SEATTLE, Feb. 13, 2018 (GLOBE NEWSWIRE) -- Trupanion, Inc. (Nasdaq:TRUP), a leading provider of medical insurance for cats and dogs, today announced financial results for the fourth quarter and full year ended December 31, 2017.
“We are pleased with our fourth quarter results, which capped off a solid year both operationally and financially. Revenue grew within our 20 – 30% target range and we meaningfully increased the funds available to us to invest in pet acquisition,” said Darryl Rawlings, CEO of Trupanion. “We plan to allocate additional funds to our test spend in 2018, with the goal of better understanding the levers that can drive enrolled pet growth while also meeting our internal rate of return targets over time.”
Fourth Quarter 2017 Financial and Business Highlights
- Total revenue was $66.5 million, an increase of 30% compared to the fourth quarter of 2016 (28% on a constant currency basis).
- Total enrolled pets (including pets from our other business segment) was 423,194 at December 31, 2017, an increase of 23% over December 31, 2016.
- Subscription business revenue was $59.0 million, an increase of 24% compared to the fourth quarter of 2016.
- Subscription enrolled pets was 371,683 at December 31, 2017, an increase of 15% over December 31, 2016.
- Net loss was $(0.8) million, or $(0.03) per basic and diluted share, compared to a net loss of $(1.7) million, or $(0.06) per basic and diluted share, in the fourth quarter of 2016. Our Q4 2017 net loss includes a one-time tax benefit of $0.6 million, or $0.02 per share, related to the revaluation of our deferred tax liabilities as a result of the 2017 Tax Cuts and Jobs Act.
- Adjusted EBITDA was $0.7 million, compared to adjusted EBITDA of $0.3 million in the fourth quarter of 2016.
- Operating cash flow was $3.0 million and free cash flow was $2.1 million, compared to operating cash flow of $3.4 million and free cash flow of $3.0 million in the fourth quarter of 2016.
Full Year 2017 Financial and Business Highlights
- Total revenue was $242.7 million, an increase of 29% compared to 2016.
- Subscription business revenue was $218.4 million, an increase of 26% compared to 2016.
- Net loss was $(1.5) million, or $(0.05) per basic and diluted share, compared to a net loss of $(6.9) million or $(0.24) per basic and diluted share, in 2016. Our 2017 net loss includes a one-time tax benefit of $0.6 million, or $0.02 per share, related to the revaluation of our deferred tax liabilities as a result of the 2017 Tax Cuts and Jobs Act.
- Adjusted EBITDA was $5.0 million, compared to adjusted EBITDA of $0.1 million in 2016.
- Operating cash flow was $9.7 million and free cash flow was $6.5 million, compared to operating cash flow of $5.0 million and free cash flow of $3.1 million in 2016.
Revenue by Quarter
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Conference Call
Trupanion’s management will host a conference call today to review its fourth quarter and full year 2017 results. The call is scheduled to begin shortly after 1:30 p.m. PT/ 4:30 p.m. ET. A live webcast will be accessible through the Investor Relations section of Trupanion’s website at http://investors.trupanion.com and will be archived online for 3 months upon completion of the conference call. Participants can access the conference call by dialing 1-877-407-0784 (United States) or 1-201-689-8560 (International). A telephonic replay of the call will also be available, one hour after the completion of the call, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 13675441.
About Trupanion
Trupanion is a leader in medical insurance for cats and dogs throughout the United States and Canada. For almost two decades, Trupanion has helped provide peace of mind to pet owners so they can focus on their pet's recovery, not financial stress. Trupanion is committed to providing pet owners with the highest value in pet medical insurance. Trupanion is listed on NASDAQ under the symbol "TRUP". The company was founded in 2000 and is headquartered in Seattle, WA. Trupanion policies are issued, in the United States, by its wholly-owned insurance entity American Pet Insurance Company and, in Canada, by Omega General Insurance Company. For more information please visit Trupanion.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to, among other things, expectations, plans, prospects and financial results for Trupanion, including, but not limited to, its expectations regarding its ability to execute its business plans. These forward-looking statements are based upon the current expectations and beliefs of Trupanion’s management as of the date of this press release, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All forward-looking statements made in this press release are based on information available to Trupanion as of the date hereof, and Trupanion has no obligation to update these forward-looking statements.
