SEATTLE, Feb. 15, 2024 (GLOBE NEWSWIRE) — Trupanion, Inc. (Nasdaq: TRUP), the main supplier of medical insurance coverage for cats and dogs, at the moment introduced monetary outcomes for the fourth quarter and full yr ended December 31, 2023. The monetary outcomes are preliminary and topic to completion of the Company’s audit as described beneath.
“I am pleased that Q4 showed continued improvement in our financial metrics,” stated Darryl Rawlings, CEO and Chair of the Board. “The combination of accelerated subscription revenue growth, continued margin expansion and efficient acquisition spend drove another quarter of positive free cash flow.”
Fourth Quarter 2023 Financial and Business Highlights
- Total income was $295.9 million, a rise of 20% in comparison with the fourth quarter of 2022.
- Total enrolled pets (together with pets from our different business section) was 1,714,473 at December 31, 2023, a rise of 12% over December 31, 2022.
- Subscription business income was $191.5 million, a rise of 21% in comparison with the fourth quarter of 2022.
- Subscription enrolled pets was 991,426 at December 31, 2023, a rise of 14% over December 31, 2022.
- Net loss was $(2.2) million, or $(0.05) per basic and diluted share, in comparison with internet lack of $(9.3) million, or $(0.23) per basic and diluted share, within the fourth quarter of 2022.
- Adjusted EBITDA was $8.5 million, in comparison with adjusted EBITDA of $2.2 million within the fourth quarter of 2022.
- Operating money stream was $17.5 million and free money stream was $13.5 million within the fourth quarter of 2023. This in comparison with working money stream of $1.0 million and free money stream of $(4.5) million within the fourth quarter of 2022.
Full Year 2023 Financial and Business Highlights
- Total income was $1.1 billion, a rise of twenty-two% in comparison with 2022.
- Subscription business income was $712.9 million, a rise of 19% in comparison with 2022.
- Net loss was $(44.7) million, or $(1.08) per basic and diluted share, in comparison with internet lack of $(44.7) million, or $(1.10) per basic and diluted share, in 2022.
- Adjusted EBITDA was $6.4 million, in comparison with adjusted EBITDA of $0.7 million in 2022.
- Operating money stream was $18.6 million and free money stream was $0.4 million in 2023. This in comparison with working money stream of $(8.0) million and free money stream of $(25.1) million in 2022.
- At December 31, 2023, the Company held $277.2 million in money and short-term investments, together with $46.6 million held outdoors the insurance coverage entities, with an extra $15 million available beneath its credit score facility.
- The Company maintained $241.3 million of capital surplus at its insurance coverage subsidiaries. This was $64.1 million greater than the estimated risk-based capital requirement of $177.2 million.
Annual Report on Form 10-Okay
While the Company remains to be finishing its evaluation of the effectiveness of its inner controls over monetary reporting in its upcoming fiscal 2023 Annual Report on Form 10-Okay, the Company expects to report two materials weaknesses in inner controls. The first materials weak spot pertains to info know-how controls, primarily within the areas of person access and program change-management over sure info know-how techniques.
The second materials weak spot pertains to inner controls over monetary reporting, pertaining to the Company’s Other Business section. The 2023 audit stays open, and the Company is working with its auditors to finish the method. As a end result, the Company’s monetary outcomes for the fourth quarter and full yr 2023 are preliminary and topic to the completion of the audit. Efforts to remediate these materials weaknesses are underway. The Company expects to offer further particulars concerning the materials weaknesses, together with its remediation efforts, in its Annual Report on Form 10-Okay.
Conference Call
Trupanion’s administration will host a convention name at the moment to overview its fourth quarter and full yr 2023 outcomes. The name is scheduled to begin shortly after 1:30 p.m. PT/ 4:30 p.m. ET. A reside webcast can be accessible via the Investor Relations part of Trupanion’s web site at https://traders.trupanion.com/ and can be archived on-line for 3 months upon completion of the convention name. Participants can access the convention name by dialing 1-877-300-8521 (United States) or 1-412-317-6026 (International). A telephonic replay of the decision may even be available after the completion of the decision, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and getting into the replay pin quantity: 10182458.
About Trupanion
Trupanion is a pacesetter in medical insurance coverage for cats and dogs all through the United States, Canada, Europe, Puerto Rico and Australia with over 990,000 pets enrolled. For over 20 years, Trupanion has given pet house owners peace of thoughts to allow them to give attention to their pet’s restoration, not monetary stress. Trupanion is dedicated to offering pet house owners with the very best worth in pet medical insurance coverage with limitless payouts for the lifetime of their pets. With its patented course of, Trupanion is the one North American supplier with the know-how to pay veterinarians immediately in seconds on the time of checkout. Trupanion is listed on NASDAQ beneath the image “TRUP”. The firm was based in 2000 and is headquartered in Seattle, WA. Trupanion insurance policies are issued, within the United States, by its wholly-owned insurance coverage entity American Pet Insurance Company and, in Canada, by Omega General Insurance Company. Trupanion Australia is a partnership between Trupanion and Hollard Insurance Company. For extra info, please go to trupanion.com.
