Financial Analysis

"Commitments and Contingencies Litigation The Company is occasionally a party to routine claims or litigation incidental to its business. The Company records accruals for loss contingencies with these legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated. The Company finalized settlements related to the previously disclosed liability exposure from its car insurance quote flow that likely led to the exposure of certain data received by a third party data provider. An accrual for the net liability of $0.5 million was recorded in March 2026 in accordance with ASC 450. The Company will continue to monitor all legal issues and assess whether to accrue liability in accordance with ASC 450 based on new information and as further developments arise. Charges and guarantees The Company provided guarantees in an aggregate amount of $2.7 million as of both March 31, 2026 and December 31, 2025, with respect to certain office leases. Assessments The Company is a member of the California FAIR Plan (""FAIR Plan"") which is an insurance pool that provides coverage to California homeowners who are unable to obtain insurance in the voluntary market. To the extent the FAIR Plan is unable to pay losses during a catastrophe event, it may seek regulatory approval to assess member companies based on their relevant market share. Members are also allowed to request prior approval for temporary supplemental fees to recoup up to 50% o …

CommitmentsAndContingenciesDisclosureTextBlock · excerpt; the full note is in the filing

"Borrowings under Financing Agreement On June 28, 2023, the Company entered into a Customer Investment Agreement (the Agreement), with GC Customer Value Arranger, LLC (a General Catalyst company) (""GC""). Under the Agreement, up to $150 million of financing would be provided for the Companys sales and marketing growth efforts. The Agreement had a commitment period of 18 months which expired on December 31, 2024 (""Original Commitment End Date""). On January 8, 2024, the Company entered into an Amended and Restated Customer Investment Agreement with GC to provide up to an additional $140 million of financing to the Company from the Original Commitment End Date through December 31, 2025 for sales and marketing growth efforts. On February 3, 2025, the Agreement was further amended under which GC will provide up to an additional $200 million of financing for sales and marketing growth efforts from January 1, 2026 to December 31, 2026. In addition, the Agreement was further amended and restated in April 2024, June 2024 and December 2025 to clarify certain provisions with no material changes to terms and conditions (collectively, the ""Amended and Restated Agreement""). The Amended and Restated Agreement contains standard customary representations, warranties and covenants by the parties, and will continue in effect unless terminated by any party pursuant to its terms. Under all of these agreements, subject to certain terms and conditions specified therein, at the start of each gr …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

"Stock-based Compensation Share option plans 2020 Incentive Compensation Plan On July 2, 2020, the Companys board of directors adopted and the Companys stockholders approved the 2020 Incentive Compensation Plan (the 2020 Plan), which became effective immediately prior to the effectiveness of the registration statement for the Companys initial public offering (""IPO"") in 2020. The 2020 Plan provides for the issuance of incentive stock options, non-qualified stock options, stock awards, stock units, stock appreciation rights and other stock-based awards. The number of shares initially reserved for issuance under the 2020 Plan is 5,503,678 shares, inclusive of available shares previously reserved for issuance under the 2015 Incentive Share Option Plan, as amended and restated on September 4, 2019 (the 2015 Plan). In addition, the number of shares reserved for issuance under the 2020 Plan is subject to increase for awards previously issued under the 2015 Plan which are forfeited or lapse unexercised. Annually, on the first day of each calendar year beginning on January 1, 2021 and ending on and including January 1, 2030, the reserve will be increased by an amount equal to the lesser of (A) 5% of the shares outstanding (on an as-converted basis) on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined by the Companys board of directors, provided that no more than 3,650,000 shares may be issued upon the exercise of incentive stoc …

DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock · excerpt; the full note is in the filing

Fair Value Measurements The following tables present the Companys fair value hierarchy for financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 ($ in millions): March 31, 2026 Level 1 Level 2 Level 3 Total Financial Assets: Corporate debt securities $ $ 490.9 $ $ 490.9 U.S. Government obligations 163.1 163.1 Asset-backed securities 50.7 50.7 Non-U.S. government obligations 27.1 27.1 Fixed maturities $ $ 731.8 $ $ 731.8 Short term investments 19.5 19.5 Total $ $ 751.3 $ $ 751.3 December 31, 2025 Level 1 Level 2 Level 3 Total Financial Assets: Corporate debt securities $ $ 501.2 $ $ 501.2 U.S. Government obligations 140.1 140.1 Asset-backed securities 45.5 45.5 Non-U.S. government obligations 22.0 22.0 Fixed maturities $ $ 708.8 $ $ 708.8 Short term investments 14.1 14.1 Total $ $ 722.9 $ $ 722.9 Financial Liabilities: Warrant Liability (1) $ $ $ $ (1) Fair value of Public and Private warrant liability amounted to less than $0.1 million as of December 31, 2025 . These warrants expired on February 9, 2026. The carrying value of Borrowings under financing agreement approximates the fair value as of March 31, 2026 and December 31, 2025, and is classified as Level 3. The fair value of all different classes of Level 2 fixed maturities and short-term investments are estimated by using quoted prices from a third-party valuation service provider to gather, analyze and interpret market information and derive fair values …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

"Income Taxes The consolidated effective tax rate was (3.6)% and (1.7)% for the three months ended March 31, 2026 and 2025, respectively. The change in effective tax rate over the two periods was predominantly reflective of the change in profit before tax of the Company's foreign jurisdictions, change in valuation allowance and change in uncertain tax positions relating to transfer pricing methodology. The Company's unrecognized tax benefits related to tax positions, excluding penalty and interest, amounted to $12.5 million and $10.0 million as of March 31, 2026 and 2025, respectively. The increase was primarily driven by the change in transfer pricing methodology in prior year. Interest and penalties related to unrecognized tax expense (benefits) are recognized in income tax expense, when applicable. Interest and penalties amounted to $0.9 million and $0.5 million as of March 31, 2026 and 2025, respectively. The Company's management believes it is reasonably possible that the unrecognized tax benefits could change within the next 12 months. On July 4, 2025, a new U.S. tax legislation was signed into law known as the One Big Beautiful Bill Act of 2025 (""OBBBA"") which includes both tax and non-tax provisions. The changes resulting from the tax provisions in OBBBA did not have a material impact on the Company's results of operations."

