EX-99.1 2 ex991q42018.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
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Trupanion Reports Fourth Quarter and Full Year 2018 Results
SEATTLE, WA. February 13, 2019 -- 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, 2018.
“2018 was another year of steady growth and progress at Trupanion. We grew revenue by 25% year-over-year, expanded the funds available to us to invest in pet acquisition, and deployed that capital at our targeted internal rates of return,” said Darryl Rawlings, Founder and CEO of Trupanion. “We also moved the ball forward on our five strategic initiatives. The work we’ve done sets us up well for 2019.”

Full Year 2018 Financial and Business Highlights
•
Total revenue was $304.0 million, an increase of 25% compared to 2017.
•
Total enrolled pets (including pets from our other business segment) was 521,326 at December 31, 2018, an increase of 23% over December 31, 2017.
•
Subscription business revenue was $263.7 million, an increase of 21% compared to 2017.
•
Subscription enrolled pets was 430,770 at December 31, 2018, an increase of 16% over December 31, 2017.
•
Net loss was $(0.9) million, or $(0.03) per basic and diluted share, compared to a net loss of $(1.5) million or $(0.05) per basic and diluted share, in 2017. Adjusted EBITDA was $8.6 million, compared to adjusted EBITDA of $5.0 million in 2017.
•
Operating cash flow was $12.7 million and free cash flow was ($44.3) million for 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 $8.3 million. This compared to operating cash flow of $9.7 million and free cash flow of $6.5 million in 2017.

Fourth Quarter 2018 Financial and Business Highlights
•
Total revenue was $82.6 million, an increase of 24% compared to the fourth quarter of 2017.
•
Subscription business revenue was $70.9 million, an increase of 20% compared to the fourth quarter of 2017.
•
Net loss was $(0.3) million, or $(0.01) per basic and diluted share, compared to a net loss of $(0.8) million, or $(0.03) per basic and diluted share, in the fourth quarter of 2017. Adjusted EBITDA was $2.5 million, compared to adjusted EBITDA of $0.7 million in the fourth quarter of 2017.
•
Operating cash flow was $3.7 million and free cash flow was $2.6 million, compared to operating cash flow of $3.0 million and free cash flow of $2.1 million in the fourth quarter of 2017.










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 2018 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: 13686650.

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 given pet owners peace of mind 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 with unlimited payouts for the life of their pets. 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 share data)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
 
(unaudited)
 
 
 
 
Revenue:
 
 
 
 
 
 
 
Subscription business
$
70,933

 
$
58,991

 
$
263,738

 
$
218,354

Other business
11,707
 
7,554
 
40,218
 
24,313
Total revenue
82,640

 
66,545

 
303,956

 
242,667

Cost of revenue:
 
 
 
 
 
 
 
Subscription business(1)
57,892

 
47,831

 
215,992

 
176,883

Other business
10,543

 
6,977

 
36,598

 
22,734

   Total cost of revenue(2)
68,435

 
54,808

 
252,590

 
199,617

Gross profit:
 
 
 
 
 
 
 
Subscription business
13,041

 
11,160

 
47,746

 
41,471

Other business
1,164

 
577

 
3,620

 
1,579

Total gross profit
14,205

 
11,737

 
51,366

 
43,050

Operating expenses:
 
 
 
 
 
 
 
Technology and development(1)
2,487

 
2,572

 
9,248

 
9,768

General and administrative(1)
4,922

 
4,546

 
18,164

 
16,820

Sales and marketing(1)
6,994

 
5,781

 
24,999

 
19,104

Total operating expenses
14,403

 
12,899

 
52,411

 
45,692

Operating loss
(198
)
 
(1,162
)
 
(1,045
)
 
(2,642
)
Interest expense
311

 
163

 
1,198

 
533

Other income, net
(238
)
 
(5
)
 
(1,309
)
 
(1,244
)
Loss before income taxes
(271
)
 
(1,320
)
 
(934
)
 
(1,931
)
Income tax expense (benefit)
4

 
(482
)
 
(7
)
 
(428
)
Net loss
$
(275
)
 
$
(838
)
 
$
(927
)
 
