Trupanion(US:TRUP)2025-02-27 21:10Enrollment and Subscription Metrics - Total pets enrolled at the end of 2024 reached 1,677,570, a decrease of 2.1% from 1,714,473 in 2023[222] - Total subscription pets enrolled increased to 1,041,212 in 2024, up 5.0% from 991,426 in 2023[222] - Total pets enrolled at the end of 2024 was 1,677,570, a decrease of 2% from 2023, while subscription pets enrolled increased by 5%[265] - Total pets enrolled reached 1,699,643 as of June 30, 2024, an increase from 1,677,570 at the end of December 2023, representing a growth of approximately 1.5%[278] - Total subscription pets enrolled was 1,020,934 at the end of June 30, 2024, compared to 991,426 at the end of September 2023, indicating a growth of about 3.0%[278] Revenue and Financial Performance - Subscription business revenue increased to $856,521,000 in 2024, up from $712,906,000 in 2023, representing a growth of 20.1%[260] - Other business revenue rose to $429,163,000 in 2024, compared to $395,699,000 in 2023, reflecting a growth of 8.4%[260] - Total revenue for 2024 reached $1,285,684,000, a 15.9% increase from $1,108,605,000 in 2023[260] - Subscription business revenue for Q4 2024 reached $227,783,000, up from $218,986,000 in Q3 2024, representing a 0.36% increase[277] - Total revenue for Q4 2024 was $337,307,000, compared to $327,456,000 in Q3 2024, marking a 2.6% growth[277] - The net loss for 2024 was $9,633,000, a significant improvement from a net loss of $44,693,000 in 2023[260] - Total revenue for the year ended December 31, 2024, increased by $177.1 million, or 16%, to $1,285.7 million compared to 2023[263] Cost and Expenses - Cost of revenue for the subscription business was $706,851,000 in 2024, up from $613,686,000 in 2023, indicating a rise of 15.2%[260] - Operating expenses totaled $188,130,000 in 2024, compared to $171,456,000 in 2023, marking a 9.7% increase[260] - Subscription cost of paying veterinary invoices (non-GAAP) was $621,093 in 2024, representing 72.5% of subscription revenue[232] - Subscription acquisition cost (non-GAAP) decreased to $64,432 in 2024, which is 7.5% of subscription revenue[232] - New pet acquisition expense was $71,379 in 2024, down from $77,372 in 2023[232] - General and administrative expense was $63,731 in 2024, up from $60,207 in 2023[232] - Total cost of revenue for the subscription business increased by $93.2 million, or 15%, to $706.9 million, with veterinary invoice expenses rising by 15%[265] - General and administrative expenses increased by $3.5 million, or 6%, to $63.7 million, primarily due to higher compensation and professional services costs[269] Retention and Member Experience - Average monthly retention rate was 98.25% in 2024, slightly down from 98.49% in 2023[222] - Average monthly retention is crucial for performance, influenced by perceived value and member experience[253] - The company plans to implement new initiatives to enhance member experience and explore adjacent opportunities[256] Technology and Development - Technology and development expense increased to $31,255 in 2024, compared to $21,403 in 2023[232] - Technology and development expenses increased by $9.9 million, or 46%, to $31.3 million, attributed to higher employee-related expenses and infrastructure costs[268] - Technology and development expenses for Q4 2024 totaled $8,172, an increase from $7,933 in Q3 2024 and $5,969 in Q4 2023[235] Cash Flow and Financial Position - Net cash provided by operating activities was $48.3 million for the year ended December 31, 2024, compared to $18.6 million in 2023, marking an increase of 159.0%[283] - Net cash used by investing activities was $13.5 million for the year ended December 31, 2024, primarily due to $9.7 million in capital expenditures related to software development[284] - Net cash used by financing activities was $4.0 million for the year ended December 31, 2024, primarily due to $2.5 million in shares withheld for tax withholdings[285] - As of December 31, 2024, the company had $307.4 million in cash, cash equivalents, and short-term investments, with $272.0 million held by insurance entities[281] Other Financial Metrics - Stock-based compensation expense totaled $33,432,000 in 2024, slightly increasing from $33,161,000 in 2023[260] - Stock-based compensation expense for Q4 2024 was approximately $800, down from $830 in Q3 2024 and $885 in Q4 2023[235] - The percentage of subscription variable expenses to subscription revenue was 9.2% in Q4 2024, slightly down from 9.4% in Q3 2024 and 10.1% in Q4 2023[235] - Goodwill impairment charges in Q4 2024 amounted to $5,299,000, with no charges reported in Q3 2024[277] - The company reported a loss from investment in joint ventures of $2,000 in Q4 2024, a recovery from a loss of $34,000 in Q3 2024[277] Market and Strategic Initiatives - The company continues to focus on market expansion and product development, with significant investments in technology and new pet acquisition strategies[236] - Approximately 16% of the company's revenue is generated in Canada, with a 10% change in the Canadian currency exchange rate potentially impacting total revenues by approximately $20.7 million[305] - WICL Segregated Account Trupanion Germany and Trupanion Switzerland were established in Q3 2024 for reinsurance agreements, with all shares owned by Trupanion, Inc.[291] - The company is required to maintain available statutory capital and surplus as a class 3 insurer under the Insurance Act of 1978, ensuring solvency and liquidity standards are met[293]