Forward-Looking Statements
This press launch incorporates forward-looking statements inside the that means of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 referring to, amongst different issues, expectations, plans, prospects and monetary outcomes for Trupanion, together with, however not restricted to, its expectations concerning its means to proceed to develop its enrollments and income, its means to remediate the fabric weaknesses in inner management over monetary reporting and the timing thereof, its’ means to finish its 2023 annual audit and well timed file its Form 10-Okay, and in any other case execute its business plan. These forward-looking statements are based mostly upon the present expectations and beliefs of Trupanion’s administration as of the date of this press launch, and are topic to sure dangers and uncertainties that might trigger precise outcomes to vary materially from these described within the forward-looking statements. All forward-looking statements made on this press launch are based mostly on info available to Trupanion as of the date hereof, and Trupanion has no obligation to update these forward-looking statements.
In specific, the next components, amongst others, may trigger outcomes to vary materially from these expressed or implied by such forward-looking statements: the flexibility to realize or preserve profitability and/or applicable ranges of money stream in future intervals; the flexibility to continue to grow our membership base and income; the accuracy of assumptions utilized in figuring out applicable member acquisition expenditures; the severity and frequency of claims; the flexibility to keep up excessive retention charges; the accuracy of assumptions utilized in pricing medical plan subscriptions and the flexibility to precisely estimate the impression of latest merchandise or choices on claims frequency; precise claims expense exceeding estimates; regulatory and different constraints on the flexibility to institute, or the choice to in any other case delay, pricing modifications in response to adjustments in precise or estimated claims expense; the effectiveness and statutory or regulatory compliance of our Territory Partner mannequin and of our Territory Partners, veterinarians and different third events in recommending medical plan subscriptions to potential members; the flexibility to retain current Territory Partners and enhance the variety of Territory Partners and lively hospitals; compliance by us and people referring us members with legal guidelines and laws that apply to our business, together with the sale of a pet medical plan; the flexibility to keep up the safety of our knowledge; fluctuations within the Canadian foreign money change price; the flexibility to guard our proprietary and member info; the flexibility to keep up our tradition and crew; the flexibility to keep up the requisite quantity of risk-based capital; our means to implement and preserve efficient controls, together with to remediate materials weaknesses in inner controls over monetary reporting; the flexibility to finish its 2023 annual audit and well timed file its Form 10-Okay, the flexibility to guard and implement Trupanion’s mental property rights; the flexibility to efficiently implement our alliance with Aflac; the flexibility to proceed key contractual relationships with third events; third-party claims together with litigation and regulatory actions; the flexibility to acknowledge advantages from investments in new options and enhancements to Trupanion’s know-how platform and web site; and our means to retain key personnel.
For an in depth dialogue of those and different cautionary statements, please seek advice from the danger components mentioned in filings with the Securities and Exchange Commission (SEC), together with however not restricted to Trupanion’s Annual Report on Form 10-Okay for the yr ended December 31, 2022 and any subsequently filed studies on Forms 10-Q, 10-Okay and 8-Okay. All paperwork are available via the SEC’s Electronic Data Gathering Analysis and Retrieval system at https://www.sec.gov or the Investor Relations part of Trupanion’s web site at https://traders.trupanion.com.
Non-GAAP Financial Measures
Trupanion’s acknowledged outcomes could embody sure non-GAAP monetary measures. These non-GAAP monetary measures could not present info that’s immediately akin to that offered by different firms in its trade as different firms in its trade could calculate or use non-GAAP monetary measures in a different way. In addition, there are limitations in utilizing non-GAAP monetary measures as a result of the non-GAAP monetary measures aren’t ready in accordance with GAAP, could also be completely different from non-GAAP monetary measures utilized by different firms and exclude bills that will have a cloth impression on Trupanion’s reported monetary outcomes. The presentation and utilization of non-GAAP monetary measures is just not meant to be thought-about in isolation or as an alternative choice to the immediately comparable monetary measures ready in accordance with GAAP. Trupanion urges its traders to overview the reconciliation of its non-GAAP monetary measures to probably the most immediately comparable GAAP monetary measures in its consolidated monetary statements, and to not depend on any single monetary or working measure to judge its business. These reconciliations are included beneath and on Trupanion’s Investor Relations web site.