$
(1,503
)
 
 
 
 
 
 
 
 
Net loss per share:
 
 
 
 
 
 
 
   Basic and Diluted
$
(0.01
)
 
$
(0.03
)
 
$
(0.03
)
 
$
(0.05
)
Weighted average common shares outstanding:
 
 
 
 
 
 
 
Basic and Diluted
33,716,975

 
29,847,574

 
31,961,192

 
29,588,324

 
 
 
 
 
 
 
 
(1)Includes stock-based compensation expense as follows:
Three Months Ended December 31,
 
Year Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
Cost of revenue
$
230

 
$
162

 
$
927

 
$
594

Technology and development
42

 
50

 
209

 
216

General and administrative
595

 
471

 
2,304

 
1,887

Sales and marketing
355

 
172

 
1,335

 
722

Total stock-based compensation expense
$
1,222

 
$
855

 
$
4,775

 
$
3,419

 
 
 
 
 
 
 
 
(2)The breakout of cost of revenue between veterinary invoice expense and other cost of revenue is as follows:
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
Veterinary invoice expense
$
58,343

 
$
46,473

 
$
214,539

 
$
170,122

Other cost of revenue
10,092

 
8,335

 
38,051

 
29,495

     Total cost of revenue
$
68,435

 
$
54,808

 
$
252,590

 
$
199,617







Trupanion, Inc.
Consolidated Balance Sheets
(in thousands, except share data)
 
December 31, 2018
 
December 31, 2017
 
 
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
26,552

 
$
25,706

Short-term investments
54,559

 
37,590

Accounts and other receivables
31,565

 
20,367

Prepaid expenses and other assets
5,300

 
2,895

Total current assets
117,976

 
86,558

Restricted cash
1,400

 
600

Long-term investments, at fair value
3,554

 
3,237

Property and equipment, net
69,803

 
7,868

Intangible assets, net
8,071

 
4,972

Other long-term assets
6,706

 
2,624

Total assets
$
207,510

 
$
105,859

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
2,767

 
$
2,716

Accrued liabilities and other current liabilities
11,347

 
7,660

Reserve for veterinary invoices
16,062

 
12,756

Deferred revenue
33,027

 
22,734

Total current liabilities
63,203

 
45,866

Long-term debt
12,862

 
9,324

Deferred tax liabilities
1,002

 
1,002

Other liabilities
1,270

 
1,233

Total liabilities
78,337

 
57,425

Stockholders’ equity:
 
 
 
Common stock: $0.00001 par value per share, 100,000,000 shares authorized at December 31, 2018 and December 31, 2017, 34,781,121 and 34,025,136 shares issued and outstanding at December 31, 2018; 30,778,796 and 30,121,496 shares issued and outstanding at December 31, 2017
—

 
—

Preferred stock: $0.00001 par value per share, 10,000,000 shares authorized at December 31, 2018 and December 31, 2017, and 0 shares issued and outstanding at December 31, 2018 and December 31, 2017
—

 
—

Additional paid-in capital
219,838

 
134,511

Accumulated other comprehensive loss
(753
)
 
(92
)
Accumulated deficit
(83,711
)
 
(82,784
)
Treasury stock, at cost: 755,985 shares at December 31, 2018 and 657,300 shares at December 31, 2017
(6,201
)
 
(3,201
)
Total stockholders’ equity
129,173

 
48,434

Total liabilities and stockholders’ equity
$
207,510

 
$
105,859












Trupanion, Inc.
Consolidated Statements of Cash Flows
(in thousands)
 
Three Months Ended December 31,
 
Year Ended December 31,
 
2018
 
2017
 
2018
 
2017
 
(unaudited)
 
 
 
 
Operating activities
 
 
 
 
 
 
 
Net loss
$
(275
)
 
$
(838
)
 
$
(927
)
 
$
(1,503
)
Adjustments to reconcile net loss to cash provided by operating activities:
 
 
 
 
 
 
 
Depreciation and amortization
1,486

 
1,024

 
4,512

 
4,232

Stock-based compensation expense
1,222

 
855

 
4,775

 
3,419

Gain on sale of equity method investment
—

 
—

 
—

 
(1,036
)
Other, net
(5
)
 
