Trupanion (TRUP) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 15% year-over-year to $327.5 million, with subscription revenue up 20% and other business up 5%.

• Net income was $1.4 million, reversing a $4.0 million loss in Q3 2023; nine-month net loss narrowed to $11.3 million from $42.5 million.

• Subscription-adjusted operating income grew 66% year-over-year, with a margin of 14%, the highest since Q1 2022, driven by pricing actions and operational discipline.

• Pet acquisition spend increased, enrolling 65,800 new pets with a 36% IRR; total subscription pets rose 6% to over 1,032,000.

• Free cash flow for Q3 2024 was $13.4 million, with trailing 12-month free cash flow reaching $30 million.

Financial highlights

• Total revenue: $327.5 million for Q3 2024 (+15%); subscription revenue: $219.0 million (+20%).

• Net income: $1.4 million ($0.03 per share) for Q3 2024, compared to a net loss of $4.0 million last year.

• Adjusted operating income: $32.6 million, up 37% year-over-year; adjusted EBITDA: $14.5 million, up from $6.1 million.

• Free cash flow: $13.4 million for Q3 2024, a $6.4 million improvement year-over-year.

• Cash and short-term investments: $293.1 million at quarter end.

Outlook and guidance

• Full-year revenue guidance raised to $1.281–$1.286 billion, representing 16% growth at midpoint.

• Subscription revenue expected at $856–$858 million, up 20% year-over-year.

• Adjusted operating income guidance increased to $114–$117 million, up 38% year-over-year.

• Q4 revenue expected at $333–$338 million; subscription revenue at $227–$229 million.

• Management expects continued enrollment and revenue growth, leveraging strong free cash flow and improved profitability.