In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the ability to achieve or maintain profitability and/or appropriate levels of cash flow in future periods; the ability to keep growing our membership base and revenue; the accuracy of assumptions used in determining appropriate member acquisition expenditures; the severity and frequency of claims; the ability to maintain high retention rates; the accuracy of assumptions used in pricing medical plan subscriptions and the ability to accurately estimate the impact of new products or offerings on claims frequency; actual claims expense exceeding estimates; regulatory and other constraints on the ability to institute, or the decision to otherwise delay, pricing modifications in response to changes in actual or estimated claims expense; the effectiveness and statutory or regulatory compliance of our Territory Partner model and of our Territory Partners, veterinarians and other third parties in recommending medical plan subscriptions to potential members; the ability to retain existing Territory Partners and increase the number of Territory Partners and active hospitals; compliance by us and those referring us members with laws and regulations that apply to our business, including the sale of a pet medical plan; the ability to maintain the security of our data; fluctuations in the Canadian currency exchange rate; the ability to protect our proprietary and member information; the ability to maintain our culture and team; the ability to maintain the requisite amount of risk-based capital; our ability to implement and maintain effective controls, including over financial reporting; the ability to protect and enforce Trupanion’s intellectual property rights; the ability to continue key contractual relationships with third parties; third-party claims including litigation and regulatory actions; the ability to recognize benefits from investments in new solutions and enhancements to Trupanion’s technology platform and website; and our ability to retain key personnel.
For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the Securities and Exchange Commission (SEC), including but not limited to, Trupanion’s Annual Report on Form 10-K for the year ended December 31, 2017 and any subsequently filed reports on Forms 10-Q and 8-K. All documents are available through the SEC’s Electronic Data Gathering Analysis and Retrieval system at www.sec.gov or the Investor Relations section of Trupanion’s website at http://investors.trupanion.com.
Non-GAAP Financial Measures
Trupanion’s stated results may include certain non-GAAP financial measures. These non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in its industry as other companies in its industry may calculate or use non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Trupanion’s reported financial results. The presentation and utilization of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Trupanion urges its investors to review the reconciliation of its non-GAAP financial measures to the most directly comparable GAAP financial measures in its consolidated financial statements, and not to rely on any single financial or operating measure to evaluate its business. These reconciliations are included below and on Trupanion’s Investor Relations website.
Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash expenses, Trupanion believes that providing various non-GAAP financial measures that exclude stock-based compensation expense and depreciation and amortization expense allows for more meaningful comparisons between its operating results from period to period. Trupanion offsets sales and marketing expense with sign-up fee revenue in the calculation of net acquisition cost because it collects sign-up fee revenue from new members at the time of enrollment and considers it to be an offset to a portion of Trupanion’s sales and marketing expenses. Trupanion believes this allows it to calculate and present financial measures in a consistent manner across periods. Trupanion’s management believes that the non-GAAP financial measures and the related financial measures derived from them are important tools for financial and operational decision-making and for evaluating operating results over different periods of time.
