Trupanion Inc (TRUP) 2019 Q2 法說會逐字稿

Greetings, and welcome to the Trupanion Second Quarter 2019 Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.

您好，歡迎來到 Trupanion 2019 年第二季度業績電話會議。（操作員說明）提醒一下，正在錄製此會議。

I would now like to turn the conference over to your host, Laura Bainbridge, Head of Investor Relations for Trupanion. Thank you. You may begin.

我現在想把會議轉交給你的主持人，Trupanion 投資者關係主管 Laura Bainbridge。謝謝。你可以開始了。

Good afternoon, and welcome to Trupanion's Second Quarter 2019 Financial Results Conference Call. Participating on today's call are Darryl Rawlings, Chief Executive Officer; and Tricia Plouf, Chief Financial Officer.

下午好，歡迎來到 Trupanion 2019 年第二季度財務業績電話會議。參加今天電話會議的有首席執行官 Darryl Rawlings；和首席財務官 Tricia Plouf。

Before we begin, I would like to remind everyone that during today's conference call, we will make certain forward-looking statements regarding the future operations, opportunities and financial performance of Trupanion within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995.

在我們開始之前，我想提醒大家，在今天的電話會議上，我們將根據《私人證券訴訟改革法》的安全港條款，就 Trupanion 的未來運營、機遇和財務業績做出某些前瞻性陳述1995 年。

These statements involve a high degree of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed. A detailed discussion of these and other risks and uncertainties are included in our earnings release, which can be found on our Investor Relations website as well as the company's most recent reports on Forms 10-K and 8-K filed with the Securities and Exchange Commission.

這些陳述涉及高度已知和未知的風險和不確定性，可能導致實際結果與討論的結果存在重大差異。對這些風險和其他風險及不確定性的詳細討論包含在我們的收益發布中，可以在我們的投資者關係網站上找到，也可以在公司最近向美國證券交易委員會提交的 10-K 和 8-K 表格報告中找到.

Today's presentation contains references to non-GAAP financial measures that management uses to evaluate the company's performance, including, without limitation, fixed expenses, variable expenses, adjusted operating income, acquisition cost, internal rate of return, adjusted EBITDA and free cash flow.

今天的演示文稿包含對管理層用來評估公司業績的非 GAAP 財務指標的參考，包括但不限於固定費用、可變費用、調整後的營業收入、收購成本、內部收益率、調整後的 EBITDA 和自由現金流。

When we use the term adjusted operating income or margin, it is intended to refer to our non-GAAP operating income or margin before new pet acquisition. Unless otherwise noted, margins and expenses will be presented on a non-GAAP basis, which excludes stock-based compensation expense and depreciation expense. These non-GAAP measures are in addition to and not a substitute for measures of financial performance prepared in accordance with the U.S. GAAP.

當我們使用術語調整後的營業收入或利潤時，它是指我們在新寵物收購之前的非 GAAP 營業收入或利潤。除非另有說明，否則利潤和費用將在非公認會計原則基礎上列報，其中不包括基於股票的補償費用和折舊費用。這些非 GAAP 措施是對根據美國公認會計原則編制的財務業績措施的補充，而不是替代措施。

Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP results, which can be found in today's press release or on Trupanion's Investor Relations website under the Quarterly Earnings tab.

鼓勵投資者審查這些非 GAAP 財務指標與最直接可比的 GAAP 結果的對賬，這些結果可以在今天的新聞稿或 Trupanion 的投資者關係網站上的“季度收益”選項卡下找到。

Lastly, I would like to remind everyone that today's call is also available via webcast on Trupanion's Investor Relations website. A replay will also be available on the site.

最後，我想提醒大家，今天的電話會議也可以通過 Trupanion 的投資者關係網站上的網絡直播獲得。重播也將在網站上提供。

And with that, I will hand the call over to Darryl.

有了這個，我會把電話交給達里爾。

Thanks, Laura, and good afternoon. We had the opportunity to speak at length to many of you during last month's Annual Shareholder Meeting. So for purposes of today's call, I'll keep my remarks brief.

