Delaware | 001-36537 | 83-0480694 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits | |
Exhibit No. | Description | |
Press release issued by Trupanion, Inc. dated November 8, 2018 | ||
TRUPANION, INC. | |
By: | /s/ Tricia Plouf |
Name: Tricia Plouf | |
Title: Chief Financial Officer |
• | Total revenue of $78.2 million, an increase of 24% compared to the third quarter of 2017. |
• | Total enrolled pets (including pets from our other business segment) was 497,942 at September 30, 2018, an increase of 23% over September 30, 2017. |
• | Subscription business revenue of $67.4 million, an increase of 19% compared to the third quarter of 2017. |
• | Subscription enrolled pets was 416,527 at September 30, 2018, an increase of 16% over September 30, 2017. |
• | Net income of $1.2 million, or $0.04 per basic share and $0.03 per diluted share, compared to net income of $0.4 million, or $0.01 per basic and diluted share, in the third quarter of 2017. |
• | Adjusted EBITDA of $3.7 million, compared to adjusted EBITDA of $2.4 million in the third quarter of 2017. |
• | Operating cash flow of $4.2 million and free cash flow of $(46.1) million in the third quarter of 2018. Excluding the cash outflow of $49.3 million related to the purchase of our headquarters building, free cash flow was $3.2 million. This compared to free cash flow in the third quarter of 2017 of $2.0 million, which included operating cash flow of $3.0 million. |
• | Total revenue of $221.3 million, an increase of 26% compared to the first nine months of 2017. |
• | Subscription business revenue of $192.8 million, an increase of 21% compared to the first nine months of 2017. |
• | Net loss of $(0.7) million, or $(0.02) per basic and diluted share, compared to net loss of $(0.7) million, or $(0.02) per basic and diluted share, in the first nine months of 2017. |
• | Adjusted EBITDA of $6.1 million, compared to adjusted EBITDA of $4.3 million in the first nine months of 2017. |
• | Operating cash flow of $9.0 million and free cash flow of $(46.8) million for the first nine months of 2018. Excluding the cash outflow of $52.5 million related to the purchase of our headquarters building, which closed in the third quarter of 2018, free cash flow was $5.7 million. This compared to free cash flow in the first nine months of 2017 of $4.4 million, which included operating cash flow of $6.7 million. |
Trupanion, Inc. Consolidated Statements of Operations (in thousands, except share data) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(unaudited) | |||||||||||||||
Revenue: | |||||||||||||||
Subscription business | $ | 67,421 | $ | 56,493 | $ | 192,805 | $ | 159,363 | |||||||
Other business | 10,743 | 6,625 | 28,511 | 16,759 | |||||||||||
Total revenue | 78,164 | 63,118 | 221,316 | 176,122 | |||||||||||
Cost of revenue: | |||||||||||||||
Subscription business(1) | 54,753 | 45,215 | 158,100 | 129,052 | |||||||||||
Other business | 9,667 | 6,096 | 26,055 | 15,757 | |||||||||||
Total cost of revenue(2) | 64,420 | 51,311 | 184,155 | 144,809 | |||||||||||
Gross profit: | |||||||||||||||
Subscription business | 12,668 | 11,278 | 34,705 | 30,311 | |||||||||||
Other business | 1,076 | 529 | 2,456 | 1,002 | |||||||||||
Total gross profit | 13,744 | 11,807 | 37,161 | 31,313 | |||||||||||
Operating expenses: | |||||||||||||||
Technology and development(1) | 2,299 | 2,471 | 6,761 | 7,196 | |||||||||||
General and administrative(1) | 4,174 | 4,017 | 13,242 | 12,274 | |||||||||||
Sales and marketing(1) | 6,365 | 4,862 | 18,005 | 13,323 | |||||||||||
Total operating expenses | 12,838 | 11,350 | 38,008 | 32,793 | |||||||||||
Operating income (loss) | 906 | 457 | (847 | ) | (1,480 | ) | |||||||||
Interest expense | 336 | 124 | 887 | 370 | |||||||||||
Other (income) expense, net | (628 | ) | (99 | ) | (1,071 | ) | (1,239 | ) | |||||||
