Lemonade Restates Fourth-Quarter EBITDA Goal After Premium Acceleration

The Tip Desk · November 11, 2026 · 3 min read

Third-quarter 2026 revenue rose 73% to $336.1 million as in force premium reached $1.55 billion, up 34%. The company provided full-year revenue guidance and reiterated a positive Adjusted EBITDA target for the fourth quarter.

Lemonade (LMND) reported third-quarter 2026 revenue of $336.1 million, up 73%, and a 12th consecutive quarter of accelerating in force premium growth, reaching $1.55 billion. It provided full-year 2026 revenue and gross earned premium guidance while restating its goal of a first positive Adjusted EBITDA quarter in the fourth quarter.

The AI-powered insurer said third-quarter in force premium rose 34% from a year earlier, after 32.4% growth in the second quarter and 32% in the first. Revenue increased 73% to $336.1 million, slower than the 79% year-over-year rise in the second quarter, which the company attributed primarily to growth in gross earned premium and a higher premium retention rate from reduced quota share cession.

Gross earned premium was $364.1 million. Gross profit rose 48% to a record $118.1 million, a slower year-over-year pace than the 76% increase to $113 million in the second quarter. Gross profit margin was 35%. Adjusted gross profit was $120.5 million.

Net loss widened to $43.7 million, or $0.56 a share, from $37.5 million, or $0.51 a share, a year earlier. The company said the increase was primarily due to higher stock-based compensation and interest expense. Adjusted EBITDA loss narrowed to $20.4 million from $25.6 million a year earlier, as the $38.2 million increase in gross profit more than offset higher operating expense, including a $24.5 million rise in growth spend.

Operating expense excluding loss and loss adjustment expense rose 36% to $191.9 million. Growth spend and interest expense increased $28.0 million, which the company said reflected a decision to lean into customer acquisition given marketing efficiency. Stock-based compensation rose $6.1 million, largely from multi-year awards granted to founders and executives in the first quarter. Other insurance expense rose $5.1 million. Lemonade said it expects the growth rate of in force premium to notably outpace growth spend from the fourth quarter of 2026 onward.

Adjusted free cash flow was $27.0 million, $9 million higher than a year earlier. Cash flow from operating activities was $7 million. Cash, cash equivalents and investments totaled about $1.2 billion at September 30, 2026.

Customer count rose 23% to 3,520,555. Premium per customer was $440. Annual dollar retention was 86%. Headcount ended the quarter at 1,321 employees, down 1% from the second quarter.

Geographic expansion continued. Renters reached nationwide availability, which the company said was a first across its product portfolio. Car is now available in 14 states covering more than 50% of the U.S. population after launches in Missouri, Florida and Pennsylvania. Lemonade Autonomous Car expanded to six states. The company said it launched 25 new product-geography combinations in 2026.

For the fourth quarter of 2026, Lemonade guided in force premium to $1.632 billion to $1.639 billion, gross earned premium to $379 million to $383 million, revenue to $342 million to $346 million, and Adjusted EBITDA to $5 million to $9 million. Full-year 2026 guidance was in force premium of $1.632 billion to $1.639 billion, gross earned premium of $1.382 billion to $1.386 billion, revenue of $1.231 billion to $1.235 billion, and Adjusted EBITDA of a $51 million to $47 million loss. The company said it continues to expect a first full year of positive Adjusted EBITDA in 2027.

An investor day is scheduled for November 17 in New York, where the company said it will discuss strategy, growth aspirations and AI capabilities.