謝謝，勞拉，下午好。在上個月的年度股東大會上，我們有機會與你們中的許多人進行了詳細的交談。因此，就今天的電話會議而言，我的發言將保持簡短。

Q2 revenue grew 26% year-over-year, and we ended the quarter with over 577,000 total enrolled pets. Adjusted operating income totaled $9.8 million, up 33% over the prior year period. We estimate our internal rate of return at 34% for the quarter, in line with our 30% to 40% target.

第二季度收入同比增長 26%，本季度末我們登記的寵物總數超過 577,000 只。調整後營業收入總計 980 萬美元，比上年同期增長 33%。我們估計本季度的內部回報率為 34%，符合我們 30% 至 40% 的目標。

You'll recall, we focus on these 3 measures when evaluating our performance. With this in mind, it was a solid quarter, and we're on track to meet our objectives for the year. We discussed the strategies for deploying our adjusted operating income at our targeted internal rates of return at our Annual Shareholder Meeting last month. Growth initiatives, including those around same-store sales and conversion, continue to comprise the bulk of our incremental spend, both in headcount and deployment of our software.

您會記得，在評估我們的績效時，我們主要關注這 3 個指標。考慮到這一點，這是一個穩健的季度，我們有望實現今年的目標。我們在上個月的年度股東大會上討論了根據目標內部回報率部署調整後營業收入的策略。增長計劃，包括圍繞同店銷售和轉化的計劃，繼續占我們增量支出的大部分，包括員工人數和軟件部署。

We're also investing more in initiatives aimed at Nirvana, including 90-day retention. You'll recall, I highlighted this as an area of opportunity in my 2018 Annual Shareholder letter. These are hard, multiyear initiatives, and we expect to measure our success in years as opposed to quarters.

我們還在針對 Nirvana 的計劃中投入更多資金，包括 90 天保留期。你會記得，我在 2018 年年度股東信中強調這是一個機會領域。這些都是艱鉅的、多年的舉措，我們希望以年而不是季度來衡量我們的成功。

Those of you who know us well, know that we maintain a long-term perspective. We are building this company for the decades ahead, and we are making additional investments to deepen our competitive moats. The expansion of our adjusted operating income provides us the flexibility to do so.

熟悉我們的人都知道，我們保持著長遠的眼光。我們正在為未來幾十年建設這家公司，我們正在進行額外投資以加深我們的競爭優勢。我們調整後營業收入的擴大為我們提供了這樣做的靈活性。

For those that attended our Annual Shareholder Meeting, I hope you walked away with a greater appreciation of the teams behind these initiatives. I've said it before, but it's worth repeating. Execution is hard, and it comes down to people. I'm humbled by the level of talent we've been able to attract and retain here at Trupanion.

對於那些參加我們年度股東大會的人，我希望你們離開時對這些舉措背後的團隊有更多的了解。我以前說過，但值得重複一遍。執行很難，這取決於人。我對我們在 Trupanion 能夠吸引和留住的人才水平感到謙卑。

Before I turn it over to Trish, I'll provide a brief regulatory update starting with last month's settlement with Washington OIC. In short, while we did not agree with some of the state's findings, nothing in the settlement materially changes the way we do business.

在我將其交給 Trish 之前，我將從上個月與華盛頓 OIC 達成的和解開始提供一個簡短的監管更新。簡而言之，雖然我們不同意該州的某些調查結果，但和解協議中的任何內容都沒有實質性地改變我們開展業務的方式。

Separately, as I acknowledged in my 2018 annual shareholder letter, we have made mistakes in the past related to call center licensing that we have since corrected. In the coming weeks, we expect to finalize a settlement with the California Department of Insurance on this.

另外，正如我在 2018 年年度股東信中承認的那樣，我們過去曾犯過與呼叫中心許可相關的錯誤，但我們已經糾正了這些錯誤。在接下來的幾週內，我們預計將與加州保險部就此達成和解。

Conversations are ongoing, but we expect the settlement to reflect the size of our business in the state. We believe we are adequately reserved for any potential fine, meaning we do not expect any meaningful financial impact, nor do we expect any resulting changes to our business practices as we have already licensed our contact center team members.