Income (loss) before income taxes | 1,198 | 432 | (663 | ) | (611 | ) | |||||||||
Income tax (benefit) expense | (7 | ) | 26 | (11 | ) | 54 | |||||||||
Net income (loss) | $ | 1,205 | $ | 406 | $ | (652 | ) | $ | (665 | ) | |||||
Net income (loss) per share: | |||||||||||||||
Basic | $ | 0.04 | $ | 0.01 | $ | (0.02 | ) | $ | (0.02 | ) | |||||
Diluted | $ | 0.03 | $ | 0.01 | $ | (0.02 | ) | $ | (0.02 | ) | |||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 33,129,416 | 30,037,282 | 31,376,239 | 29,500,958 | |||||||||||
Diluted | 36,385,360 | 33,113,981 | 31,376,239 | 29,500,958 | |||||||||||
(1)Includes stock-based compensation expense as follows: | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Cost of revenue | $ | 249 | $ | 170 | $ | 698 | $ | 432 | |||||||
Technology and development | 58 | 57 | 167 | 166 | |||||||||||
General and administrative | 634 | 503 | 1,708 | 1,416 | |||||||||||
Sales and marketing | 358 | 165 | 980 | 550 | |||||||||||
Total stock-based compensation expense | $ | 1,299 | $ | 895 | $ | 3,553 | $ | 2,564 | |||||||
(2)The breakout of cost of revenue between veterinary invoice expense and other cost of revenue is as follows: | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Veterinary invoice expense | $ | 54,303 | $ | 43,453 | $ | 156,196 | $ | 123,649 | |||||||
Other cost of revenue | 10,117 | 7,858 | 27,959 | 21,160 | |||||||||||
Total cost of revenue | $ | 64,420 | $ | 51,311 | $ | 184,155 | $ | 144,809 |
Trupanion, Inc. Consolidated Balance Sheets (in thousands, except share data) | |||||||
September 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 34,677 | $ | 25,706 | |||
Short-term investments | 39,422 | 37,590 | |||||
Accounts and other receivables | 31,985 | 20,367 | |||||
Prepaid expenses and other assets | 4,184 | 2,895 | |||||
Total current assets | 110,268 | 86,558 | |||||
Restricted cash | 1,400 | 600 | |||||
Long-term investments, at fair value | 3,545 | 3,237 | |||||
Property and equipment, net | 69,998 | 7,868 | |||||
Intangible assets, net | 8,084 | 4,972 | |||||
Other long-term assets | 6,580 | 2,624 | |||||
Total assets | $ | 199,875 | $ | 105,859 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 2,163 | $ | 2,716 | |||
Accrued liabilities and other current liabilities | 12,006 | 7,660 | |||||
Reserve for veterinary invoices | 14,216 | 12,756 | |||||
Deferred revenue | 32,848 | 22,734 | |||||
Total current liabilities | 61,233 | 45,866 | |||||
Long-term debt | 8,604 | 9,324 | |||||
Deferred tax liabilities | 1,002 | 1,002 | |||||
Other liabilities | 1,174 | 1,233 | |||||
Total liabilities | 72,013 | 57,425 | |||||
Stockholders’ equity: | |||||||
Common stock: $0.00001 par value, 100,000,000 shares authorized; 34,171,653 and 33,415,668 shares issued and outstanding at September 30, 2018; 30,778,796 and 30,121,496 shares issued and outstanding at December 31, 2017 | — | — | |||||
Preferred stock: $0.00001 par value, 10,000,000 shares authorized; no shares issued and outstanding | — | — | |||||
Additional paid-in capital | 217,833 | 134,511 | |||||
Accumulated other comprehensive loss | (334 | ) | (92 | ) | |||
Accumulated deficit | (83,436 | ) | (82,784 | ) | |||
Treasury stock, at cost: 755,985 shares at June 30, 2018 and 657,300 shares at December 31, 2017 | (6,201 | ) | (3,201 | ) | |||
Total stockholders’ equity | 127,862 | 48,434 | |||||
Total liabilities and stockholders’ equity | $ | 199,875 | $ | 105,859 |
Trupanion, Inc. Consolidated Statements of Cash Flows (in thousands) | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(unaudited) | |||||||||||||||
Operating activities | |||||||||||||||
Net income (loss) | $ | 1,205 | $ | 406 | $ | (652 | ) | $ | (665 | ) | |||||
Adjustments to reconcile net income (loss) to cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 1,136 | 1,095 | 3,027 | 3,208 | |||||||||||
