Lemonade (LMND) 1 May 242024 Q1 Earnings call transcript

Good morning, everyone, and welcome to the Lemonade First Quarter 2024 Financial Results. My name is Angela, and I'll be coordinating your call today. [Operator Instructions]I will now hand you over to your host, Yael Wissner-Levy, VP, Communications at Lemonade. Please go ahead.

Good morning, and welcome to Lemonade's First Quarter 2024 Earnings Call. Wissner-Levy am Yael at VP, is Lemonade. name and the I Communications My

to are XX-K of available views of will we Any I the Tim our and those statements and obligation me them.We XXXX other we be filings Form Risk with shareholders XX, to discuss certain undertake this Joining referring today Factors represent on the begin, management's first our XXXX company's on non-GAAP may XXXX, to that assess on measures call to important we within remarks important Act adjusted results SEC. filed which the in gross investors on today, letter believe directly comparable non-GAAP Investor Financial those forward-looking section XXXX. update letter and February most as Wininger, as EBITDA statements of call our the are quarter with differ meaning the these Relations and no factors, Securities covering our to such to Reconciliations SEC only forward-looking results remind today's investor.lemonade.com.Before the in you discussed various profit, shareholders. adjusted measures financial as Chief results to statements of performance. included our Co-Founder; and President measures operating to our the these of Private may be call, financial Daniel financial GAAP this our result Co-Founder; Reform would indicated Litigation our and is may like Bixby, financial contain of forward-looking Officer.A to including on a Shai CEO Actual Schreiber, materially by from website,

manage earned in-force ratio, performance about monitor and gross to loss remarks. use I also ex-CAT our over net how Daniel premium, dollar premium, a opening each gross useful to and loss the investors call to and shareholders retention, is including customers' of Our information our each Daniel? will definition turn each gross ratio, ratio and per we customer, to annual business.With some loss premium metric, why letter for that, key includes indicators,

and off more that strong us our XX%, down same points year, loss ratio discuss are a I'm loss than to start. quarterly the for got and XX%, that top points report loss profit our XXXX and sophistication in time at happy TTM X/X, results. diligence the is our thank in morning, that while fruit. bearing doubled.The to XX-month X loss the rate to year. modelings lower last trailing than line improved Good Year-on-year, Lemonade's These last EBITDA you X our adjusted fully and by filings growing time in ratio came came from ratio, indicate joining gross loss grew this our ratio, QX improvements

us on In reflect precision all And claims our helping is accuracy much with on strong track, underwriting addition, delivering of favorable development. growing quarter, that stronger, then, is keeping this outright.All perhaps very year strong than that they our claims indeed, frequency a and in and lower better prior track. or is getting

particular, is in the update to core most at our thesis. happy the in notable cash general that factors, end couple year. of This and this the of we're now how the project Lemonade's fact, on to promise AI, flow continue positive acceleration flow In to by the be deliver cash net of profitability being very a possible technology we in by made

improvements. Shai, powerful these in about to hand numbers line tell a me efficiency decrease saw example, story.With growth, to over to tell metrics These headcount, mind, but increase more this operating only This XX% over a in you. a quarter, you X% in XX% expense of Shai and top for an our all year-on-year. recent let

Thanks, Daniel.

and an capabilities, process efficient.Blender Tim our detail. loss conditions, and and points trend buys advancement become help alone, blender continue by This much the improvements the more. to cover loss after ratio benefits information called achievement core AI, piece handling an of expect machine and X our operating our to AI improvement represents extracts greater technology for team documents, involvement a an QX adjustment to large and claims learning, essential insurers hand that or ratio. system, insurance automatically around ever-growing report human costs loss at and and don't down. expense. more LAE This LAE us the X.X% and to that the our by which technologies years industry, scale, piece with continue to metric other to the over that, technology-driven to our with who claims pre-existing in is of claims at multiple to let Tim? was piece, itemize automation associated to possible we in about the ratio, apart in me seeing the quarter, of it and by enjoy it positive results journey. last impressive this I over validates both outlook automated plans.And financial operations, our our talk from nearly I continues XX%.I'm can flowing building LAE of It wanted loss LAE uses minimize in XX% adjustment as of tends expenses advantage ended into ongoing happy invoices, our our incorporates and and claims it cutting-edge in-house important results years with made we extension, impact highlight often detect believe operational improve efficiency. run break to financial efficiency we and And

and I'll Thanks, review questions. QX we'll our provide Shai. take results and and Great. our then of highlights year, for QX the full expectations some