| Trupanion, Inc. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| (unaudited) | ||||||||||||||||
| Revenue: | ||||||||||||||||
| Subscription business | $ | 58,991 | $ | 47,422 | $ | 218,354 | $ | 173,356 | ||||||||
| Other business | 7,554 | 3,918 | 24,313 | 14,874 | ||||||||||||
| Total revenue | 66,545 | 51,340 | 242,667 | 188,230 | ||||||||||||
| Cost of revenue: | ||||||||||||||||
| Subscription business (1) | 47,831 | 38,528 | 176,883 | 141,321 | ||||||||||||
| Other business | 6,977 | 3,594 | 22,734 | 13,621 | ||||||||||||
| Total cost of revenue (2) | 54,808 | 42,122 | 199,617 | 154,942 | ||||||||||||
| Gross profit: | ||||||||||||||||
| Subscription business | 11,160 | 8,894 | 41,471 | 32,035 | ||||||||||||
| Other business | 577 | 324 | 1,579 | 1,253 | ||||||||||||
| Total gross profit | 11,737 | 9,218 | 43,050 | 33,288 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Technology and development (1) | 2,572 | 2,744 | 9,768 | 9,534 | ||||||||||||
| General and administrative (1) | 4,546 | 4,177 | 16,820 | 15,205 | ||||||||||||
| Sales and marketing (1) | 5,781 | 3,951 | 19,104 | 15,247 | ||||||||||||
| Total operating expenses | 12,899 | 10,872 | 45,692 | 39,986 | ||||||||||||
| Operating loss | (1,162 | ) | (1,654 | ) | (2,642 | ) | (6,698 | ) | ||||||||
| Interest expense | 163 | 81 | 533 | 218 | ||||||||||||
| Other (income) expense, net | (5 | ) | (19 | ) | (1,244 | ) | (58 | ) | ||||||||
| Loss before income taxes | (1,320 | ) | (1,716 | ) | (1,931 | ) | (6,858 | ) | ||||||||
| Income tax (benefit) expense | (482 | ) | 7 | (428 | ) | 38 | ||||||||||
| Net loss | $ | (838 | ) | $ | (1,723 | ) | $ | (1,503 | ) | $ | (6,896 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic and diluted | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.05 | ) | $ | (0.24 | ) | ||||
| Weighted-average common shares outstanding: | ||||||||||||||||
| Basic and diluted | 29,847,574 | 29,020,559 | 29,588,324 | 28,527,602 | ||||||||||||
| (1) Includes stock-based compensation expense as follows: | ||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Cost of revenue | $ | 162 | $ | 60 | $ | 594 | $ | 275 | ||||||||
| Technology and development | 50 | 88 | 216 | 246 | ||||||||||||
| General and administrative | 471 | 470 | 1,887 | 1,893 | ||||||||||||
| Sales and marketing | 172 | 113 | 722 | 532 | ||||||||||||
| Total stock-based compensation expense | $ | 855 | $ | 731 | $ | 3,419 | $ | 2,946 | ||||||||
| (2)The breakout of cost of revenue between veterinary invoice expense and other cost of revenue is as follows: | ||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Veterinary invoice expense | $ | 46,473 | $ | 36,211 | $ | 170,122 | $ | 133,534 | ||||||||
| Other cost of revenue | 8,335 | 5,911 | 29,495 | 21,408 | ||||||||||||
| Total cost of revenue | $ | 54,808 | $ | 42,122 | $ | 199,617 | $ | 154,942 | ||||||||
| Trupanion, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (in thousands, except per share data) | ||||||||
| December 31, 2017 | December 31, 2016 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 25,706 | $ | 23,637 | ||||
| Short-term investments | 37,590 | 29,570 | ||||||
| Accounts and other receivables | 20,367 | 10,118 | ||||||
| Prepaid expenses and other assets | 2,895 | 2,062 | ||||||
| Total current assets | 86,558 | 65,387 | ||||||
| Restricted cash | 600 | 600 | ||||||
| Long-term investments, at fair value | 3,237 | 2,579 | ||||||