Because of various available valuation methodologies, subjective assumptions and the number of fairness devices that may impression an organization’s non-cash bills, Trupanion believes that offering numerous non-GAAP monetary measures that exclude stock-based compensation expense and depreciation and amortization expense permits for extra significant comparisons between its working outcomes from interval to interval. Trupanion offsets new pet acquisition expense with sign-up charge income within the calculation of internet acquisition cost as a result of it collects sign-up charge income from new members on the time of enrollment and considers it to be an offset to a portion of Trupanion’s new pet acquisition expense. Trupanion believes this permits it to calculate and current monetary measures in a constant method throughout intervals. Trupanion’s administration believes that the non-GAAP monetary measures and the associated monetary measures derived from them are vital instruments for monetary and operational decision-making and for evaluating working outcomes over completely different intervals of time.
| Trupanion, Inc. Consolidated Statements of Operations (in hundreds, besides share knowledge) |
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| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||
| Revenue: | |||||||||||||||
| Subscription business | $ | 191,537 | $ | 158,562 | $ | 712,906 | $ | 596,610 | |||||||
| Other business | 104,320 | 87,447 | 395,699 | 308,569 | |||||||||||
| Total income | 295,857 | 246,009 | 1,108,605 | 905,179 | |||||||||||
| Cost of income: | |||||||||||||||
| Subscription business(1) | 158,631 | 131,823 | 613,686 | 497,684 | |||||||||||
| Other business | 97,162 | 80,537 | 363,903 | 285,310 | |||||||||||
| Total cost of income(2) | 255,793 | 212,360 | 977,589 | 782,994 | |||||||||||
| Operating bills: | |||||||||||||||
| Technology and improvement(1) | 5,969 | 6,955 | 21,403 | 25,133 | |||||||||||
| General and administrative(1) | 13,390 | 10,472 | 60,207 | 39,379 | |||||||||||
| New pet acquisition expense(1) | 17,189 | 22,457 | 77,372 | 89,500 | |||||||||||
| Depreciation and amortization | 3,029 | 2,897 | 12,474 | 10,921 | |||||||||||
| Total working bills | 39,577 | 42,781 | 171,456 | 164,933 | |||||||||||
| Gain (loss) from funding in three way partnership | (79 | ) | (85 | ) | (219 | ) | (253 | ) | |||||||
| Operating loss | 408 | (9,217 | ) | (40,659 | ) | (43,001 | ) | ||||||||
| Interest expense | 3,697 | 1,587 | 12,077 | 4,267 | |||||||||||
| Other earnings, internet | (1,256 | ) | (1,504 | ) | (7,701 | ) | (3,072 | ) | |||||||
| Loss earlier than earnings taxes | (2,033 | ) | (9,300 | ) | (45,035 | ) | (44,196 | ) | |||||||
| Income tax expense (profit) | 130 | (15 | ) | (342 | ) | 476 | |||||||||
| Net loss | $ | (2,163 | ) | $ | (9,285 | ) | $ | (44,693 | ) | $ | (44,672 | ) | |||
| Net loss per share: | |||||||||||||||
| Basic and diluted | $ | (0.05 | ) | $ | (0.23 | ) | $ | (1.08 | ) | $ | (1.10 | ) | |||
| Weighted common shares of widespread inventory excellent: | |||||||||||||||
| Basic and diluted | 41,716,527 | 40,936,507 | 41,436,882 | 40,765,355 | |||||||||||
| (1)Includes stock-based compensation expense as follows: | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Cost of income | $ | 1,478 | $ | 1,346 | $ | 5,279 | $ | 6,484 | |||||||
| Technology and improvement | 861 | 1,549 | 2,846 | 4,742 | |||||||||||
| General and administrative | 3,269 | 3,550 | 17,717 | 12,831 | |||||||||||
| New pet acquisition expense | 1,693 | 2,122 | 7,319 | 9,336 | |||||||||||
| Total stock-based compensation expense | $ | 7,301 | $ | 8,567 | $ | 33,161 | $ | 33,393 | |||||||
| (2)The breakout of cost of income between veterinary bill expense and different cost of income is as follows: | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Veterinary bill expense | $ | 217,739 | $ | 176,083 | $ | 831,055 | $ | 649,737 | |||||||
| Other cost of income | 38,054 | 36,277 | 146,534 | 133,257 | |||||||||||
| Total cost of income | $ | 255,793 | $ | 212,360 | $ | 977,589 | $ | 782,994 | |||||||
| Trupanion, Inc. Consolidated Balance Sheets (in hundreds, besides share knowledge) |
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| December 31, 2023 | December 31, 2022 | ||||||
| (unaudited) | |||||||
| Assets | |||||||
| Current property: | |||||||
| Cash and money equivalents | $ | 147,501 | $ | 65,605 | |||
| Short-term investments | 129,667 | 156,804 | |||||
