Lemonade shares tumble as revenue guidance falls short

Published 25/02/2025, 23:16
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NEW YORK - Lemonade, Inc. (NYSE:LMND) reported better-than-expected fourth quarter results but saw its shares fall 7% in after-hours trading as the insurance technology company’s revenue guidance for the upcoming quarter and full year came in below analyst estimates.

The AI-powered insurance provider posted adjusted earnings per share of -$0.42 for Q4, beating the analyst consensus of -$0.61. Revenue rose 29% YoY to $148.8 million, surpassing expectations of $145.02 million.

However, Lemonade’s outlook disappointed investors. The company forecast Q1 2025 revenue of $143-145 million, below the $151.4 million analysts were expecting. For full-year 2025, Lemonade sees revenue of $655-657 million, also short of the $667.5 million consensus estimate.

"Our fourth quarter saw accelerating topline growth, expense stability, significantly narrowing Adj. EBITDA losses, and $27 million of Adjusted Free Cash Flow," said Daniel Schreiber, CEO and co-founder of Lemonade. "By any standard, it was our best quarter ever."

The company highlighted strong growth in its pet insurance business, which reached $283 million of in-force premium at year-end 2024, up 57% YoY. Lemonade also noted its gross loss ratio improved to 63% in Q4, the best result in its history.

Despite the positive Q4 results, the weaker-than-expected guidance appears to be weighing on investor sentiment. The stock’s 7% decline suggests the market is focused on Lemonade’s near-term growth outlook rather than its recent performance improvements.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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