Lemonade, Inc. (NYSE: LMND) shares have weakened more than 15% last trading week, even though the company reported better than expected third-quarter results this month. Total revenue has increased by 100.6% Y/Y to $35.7 million, but the company is still not profitable.
Lemonade is still not profitable
Lemonade is a company that provides various insurance products in the United States and Europe, while its insurance products cover stolen or damaged property and personal liability.
Lemonade also offers renters, homeowners, pet, and life insurance products and has approximately one million customers, and 70% of its customers are under the age of 35.
Lemonade reported better than expected third-quarter results this month; total revenue has increased by 100.6% Y/Y to $35.7 million, $2.18 million above expectations, while the GAAP earnings per share were -$1.08 (beats by $0.08). Timothy Bixby, CFO of Lemonade, said:
We had another strong quarter of growth driven by additions of new customers, as well as the continued increase in premium per customer. We also continue to add new Lemonade team members in all areas of the company in support of customer and premium growth and both current and future product launches.
Premium per customer increased 26% compared with the same period in 2020, and gross earned premium in the third quarter increased 86% to $79.6 million.
The company had a record volume of cross-sales at about $5 million while the gross loss ratio in the third quarter was 77%, up from 72% a year ago.
The increase in loss ratio masks an important underlying trend, and these gains were primarily driven by the impact of the company’s rapidly growing new business lines.
Lemonade is in a good position