| Equity method investment | - | 271 | ||||||
| Property and equipment, net | 7,868 | 8,464 | ||||||
| Intangible assets, net | 4,972 | 4,910 | ||||||
| Other long-term assets | 2,624 | 134 | ||||||
| Total assets | $ | 105,859 | $ | 82,345 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,716 | $ | 2,006 | ||||
| Accrued liabilities and other current liabilities | 7,660 | 5,416 | ||||||
| Reserve for veterinary invoices | 12,756 | 9,521 | ||||||
| Deferred revenue | 22,734 | 13,463 | ||||||
| Total current liabilities | 45,866 | 30,406 | ||||||
| Long-term debt | 9,324 | 4,767 | ||||||
| Deferred tax liabilities | 1,002 | 1,623 | ||||||
| Other liabilities | 1,233 | 834 | ||||||
| Total liabilities | 57,425 | 37,630 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock, $0.00001 par value per share, 100,000,000 shares authorized at December 31, 2017 and December 31, 2016, 30,778,796 and 30,121,496 shares issued and outstanding at December 31, 2017; 30,156,247 and 29,498,947 shares issued and outstanding at December 31, 2016. | - | - | ||||||
| Preferred stock: $0.00001 par value per share, 10,000,000 shares authorized at December 31, 2017 and December 31, 2016, and 0 shares issued and outstanding at December 31, 2017 and December 31, 2016. | - | - | ||||||
| Additional paid-in capital | 134,511 | 129,574 | ||||||
| Accumulated other comprehensive loss | (92 | ) | (377 | ) | ||||
| Accumulated deficit | (82,784 | ) | (81,281 | ) | ||||
| Treasury stock, at cost: 657,300 shares at December 31, 2017 and December 31, 2016. | (3,201 | ) | (3,201 | ) | ||||
| Total stockholders’ equity | 48,434 | 44,715 | ||||||
| Total liabilities and stockholders’ equity | $ | 105,859 | $ | 82,345 | ||||
| Trupanion, Inc. | ||||||||||||||||||
| Consolidated Statements of Cash Flows | ||||||||||||||||||
| (in thousands) | ||||||||||||||||||
| Three Months Ended | Years Ended | |||||||||||||||||
| December 31, | December 31, | |||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| (unaudited) | ||||||||||||||||||
| Operating activities | ||||||||||||||||||
| Net loss | $ | (838 | ) | $ | (1,723 | ) | $ | (1,503 | ) | $ | (6,896 | ) | ||||||
| Adjustments to reconcile net loss to cash provided by operating activites: | ||||||||||||||||||
| Depreciation and amortization | 1,024 | 1,229 | 4,232 | 3,846 | ||||||||||||||
| Stock-based compensation expense | 855 | 731 | 3,419 | 2,946 | ||||||||||||||
| Gain on sale of equity method investment | - | - | (1,036 | ) | - | |||||||||||||
| Other, net | (626 | ) | (114 | ) | (383 | ) | 104 | |||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||
| Accounts and other receivables | (55 | ) | 193 | (10,219 | ) | (1,830 | ) | |||||||||||
| Prepaid expenses and other assets | 118 | (169 | ) | (179 | ) | 48 | ||||||||||||
| Accounts payable, accrued liabilities, and other liabilities | 897 | 1,789 | 3,019 | 1,164 | ||||||||||||||
| Reserve for veterinary invoices | 1,510 | 1,183 | 3,149 | 3,226 | ||||||||||||||
| Deferred revenue | 92 | 319 | 9,167 | 2,398 | ||||||||||||||
| Net cash provided by operating activities | 2,977 | 3,438 | 9,666 | 5,006 | ||||||||||||||
| Investing activities | ||||||||||||||||||
| Purchases of investment securities | (11,216 | ) | (15,624 | ) | (31,920 | ) | (31,616 | ) | ||||||||||
| Maturities of investment securities | 7,494 | 14,670 | 23,372 | 27,247 | ||||||||||||||