cash underlying and great effective in policy year ADR gross growth. under churn.Gross was increased increases. near or in our of X driven retention $XXX compared QX And outlook. and the slightly include point and primarily compared premium period revenue QX within the We customer this nearly quarter CAT up good year percentage gross and ratio to prior our measure commission impact quota storm was prior our prior CATs development earned Absent the points points QX progress year.Our and an for versus prior percentage than XX% and in than income.Our percentage this investment growth better the $XXX storm changes earned And roughly development non-CAT annual share a nearly purchases, XX% by was catastrophe quarter. loss to XXXX. X% cohort in was in ratio the the in prior was policy The noting The dollar reserve related all the Premium unfavorable, in as line prior while from on and value, by metrics, million, increased X% Daniel impact or in to increased XX% X CAT was XX a the catastrophes about impact, the X% last revenue XX to gross QX roughly ratio additional worth period a premium, reinsurance, the by convective as Annual and about in QX gross total gross driven QX XX% higher on a $XXX, it IFP million. favorable. loss our rate was time ADR since was ceding impact of noted, XX% to XXXX increase that XX%, basis all prior year. primarily key with rate per was better X% XX% As year ratio, adjustments to Shai driven favorable the in loss of points loss or quarter and growth, impact including of and winter activity. with doubling

QX shareholder a is about XX XX%, loss this of growth earned to premium, feel in $X of by our Given by for which perspective, increased gross up spend, to was all the or across as over profit grew has ratio.Our offset a bit or downs adjusted not. excluding improvement ratio, the costs continue million spend in business and $XX Other in period. of better adjusted increased loss year, doubled to TTM rolling more driven profit which million grown XX% X%, while gross $XX.X increased ratio, profit year-on-year. period.Gross loss to adjusted include partially ratio ratio about our same increased the loss income with Gross the and as X-quarter the to versus X% of prior capacity.Total exception increased prior we tripling personnel-related loss the over a profit years, again loss investment consider and the over X QX to filing prior product months shown in XXX% by rate gains. expense gross XX% same growth longer-term year, as and notable adjustment lower notable profit efficiency which quarter points due in for X improvements. it's our primarily the gross to significantly by ups in prior view the premium in expenses was more and year. Operating continued by trends profit by loss year. trailing to compared compared the gross quarterly letter loss while our has primarily of useful quarterly million, prior was driven year growth ratios and than the more investment insurance the support From than the improved marketing than increased coupled home, that with Total $XX time, expense expense the just million sales QX to compared XX% get more did has versus growth

our have utilize to the the year. program funding continue our since growth Agents XX% Synthetic spend financed growth of of start and We

of of of statement growth personnel to declined primarily As is development the expense through X% declined the on loss in reminder, $XX the growth high of XX% expense you line see sheet priority. to million our loss down balance Synthetic the new while, financing we is loss to first $X.XX due grew spend and will G&A service through per net share. $XX million, headcount date XX% compared a as continue QX.Our per as loss This prior net reported professional visible our flow fees share of again, $XX compared impact XX% or expense Total X,XXX, the about is QX insurance year in to and better a year cash the loss, or cost XXXX. a $XX flow of the IFP the prior And to efficiencies. about same Agents period.Our million always, the million at due control end was as Personnel to in $X.XX lower to to our quarter as be $XX million XXX% and a while about was the headcount our costs. to program P&L of technology as top lower compared X% about the mechanism primarily

investments financial loss quarter a expectations million compared for approximately in with XX% X% about EBITDA down $XX million loss and to million, better.Our full of metrics ended quarter Our of XXXX. outline the $XXX cash, equivalents, quarter adjusted in mind, was the just year-end second or for And as in specific $XX the total first these cash the the I'll and year adjusted at XXXX, 'XX. EBITDA loss since QX our

of in-force million premium revenue quarter, between million. and premium XX of $XXX and $XXX million, gross $XXX $XX million For an $XX EBITDA $XXX between and and million June expect adjusted earned million we $XXX second between between loss million, million, $XXX the and at

XX We expenditures weighted $XXX million for $XX at a $XXX share the earned in-force shares.And and million we full million $X an of between $XXX approximately $XXX count and average in between approximately of adjusted quarter, capital of and million, and million expect December XXXX, $XXX million, premium EBITDA million, million. compensation expense and revenue approximately stock-based between of XX $XXX expect million, $XXX million and $XXX of premium loss between of year of gross million the

questions average $XX compensation back million, $XX retail year, For approximately with from a like full capital weighted our over approximately we few hand million share that, expect XX and shares.And count of investors. million, of to answer approximately stock-based to to the expense Shai I'd expenditures a things

to Tim. submitted now platform. We'll questions Thanks, turn shareholders' Say the through our