對話正在進行中，但我們希望和解能夠反映我們在該州的業務規模。我們相信我們對任何潛在的罰款都有充分的準備，這意味著我們預計不會產生任何有意義的財務影響，我們也不會預計我們的業務實踐會因此發生任何變化，因為我們已經授權了我們的聯絡中心團隊成員。

Nevertheless, we take these matters seriously. We value our relationships with regulators and are committed to building upon and maintaining the lines of communication with all departments of insurance. We operate in a rapidly growing industry and expect and welcome dialogue at the state level.

儘管如此，我們還是認真對待這些問題。我們重視與監管機構的關係，並致力於建立和維護與所有保險部門的溝通渠道。我們在一個快速發展的行業中運營，期待並歡迎在州一級進行對話。

Recently, a few states have inquired about the role of Territory Partners, a topic we've discussed at length over the years with state regulators. If on the heels of our dialogue they prefer that Territory Partners within their state operate with a license, we will require that they do so. It is a process in which we are well versed.

最近，一些州詢問了領土合作夥伴的作用，這是我們多年來與州監管機構詳細討論的話題。如果在我們的對話之後，他們更希望他們所在州的領土合作夥伴獲得許可經營，我們將要求他們這樣做。這是一個我們非常熟悉的過程。

Since 2015, we have helped hundreds of our contact center representatives achieve the necessary licensing requirements. More fundamentally, we are well aligned with regulators. Regulators want to ensure customers receive a high-value proposition, there's transparency and that customers are treated fairly. We want the same things. Trust, transparency, doing what we say, these are the values we live by at Trupanion, and important tenets of our culture.

自 2015 年以來，我們已幫助數百名聯絡中心代表達到必要的許可要求。更重要的是，我們與監管機構保持一致。監管機構希望確保客戶獲得高價值主張、透明度和公平對待客戶。我們想要同樣的東西。信任、透明、言出必行，這些是我們在 Trupanion 賴以生存的價值觀，也是我們文化的重要信條。

Companies often tout their culture, and we're no different. Culture has to be experienced to be understood, which is one of the reasons we stress the importance of attending our Annual Shareholder Meeting. This once-a-year event is the best opportunity to meet the team, experience the culture and get an in-depth understanding of our key business initiatives.

公司經常吹捧他們的文化，我們也不例外。必須體驗才能理解文化，這也是我們強調參加年度股東大會的重要性的原因之一。這個一年一度的活動是結識團隊、體驗文化和深入了解我們的關鍵業務計劃的最佳機會。

We want to thank those of you who were able to attend this year, especially those who traveled from across the country and around the globe. Your participation is what helps make this event a success. We hope to see you all next year on June 11.

我們要感謝今年能夠出席的各位，尤其是來自全國各地和全球各地的各位。您的參與有助於使本次活動取得成功。我們希望明年 6 月 11 日再見。

And with that, I'll hand the call over to Trish.

有了這個，我會把電話交給崔西。

Thanks, Darryl. Today, I'll review our second quarter results in detail as well as provide our third quarter and updated full year outlook.

謝謝，達里爾。今天，我將詳細回顧我們的第二季度業績，並提供我們的第三季度和更新後的全年展望。

Revenue for the second quarter was $92.2 million, up 26% year-over-year and led by strong pet enrollment in both our subscription and other business segments. Total enrolled pets increased 22% year-over-year to over 577,000 pets as of June 30. Subscription revenue was $77.7 million in the quarter, up 22% year-over-year. Total enrolled subscription pets increased 15% year-over-year to over 461,000 pets enrolled as of June 30. Pet growth within our subscription business continued to benefit from increased leads from our core veterinary channel.

第二季度的收入為 9220 萬美元，同比增長 26%，這得益於我們訂閱和其他業務部門的強勁寵物註冊。截至 6 月 30 日，註冊寵物總數同比增長 22%，達到 577,000 多只。本季度訂閱收入為 7770 萬美元，同比增長 22%。截至 6 月 30 日，註冊訂閱寵物總數同比增長 15%，達到 461,000 多只。我們訂閱業務中的寵物增長繼續受益於我們核心獸醫渠道的潛在客戶增加。

Monthly average revenue per pet for the quarter was $57.11, an increase of 6% year-over-year and in line with our historical average of 5% to 6%. In local currency, monthly average revenue per pet increased by 7% from the prior year for our U.S. members and by 5% for our Canadian members.