| Proceeds from sale of equity method investment | - | - | 1,402 | - | ||||||||||||||
| Purchases of property and equipment | (884 | ) | (395 | ) | (3,131 | ) | (1,941 | ) | ||||||||||
| Other investments | (17 | ) | (68 | ) | (2,779 | ) | (198 | ) | ||||||||||
| Net cash used in investing activities | (4,623 | ) | (1,417 | ) | (13,056 | ) | (6,508 | ) | ||||||||||
| Financing activities | ||||||||||||||||||
| Proceeds from exercise of stock options | 463 | 1,009 | 2,545 | 3,745 | ||||||||||||||
| Taxes paid related to net share settlement of equity awards | - | - | (1,170 | ) | (662 | ) | ||||||||||||
| Proceeds from debt financing, net financing fees | 1,980 | 1,000 | 4,400 | 4,988 | ||||||||||||||
| Other financing | (282 | ) | (289 | ) | (694 | ) | (399 | ) | ||||||||||
| Net cash provided by financing activities | 2,161 | 1,720 | 5,081 | 7,672 | ||||||||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net | (58 | ) | (130 | ) | 378 | 111 | ||||||||||||
| Net increase in cash, cash equivalents, and restricted cash | 457 | 3,611 | 2,069 | 6,281 | ||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | 25,849 | 20,626 | 24,237 | 17,956 | ||||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | 26,306 | $ | 24,237 | $ | 26,306 | $ | 24,237 | ||||||||||
| The following tables set forth our key operating metrics: | ||||||||||||||||||||||||||||||||
| Years Ended | ||||||||||||||||||||||||||||||||
| December 31, | ||||||||||||||||||||||||||||||||
| 2017 | 2016 | |||||||||||||||||||||||||||||||
| Total subscription pets enrolled (at period end) | 371,683 | 323,233 | ||||||||||||||||||||||||||||||
| Total pets enrolled (at period end) | 423,194 | 343,649 | ||||||||||||||||||||||||||||||
| Monthly average revenue per pet | $ | 52.07 | $ | 47.82 | ||||||||||||||||||||||||||||
| Lifetime value of a pet (LVP) | $ | 727 | $ | 631 | ||||||||||||||||||||||||||||
| Average pet acquisition cost (PAC) | $ | 152 | $ | 123 | ||||||||||||||||||||||||||||
| Average monthly retention | 98.63 | % | 98.60 | % | ||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||||
| Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | |||||||||||||||||||||||||
| Total subscription pets enrolled (at period end) | 371,683 | 359,102 | 346,409 | 334,909 | 323,233 | 312,282 | 299,856 | 287,123 | ||||||||||||||||||||||||
| Total pets enrolled (at period end) | 423,194 | 404,069 | 383,293 | 364,259 | 343,649 | 334,070 | 320,896 | 307,298 | ||||||||||||||||||||||||
| Monthly average revenue per pet | $ | 53.17 | $ | 52.95 | $ | 51.47 | $ | 50.50 | $ | 49.17 | $ | 48.37 | $ | 47.39 | $ | 46.12 | ||||||||||||||||
| Lifetime value of a pet (LVP) | $ | 727 | $ | 701 | $ | 654 | $ | 637 | $ | 631 | $ | 624 | $ | 622 | $ | 603 | ||||||||||||||||
| Average pet acquisition cost (PAC) | $ | 184 | $ | 151 | $ | 143 | $ | 128 | $ | 133 | $ | 120 | $ | 118 | $ | 123 | ||||||||||||||||
| Average monthly retention | 98.63 | % | 98.61 | % | 98.57 | % | 98.58 | % | 98.60 | % | 98.61 | % | 98.64 | % | 98.65 | % | ||||||||||||||||
| The following table reflects the reconciliation of cash provided by operating activities to free cash flow (in thousands): | |||||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||||
| Net cash provided by operating activities | $ | 2,977 | $ | 3,438 | $ | 9,666 | $ | 5,006 | |||||||||
| Purchases of property and equipment | (884 | ) | (395 | ) | (3,131 | ) | (1,941 | ) | |||||||||