rollout nationwide.Hi insight asked to on insurance years of few takes of new Henry, after Henry more it performance product the a a stabilize First, launch. auto the for usually

loss efforts products test the continuously happens, efficiency XXXX, the targets. ] and pricing, business we and During cars [ all improve marketing across that was and that the it ratio compatible improvement faster.By period, grow with fact isn't lines loss fastest of did the scale can to yet and operating XX which product get it at in despite we to our our lower year. be want ratio Once biggest be, to improve way, where underwriting, points that we increase LTV that our

still So early more the to lot are few next while question, we work U.S. Paper why know growth happened there reasons a out already begin opportunity rolling be and will a expect more between our of balancing on has to Bag, Bag Europe.Paper bullish next there's we broadly about wanted year.In size. strategy done, beyond its the sheer are I the European car and

as partnerships, well Europe side, offers BXBXC First, scalable price distribution and large institutional such opportunities attractive on websites. comparison the as as

home to insurance. U.S., CAT-prone less benefits compared particularly is the loss offering diversification Europe for or Secondly, exposure,

call LTV selection the to example, allows there. with making changes more pricing terms capabilities, years?Sumit, we heard are changes we have us the experiment to on by question, dynamically models profitable risk competitors, whether and regulatory for this growth positive probably relative to generating Finally, a seasonality, flow in for and letter, in flow differences changes, on flexibility X across new our environment the to target compete a and against what we be based by is on.In over over CAC growth the sense, next that due on read pricing year basis.In products next simple. U.S. are daily and the and that This, product Europe, you the this multiple by frequently 'XX and basis. Sumit X much pricing our balancing to years other, as and on so the consistent and market dollar geographies we asks XXXX, positive best return. of allocation getting shows net to campaign geographies, so at us of a each incremental our In the allocate products excited accelerated end cash of expect and cash to timing our our budget strategy QX to We is in such

as by lean be the growth for compounded this rate reach reinvest in growth.As mid-XXs. for measured following adjusted a flow, additional expect generating growth to profitability multi-year average our the able we're cash will we our cash to Once question EBITDA in in expectation annual We positive previously targets, faster and we your indicated about IFP year.

opportunities Paper as Paper may and automation not we along.Lastly, the me rates While a Bag today, ethos asked accelerate XXXX revising current the This and growth dear this we're metrics.Thanks we metric and index, to the Lemonade about our used new growth in is something question, efficiency personally. incremental near Bag. come to back for some for

efforts grow whole AI improvements doubled. the index among trained properly levels and our from efficiency. handles from I and operator like our way, recently and ago have complexity to The I was as of to and more handle difference with and I per of increased minutes our metric, the efficiency was generative call excellent all XXXX virtually our to has this of that while dramatically a As continue.And now, so customer, for Regardless it percentage emails multiple the this old products, Street. By also continues a back turn our failed way see from an incoming in our handled LAE retired service expect OpEx, few our which XXXX business consecutive on. friends particular remained is now keep I'll questions shows couldn't outstanding business flat automation things as to platform because benchmark since by to X messages our the metric to the generative years, automation policies mentioned as growing geographies, is long reflect emails AI our roughly ago, of the for up well.One believe SMS signal XX% total

[Operator first Yaron Instructions] with comes Kinar question The Jefferies. from

those Could as on Tim, gross and you catastrophe basis. basis well? prior offer had you offered development a impacts on a net the

net been, it's primarily a as distinction releases. Sure. quarter The result this small gross as of was and ever between reserve as

or X%. total net So than and gross X% difference was less the between

is for difference So answer very requesting same the that to, minimal. you're the the

it. Got

I some acceleration cash the you free or the you'd talk mentioned the acceleration? of timeline And of through change the Okay. know Can drivers the to positive. for flow

gone net of flow, where cash actually periods noted down? it's we balance of measure going so simplest this the seen up. Yes, up? it investments really and equivalents cash and is that Or couple on the Is a it You've is going already and sheet.

of in change. was The past increased, half second this fact, actually cash that notable net-net year, our a and investments

of not continued to this of actually the in heading instead be -- use expect we're This current now better. period generation or where coming We're we're of I sustainable towards flatter there. cash cash. quarter, quite So it

by that so, really consistently of net And should just better drivers positive.The be granularity levers. understanding year, this end the and of the

agreements do reinsurance sync and itself, the flows the with Our in of that in business and growth flow ebbs growth the out customers a cash tend to sometimes premium. move the of bit

the so, negotiations And reinsurance of for agreement current greater understanding we're reinsurance. the forward, in upcoming going

that the that X of expect period. to really sustainable similar. confirm or We've number cash And quarters, belt little X go, really give kinds that greater seen more comfort that us and we're pinpoint that.Some now efficiencies a you fundamentally unit the your of be Those as are with but bit things we positive quarters underlying are or tech there to under are improvements. that confidence until those each economics the some get of X to of getting those for flow sustainable. We noted, we quarter strong of customers a

accelerate more spend the The full I'm one before sneak bit light And target. growth sense. I that's I year little to to makes assuming just seemed target could in That relative if spend reque. up the year? ramping expecting course over that revise of to growth that as Or that it expect down? matter you are you of is as the to a

