Why Is LMND Stock Surging Today?

• Lemonade reported a gross earned premium of $274.7 million, an increase of $61.6 million, primarily due to the rise in in-force premiums earned during the quarter.
• The firm’s customer count increased by 24% to 2,869,900 as compared to the third quarter of 2024. 
• President and Co-Founder Shai Wininger said during a post-earnings call that the company’s investment in automation has been paying off.

Lemonade (LMND) stock surged over 30% in afternoon trading after the company raised its annual revenue forecast, driven by steady customer count and in-force premiums.

The firm now expects 2025 revenue to come between $727 million and $732 million, compared with the prior forecast of $710 million to $715 million.

Lemonade expects adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) loss to be between $127 million and $130 million, compared with the previous forecast of a loss of $135 million to $140 million.

President and Co-Founder Shai Wininger said during a post-earnings call that the company’s investment in automation has been paying off.

Wininger stated that, despite Lemonade's relatively small size compared to the largest U.S. carriers, it achieved a superior level of efficiency, with a loss adjustment expense of 7% on average across all its products.

AI Boost At Lemonade

Wininger said that using Blender, its AI-powered insurance operating system, claim adjusters can handle three times the claim volume they could before.

The company said that its AI deployments are now being reflected on “pretty much every line” in Lemonade’s profit and loss statement. Lemonade noted that marketing spends have more than tripled, driven by AI-powered improvements in segmentation and pricing.

“AI also enabled us to keep our operating expenses, excluding growth spend, almost flat,” Lemonade said.

Q3 Results

The company’s quarterly revenue came in at $194.5 million, compared with Wall Street expectations of $185.1 million, according to data compiled by Fiscal AI.

Lemonade’s in-force premium grew 30% in the third quarter, the company’s eighth consecutive quarter of accelerating growth. The company reported gross earned premiums of $274.7 million in the quarter, an increase of $61.6 million, primarily due to the rise in in-force premiums earned during the quarter.

Lemonade’s customer count increased by 24% to 2,869,900 as compared to the third quarter of 2024. Its third-quarter loss per share was $0.51, compared with analysts’ estimates of $0.70.

Retail sentiment on Lemonade improved to ‘extremely bullish’ from ‘bullish’ territory compared to a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

Shares of Lemonade have gained over 162% in the last 12 months. 

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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