Trupanion Reports Third Quarter 2015 Results

- Total revenue of $37.9 million, up 25% year-over-year (up 30% on a constant currency basis)

- 276,988 total enrolled pets at quarter-end, up 25% year-over-year

Nov 03, 2015, 16:15 ET from Trupanion, Inc.

SEATTLE, Nov. 3, 2015 /PRNewswire/ -- Trupanion, Inc. (NYSE: TRUP), a direct-to-consumer, monthly subscription business that provides medical plans for cats and dogs, today announced financial results for the three and nine months ended September 30, 2015.

"Our third quarter performance was exceptionally strong, as evidenced by the strength of our new pet enrollments and the acceleration in our active hospital growth rate to the highest level in four years," said Darryl Rawlings, Trupanion's Chief Executive Officer.  "As is evident, our Territory Partners continue to build the trust and support of veterinarians and their staff.  We also continued our efforts to provide a world-class member experience with the deployment of Trupanion Express.  We are ahead of schedule on Trupanion Express installations, having already achieved our year-end projections of 350 Trupanion Express enabled hospitals during the third quarter."

Rawlings added, "Our core subscription business remains the primary driver of our performance, posting 27% revenue growth despite foreign exchange headwinds and a 26% increase in enrolled pets.  Our value proposition continues to resonate with our members, as evidenced by our continually strong 98.66% monthly membership retention rate.  We also delivered subscription gross margin expansion to within our long-term target of 18-21%.  As a result, subscription gross profit increased 54% over the prior year period."

Third Quarter 2015 Financial Highlights (All comparisons on a year-over-year basis)

  • Total revenue was $37.9 million, an increase of 25%.  Revenue growth was 30% on a constant currency basis.
  • Subscription business revenue was $34.4 million, an increase of 27%.  Subscription business revenue increased 33% on a constant currency basis.
  • Adjusted EBITDA was a loss of $(3.2) million, compared to a loss of $(2.9) million.
  • Net loss was $(4.6) million, compared to a net loss of $(8.5) million.
  • Cash, cash equivalents and short-term investments of $44.9 million.

Year-to-date 2015 Financial Highlights (All comparisons on a year-over-year basis)

  • Total revenue was $106.8 million, an increase of 27%.  Total revenue growth was 31% on a constant currency basis.
  • Subscription business revenue was $96.7 million, an increase of 29%.  Subscription business revenue increased 34% on a constant currency basis.
  • Adjusted EBITDA was a loss of $(9.7) million, compared to a loss of $(7.4) million.
  • Net loss was $(14.2) million, compared to a net loss of $(16.9) million.

Third Quarter 2015 Operating Metrics (All comparisons on a year-over-year basis)

  • Monthly adjusted revenue per pet (ARPP) was $45.15, an increase of 0.6%.  ARPP increased 5% on a constant currency basis. 
  • The ratio of lifetime value of a pet (LVP) to average pet acquisition cost (PAC) was 4.6 to 1.
  • Total enrolled pets (including pets from our other business segment) was 276,988 at quarter-end, up 25%.
  • Subscription pets enrolled was 258,546 at quarter-end, up 26%.

Outlook Trupanion currently expects to achieve the following results for the full year ending December 31, 2015:

  • Total revenue is expected to be in the range of $146.5 - $148.5 million.
  • Adjusted EBITDA is expected to be in the range of $(13)-$(10) million.

The company's outlook for full year 2015 assumes a 75% Canadian currency exchange rate, the approximate rate at the end of September 2015.

Revenue by Quarter

Conference Call Trupanion's management will host a conference call today to review its third quarter 2015 results and to discuss its financial outlook for the full year 2015. The call is scheduled to begin at 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 60 days upon completion of the conference call. Participants can access the conference call by dialing 1-866-311-7654 (United States), 1-855-669-9657 (Canada), or 1-412-902-4113 (International). A telephonic replay of the call will also be available, one hour after the completion of the call, by dialing 1-877-344-7529 (United States), 1-855-669-9658 (Canada), or 1-412-317-0088 (International) and entering the replay pin number: 10057847.