(626
)
 
(240
)
 
(383
)
Changes in operating assets and liabilities:
 
 
 
 
 
 
 
Accounts and other receivables
344

 
(55
)
 
(11,248
)
 
(10,219
)
Prepaid expenses and other assets
(2,079
)
 
118

 
(2,628
)
 
(179
)
Accounts payable, accrued liabilities, and other liabilities
682

 
897

 
4,531

 
3,019

Reserve for veterinary invoices
1,956

 
1,510

 
3,440

 
3,149

Deferred revenue
332

 
92

 
10,465

 
9,167

Net cash provided by operating activities
3,663

 
2,977

 
12,680

 
9,666

Investing activities
 
 
 
 
 
 
 
Purchases of fixed maturity investment securities
(23,295
)
 
(11,216
)
 
(52,862
)
 
(31,920
)
Maturities of fixed maturity investment securities
8,008

 
7,494

 
35,413

 
23,372

Purchases of other investments
—

 
—

 
(3,000
)
 
—

Acquisition of lease intangibles, related to corporate real estate acquisition
—

 
—

 
(2,959
)
 
—

Proceeds from sale of equity method investment
—

 
—

 
—

 
1,402

Purchases of property and equipment
(1,080
)
 
(884
)
 
(56,936
)
 
(3,131
)
Other
(255
)
 
(17
)
 
(1,107
)
 
(2,779
)
Net cash used in investing activities
(16,622
)
 
(4,623
)
 
(81,451
)
 
(13,056
)
Financing activities
 
 
 
 
 
 
 
Proceeds from public offering of common stock, net of offering costs
—

 
—

 
65,671

 
—

Proceeds from exercise of stock options
729

 
463

 
3,601

 
2,545

Shares withheld to satisfy tax withholding
—

 
—

 
(1,839
)
 
(1,170
)
Proceeds from debt financing, net of financing fees
4,242

 
1,980

 
13,431

 
4,400

Repayment of debt financing
—

 
—

 
(10,000
)
 
—

Other financing
581

 
(282
)
 
365

 
(694
)
Net cash provided by financing activities
5,552

 
2,161

 
71,229

 
5,081

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net
(718
)
 
(58
)
 
(812
)
 
378

Net change in cash, cash equivalents, and restricted cash
(8,125
)
 
457

 
1,646

 
2,069

Cash, cash equivalents, and restricted cash at beginning of period
36,077

 
25,849

 
26,306

 
24,237

Cash, cash equivalents, and restricted cash at end of period
$
27,952

 
$
26,306

 
$
27,952

 
$
26,306















The following tables set forth our key operating metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
Total pets enrolled (at period end)
521,326

 
423,194

 
 
 
 
 
 
 
 
 
 
 
 
Total subscription pets enrolled (at period end)
430,770

 
371,683

 
 
 
 
 
 
 
 
 
 
 
 
Monthly average revenue per pet
$
54.34

 
$
52.07

 
 
 
 
 
 
 
 
 
 
 
 
Lifetime value of a pet (LVP)
$
710

 
$
727

 
 
 
 
 
 
 
 
 
 
 
 
Average pet acquisition cost (PAC)
$
164

 
$
152

 
 
 
 
 
 
 
 
 
 
 
 
Average monthly retention
98.60
%
 
98.63
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Dec. 31, 2018
 
Sept. 30, 2018
 
Jun. 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
Total pets enrolled (at period end)
521,326

 
497,942

 
472,480

 
446,533

 
423,194

 
404,069

 
383,293

 
364,259

Total subscription pets enrolled (at period end)
430,770

 
416,527

 
401,033

 
385,640

 
371,683

 
359,102

 
346,409

 
334,909

Monthly average revenue per pet
$
55.15

 
$
54.55

 
$
53.96

 
$
53.62

 
$
53.17

 
$
52.95

 
$
51.47

 
$
50.50

Lifetime value of a pet (LVP)
$
710

 
$
714

 
$
732

 
$
727

 
$
727

 
$
701

 
$
654

 
$
637

Average pet acquisition cost (PAC)
$
186

 
$
155

 
$
150

 
$
165

 
$
184

 
$
151

 
$
143

 
$
128

Average monthly retention
98.60
%
 
98.61
%
 
98.64
%
 
98.63
%
 
98.63
%
 
98.61
%
 
98.57
%
 
98.58
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


























The following table reflects the reconciliation of cash provided by operating activities to free cash flow (in thousands):
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
Year Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
 
