Trupanion, Inc 10-Q for FY2026 Q3
Trupanion, Inc. (TRUP)
10-Q
2026-11-05
For: 2026-09-30
View Original
Added on
November 05, 2026
About this 10-Q
Trupanion, Inc filed this 10-Q on November 5, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $405.59M
- up 10.5% from $366.92M a year earlier
- Diluted EPS
- $0.21
- up 61.5% from $0.13 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the quarterly period ended September 30, 2026
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||
For the transition period from ____ to ____
Commission File Number: 001-36537
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ | ☐ | No | ||||||||||||
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ | ☐ | No | ||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||||||||
| Emerging growth company | |||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
As of October 29, 2026, there were approximately 43,265,932 shares of the registrant’s common stock outstanding.
TRUPANION, INC.
TABLE OF CONTENTS
| Page | ||||||||
| Item 1. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
Note About Forward-Looking Statements
This Quarterly Report on Form 10-Q of Trupanion, Inc. contains forward-looking statements within the meaning of the federal securities laws. The words “believe,” “may,” “will,” “potentially,” “estimate,” “target,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan” and “expect,” and similar expressions that convey uncertainty of future events or outcomes, are intended to identify forward-looking statements.
These and other forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation, those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission on February 13, 2026, in particular the risk factors discussed under the heading "Risk Factors" in Part I, Item 1A. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely on forward-looking statements as predictions of future events. We undertake no obligation to update publicly any forward-looking statements for any reason, except as required by law.
Unless otherwise stated or the context otherwise indicates, references to “we,” “us,” “our” and similar references refer to Trupanion, Inc. and its subsidiaries taken as a whole.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
| TRUPANION, INC. Condensed Consolidated Statements of Operations (in thousands, except share data) (unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
Veterinary invoice expense(1) | |||||||||||||||||||||||
Other cost of revenue(1) | |||||||||||||||||||||||
| Total cost of revenue | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Technology and development(1) | |||||||||||||||||||||||
General and administrative(1) | |||||||||||||||||||||||
New pet acquisition expense(1) | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Loss from investment in joint venture | ( | ||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Other (income), net | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | $ | $ | $ | |||||||||||||||||||
| Diluted | $ | $ | $ | $ | |||||||||||||||||||
| Weighted average shares of common stock outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
(1) Includes stock-based compensation expense as follows: | |||||||||||||||||||||||
| Veterinary invoice expense | $ | $ | $ | $ | |||||||||||||||||||
| Other cost of revenue | |||||||||||||||||||||||
| Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| New pet acquisition expense | |||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
1
TRUPANION, INC. Condensed Consolidated Statements of Comprehensive Income (in thousands) (unaudited) | |||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | ( | ||||||||||||||||||||
| Net unrealized gain (loss) on available-for-sale investments | ( | ( | |||||||||||||||||||||
| Other comprehensive income (loss), net of taxes | ( | ( | ( | ||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
2
| TRUPANION, INC. Condensed Consolidated Balance Sheets (in thousands, except share data) | |||||||||||
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | (unaudited) | ||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term investments | |||||||||||
Accounts and other receivables, net of allowance for credit losses of $ | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| Total current assets | |||||||||||
| Restricted cash | |||||||||||
| Long-term investments | |||||||||||
| Property, equipment, and internal-use software, net | |||||||||||
| Intangible assets, net | |||||||||||
| Other long-term assets | |||||||||||
| Goodwill | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and stockholders’ equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued liabilities and other current liabilities | |||||||||||
| Reserve for veterinary invoices | |||||||||||
| Deferred revenue | |||||||||||
| Long-term debt - current portion | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Deferred tax liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Stockholders’ equity: | |||||||||||
Common stock: $ | |||||||||||
Preferred stock: $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive income (loss) | ( | ||||||||||
| Accumulated deficit | ( | ( | |||||||||
Treasury stock, at cost: | ( | ( | |||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See accompanying notes to the condensed consolidated financial statements.
3
| Trupanion, Inc. Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share amounts) (unaudited) | |||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Treasury Stock | Total Stockholders' Equity | ||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||
| Balance at July 1, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||
| Issuance of common stock in connection with the Company's equity award programs, net of tax withholdings | — | ( | — | — | — | ( | |||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Repurchases of common stock | ( | — | — | — | — | ( | (25,069) | ||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | ( | ||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Treasury Stock | Total Stockholders' Equity | ||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||
| Balance at July 1, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Issuance of common stock in connection with the Company's equity award programs, net of tax withholdings | — | ( | — | — | — | ( | |||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | ( | ||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
4
| Trupanion, Inc. Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share amounts) (unaudited) | |||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock | Total Stockholders' Equity | ||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
| Issuance of common stock in connection with the Company's equity award programs, net of tax withholdings | — | ( | — | — | — | ( | |||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Repurchases of common stock | ( | — | — | ( | ( | ||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | ( | ||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock | Total Stockholders' Equity | ||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||
| Issuance of common stock in connection with the Company's equity award programs, net of tax withholdings | — | ( | — | — | — | ( | |||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | ||||||||||||||||||
| Other comprehensive income | — | — | — | — | — | ||||||||||||||||||
| Net income | — | — | — | — | — | ||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
5
TRUPANION, INC.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation expense | |||||||||||
| Realized gain on nonmonetary exchange of preferred stock investment | ( | ||||||||||
| Other, net | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts and other receivables | ( | ||||||||||
| Prepaid expenses and other assets | ( | ||||||||||
| Accounts payable, accrued liabilities, and other liabilities | ( | ||||||||||
| Reserve for veterinary invoices | ( | ||||||||||
| Deferred revenue | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Investing activities | |||||||||||
| Purchases of investment securities | ( | ( | |||||||||
| Maturities and sales of investment securities | |||||||||||
| Purchases of property, equipment, and internal-use software | ( | ( | |||||||||
| Other | ( | ||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Financing activities | |||||||||||
| Repayment of debt financing | ( | ( | |||||||||
| Repurchases of common stock | ( | ||||||||||
| Proceeds from exercise of stock options | |||||||||||
| Shares withheld to satisfy tax withholding | ( | ( | |||||||||
| Other | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net | ( | ||||||||||
| Net change in cash, cash equivalents, and restricted cash | ( | ||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | |||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | |||||||||
| Supplemental disclosures | |||||||||||
| Noncash investing and financing activities: | |||||||||||
| Purchases of property, equipment, and internal-use software included in accounts payable and accrued liabilities | $ | $ | |||||||||
| Purchase of intellectual property in exchange for preferred stock investment | $ | $ | |||||||||
See accompanying notes to the condensed consolidated financial statements.
6
TRUPANION, INC.
Notes to the Condensed Consolidated Financial Statements (unaudited)
1. Nature of Operations and Significant Accounting Policies
Description of Business and Basis of Presentation
Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the "Company") provides medical insurance for cats and dogs in the United States, Canada, and certain countries in Continental Europe. Through its data-driven, vertically-integrated approach, the Company develops and offers high-value medical insurance products, priced to take into account each pet's unique characteristics and coverage level.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from such estimates. See Note 1 to the audited financial statements included in the 2025 10-K for additional discussion of these estimates and assumptions.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, which requires public business entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of this ASU on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025-06, which modernizes the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The ASU is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of adopting ASU 2025-06.
2. Net Income per Share
Basic net income per share is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is calculated using the weighted average number of shares of common stock plus, when dilutive, potential shares of common stock outstanding using the treasury-stock method. Potential shares of common stock outstanding include stock options, and unvested restricted stock units.
The components of basic and diluted earnings per share were as follows (in thousands, except share and per share information):
7
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Basic earnings per share: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Shares used in computation: | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding | |||||||||||||||||||||||
| Basic earnings per share | $ | $ | $ | $ | |||||||||||||||||||
| Diluted earnings per share: | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | |||||||||||||||||||
| Shares used in computation: | |||||||||||||||||||||||
| Weighted average shares of common stock outstanding | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
| Weighted average number of shares | |||||||||||||||||||||||
| Diluted earnings per share | $ | $ | $ | $ | |||||||||||||||||||
The following potentially dilutive equity securities were not included in the diluted earnings per share of common stock calculation because they would have had an antidilutive effect:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Restricted stock units | |||||||||||||||||||||||
3. Investments
Available-for-sale securities are classified as short-term versus long-term investments based on whether they represent the investment of funds available for current operations. Currently, all available-for-sale securities are considered short-term in nature. Held-to-maturity securities are classified as short-term versus long-term investments based on their maturity dates. The amortized cost, gross unrealized holding gains and losses, and estimated fair value of long-term and short-term investments by major security type and class of security were as follows as of September 30, 2026 and December 31, 2025 (in thousands):
8
| Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Fair Value | |||||||||||||||||||||||
| As of September 30, 2026 | ||||||||||||||||||||||||||
| Long-term investments: | ||||||||||||||||||||||||||
| Held-to-maturity investments | ||||||||||||||||||||||||||
| U.S. treasury securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
| $ | $ | $ | ( | $ | ||||||||||||||||||||||
| Short-term investments: | ||||||||||||||||||||||||||
| Available-for-sale investments | ||||||||||||||||||||||||||
| U.S. treasury securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | ( | |||||||||||||||||||||||||
| Other asset-backed securities | ( | |||||||||||||||||||||||||
| Corporate bonds | ( | |||||||||||||||||||||||||
| $ | $ | $ | ( | $ | ||||||||||||||||||||||
| Held-to-maturity investments | ||||||||||||||||||||||||||
| U.S. treasury securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Foreign treasury securities | ( | |||||||||||||||||||||||||
| Certificates of deposit | ||||||||||||||||||||||||||
| $ | $ | $ | ( | $ | ||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Holding Gains | Gross Unrealized Holding Losses | Fair Value | |||||||||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||||||||
| Long-term investments: | ||||||||||||||||||||||||||
| Held-to-maturity investments | ||||||||||||||||||||||||||
| U.S. treasury securities | $ | $ | $ | $ | ||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| Short-term investments: | ||||||||||||||||||||||||||
| Available-for-sale investments | ||||||||||||||||||||||||||
| U.S. treasury securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | ( | |||||||||||||||||||||||||
| Other asset-backed securities | ||||||||||||||||||||||||||
| Corporate bonds | ( | |||||||||||||||||||||||||
| $ | $ | $ | ( | $ | ||||||||||||||||||||||
| Held-to-maturity investments | ||||||||||||||||||||||||||
| U.S. treasury securities | $ | $ | $ | $ | ||||||||||||||||||||||
| Foreign treasury securities | ||||||||||||||||||||||||||
| Certificates of deposit | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
9
Future maturities of investments classified as available-for-sale and held-to-maturity are as follows (in thousands):
| As of September 30, 2026 | |||||||||||
| Amortized Cost | Fair Value | ||||||||||
| Available-for-sale: | |||||||||||
| Due under one year | $ | $ | |||||||||
| Due after one year through five years | |||||||||||
| $ | $ | ||||||||||
| Available-for-sale collateralized: | |||||||||||
| Due under one year | $ | $ | |||||||||
| Due after one year through five years | |||||||||||
| Due after five years through ten years | |||||||||||
| Due after ten years | |||||||||||
| $ | $ | ||||||||||
| Held-to-maturity: | |||||||||||
| Due under one year | $ | $ | |||||||||
| Due after one year through five years | |||||||||||
| $ | $ | ||||||||||
The following tables present the gross unrealized losses and related fair values for the Company's investment in available-for-sale securities, grouped by duration of time in a continuous unrealized loss position as of September 30, 2026 and December 31, 2025 (in thousands):
| Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||||||||||||||||
| As of September 30, 2026 | |||||||||||||||||||||||||||||||||||
| U.S. treasury securities | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Other asset-backed securities | ( | ( | |||||||||||||||||||||||||||||||||
| Corporate bonds | ( | ( | |||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
| Less than 12 Months | 12 Months or More | Total | |||||||||||||||||||||||||||||||||
| Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | ||||||||||||||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||||||||||||||
| U.S. treasury securities | $ | $ | ( | $ | $ | $ | $ | ( | |||||||||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | ( | ( | ( | ||||||||||||||||||||||||||||||||
| Other asset-backed securities | |||||||||||||||||||||||||||||||||||
| Corporate bonds | ( | ( | |||||||||||||||||||||||||||||||||
| Total | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
As of September 30, 2026, 153 of the securities held were in an unrealized loss position. Unrealized losses on available-for-sale investments relate to interest rate changes. The Company does not expect material credit losses from its available-for-sale investments, considering the composition of the investment portfolio and the credit rating of these investments. The Company determined it is not likely to, and does not intend to, sell securities currently in a loss position prior to a potential recovery of their cost basis. The Company does not expect material credit losses from its held-to-maturity investments, considering the composition of the investment portfolio and the credit loss history of these investments.
