Lemonade ($LMND)

As of 2024-05-04

4Q 2023 Shareholder Letter

$LMND Stock Thesis in 20 Minutes

• ~70m shares outstanding (low share count).

• Ended Q3 and Q4 2023 with $945 cash and investments.

• Europe is becoming an increasingly important part of the business. Lemonade will be an international insurance company.

• In Force Premium (IFP) and Customer Count (CC) continues to rise while Gross Loss Ratio (GLR) continues to fall.

• Use of AI is central to the benevolent cycle that improves the strength of the business over time. From the 4Q 2023 Shareholder Letter, page 10: "This composite AI harnesses some 50 machine learning models to predict, for each customer, their lifetime value, or LTV, in net present dollar terms."

• Doubling their growth budget is expected to increase IFP by 50%.

• Guiding for 25% CAGR.

• Company should be cash flow positive 4Q-2024 and profitable by mid 2026.

• Expected cash burn between now and when the company is cash flow positive (~mid 2025) is $90m.

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