Lemonade Inc., a tech-powered insurance provider, said Tuesday it would spend more on growth this year, a move it said would hurt profits in the months ahead following a year of “extraordinary challenges” in the insurance industry. In a letter to shareholders, management said Lemonade
LMND,
+8.44%
planned to “roughly double” its growth budget this year from the $55 million it spent in 2023.
“As the universe of products and geographies where we are rate-adequate expands, we intend to grow in lockstep. Ours, after all, is a business that grows in profitability as it grows in scale — and so grow we must,” the company said. “The associated spend, and the resultant growth, should boost our bottom line a couple of years hence, but it will weigh on our bottom line in the coming quarters,” it added. “Threading that needle — doubling growth spend while shrinking adjusted Ebitda losses — will be our central challenge in 2024.” The company — which offers rent, homeowner, life and pet insurance backed by AI-driven forecasting — reported a fourth-quarter per-share loss of 61 cents per share, narrower than FactSet forecasts for 80 cents a share. Revenue was $115.5 million, above estimates for $111.7 million. Shares fell 13.7% after hours. T …
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LMND,
+8.44%
planned to “roughly double” its growth budget this year from the $55 million it spent in 2023.
“As the universe of products and geographies where we are rate-adequate expands, we intend to grow in lockstep. Ours, after all, is a business that grows in profitability as it grows in scale — and so grow we must,” the company said. “The associated spend, and the resultant growth, should boost our bottom line a couple of years hence, but it will weigh on our bottom line in the coming quarters,” it added. “Threading that needle — doubling growth spend while shrinking adjusted Ebitda losses — will be our central challenge in 2024.” The company — which offers rent, homeowner, life and pet insurance backed by AI-driven forecasting — reported a fourth-quarter per-share loss of 61 cents per share, narrower than FactSet forecasts for 80 cents a share. Revenue was $115.5 million, above estimates for $111.7 million. Shares fell 13.7% after hours. T …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]