Trupanion — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the third quarter of 2026 was $405.6 million, an 11% increase compared to the third quarter of 2025.
• Subscription business revenue was $287.9 million, a 14% increase compared to the third quarter of 2025.
• Net income was $9.3 million ($0.21 per basic and diluted share) for the third quarter of 2026, compared to $5.9 million ($0.14 basic, $0.13 diluted) in the third quarter of 2025.
• Adjusted EBITDA was $20.8 million for the third quarter of 2026, compared to $19.6 million in the third quarter of 2025.
• Operating cash flow was $30.7 million and free cash flow was $28.5 million for the third quarter of 2026, compared to $29.2 million and $23.9 million, respectively, in the third quarter of 2025.
• For the first nine months of 2026, total revenue was $1,182.6 million (up 11% year-over-year), and net income was $21.0 million ($0.48 per share), compared to $13.8 million ($0.32 per share) in the first nine months of 2025.
• Adjusted EBITDA for the first nine months of 2026 was $57.9 million, compared to $48.4 million in the prior year period.
• Operating cash flow for the first nine months of 2026 was $66.3 million and free cash flow was $61.4 million, compared to $60.2 million and $50.0 million, respectively, in the first nine months of 2025.
• At September 30, 2026, the company held $396.8 million in cash and short-term investments.
• Deferred revenue was $290.2 million at September 30, 2026, compared to $270.9 million at December 31, 2025.
• Long-term debt was $94.5 million at September 30, 2026, compared to $101.8 million at December 31, 2025.

Guidance and Future Outlook:

• Management stated the company is investing with discipline in organic growth and expressed confidence in the long-term value being built.
• The press release notes the seventh consecutive quarter of improvement in retention.
• Forward-looking statements indicate expectations regarding the ability to continue growing enrollments and revenue, repurchase shares, and execute the business plan.
• Risks to future results include the ability to maintain profitability and cash flow, keep growing the membership base, and manage claims severity and frequency.

Business Segments and Product Lines:

• Subscription enrolled pets reached 1,145,160 at September 30, 2026, a 6% increase over September 30, 2025.
• Total enrolled pets (including other business segments) was 1,626,901 at September 30, 2026, a 2% decrease over September 30, 2025.
• Monthly average revenue per pet for the subscription business was $87.41 for the first nine months of 2026, up from $79.84 in the same period of 2025.
• Average pet acquisition cost (PAC) was $297 for the first nine months of 2026, compared to $278 in the first nine months of 2025.
• Average monthly retention for the subscription business was 98.38% for the first nine months of 2026, compared to 98.33% in the prior year period.
• The company operates a Territory Partner model and has an alliance with Aflac.

Market and Competitive Landscape:

• Trupanion is a leading provider of medical insurance for cats and dogs in the United States, Canada, and certain countries in Continental Europe.
• The company is the only North American provider with technology to pay veterinarians directly in seconds at the time of checkout.
• The press release does not provide specific market share data or detailed competitive landscape analysis beyond the company's positioning as a leader.

Risks and Challenges:

• Key risks include the ability to achieve or maintain profitability and appropriate cash flow levels.
• Risks involve the accuracy of assumptions regarding member acquisition expenditures, claims severity/frequency, and pricing.
• Regulatory constraints on pricing modifications and compliance with laws regarding the sale of pet medical plans are cited as potential challenges.
• The effectiveness of the Territory Partner model and the ability to retain Territory Partners and active hospitals are identified as risks.
• Potential impacts from third-party claims, litigation, and regulatory actions are noted.

Management Commentary and Tone:

• Margi Tooth, CEO and President, described the third-quarter results as "strong," citing record cash flow, increased profitability, and continued progress on strategic initiatives.
• Management highlighted the seventh consecutive quarter of retention improvement as a key achievement.
• The tone reflects confidence in the business compounding and the long-term value creation for pet parents and shareholders.

Other Key Points:

• During the third quarter of 2026, the company repurchased approximately 0.8 million shares of common stock at an aggregate cost of approximately $25.0 million.
• In June, the Board authorized a share repurchase program allowing for up to $100.0 million of shares with no expiration date.
• As of September 30, 2026, approximately $75.0 million remained available for repurchases under the program.
• The company repaid $15.0 million on its PNC revolving credit facility in October 2026, leaving $18.5 million in available capacity.
• The company hosts a conference call to review results, with a live webcast available on its Investor Relations website.