Lemonade reported another quarter of accelerating growth, with in-force premium up 34% and revenue up 73% from a year earlier. The insurer also posted record gross profit and positive adjusted free cash flow, while remaining loss-making. Management reiterated its expectation of reaching positive adjusted EBITDA in the fourth quarter of 2026.
The shareholder letter also highlighted Lemonade’s expansion into new markets and its efforts to prepare for a future in which consumers may use AI agents to choose insurance.
Third-quarter performance
- In-force premium reached $1.55 billion, up 34% year over year. Lemonade said this marked its 12th consecutive quarter of accelerating growth in the metric.
- Revenue rose 73% to $336 million. Gross earned premium was $364 million.
- Gross profit increased 48% to a record $118 million.
- The company’s net loss was $44 million, compared with a $26 million loss a year earlier. Its adjusted EBITDA loss narrowed to $20 million from $38 million.
- Adjusted free cash flow was positive $27 million, an improvement of $9 million year over year. Cash flow from operating activities was positive $7 million, up $3 million.
- Lemonade said its net loss as a share of gross earned premium was 12%, down from 14% a year earlier and 32% in the third quarter of 2024.
Expansion and strategy
- Lemonade expects to reach positive adjusted EBITDA in Q4 2026. That is a management target, not a result already achieved; the company remains net-loss-making.
- The company launched 25 new combinations of products and geographies in 2026. It attributed the faster expansion pace to Lemonade OS, its technology platform, which it says allows it to enter markets with less additional overhead.
- Renters insurance is now available nationwide, a first across Lemonade’s product portfolio. The company said nationwide availability may open access to distribution partnerships that were previously unavailable.
- Its car insurance product is available in 14 states, covering more than half of the U.S. population. Lemonade cited recent launches in Missouri, Florida and Pennsylvania and said further state launches are planned.
- Lemonade also pointed to the potential growth of personal AI agents in insurance shopping. It believes its decade of investment in AI-based infrastructure gives it a foundation for that shift, and says it is developing capabilities for an insurance experience built around AI agents. The company’s view is that agents could place greater emphasis on price, coverage and service than on brand or traditional distribution reach.
- Lemonade plans to provide a broader update on its strategy, growth ambitions and AI capabilities at an investor day in New York on November 17.
Investor takeaway: Growth and gross profit accelerated, and both adjusted free cash flow and operating cash flow were positive in the quarter. But Lemonade has not yet reached adjusted EBITDA profitability; its stated goal is to do so in Q4 2026.