Trupanion, Inc. · NASDAQ:TRUP
Trupanion — Investor Presentation (August 2023)
20 slides from Trupanion's investor presentation, August 2023
Slide 1: Trupanion Investor Presentation August 2023
August 2023 Trupanion Investor Presentation
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to, among other things, expectations, plans, prospects and financial results for Trupanion, including, but not limited
Slide 3: Growth company
Growth company Market Large, underpenetrated market Economics Compounding, monthly recurring cash flow Moats Difficult to replicate with foundation to build Financials 20%+ revenue growth & strong returns on invested capital Position Leading the category, industry leading retention 3
Slide 4: Who We Are
Who We Are Trupanion exists to help loving, responsible pet owners budget & care for their pets. 4
Slide 5: Why Trupanion
Why Trupanion Broadest coverage Best Value Customer Service • Comprehensive, lifelong • No birthday pricing, unique to • Only brand with software enabling coverage if pet becomes industry direct payment to veterinarian at sick or injured time of checkout • 71% claims payout • Freedom to choose any •
Slide 6: Trupanion Eliminates Uncertainty Around Cost of Care
Trupanion Eliminates Uncertainty Around Cost of Care + 6
Slide 7: Large, Underpenetrated Markets
Large, Underpenetrated Markets LARGE, UNDERPENETRATED MARKETS (1),(2),(3),(4) 67% 25% 12% 8% 9% 7% 7% ~2% 3% 3% ~2% 1 Kynetec on behalf of the Canadian Animal Health Institute, CAHI Estimate of Canadian Dog and Cat Population Survey, 2016. 2 Packaged Facts, a division of Market Research Group, LLC,
Slide 8: Estimated Market Opportunity
Estimated Market Opportunity 200M cats and dogs in North America 120M visit the veterinarian every year 12M puppies and kittens born each year 1M new pet leads per month 8
Slide 9: Estimated Market Opportunity
Estimated Market Opportunity 1,000,000 puppies and kittens per month visiting veterinarians ÷ 25,000 veterinary hospitals in North America = 40 new puppies and kittens per hospital, per month 9
Slide 10: Pet Medical Insurance is a growing $1B+ category
Pet Medical Insurance is a growing $1B+ category! $3.51 ($ in billions) $2.84 $2.17 $1.72 $1.39 $1.16 $0.94 $0.77 2015 2016 2017 2018 2019 2020 2021 2022 Source: NAPHIA 2023 State of the Industry Report. North America Gross Written Premiums in USD. 10
Slide 11: Trupanion is the growth leader in North America
Trupanion is the growth leader in North America • Industry revenue was $3.5B in 2022, up 24% YOY • The industry added $670M in revenue in 2022, consistent with the prior year • In 2022, Trupanion Inc. was the largest contributor of the category's growth at 29% and was the largest provider of medical
Slide 12: Growing our Global Footprint
Growing our Global Footprint 12
Slide 13: Defensible Moats
Defensible Moats Deep Superior Data Patented, Veterinary Value Driven Automated & Relationships Proposition Advantage Direct Veterinary Invoice Payment 13
Slide 14: Total Revenue Growth
Total Revenue Growth $300.0 ($ in millions) $270.6 $256.3 $246.0 $250.0 $233.8 $219.4 $206.0 $194.4 $200.0 $181.7 $168.3 $154.7 $142.7 $150.0 $130.1 $117.9 $111.3 $105.5 $99.3 $100.0 $87.0 $92.2 $82.6 $78.2 $73.4 $69.8 $66.6 $63.1 $58.3 $54.7 $51.3 $45.8 $48.4 $50.0 $40.2 $42.7 $33.3 $35.6 $37.9 $28
Slide 15: Revenue By Cohort
Revenue By Cohort $300.0 $280.0 $260.0 $240.0 $220.0 $200.0 AVERAGE MONTHLY RETENTION; 98.61% (1) $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 $60.0 $40.0 $20.0 - 2010Q1 2011Q1 2012Q1 2013Q1 2014Q1 2015Q1 2016Q1 2017Q1 2018Q1 2019Q1 2020Q1 2021Q1 2022Q1 2023Q1 2023 Q2 (20.0) Other Business Pre-2010 2010
Slide 16: Unit Economics – Single Ave. Subscription Pet
Unit Economics1 – Single Ave. Subscription Pet Monthly ARPU $63.73 Paying Veterinary Invoices (48.07) Variable Expenses (providing 24/7 fast service) (6.24) Fixed Expenses (G&A + IT) (2.89) Cash generated per month, prior to capital charge $6.53 x 71.9 months2 = $470 LVP, incl fixed expenses Capital
Slide 17: Growth Levers
Growth Levers • Number of stores in North America MORE LEADS • Same-store-sales HIGHER CONVERSION MORE COVERAGE • Different subscription offerings LESS COVERAGE DIFFERENT CHANNELS OTHER PET SUBSCRIPTION PRODUCTS • Adjunct business lines (WHERE WE HAVE COMPETITIVE ADVANTAGE) • International markets A
Slide 18: Returns on Invested Capital
Returns on Invested Capital Q 25% internal 2 ' $236 rate of return 2 3 $470 Pet Acquisition Cost 1 Average Expected Cash Flow per Pet 2 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 1) PAC as of the three month period ended 6.30.2023 2) Estimated cash flows prior to new pet acquisition. 18
Slide 19: Margin Profile
Margin Profile $ in millions Subscription Business Other Business Total Q2'22 Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 Revenue $145.8 $173.3 $73.6 $97.3 $219.4 $270.6 23.3% Cost of Goods $106.2 $133.4 $50.4 $72.4 $156.6 $205.9 Variable Expenses $14.4 $16.8 $18.0 $17.2 $32.5 $34.0 Fixed Expenses $6.3 $8.9 $3.2
Slide 20: Questions?
Questions? Thank you.