Lemonade, an artificial intelligence-driven digital insurance company, announced its financial results for the first quarter of 2026, with revenue of $258 million, a 71% increase from the same period last year.
The revenue increase was attributed to an increase in gross premiums earned and higher premium retention rates due to lower quota share transfer rates effective in the third quarter of 2025.
Lemonade’s net loss also improved in the first quarter of 2026 compared to the first quarter of 2025, with a net loss of $35.8 million, down from a loss of $62.4 million in the same period last year.
Gross profit increased significantly in the quarter, reaching $100.1 million, an increase of 159% compared to the first quarter of 2025. Adjusted gross profit was $100.8 million, an increase of 119% compared to the first quarter of 2025.
The improvement was primarily due to improved underwriting performance and the impact of the California wildfires in the first quarter of 2025, which resulted in higher revenue and a 19-point improvement in net loss ratio.
Adjusted EBITDA loss was $17.1 million, down from a $47 million loss in the first quarter of 2025. The year-over-year improvement was primarily attributable to improved revenue growth and underwriting results, partially offset by higher growth expenses.
Inforced premiums (IFP), defined as total annualized customer premiums as of the period-end date, increased 32% to $1.33 billion. Compared with the first quarter of 2025, the number of customers increased by 23% to 3,142,581.
Lemonade reported premiums earned increased 31% to $306.2 million compared to the first quarter of 2025, primarily due to higher IFP revenue during the quarter.
“Our first quarter results were outstanding, again characterized by accelerated revenue growth, healthy underwriting results and strong operating leverage,” Lemonade said. “We are firmly on track to our first positive Adjusted EBITDA quarter, which we continue to expect to be achieved in the fourth quarter of 2026.”