| Accounts and different receivables, internet of allowance for uncertain accounts of $1,085 at December 31, 2023 and $540 at December 31, 2022 | 267,899 | 232,439 | |||||
| Prepaid bills and different property | 17,022 | 14,248 | |||||
| Total present property | 562,089 | 469,096 | |||||
| Restricted money | 22,963 | 19,032 | |||||
| Long-term investments | 12,866 | 7,841 | |||||
| Property, tools and internal-use software program, internet | 103,650 | 90,701 | |||||
| Intangible property, internet | 18,745 | 24,031 | |||||
| Other long-term property | 18,922 | 18,943 | |||||
| Goodwill | 43,713 | 41,983 | |||||
| Total property | $ | 782,948 | $ | 671,627 | |||
| Liabilities and stockholders’ fairness | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 10,505 | $ | 9,471 | |||
| Accrued liabilities and different present liabilities | 34,052 | 32,616 | |||||
| Reserve for veterinary invoices | 63,238 | 43,734 | |||||
| Deferred income | 235,329 | 202,692 | |||||
| Long-term debt – present portion | 1,350 | 1,103 | |||||
| Total present liabilities | 344,474 | 289,616 | |||||
| Long-term debt | 127,580 | 68,354 | |||||
| Deferred tax liabilities | 2,685 | 3,392 | |||||
| Other liabilities | 4,487 | 4,968 | |||||
| Total liabilities | 479,226 | 366,330 | |||||
| Stockholders’ fairness: | |||||||
| Common inventory: $0.00001 par worth per share, 100,000,000 shares approved; 42,887,052 and 41,858,866 issued and excellent at December 31, 2023; 42,041,344 and 41,013,158 shares issued and excellent at December 31, 2022 | — | — | |||||
| Preferred inventory: $0.00001 par worth per share, 10,000,000 shares approved; no shares issued and excellent | — | — | |||||
| Additional paid-in capital | 536,108 | 499,694 | |||||
| Accumulated different complete loss | 403 | (6,301 | ) | ||||
| Accumulated deficit | (216,255 | ) | (171,562 | ) | |||
| Treasury inventory, at cost: 1,028,186 shares at December 31, 2023 and December 31, 2022 | (16,534 | ) | (16,534 | ) | |||
| Total stockholders’ fairness | 303,722 | 305,297 | |||||
| Total liabilities and stockholders’ fairness | $ | 782,948 | $ | 671,627 | |||
| Trupanion, Inc. Consolidated Statements of Cash Flows (in hundreds) |
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| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||
| Operating actions | |||||||||||||||
| Net loss | $ | (2,163 | ) | $ | (9,285 | ) | $ | (44,693 | ) | $ | (44,672 | ) | |||
| Adjustments to reconcile internet loss to money offered by (utilized in) working actions: | |||||||||||||||
| Depreciation and amortization | 3,029 | 2,897 | 12,474 | 10,921 | |||||||||||
| Stock-based compensation expense | 7,301 | 8,567 | 33,161 | 33,393 | |||||||||||
| Other, internet | 2,481 | 1,023 | 1,347 | 1,051 | |||||||||||
| Changes in working property and liabilities: | |||||||||||||||
| Accounts and different receivables | 10,153 | (8,034 | ) | (35,440 | ) | (66,982 | ) | ||||||||
| Prepaid bills and different property | 854 | (807 | ) | (1,907 | ) | (5,227 | ) | ||||||||
| Accounts payable, accrued liabilities, and different liabilities | 5,476 | 2,388 | 1,644 | 3,136 | |||||||||||
| Reserve for veterinary invoices | 1,788 | 4,164 | 19,485 | 4,227 | |||||||||||
| Deferred income | (11,412 | ) | 106 | 32,567 | 56,153 | ||||||||||
| Net money offered by (utilized in) working actions | 17,507 | 1,019 | 18,638 | (8,000 | ) | ||||||||||
| Investing actions | |||||||||||||||
| Purchases of funding securities | (56,547 | ) | (147,346 | ) | (165,936 | ) | (273,006 | ) | |||||||
| Maturities and gross sales of funding securities | 42,905 | 134,718 | 190,270 | 239,210 | |||||||||||
| Cash paid in business acquisition, internet of money acquired | — | (12,279 | ) | — | (15,034 | ) | |||||||||
| Purchases of property, tools, and internal-use software program | (3,970 | ) | (5,478 | ) | (18,280 | ) | (17,088 | ) | |||||||
| Other | 165 | (167 | ) | 1,585 | (1,598 | ) | |||||||||
| Net money offered by (utilized in) investing actions | (17,447 | ) | (30,552 | ) | 7,639 | (67,516 | ) | ||||||||
| Financing actions | |||||||||||||||
| Proceeds from debt financing, internet of financing charges | — | 14,826 | 60,102 | 69,138 | |||||||||||
| Repayment of debt financing | (337 | ) | (271 | ) | (1,717 | ) | (571 | ) | |||||||
| Repurchases of widespread inventory | — | — | — | (5,755 | ) | ||||||||||
| Proceeds from train of inventory choices | 1,374 | 706 | 2,655 | 2,290 | |||||||||||
| Shares withheld to fulfill tax withholding | (240 | ) | (579 | ) | (1,536 | ) | (4,359 | ) | |||||||