10
4. Other Investments
Preferred Stock Investment and Nonmonetary Exchange
The Company invested $7.0 million in the preferred stock of a variable interest entity, Baystride, Inc. ("Baystride"), a U.S.-based privately held corporation operating in the pet food industry. The Company did not have power over the activities that most significantly impact the economic performance of the entity and was, therefore, not the primary beneficiary. The preferred stock investment in the entity was redeemable and, therefore, was accounted for as an available-for-sale debt security and measured at fair value at each balance sheet date and as of the transaction date. The estimated fair value of the preferred stock investment was a Level 3 measurement, and was based on certain unobservable inputs such as the value of the underlying enterprise, volatility, time to liquidity, and market interest rates. Significant changes in any of these unobservable inputs would result in a change in the fair value measurement.
On June 3, 2025, the Company entered into a purchase agreement for intellectual property developed by Baystride. In exchange for this intellectual property, the Company transferred all of its Baystride preferred stock back to Baystride. The Company concluded that the transaction met the definition of a nonmonetary exchange and an asset acquisition.
The Company determined that the cost to acquire the intellectual property was $14.9 million, which was comprised of the fair value of the Baystride preferred stock relinquished of $14.8 million and direct transaction costs of $0.1 million. The acquired intellectual property has been recorded as a patent within Intangible assets, net on the Company's Consolidated Balance Sheet and will be amortized over a 20-year useful life. The nonmonetary exchange resulted in a gain of $7.8 million, calculated as the difference between the Company's initial $7.0 million investment in Baystride's preferred stock and its $14.8 million fair value on the transaction date. This gain was recorded to Other (income), net within the Company's Consolidated Statements of Operations.
5. Fair Value
Fair Value Disclosures
The following table summarizes, by major security type, the Company's assets that are measured at fair value on a recurring basis, and placement within the fair value hierarchy (in thousands):
| As of September 30, 2026 | |||||||||||||||||||||||
| Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | |||||||||||||||||||
| Fixed maturities: | |||||||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | |||||||||||||||||||||||
| Other asset-backed securities | |||||||||||||||||||||||
| Corporate bonds | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Money market funds | $ | $ | $ | $ | |||||||||||||||||||
| Fixed maturities: | |||||||||||||||||||||||
| U.S. treasury securities | |||||||||||||||||||||||
| Mortgage-backed securities and collateralized mortgage obligations | |||||||||||||||||||||||
| Other asset-backed securities | |||||||||||||||||||||||
| Corporate bonds | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
11
The Company measures the fair value of money market funds, classified as Level 1, based on quoted prices in active markets for identical assets. The fair values of the Company's fixed maturity investments classified as Level 2 are based on either recent trades in inactive markets or quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. Held-to-maturity investments are carried at amortized cost and the fair value and changes in unrealized gains and losses are disclosed in Note 3, Investments. The fair value of these investments is determined in the same manner as available-for-sale securities and are considered either a Level 1 or Level 2 measurement.
The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers between levels for the nine months ended September 30, 2026 and the year ended December 31, 2025.
Fair Value Disclosures - Other Assets and Liabilities
Notes receivable of $2.4 million were included in Prepaid expenses and other assets as of September 30, 2026, and $2.5 million were included in Other long-term assets as of December 31, 2025. Classification of notes receivable in the Company's Consolidated Balance Sheets is determined based on the expected maturity of each note. The Company records notes receivable at their estimated collectible amount and estimates that the carrying value of notes receivable approximates their fair value. The estimated fair value represents a Level 3 measurement within the fair value hierarchy, and is based on market interest rates and the assessed creditworthiness of the third party.
The Company estimates the fair value of long-term debt based upon rates currently available to the Company for debt with similar terms and remaining maturities. This is a Level 3 measurement. Based upon the terms of the debt, the carrying amount of long-term debt approximated fair value at September 30, 2026.
6. Commitments and Contingencies
Legal Proceedings
From time to time the Company is or may become subject to various legal proceedings arising in the ordinary course of business, including proceedings involving members, other entities or regulatory bodies. Estimated liabilities are recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. At this time, the Company does not believe any such matters to be material individually or in the aggregate. These views are subject to change following the outcome of future events or the results of future developments.
7. Reserve for Veterinary Invoices
Reserve for veterinary invoices
Summarized below are the changes in total liability for the Company's subscription business segment (in thousands):
12
| Nine Months Ended September 30, | ||||||||||||||
| Subscription | 2026 | 2025 | ||||||||||||
| Reserve at beginning of year | $ | $ | ||||||||||||
| Veterinary invoice expenses during the period related to: | ||||||||||||||
| Current year | ||||||||||||||
| Prior years | ||||||||||||||
| Total veterinary invoice expense | ||||||||||||||
| Amounts paid during the period related to: | ||||||||||||||
| Current year | ||||||||||||||
| Prior years | ||||||||||||||
| Total paid | ||||||||||||||
| Non-cash expenses | ||||||||||||||
| Reserve at end of period | $ | $ | ||||||||||||
The Company had unfavorable development on veterinary invoice reserves of $2.6 million for the nine months ended September 30, 2026, including favorable development of $0.4 million attributable to accident year 2025 and unfavorable development of $3.0 million attributable to accident year 2024 and prior. The favorable development for accident year 2025 was primarily driven by lower than expected frequency of claims. The unfavorable development for accident year 2024 and prior was primarily driven by higher than expected frequency of claims. Non-cash expenses are primarily comprised of stock-based compensation for employees performing claims processing related duties.
Summarized below are the changes in total liability for the Company's other business segment (in thousands):
| Nine Months Ended September 30, | ||||||||||||||
| Other Business | 2026 | 2025 | ||||||||||||
| Reserve at beginning of year | $ | $ | ||||||||||||
| Veterinary invoice expenses during the period related to: | ||||||||||||||
| Current year | ||||||||||||||
| Prior years | ( | |||||||||||||
| Total veterinary invoice expense | ||||||||||||||
| Amounts paid during the period related to: | ||||||||||||||
| Current year | ||||||||||||||
| Prior years | ||||||||||||||
| Total paid | ||||||||||||||
| Non-cash expenses | ||||||||||||||
| Reserve at end of period | $ | $ | ||||||||||||
The Company had unfavorable development on veterinary invoice reserves for the other business segment of $1.8 million for the nine months ended September 30, 2026, including unfavorable development on veterinary invoice reserves of $1.7 million attributable to accident year 2025 and unfavorable development of $0.1 million attributable to accident year 2024 and prior. The unfavorable development for accident years 2025 and prior was primarily driven by higher than expected frequency of claims.
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Reserve for veterinary invoices, by year of occurrence
In the following tables, the reserve for veterinary invoices for each segment is presented as the amount (in thousands) by the year to which the veterinary invoice relates, referred to as the year of occurrence.
| Subscription | As of September 30, 2026 | ||||
| Year of Occurrence | |||||
| 2024 and prior | $ | ||||
| 2025 | |||||
| 2026 | |||||
| $ | |||||
| Other Business | As of September 30, 2026 | ||||
| Year of Occurrence | |||||
| 2024 and prior | $ | ||||
| 2025 | |||||
| 2026 | |||||
| $ | |||||
8. Debt
Prior Credit Facility
On March 25, 2022 , the Company entered into a credit agreement with Piper Sandler Finance, LLC, acting as the administrative agent, that provided the Company with $150.0 million in credit (the "Prior Credit Facility"). The Prior Credit Facility obligated the Company to repay 0.25 % of any then-outstanding Term Loans, together with accrued and unpaid interest, on a quarterly basis. In November 2025, the Company repaid the Prior Credit Facility in full utilizing proceeds from the PNC Facility (as defined below).
PNC Facility
On November 4, 2025, the Company entered into a credit agreement with PNC Bank, National Association acting as the administrative agent, that provides the Company with $120.0 million in credit (the "PNC Facility") consisting of:
(a) an initial term loan in an aggregate principal amount of $100.0 million ("PNC Initial Term Loan"), which was funded at closing;
(b) commitments for revolving loans in an aggregate principal amount at any time outstanding not in excess of $20.0 million ("PNC Revolving Loans"), of which $15.0 million was originally drawn. Additionally, $1.5 million of borrowing capacity has been reserved for an irrevocable letter of credit pursuant to the Company's manufacturing facility lease. Remaining undrawn or uncommitted amounts may be drawn at any time prior to maturity.
The PNC Facility is secured by substantially all assets of the Company and its subsidiaries. Proceeds from the PNC Facility were utilized to pay off the Prior Credit Facility. The credit agreement with PNC Bank contains financial and other covenants. As of September 30, 2026, the Company was in compliance with all financial and other covenants. During the third quarter of 2026, the Company amended the PNC Facility to modify certain financial covenants, increasing the capacity for share repurchases under the Company's new share repurchase program.
To the extent not previously paid, the PNC Facility is due and payable on November 4, 2028. The Company will make quarterly principal payments of $2.5 million on the PNC Initial Term Loan. The Company may voluntarily prepay loans or reduce revolving commitments under the PNC Facility at any time without premium or penalty.
Loans under the PNC Facility bear interest at a reference rate plus an applicable margin, which will generally be the SOFR reference rate plus 2.75% per annum. The stated interest rate as of September 30, 2026 was approximately 6.82 % for the aggregate outstanding term loans. The Company incurred total debt issuance cost of approximately $0.8 million, which is reported in the Consolidated Balance Sheet as a direct reduction from the carrying amount of the PNC Facility, and is amortized as interest expense over the term of three years.
14
Future principal payments on outstanding borrowings as of September 30, 2026 are as follows (in thousands):
| Year Ending December 31, | As of September 30, 2026 | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| Total | $ | |||||||
9. Stock-Based Compensation
Stock-based compensation expense includes restricted stock units granted to employees and other service providers and has been reported in the Company’s Consolidated Statements of Operations depending on the function performed by the employee or other service provider. Stock-based compensation expense recognized in each category of the Consolidated Statements of Operations was as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Veterinary invoice expense | $ | $ | $ | $ | |||||||||||||||||||
| Other cost of revenue | |||||||||||||||||||||||
| Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| New pet acquisition expense | |||||||||||||||||||||||
| Total expensed stock-based compensation | |||||||||||||||||||||||
| Capitalized stock-based compensation | |||||||||||||||||||||||
| Total stock-based compensation | $ | $ | $ | $ | |||||||||||||||||||
Stock Options
The following table presents information regarding stock options granted, exercised, and forfeited for the period presented:
| Number of Options | Weighted Average Exercise Price per Share | Aggregate Intrinsic Value (in thousands) | |||||||||||||||
| Outstanding as of December 31, 2025 | $ | $ | |||||||||||||||
| Granted | — | ||||||||||||||||
| Exercised | ( | ||||||||||||||||
| Forfeited | ( | — | |||||||||||||||
| Outstanding as of September 30, 2026 | |||||||||||||||||
| Exercisable as of September 30, 2026 | $ | $ | |||||||||||||||
As of September 30, 2026, stock options outstanding and stock options exercisable had a weighted average remaining contractual life of 0.6
The Company has not granted any new stock options since 2017 and all outstanding options vested prior to January 1, 2022. The Company issues authorized shares upon the exercise of stock options.
Restricted Stock Units
15
The following table presents information regarding restricted stock units granted, vested and forfeited for the period presented:
| Number of Shares | Weighted Average Grant Date Fair Value per Share | ||||||||||
| Unvested shares as of December 31, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
| Unvested shares as of September 30, 2026 | $ | ||||||||||
10. Stockholders' Equity
Common Stock and Preferred Stock
As of September 30, 2026, the Company had 100,000,000 shares of common stock authorized and 43,264,468 shares of common stock outstanding. Holders of common stock are entitled to one vote on each matter properly submitted to the stockholders of the Company except those related to matters concerning possible outstanding preferred stock. As of September 30, 2026, the Company had 10,000,000 shares of undesignated preferred stock authorized for future issuance and did not have any outstanding shares of preferred stock. The holders of common stock are also entitled to receive dividends as and when declared by the board of directors of the Company (the "Board"), whenever funds are legally available. These rights are subordinate to the dividend rights of holders of any senior classes of stock outstanding at the time. The Company does not intend to declare or pay any cash dividends in the foreseeable future.
