New York-based Lemonade (NYSE:LMND) reported fourth-quarter results Thursday that surpassed analyst expectations across the board, sending a strong signal that its AI-driven underwriting model is finally reaching critical scale.
The company posted a net loss of $21.7 million, or 29 cents per share, significantly narrower than the 41-cent loss anticipated by Wall Street.
Revenue surged 53% year-over-year to $228.1 million, outperforming forecasts of $216.7 million.
The results cap a year where Lemonade saw its stock price more than double as investors began to reward its improving unit economics.
The primary engine behind the beat was a dramatic improvement in the company’s gross loss ratio, which fell to 52% in the fourth quarter from 63% a year earlier.
This metric, which tracks how much an insurer pays out in claims versus the premiums it collects, is now well within the range of traditional industry leaders.
Lemonade’s 2026 outlook was equally bullish.
The company expects full-year revenue to reach approximately $1.19 billion, representing roughly 60% growth.
Management reiterated its goal of reaching positive adjusted EBITDA by the fourth quarter of 2026, with 2027 projected to be its first full year of adjusted EBITDA profitability.
The company ended the year with $1.12 billion in cash and investments.