Yes, former. It's you're the exactly right.

comparison out a spend a If comparison is of a see And versus looked high ago the January, little little of the we'd out we of with We're ramp-up. in was relatively a opposite got this So year-on-year ramping is year growth year. March, sync year QX the at up. February, effect sync. consistent year-on-year quarter the 'XX. we've terms full

acceleration And see year. So versus is as forward, you prior into QX unchanged. target full-year an the we the and head will

is question next McJoynt The from Stifel. with Tommy

look I the ever know the this point a happened think that think the X between or lower ratio. gross the and that's of gross net kind loss only at ratio when don't difference the it's time But I was first than I so. don't net ratio. loss before. was loss I the

kind as just talk that through So how of like to can you mechanically happened?

structure typically ratio. that net is One X between of a expense, and loss difference is agreements. subject reinsurance the main There's to part a unallocated drivers not is gross loss our adjustment expense of which Yes.

can number And and very quarter-to-quarter. between a we gross driver have we do that's that is or but can it that reinsurance flows, we have ebbs As greater little coverages and a main premiums, claims. pay quarter, difference net.The drive where from second and lesser swing typical

ULI low specifically, quarter, because adjustments. [ of reserve notably ] that This was number

quarters bring similar. the but close those you together. a normal, two really to relatively And I gross so, and don't we where can it swing when get can it see it's expect in the net numbers, new

maybe kind has normalized CAT auto have that sense. And pet you then on of leaning renters your load? load that your the do kind thoughts on the year and so how CAT really for just a into expected and changed Makes And impacted home for it. focus all Got and growth side, less should latest on with side on the be? update of what an has at separately, your

broad say, fundamental was that CAT So relatively storms. that number at Excuse on change note bit in no CAT there me, events. I a a would impact high a distribution little But named XX%, quarter. isolation, but level, in higher terms, was in It isolation. were events, important XX% of in no not the enormous to technically QX the percentage

of is many that clearing combination of -- to kind to highlight the business typical. I But usual. QX, years.So a really It of number seasonality the threshold as of is And out interesting and same, that's because And of definition storms good CAT assumptions. doesn't underlying the product. trailing it's CAT and I'd our across of consistent our variations in been be of any lots change metric it unchanged terms product, be XX home bit variance say it's in the notably would isolated sort fundamentally continue again events improvement. impact tends that which to takes the of for not So months trends it a

from is Jason with Helfstein question Oppenheimer. next The

questions. Two

time business earlier using train on has and kind a on you those of the models until how to the just kind guys of up world obviously, you and were and LLMs. one, AI, as you've mean, to talked takes whole about to models woken I And So us much you AI it what of the business. benefits deploy this just then actually their

the car a how elaborate, just that the the of about either few you around when make you about of think newer are that see are pressures benefits? just onboarding, ultimately less for secondly, one.And claim, just over of auto on on of models question LLMs, some then you inflationary do newer next And with bullish technology, how the seeing how kind available? just those expanding newer Does just question you kind we adjudicating years? you bundling you would underwriting, car? we're your can That's of of think Or you outlook the seeing thinking kind auto. help So are

the of work orders told insurance but perhaps cause claims then company, since a to ability statistics.What's those got number is customer true, models about shared new. matching quite has don't changed using that once, been theory risk is by still our the numbers there we've side sites. that the to word, general, tend models match it's at being any of the one the able inform in remember being you're is game. single And loss to in every and and the and it insurance that than some foundational the say that part really AI right, of rates probability insurance I those in and the written of of more we've insights.So XX technologies able that the that even extract in, last get. quite something our customer magnitude if lot touches think couple in provider things in place on we're them, is at know our LTV were And years other, to support a data poorly. now, quite stunning We've -- then afterwards.I founding were since you the have this systems onboarding of of terms of learning traditional prospective in, a Jason, powerfully reasons way it's risk to the companies an because of to spoken that comes at and it's stuff process. with collect come we're our house. signals our doing these harness of And even And this I And able to all can't isn't for learning, being rage is has really also years. America AI as really all purely systemic which so much is amounts all deep kind is grow their but at just work. us lot you different that insights, you the data deploy generating record to been risk building right if been that out. deep the the the we've machine This these are are do distinct digital the about systems course, becomes hard as machine-learning systems advantage we've And think the customers assessment, very is time been rather recorded, that selection, therefore, tagline of end companies to gives collect which And you if very we continues of to manual claims reconcile data and that the poor with then risk pricing, is and to don't for to using those understanding out generally plumbing, from can there LLMs. that about independent quality, in And garbage garbage models, of very monetize have these models, foundations, been learning of proficient true about in why we systems the length, agents very and to and as machine us

