B+
Overall grade
B
Financial quality
The sleeper story is Lemonade is quietly building a monopoly on autonomous vehicle risk data while everyone focuses on Pet hitting $500M. They're the only insurer with real-time telemetry on Tesla FSD performance, pricing autonomous miles at 50% discounts with 70% higher conversion rates. The obvious headline is continued growth acceleration, but the binding constraint is customer retention - ADR stuck at 85% despite completing their book cleaning suggests deeper retention issues they're not addressing. Management's most revealing quote: 'Clean-the-book efforts have largely wrapped up by end of 2025' yet retention hasn't improved, indicating either incomplete execution or new problems. My view changes if ADR starts improving meaningfully next quarter or if they provide specific autonomous penetration metrics showing this isn't just a niche play.
The 30-second version
- The sleeper story: They've quietly become a data monopoly on autonomous driving risk
- Growth acceleration continues but marketing spend efficiency is the real story
- ADR stuck at 85% despite clean-the-book efforts 'largely wrapped up' - retention isn't improving
What changed this quarter
| Metric | Prior | This quarter |
|---|---|---|
| In-Force Premium | $1.24B (+31% YoY) | $1.33B (+32% YoY) |
| Revenue | $228M (+53% YoY) | $258M (+71% YoY) |
| Customer Growth | +23% YoY | +23% YoY |
| New Customer Adds | ~550K full year | 158K in Q1 vs 115K prior year Q1 |
| Gross Profit | $111M (+73% YoY) | $100M (+159% YoY) |
| Adjusted EBITDA Loss | $5M loss | $17M loss |
| Adjusted Free Cash Flow | $37M positive | $17M positive |
| Gross Loss Ratio | 52% | 62% |
Accountability tracked
8 new promises made4 narrative shifts flagged6 prior promises graded
Inside the full report
The complete write-up covers the full promise ledger with kept/missed calls, disclosure-quality scoring, the metrics-vanished check, verification items, and the questions to ask next quarter.
Subscribe to Call Sheet Daily →