| Other | (228 | ) | — | (378 | ) | — | |||||||||
| Net money offered by (utilized in) financing actions | 569 | 14,682 | 59,126 | 60,743 | |||||||||||
| Effect of international change price adjustments on money, money equivalents, and restricted money, internet | 1,254 | 505 | 424 | (1,459 | ) | ||||||||||
| Net change in money, money equivalents, and restricted money | 1,883 | (14,346 | ) | 85,827 | (16,232 | ) | |||||||||
| Cash, money equivalents, and restricted money at starting of interval | 168,581 | 98,983 | 84,637 | 100,869 | |||||||||||
| Cash, money equivalents, and restricted money at finish of interval | $ | 170,464 | $ | 84,637 | $ | 170,464 | $ | 84,637 | |||||||
| The following tables set forth our key working metrics: | |||||||||||||||||||||||||||||||
| Year Ended December 31, |
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| 2023 | 2022 | ||||||||||||||||||||||||||||||
| Total Business: | |||||||||||||||||||||||||||||||
| Total pets enrolled (at interval finish) | 1,714,473 | 1,537,573 | |||||||||||||||||||||||||||||
| Subscription Business: | |||||||||||||||||||||||||||||||
| Total subscription pets enrolled (at interval finish) | 991,426 | 869,862 | |||||||||||||||||||||||||||||
| Monthly common income per pet | $ | 65.26 | $ | 63.82 | |||||||||||||||||||||||||||
| Lifetime worth of a pet, together with mounted bills | $ | 419 | $ | 641 | |||||||||||||||||||||||||||
| Average pet acquisition cost (PAC) | $ | 228 | $ | 289 | |||||||||||||||||||||||||||
| Average month-to-month retention | 98.49 | % | 98.69 | % | |||||||||||||||||||||||||||
| Three Months Ended |
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| Dec. 31, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
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| Total Business: | |||||||||||||||||||||||||||||||
| Total pets enrolled (at interval finish) | 1,714,473 | 1,712,177 | 1,679,659 | 1,616,865 | 1,537,573 | 1,439,605 | 1,348,145 | 1,267,253 | |||||||||||||||||||||||
| Subscription Business: | |||||||||||||||||||||||||||||||
| Total subscription pets enrolled (at interval finish) | 991,426 | 969,322 | 943,958 | 906,369 | 869,862 | 808,077 | 770,318 | 736,691 | |||||||||||||||||||||||
| Monthly common income per pet | $ | 67.07 | $ | 65.82 | $ | 64.41 | $ | 63.58 | $ | 63.11 | $ | 63.80 | $ | 64.26 | $ | 64.21 | |||||||||||||||
| Lifetime worth of a pet, together with mounted bills | $ | 419 | $ | 428 | $ | 470 | $ | 541 | $ | 641 | $ | 673 | $ | 713 | $ | 730 | |||||||||||||||
| Average pet acquisition cost (PAC) | $ | 217 | $ | 212 | $ | 236 | $ | 247 | $ | 283 | $ | 268 | $ | 309 | $ | 301 | |||||||||||||||
| Average month-to-month retention | 98.49 | % | 98.55 | % | 98.61 | % | 98.65 | % | 98.69 | % | 98.71 | % | 98.74 | % | 98.75 | % | |||||||||||||||
| The following desk displays the reconciliation of money offered by working actions to free money stream (in hundreds): | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Net money offered by (utilized in) working actions | $ | 17,507 | $ | 1,019 | $ | 18,638 | $ | (8,000 | ) | ||||||
| Purchases of property, tools, and internal-use software program | (3,970 | ) | (5,478 | ) | (18,280 | ) | (17,088 | ) | |||||||
| Free money stream | $ | 13,537 | $ | (4,459 | ) | $ | 358 | $ | (25,088 | ) | |||||
| The following tables mirror the reconciliation between GAAP and non-GAAP measures (in hundreds besides percentages): | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Veterinary bill expense | $ | 217,739 | $ | 176,083 | $ | 831,055 | $ | 649,737 | ||||||||
| Less: | ||||||||||||||||
| Stock-based compensation expense1 | (885 | ) | (899 | ) | (3,450 | ) | (4,054 | ) | ||||||||
| Other business cost of paying veterinary invoices | (77,572 | ) | (59,946 | ) | (287,858 | ) | (212,857 | ) | ||||||||
| Subscription cost of paying veterinary invoices (non-GAAP) | $ | 139,282 | $ | 115,238 | $ | 539,747 | $ | 432,826 | ||||||||
| % of subscription income | 72.7 | % | 72.7 | % | 75.7 | % | 72.5 | % | ||||||||
| Other cost of income | $ | 38,054 | $ | 36,277 | $ | 146,534 | $ | 133,257 | ||||||||
| Less: | ||||||||||||||||
| Stock-based compensation expense1 | (386 | ) | (414 | ) | (1,544 | ) | (2,232 | ) | ||||||||
| Other business variable bills | (19,301 | ) | (20,591 | ) | (75,756 | ) | (72,453 | ) | ||||||||
| Subscription variable bills (non-GAAP) | $ | 18,367 | $ | 15,272 | $ | 69,234 | $ | 58,572 | ||||||||
| % of subscription income | 9.6 | % | 9.6 | % | 9.7 | % | 9.8 | % | ||||||||