Share Repurchase Program
In April 2021, the Board approved a share repurchase program, pursuant to which the Company was authorized to repurchase outstanding shares of its common stock, between May 2021 and May 2026. In June 2026, the Board approved a new share repurchase program, pursuant to which the Company is authorized to repurchase up to an aggregate of $100.0 million of its outstanding shares of common stock, with no expiration date. The Company is not obligated to repurchase any specific number or dollar amount of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company’s compliance with the PNC Facility, available cash, cash flow from operations, stock price, general economic, business and market conditions, and alternative investment opportunities. The Company repurchased 830,389 shares during the three and nine months ended September 30, 2026, for an aggregate amount of $25.0 million (excluding excise tax of $0.1 million on stock repurchases as a result of the Inflation Reduction Act of 2022 and including direct costs incurred to acquire the shares). No shares were repurchased during the nine months ended September 30, 2025.
16
11. Accumulated Comprehensive Income (Loss)
A summary of the components of Accumulated other comprehensive income (loss) is as follows (in thousands):
| Three months ended September 30, 2026 | Foreign Currency Translation | Net Unrealized Loss on Available-for-Sale Securities | Total | |||||||||||||||||
| Balance as of July 1, 2026 | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Other comprehensive loss | ( | ( | ( | |||||||||||||||||
| Balance as of September 30, 2026 | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Three months ended September 30, 2025 | Foreign Currency Translation | Net Unrealized Gain on Available-for-Sale Securities | Total | |||||||||||||||||
| Balance as of July 1, 2025 | $ | $ | $ | |||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | |||||||||||||||||
| Nine Months Ended September 30, 2026 | Foreign Currency Translation | Net Unrealized Gain (Loss) on Available-for-Sale Securities | Total | |||||||||||||||||
| Balance as of January 1, 2026 | $ | $ | $ | |||||||||||||||||
| Other comprehensive loss | ( | ( | ( | |||||||||||||||||
| Balance as of September 30, 2026 | $ | ( | $ | ( | $ | ( | ||||||||||||||
| Nine Months Ended September 30, 2025 | Foreign Currency Translation | Net Unrealized Gain on Available-for-Sale Securities | Total | |||||||||||||||||
| Balance as of January 1, 2025 | $ | ( | $ | $ | ( | |||||||||||||||
| Other comprehensive income | ||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | |||||||||||||||||
In connection with the nonmonetary exchange discussed in Note 4, the Company reclassified $0.9 million of previously unrealized gain from Accumulated other comprehensive income (loss) to Other (income), net during the nine months ended September 30, 2025.
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12. Segments
The Company has two reporting segments: subscription business and other business. The subscription business segment generates revenue primarily from subscription payments related to the Company's direct-to-consumer products. The other business segment generates revenue from other product offerings, primarily by underwriting policies on behalf of third parties with whom the Company has a business-to-business relationship. The other business segment has, and targets, a lower margin profile than the Company's subscription business segment. The Company does not undertake marketing efforts for these policies and has a business-to-business relationship with these third-parties.
The Company's chief operating decision maker is its Chief Executive Officer. The chief operating decision maker reviews revenue and operating income (loss) to evaluate segment performance. Revenue, veterinary invoice expense, other cost of revenue, and new pet acquisition expenses are generally directly attributed to each segment. Other operating expenses, such as technology and development expense, general and administrative expense, and depreciation and amortization, are generally allocated proportionately based on revenue in each segment. Interest and other expenses and income taxes are not allocated to the segments, nor included in the measure of segment profit or loss. The Company does not analyze discrete segment balance sheet information related to long-term assets. Substantially all of the Company’s long-lived assets were located in the United States as of September 30, 2026 and December 31, 2025.
Operating income (loss) of the Company’s segments was as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Subscription business: | |||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||
| Veterinary invoice expense | |||||||||||||||||||||||
| Other cost of revenue | |||||||||||||||||||||||
| Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| New pet acquisition expense | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Subscription business operating income | 11,456 | 7,826 | 26,276 | 13,410 | |||||||||||||||||||
| Other business: | |||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| Veterinary invoice expense | |||||||||||||||||||||||
| Other cost of revenue | |||||||||||||||||||||||
| Technology and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| New pet acquisition expense | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Other business operating loss | (1,913) | (1,967) | (5,581) | (6,405) | |||||||||||||||||||
| Loss from investment in joint venture | ( | ||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Other (income), net | ( | ( | ( | ( | |||||||||||||||||||
| Income before income taxes | $ | $ | $ | $ | |||||||||||||||||||
18
The following table presents the Company’s revenue by geographic region of the member (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| United States | $ | $ | $ | $ | |||||||||||||||||||
| Canada and other | |||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | |||||||||||||||||||
13. Income Taxes
The effective tax rates for the three and nine months ended September 30, 2026 were 9.4 % and 11.0 %, respectively, compared to 11.0 % and 12.1 %, respectively, for the corresponding periods in 2025, primarily due to changes in the jurisdictional makeup of income and losses.
14. Subsequent Events
The Company has evaluated events subsequent to September 30, 2026 through the date these financial statements are issued to assess the need for potential recognition or disclosure.
PNC Facility Revolving Loans Repayment
On October 8, 2026, the Company repaid $15.0 million of borrowings under its revolving credit facility.
19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
We provide medical insurance for cats and dogs in the United States, Canada, and certain countries in Continental Europe. Through our data-driven, vertically-integrated approach, we develop and offer high-value medical insurance products, priced to take into account each pet’s unique characteristics and coverage level. Our growing and loyal membership base provides us with highly predictable and recurring revenue.
We operate in two reporting segments: subscription business and other business. We generate revenue in our subscription business segment primarily through insurance premiums, which we refer to as subscription payments from direct-to-consumer products. We operate our subscription business segment similar to other subscription-based businesses, with a focus on achieving a target margin prior to our new pet acquisition expense and acquiring as many pets as possible at our targeted average estimated internal rate of return. Within our subscription business, we also provide "Powered by Trupanion" pet insurance product offerings marketed by third parties, low and medium average revenue per pet products marketed under the brand names Furkin and PHI Direct in Canada, and a Trupanion branded product in Germany and Switzerland. We either directly underwrite or assume full insurance risk for these products through reinsurance arrangements. We provide a full suite of services and support for these products and they are designed to align with the target margin profile of our subscription business segment. Within this segment, we also offer products in certain countries in Continental Europe, which are currently underwritten by third parties who pay us commissions that we recognize as revenue.
We generate leads for our subscription business segment from a diverse set of member acquisition channels, which we then seek to convert into members through our contact center, website and other direct-to-consumer activities. These channels include referrals from third-parties such as veterinarians and existing members. Veterinary hospitals represent our largest referral source. Our “Territory Partners” create relationships with veterinary hospital teams through face-to-face visits. Territory Partners are dedicated to cultivating direct veterinary relationships and helping those veterinarians understand the benefits of high-quality medical insurance. Veterinarians then educate pet parents, who visit our website or call our contact center to learn more about, and potentially enroll in, a Trupanion product. We also receive a significant number of new leads from existing members adding pets and referring their friends and family members. Our direct-to-consumer acquisition channels serve as important resources for pet parent education and drive new member leads and conversion. We monitor average pet acquisition cost to evaluate the efficiency in acquiring new members and measure effectiveness based on our targeted return on investment.
Our other business segment generates revenue from other product offerings, primarily by underwriting policies on behalf of third parties with whom we generally have a business-to-business relationship. This business segment has, and targets, a significantly lower margin profile than our subscription business segment and is not part of our core business strategy. The largest source of revenue within this segment is from our long-standing contractual relationship as an underwriter for Pets Best, a third-party insurance provider we have worked with since 2015. We and Pets Best have agreed to end our relationship after the third quarter of 2028. We expect that enrollment from Pets Best will continue to decline as it rolls off business and engages other third-party underwriters. Additional products in this segment include the U.S. Department of Veterans Affairs program and employer-sponsored programs, primarily for companies with animal health related operations.
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Key Operating Metrics
The following table sets forth total enrolled pets in our subscription and our other business segment and key operating metrics for our subscription business for year-to-date values as well as each of the last eight fiscal quarters.
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Total Business: | |||||||||||
| Total pets enrolled (at period end) | 1,626,901 | 1,654,414 | |||||||||
| Subscription Business: | |||||||||||
| Total subscription pets enrolled (at period end) | 1,145,160 | 1,082,412 | |||||||||
| Monthly average revenue per pet | $ | 87.41 | $ | 79.84 | |||||||
| Average pet acquisition cost (PAC) | $ | 297 | $ | 278 | |||||||
| Average monthly retention | 98.38 | % | 98.33 | % | |||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| Sep. 30, 2026 | Jun. 30, 2026 | Mar. 31, 2026 | Dec. 31, 2025 | Sep. 30, 2025 | Jun. 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||
| Total Business: | |||||||||||||||||||||||||||||||||||||||||||||||
| Total pets enrolled (at period end) | 1,626,901 | 1,633,131 | 1,637,665 | 1,647,565 | 1,654,414 | 1,660,455 | 1,667,637 | 1,677,570 | |||||||||||||||||||||||||||||||||||||||
| Subscription Business: | |||||||||||||||||||||||||||||||||||||||||||||||
| Total subscription pets enrolled (at period end) | 1,145,160 | 1,124,548 | 1,105,783 | 1,096,173 | 1,082,412 | 1,066,354 | 1,052,845 | 1,041,212 | |||||||||||||||||||||||||||||||||||||||
| Monthly average revenue per pet | $ | 88.95 | $ | 87.44 | $ | 85.79 | $ | 83.56 | $ | 82.01 | $ | 79.93 | $ | 77.53 | $ | 76.02 | |||||||||||||||||||||||||||||||
| Average pet acquisition cost (PAC) | $ | 279 | $ | 299 | $ | 315 | $ | 320 | $ | 290 | $ | 276 | $ | 267 | $ | 261 | |||||||||||||||||||||||||||||||
| Average monthly retention | 98.38 | % | 98.37 | % | 98.35 | % | 98.34 | % | 98.33 | % | 98.29 | % | 98.28 | % | 98.25 | % | |||||||||||||||||||||||||||||||
Total pets enrolled and total subscription pets enrolled include certain pet enrollments in European markets, where policies are currently underwritten by third parties and Trupanion is acting as an insurance broker. Per pet metrics, however, exclude these European policies, as their revenue is currently earned from commissions, as opposed to the subscription payments earned by the remainder of our subscription business.
Total pets enrolled. Total pets enrolled reflects the number of pets enrolled in one of the insurance products offered in our subscription business segment or our other business segment at the end of each period presented. We monitor total pets enrolled because it provides an indication of the growth of our consolidated business.
Total subscription pets enrolled. Total subscription pets enrolled reflects the number of pets enrolled in one of the insurance products offered in our subscription business segment at the end of each period presented. We monitor total subscription pets enrolled because it provides an indication of the growth of our subscription business. Because our subscription business has a significantly higher margin profile than our other business, changes in the rate of growth of our subscription pet enrollment tend to have a greater impact on our consolidated performance.
Monthly average revenue per pet. Monthly average revenue per pet is calculated as amounts billed in a given period for subscriptions divided by the total number of subscription pet months in the period. Total subscription pet months in a period represents the sum of all subscription pets enrolled for each month during the period. We monitor monthly average revenue per pet because it is an indicator of the per pet unit economics of our subscription business.
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Average pet acquisition cost. Average pet acquisition cost ("PAC") is calculated as net acquisition cost divided by the total number of new subscription pets enrolled in that period. Net acquisition cost, a non-GAAP financial measure, is calculated in a reporting period as new pet acquisition expense, excluding stock-based compensation expense and other business segment expense, offset by sign-up fee revenue. We exclude stock-based compensation expense because the amount varies from period to period based on the number of awards issued and market-based valuation inputs. We offset sign-up fee revenue because it is a one-time charge to some new members collected at the time of enrollment used to partially offset initial setup costs, which are included in new pet acquisition expenses. We exclude other business segment pet acquisition expense because it does not relate to subscription enrollments. We monitor average pet acquisition cost to evaluate the efficiency in acquiring new members and measure effectiveness based on our targeted return on investment.