About Trupanion Founded in 2000, Trupanion is an industry-leading, direct-to-consumer, monthly subscription business that provides medical plans for cats and dogs in the United States, Canada and Puerto Rico through its affiliated entities. With over 275,000 total enrolled pets (as of November 3, 2015), Trupanion is one of the largest pet medical insurance companies in North America with the mission to help the pets we all love receive the best veterinary care. Trupanion offers a simple, fair and comprehensive pet medical plan that pays 90% of covered veterinary costs for pets' illness and injury claims. Trupanion's shares are traded on the New York Stock Exchange under the ticker symbol TRUP. The company is headquartered in Seattle, WA and can be found online at 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 and financial objectives and its future operating results and expenditures. 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 in the future; the accuracy of assumptions used in determining appropriate member acquisition expenditures; the severity and frequency of claims; fluctuations in the Canadian currency exchange rate; 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 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 increase the number of Territory Partners and active hospitals; 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; the ability to protect and enforce the Trupanion's intellectual property rights; 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 compliance with laws and regulations that apply to our business, including the sale of a pet medical plan.

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, 2014 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 include certain non-GAAP financial measures, including adjusted revenue, Trupanion's stated results include certain non-GAAP financial measures, including free cash flow, adjusted revenue, contribution margin, acquisition cost and adjusted EBITDA. Free cash flow is a non-GAAP measure that Trupanion defines as net cash used in operating activities less purchases of property and equipment. Monthly adjusted revenue per pet is calculated in part based on adjusted revenue, a non-GAAP financial measure that Trupanion defines as revenue from our subscription business segment excluding sign-up fee revenue and the change in deferred revenue between periods. Lifetime value of a pet is calculated in part based on contribution margin, a non-GAAP financial measure, that Trupanion defines as gross profit from its subscription business segment for the 12 months prior to the period end date excluding stock-based compensation expense related to cost of revenue from its subscription business segment, sign-up fee revenue and the change in deferred revenue between periods. Average pet acquisition cost is calculated in part based on acquisition cost, a non-GAAP financial measure that Trupanion defines as sales and marketing expenses, excluding stock-based compensation expense and other business segment sales and marketing expense, net of sign-up fee revenue. Adjusted EBITDA is a non-GAAP financial measure that Trupanion defines as net loss excluding stock-based compensation expense, depreciation and amortization expense, interest income, interest expense, change in fair value of warrant liabilities and income tax expense (benefit).

Trupanion's 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. Further, stock-based compensation expense and other items used in the calculation of adjusted EBITDA have been and will continue to be for the foreseeable future significant recurring expenses in Trupanion's business. 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.

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 non-GAAP financial measures such as contribution margin, acquisition cost and adjusted EBITDA that exclude stock-based compensation expense and, in the case of adjusted EBITDA, the change in fair value of warrant liabilities allows for more meaningful comparisons between its operating results from period to period. Trupanion excludes sign-up fee revenue from the calculation of both adjusted revenue and contribution margin 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. For this reason, Trupanion also nets sign-up fees with sales and marketing expenses in its calculation of acquisition cost. Trupanion excludes changes in deferred revenue from the calculation of both adjusted revenue and contribution margin in order to eliminate fluctuations caused by the timing of pet enrollment during the last month of any particular period in which such measures are being presented or utilized. Trupanion excludes the change in fair value of warrant liabilities from its calculation of adjusted EBITDA in order to eliminate fluctuations caused by changes in its stock price. Trupanion believes this allows it to calculate and present adjusted revenue, contribution margin and acquisition cost and the related financial measures it derives from them, as well as adjusted EBITDA, in a consistent manner across periods. Trupanion calculates non-GAAP free cash flow as net cash used in operating activities less purchases of property and equipment. Free cash flow is included as it is a key measure used by Trupanion's management and board of directors. Trupanion's management believes free cash flow is an important indicator of liquidity and its business performance as it measures the amount of cash generated that is available to repay debt obligations, make investments and for certain other activities. Free cash flow also reflects changes in working capital. Trupanion's non-GAAP financial measures and the related financial measures it derives from them are important tools for financial and operational decision-making and for evaluating its own operating results over different periods of time.

Trupanion has not reconciled adjusted EBITDA guidance to net income (loss) guidance because it does not provide guidance for stock-based compensation expense, depreciation and amortization, interest income, interest expense, change in fair value of warrant liabilities or income tax expense (benefit), which are reconciling items between net income (loss) and adjusted EBITDA.  Accordingly, reconciliation to net income (loss) is not available without unreasonable effort.  For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see the reconciliation tables included in this press release.