| Technology and improvement expense | $ | 5,969 | $ | 6,955 | $ | 21,403 | $ | 25,133 | ||||||||
| General and administrative expense | 13,390 | 10,472 | 60,207 | 39,379 | ||||||||||||
| Less: | ||||||||||||||||
| Stock-based compensation expense1 | (3,797 | ) | (5,019 | ) | (19,869 | ) | (17,135 | ) | ||||||||
| Non-recurring transaction or restructuring bills2 | — | (193 | ) | (4,175 | ) | (372 | ) | |||||||||
| Development bills3 | (1,683 | ) | (2,084 | ) | (5,100 | ) | (7,789 | ) | ||||||||
| Fixed bills (non-GAAP) | $ | 13,879 | $ | 10,131 | $ | 52,466 | $ | 39,216 | ||||||||
| % of complete income | 4.7 | % | 4.1 | % | 4.7 | % | 4.3 | % | ||||||||
| New pet acquisition expense | $ | 17,189 | $ | 22,457 | $ | 77,372 | $ | 89,500 | ||||||||
| Less: | ||||||||||||||||
| Stock-based compensation expense1 | (1,567 | ) | (2,079 | ) | (7,000 | ) | (9,116 | ) | ||||||||
| Other business pet acquisition expense | (77 | ) | (65 | ) | (200 | ) | (541 | ) | ||||||||
| Subscription acquisition cost (non-GAAP) | $ | 15,545 | $ | 20,313 | $ | 70,172 | $ | 79,843 | ||||||||
| % of subscription income | 8.1 | % | 12.8 | % | 9.8 | % | 13.4 | % | ||||||||
| 1Trupanion staff could elect to take restricted inventory models in lieu of money cost for his or her bonuses. We account for such expense as stock-based compensation based on GAAP, however we don’t embody it in any non-GAAP changes. Stock-based compensation related to bonuses was roughly $0.7 million and $1.3 million for the three months and yr ended December 31, 2023, respectively. | ||||||||||||||||
| 2Consists of business acquisition transaction bills, severance and authorized prices as a consequence of sure executives’ departures, and a $3.8 million non-recurring settlement of accounts receivable within the first quarter of 2023 associated to uncollected premiums in reference to the transition of underwriting a third-party business to different insurers. | ||||||||||||||||
| 3As we enter the subsequent part of our progress, we count on to spend money on initiatives which are pre-revenue, together with including new merchandise and worldwide growth. These improvement bills are prices associated to product exploration and improvement which are pre-revenue and traditionally have been insignificant. We view these actions as makes use of of our adjusted working earnings separate from pet acquisition spend. | ||||||||||||||||
| The following tables mirror the reconciliation of GAAP measures to non-GAAP measures (in hundreds, besides percentages): | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Operating Income, GAAP Basis | $ | 408 | $ | (9,217 | ) | $ | (40,659 | ) | $ | (43,001 | ) | |||||
| Non-GAAP Expense changes | ||||||||||||||||
| Acquisition cost | 15,622 | 20,378 | 70,372 | 80,384 | ||||||||||||
| Stock-based compensation expense1 | 6,636 | 8,411 | 31,864 | 32,537 | ||||||||||||
| Development bills3 | 1,683 | 2,084 | 5,100 | 7,789 | ||||||||||||
| Depreciation and amortization | 3,029 | 2,897 | 12,474 | 10,921 | ||||||||||||
| Non-recurring transaction or restructuring bills2 | — | 193 | 4,175 | 372 | ||||||||||||
| Gain (loss) from funding in three way partnership | (79 | ) | (85 | ) | (219 | ) | (253 | ) | ||||||||
| Total Adjusted Operating earnings | $ | 27,457 | $ | 24,831 | $ | 83,545 | $ | 89,255 | ||||||||
| Subscription Business: | ||||||||||||||||
| Subscription Operating Income, GAAP Basis | $ | 1,300 | $ | (8,753 | ) | $ | (35,994 | ) | $ | (39,757 | ) | |||||
| Non-GAAP Expense changes | ||||||||||||||||
| Acquisition cost | 15,545 | 20,313 | 70,172 | 79,843 | ||||||||||||
| Stock-based compensation expense1 | 5,006 | 6,628 | 24,488 | 26,673 | ||||||||||||
| Development bills3 | 1,090 | 1,343 | 3,281 | 5,123 | ||||||||||||
| Depreciation and amortization | 1,961 | 1,867 | 8,021 | 7,205 | ||||||||||||
| Non-recurring transaction or restructuring bills2 | — | 124 | 218 | 241 | ||||||||||||
| Subscription Adjusted Operating earnings | $ | 24,902 | $ | 21,522 | $ | 70,186 | $ | 79,328 | ||||||||
| Other Business: | ||||||||||||||||
| Other Business Operating Income, GAAP Basis | $ | (813 | ) | $ | (379 | ) | $ | (4,446 | ) | $ | (2,992 | ) | ||||
| Non-GAAP Expense changes | ||||||||||||||||
| Acquisition cost | 77 | 65 | 200 | 541 | ||||||||||||
| Stock-based compensation expense1 | 1,630 | 1,783 | 7,376 | 5,865 | ||||||||||||
| Development bills3 | 593 | 741 | 1,819 | 2,666 | ||||||||||||
| Depreciation and amortization | 1,068 | 1,030 | 4,453 | 3,716 | ||||||||||||