Average monthly retention. Average monthly retention is measured as the monthly retention rate of enrolled subscription pets for each applicable period averaged over the 12 months prior to the period end date. As such, our average monthly retention rate as of September 30, 2026 is an average of each month’s retention from October 1, 2025 through September 30, 2026. We calculate monthly retention as the number of pets that remain after subtracting all pets that cancel during a month, including pets that enroll and cancel within that month, divided by the total pets enrolled at the beginning of that month. We monitor average monthly retention because it provides a measure of member satisfaction and allows us to calculate the implied average subscriber life in months.
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Non-GAAP Financial Measures
In addition to our results determined in accordance with U.S. GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken collectively, may be helpful to investors in providing consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for, the directly comparable financial measures prepared in accordance with GAAP.
We calculate these non-GAAP financial measures by excluding certain non-cash or non-recurring expenses. We exclude non-recurring transactions and restructuring expenses as they are not indicative of our operating performance. We exclude stock-based compensation as it is non-cash in nature. Although stock-based compensation expenses are expected to remain recurring expenses for the foreseeable future, we believe excluding them allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies. We define non-GAAP development expenses as operating expenses incurred to develop new products and offerings that are pre-revenue. We define non-GAAP fixed expenses as the total of technology and development expense and general and administrative expense, less stock-based compensation expense, non-recurring transaction and restructuring expense, and development expenses related to exploring and developing new products and offerings that generally are in the pre-revenue stage or not at scale.
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The following table presents the reconciliation of our non-GAAP financial measures from corresponding GAAP measures for year-to-date values as well as each of the last eight fiscal quarters (in thousands):
| Nine Months Ended September 30, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Veterinary invoice expense | $ | 848,362 | $ | 766,157 | ||||||||||
| Less: | ||||||||||||||
Stock-based compensation expense(1) | (1,531) | (2,188) | ||||||||||||
Other business cost of paying veterinary invoices(2) | (261,056) | (247,369) | ||||||||||||
| Subscription cost of paying veterinary invoices (non-GAAP) | $ | 585,775 | $ | 516,600 | ||||||||||
| % of subscription revenue | 70.2 | % | 71.0 | % | ||||||||||
| Other cost of revenue | $ | 138,092 | $ | 130,311 | ||||||||||
| Less: | ||||||||||||||
Stock-based compensation expense(1) | (1,774) | (1,661) | ||||||||||||
Other business variable expenses(2) | (61,814) | (62,969) | ||||||||||||
| Subscription variable expenses (non-GAAP) | $ | 74,504 | $ | 65,681 | ||||||||||
| % of subscription revenue | 9.0 | % | 9.0 | % | ||||||||||
| Technology and development expense | $ | 36,559 | $ | 26,545 | ||||||||||
| General and administrative expense | 58,067 | 58,325 | ||||||||||||
| Less: | ||||||||||||||
Stock-based compensation expense(1) | (19,775) | (18,340) | ||||||||||||
Development expenses(3) | (5,928) | (3,551) | ||||||||||||
| Fixed expenses (non-GAAP) | $ | 68,923 | $ | 62,979 | ||||||||||
| % of total revenue | 5.9 | % | 5.9 | % | ||||||||||
| New pet acquisition expense | $ | 69,595 | $ | 62,305 | ||||||||||
| Less: | ||||||||||||||
Stock-based compensation expense(1) | (3,502) | (5,916) | ||||||||||||
Other business pet acquisition expense(2) | (44) | (82) | ||||||||||||
| Subscription acquisition cost (non-GAAP) | $ | 66,049 | $ | 56,307 | ||||||||||
| % of subscription revenue | 7.9 | % | 7.7 | % | ||||||||||
(1) Trupanion employees may elect to take restricted stock units in lieu of cash payment for their bonuses. We account for such expense as stock-based compensation in accordance with GAAP, but we do not include it in any non-GAAP adjustments. Stock-based compensation associated with bonuses was approximately $0.4 million for the nine months ended September 30, 2026. (2) Excludes the portion of stock-based compensation expense attributable to the other business segment. (3) Consists of costs related to product exploration and development that are pre-revenue and historically have been insignificant. | ||||||||||||||
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| Three Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Sep. 30, 2026 | Jun. 30, 2026 | Mar. 31, 2026 | Dec. 31, 2025 | Sep. 30, 2025 | Jun. 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||
| Veterinary invoice expense | $ | 287,458 | $ | 279,468 | $ | 281,436 | $ | 262,818 | $ | 263,127 | $ | 255,580 | $ | 247,450 | $ | 245,663 | ||||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense(1) | (483) | (496) | (552) | (614) | (666) | (758) | (763) | (800) | ||||||||||||||||||||||||||||||||||||||||||
Other business cost of paying veterinary invoices(2) | (86,369) | (84,665) | (90,022) | (81,452) | (85,394) | (82,706) | (79,269) | (85,378) | ||||||||||||||||||||||||||||||||||||||||||
| Subscription cost of paying veterinary invoices (non-GAAP) | $ | 200,606 | $ | 194,307 | $ | 190,862 | $ | 180,752 | $ | 177,067 | $ | 172,116 | $ | 167,418 | $ | 159,485 | ||||||||||||||||||||||||||||||||||
| % of subscription revenue | 69.7 | % | 70.2 | % | 70.8 | % | 69.1 | % | 70.1 | % | 71.1 | % | 71.8 | % | 70.0 | % | ||||||||||||||||||||||||||||||||||
| Other cost of revenue | $ | 48,635 | $ | 48,333 | $ | 41,124 | $ | 49,008 | $ | 43,739 | $ | 43,150 | $ | 43,422 | $ | 38,721 | ||||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense(1) | (596) | (615) | (564) | (600) | (579) | (601) | (482) | (476) | ||||||||||||||||||||||||||||||||||||||||||
Other business variable expenses(2) | (22,850) | (22,881) | (16,083) | (25,589) | (20,702) | (20,531) | (21,736) | (17,336) | ||||||||||||||||||||||||||||||||||||||||||
| Subscription variable expenses (non-GAAP) | $ | 25,189 | $ | 24,837 | $ | 24,477 | $ | 22,819 | $ | 22,458 | $ | 22,018 | $ | 21,204 | $ | 20,909 | ||||||||||||||||||||||||||||||||||
| % of subscription revenue | 8.7 | % | 9.0 | % | 9.1 | % | 8.7 | % | 8.9 | % | 9.1 | % | 9.1 | % | 9.2 | % | ||||||||||||||||||||||||||||||||||
| Technology and development expense | $ | 12,511 | $ | 12,754 | $ | 11,294 | $ | 11,303 | $ | 9,887 | $ | 8,586 | $ | 8,072 | $ | 8,172 | ||||||||||||||||||||||||||||||||||
| General and administrative expense | 19,440 | 19,525 | 19,102 | 18,323 | 18,311 | 20,122 | 19,892 | 16,828 | ||||||||||||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense(1) | (5,955) | (7,545) | (6,274) | (6,617) | (6,551) | (6,393) | (5,396) | (5,277) | ||||||||||||||||||||||||||||||||||||||||||
Development expenses(3) | (2,427) | (1,801) | (1,701) | (1,798) | (1,199) | (946) | (1,406) | (1,322) | ||||||||||||||||||||||||||||||||||||||||||
| Fixed expenses (non-GAAP) | $ | 23,569 | $ | 22,933 | $ | 22,421 | $ | 21,211 | $ | 20,448 | $ | 21,369 | $ | 21,162 | $ | 18,401 | ||||||||||||||||||||||||||||||||||
| % of total revenue | 5.8 | % | 5.8 | % | 5.8 | % | 5.6 | % | 5.6 | % | 6.0 | % | 6.2 | % | 5.5 | % | ||||||||||||||||||||||||||||||||||
| New pet acquisition expense | $ | 24,179 | $ | 22,805 | $ | 22,611 | $ | 23,103 | $ | 21,946 | $ | 19,843 | $ | 20,516 | $ | 18,354 | ||||||||||||||||||||||||||||||||||
| Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense(1) | (850) | (1,227) | (1,425) | (1,530) | (1,527) | (1,516) | (2,873) | (1,482) | ||||||||||||||||||||||||||||||||||||||||||
Other business pet acquisition expense(2) | (3) | (15) | (26) | (8) | (5) | (74) | (3) | (8) | ||||||||||||||||||||||||||||||||||||||||||
| Subscription acquisition cost (non-GAAP) | $ | 23,326 | $ | 21,563 | $ | 21,160 | $ | 21,565 | $ | 20,414 | $ | 18,253 | $ | 17,640 | $ | 16,864 | ||||||||||||||||||||||||||||||||||
| % of subscription revenue | 8.1 | % | 7.8 | % | 7.9 | % | 8.2 | % | 8.1 | % | 7.5 | % | 7.6 | % | 7.4 | % | ||||||||||||||||||||||||||||||||||
(1) Trupanion employees may elect to take restricted stock units in lieu of cash payment for their bonuses. We account for such expense as stock-based compensation in accordance with GAAP, but we do not include it in any non-GAAP adjustments. Stock-based compensation associated with bonuses was approximately $0.2 million for the three months ended September 30, 2026. (2) Excludes the portion of stock-based compensation expense attributable to the other business segment. (3) Consists of costs related to product exploration and development that are pre-revenue and historically have been insignificant. | ||||||||||||||||||||||||||||||||||||||||||||||||||
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When determining our PAC, we calculate net acquisition cost for a more comparable metric across periods. Net acquisition cost, a non-GAAP financial measure, is calculated in a reporting period as GAAP new pet acquisition expense, excluding stock-based compensation expense, other business segment expense, and pet acquisition expense for commission-based policies, offset by sign-up fee revenue. We exclude stock-based compensation expense because the amount varies from period to period based on the number of awards issued and market-based valuation inputs. We exclude other business segment pet acquisition expense because it does not relate to subscription enrollments. We exclude pet acquisition expense for commission-based policies because the revenue of these products is earned from commissions from a third-party underwriter, as opposed to the subscription payments earned by the remainder of our subscription business. We offset sign-up fee revenue because it is a one-time charge to some new members collected at the time of enrollment used to partially offset initial setup costs, which are included in new pet acquisition expenses.
The following table reconciles GAAP new pet acquisition expense to non-GAAP net acquisition cost for year-to-date values as well as each of the last eight fiscal quarters (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| New pet acquisition expense | $ | 69,595 | $ | 62,305 | |||||||
| Net of sign-up fee revenue | (3,474) | (3,258) | |||||||||
| Excluding: | |||||||||||
| Stock-based compensation expense | (3,502) | (5,916) | |||||||||
| Other business pet acquisition expense | (44) | (82) | |||||||||
| Pet acquisition expense for commission-based policies | (3,886) | (2,315) | |||||||||
| Net acquisition cost | $ | 58,689 | $ | 50,734 | |||||||
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| Sep. 30, 2026 | Jun. 30, 2026 | Mar. 31, 2026 | Dec. 31, 2025 | Sep. 30, 2025 | Jun. 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||
| New pet acquisition expense | $ | 24,179 | $ | 22,805 | $ | 22,611 | $ | 23,103 | $ | 21,946 | $ | 19,843 | $ | 20,516 | $ | 18,354 | |||||||||||||||||||||||||||||||
| Net of sign-up fee revenue | (1,290) | (1,109) | (1,075) | (1,049) | (1,157) | (1,061) | (1,040) | (906) | |||||||||||||||||||||||||||||||||||||||
| Excluding: | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | (850) | (1,227) | (1,425) | (1,530) | (1,527) | (1,516) | (2,873) | (1,482) | |||||||||||||||||||||||||||||||||||||||
| Other business pet acquisition expense | (3) | (15) | (26) | (8) | (5) | (74) | (3) | (8) | |||||||||||||||||||||||||||||||||||||||
| Pet acquisition expense for commission-based policies | (1,659) | (1,270) | (957) | (869) | (790) | (927) | (598) | (1,125) | |||||||||||||||||||||||||||||||||||||||
| Net acquisition cost | $ | 20,377 | $ | 19,184 | $ | 19,128 | $ | 19,647 | $ | 18,467 | $ | 16,265 | $ | 16,002 | $ | 14,833 | |||||||||||||||||||||||||||||||
Components of Operating Results
General
We operate in two reporting segments: subscription business and other business. We generate revenue in our subscription business segment primarily by subscription payments from direct-to-consumer products. We operate our subscription business segment similar to other subscription-based businesses, with a focus on achieving a target margin prior to our pet acquisition expense and acquiring as many pets as possible at our targeted average estimated internal rate of return. Within our subscription business, we also currently provide "Powered by Trupanion" pet insurance product offerings marketed by third parties, low and medium average revenue per pet products marketed under the brand names Furkin and PHI Direct in Canada, and a Trupanion branded product in Germany and Switzerland. We either directly underwrite or assume full insurance risk for these products through reinsurance arrangements. We provide a full suite of services and support for these products and they are designed to align with the target margin profile of our subscription business segment. Within this segment we also offer products in certain countries in Continental Europe, which are currently underwritten by third parties who pay us commissions that we recognize as revenue.