Stock-based compensation expense | 1,299 | 895 | 3,553 | 2,564 | |||||||||||
Gain on sale of equity method investment | — | — | — | (1,036 | ) | ||||||||||
Other, net | (275 | ) | 187 | (237 | ) | 243 | |||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts and other receivables | (3,424 | ) | (3,196 | ) | (11,592 | ) | (10,164 | ) | |||||||
Prepaid expenses and other assets | 269 | (114 | ) | (549 | ) | (297 | ) | ||||||||
Accounts payable, accrued liabilities, and other liabilities | 1,282 | 1,209 | 3,849 | 2,122 | |||||||||||
Reserve for veterinary invoices | 191 | 380 | 1,484 | 1,639 | |||||||||||
Deferred revenue | 2,472 | 2,146 | 10,133 | 9,075 | |||||||||||
Net cash provided by operating activities | 4,155 | 3,008 | 9,016 | 6,689 | |||||||||||
Investing activities | |||||||||||||||
Purchases of fixed maturity investment securities | (9,181 | ) | (5,809 | ) | (29,567 | ) | (20,704 | ) | |||||||
Maturities of fixed maturity investment securities | 12,390 | 4,166 | 27,405 | 15,878 | |||||||||||
Purchases of other investments | (3,000 | ) | — | (3,000 | ) | — | |||||||||
Acquisition of lease intangibles, related to corporate real estate acquisition | (2,959 | ) | — | (2,959 | ) | — | |||||||||
Proceeds from sale of equity method investment | — | — | — | 1,402 | |||||||||||
Purchases of property and equipment | (50,236 | ) | (983 | ) | (55,856 | ) | (2,247 | ) | |||||||
Other investments | (965 | ) | (9 | ) | (852 | ) | (2,762 | ) | |||||||
Net cash used in investing activities | (53,951 | ) | (2,635 | ) | (64,829 | ) | (8,433 | ) | |||||||
Financing activities | |||||||||||||||
Proceeds from public offering of common stock, net of offering costs | (196 | ) | — | 65,690 | — | ||||||||||
Proceeds from exercise of stock options | 1,216 | 435 | 2,872 | 2,082 | |||||||||||
Shares withheld to satisfy tax withholding | (1,839 | ) | (1,170 | ) | (1,839 | ) | (1,170 | ) | |||||||
Proceeds from exercise of warrants | — | — | 300 | — | |||||||||||
Proceeds from debt financing, net of financing fees | (61 | ) | 961 | 9,189 | 2,420 | ||||||||||
Repayment of debt financing | (10,000 | ) | — | (10,000 | ) | — | |||||||||
Other financing | (179 | ) | (209 | ) | (535 | ) | (412 | ) | |||||||
Net cash (used in) provided by financing activities | (11,059 | ) | 17 | 65,677 | 2,920 | ||||||||||
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net | 108 | 255 | (93 | ) | 436 | ||||||||||
Net change in cash, cash equivalents, and restricted cash | (60,747 | ) | 645 | 9,771 | 1,612 | ||||||||||
Cash, cash equivalents, and restricted cash at beginning of period | 96,824 | 25,204 | 26,306 | 24,237 | |||||||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 36,077 | $ | 25,849 | $ | 36,077 | $ | 25,849 |
The following tables set forth our key operating metrics: | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||
Total pets enrolled (at period end) | 497,942 | 404,069 | |||||||||||||||||||||||||||||
Total subscription pets enrolled (at period end) | 416,527 | 359,102 | |||||||||||||||||||||||||||||
Monthly average revenue per pet | $ | 54.06 | $ | 51.67 | |||||||||||||||||||||||||||
Lifetime value of a pet (LVP) | $ | 714 | $ | 701 | |||||||||||||||||||||||||||
Average pet acquisition cost (PAC) | $ | 157 | $ | 141 | |||||||||||||||||||||||||||
Average monthly retention | 98.61 | % | 98.61 | % | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||
Sept. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | ||||||||||||||||||||||||
Total pets enrolled (at period end) | 497,942 | 472,480 | 446,533 | 423,194 | 404,069 | 383,293 | 364,259 | 343,649 | |||||||||||||||||||||||
Total subscription pets enrolled (at period end) | 416,527 | 401,033 | 385,640 | 371,683 | 359,102 | 346,409 | 334,909 | 323,233 | |||||||||||||||||||||||