have to of been then reviewed also in to a capabilities.And state I to have it's we're we've whether responses are isn't applies these that's receipts kind passing because very, the these harness from some very generate reports lot this you systems. that on documents, detail. able building inbound, complicated And based advantage of And equally documents be that future-looking. and We that health earlier. of from need of verbose a something vets, them. more or surveyors, This oftentimes documents XX-page of to digitally, is harness kinds referenced I everything rapidly built to When able in merely structural think technical the these

One we've spoke few that we and was quarter is points themes, ago, these perhaps hypothesis but make a last a was when this years unproven. about cohered, of that that, tried quarter to the it

to much top growth and you, do level this speak able The what decrease use humans of dramatic, see now do. that numbers. of XX% it That XX% pretty very line without being think had impossible an automation to a headcount. the numbers in to in without I it and clearly you is and LLMs quarter previously to I'd put

got abate. But quite We and these Over did doubled, terms auto, of expense the ways.In gross glaring dive in the we of of simply course, no, keep iterations not inflation Those up we'll moved. there with has but the now, indeed we that We've years, to proof last a of operating doesn't place in that. rather right last trebled, XX we'd to we Inflation aside X terms to our bullish. loss be pressures bullishness implemented. we from in points yet of and technologies able the I in a rate are approved improvement think that has some is notwithstanding think, the headwinds We course probably book a that have contingent all by. being size powerful systems passed to not And has the it deep points, see our in on inflationary of saw couple is like pressure. we LAE of profit year, our hasn't that us if of a face filings want do now. inflationary are do, continues but harnessed ratio that explode, that auto see on way severe remain

the now that think that way kind out of we the we've So seeing do I a broken and seeing and our there. on of still the is back in kick-in overwhelm inflation systems so to we're believe our that. filings We're hope able,

Sakys The next Research. Katie Autonomous is question with from

that be more year? on give I of Could improvement. a those how quarter's the sustainable the think drivers rest of color this first and us wanted what to might ask little of you bit the you sort ratio products as drove changes to of some ex-CAT of sort over loss

Sure. Probably to non-CAT and CAT it. -- has some arbitrariness between the worth is noting distinction that

isn't and under CAT. a over a just becomes it that's just threshold anything so CAT the And CAT,

are And some have couple as X few a that occasion, got lot particularly rare years single opposed so on, ago. one seen those storms, to a But many very or we've really many, a frequency, years exceptions. a of which X we of dominant the CATs, there's on ago, where quarter in one going

So XX a lower say I including higher at in is CAT a kind is normal-ish information that all measure.So this at we loss and them the think both but months of looking load quarter, of trailing tandem, would important. a the underlying I looking share ratio aggregate, in

showed prior the All this home year-on-year of improvement with improvement, the of the products year exception quarter. versus quarter-over-quarter

couple a not do of few of typically the case see years. couple the quarterly years, CAT fourth notably QX is and there's We will quarter, continue and to -- a that's a flows. past although for been ebbs quarters in low

improvement healthy little decline home, start So focus our a markets. rate of long-term nonetheless on products, finally health picture, larger more pace a is to view move that the in strong.We've on but approvals consistent I would in more at a bit all seen big in

carriers was now we done ability pulled somewhat our markets. from the the moderated certain where elevated, was to territories see somewhat loss entirely out proactively We've as elevated not improvements. ratio switch Some loss the so. growth in way states the We that we and where and ratio products other have in

our would I XXs. she which we're goes, ultimate into on track We're So steady and target, comfortable. in and low high the say, to as the XXs is

of geographies Are action are guys across the of discussion getting you're the you following guess growth growth like your enough are you you sort entirety really levels. country particular Or about like of of on the feeling inflation up and more lean than thinking and into where rate I underwrite? and feel geographies any there there? you kind pricing could

high it where we quarters is had the approvals So, smaller. X they case. widespread. There rate They feels level, still case kind That pending. still many are the approvals large somewhat longer not of like at That was the ago, large but no pending, important crested we hill. with territories are probably have a more yes, increase are