| Free cash flow | $ | 2,093 | $ | 3,043 | $ | 6,535 | $ | 3,065 | |||||||||
| The following table reflects the reconciliation of GAAP measures to non-GAAP measures (in thousands, except percentages): | ||||||||||||||||||
| Three Months Ended December 31, | Years Ended December 31, | |||||||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||||
| Veterinary invoice expense | $ | 46,473 | $ | 36,211 | $ | 170,122 | $ | 133,534 | ||||||||||
| Stock-based compensation expense | (95 | ) | (45 | ) | (355 | ) | (234 | ) | ||||||||||
| Cost of goods | $ | 46,378 | $ | 36,166 | $ | 169,767 | $ | 133,300 | ||||||||||
| % of revenue | 69.7 | % | 70.4 | % | 70.0 | % | 70.8 | % | ||||||||||
| Other cost of revenue | $ | 8,335 | $ | 5,911 | $ | 29,495 | $ | 21,408 | ||||||||||
| Stock-based compensation expense | (67 | ) | (15 | ) | (239 | ) | (41 | ) | ||||||||||
| Variable expenses | $ | 8,268 | $ | 5,896 | $ | 29,256 | $ | 21,367 | ||||||||||
| % of revenue | 12.4 | % | 11.5 | % | 12.1 | % | 11.4 | % | ||||||||||
| Subscription gross profit | $ | 11,160 | $ | 8,894 | $ | 41,471 | $ | 32,035 | ||||||||||
| Stock-based compensation expense | 162 | 60 | 594 | 275 | ||||||||||||||
| Non-GAAP subscription gross profit | $ | 11,322 | $ | 8,954 | $ | 42,065 | $ | 32,310 | ||||||||||
| % of subscription revenue | 19.2 | % | 18.9 | % | 19.3 | % | 18.6 | % | ||||||||||
| Gross profit | $ | 11,737 | $ | 9,218 | $ | 43,050 | $ | 33,288 | ||||||||||
| Stock-based compensation expense | 162 | 60 | 594 | 275 | ||||||||||||||
| Non-GAAP gross profit | $ | 11,899 | $ | 9,278 | $ | 43,644 | $ | 33,563 | ||||||||||
| % of revenue | 17.9 | % | 18.1 | % | 18.0 | % | 17.8 | % | ||||||||||
| Technology and development expense | $ | 2,572 | $ | 2,744 | $ | 9,768 | $ | 9,534 | ||||||||||
| General and administrative expense | 4,546 | 4,177 | 16,820 | 15,205 | ||||||||||||||
| Depreciation and amortization expense | (1,024 | ) | (1,229 | ) | (4,232 | ) | (3,846 | ) | ||||||||||
| Stock-based compensation expense | (521 | ) | (558 | ) | (2,103 | ) | (2,139 | ) | ||||||||||
| Fixed expenses | $ | 5,573 | $ | 5,134 | $ | 20,253 | $ | 18,754 | ||||||||||
| % of revenue | 8.4 | % | 10.0 | % | 8.3 | % | 10.0 | % | ||||||||||
| Sales and marketing expense | $ | 5,781 | $ | 3,951 | $ | 19,104 | $ | 15,247 | ||||||||||
| Stock-based compensation expense | (172 | ) | (113 | ) | (722 | ) | (532 | ) | ||||||||||
| Acquisition cost | $ | 5,609 | $ | 3,838 | $ | 18,382 | $ | 14,715 | ||||||||||
| % of revenue | 8.4 | % | 7.5 | % | 7.6 | % | 7.8 | % | ||||||||||
| The following tables reflect the reconciliation of acquisition cost and net acquisition cost to sales and marketing expense (in thousands): | |||||||||||||||||||||||||||||||||
| Years Ended | |||||||||||||||||||||||||||||||||
| December 31, | |||||||||||||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||||||||||||||||
| Sales and marketing expenses | $ | 19,104 | $ | 15,247 | |||||||||||||||||||||||||||||
| Excluding: | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense | (722 | ) | (532 | ) | |||||||||||||||||||||||||||||
| Acquisition cost | 18,382 | 14,715 | |||||||||||||||||||||||||||||||
| Net of: | |||||||||||||||||||||||||||||||||
| Sign-up fee revenue | (2,169 | ) | (2,073 | ) | |||||||||||||||||||||||||||||
| Other business segment sales and marketing expense | (218 | ) | (218 | ) | |||||||||||||||||||||||||||||
