Lemonade’s third quarter results were well received by the market, reflecting both strong top-line growth and improved profitability metrics. Management credited the performance to accelerating in-force premium expansion, effective cross-selling—particularly within its car insurance business—and sustained reductions in loss and expense ratios. CEO Daniel Schreiber pointed to the company’s ability to double gross profit while maintaining modest increases in underlying expenses, describing the shift as “the hallmark of an AI-first company.” The company emphasized that technology-driven efficiency, particularly in claims handling, and growing adoption of its platform across products and geographies were key contributors to the quarter’s outcome.

Is now the time to buy LMND? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Lemonade’s Q3 Earnings Call

• Thomas Mcjoynt-Griffith (Keefe, Bruyette, & Woods) asked about the sustainability of CAC-less car insurance sales; CFO Tim Bixby said the 50% rate of cross-sell has been stable and is expected to continue.
• Jason Helfstein (Oppenheimer) queried Lemonade’s progress and future potential with AI; CEO Daniel Schreiber said the company scores highly today but believes there is much more to achieve, especially as AI technology rapidly evolves.
• Katie Sakys (Autonomous Research) questioned guidance conservatism despite strong retention; Bixby explained that home policy portfolio pruning continues, which tempers growth projections, even as retention trends improve.
• Zachary Gunn (FT Partners) sought detail on European loss ratio improvements; Schreiber attributed gains to dynamic pricing and a more responsive business model compared to the U.S.
• Andrew Andersen (Jefferies) raised questions about pet insurance competition and automation’s impact on service; Bixby cited stable loss ratios and competitive pricing, while Schreiber emphasized that AI-driven automation enhances customer experience without sacrificing service quality.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be watching (1) the speed and breadth of new product launches enabled by the Local platform, (2) further reductions in loss adjustment and operating expense ratios as AI capabilities deepen, and (3) continued improvement in retention and cross-sell rates, particularly in car and pet insurance. Progress on European market expansion and execution of dynamic pricing strategies will also be important milestones.

Lemonade currently trades at $78.80, up from $58.63 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free for active Edge members).

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