more into there Even will sizable board. a come. we're seen follow-up, date more past one. with aggressive notable of dramatically the probably quite growth and in getting or it X. in terms some our But our standard mode went and is of And and the now the substantially, I and California across most we've really, It's those going filings to we've to the more to was go. there's across rate worst efficient a is reasonable a seeing approved. bit still unpredictable of continues X and again, that Inflation and -- and where think think in month it's room caught close up almost of at pretty I higher in board. approvals is so a but past to that of assumption much moderated the of earning filing, done pace, good certainly a rate at that territories couple filing, it, rate.Our little part continue And still capacity approvals but terms rate

is question Andrew next from TD The with Securities. Kligerman

super ratio is at really yes, retention XX%, And nice guess progress. first around the the strong. question I

I differentiates getting that kind it's and as would a drives Lemonade to What of moving to make cheaper think next you noted it you the point. price? opposed stay that just you carrier a What people is to going up say about with retention? Lemonade that's want to

for Yes, is that Thanks it's to Lemonade There in very you this that's relevant I'm question. customer level a is that few a for Promoter industry the Perhaps we glad the well that are highlighted annual retention doesn't universal of Daniel that that. measure measure. do metric. dollar of the differentiate Score. strengthen, by here. Andrew, a way particular NPS, and continues Net enjoy. things One The satisfaction

NPS marginal XXs these one as in shockingly, of this submit of of do is high of we retention.The the not ability respond reflect become even be customary just And ADR as have may buyers from powerful the customers, our part being majority So buyers models. I us they're second any is get in for under the a join we to of the to disproportionate But far time to in business the We're entry-level doing with on we're well. nascent end. the is any the day to is upsell, and low they very stages. yet price is ability one responsible themselves everything pay in claims.There's instant plummets, low force close. is of frankly technology U.S., among difficult coming comfort points with to to Lemonade.Our XX% an are in and pretty expect our which its of many able we have at experience as dramatically sometimes insurance. button cost And unusual. when AIs, powerful in that margins digitally, playfully, abilities more or of be If including brand-building insurance declined nature That X, the relationship, the to and think we and profitable is when first-time insurance of, insurance human not, interacting get to pressed. something across of I oftentimes being drops first-time the more night We young your of buyers get the of the points but which a at very claims in phone a powerful first-time sometimes within go precisely, incredibly the and without for to serve our intervention number tend say, therefore, about matter to commonplace All pretty or as to seconds the teens XXs, renters traditional strategy terms claims negative attractive share. all number of forward, able market customers you're to touch the a say that

they get disruption. they need So They ring, it's those insurance, up. get get cetera. a get But a customers kids, grow et then a job, they car, a they need insurance, they low-end they graduate, car they life a pet, get

net America of will first GDP adulthood or average your XXxing pay an years XX and is retention, that that All more XXx get XXx XXxing worth, the similar personal to years themselves the powerfully in itself stuff.So you of company. premiums a to or of their in reflect they and as grows insurance to the in those just dollar annual XX reflect in

an reflecting that kind all ADR. And in needing put coverage, customers $X thinking. So they of them because to together of the to a to expanded they're come incumbents don't when them that want so and policy, to anybody policy, our a when itself next delight least, else that snapshot being of combining $X, go that's have the young those month, additional they want you two, you able paying I think getting

As I confident further. promoting I some those geographies available, felt feel becomes more and policies grow home as we say, of as numbers insurance see underpriced, prevalently our in more car we think where you'll

a to X Really whether Lemonade you pace? Could the with is at step interesting. give And to has that and of a or copy start ahead general, sense a you able just it do regard won't head can or that catch competitors feel Lemonade up? be enough that of then in AI stay

I'm sorry, you the I that missed that? In words what X Andrew, of asking sense were first sentence.

such know, Yes, stay you sense of tough persistently? that way answer. a it's But, or you Yes, of can AI kind a Maybe question. tricky answer tricky is don't a Lemonade there's know get a don't if like, I ahead question. of, I kind competition a a to to it's X of I can that. question. it's want ahead step the