Contacts

Investors: Laura Bainbridge, Addo Communications 310.829.5400 InvestorRelations@trupanion.com

Media: Britta Gidican, Director, Public Relations 206.607.1930 MediaRelations@trupanion.com

Trupanion, Inc.

Consolidated Statements of Operations

(in thousands, except for share and per share data)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

(unaudited)

Revenue:

Subscription business

$

34,420

$

27,112

$

96,684

$

74,885

Other business

3,445

3,200

10,078

9,157

Total revenue

37,865

30,312

106,762

84,042

Cost of revenue:

Subscription business (1)

28,145

23,051

79,572

61,711

Other business

3,129

2,816

9,231

7,980

Total cost of revenue

31,274

25,867

88,803

69,691

Gross profit:

Subscription business

6,274

4,061

17,112

13,174

Other business

317

384

847

1,177

Total gross profit

6,591

4,445

17,959

14,351

Operating expenses:

Sales and marketing (1)

4,128

2,934

11,312

8,390

Technology and development (1)

3,005

2,532

8,683

7,285

General and administrative (1)

4,067

4,385

11,760

10,463

Total operating expenses

11,200

9,851

31,755

26,138

Operating loss

(4,609)

(5,406)

(13,796)

(11,787)

Interest expense

14

5,155

298

6,623

Other expense (income), net

4

(2,066)

8

(1,545)

Loss before income taxes

(4,627)

(8,495)

(14,102)

(16,865)

Income tax expense

16

14

102

36

Net loss

$

(4,643)

$

(8,509)

$

(14,204)

$

(16,901)

Net loss per share:

    Basic and diluted

$

(0.17)

$

(0.41)

$

(0.52)

$

(2.09)

Weighted-average shares used to compute net loss per share:

   Basic and diluted

27,755,310

20,857,126

27,564,975

8,092,287

(1)Includes stock-based compensation expense as follows:

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

Cost of revenue

$

68

$

78

$

195

$

223

Sales and marketing 

102

115

342

408

Technology and development

97

110

311

306

General and administrative

482

1,698

1,501

2,257

Total stock-based compensation expense

$

749

$

2,001

$

2,349

$

3,194

 

Trupanion, Inc.

Consolidated Balance Sheets

(in thousands, except for share data)

September 30, 2015

December 31, 2014

(unaudited)

Assets

Current assets:

Cash and cash equivalents

$

21,688

$

53,098

Short-term investments

23,203

22,371

Accounts and other receivables

8,344

7,887

Prepaid expenses and other assets

2,157

1,299

Total current assets

55,392

84,655

Long-term investments, at fair value

2,420

942

Equity method investment

300

Property and equipment, net

9,614

7,862

Intangible assets, net

4,799

4,847

Other long term assets

29

Total assets

$

72,554

$

98,306

Liabilities and stockholders' equity 

Current liabilities:

Accounts payable

$

1,451

$

1,962

Accrued liabilities

4,327

4,607

Claims reserve

6,188

5,107

Deferred revenue

10,604

9,345

Other payables

668

1,523

Total current liabilities

23,238

22,544

Long-term debt

-

14,900

Deferred tax liabilities

1,495

1,495

Other liabilities

412

92

Total liabilities

25,145

39,031

Stockholders' equity:

Common stock, $0.00001 par value per share, 200,000,000 shares authorized at September 30, 2015 and December 31, 2014, 28,898,227 and 28,277,248 issued and outstanding at September 30, 2015; 28,451,920 and 27,830,941 shares issued and outstanding at December 31, 2014.

-

-

Preferred stock: $0.00001 par value per share, 10,000,000 authorized at September 30, 2015 and December 31, 2014, and 0 issued and outstanding at September 30, 2015 and December 31, 2014.

-

-

Additional paid-in capital

121,741

119,045

Accumulated other comprehensive (loss) income

(348)

11

Accumulated deficit

(71,383)

(57,180)

Treasury stock, at cost: 620,979 shares at September 30, 2015 and December 31, 2014.

(2,601)

(2,601)

Total stockholders' equity

47,409

59,275

Total liabilities and stockholders' equity

$

72,554

$

98,306

 

Trupanion, Inc.

Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

(unaudited)

Operating activities

Net loss

$  (4,643)

$  (8,509)

$ (14,204)

$ (16,901)

Adjustments to reconcile net loss to cash used in operating activities:

Depreciation and amortization

673

504

1,800

1,234

Amortization of debt discount and prepaid loan fees

5

4,563

5

5,033

Warrant income

-

(2,054)

-

(1,574)

Stock-based compensation expense

749

2,001

2,349

3,194

Other, net

22

4

(91)

56

Changes in operating assets and liabilities:

Accounts and other receivables

419

(508)

(504)

(828)

Prepaid expenses and other current assets

(488)

(335)

(868)

(456)

Accounts payable

223

76

(329)

151

Accrued liabilities

670

30

53

(398)

Claims reserve

413

1,018

1,127

(201)

Deferred revenue

561

520

1,310

823

Other payables, net

526

(573)

(416)

167

Net cash used in operating activities

(870)

(3,263)

(9,768)

(9,700)

Investing activities

Purchases of investment securities

(5,016)

(10,189)

(16,082)

(26,455)

Maturities of investment securities

3,313

4,962

13,580

23,239

Equity method investment

(300)

-

(300)

-

Purchases of property and equipment

(1,171)

(1,746)

(3,816)

(4,013)

Net cash used in investing activities

(3,174)

(6,973)

(6,618)

(7,229)

Financing activities

Release of restricted cash

-

2,700

-

3,000

Tax withholding on restricted stock

(259)

-

(643)

-

Payment of loan fee

-

-

-

(103)

Repayment of debt financing

-

(31,700)

(14,900)

(32,000)

Proceeds from exercise of stock options

113

115

914

161

Proceeds from debt financing

-

15,000

-

-

Proceeds from line of credit

-

-

-

17,000

Net proceeds from initial public offering

-

73,933

-

72,946

Net cash (used in) provided by financing activities

(146)

60,048

(14,629)

61,004

Effect of foreign exchange rates on cash, net

(278)

(31)

(395)

55

Net change in cash and cash equivalents

(4,468)

49,781

(31,410)

44,130

Cash and cash equivalents at beginning of period

26,157

9,288

53,098

14,939

Cash and cash equivalents at end of period

$ 21,688

$ 59,069

$  21,688

$  59,069

 

The following tables set forth our key financial and operating metrics:

Nine Months Ended

September 30,

2015

2014

Total pets enrolled (at period end)

276,988

221,479

Total subscription pets enrolled (at period end)

258,546

205,194

Monthly adjusted revenue per pet

$   44.88

$   43.89

Lifetime value of a pet

$      591

$      580

Average pet acquisition cost

$      132

$      114

Average monthly retention

98.66%

98.67%

Adjusted EBITDA (in thousands)

$ (9,711)

$ (7,444)

Three Months Ended

Sept. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2014

Sept. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Total pets enrolled (at period end)

276,988

259,948

246,106

232,450

221,479

207,969

194,902

182,497

Total subscription pets enrolled (at period end)

258,546

241,808

228,409

215,491

205,194

192,338

179,819

168,405

Monthly adjusted revenue per pet

$   45.15

$   45.10

$   44.34

$   44.79

$   44.88

$   43.60

$   43.07

$   43.06

Lifetime value of a pet (LVP)

$      591

$      570

$      567

$      591

$      580

$      602

$      612

$      613

Average pet acquisition cost (PAC)

$      129

$      133

$      134

$      145

$      115

$      114

$      113

$      106

Average monthly retention

98.66%

98.67%

98.66%

98.69%

98.67%

98.65%

98.65%

98.65%

Adjusted EBITDA (in thousands)

$ (3,234)

$ (3,165)

$ (3,333)

$ (2,903)

$ (2,908)

$ (2,459)

$ (2,079)

$ (1,780)

 

The following table reflects the reconciliation of cash used in operating activities to free cash flow (in thousands):

Three Months Ended

Nine Months Ended

September 30,

September 30,

2015

2014

2015

2014

Net cash used in operating activities

$    (870)

$ (3,263)

$   (9,768)

$   (9,700)

Purchases of property and equipment

(1,171)

(1,746)

(3,816)

(4,013)

Free cash flow

$ (2,041)

$ (5,009)

$ (13,584)

$ (13,713)

 

The following table reflects the reconciliation of GAAP measures to non-GAAP measures (in thousands, except percentages):

Three Months Ended September 30,

Nine Months Ended September,

2015

2014

2015

2014

GAAP cost of revenue

$

31,274

$

25,867

$

88,803

$

69,691

Stock-based compensation expense

(68)

(78)

(195)

(223)

Non-GAAP cost of revenue

$

31,206

$

25,789

$

88,608

$

69,468

% of revenue

82.4%

85.1%

83.0%

82.7%

GAAP gross profit

$

6,591

$

4,445

$

17,959

$

14,351

Stock-based compensation expense

68

78

195

223

Non-GAAP gross profit

$

6,659

$

4,523

$

18,154

$

14,574

% of revenue

17.6%

14.9%

17.0%

17.3%

GAAP sales and marketing expense

$

4,128

$

2,934

$

11,312

$

8,390

Stock-based compensation expense

(102)

(115)

(342)

(408)

Non-GAAP sales and marketing expense

$

4,026

$

2,819

$

10,970

$

7,982

% of revenue

10.6%

9.3%

10.3%

9.5%

GAAP technology and development expense

$

3,005

$

2,532

$

8,683

$

7,285

Stock-based compensation expense

(97)

(110)

(311)

(306)

Non-GAAP technology and development expense

$

2,908

$

2,422

$

8,372

$

6,979

% of revenue

7.7%

8.0%

7.8%

8.3%

GAAP general and administrative expense

$

4,067

$

4,385

$

11,760

$

10,463

Stock-based compensation expense

(482)

(1,698)

(1,501)

(2,257)

Non-GAAP general and administrative expense

$

3,585

$

2,687

$

10,259

$

8,206

% of revenue

9.5%

8.9%

9.6%

9.8%

GAAP operating loss

$

(4,609)

$

(5,406)

$

(13,796)

$

(11,787)

Stock-based compensation expense

749

2,001

2,349

3,194

Non-GAAP operating loss

$

(3,860)

$

(3,405)

$

(11,447)

$

(8,593)

% of revenue

10.2%

11.2%

10.7%

10.2%

GAAP subscription business gross profit

$

6,274

$

4,061

$

17,112

$

13,174

Stock-based compensation expense

68

78

195

223

Non-GAAP subscription business gross profit

$

6,342

$

4,139

$

17,307

$

13,397

% of subscription revenue

18.4%

15.3%

17.9%

17.9%

 

The following tables reflect the reconciliation of adjusted revenue to revenue (in thousands):

Nine Months Ended

September 30,

2015

2014

Revenue

$ 106,762

$ 84,042

Excluding:

Other business revenue

(10,078)

(9,157)

Change in deferred revenue

1,072

731

Sign-up fee revenue

(1,477)

(1,209)

Adjusted revenue

$   96,279

$ 74,407

Three Months Ended

Sept. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2014

Sept. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Revenue

$   37,865

$ 35,587

$ 33,310

$ 31,868

$ 30,312

$ 28,090

$ 25,640

$ 24,011

Excluding:

Other business revenue

(3,445)

(3,379)

(3,254)

(3,251)

(3,200)

(3,178)

(2,779)

(2,736)

Change in deferred revenue

423

321

328

247

385

84

262

452

Sign-up fee revenue

(542)

(451)

(484)

(363)

(425)

(407)

(377)

(345)

Adjusted revenue

$   34,301

$ 32,078

$ 29,900

$ 28,501

$ 27,072

$ 24,589

$ 22,746

$ 21,832

 

The following tables reflect the reconciliation of contribution margin to gross profit (in thousands):

Twelve Months Ended

Sept. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2014

Sept. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Gross profit

$ 23,483

$ 21,337

$ 20,701

$ 19,874

$ 18,439

$ 18,113

$ 16,792

$ 15,644

Excluding:

Stock-based compensation expense

286

296

302

315

309

287

270

230

Other business segment gross profit

(1,211)

(1,278)

(1,549)

(1,539)

(1,468)

(1,314)

(967)

(768)

Change in deferred revenue

1,319

1,281

1,044

977

1,183

1,111

1,246

1,107

Sign-up fee revenue

(1,840)

(1,723)

(1,679)

(1,572)

(1,554)

(1,514)

(1,464)

(1,418)

Contribution margin

$ 22,037

$ 19,913

$ 18,819

$ 18,055

$ 16,909

$ 16,683

$ 15,877

$ 14,795

 

The following tables reflect the reconciliation of acquisition cost to sales and marketing expense (in thousands):

Nine Months Ended

September 30,

2015

2014

Sales and marketing expenses

$ 11,312

$ 8,390

Excluding:

Stock-based compensation expense

(342)

(408)

Other business segment sales and marketing expense

(72)

(94)

Net of:

Sign-up fee revenue

(1,477)

(1,209)

Acquisition cost

$   9,421

$ 6,679

Three Months Ended

Sept. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2014

Sept. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Sales and marketing expenses

$   4,128

$ 3,533

$ 3,651

$ 3,218

$  2,934

$ 2,810

$ 2,646

$ 2,238

Excluding:

Stock-based compensation expense

(102)

(110)

(130)

(147)

(115)

(144)

(149)

(185)

Other business segment sales and marketing expense

(16)

(30)

(26)

(30)

(22)

(28)

(44)

(6)

Net of:

Sign-up fee revenue

(542)

(451)

(484)

(363)

(425)

(407)

(377)

(345)

Acquisition cost

$   3,468

$ 2,942

$ 3,011

$ 2,678

$  2,372

$ 2,231

$ 2,076

$ 1,702

 

The following tables reflect the reconciliation of adjusted EBITDA to net loss (in thousands):

Nine Months Ended

September 30,

2015

2014

Net loss

$ (14,204)

$ (16,901)

Excluding:

Stock-based compensation expense

2,349

3,194

Depreciation and amortization expense

1,800

1,234

Interest income

(56)

(56)

Interest expense

298

6,623

Change in fair value of warrant liabilities

-

(1,574)

Income tax expense

102

36

Adjusted EBITDA

$   (9,711)

$   (7,444)

Three Months Ended

Sept. 30, 2015

Jun. 30, 2015

Mar. 31, 2015

Dec. 31, 2014

Sept. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Net loss

$   (4,643)

$   (4,625)

$ (4,936)

$ (4,276)

$ (8,509)

$ (3,479)

$ (4,913)

$ (3,203)

Excluding:

Stock-based compensation expense

749

897

703

890

2,001

626

567

574

Depreciation and amortization expense

649

563

566

441

505

419

310

229

Interest income

(19)

(18)

(19)

(18)

(20)

(18)

(18)

(13)

Interest expense

14

40

245

103

5,155

726

742

225

Change in fair value of warrant liabilities

-

-

-

-

(2,054)

(740)

1,219

414

Income tax expense (benefit)

16

(22)

108

(43)

14

7

14

(6)

Adjusted EBITDA

$   (3,234)

$   (3,165)

$ (3,333)

$ (2,903)

$ (2,908)

$ (2,459)

$ (2,079)

$ (1,780)

 

The following table reflects 2014 results by quarter after the reclass of certain pets from the subscription business segment  to the other business segment (in thousands):

Dec. 31,

Sept. 30,

Jun. 30,

Mar. 31,

2014

2014

2014

2014

Revenue:

Subscription business

$ 28,617

$ 27,112

$ 24,912

$ 22,861

Other business

3,251

3,200

3,178

2,779

Total revenue

31,868

30,312

28,090

25,640

Cost of revenue:

Subscription business 

23,456

23,051

20,273

18,387

Other business

2,888

2,816

2,667

2,497

Total cost of revenue

26,344

25,867

22,940

20,884

Gross profit:

Subscription business

5,161

4,061

4,639

4,473

Other business

363

384

511

283

Total gross profit

5,524

4,445

5,150

4,756

Operating expenses:

Sales and marketing 

3,218

2,934

2,810

2,646

Technology and development 

2,614

2,532

2,553

2,200

General and administrative 

3,850

4,385

3,292

2,786

Total operating expenses

9,682

9,851

8,655

7,632

Operating loss

(4,158)

(5,406)

(3,505)

(2,876)

Interest expense

103

5,155

726

736

Other expense (income), net

58

(2,066)

(759)

1,286

Loss before income taxes

(4,319)

(8,495)

(3,472)

(4,898)

Income tax (benefit) expense

(43)

14

7

15

Net loss

$  (4,276)

$  (8,509)

$  (3,479)

$  (4,913)

 

Logo - http://photos.prnewswire.com/prnh/20141030/155651LOGO Photo - http://photos.prnewswire.com/prnh/20151102/283150

 

SOURCE Trupanion, Inc.



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