Trupanion Stock Earnings Reports

Trupanion delivered a strong Q3 2025 driven by improved retention, accelerating net pet adds and record subscription adjusted operating income and margin. Key financials: total revenue $366.9M (+12% Y/Y), subscription revenue $252.7M (+15% Y/Y), subscription AOI $39.1M (+27% Y/Y) with subscription adjusted operating margin at a record 15.5%. Subscription pets reached ~1.082M (5% Y/Y) and trailing 12-month retention modestly improved to 98.33%. Variable and fixed expense efficiencies drove overall expense improvement to 14.5% of subscription revenue (from 15.0% prior year). Free cash flow was $23.9M in the quarter ($71.9M over last 4 quarters) and cash & short-term investments were $348.5M. Management deployed $20.4M in pet acquisition cost (PAC) to acquire ~68.1k subscription pets (average PAC ~$290 excluding MGA pets). They refinanced their term loan with a new $120M 3-year facility with PNC, lowering interest spread and improving financial flexibility. Guidance was updated: FY2025 total revenue $1.433B–$1.439B; subscription revenue $986M–$989M; total AOI $148M–$151M. Management emphasizes a shift from defense to offense — reinvesting strong margins and free cash flow to accelerate growth, expand brand and partnerships (e.g., BMO Insurance in Canada, Seattle Reign FC), while remaining disciplined on pricing and retention. Key near-term puts/takes: continued investment into pet acquisition and retention, monitoring veterinary inflation (cost-plus pricing model), and benefit from lower interest expense from the refinancing (estimated ~$8–9M annual interest savings).