Our other business segment generates revenue from other product offerings, primarily by underwriting policies on behalf of third parties with whom we generally have a business-to-business relationship. This business segment has and targets, a significantly lower margin profile than our subscription business and is not part of our core business strategy. The largest source of revenue within this segment is from our long-standing contractual relationship with Pets Best, a third party insurance
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provider we have worked with since 2015. Additional products in this segment include the U.S. Department of Veterans Affairs program and employer-sponsored programs, primarily for companies with animal health related operations.
Revenue
We generate revenue in our subscription business segment primarily from subscription payments for our pet medical insurance. Subscription payments are paid at the beginning of each subscription period. In most cases, our members authorize us to directly charge their credit card, debit card or bank account through automatic funds transfer. Subscription revenue is recognized on a pro rata basis over the policy term. Membership may be canceled at any time without penalty, and we issue a refund for the unused portion of the canceled membership. In addition to subscription payments, we generate a small amount of revenue from charging a one-time sign-up fee collected at the time of new enrollment to partially offset initial setup costs. Sign-up fees are related to Trupanion’s obligation to provide insurance coverage and are recognized over the policy term. We also generate a portion of our subscription business segment revenue through commissions earned in certain European markets, where policies are currently underwritten by third parties and Trupanion is acting as an insurance broker.
We generate revenue in our other business segment primarily from writing policies on behalf of third parties where we do not undertake direct consumer marketing. This segment also includes revenue from other pet insurance products that have a significantly lower margin profile than our subscription business.
Cost of Revenue
Cost of revenue in each of our segments is comprised of the following:
Veterinary invoice expense
Veterinary invoice expense includes our costs to review and pay veterinary invoices, administer the payments, and provide member services, and other operating expenses directly or indirectly related to this process. We also accrue for veterinary invoices that have been incurred but not yet received and for the estimated internal costs of processing those invoices. This also includes amounts paid by unaffiliated general agents on our behalf, and an estimate of amounts incurred and not yet paid for our other business segment.
Other cost of revenue
Other cost of revenue for the subscription business segment includes direct and indirect member service expenses, Territory Partner commissions per member renewal, payment processing fees and premium tax expenses. Other cost of revenue for the other business segment includes the commissions we pay to unaffiliated general agents, costs to administer the programs in the other business segment and premium taxes on the sales in this segment.
Operating Expenses
Our operating expenses are classified into four categories: technology and development, general and administrative, new pet acquisition expense, and depreciation and amortization. For each category, except depreciation and amortization, the largest component is personnel costs, which include salaries, employee benefit costs, bonuses and stock-based compensation expense.
Technology and development
Technology and development expenses primarily consist of personnel costs and related expenses for our technology staff, which includes information technology development, security, infrastructure support, and third-party services. It also includes expenses associated with development in new geographies and new products and offerings.
General and administrative
General and administrative expenses consist primarily of personnel costs and related expenses for our finance, actuarial, human resources, regulatory, legal and general management functions, as well as facilities and professional services.
New pet acquisition expense
New pet acquisition expenses primarily consist of costs to acquire a pet (including costs associated directly to supporting the first year of a member), personnel costs, costs to educate veterinarians and consumers about the benefits of Trupanion, costs to generate leads and to convert leads into enrolled pets, as well as print, online and promotional advertising costs.
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Depreciation and amortization
Depreciation and amortization expenses consist of depreciation of property, equipment, and software developed for internal use, as well as amortization of finite-lived intangible assets.
Gain (loss) from investment in joint venture
Gain (loss) from investment in joint venture consists of the share of income and losses from our equity method investment in a joint venture in Australia, as well as income and expenses associated with administrative services provided to the joint venture. In March 2025, we restructured this relationship from a joint venture to a brand license and services arrangement.
Stock-based compensation
Stock-based compensation is included in the cost and expense line items above. Stock-based compensation will vary depending on corporate performance and terms of the awards under our equity incentive plan. For example, when we have delivered strong performance, stock-based compensation may increase as a result of incentive-based awards under our equity incentive plan.
Factors Affecting Our Performance
Average monthly retention. Our performance depends on our ability to continue to retain our existing and newly enrolled pets and is impacted by our ability to provide a best-in-class value and member experience. Our ability to retain enrolled pets depends on a number of factors, including the actual and perceived value of our services and the quality of our member experience, the ease and transparency of the process for reviewing and paying veterinary invoices for our members, the rate of veterinary inflation and of our pricing adjustments, and the competitive environment. In addition, other initiatives across our business may temporarily impact retention and make it difficult for us to improve or maintain this metric. For example, if the number of new pets enrolled increases at a faster rate than our historical experience, our average monthly retention rate could be adversely impacted, as our retention rate is generally lower during the first year of member enrollment.
Investment in pet acquisition. We have made, and may continue to make, significant investments to grow our member base. Our pet acquisition cost and the number of new members we enroll depends on a number of factors, including the amount we have available and we elect to invest in pet acquisition activities in any particular period in the aggregate and by channel, the frequency of existing members adding a pet or referring their friends or family, the effectiveness of our sales execution and marketing initiatives, changes in costs of media, the mix of our pet acquisition expenditures and the competitive environment. Our average pet acquisition cost has in the past significantly varied, and in the future may significantly vary, from period to period based upon specific marketing initiatives and estimated rates of return on pet acquisition spend. We also regularly test new member acquisition channels and marketing initiatives, which may be more expensive than our traditional marketing channels and may increase our average pet acquisition costs. We continually assess our pet acquisition activities by monitoring the estimated return on PAC spend both on a detailed level by acquisition channel and in the aggregate.
Timing of price adjustments. Our subscription business’s cost-plus model depends on our ability to estimate our operating costs and expenses, including veterinary invoice expenses, and to adjust our pricing to achieve our target margins. We regularly reevaluate and adjust the price of our subscriptions, with a goal of achieving our targeted payout ratio, subject to the review and approval of regulators where applicable. This makes it important for us to accurately estimate our costs and to promptly implement pricing adjustments, which generally roll onto our book of insured pets over the succeeding twelve months following any applicable regulatory approval. As a result, we may have timing mismatches during which our pricing does not reflect our current expense profile. In periods of rapid increases in veterinary invoice expenses, including periods of significant inflation, this timing mismatch may have a significant impact on our margin profile.
Timing of initiatives. Over time, we plan to implement new initiatives to improve our member experience, make modifications to our subscription plan, introduce new coverage plans, pursue pet food or other adjacent opportunities, improve our technology, increase the number of veterinary hospitals using our patented direct pay software, and find other ways to maintain a strong value proposition for our members. The implementation of such initiatives could impact our expense profile and result in us incurring expenses that may not always directly coincide with revenue increases, resulting in fluctuations in revenue and profitability in our subscription business segment.
Mix of sales. The relative mix of our business by geography, pet age, species, breed, and other factors impacts the monthly average revenue per pet we receive. For example, prices from our plans could vary depending on the relative cost of veterinary care in different countries or areas or whether the pet is a dog or a cat. As our mix of business between products and geographies changes, our metrics, such as our monthly average revenue per pet, and our exposure to foreign exchange fluctuations will be impacted. We expect our international business, additional product offerings and "Powered by Trupanion" plans to grow and, in turn, we expect these effects to increase.
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Other business segment. Our other business segment primarily includes other product offerings that are materially different from those in our subscription business segment. In addition, we expect the growth rate and margin profile of this segment to be significantly different from our subscription business segment. We do not undertake marketing efforts for and are not the primary interface with the customers of the third parties for whom we underwrite other business segment policies. Our relationships in our other business segment are generally subject to termination provisions and are non-exclusive, including our contractual relationship with Pets Best. Accordingly, we have limited influence on the volume of business of this segment. Loss of an entire program via contract termination could result in the associated policies and revenue being lost over a period of 12 to 18 months, which could have a material impact on our results of operations. In some cases, we have structured exclusive relationships, but those relationships have been and may continue to be subject to limitations on the number of enrolled pets as to which we will write policies for the third party. We may enter into additional relationships in this segment in the future, if we believe they will be beneficial, which could impact our operating results.