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Recently Issued Accounting Pronouncements Pending Adoption In December 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , requiring additional disclosures in the financial statements which disaggregates information underlying certain relevant income statement expense captions in tabular format. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 31, 2027, and retrospective application is permitted. The Company is currently evaluating the impact of the adoption of this standard. In September 2025, the FASB issued ASU 2025-06, which amends the guidance in ASC 350-40, Intangibles - Goodwill and Other - Internal-Use Software . The amendment modernizes the recognition and disclosure for internal-use software costs, removes previous references to project stages and introduced a more judgment-based approach in capitalizing costs. This ASU is effective for annual periods beginning after December 15, 2027, on a prospective, retrospective or modified transition approach. The Company is currently evaluating the impact of the adoption of this standard. There are no other new accounting standards identified and not yet implemented that are expected to have a material effect on the Company's consolidated financial statements.

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Related Party Transactions The Companys Chief Executive Officer and President, both of whom are also members of the Companys board of directors, are the two sole members of the board of directors of the Lemonade Foundation. The Company contributed 500,000 shares of common stock with a fair market value of $24.36 per share (Note 10), of which 400,000 shares were owned by the Lemonade Foundation as of March 31, 2026 and December 31, 2025. There was no outstanding amount due to or from the Lemonade Foundation as of March 31, 2026 and December 31, 2025. …

RelatedPartyTransactionsDisclosureTextBlock · excerpt; the full note is in the filing

Segment Information The Company operates in one reportable segment providing personal property and casualty insurance products within the United States and Europe, including the UK. Insurance coverage under the homeowners multi-peril, inland marine and general liability and private passenger auto lines of business are offered to individual customers through its direct to consumer distribution channel which follows the same underwriting and claims process. The Company's Chief Operating Decision Maker (CODM) is the Chief Executive Officer. The CODM manages the Companys operations, evaluates the operating performance and decides on allocation of resources based on segment / consolidated net income (loss). Loss and loss adjustment expenses and advertising expenses ( growth spend), as included in Sales and Marketing expenses, in the condensed consolidated statements of operations and comprehensive loss, represents the significant expenses which are regularly provided and reviewed by the CODM. The operating results of the personal property and casualty insurance reportable segment is presented in the following table below ($ in millions): Three Months Ended March 31, 2026 2025 Total revenue $ 258.0 $ 151.2 less: Loss and loss adjustment expenses, net 133.3 85.4 Other insurance expense 24.1 26.1 Sales and marketing 11.8 5.1 Advertising expenses 54.3 38.1 Technology development 26.9 22.0 General and administrative 35.0 28.1 Interest expense 6.2 3.3 Depreciation and amortization 2.7 4 …

SegmentReportingDisclosureTextBlock · excerpt; the full note is in the filing

Summary of Significant Accounting Policies Cash, cash equivalents and restricted cash The following represents the Companys cash, cash equivalents and restricted cash as of March 31, 2026 and December 31, 2025 ($ in millions): March 31, December 31, 2026 2025 Cash and cash equivalents $ 374.3 $ 385.0 Restricted cash 12.2 11.8 Total cash, cash equivalents and restricted cash $ 386.5 $ 396.8 Cash and cash equivalents consist primarily of bank deposits and money market accounts with maturities of three months or less at the date of acquisition and are stated at cost, which approximates fair value. The Companys restricted cash primarily relates to insurance policy premiums collected by the Company that it holds in a segregated cash account for transmittal to the underwriting carrier, or settlement of insurance related claims. The Company also has restricted cash relating to security deposits for certain office leases. The carrying value of restricted cash approximates fair value. New Accounting Pronouncements Recently Issued Accounting Pronouncements Pending Adoption In December 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , requiring additional disclosures in the financial statements which disaggregates information underlying certain relevant income statement expense captions in tabular format. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 31, 2027, an …

SignificantAccountingPoliciesTextBlock · excerpt; the full note is in the filing

"Stockholders Equity Common stock The Company's certificate of incorporation, as amended and restated, authorized the Company to issue 200,000,000 shares of par value $0.00001 per share common stock. The voting, dividend and liquidation rights of the holders of the Companys common stock is subject to and qualified by the rights, powers and preferences of the holders of the preferred stock. There were 76,786,720 and 75,907,215 total issued and outstanding shares as of March 31, 2026 and December 31, 2025, respectively. The Company in 2020 made a contribution of 500,000 issued shares of common stock to the Lemonade Foundation, a related party (Note 14), of which 400,000 shares were owned as of both March 31, 2026 and December 31, 2025. Undesignated Preferred Stock The Company's certificate of incorporation, as amended and restated in 2020, authorized the Company to issue up to 10,000,000 shares of undesignated preferred stock, with par value $0.00001 per share. As of both March 31, 2026 and December 31, 2025, there were no shares of undesignated preferred stock issued or outstanding. Warrants The Company in 2022 entered into an omnibus agreement (the Omnibus Agreement) and a warrant agreement (the Warrant Agreement and, together with the Omnibus Agreement, the Agreements) with Chewy Insurance Services, LLC (the Warrantholder or ""Chewy"") in connection with the execution of an agency agreement on the same date between the Company, Lemonade Insurance Agency, LLC, Lemonade Insura …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing