Lemonade, Inc.

Hello, everybody, and welcome to the Lemonade Q4 2025 earnings call. My name is Elliot, and I'll be coordinating your call today. If you'd like to register a question during today's event, please press star 1 on your telephone keypad. And I'd like to hand over to the Lemonade team. Please go ahead.

Good morning, and welcome to Lemonade's fourth quarter 2025 earnings call. Joining us on our call today, we have Daniel Schreiber, CEO and co-founder, Shai Winninger, President and co-founder, and Tim Bixby, Chief Financial Officer. The letter to shareholders covering the company's fourth quarter 2025 financial results is available on our investor relations website at Lemonade.com slash investor. I would like to remind you that management remarks made on this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors, including those discussed in the risk factors section of our most recent Form 10-K filed with the SEC and our more recent filings with the SEC. Any forward-looking statements made on this call represent our views only as of today, and we undertake no obligation to update them. We will be referring to certain non-GAAP financial measures on today's call, including adjusted EBITDA, adjusted free cash flow, and adjusted gross profit, which we believe may be important to investors to assess our operating performance. Reconciliations of our non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our letter to shareholders. Our letter to shareholders also includes information about our key performance indicators, including number of customers, in-force premium, premium per customer, annual dollar retention, gross earned premium, gross loss ratio, gross loss ratio ex-cat, trailing 12-month loss ratio, and net loss ratio, and a definition of each metric, why each is useful to investors, and how we use each to monitor and manage our business. With that, I'll turn the call over to Daniel for some opening remarks.

Good morning, and thank you for joining us to review Lemonade's results for Q4 2025. By any measure, this was our strongest quarter ever, and it capped a year of excellent financial execution and operating performance. In the fourth quarter, in-force premium grew to $1.24 billion, up 31% year over year, and this extended our streak of accelerating growth to nine consecutive quarters. Revenue grew even faster, up 53%, reflecting both growth and improving economics across the business. Indeed, I'm pleased to share that this growth translated directly into profitability metrics. Gross profit increased 73% year-over-year to a record $111 million. And if I zoom out to take in a three-year perspective, our gross profit has been compounding at an annual compounded growth rate in the triple digits. As a result, adjusted EBITDA loss narrowed to just $5 million in the quarter, placing us on the brink of break-even. And this represented a $19 million improvement year-over-year. Indeed, we generated $37 million in positive adjusted free cash flow in the fourth quarter, capping a strong year of cash generation. 2025 was our second consecutive year where we saw our cash reserves swell. Somewhat unusually, insurance is a business that tends to turn cash flow positive before gap accounting positive. though the one almost inevitably follows the other. This then is as good a spot as any to reiterate a long-standing expectation that we will be EBITDA profitable in Q4 of this year and EBITDA positive for the full year of 2027. We continue to be highly focused on growth and accelerating growth because it's a gift that keeps on giving. Faster growth drives better data and further sharpens our segmentation and pricing capabilities. This powers improving underwriting performance and rapid gross profit growth, and we can swiftly redeploy gross profit, thus generated, into profitable growth investments with compelling new news economics. And so the cycle continues. It's energizing to see the flywheel continue to compound even as we scale. What's particularly encouraging is that all this progress is broad-based. PET, CAR, and Europe are all coming into their own as powerful growth drivers, each combining hypergrowth with improving underwriting performance. In our shareholder letter, we highlight critical initiatives we are investing in this year to leverage the latest AI technologies to further enhance our go-to-market operations, pricing, and cross-selling capabilities. We believe that these initiatives can drive durable competitive advantage in pricing and unit economics that support our ability to sustain an industry-leading gross profit growth profile for years to come. One last thing, I wanted to take a moment to draw your attention to our upcoming Investor Day. This event is scheduled to take place in November of this year in New York and online. Specifics will follow, and we certainly hope you'll be able to join us for significant updates on our vision, AI capabilities, and ambitious plans. And with that, I'll hand over to Shai. Shai?