| Non-recurring transaction or restructuring bills2 | — | 69 | 3,957 | 131 | ||||||||||||
| Other Business Adjusted Operating earnings | $ | 2,555 | $ | 3,309 | $ | 13,359 | $ | 9,927 | ||||||||
| 1Trupanion staff could elect to take restricted inventory models in lieu of money cost for his or her bonuses. We account for such expense as stock-based compensation based on GAAP, however we don’t embody it in any non-GAAP changes. Stock-based compensation related to bonuses was roughly $0.7 million and $1.3 million for the three months and yr ended December 31, 2023, respectively. | ||||||||||||||||
| 2Consists of business acquisition transaction bills, severance and authorized prices as a consequence of sure executives’ departures, and a $3.8 million non-recurring settlement of accounts receivable within the first quarter of 2023 associated to uncollected premiums in reference to the transition of underwriting a third-party business to different insurers. | ||||||||||||||||
| 3As we enter the subsequent part of our progress, we count on to spend money on initiatives which are pre-revenue, together with including new merchandise and worldwide growth. These improvement bills are prices associated to product exploration and improvement which are pre-revenue and traditionally have been insignificant. We view these actions as makes use of of our adjusted working earnings separate from pet acquisition spend. | ||||||||||||||||
| The following tables mirror the reconciliation of GAAP measures to non-GAAP measures (in hundreds, besides percentages): | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Subscription income | $ | 191,537 | $ | 158,562 | $ | 712,906 | $ | 596,610 | |||||||
| Subscription cost of paying veterinary invoices | 139,281 | 115,238 | 539,746 | 432,826 | |||||||||||
| Subscription variable bills | 18,367 | 15,272 | 69,234 | 58,572 | |||||||||||
| Subscription mounted bills* | 8,987 | 6,530 | 33,740 | 25,884 | |||||||||||
| Subscription adjusted working earnings | $ | 24,902 | $ | 21,522 | $ | 70,186 | $ | 79,328 | |||||||
| Other business income | $ | 104,320 | $ | 87,447 | $ | 395,699 | $ | 308,569 | |||||||
| Other business cost of paying veterinary invoices | 77,572 | 59,946 | 287,858 | 212,857 | |||||||||||
| Other business variable bills | 19,301 | 20,591 | 75,756 | 72,453 | |||||||||||
| Other business mounted bills* | 4,892 | 3,601 | 18,726 | 13,332 | |||||||||||
| Other business adjusted working earnings | $ | 2,555 | $ | 3,309 | $ | 13,359 | $ | 9,927 | |||||||
| Revenue | $ | 295,857 | $ | 246,009 | $ | 1,108,605 | $ | 905,179 | |||||||
| Cost of paying veterinary invoices | 216,854 | 175,184 | 827,605 | 645,683 | |||||||||||
| Variable bills | 37,668 | 35,863 | 144,990 | 131,025 | |||||||||||
| Fixed bills* | 13,879 | 10,131 | 52,466 | 39,216 | |||||||||||
| Total business adjusted working earnings | $ | 27,457 | $ | 24,831 | $ | 83,545 | $ | 89,255 | |||||||
| As a share of income: | Three Months Ended December 31, | Year Ended December 31, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Subscription income | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| Subscription cost of paying veterinary invoices | 72.7 | % | 72.7 | % | 75.7 | % | 72.5 | % | |||||||
| Subscription variable bills | 9.6 | % | 9.6 | % | 9.7 | % | 9.8 | % | |||||||
| Subscription mounted bills* | 4.7 | % | 4.1 | % | 4.7 | % | 4.3 | % | |||||||
| Subscription adjusted working earnings | 13.0 | % | 13.6 | % | 9.8 | % | 13.3 | % | |||||||
| Other business income | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| Other business cost of paying veterinary invoices | 74.4 | % | 68.6 | % | 72.7 | % | 69.0 | % | |||||||
| Other business variable bills | 18.5 | % | 23.5 | % | 19.1 | % | 23.5 | % | |||||||
| Other business mounted bills* | 4.7 | % | 4.1 | % | 4.7 | % | 4.3 | % | |||||||
| Other business adjusted working earnings | 2.4 | % | 3.8 | % | 3.4 | % | 3.2 | % | |||||||
| Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| Cost of paying veterinary invoices | 73.3 | % | 71.2 | % | 74.7 | % | 71.3 | % | |||||||
| Variable bills | 12.7 | % | 14.6 | % | 13.1 | % | 14.5 | % | |||||||
| Fixed bills* | 4.7 | % | 4.1 | % | 4.7 | % | 4.3 | % | |||||||
| Total adjusted working earnings | 9.3 | % | 10.1 | % | 7.5 | % | 9.9 | % | |||||||
*Fixed bills characterize shared providers that assist each our subscription and different business segments and, as such, are typically allotted to every section pro-rata based mostly on revenues.