Monthly average revenue per pet | $ | 54.55 | $ | 53.96 | $ | 53.62 | $ | 53.17 | $ | 52.95 | $ | 51.47 | $ | 50.50 | $ | 49.17 | |||||||||||||||
Lifetime value of a pet (LVP) | $ | 714 | $ | 732 | $ | 727 | $ | 727 | $ | 701 | $ | 654 | $ | 637 | $ | 631 | |||||||||||||||
Average pet acquisition cost (PAC) | $ | 155 | $ | 150 | $ | 165 | $ | 184 | $ | 151 | $ | 143 | $ | 128 | $ | 133 | |||||||||||||||
Average monthly retention | 98.61 | % | 98.64 | % | 98.63 | % | 98.63 | % | 98.61 | % | 98.57 | % | 98.58 | % | 98.6 | % | |||||||||||||||
The following table reflects the reconciliation of cash provided by operating activities to free cash flow (in thousands): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||
Net cash provided by operating activities | $ | 4,155 | $ | 3,008 | $ | 9,016 | $ | 6,689 | ||||||||
Purchases of property and equipment | (50,236 | ) | (983 | ) | (55,856 | ) | (2,247 | ) | ||||||||
Free cash flow | $ | (46,081 | ) | $ | 2,025 | $ | (46,840 | ) | $ | 4,442 | ||||||
Exclude building purchase, net of acquired lease intangibles | 49,284 | — | 52,534 | — | ||||||||||||
Free cash flow, excluding building purchase, net of acquired lease intangibles | $ | 3,203 | $ | 2,025 | $ | 5,694 | $ | 4,442 |
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 30, | ||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||
Veterinary invoice expense | $ | 54,303 | $ | 43,453 | $ | 156,196 | $ | 123,649 | |||||||||
Stock-based compensation expense | (153 | ) | (101 | ) | (421 | ) | (260 | ) | |||||||||
Cost of goods | $ | 54,150 | $ | 43,352 | $ | 155,775 | $ | 123,389 | |||||||||
% of revenue | 69.3 | % | 68.7 | % | 70.4 | % | 70.1 | % | |||||||||
Other cost of revenue | $ | 10,117 | $ | 7,858 | $ | 27,959 | $ | 21,160 | |||||||||
Stock-based compensation expense | (96 | ) | (69 | ) | (277 | ) | (172 | ) | |||||||||
Variable expenses | $ | 10,021 | $ | 7,789 | $ | 27,682 | $ | 20,988 | |||||||||
% of revenue | 12.8 | % | 12.3 | % | 12.5 | % | 11.9 | % | |||||||||
Subscription gross profit | $ | 12,668 | $ | 11,278 | $ | 34,705 | $ | 30,311 | |||||||||
Stock-based compensation expense | 249 | 170 | 698 | 432 | |||||||||||||
Non-GAAP subscription gross profit | $ | 12,917 | $ | 11,448 | $ | 35,403 | $ | 30,743 | |||||||||
% of subscription revenue | 19.2 | % | 20.3 | % | 18.4 | % | 19.3 | % | |||||||||
Gross profit | $ | 13,744 | $ | 11,807 | $ | 37,161 | $ | 31,313 | |||||||||
Stock-based compensation expense | 249 | 170 | 698 | 432 | |||||||||||||
Non-GAAP gross profit | $ | 13,993 | $ | 11,977 | $ | 37,859 | $ | 31,745 | |||||||||
% of revenue | 17.9 | % | 19.0 | % | 17.1 | % | 18.0 | % | |||||||||
Technology and development expense | $ | 2,299 | $ | 2,471 | $ | 6,761 | $ | 7,196 | |||||||||
General and administrative expense | 4,174 | 4,017 | 13,242 | 12,274 | |||||||||||||
Depreciation and amortization expense | (1,136 | ) | (1,095 | ) | (3,027 | ) | (3,208 | ) | |||||||||
Stock-based compensation expense | (692 | ) | (560 | ) | (1,875 | ) | (1,582 | ) | |||||||||
Fixed expenses | $ | 4,645 | $ | 4,833 | $ | 15,101 | $ | 14,680 | |||||||||
% of revenue | 5.9 | % | 7.7 | % | 6.8 | % | 8.3 | % | |||||||||
Sales and marketing expense | $ | 6,365 | $ | 4,862 | $ | 18,005 | $ | 13,323 | |||||||||
Stock-based compensation expense | (358 | ) | (165 | ) | (980 | ) | (550 | ) | |||||||||
Acquisition cost | $ | 6,007 | $ | 4,697 | $ | 17,025 | $ | 12,773 | |||||||||
% of revenue | 7.7 | % | 7.4 | % | 7.7 | % | 7.3 | % |
The following tables reflect the reconciliation of acquisition cost and net acquisition cost to sales and marketing expense (in thousands): | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||
Sales and marketing expenses | $ | 18,005 | $ | 13,323 | |||||||||||||||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Stock-based compensation expense | (980 | ) | (550 | ) | |||||||||||||||||||||||||||
