Trupanion(US:TRUP)2025-11-06 22:02Enrollment and Retention - Total pets enrolled at the end of September 30, 2025, was 1,654,414, a decrease from 1,688,903 in 2024[92] - Total subscription pets enrolled at the end of September 30, 2025, was 1,082,412, an increase from 1,032,042 in 2024[92] - Average monthly retention rate remained stable at 98.33% as of September 30, 2025, compared to 98.29% in 2024[92] - Total pets enrolled at the end of the period decreased by 2% to 1,654,414 compared to 1,688,903 in 2024[130] - Total subscription pets enrolled at period end increased by 5% to 1,082,412 for the three months ended September 30, 2025[139] Revenue and Growth - Subscription business revenue for Q3 2025 was $252.7 million, up from $219.0 million in Q3 2024, representing a growth of 15.0% year-over-year[126] - Total revenue for the nine months ended September 30, 2025, reached $1.06 billion, compared to $948.4 million for the same period in 2024, reflecting an increase of 11.8%[126] - Total revenue for the three months ended September 30, 2025, increased by $39.5 million, or 12%, to $366.9 million compared to the same period in 2024[128] - Subscription business revenue rose by $33.7 million, or 15%, to $252.7 million for the three months ended September 30, 2025, driven by a 10% increase in monthly average revenue per pet[128] - Subscription business revenue for the nine months ended September 30, 2025, increased by $99.2 million, or 16%, to $727.9 million, driven by an 11% increase in monthly average revenue per pet[129] Expenses and Costs - Average pet acquisition cost (PAC) rose to $278 in 2025 from $227 in 2024, indicating an increase of about 22.5%[92] - Subscription cost of paying veterinary invoices (non-GAAP) was $516,600 for the nine months ended September 30, 2025, accounting for 71.0% of subscription revenue[101] - Subscription variable expenses (non-GAAP) were $65,681, representing 9.0% of subscription revenue for the nine months ended September 30, 2025[101] - New pet acquisition expense was $62,305 for the nine months ended September 30, 2025, with subscription acquisition cost (non-GAAP) at $56,307, or 7.7% of subscription revenue[101] - Cost of revenue for the subscription business was $200.8 million in Q3 2025, which is 79.3% of subscription revenue, down from 81.0% in Q3 2024[127] - Total cost of revenue for the subscription business segment increased by $60.9 million, or 12%, to $586.1 million for the nine months ended September 30, 2025[132] - General and administrative expenses for the nine months ended September 30, 2025, increased by $11.4 million, or 24%, to $58.3 million compared to the same period in 2024[138] - New pet acquisition expenses increased by $3.6 million, or 20%, to $21.9 million for the three months ended September 30, 2025, driven by increased marketing spend[139] Profitability - Operating income for Q3 2025 was $5.9 million, compared to an operating loss of $1.7 million in Q3 2024[126] - Net income for the nine months ended September 30, 2025, was $13.8 million, a significant improvement from a net loss of $11.3 million in the same period of 2024[126] Cash Flow and Financial Position - Net cash provided by operating activities was $60.2 million for the nine months ended September 30, 2025, compared to $24.6 million for the same period in 2024[152] - Net cash used in investing activities was $53.8 million for the nine months ended September 30, 2025, primarily due to purchases of investment securities totaling $183.0 million[153] - As of September 30, 2025, the company had $348.5 million in cash, cash equivalents, and short-term investments[150] - The company repaid $15.7 million on the Credit Facility during the nine months ended September 30, 2025[154] Underwriting and Risk Management - The company plans to assume full insurance risk for certain products currently underwritten by third parties in Continental Europe[88] - The other business segment, primarily from underwriting policies for Pets Best, is expected to see a decline in enrollment as it engages other third-party underwriters[90] - The company aims to assume full insurance risk for certain products in Continental Europe through direct underwriting or reinsurance arrangements[106] - GPIC began underwriting a material portion of the company's business in Canada in the third quarter of 2025[161] - WICL is required to maintain available statutory capital and surplus at a level equal to or in excess of a prescribed minimum based on net written premiums and loss reserves[165] Accounting and Compliance - There have been no material changes to critical accounting policies or estimates compared to the previous fiscal year[170] - Management believes there have been no material changes to quantitative or qualitative disclosures about market risk during the first nine months ended September 30, 2025[172]