Here's the 1 thing to Watch When Lemonade Releases Earnings on April 29
Key Points
Lemonade's revenue has been increasing, and growth has been accelerating.
Its loss ratio is declining.
It's still unprofitable on an adjusted EBITDA basis.
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Lemonade (NYSE: LMND) stock has seen a resurgence lately after several years of disappointing returns for shareholders, but it dropped after its last earnings report on Feb. 19. But the next report will be released later this month, and the company has a chance to redeem itself.
Here's what investors should focus on when the innovative insurance company reports fiscal 2026 Q1 earnings on April 29.
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Lemonade has managed high growth in several metrics from its 2020 inception, and not only has it maintained that, but growth in in-force premiums (IFP), its top-line metric, has accelerated for the past seven quarters. That implies several positive things: Customers are spending more, people are attracted to the platform, and the machine learning algorithms are working.
There's been significant progress over the past few years across the business, and management is confident it has the right approach to insurance.
The main issue holding investors back has been profitability, and that's measured in several ways. The loss ratio is an insurance metric that demonstrates how much the company pays out in claims, and a lower number is better. Lemonade's loss ratio has been improving, which is likely the main reason the stock has recovered.
However, Lemonade is still reporting net losses. It's actually still reporting adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) losses, but management is expecting that to turn positive in the fourth quarter of fiscal 2026 and significantly improve throughout the year.
The main thing to watch in the first-quarter report is how well adjusted EBITDA is improving, which will give investors a sense of how likely it is to be positive by the end of the year.
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Jennifer Saibil has positions in Lemonade. The Motley Fool has positions in and recommends Lemonade. The Motley Fool has a disclosure policy.
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