Lemonade Q1 Earnings: What To Expect

With its recent expansion in Europe, as well as increased popularity, we look at what to expect for Lemonade’s Q1 earnings next week.

Lemonade is a company that sells insurance for pets, renters, homeowners, and more. Recently it has also started selling life insurance, which will be a big revenue driver in the future. It is available in the U.S. The Netherlands, Germany, and since December 2020, France. In addition, it increased its number of customers to just over 1 million by the end of last year, which is a remarkable feat considering Lemonade was only founded in 2015. 

In its latest earnings report, the insurance company did quite well with revenue of $20.5 million for the quarter, which was actually down 5% year-over-year (YoY), although this was due to new accountancy rules that it had implemented. However, revenue for the year came in at $94.4 million, up 40% YoY. Furthermore, Q4 20 saw an adjusted profit of $9.4 million and for the full year $31.2 million, an increase of 86% and 138% respectively.

With the Q1 earnings report set to be released next week, many investors will be hoping to see a continuation of this growth. 

When is Lemonade’s earnings date? 

Lemonade will report its earnings for the first quarter of 2021 on Tuesday, May 11, after market close. A conference call will be hosted the following morning at 8 am Eastern Standard Time to discuss the earnings. 

How can I listen to Lemonade’s earnings call?

To listen to the call and to access the transcript, as well as the shareholder’s letter and the financial statements for the quarter, all you need to do is go to Lemonade’s investor relations page. There you can find a link to the webcast as well as the published reports.

A MyWallSt subscription gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team post daily insights, subscriber-only podcasts and the headlines that move the market. Get your free access now!

What to expect from Lemonade’s earnings

According to Lemonade’s own predictions, revenue is expected to come in between $21.5 and $22.5 million. Whilst this is only a small improvement from last quarter, investors would do well to remember that the Texas Freeze last year will have impacted the company’s financials due to a large number of claims processed. This impact has been calculated into their earnings estimations for Q1. 

Indeed, earnings per share are actually expected to decrease this quarter according to many analysts. The average projection is expected to show an EPS of -$0.81 in comparison to the -$0.6 that was reported last quarter. 

However, Lemonade does expect its in-force premium to go up from $213 million to $241 – $246 million as well as an increase for the premium per customer. The addition of life insurance which was rolled out this quarter will boost these numbers. 

Investors should keep an eye on these numbers as well as the percentage increase of customers. As Lemonade keeps growing, so too should its customer base, particularly as it is likely to continue with its European expansion. Between 2018 and 2019 there was a 108% increase, for 2019 – 2020 the increase was 56%. This is a drastic difference in just one year, although this could be attributed to the pandemic-related reduction in consumer spending. 

Overall, investors should be watching for an increase in revenue, in force premiums, as well as the number of customers.

For the full year, analyst’s estimates project Lemonades earnings to come in at -$3.15 per share, which would be an increase of 13.2% YoY. Estimates also put its revenue at $115 million for 2021 representing a change of +21.8% YoY. 

Read more: 

If you want to read up on Lemonade a bit more thoroughly, we have a good few articles on our blog that could pique your interest: 

MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.

Read More