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Results of Operations
The following tables set forth our results of operations for the periods presented both in absolute dollars and as a percentage of total revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Subscription business | $ | 287,900 | $ | 252,697 | $ | 834,043 | $ | 727,917 | |||||||||||||||
| Other business | 117,693 | 114,223 | 348,533 | 334,535 | |||||||||||||||||||
| Total revenue | 405,593 | 366,920 | 1,182,576 | 1,062,452 | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Subscription business | 226,872 | 200,766 | 663,578 | 586,098 | |||||||||||||||||||
| Other business | 109,221 | 106,100 | 322,876 | 310,370 | |||||||||||||||||||
Total cost of revenue(1) | 336,093 | 306,866 | 986,454 | 896,468 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Technology and development(1) | 12,511 | 9,887 | 36,559 | 26,545 | |||||||||||||||||||
General and administrative(1) | 19,440 | 18,311 | 58,067 | 58,325 | |||||||||||||||||||
New pet acquisition expense(1) | 24,179 | 21,946 | 69,595 | 62,305 | |||||||||||||||||||
| Depreciation and amortization | 3,827 | 4,051 | 11,206 | 11,804 | |||||||||||||||||||
| Total operating expenses | 59,957 | 54,195 | 175,427 | 158,979 | |||||||||||||||||||
| Loss from investment in joint venture | — | — | — | (305) | |||||||||||||||||||
| Operating income | 9,543 | 5,859 | 20,695 | 6,700 | |||||||||||||||||||
| Interest expense | 1,816 | 2,790 | 5,523 | 9,683 | |||||||||||||||||||
| Other (income), net | (2,519) | (3,530) | (8,403) | (18,684) | |||||||||||||||||||
| Income before income taxes | 10,246 | 6,599 | 23,575 | 15,701 | |||||||||||||||||||
| Income tax expense | 964 | 726 | 2,582 | 1,898 | |||||||||||||||||||
| Net income | $ | 9,282 | $ | 5,873 | $ | 20,993 | $ | 13,803 | |||||||||||||||
(1) Includes stock-based compensation expense as follows: | ||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
Veterinary invoice expense(2) | $ | 497 | $ | 677 | $ | 1,562 | $ | 2,221 | |||||||||||||||
Other cost of revenue(2) | 601 | 585 | 1,790 | 1,679 | |||||||||||||||||||
| Technology and development | 1,216 | 1,705 | 5,588 | 4,326 | |||||||||||||||||||
| General and administrative | 4,849 | 4,971 | 14,480 | 14,546 | |||||||||||||||||||
| New pet acquisition expense | 889 | 1,561 | 3,601 | 6,013 | |||||||||||||||||||
| Total stock-based compensation expense | $ | 8,052 | $ | 9,499 | $ | 27,021 | $ | 28,785 | |||||||||||||||
(2) Veterinary invoice expense and Other cost of revenue together comprise stock-based compensation expense included within Total cost of revenue. | ||||||||||||||
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (as a percentage of revenue) | |||||||||||||||||||||||
| Revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
| Cost of revenue | 83 | 84 | 83 | 84 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Technology and development | 3 | 3 | 3 | 2 | |||||||||||||||||||
| General and administrative | 5 | 5 | 5 | 5 | |||||||||||||||||||
| New pet acquisition expense | 6 | 6 | 6 | 6 | |||||||||||||||||||
| Depreciation and amortization | 1 | 1 | 1 | 1 | |||||||||||||||||||
| Total operating expenses | 15 | 15 | 15 | 14 | |||||||||||||||||||
| Loss from investment in joint venture | — | — | — | — | |||||||||||||||||||
| Operating income | 2 | 2 | 2 | 1 | |||||||||||||||||||
| Interest expense | — | (1) | — | (1) | |||||||||||||||||||
| Other (income), net | 1 | 1 | 1 | 2 | |||||||||||||||||||
| Income before income taxes | 3 | 2 | 3 | 2 | |||||||||||||||||||
| Income tax expense | — | — | — | — | |||||||||||||||||||
| Net income | 3 | % | 2 | % | 3 | % | 2 | % | |||||||||||||||
| Stock-based compensation expense: | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (as a percentage of revenue) | |||||||||||||||||||||||
Veterinary invoice expense(2) | — | % | — | % | — | % | — | % | |||||||||||||||
Other cost of revenue(2) | — | — | — | — | |||||||||||||||||||
| Technology and development | — | — | — | — | |||||||||||||||||||
| General and administrative | 1 | 1 | 1 | 1 | |||||||||||||||||||
| New pet acquisition expense | — | — | — | 1 | |||||||||||||||||||
| Total stock-based compensation expense | 1 | % | 1 | % | 1 | % | 2 | % | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| (as a percentage of subscription revenue) | |||||||||||||||||||||||
| Subscription business revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||
| Subscription business cost of revenue | 79 | 79 | 80 | 81 | |||||||||||||||||||
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Comparison of the Three and Nine Months Ended September 30, 2026 and 2025
Revenue
| Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands, except percentages, pet and per pet data) | |||||||||||||||||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||||||||||||
| Subscription business | $ | 287,900 | $ | 252,697 | 14 | % | $ | 834,043 | $ | 727,917 | 15 | % | |||||||||||||||||||||||
| Other business | 117,693 | 114,223 | 3 | 348,533 | 334,535 | 4 | |||||||||||||||||||||||||||||
| Total revenue | $ | 405,593 | $ | 366,920 | 11 | $ | 1,182,576 | $ | 1,062,452 | 11 | |||||||||||||||||||||||||
| Percentage of Revenue by Segment: | |||||||||||||||||||||||||||||||||||
| Subscription business | 71 | % | 69 | % | 71 | % | 69 | % | |||||||||||||||||||||||||||
| Other business | 29 | 31 | 29 | 31 | |||||||||||||||||||||||||||||||
| Total revenue | 100 | % | 100 | % | 100 | % | 100 | % | |||||||||||||||||||||||||||
| Total pets enrolled (at period end) | 1,626,901 | 1,654,414 | (2) | 1,626,901 | 1,654,414 | (2) | |||||||||||||||||||||||||||||
| Total subscription pets enrolled (at period end) | 1,145,160 | 1,082,412 | 6 | 1,145,160 | 1,082,412 | 6 | |||||||||||||||||||||||||||||
| Monthly average revenue per pet | $ | 88.95 | $ | 82.01 | 8 | $ | 87.41 | $ | 79.84 | 9 | |||||||||||||||||||||||||
| Average monthly retention | 98.38 | % | 98.33 | % | 98.38 | % | 98.33 | % | |||||||||||||||||||||||||||
Three months ended September 30, 2026 compared to three months ended September 30, 2025. Total revenue increased by $38.7 million, or 11%, to $405.6 million for the three months ended September 30, 2026. Revenue from our subscription business segment increased by $35.2 million, or 14%, to $287.9 million for the three months ended September 30, 2026. This increase was primarily due to an 8% increase in monthly average revenue per pet and an increase in subscription pet months (the sum of pets enrolled for each month during a period) for policies underwritten by Trupanion. Our subscription pets enrolled increased by 62,748 pets, or 6%, to 1,145,160 as of September 30, 2026, which represents a 1% increase in growth rate of pets enrolled compared to the prior year period's growth rate of 5%. Revenue from our other business segment increased by $3.5 million, or 3%, to $117.7 million for the three months ended September 30, 2026. This increase was primarily driven by a 22% increase in monthly average revenue per pet in this segment, partially offset by a decrease in pet months primarily reflecting the expected run-off of pets we historically insured for Pets Best.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025. Total revenue increased by $120.1 million, or 11%, to $1,182.6 million for the nine months ended September 30, 2026. Revenue from our subscription business segment increased by $106.1 million, or 15%, to $834.0 million for the nine months ended September 30, 2026. This increase was primarily due to a 9% increase in monthly average revenue per pet and an increase in subscription pet months for policies underwritten by Trupanion. Revenue from our other business segment increased by $14.0 million, or 4%, to $348.5 million for the nine months ended September 30, 2026. This increase was primarily driven by a 22% increase in monthly average revenue per pet in this segment, partially offset by a decrease in pet months primarily reflecting the expected run-off of pets we historically insured for Pets Best.
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Cost of Revenue
| Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands, except percentages, pet and per pet data) | |||||||||||||||||||||||||||||||||||
| Cost of Revenue: | |||||||||||||||||||||||||||||||||||
| Subscription business: | |||||||||||||||||||||||||||||||||||
| Veterinary invoice expense | $ | 201,089 | $ | 177,733 | 13 | % | $ | 587,306 | $ | 518,788 | 13 | % | |||||||||||||||||||||||
| Other cost of revenue | 25,783 | 23,033 | 12 | 76,272 | 67,310 | 13 | |||||||||||||||||||||||||||||
| Total cost of revenue | 226,872 | 200,766 | 13 | 663,578 | 586,098 | 13 | |||||||||||||||||||||||||||||
| Other business: | |||||||||||||||||||||||||||||||||||
| Veterinary invoice expense | 86,369 | 85,394 | 1 | 261,056 | 247,369 | 6 | |||||||||||||||||||||||||||||
| Other cost of revenue | 22,852 | 20,706 | 10 | 61,820 | 63,001 | (2) | |||||||||||||||||||||||||||||
| Total cost of revenue | $ | 109,221 | $ | 106,100 | 3 | $ | 322,876 | $ | 310,370 | 4 | |||||||||||||||||||||||||
| Percentage of Revenue by Segment: | |||||||||||||||||||||||||||||||||||
| Subscription business: | |||||||||||||||||||||||||||||||||||
| Veterinary invoice expense | 70 | % | 70 | % | 71 | % | 71 | % | |||||||||||||||||||||||||||
| Other cost of revenue | 9 | 9 | 9 | 9 | |||||||||||||||||||||||||||||||
| Total cost of revenue | 79 | 79 | 80 | 80 | |||||||||||||||||||||||||||||||
| Other business: | |||||||||||||||||||||||||||||||||||
| Veterinary invoice expense | 74 | 75 | 75 | 74 | |||||||||||||||||||||||||||||||
| Other cost of revenue | 19 | 18 | 18 | 19 | |||||||||||||||||||||||||||||||
| Total cost of revenue | 93 | % | 93 | % | 93 | % | 93 | % | |||||||||||||||||||||||||||
| Total pets enrolled (at period end) | 1,626,901 | 1,654,414 | (2) | 1,626,901 | 1,654,414 | (2) | |||||||||||||||||||||||||||||
| Total subscription pets enrolled (at period end) | 1,145,160 | 1,082,412 | 6 | 1,145,160 | 1,082,412 | 6 | |||||||||||||||||||||||||||||
Three months ended September 30, 2026 compared to three months ended September 30, 2025. Total cost of revenue for our subscription business segment increased by $26.1 million, or 13%, to $226.9 million, for the three months ended September 30, 2026. This increase was driven by a $23.4 million, or 13%, increase in veterinary invoice expense and a $2.8 million, or 12%, increase in other cost of revenue. The 13% increase in veterinary invoice expense was driven by an 8% increase in veterinary invoice expense per pet and an increase in total subscription pet months for policies underwritten by Trupanion. The 12% increase in other cost of revenue was primarily due to general increases in costs attributable to growth in our membership and subscription revenue. Subscription business total cost of revenue remained consistent at 79% of segment revenue year-over-year.
Total cost of revenue for our other business segment increased by $3.1 million, or 3%, to $109.2 million for the three months ended September 30, 2026. This increase was primarily driven by a $1.0 million, or 1%, increase in veterinary invoice expense and a $2.1 million, or 10%, increase in other cost of revenue. The 1% increase in veterinary invoice expense was primarily driven by a 19% increase in veterinary invoice expense per pet, partially offset by a decrease in pet months in this segment primarily reflecting the expected run-off of pets we historically insured for Pets Best. Within our other business segment, fluctuations in other cost of revenue are largely driven by trends in revenue and veterinary invoice expense and remained consistent at 93% of segment revenue year-over-year.
Total cost of revenue for our other business segment increased by $3.1 million, or 3%, to $109.2 million for the three months ended September 30, 2026. This increase was primarily driven by a $1.0 million, or 1%, increase in veterinary invoice expense and a $2.1 million, or 10%, increase in other cost of revenue. The 1% increase in veterinary invoice expense was primarily driven by a 19% increase in veterinary invoice expense per pet, partially offset by a decrease in pet months in this segment primarily reflecting the expected run-off of pets we historically insured for Pets Best. Within our other business segment, fluctuations in other cost of revenue are largely driven by trends in revenue and veterinary invoice expense and remained consistent at 93% of segment revenue year-over-year.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025. Total cost of revenue for our subscription business segment increased by $77.5 million, or 13%, to $663.6 million, for the nine months ended September 30, 2026. This increase was driven by a $68.5 million, or 13%, increase in veterinary invoice expense and a $9.0 million, or 13%, increase in other cost of revenue. The 13% increase in veterinary invoice expense was driven by an 8% increase in veterinary invoice expense per pet and an increase in total subscription pet months for policies underwritten by Trupanion. The 13% increase in other cost of revenue was primarily due to general increases in costs attributable to growth in our membership and subscription revenue. Subscription business total cost of revenue remained consistent at 80% of revenue year-over-year.
33
Total cost of revenue for our other business segment increased by $12.5 million, or 4%, to $322.9 million for the nine months ended September 30, 2026. This increase was primarily driven by a $13.7 million, or 6%, increase in veterinary invoice expense and partially offset by a $1.2 million, or 2%, decrease in other cost of revenue. The 6% increase in veterinary invoice expense was primarily driven by a 23% increase in veterinary invoice expense per pet, partially offset by a decrease in pet months in this segment primarily reflecting the expected run-off of pets we historically insured for Pets Best. Within our other business segment, fluctuations in other cost of revenue are largely driven by trends in revenue and veterinary invoice expense and remained consistent at 93% of segment revenue year-over-year.
Technology and Development Expenses
| Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | (in thousands, except percentages) | ||||||||||||||||||||||||||||||||||
| Technology and development | $ | 12,511 | $ | 9,887 | 27 | % | $ | 36,559 | $ | 26,545 | 38 | % | |||||||||||||||||||||||
| Percentage of total revenue | 3 | % | 3 | % | 3 | % | 2 | % | |||||||||||||||||||||||||||
Three months ended September 30, 2026 compared to three months ended September 30, 2025. Technology and development expenses increased by $2.6 million, or 27%, to $12.5 million for the three months ended September 30, 2026. This increase was primarily due to increases of $1.2 million in development expense, $0.7 million in general compensation and other employee-related expenses, $0.6 million in IT infrastructure-related expenses, and a $0.2 million reduction in capitalized expenditures related to internally developed software projects, partially offset by a $0.5 million decrease in stock-based compensation expenses. Technology and development expenses remained consistent at 3% of total revenue year-over-year.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025. Technology and development expenses increased by $10.0 million, or 38%, to $36.6 million for the nine months ended September 30, 2026. This increase was primarily due to increases of $3.1 million in general compensation and other employee-related expenses, $2.4 million in development expenses, $1.3 million in stock-based compensation expenses primarily driven by a one-time award modification, $1.3 million in IT infrastructure related expenses and a $1.6 million reduction in capitalized expenditures related to internally developed software projects. Technology and development expenses increased from 2% to 3% of total revenue year-over-year.