Net cash provided by operating activities
$
3,663

 
$
2,977

 
$
12,680

 
$
9,666

 
Purchases of property and equipment
(1,080
)
 
(884
)
 
(56,936
)
 
(3,131
)
 
Free cash flow
$
2,583

 
$
2,093

 
$
(44,256
)
 
$
6,535

 
Exclude building purchase, net of acquired lease intangibles
—

 
—

 
52,534

 
—

 
Free cash flow, excluding building purchase, net of acquired lease intangibles
$
2,583

 
$
2,093

 
$
8,278

 
$
6,535

 




















The following table reflects the reconciliation of GAAP measures to non-GAAP measures (in thousands, except percentages):
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended December 31,
 
Year Ended December 31,
 
 
2018
 
2017
 
2018
 
2017
Veterinary invoice expense
 
$
58,343

 
$
46,473

 
$
214,539

 
$
170,122

Stock-based compensation expense
 
(150
)
 
(95
)
 
(571
)
 
(355
)
Cost of goods
 
$
58,193

 
$
46,378

 
$
213,968

 
$
169,767

% of revenue
 
70.4
%
 
69.7
%
 
70.4
%
 
70.0
%
 
 
 
 
 
 
 
 
 
Other cost of revenue
 
$
10,092

 
$
8,335

 
$
38,051

 
$
29,495

Stock-based compensation expense
 
(79
)
 
(67
)
 
(356
)
 
(239
)
Variable expenses
 
$
10,013

 
$
8,268

 
$
37,695

 
$
29,256

% of revenue
 
12.1
%
 
12.4
%
 
12.4
%
 
12.1
%
 
 
 
 
 
 
 
 
 
Subscription gross profit
 
$
13,041

 
$
11,160

 
$
47,746

 
$
41,471

Stock-based compensation expense
 
229

 
162

 
927

 
594

Non-GAAP subscription gross profit
 
$
13,270

 
$
11,322

 
$
48,673

 
$
42,065

% of subscription revenue
 
18.7
%
 
19.2
%
 
18.5
%
 
19.3
%
 
 
 
 
 
 
 
 
 
Gross profit
 
$
14,205

 
$
11,737

 
$
51,366

 
$
43,050

Stock-based compensation expense
 
229

 
162

 
927

 
594

Non-GAAP gross profit
 
$
14,434

 
$
11,899

 
$
52,293

 
$
43,644

% of revenue
 
17.5
%
 
17.9
%
 
17.2
%
 
18.0
%
 
 
 
 
 
 
 
 
 
Technology and development expense
 
$
2,487

 
$
2,572

 
$
9,248

 
$
9,768

General and administrative expense
 
4,922

 
4,546

 
18,164

 
16,820

Depreciation and amortization expense
 
(1,485
)
 
(1,024
)
 
(4,512
)
 
(4,232
)
Stock-based compensation expense
 
(638
)
 
(521
)
 
(2,513
)
 
(2,103
)
Fixed expenses
 
$
5,286

 
$
5,573

 
$
20,387

 
$
20,253

% of revenue
 
6.4
%
 
8.4
%
 
6.7
%
 
8.3
%
 
 
 
 
 
 
 
 
 
Sales and marketing expense
 
$
6,994

 
$
5,781

 
$
24,999

 
$
19,104

Stock-based compensation expense
 
(355
)
 
(172
)
 
(1,335
)
 
(722
)
Acquisition cost
 
$
6,639

 
$
5,609

 
$
23,664

 
$
18,382

% of revenue
 
8.0
%
 
8.4
%
 
7.8
%
 
7.6
%

















The following tables reflect the reconciliation of acquisition cost and net acquisition cost to sales and marketing expense (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
Sales and marketing expenses
$
24,999

