Slide 1: Quarterly Earnings Supplement Q4 2023
Quarterly Earnings Supplement Q4 2023
Slide 2: Total Subscription Revenue Growth
$191.5 2023 $182.9 $173.3 $165.2 $158.6 2022 $152.4 $145.8 $139.8 $134.1 2021 $127.1 $120.4 $113.3 $106.4 2020 $99.4 Miscellaneous Revenue $92.5 $89.5 $86.6 2019 $82.6 $77.7 $74.2 $70.9 Total Subscription Revenue Growth 2018 $67.4 Revenue from New Subscription Pets $63.9 $61.5 $59.0 2017 $56.5 $52.6
Slide 3: Subscription Revenue By Cohort
Subscription Revenue By Cohort $200.0 ($ in millions) $175.0 $150.0 $125.0 $100.0 $75.0 $50.0 $25.0 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Pre-2010 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Slide 4: Product Offerings
Product Offerings Other Business Subscription Segment Segment Other Subscription Other Subscription Trupanion Core Products Pets Best Products North America North America I nternational Veteran Affairs PetExpert* Service Dog US PHI Direct (Czechia, Slovakia, Belgium, Poland) Program Legacy Worksite
Slide 5: Subscription Adjusted Operating Margin
Subscription Adjusted Operating Margin 13.9% 14.3% 13.3% 9.8% Annual 2020 2021 2022 2023 14.5% 13.8% 14.7% 13.6% 13.8% 14.6% 15.1% 14.0% 12.7% 12.9% 12.8% 13.6% 13.0% 10.1% Quarterly 7.6% 8.2% Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23
Slide 6: Estimated Internal Rates of Return (Trupanion Core)
Estimated Internal Rates of Return (Trupanion Core) • 54,200 gross new pets • $67.61 new pet ARPU • 12.2% per pet adjusted operating margin (AOM)* • 74.6 month average subscriber life* • $615 pet lifetime value (LVP)* • $233 pet acquisition cost (PAC); $14 million (88%) total PAC spend • 42% Interna
Slide 7: Estimated Internal Rates of Return (Other North American Subscription)
Estimated Internal Rates of Return (Other North American Subscription) • 9,000 gross new pets • $38.06 new pet ARPU • 17.7 month average subscriber life* • Negative per pet AOM & IRR due to lack of operating scale • $119 PAC; $1.1 million (7%) total PAC spend *Based on data since product launch in Q
Slide 8: International Metrics
International Metrics • 3,400 gross new pets • $800K (5%) of total PAC spend • International policies are currently underwritten by third parties • As such, per pet subscription metrics exclude these policies
Slide 9: Estimated Internal Rates of Return by P&L
Estimated Internal Rates of Return by P&L Q4 2023 Q4 2023 Q4 2023 Q4 2023 Other North Managing General Total Sub Segment Trupanion Core American Products* Agent Products Gross new pets 66,600 54,200 9,000 3,400 Quarterly new pet ARPU $63.39 $67.61 $38.06 Not included Quarterly pet acquisition cost $
Slide 10: Free Cash Flow
Free Cash Flow The following table reflects the reconciliation of cash prov ided by operating activ ities to free cash flow (in thousands): Three Months Ended Year Ended December 31, December 31, 2023 2022 2023 2022 Net cash provided by (used in) operating activities $17,507 $1,019 $18,638 $(8,000)
Slide 11: Outlook
Outlook Q1 2024 Full Year 2024 Revenue $297M to $302M $1.241B to $1.273B Subscription revenue $198M to $200M $842M to $862M Adjusted operating income $21M to $23M $100M to $120M CAD FX Rate 74% 74%
Slide 12: Q&A
a> Q&A trwpanion Medical insurance for the life of your pet.
Slide 13: Appendix
Appendix trwpanion
Slide 14: Estimated Internal Rates of Return (New Methodology)
Estimated Internal Rates of Return (New Methodology) Q4 2023 Quarterly average revenue per new pet $63.39 Estimated trailing 3-year profit per pet per month (12.1% $7.66 X 73.0 months = $559 (Lifetime value of a pet, including fixed expenses) margin) Year 0 1 2 3 4 5 6 Months* 6 12 12 12 12 12 7.0 7
Slide 15: Estimated Internal Rates of Return (Prior Methodology)
Estimated Internal Rates of Return (Prior Methodology) Year 0 1 2 3 4 5 6 Months* 6 12 12 12 12 12 0.2 66.2 Estimated profit per pet per month $6 $6 $6 $6 $6 $6 $6 Estimated profit per pet $38 $76 $76 $76 $76 $76 $1 $419 Capital charge** $(4) $(8) $(8) $(8) $(8) $(8) $(0) Quarterly pet acquisition c
Slide 16: Unit Economics – Single Average Subscription Pet (Prior Methodology)
Unit Economics1 – Single Average Subscription Pet (Prior Methodology) Monthly ARPU $65.26 Paying veterinary invoices (49.50) Variable expenses (providing 24/7 fast service) (6.34) Fixed expenses (G&A + IT) (3.10) Cash generated per month, prior to capital charge $6.32 x 66.2 months2 = $419 LVP, incl
Slide 17: Definitions
Definitions • Total pets enrolled. Total pets enrolled reflects the number of subscription pets or pets enrolled in one of the insurance products offered in our other business segment at the end of each period presented. We monitor total pets enrolled because it prov ides an indication of the growth