General and Administrative Expenses
| Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | (in thousands, except percentages) | ||||||||||||||||||||||||||||||||||
| General and administrative | $ | 19,440 | $ | 18,311 | 6 | % | $ | 58,067 | $ | 58,325 | — | % | |||||||||||||||||||||||
| Percentage of total revenue | 5 | % | 5 | % | 5 | % | 5 | % | |||||||||||||||||||||||||||
Three months ended September 30, 2026 compared to three months ended September 30, 2025. General and administrative expenses increased by $1.1 million, or 6%, to $19.4 million for the three months ended September 30, 2026. This increase was primarily driven by increases of $0.6 million in general compensation and other employee-related expenses, $0.5 million in foreign consumption taxes, and $0.3 million in other miscellaneous expenses, partially offset by a decrease of $0.3 million in underwriting fees related to our Canadian business. General and administrative expenses remained consistent at 5% of total revenue year-over-year.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025. General and administrative expenses decreased by $0.3 million to $58.1 million for the nine months ended September 30, 2026. This decrease was driven by decreases of $5.1 million in underwriting fees related to our Canadian business and $1.0 million in professional services, partially offset by increases of $2.4 million in foreign consumption taxes, $1.7 million in other miscellaneous expenses and $1.7 million in general compensation and other employee-related expenses. General and administrative expenses remained consistent at 5% of total revenue year-over-year.
New Pet Acquisition Expense
34
| Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands, except percentages, pet and per pet data) | |||||||||||||||||||||||||||||||||||
| New pet acquisition expense | $ | 24,179 | $ | 21,946 | 10 | % | $ | 69,595 | $ | 62,305 | 12 | % | |||||||||||||||||||||||
| Percentage of total revenue | 6 | % | 6 | % | 6 | % | 6 | % | |||||||||||||||||||||||||||
| Subscription Business: | |||||||||||||||||||||||||||||||||||
| Total subscription pets enrolled (at period end) | 1,145,160 | 1,082,412 | 6 | 1,145,160 | 1,082,412 | 6 | |||||||||||||||||||||||||||||
| Average pet acquisition cost (PAC) | $ | 279 | $ | 290 | (4) | $ | 297 | $ | 278 | 7 | |||||||||||||||||||||||||
Three months ended September 30, 2026 compared to three months ended September 30, 2025. New pet acquisition expenses increased by $2.2 million, or 10%, to $24.2 million for the three months ended September 30, 2026. This increase was primarily driven by increased marketing spend as we have begun deploying more capital to acquire new pets in a disciplined manner. New pet acquisition expense as a percentage of revenue remained constant at 6%.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025. New pet acquisition expenses increased by $7.3 million, or 12%, to $69.6 million for the nine months ended September 30, 2026. This increase was primarily driven by increased marketing spend as we have begun deploying more capital to acquire new pets in a disciplined manner. New pet acquisition expense as a percentage of revenue remained constant at 6%.
Depreciation and Amortization
| Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||
| Depreciation and amortization | $ | 3,827 | $ | 4,051 | (6) | % | $ | 11,206 | $ | 11,804 | (5) | % | |||||||||||||||||||||||
| Percentage of total revenue | 1 | % | 1 | % | 1 | % | 1 | % | |||||||||||||||||||||||||||
Three months ended September 30, 2026 compared to three months ended September 30, 2025. Depreciation and amortization expense decreased by $0.2 million, or 6%, to $3.8 million for the three months ended September 30, 2026, primarily due to more internally developed software projects reaching the end of their estimated useful lives than being placed into service.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025. Depreciation and amortization expense decreased by $0.6 million, or 5%, to $11.2 million for the nine months ended September 30, 2026, primarily due to more internally developed software projects reaching the end of their estimated useful lives than being placed into service.
Total Other (Income), Net
| Three Months Ended September 30, | % Change | Nine Months Ended September 30, | % Change | ||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||||||||
| (in thousands, except percentages) | |||||||||||||||||||||||||||||||||||
| Interest expense | $ | 1,816 | $ | 2,790 | (35) | % | $ | 5,523 | $ | 9,683 | (43) | % | |||||||||||||||||||||||
| Other (income), net | (2,519) | (3,530) | (29) | (8,403) | (18,684) | (55) | |||||||||||||||||||||||||||||
Total other (income), net | $ | (703) | $ | (740) | 5 | $ | (2,880) | $ | (9,001) | (68) | |||||||||||||||||||||||||
| Percentage of total revenue | — | % | — | % | — | % | (1) | % | |||||||||||||||||||||||||||
Three months ended September 30, 2026 compared to three months ended September 30, 2025. Total other (income), net remained relatively consistent at $0.7 million of income for the three months ended September 30, 2026, primarily due to increases of $0.8 million in other investment losses and $0.4 million in foreign currency losses. These decreases in income were partially offset by a $1.0 million decrease in interest expense.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025. Total other (income), net decreased by $6.1 million from $9.0 million of income to $2.9 million for the nine months ended September 30, 2026, primarily due to a $7.8 million realized gain on the nonmonetary exchange of our Baystride preferred stock investment for intellectual property developed by Baystride in 2025 and a $2.0 million increase in foreign currency losses. These decreases in income were partially offset by a $4.2 million decrease in interest expense.
35
Income Tax Expense
Three months ended September 30, 2026 compared to three months ended September 30, 2025. Income tax expense increased by $0.3 million from $0.7 million to $1.0 million for the three months ended September 30, 2026, primarily due to a change in the jurisdictional makeup of income and losses.
Nine months ended September 30, 2026 compared to nine months ended September 30, 2025. Income tax expense increased by $0.7 million from $1.9 million to $2.6 million for the nine months ended September 30, 2026, primarily due to increased worldwide pre-tax net income and a change in the jurisdictional makeup of income and losses.
36
Liquidity and Capital Resources
The following table summarizes our cash flows for the periods indicated (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2026 | 2025 | ||||||||||
| Net cash provided by operating activities | $ | 66,290 | $ | 60,226 | |||||||
| Net cash used in investing activities | (3,792) | (53,761) | |||||||||
| Net cash used in financing activities | (33,365) | (17,787) | |||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net | (1,083) | 701 | |||||||||
| Net change in cash, cash equivalents, and restricted cash | $ | 28,050 | $ | (10,621) | |||||||
Our primary requirements for liquidity are paying veterinary invoices, funding and growing our operations, funding our capital requirements, investing in new member acquisition, investing in enhancements to our member experience, and servicing debt. We have certain contractual obligations in the normal course of business, including obligations and commitments relating to our credit arrangements, non-cancellable vendor purchase agreements, as well as future payments of veterinary invoices. Refer to Note 7, Reserve for Veterinary Invoices, included in Item 1 of Part I of this report, for further details on anticipated cash outflows.
Our primary source of liquidity has been cash provided by our operations. We believe our operating cash flow is sufficient to fund our operations and capital requirements for the next 12 months. As we continue to grow and consider strategic opportunities, however, we may explore additional financing to fund our operations and growth or for strategic purposes. Financing could include equity, equity-linked, or debt financing. Additional financing may not be available to us on acceptable terms, or at all. If our capital surplus in our underwriting entities grows relative to the rate of growth of our business, we may also increase available cash for operations and growth via dividends or other methods, from one or more of our underwriting entities.
As of September 30, 2026, we had $396.8 million in cash, cash equivalents and short-term investments, of which $317.9 million was held by our insurance entities. Outside of insurance entities, we held $78.9 million in cash, cash equivalents and short-term investments with an additional $3.5 million available under our PNC Facility.
In April 2021, our board of directors (the "Board") approved a share repurchase program, pursuant to which we could repurchase outstanding shares of our common stock, between May 2021 and May 2026. In June 2026, the Board approved a new share repurchase program, pursuant to which we are authorized to repurchase up to an aggregate of $100.0 million of our outstanding shares of common stock, with no expiration date. We are not obligated to repurchase any specific number or dollar amount of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including our compliance with the PNC Facility, available cash, cash flow from operations, stock price, general economic, business and market conditions, and alternative investment opportunities. We repurchased 830,389 shares during the nine months ended September 30, 2026 for an aggregate amount of $25.0 million (excluding the excise tax of $0.1 million on stock repurchases as a result of the Inflation Reduction Act of 2022 and including direct costs incurred to acquire the shares). As of September 30, 2026, $75.0 million remained available for share repurchases under the repurchase program.
Operating Cash Flows
Net cash provided by operating activities was $66.3 million for the nine months ended September 30, 2026, compared to $60.2 million for the nine months ended September 30, 2025. This increase was primarily driven by improved operating results largely driven by higher revenue and improved subscription business margins, partially offset by timing differences in working capital activities. Changes in accounts receivable and deferred revenue were primarily related to annual policies with annual payment terms within our other business segment. Changes in our reserve for veterinary invoices are driven by multiple factors, including ongoing analysis of claims frequency and severity. Additionally, changes in our accounts payable, accrued liabilities, and other liabilities are primarily due to differences in timing of payments.
Investing Cash Flows
Net cash used by investing activities was $3.8 million for the nine months ended September 30, 2026, primarily consisting of purchases of investment securities of $155.4 million as well as $4.9 million of capital expenditures primarily related to the development of internal-use software focused on member experience, claims processing and internal policy management improvements, partially offset by $156.7 million in sales and maturities of investment securities. Net cash used by investing activities was $53.8 million for the nine months ended September 30, 2025, primarily consisting of purchases of investment securities of $183.0 million as well as $10.2 million of capital expenditures primarily related to the development of internal-use software focused on member experience, claims processing and internal policy management improvements, partially offset by $137.8 million in sales and maturities of investment securities.
37
Financing Cash Flows
Net cash used in financing activities was $33.4 million for the nine months ended September 30, 2026, primarily consisting of $25.0 million in repurchases of common stock under our share repurchase program and $7.5 million in repayments on the PNC Facility. Net cash used in financing activities was $17.8 million for the nine months ended September 30, 2025, primarily consisting of $15.7 million in repayments on the Prior Credit Facility, as well as $2.9 million in shares withheld to satisfy tax withholding, partially offset by $1.4 million in proceeds from exercise of stock options.
Long-Term Debt
PNC Facility
In November 2025, we entered into a credit agreement (the "PNC Agreement") with PNC Bank, National Association, as the administrative agent. The PNC Agreement provides for a term loan facility of $100.0 million and a revolving credit facility of $20.0 million (collectively, the "PNC Facility"). The PNC Facility matures in November 2028.
Loans under the PNC Facility bear interest at a reference rate plus an applicable margin, which will generally be the SOFR reference rate plus 2.75% per annum. We make quarterly principal payments of $2.5 million on the term loan facility. We may voluntarily prepay loans or reduce revolving commitments under the PNC Facility at any time without premium or penalty.
As of September 30, 2026, the outstanding principal balance under the PNC Facility was $105.0 million. In October 2026, we repaid $15.0 million of borrowings under our revolving credit facility.
The loans under the PNC Agreement are secured by substantially all of our assets. The PNC Agreement contains financial and other covenants, including quarterly financial ratios, and it includes limitations on, among other things, indebtedness, liens, investments, and mergers or similar transactions.
Regulation
The majority of our investments are held by our insurance entities to satisfy risk-based capital requirements (also referred to as minimum capital requirements) of applicable state and federal regulators. These regulatory requirements provide a method for analyzing the minimum amount of capital (statutory capital and surplus plus other adjustments) appropriate for an insurance company to support its overall business operations, taking into account the risk characteristics of the company’s assets, liabilities and certain other items. An insurance entity cannot use this capital for general operating expenses without regulatory approval. An insurance company found to have insufficient statutory capital based on its risk-based or minimum capital test requirements or otherwise fails to satisfy other applicable statutory requirements may be subject to varying levels of additional regulatory oversight.
As of September 30, 2026, our insurance entities collectively held $91.4 million in cash and cash equivalents, to be used for operating expenses of our insurance entities, $226.5 million in short-term investments and $291.7 million in other current assets. The majority of the assets in our insurance entities are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate.
We are subject to comprehensive regulation and supervision in the jurisdictions where we conduct business, including requirements regarding our capital structure, ownership, financial condition, general business operations, transactions between affiliated entities and payment of dividends from our insurance subsidiaries. We are also subject to market conduct examinations of our management and operations.
The National Association of Insurance Commissioners ("NAIC") has approved a series of uniform statutory accounting principles applicable in some form in all states. Developed to ensure insurance companies maintain sufficient capital to pay claims and remain solvent, these principles conservatively value assets and liabilities and usually result in differences from financial statements prepared in accordance with U.S. GAAP. The NAIC has also adopted risk-based capital requirements for life, health and property and casualty insurance companies, which require APIC and ZPIC to maintain certain levels of surplus to support our overall business operations in consideration of our size and risk profile. If we fail to maintain the amount of risk-based capital required, we will be subject to additional regulatory oversight. To comply with these regulations, we may be required to maintain capital that we would otherwise invest in our growth and operations.