 
$
19,104

 
 
 
 
 
 
 
 
 
 
 
 
Excluding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
(1,335
)
 
(722
)
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition cost
23,664

 
18,382

 
 
 
 
 
 
 
 
 
 
 
 
Net of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sign-up fee revenue
(2,587
)
 
(2,169
)
 
 
 
 
 
 
 
 
 
 
 
 
Other business segment sales and marketing expense
(377
)
 
(218
)
 
 
 
 
 
 
 
 
 
 
 
 
Net acquisition cost
$
20,700

 
$
15,995

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Dec. 31, 2018
 
Sept. 30, 2018
 
Jun. 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
Sales and marketing expenses
$
6,994

 
$
6,365

 
$
5,702

 
$
5,938

 
$
5,781

 
$
4,862

 
$
4,372

 
$
4,089

Excluding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
(355
)
 
(358
)
 
(349
)
 
(273
)
 
(172
)
 
(165
)
 
(198
)
 
(187
)
Acquisition cost
6,639

 
6,007

 
5,353

 
5,665

 
5,609

 
4,697

 
4,174

 
3,902

Net of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sign-up fee revenue
(655
)
 
(693
)
 
(624
)
 
(616
)
 
(550
)
 
(558
)
 
(517
)
 
(544
)
Other business segment sales and marketing expense
(102
)
 
(99
)
 
(88
)
 
(87
)
 
(56
)
 
(51
)
 
(63
)
 
(48
)
Net acquisition cost
$
5,882

 
$
5,215

 
$
4,641

 
$
4,962

 
$
5,003

 
$
4,088

 
$
3,594

 
$
3,310

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 





The following tables reflect the reconciliation of adjusted EBITDA to net income (loss) (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
2017
 
 
 
 
 
 
 
 
 
 
 
 
Net loss
$
(927
)
 
$
(1,503
)
 
 
 
 
 
 
 
 
 
 
 
 
Excluding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
4,775

 
3,419

 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization expense
4,512

 
4,232

 
 
 
 
 
 
 
 
 
 
 
 
Interest income
(862
)
 
(227
)
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
1,198

 
533

 
 
 
 
 
 
 
 
 
 
 
 
Income tax benefit
(7
)
 
(428
)
 
 
 
 
 
 
 
 
 
 
 
 
Gain from equity method investment
(107
)
 
(1,029
)
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted EBITDA
$
8,582

 
$
4,997

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Dec. 31, 2018
 
Sept. 30, 2018
 
Jun. 30, 2018
 
Mar. 31, 2018
 
Dec. 31, 2017
 
Sept. 30, 2017
 
Jun. 30, 2017
 
Mar. 31, 2017
Net income (loss)
$
(275
)
 
$
1,205

 
$
(377
)
 
$
(1,480
)
 
$
(838
)
 
$
406

 
$
411

 
$
(1,482
)
Excluding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
1,222

 
1,299

 
1,286

 
968

 
855

 
895

 
888

 
781

Depreciation and amortization expense
1,485

 
1,136

 
964

 
927

 
1,024

 
1,095

 
1,077

 
1,036

Interest income
(234
)
 
(317
)
 
(179
)
 
(132
)
 
(3
)
 
(97
)
 
(76
)
 
(51
)
Interest expense
311

 
336

 
332

 
219

 
163

 
124

 
109

 
137

Income tax expense (benefit)
4

 
(7
)
 
91

 
(95
)
 
(482
)
 
26

 
4

 
24

(Gain) loss from equity method investment
—

 
—

 
(107
)
 
—

 
—

 
—

 
(1,036
)
 
7

Adjusted EBITDA
$
2,513

 
$
3,652

 
$
2,010

 
$
407

 
$
719

 
$
2,449

 
$
1,377

 
$
452

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 







Contacts: 

Investors:
Laura Bainbridge, Investor Relations Officer
310.829.5400
InvestorRelations@trupanion.com
Media:
Scott Janzen, Trupanion Director of Communications
888.612.1138 ext 3450
scott.janzen@trupanion.com