| Net acquisition cost | $ | 15,995 | $ | 12,424 | |||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||
| Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | ||||||||||||||||||||||||||
| Sales and marketing expenses | $ | 5,781 | $ | 4,862 | $ | 4,372 | $ | 4,089 | $ | 3,951 | $ | 3,892 | $ | 3,564 | $ | 3,840 | |||||||||||||||||
| Excluding: | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense | (172 | ) | (165 | ) | (198 | ) | (187 | ) | (113 | ) | (172 | ) | (165 | ) | (82 | ) | |||||||||||||||||
| Acquisition cost | 5,609 | 4,697 | 4,174 | 3,902 | 3,838 | 3,720 | 3,399 | 3,758 | |||||||||||||||||||||||||
| Net of: | |||||||||||||||||||||||||||||||||
| Sign-up fee revenue | (550 | ) | (558 | ) | (517 | ) | (544 | ) | (526 | ) | (525 | ) | (495 | ) | (527 | ) | |||||||||||||||||
| Other business segment sales and marketing expense | (56 | ) | (51 | ) | (63 | ) | (48 | ) | (62 | ) | (63 | ) | (55 | ) | (38 | ) | |||||||||||||||||
| Net acquisition cost | $ | 5,003 | $ | 4,088 | $ | 3,594 | $ | 3,310 | $ | 3,250 | $ | 3,132 | $ | 2,849 | $ | 3,193 | |||||||||||||||||
| The following tables reflect the reconciliation of adjusted EBITDA to net (loss) income (in thousands): | |||||||||||||||||||||||||||||||||
| Years Ended | |||||||||||||||||||||||||||||||||
| December 31, | |||||||||||||||||||||||||||||||||
| 2017 | 2016 | ||||||||||||||||||||||||||||||||
| Net loss | $ | (1,503 | ) | $ | (6,896 | ) | |||||||||||||||||||||||||||
| Excluding: | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 3,419 | 2,946 | |||||||||||||||||||||||||||||||
| Depreciation and amortization expense | 4,232 | 3,846 | |||||||||||||||||||||||||||||||
| Interest income | (227 | ) | (119 | ) | |||||||||||||||||||||||||||||
| Interest expense | 533 | 218 | |||||||||||||||||||||||||||||||
| Income tax (benefit) expense | (428 | ) | 38 | ||||||||||||||||||||||||||||||
| (Gain) loss from equity method investment | (1,029 | ) | 29 | ||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 4,997 | $ | 62 | |||||||||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||
| Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | ||||||||||||||||||||||||||
| Net (loss) income | $ | (838 | ) | $ | 406 | $ | 411 | $ | (1,482 | ) | $ | (1,723 | ) | $ | (1,637 | ) | $ | (964 | ) | $ | (2,572 | ) | |||||||||||
| Excluding: | |||||||||||||||||||||||||||||||||
| Stock-based compensation expense | 855 | 895 | 888 | 781 | 731 | 776 | 743 | 696 | |||||||||||||||||||||||||
| Depreciation and amortization expense | 1,024 | 1,095 | 1,077 | 1,036 | 1229 | 1,093 | 739 | 785 | |||||||||||||||||||||||||
| Interest income | (3 | ) | (97 | ) | (76 | ) | (51 | ) | (41 | ) | (29 | ) | (26 | ) | (23 | ) | |||||||||||||||||
| Interest expense | 163 | 124 | 109 | 137 | 81 | 66 | 41 | 30 | |||||||||||||||||||||||||
| Income tax (benefit) expense | (482 | ) | 26 | 4 | 24 | 7 | 13 | 4 | 14 | ||||||||||||||||||||||||
| (Gain) loss from equity method investment | - | - | (1,036 | ) | 7 | 18 | 22 | (15 | ) | 4 | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 719 | $ | 2,449 | $ | 1,377 | $ | 452 | $ | 302 | $ | 304 | $ | 522 | $ | (1,066 | ) | ||||||||||||||||
Contacts:
Investors:
Laura Bainbridge, Addo Investor Relations
310.829.5400
InvestorRelations@trupanion.com
Media:
Scott Janzen, Trupanion Director of Communications
888.612.1138 ext 3450
scott.janzen@trupanion.com
