195.83% |
| Operating Income | -140.2M | -160.9M | -203.9M | -229.8M | -294.8M | -233.6M | -120.8M | -107.9M | -52.6M | -26.3M |
| Operating Margin % | -13.07% | -21.81% | -38.73% | -53.47% | -114.84% | -181.93% | -127.97% | -160.33% | -233.78% | -1095.83% |
| Operating Income Growth % | - | 21.09% | 11.27% | 22.05% | -26.2% | -93.38% | -11.96% | -105.13% | -100% | - |
| EBITDA | -129.9M | -145.7M | -183.9M | -209.8M | -282.6M | -229.9M | -119.1M | -107.3M | -52.5M | 1.7M |
| EBITDA Margin % | -12.11% | -19.75% | -34.93% | -48.81% | -110.09% | -179.05% | -126.17% | -159.44% | -233.33% | 70.83% |
| Interest Expense | 8.1M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Non-Operating Income | -8.1M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Pretax Income | -140.2M | -160.9M | -203.9M | -229.8M | -294.8M | -233.6M | -120.8M | -107.9M | -52.6M | -28M |
| Pretax Margin % | -13.07% | -21.81% | -38.73% | -53.47% | -114.84% | -181.93% | -127.97% | -160.33% | -233.78% | -1166.67% |
| Income Tax | 4.4M | 4.6M | -1.7M | 7.1M | 3M | 7.7M | 1.5M | 600K | 300K | 100K |
| Effective Tax Rate % | -3.14% | -2.86% | 0.83% | -3.09% | -1.02% | -3.3% | -1.24% | -0.56% | -0.57% | -0.36% |
| Net Income | -144.6M | -165.5M | -202.2M | -236.9M | -297.8M | -241.3M | -122.3M | -108.5M | -52.9M | -28.1M |
| Net Margin % | -13.48% | -22.43% | -38.4% | -55.12% | -116.01% | -187.93% | -129.56% | -161.22% | -235.11% | -1170.83% |
| Net Income Growth % | 16.8% | 18.15% | 14.65% | 20.45% | -23.41% | -97.3% | -12.72% | -105.1% | -88.26% | - |
| EPS (Diluted) | -1.86 | -2.30 | -2.85 | -3.40 | -4.59 | -3.94 | -2.21 | -2.49 | -1.21 | -2.58 |
| EPS Growth % | 19.67% | 19.3% | 16.18% | 25.93% | -16.5% | -78.28% | 11.24% | -105.79% | 53.1% | - |
| EPS (Basic) | - | -2.30 | -2.85 | -3.40 | -4.59 | -3.94 | -2.21 | -2.49 | -1.21 | -2.58 |
| Diluted Shares Outstanding | 77.54M | 71.82M | 71.02M | 69.66M | 64.92M | 61.22M | 55.32M | 43.61M | 43.61M | 10.89M |
Quick answers to the most common questions about buying LMND stock.
For fiscal year 2025, Lemonade, Inc. (LMND) reported total revenue of $737.9M. This represents a 30645.8% increase compared to $2.4M in 2017.
Lemonade, Inc. (LMND) reported a net loss of $165.5M for the fiscal year ending 2025.
Lemonade, Inc. (LMND) reported an operating income of $-160.9M, resulting in an operating profit margin of -21.8%. This margin reflects the operational efficiency of the business before interest and taxes.
Lemonade, Inc. (LMND) generated $297.2M in gross profit for the year, representing a gross profit margin of 40.3%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Persistent underwriting losses and cash burn
Metrics are mathematically derived from official filings.
Premium Growth Accelerates Sharply
Lemonade's revenue surged 40.2% year-over-year on a TTM basis, with the latest quarter showing 67% growth, according to recent financial statements, indicating robust demand across its product lines.
The acceleration in premium growth, from 16.6% in 2024Q2 to 67.0% in 2026Q2, suggests successful expansion into auto and pet insurance, leveraging its existing customer base. However, this rapid growth may strain underwriting capacity and increase exposure to higher-severity lines, warranting close monitoring of loss ratios.
Underwriting Losses Persist Despite Improvement
The combined ratio improved to 115.3% in 2026Q2 from 145.2% in 2024Q2, as reported in financial statements, yet remains above 100%, indicating continued underwriting losses.
While the loss ratio has shown volatility, with a notable dip to 37.0% in 2025Q4, the overall trend suggests improving but still inadequate pricing. The expense ratio remains elevated, reflecting heavy investment in technology and customer acquisition, which may not scale down as quickly as revenue grows.
Reserve Releases Mask Underlying Volatility
The loss ratio swung from 73.7% in 2025Q1 to 37.0% in 2025Q4, based on reported figures, suggesting possible favorable reserve development that may not be sustainable.
The sharp quarterly fluctuations in loss ratios, particularly the low 37.0% in 2025Q4, could indicate prior-year reserve releases that temporarily boost earnings. Investors should scrutinize the quality of reserves, especially in newer auto and pet lines, as initial loss estimates may prove inadequate, leading to future adverse development.
Investment Income Minimal, Float Not Yet Material
Investment income data is unavailable across all periods, as per financial statements, suggesting it contributes negligibly to earnings, with the company relying on underwriting and capital raises for funding.
The absence of reported investment income implies that Lemonade's float is not yet generating meaningful returns, likely due to conservative asset allocation and relatively small investment portfolio. As premiums grow, the float could become a future earnings driver, but currently it does little to offset underwriting losses.
Expense Ratio Remains High, Scale Elusive
Operating expenses as a percentage of revenue remain elevated, with operating margin at -21.8% in 2026Q2, according to financial statements, indicating that fixed costs have not yet been diluted by growth.
Despite rapid revenue growth, the expense ratio has not improved proportionally, suggesting that investments in R&D and marketing are growing in tandem. The shift to 'Synthetic Agents' financing may obscure true acquisition costs, and investors should monitor whether these expenses eventually translate into customer lifetime value.
2025Q4: A Turning Point or Anomaly?
In 2025Q4, the loss ratio plummeted to 37.0% and operating loss narrowed to -$20.6M, as reported in financial statements, marking a potential inflection point in underwriting performance.
This quarter stands out as the best underwriting result in the provided data, possibly reflecting favorable reserve development or improved risk selection. However, the subsequent quarter's loss ratio of 56.2% suggests that the 2025Q4 performance may not be repeatable, and investors should question whether the company has truly achieved a structural improvement or if it was a one-off.
What Could Invalidate the Base Case
Despite improving combined ratios, Lemonade's reliance on reserve releases and synthetic agents financing may mask underlying underwriting inadequacy, as per reported figures, challenging the sustainability of its growth story.
The sharp improvement in loss ratios, particularly in 2025Q4, could be driven by favorable prior-year reserve development rather than genuine underwriting improvement, which may reverse in future periods. Additionally, the use of 'Synthetic Agents' financing shifts acquisition costs off the income statement, potentially understating true cash burn and overstating profitability. If loss ratios revert to historical levels or financing costs escalate, the company's path to profitability could be significantly delayed, undermining the current valuation.