- Lemonade noted that while its growth drivers are increasingly diversified, insurance for pets and cars remains in the driver’s seat.
- The company’s pet insurance segment delivered an IFP growth in the mid-50s for the second consecutive year, accounting for a total of $439 million during the year.
- The car insurance segment also delivered a notable IFP growth of 53% during the year, accounting for $187 million of Lemonade’s total In Force Premiums.
Lemonade Inc. (LMND) shares soared nearly 18% in Thursday’s pre-market trade after the company reported its ninth consecutive quarter of In Force Premium (IFP) growth acceleration.
“The strength of Q4's results reflects the compounding nature of our model. Faster growth expands our data advantage, which sharpens our AI-powered segmentation and pricing models,” Lemonade said, while noting that IFP grew 31% year-on-year to $1.24 billion in Q4.
Lemonade’s fourth-quarter (Q4) results also beat Wall Street estimates. The company reported a loss of $0.29 per share during the quarter on revenue of $228 million, while Wall Street analysts expected a loss of $0.39 per share on revenue of $218 million, according to Stocktwits data.
Retail sentiment around Lemonade trended in the ‘bullish’ territory at the time of writing, with message volumes at ‘high’ levels.
Pets And Cars Drive Lemonade’s Growth
Lemonade noted that while its growth drivers are increasingly diversified, insurance for pets and cars remains in the driver’s seat.
Lemonade’s pet insurance segment delivered an IFP growth in the mid-50s for the second consecutive year, accounting for a total of $439 million during the year. “Our share of new pet insurance business continued to expand: Lemonade now has the fastest-growing share of Google search volume among U.S. pet insurance companies,” the company said.
The car insurance segment also delivered a notable IFP growth of 53% during the year, accounting for $187 million of the company’s total In Force Premiums. Lemonade expects 2026 to be the year of a broader breakout for car insurance.
The segment also showed a significant underwriting improvement, with loss ratio improving meaningfully as pricing segmentation, telematics-driven loss prediction, claims efficiency, and accuracy all advanced in parallel, Lemonade added.
AI Drives Down Lemonade’s Cost Of Claims
The New York-headquartered insurance company also noted that artificial intelligence has driven down its cost of claims.
Lemonade Pets, for instance, saw a continued decline in the cost of claims during 2025. The company said that while each pet insurance claim cost $44 in 2021, it is now down to $14.
“Our 2025 result of $14 represents a level we believe to be industry-leading and is a clear testament to the growing impact of AI across claims and operations,” Lemonade said.
2026 Outlook
For fiscal year 2026, Lemonade sees revenue in the $1.187 billion to $1.192 billion range, compared to a consensus estimate of $1.16 billion. In the first quarter (Q1), Lemonade expects revenue to be between $246 million and $251 million, compared to an estimated $241.57 million, according to TheFly.
“We will continue to deploy our LTV AI across channels, products, and geographies to drive rapid gross profit growth, while using AI to drive operating leverage and reach Adjusted EBITDA profitability,” the company added.
LMND stock is down 8% year-to-date, but up 71% over the past 12 months.
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