Acquisition cost | 17,025 | 12,773 | |||||||||||||||||||||||||||||
Net of: | |||||||||||||||||||||||||||||||
Sign-up fee revenue | (1,933 | ) | (1,061 | ) | |||||||||||||||||||||||||||
Other business segment sales and marketing expense | (275 | ) | (162 | ) | |||||||||||||||||||||||||||
Net acquisition cost | $ | 14,817 | $ | 11,550 | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||
Sept. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | ||||||||||||||||||||||||
Sales and marketing expenses | $ | 6,365 | $ | 5,702 | $ | 5,938 | $ | 5,781 | $ | 4,862 | $ | 4,372 | $ | 4,089 | $ | 3,951 | |||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Stock-based compensation expense | (358 | ) | (349 | ) | (273 | ) | (172 | ) | (165 | ) | (198 | ) | (187 | ) | (113 | ) | |||||||||||||||
Acquisition cost | 6,007 | 5,353 | 5,665 | 5,609 | 4,697 | 4,174 | 3,902 | 3,838 | |||||||||||||||||||||||
Net of: | |||||||||||||||||||||||||||||||
Sign-up fee revenue | (693 | ) | (624 | ) | (616 | ) | (550 | ) | (558 | ) | (517 | ) | (544 | ) | (526 | ) | |||||||||||||||
Other business segment sales and marketing expense | (99 | ) | (88 | ) | (87 | ) | (56 | ) | (51 | ) | (63 | ) | (48 | ) | (62 | ) | |||||||||||||||
Net acquisition cost | $ | 5,215 | $ | 4,641 | $ | 4,962 | $ | 5,003 | $ | 4,088 | $ | 3,594 | $ | 3,310 | $ | 3,250 | |||||||||||||||
The following tables reflect the reconciliation of adjusted EBITDA to net income (loss) (in thousands): | |||||||||||||||||||||||||||||||
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2018 | 2017 | ||||||||||||||||||||||||||||||
Net loss | $ | (652 | ) | $ | (665 | ) | |||||||||||||||||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Stock-based compensation expense | 3,553 | 2,564 | |||||||||||||||||||||||||||||
Depreciation and amortization expense | 3,027 | 3,208 | |||||||||||||||||||||||||||||
Interest income | (628 | ) | (224 | ) | |||||||||||||||||||||||||||
Interest expense | 887 | 370 | |||||||||||||||||||||||||||||
Income tax (benefit) expense | (11 | ) | 54 | ||||||||||||||||||||||||||||
Gain from equity method investment | (107 | ) | (1,029 | ) | |||||||||||||||||||||||||||
Adjusted EBITDA | $ | 6,069 | $ | 4,278 | |||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||
Sept. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sept. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | ||||||||||||||||||||||||
Net income (loss) | $ | 1,205 | $ | (377 | ) | $ | (1,480 | ) | $ | (838 | ) | $ | 406 | $ | 411 | $ | (1,482 | ) | $ | (1,723 | ) | ||||||||||
Excluding: | |||||||||||||||||||||||||||||||
Stock-based compensation expense | 1,299 | 1,286 | 968 | 855 | 895 | 888 | 781 | 731 | |||||||||||||||||||||||
Depreciation and amortization expense | 1,136 | 964 | 927 | 1,024 | 1,095 | 1,077 | 1,036 | 1,229 | |||||||||||||||||||||||
Interest income | (317 | ) | (179 | ) | (132 | ) | (3 | ) | (97 | ) | (76 | ) | (51 | ) | (41 | ) | |||||||||||||||
Interest expense | 336 | 332 | 219 | 163 | 124 | 109 | 137 | 81 | |||||||||||||||||||||||
Income tax (benefit) expense | (7 | ) | 91 | (95 | ) | (482 | ) | 26 | 4 | 24 | 7 | ||||||||||||||||||||
(Gain) loss from equity method investment | — | (107 | ) | — | — | — | (1,036 | ) | 7 | 18 | |||||||||||||||||||||
Adjusted EBITDA | $ | 3,652 | $ | 2,010 | $ | 407 | $ | 719 | $ | 2,449 | $ | 1,377 | $ | 452 | $ | 302 | |||||||||||||||
The following table reflects the reconciliation of net income (loss), excluding gain on equity method investment, to net income (loss): | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income (loss) | $ | 1,205 | $ | 406 | $ | (652 | ) | $ | (665 | ) | |||||
Excluding: | |||||||||||||||
Gain on equity method investment | — | — | (107 | ) | (1,036 | ) | |||||||||
Net income (loss), excluding gain on equity method investment | $ | 1,205 | $ | 406 | $ | (759 | ) | $ | (1,701 | ) |