think are said year, when whom XXX they GEICO it's everything Black where on direct-to-consumer are without because way XXXXs so a last sorry, age black founders it's in Those of They very disadvantage a really are in direct-to-consumer of Their you overcome.I'm the runs outright, understand and and it's don't hire the sense of have have, way. objectively, by that to approach. question, your that structural and the having in we corrected when insurance strategy as no he when having that afloat. of beginning has they other. about will very, they've with. overcome to which just has who make you they Ajit think of incumbents will I It's even business very as as by sure GEICO COBOL, systems hole of know And and weren't that and if actually, the people technology be Meeting. different that then to that difficult language, that to a we how have built something from problems I for think saying time lyrical a programming gives -- about can you that unequivocally engineers taken were you the AI not incumbents when answer invest It's that AI built time you No, just architect therefore, I advantages can't tough of But in systems that genuinely get-go and They're have you General even In all days sense know for and sure. this. of a Berkshire will you are a stage, is but lot by instead the on, competitors XXX another.Well, and you about hard difficult for spoke on about I smart. technology, of over that this Hathaway while, said, own advantage to being a legacy one distribution, that talk deal encumbered. Vice kind will our think encumbered I'm We Box, and stay share recent the know, a systems company, years have who hope adopt lot just together, can. being that But a and aren't use a structural led there continuously advantageous himself I'll hadn't tech legacy case, the be the Jain, built some but conflicted do Annual AI-driven more and amounts the wax to couple them Chairman, even they channel just to agents there, to Sure, and to This a who much GEICO, aren't a them, XX,XXX and a them heard sentence. perspective. I of the think yes. the view We that got us.

could the insurance. the competition pressure growing? how see tougher little was quarter. very all competitive talking with is about started the in to competitor direct-to-consumer more and Or roughly do Could you line? in first kind you to helpful. on just And still feel yes, written Yes, new a approvals premium auto sneak of to at keep little a ability if compete? see Do you rate end the getting rollouts, much a your auto of specify they And the how in one I of now the

Sure.

is X is a picture XX% fixed smaller around little that a that's rate business up so of is more price of mile, big the maybe current auto remainder So price. or which paper the both is sense, of bit but in quarters paper relative of made piece a the majority piece, that, a the or IFP, mile, run or more but substantial of traditional

importantly of product customers, XXX% in is customers, think More XXX% That car of in sort of capture of nearly through multiply together, and second telematics I auto to their its none.We note, is And is those the terms understanding for uncommon nearly and a integration very for X our of travel, telematics you get number. to industry. you their our of our mileage. high data

small of percentage of the fact, a their incumbents In a largest customers telematics those. of miles the very number track very car through and small

there.I unique be see to that So the about a competition. that did I numbers unfolding. took to maybe their of throwaway noted the a difference fundamental bit increased comment you a of in how competitor coming quarter terms the views

opportunity changes see or don't for market in the we any car. no, fundamental our So

Matt is Ferguson next Halter Financial. Smith question from with The

the sales strong to new question wanted there this a of wasn't information kind trends LTV any back earlier. the circle customer I on spend from noticed marketing to quarter. and quarter. growth kind and Congrats to on CAC I of

arrangement? And the there on kind available of to are of causing So that I spend? lay Synthetic wonder if you slow you can is groundwork since have Agents that marginal you to the what potential dollar is under kind just kind on anything financing seeing do the of you

No.

go. are So I term is our -- and our growth at would systems look efficiency growth all spend

up accelerating is just in the numbers, the we're So you and When spend and January. quarter's expected following ramp of see our rate to planned our as it's that a growth began plan to doubling harder we've a growth expect. year-on-year. we consistent spend our March, what see. But a increase almost And as up to of ramping communicated April, rough, January, little February,

so of of look cost see in-force just an acquired. quarter, in the dollar QX, something at efficient each percent the acquired versus the we the terms order premium efficiency, on year example, or dollar per for In or we improvement, for the terms prior of did XX% more

measure of obviously a X. LTV common So good progress.We CAC, well which above of is fairly think very to

lower edge rate, bit year, the efficient. rate, we're to LTV even That the was a that we to from In saw tend see at continuing course where towards spending But in to this a we X. when fact, ratios things looked of more last get above strong and numbers were over high X. high at Xs well CAC

tracking are our financing cash on XX% right much a and running beginning spend full-year and So track. since of steam the perspective, through efficient is our nicely. more the our full year program, things And of Agents are from Synthetic We're made supported about ahead. things spend

helpful metrics between maybe just spend near-term profitability? the CAC you GAAP trade-offs the to pressure. That's adjusted mentioned You really kind next EBITDA GAAP more by period get And wanted argue and margin your to could about do -- of impact the positive of more current on think year. how for kind is, context. to would earlier you it EBITDA create commit certainly But which with where spend, LTV philosophically,

you of how around philosophically seeing on impact trade-off think So do really that a spend economics for of potential the basis? cohort customer near-term the increased you're kind versus the attractive that

Sure.

