Lemonade’s Q3 2022 highlights
Lemonade shared their Q3 2022 results. Here are some highlights:
- The company ended the quarter with 1,775,824 customers, a 30% increase compared to Q3 2021. From Q2 to Q3 of this year, Lemonade grew its customer base by ~196k thanks to some help from Metromile.
- In-force premium reached $609 million, a 76% increase compared to Q3 2021. Metromile contributed 32 percentage points for the quarter.
- Premium per customer stood at $343, an increase of 35% compared to Q3 2021.
- Gross loss ratio was 94% vs 77% in Q3 2021. Net loss ratio stood at 105%.
- Net loss for the quarter was $91.4 million, compared to $66.4 million in Q3 2021. Since the beginning of the year, Lemonade reported a net loss of $234.1 million.
- Sales and marketing expense for the quarter was $35.8 million, compared to $42.2.1 million in Q3 2021.
- The company’s cash, cash equivalents, and investments totaled approximately $1.1 billion at September 30, 2022 as compared to $1.1 billion as of December 31, 2021, primarily reflecting the $134.4 million of net cash used in operations since December 31, 2021, offset by $164.8 million of cash, cash equivalents and investments acquired via the Metromile acquisition.
“Given today’s high cost of capital, we are intentionally decelerating towards our ‘optimal cash burn’ velocity, which we estimate in the 20-25% annual growth range. In other words, given the high cost of gas, we’re now optimizing for miles per gallon, not miles per hour. If the 76% growth we report today seems at odds with our stated priorities, bear in mind our growth was favorably impacted by Metromile which added 32 percentage points for the quarter. Given our penchant and track record for rapid growth, we thought it sensible to underline our deliberate, tactical, slowdown. We’re chomping at the bit, to be sure, but we’re comforted in the knowledge that the huge growth opportunity before us isn’t going anywhere. In any event, as we said last quarter, “insurance is a business that thrives at scale, and so even as we optimize for cash rather than growth, we will continue to see growth too.” – Lemonade.