NAIC also has adopted a pet insurance model act to establish regulatory standards for the pet insurance industry, related to how insurers enforce waiting periods, certain policy conditions, and the sale of pet insurance in general.
Although U.S. federal law generally does not directly regulate the insurance industry, various federal regulatory and legislative changes have been proposed in the past and could be proposed in the future, including proposed federal regulation that could supplement or replace the current system of state regulation of insurers. It is not possible to predict whether any of these proposals might be adopted, or the effect federal involvement in insurance may have on us.
American Pet Insurance Company ("APIC")
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APIC, our wholly-owned insurance subsidiary domiciled in New York, underwrites all of our policies in the U.S. As our business in the U.S. grows, the amount of capital we are required to maintain to satisfy our risk-based capital requirements will also increase, though risk-based capital requirements also take our overall rate of growth into consideration. Recently, our other business segment growth has slowed, and we currently expect that to continue, which would reduce capital requirements. In the first and third quarters of 2026, APIC distributed extraordinary dividends of $14.9 million and $44.0 million, respectively, to Trupanion, Inc. APIC's primary regulator is the New York Department of Financial Services ("NY DFS").
ZPIC Insurance Company ("ZPIC")
ZPIC, our wholly-owned insurance subsidiary domiciled in Missouri, has not yet begun underwriting activity, but we have funded its required statutory capital. We formed this insurance subsidiary to provide us flexibility as to the insurance entity we use to market and write policies in the United States. ZPIC's primary regulator is the Missouri Department of Commerce and Insurance ("MODCI").
GPIC Insurance Company ("GPIC")
GPIC, our wholly-owned insurance subsidiary domiciled in Canada, underwrites the majority of our policies in Canada. We are continuing to transition the remaining portion of our insurance activity in Canada to GPIC from a fronting arrangement with Accelerant Insurance Company of Canada (formerly Omega General Insurance Company) ("Accelerant"). Pursuant to the Canadian Office of the Superintendent of Financial Institutions ("OSFI") regulations, we have contributed CAD $44.1 million to GPIC as of September 30, 2026, as the required statutory capital for this subsidiary. The capital we maintain at GPIC is, and for the foreseeable future may continue to be, more than the amount that we historically held subject to our fronting arrangement with Accelerant.
Under the terms of our agreements with Accelerant, we retain any financial risk associated with our Canadian business. Accelerant's Canadian insurance operations are supervised and regulated by Canadian federal, provincial and territorial governments and Accelerant is a fully licensed insurer in all of the Canadian provinces and territories in which we do business.
Wyndham Insurance Company (SAC) Limited ("WICL") Segregated Account AX, Wyndham Insurance Company (SAC) Limited Segregated Account Trupanion Germany and Wyndham Insurance Company (SAC) Limited Segregated Account Trupanion Switzerland
WICL is domiciled in Bermuda and regulated by the Bermuda Monetary Authority ("BMA"). WICL Segregated Account AX was established by WICL, with Trupanion, Inc. as the shareholder, to enter into a reinsurance agreement with Accelerant for our business activity in Canada. All of the assets and liabilities of WICL Segregated Account AX are legally segregated from other assets and liabilities within WICL, and all shares of the segregated account are owned by Trupanion, Inc. Trupanion, Inc. received dividends of $3.3 million, $5.0 million and $3.7 million from WICL Segregated Account AX in the first, second and third quarters of 2026, respectively, as permitted under our agreements with WICL. As required by OSFI regulations related to our reinsurance agreement with Accelerant, we are required to maintain a Canadian Reinsurance Trust account with the greater of CAD $2.0 million or 120% of unearned Canadian premium plus 20% of outstanding Canadian claims, including all incurred but not reported claims. As of September 30, 2026, the account held CAD $2.0 million.
WICL Segregated Account Trupanion Germany and WICL Segregated Account Trupanion Switzerland were established in the third quarter of 2024 by WICL, with Trupanion, Inc. as the shareholder, for purposes of entering into reinsurance agreements with underwriters in Germany and Switzerland, respectively. All of the assets and liabilities of WICL Segregated Account Trupanion Germany and WICL Segregated Account Trupanion Switzerland are legally segregated from other assets and liabilities within WICL, and all shares of the segregated accounts are owned by Trupanion, Inc.
Though we are not directly regulated by the BMA, WICL's regulation and compliance impacts us as it could have an adverse impact on our ability to secure dividends from our WICL segregated accounts. WICL is regulated by the BMA under the Insurance Act of 1978 ("Insurance Act") and the Segregated Accounts Company Act of 2000. The Insurance Act imposes on Bermuda insurance companies, solvency and liquidity standards, certain restrictions on the declaration and payment of dividends and distributions, certain restrictions on the reduction of statutory capital, and auditing and reporting requirements, and grants the BMA powers to supervise and, in certain circumstances, to investigate and intervene in the affairs of insurance companies. Under the Insurance Act, WICL, as a class 3 insurer, is required to maintain available statutory capital and surplus at a level equal to or in excess of a prescribed minimum established by reference to net written premiums and loss reserves.
Under the Bermuda Companies Act 1981, as amended, a Bermuda company may not declare or pay a dividend or make a distribution out of contributed surplus if there are reasonable grounds for believing that: (a) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (b) the realizable value of the company’s assets would thereby be less than its liabilities. The Segregated Accounts Company Act of 2000 further requires that dividends out of a segregated account can only be paid to the extent that the account remains solvent and the value of its assets remain greater than the aggregate of its liabilities and its issued share capital and share premium accounts.
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Contractual Obligations
We enter into long-term contractual obligations and commitments in the normal course of business, consisting primarily of debt obligations and non-cancellable vendor service agreements. In November 2025, we entered into the PNC Agreement, which provides up to $120.0 million of credit, including a $100.0 million term loan and a $20.0 million revolving loan facility. We used the proceeds under the PNC Agreement to repay all amounts due and outstanding under our Prior Credit Facility. The PNC Agreement will require us to repay the underlying obligations over a three-year term at SOFR plus a margin. Refer to Note 8, Debt and Note 14, Subsequent Events included in Item 1 of Part I of this report, for further details regarding the credit agreement, including interest and future principal repayments.
Critical Accounting Policies and Significant Estimates
Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported revenue and expenses during the reporting periods.
Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Generally, we base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.
There have been no material changes to our critical accounting policies or estimates as compared to those described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
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Item 3. Quantitative and Qualitative Disclosures About Market Risks
Management believes there have been no material changes to our quantitative or qualitative disclosures about market risk during the first nine months ended September 30, 2026. For a discussion of our exposure to market risk, refer to our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2025 Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of September 30, 2026, the disclosure controls and procedures were effective.
Changes in Internal Control
There were no changes in our internal control over financial reporting during the three months ended September 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are subject to litigation matters and claims arising from the ordinary course of business. Further information with respect to this item may be found in Note 6 of Part 1 Item 1, "Financial Statements (unaudited)", under the caption, "Legal Proceedings" which information is incorporated herein by reference.
Item 1A. Risk Factors
Our business, results of operations, and financial conditions are subject to various risks as described in Part I, Item 1A of the 2025 Form 10-K and Part II, Item IA of the Form 10-Q for the quarter ended June 30, 2026. Except for the risk factors disclosed therein, which are hereby incorporated by reference into this Part II, Item 1A of this Form 10-Q, there have been no material changes to the risk factors identified in our Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Company Purchases of Equity Securities
Stock repurchases during the three months ended September 30, 2026 were as follows:
| Period | Total Number of Shares Purchased | Average Price Paid per Share(1) | Total Number of Shares Purchased as Part of Publicly Announced Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | ||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| July 1, 2026 - July 31, 2026 | — | $ | — | — | $ | 100,000 | ||||||||||||||||||||
| August 1, 2026 - August 31, 2026 | 830,389 | $ | 30.11 | 830,389 | $ | 75,000 | ||||||||||||||||||||
| September 1, 2026 - September 30, 2026 | — | $ | — | — | $ | 75,000 | ||||||||||||||||||||
| Total | 830,389 | 830,389 | ||||||||||||||||||||||||
(1) Average price paid per share includes costs associated with the repurchases but excludes excise tax of $0.1 million on stock repurchases imposed by the Inflation Reduction Act of 2022. | ||||||||||||||||||||||||||
Recent Sales of Unregistered Securities
Pursuant to a marketing agreement between us and a strategic distributor, we agreed to issue shares of our common stock to the distributor as partial consideration for sales made through the distributor’s marketing channels of white-label medical and wellness pet insurance products that we create and administer under the agreement. The number of shares we issue is determined quarterly, based on a percentage of revenue from such product sales divided by the volume weighted average price per share for the preceding quarter or, if lower, for the three months ended December 5, 2021. The shares we issue are subject to various restrictions, including a minimum holding period of two years and customary transfer restrictions for shares acquired in a private placement. During the quarter ended September 30, 2026, we issued 9,071 shares of our common stock to the distributor in respect of product sales that occurred in the quarter ended June 30, 2026. We offered and sold these shares in reliance upon the exemption from the registration set forth under Section 4(a)(2) of the Securities Act, and the regulations promulgated thereunder relating to sales by an issuer not involving any public offering, and in reliance on similar exemptions under applicable state laws.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
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Rule 10b5-1 Plan
On September 3, 2026 , Fawwad Qureshi , our Chief Financial Officer , adopted a trading plan intended to satisfy Rule 10b5-1 to sell 50% of the net vested shares to be acquired upon the future vesting of RSUs over a period ending on November 30, 2027 , subject to certain conditions.
On September 4, 2026 , John Gallagher , our Chief Operating Officer , adopted a trading plan intended to satisfy Rule 10b5-1 to sell up to 20,955 shares of our common stock plus 50% of the net vested shares to be acquired upon the future vesting of RSUs over a period ending on October 29, 2027 , subject to certain conditions.
During the three months ended September 30, 2026, no other director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted, or terminated, including by modification, a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.
Item 6. Exhibits
| Exhibit | Incorporated by Reference | Filed/Furnished | ||||||||||||||||||||||||||||||||||||
| Number | Exhibit Description | Form | File No. | Exhibit | Exhibit Filing Date | Herewith | ||||||||||||||||||||||||||||||||
| 8-K | 001-36537 | 3.1 | 6/12/2023 | |||||||||||||||||||||||||||||||||||
| 8-K | 001-36537 | 3.2 | 6/12/2023 | |||||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||||||||
| X | ||||||||||||||||||||||||||||||||||||||
| 101.INS | XBRL Instance Document - the instance does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | X | ||||||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | X | ||||||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | X | ||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | X | ||||||||||||||||||||||||||||||||||||
| + | Indicates a management contract or compensatory plan or arrangement. | ||||
| * | This certification is deemed not filed for purpose of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act. | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.
| TRUPANION, INC. | ||||||||
| Date: November 5, 2026 | /s/ Margi Tooth | |||||||
Margi Tooth Chief Executive Officer (Principal Executive Officer) | ||||||||
| Date: November 5, 2026 | /s/ Fawwad Qureshi | |||||||
Fawwad Qureshi Chief Financial Officer (Principal Financial and Accounting Officer) | ||||||||
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Exhibit 31.1
Certification of Principal Executive Officer
Pursuant To Exchange Act Rule 13a-14(a)/15d-14a
As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act Of 2002
I, Margi Tooth, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Trupanion, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2026
/s/ Margi Tooth
Margi Tooth
Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
Certification of Principal Financial Officer
Pursuant To Exchange Act Rule 13a-14(a)/15d-14a
As Adopted Pursuant To Section 302 of the Sarbanes-Oxley Act Of 2002
I, Fawwad Qureshi, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Trupanion, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 5, 2026
/s/ Fawwad Qureshi
Fawwad Qureshi
Chief Financial Officer
(Principal Financial Officer)
Exhibit 32.1
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Margi Tooth, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.The Quarterly Report of Trupanion, Inc. on Form 10-Q for the quarterly period ended September 30, 2026, as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Trupanion, Inc.
Date: November 5, 2026
/s/ Margi Tooth
Margi Tooth
Chief Executive Officer
(Principal Executive Officer)
Exhibit 32.2
Certification of Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350,
As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
I, Fawwad Qureshi, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.The Quarterly Report of Trupanion, Inc. on Form 10-Q for the quarterly period ended September 30, 2026, as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in such Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Trupanion, Inc.
Date: November 5, 2026
/s/ Fawwad Qureshi
Fawwad Qureshi
Chief Financial Officer
(Principal Financial Officer)