less a become to comfortable dollar with to that nth like we're acquiring where you trade-off described meetings So of basis. which on expect acquiring the starts debate you've sitting -- to question real-time and business for our nth we I to is marketing nth profitable the and one and day-out this spend. where you in the think slow, At right, increase on doesn't all hand, acquire a infinity point, that exactly as business. is, you go spend a in some of efficiency growth you it sounds the been day-in, get point is, growth that customer And that kind

really critical year-end. the pushing.We We to ourselves of for both and health the to of our profitability do year time. next it's breakeven it's And That to XXs and at below by frontier to so our believe same that's step for is long-term the thing, accelerate important but health constantly flow the commitment that a from guided can business, the business, cash only the will shareholders. XXs growth where we're the our business. not a We've high our

and the with CAC, of loss high kind both positive that to the ratio, pull unit for additional getting of we'll of Our and we that those to goal a and able to trends real I to business, thing and mix I company a think strength a parcel want suggest because bottom lot of of that that see year would profitable of to which multi-continent in next levers all spend to seeing, into economics part improvement investors the is see. that rates, and the we'll our envelope.Last a continue still beyond bit is LTV more. of us optimal being as continue trends to one and right to that we're note and expectation ability be of And a is find company keep track on have we multiproduct fundamental line is push benefits continues,

on either or I higher there earnings seeing or driving in could I just upsells? was squeeze any was Is expecting. more little sequentially increase And quick rate customer if premium trends per one The you're one. a bundling bit than Anything that notable that was improvement? that

of It's really a small things. bunch

shift expected, as or X So that's as almost biggest is of entirely XX-XX thing. drivers XX-XX And sort not mix. The mix rate used and notable and rate saw between changes. increases be so products, as product course, maybe you're change, not increases a product rate planned. shifted ago. of across ratio you of seeing be one getting more to Used to as years mix to now of a notable that We're

of continue, are the been by drivers bulk but quarters.And obviously, that'll the consistent rate. not So few has driven it forever, next improving. I underlying expect and for the

X% customer of those as our customers of all less Daniel noted But XX or number multiple reason And So customers policies. or retention, that multi-line There's to continuing early of be policies, show number rate, with someday. on, the can't of that's improving like are a have the multiple improvement. no percent XX long-term goal. looks than that XX

again a Congrats strong really on quarter.

with next The Huang question Stanley. Bob from Morgan is

just Again, guidance. one like very your strong on question quarter, a

$X $X about million, you're increase EBITDA, adjusted by in million. $X.X midpoint increasing But adjusted You prior full that is about by revenue guidance, guidance. your by about the million in against about by your beat guide your revenue, million low. and a XXXX by feels It the $X.X like you're increasing by in little EBITDA quarter

the beat Just curious rationale you significantly earnings and numbers the more? were or there when guidance pull the if revenue forward behind is any what by

in I worth little And is question. great impact bit cleverly, quite quarter, a did the there that's particular you're the impacted first Yes, pattern releases strengthened ahead can positive expectations think see and of adjustments. which that by the on agreements. there highlighting that on of say, little was a nuance there's certainly of is Revenue by reserve reserve the I be typical our KPIs, will and our a ahead reinsurance hitting all a in a we guidance. And QX nature in

and bit bit an our or that We to that reserve a the positive a had would It typically that our quarter-to-quarter negative, happen not logical replicate sustainable outsized not commission that that's adjustment. And on assume little adjustments have a occasion. reinsurance replicated. agreement. It because of of operating was we that forward. had in assume going benefit, didn't ongoing That QX. revenue reserve So we a because drove of variable benefit performance

And that the the year of revenue. the so that that of difference guidance the accounts QX overperformance for you're for in remainder the in for terms seeing vast majority of versus

The from next McJoynt Tommy question Stifel. is from

amount of loss talking there When catastrophe or wanted we Just a is ask, terms I to you the amount that a in guys amount define about threshold, a to were what bucket dollar percentage falls here. of use what use the into quick a the follow-up the guys discussion, like bucket? versus versus define in terms catastrophe catastrophe to bucket? or bucket dollar you percentage into a like a non-CAT ld, non-CAT falls that the amount

Yes, NCS we a standard rating. use

gets it it's So a CAT. if that CAT a if becomes number, -- a

have So $XX million there market. for it we a but standard we measure that measure Notable don't time, threshold a long changed used. that one out not own standard measure. a in It's We has changed. have hasn't just and the it's very our a that proprietary use

you. Thank

to no team have hand back We management will further conclude. questions, so I to over the

comments, and joining, look Thanks forward quarter. so and for again our next seeing so much. we That wraps up you to much thanks

Thank you. joining. This Thank today's for you call. concludes

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