Shares of Lemonade Inc (NYSE:LMND) jumped more than 35% on Wednesday after the digital insurer reported its eighth straight quarter of accelerating growth and sharply narrower losses for the third quarter of 2025.
The company said revenue rose 42% from a year earlier to $195 million, while in-force premium climbed 30% to $1.16 billion, ahead of plan. Gross profit more than doubled to $80 million, lifting the gross margin to 41%.
Lemonade’s adjusted EBITDA loss was nearly halved to $26 million, as its loss ratio fell to an all-time low of 62%. The company also highlighted continued improvement in its car insurance unit, where the loss ratio dropped to 76%.
Customer numbers rose 24% to 2.87 million, while claims loss adjustment expenses (LAE) fell below 7%, beating the industry average of 9%. In Europe, IFP grew 168% year over year to $51 million.
With over $1 billion in cash and investments, Lemonade raised its full-year 2025 guidance across all metrics and said it expects to achieve positive adjusted EBITDA by the fourth quarter of 2026.