Adjusted working earnings is a non-GAAP monetary measure that adjusts working earnings (loss) to take away the impact of acquisition cost, improvement bills, non-recurring transaction or restructuring bills, and achieve (loss) from funding in three way partnership. Non-cash objects, comparable to stock-based compensation expense and depreciation and amortization, are additionally excluded. Acquisition cost, improvement bills, achieve (loss) from funding in three way partnership, stock-based compensation expense, and depreciation and amortization are anticipated to stay recurring bills for the foreseeable future, however are excluded from this metric to measure scale in different areas of the business. Management believes acquisition prices primarily characterize the cost to amass new subscribers and are pushed by the quantity of progress we select to pursue based mostly totally on the quantity of our adjusted working earnings interval over interval. Accordingly, this measure is just not indicative of our core working earnings efficiency. We additionally exclude improvement bills, achieve (loss) from funding in three way partnership, stock-based compensation expense, and depreciation and amortization as a result of some traders could not view these objects as reflective of our core working earnings efficiency.
Management makes use of adjusted working earnings and the margin on adjusted working earnings to know the results of scale in its non-acquisition cost and improvement bills and to plan future promoting expenditures, that are designed to amass new pets. Management makes use of this measure as a principal approach of understanding the working efficiency of its business unique of acquisition cost and new product exploration and improvement initiatives. Management believes disclosure of this metric supplies traders with the identical knowledge that the Company employs in assessing its total operations and that disclosure of this measure could present helpful info concerning the effectivity of our utilization of revenues, return on promoting {dollars} within the type of new subscribers and future use of available money to assist the continued progress of our business.
| The following tables mirror the reconciliation of adjusted EBITDA to internet loss (in hundreds): | |||||||||||||||||||||||||||||||
| Year Ended December 31, | |||||||||||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||||||||||
| Net loss | $ | (44,693 | ) | $ | (44,672 | ) | |||||||||||||||||||||||||
| Excluding: | |||||||||||||||||||||||||||||||
| Stock-based compensation expense | 31,864 | 32,537 | |||||||||||||||||||||||||||||
| Depreciation and amortization expense | 12,474 | 10,921 | |||||||||||||||||||||||||||||
| Interest earnings | (9,011 | ) | (3,026 | ) | |||||||||||||||||||||||||||
| Interest expense | 12,077 | 4,267 | |||||||||||||||||||||||||||||
| Other non-operating bills | — | (1 | ) | ||||||||||||||||||||||||||||
| Income tax (profit) expense | (342 | ) | 476 | ||||||||||||||||||||||||||||
| Non-recurring transaction or restructuring bills | 4,175 | 372 | |||||||||||||||||||||||||||||
| (Gain) loss from fairness methodology funding | (110 | ) | (131 | ) | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 6,434 | $ | 743 | |||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||
| Dec. 31, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | ||||||||||||||||||||||||
| Net loss | $ | (2,163 | ) | $ | (4,036 | ) | $ | (13,714 | ) | $ | (24,780 | ) | $ | (9,285 | ) | $ | (12,914 | ) | $ | (13,618 | ) | $ | (8,855 | ) | |||||||
| Excluding: | |||||||||||||||||||||||||||||||
| Stock-based compensation expense | 6,636 | 6,585 | 6,503 | 12,140 | 8,412 | 8,306 | 8,462 | 7,358 | |||||||||||||||||||||||
| Depreciation and amortization expense | 3,029 | 2,990 | 3,253 | 3,202 | 2,897 | 2,600 | 2,707 | 2,717 | |||||||||||||||||||||||
| Interest earnings | (2,842 | ) | (2,389 | ) | (2,051 | ) | (1,729 | ) | (1,614 | ) | (1,018 | ) | (297 | ) | (97 | ) | |||||||||||||||
| Interest expense | 3,697 | 3,053 | 2,940 | 2,387 | 1,587 | 1,408 | 1,193 | 79 | |||||||||||||||||||||||
| Other non-operating bills | — | — | — | — | — | — | (1 | ) | — | ||||||||||||||||||||||
| Income tax expense (profit) | 130 | (43 | ) | (238 | ) | (191 | ) | (15 | ) | 496 | 19 | (24 | ) | ||||||||||||||||||
| Non-recurring transaction or restructuring bills | — | 8 | 65 | 4,102 | 193 | 179 | — | — | |||||||||||||||||||||||
| (Gain) loss from fairness methodology funding | — | (110 | ) | — | — | — | — | (131 | ) | — | |||||||||||||||||||||
| Adjusted EBITDA | $ | 8,487 | $ | 6,058 | $ | (3,242 | ) | $ | (4,869 | ) | $ | 2,175 | $ | (943 | ) | $ | (1,666 | ) | $ | 1,178 | |||||||||||
Contacts:
Investors:
Laura Bainbridge
Senior Vice President, Corporate Communications
[email protected]
A photograph accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/43ac6979-0a60-4a85-be2c-e575f1305fdf
