Lemonade leaps after Q1 financials

Less than two weeks ago, the share price of insurance company Lemonade (NYSE:LMND) was at an all-time low, but it has since changed direction. After the first quarter financials were released, the share price rose 47% in three sessions. After-hours financial statements were released to Wall Street last Wednesday, and in the following days the share price rose from $11.10 to $16.30, giving the company a market capitalization of more than $1.1 billion, up more than $350 million.

Lemonade, founded and managed by Daniel Schreiber and Shay Weininger, is a digital insurance company operating in the United States. It provides insurance for landlords and renters, auto insurance, life insurance, personal liability insurance, and pet insurance. In the first quarter of this year, Lemonade beat consensus analyst estimates, and raised its annual guidance; This, the company noted, is despite the effects of inflation and the occurrence of natural disasters in the first quarter.

First-quarter revenue was $95.2 million, up 115% from the first quarter of 2022. The company’s quarterly net loss decreased 2% to $658 million, and adjusted EBITDA was negative $50.8 million, Compared to negative EBITDA of $57.4 million correspondingly. quarter of 2022. At the end of the first quarter of this year, Lemonade had $993 million in cash.

Lemonade reported 23% growth in its customer base in the quarter to 1.86 million, and 26% growth in average premiums per customer, resulting in 56% growth in IFP (premiums in effect, defined as customers’ combined annual premiums as of from the period end date”) to $653 million. For the second quarter, Lemonade expects IFP of $665-668 million, revenue of $96-98 million and negative earnings of $55-58 million. For 2023 as a whole, the Company’s updated guidance is for year-end IFPs of $700-705 million, annualized revenue of $392-396 million, and negative EBITDA of $00-205 million.

Like many tech companies, Lemonade emphasizes the artificial intelligence (AI) business. In a letter to shareholders, it states that it will later report on the impact of generative AI on its business. Meanwhile, it says that the use of AI continues to make its operations more efficient, and that half of claims are processed entirely automatically using AI.

“In the third quarter of 2022 we turned a page, and since then we have been on a positive trend towards profitability,” Weininger said. “We met our targets for the first quarter exceeding expectations and reported growth across all criteria, so our guidance has been updated accordingly. Lemonade is founded and operates on the basis of artificial intelligence, which reduces our costs daily. In light of this, we estimate that over the next 18 months Investors will see significant savings in the company’s cost structure, while at the same time improving service.”

Another digital insurer with Israeli roots is Hippo Holdings (NYSE: HIPO), which released its quarterly financial statements yesterday. Hippo reported a 62% increase in revenue to $39.8 million, and a net loss for the quarter of $69.8 million, or $3.01 per share. EBITDA was negative $52.1M, compared to negative EBITDA of $48.5M in Q1 2022. Hippo sees revenue growth of 45%

Published by Globes, Israel business news – en.globes.co.il – on May 10, 2023.

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