本季度每隻寵物的月平均收入為 57.11 美元，同比增長 6%，與我們 5% 至 6% 的歷史平均水平一致。以當地貨幣計算，美國會員每隻寵物的月平均收入較上年增長 7%，加拿大會員增長 5%。

Average monthly retention was 98.57% compared to 98.64% in the prior year period. Keep in mind that retention is a trailing 12-month metric. And in periods of accelerated growth, 90-day retention will act as a headwind. Given this dynamic, we do not expect meaningful improvements relative to our 10-year historical average of 98.5%, though we did see sequential improvement in Q2 over Q1.

平均每月保留率為 98.57%，而去年同期為 98.64%。請記住，留存率是一個過去 12 個月的指標。在加速增長時期，90 天的留存率將成為不利因素。鑑於這種動態，我們預計相對於我們的 10 年曆史平均水平 98.5% 不會有有意義的改善，儘管我們確實看到第二季度比第一季度有所改善。

Our other business revenue, which generally is comprised of our revenue that has a B2B component, totaled $14.5 million for the quarter, an increase of 52% year-over-year. Year-over-year growth in our other business segment reflects an increase in the number of enrolled pets.

我們的其他業務收入，通常包括我們具有 B2B 部分的收入，本季度總計 1450 萬美元，同比增長 52%。我們其他業務部門的同比增長反映了註冊寵物數量的增加。

Subscription gross margin was just under 18% in the quarter, impacted primarily by increased veterinary invoice expense, which grew 7% year-over-year on a per-pet basis. Generally speaking, we would expect veterinary invoice expense per pet to increase in line with ARPU on an annual basis, about 5% to 6% per year, though it's not unusual to see more variability quarter to quarter. We continue to expect that our full year subscription growth margin will fall within our annual target of 18% to 21%. Total gross margin was 16%, which includes our other business segment.

本季度訂閱毛利率略低於 18%，主要受獸醫發票費用增加的影響，按每隻寵物計算，該費用同比增長 7%。一般來說，我們預計每隻寵物的獸醫發票費用每年都會隨著 ARPU 的增長而增長，大約每年 5% 到 6%，儘管每個季度之間出現更多變化並不罕見。我們繼續預計我們的全年訂閱增長率將在我們 18% 至 21% 的年度目標範圍內。總毛利率為 16%，其中包括我們的其他業務部門。

Fixed expenses were $5.2 million or 5.6% of total revenue in the quarter, down 160 basis points from the prior year period and approximately 60 basis points from our 5% target at operational scale. Scale in our fixed expenses reflects the benefit of owning our home office building.

本季度固定費用為 520 萬美元，佔總收入的 5.6%，比上年同期下降 160 個基點，比我們運營規模 5% 的目標低約 60 個基點。我們固定開支的規模反映了擁有我們的家庭辦公樓的好處。

Adjusted operating income totaled $9.8 million in the second quarter, a 33% increase from $7.3 million in the prior year period. Net loss for the quarter was $1.9 million.

第二季度調整後營業收入總計 980 萬美元，比去年同期的 730 萬美元增長 33%。本季度淨虧損為 190 萬美元。

As a percentage of revenue, adjusted operating margin expanded approximately 60 basis points year-over-year to 11%. As a reminder, adjusted operating income are the funds available to invest in growth and other long-term initiatives.

作為收入的百分比，調整後的營業利潤率同比增長約 60 個基點至 11%。提醒一下，調整後的營業收入是可用於投資增長和其他長期計劃的資金。

During the quarter, we deployed $8.2 million of our adjusted operating income compared to $5.4 million in the prior year period. This spend related to the acquisition of approximately 35,000 new subscription pets as well as investments in building out teams primarily around same-store sales and conversion. We were encouraged to see small incremental improvements in conversion rates late in the quarter, a trend that has since continued in the third quarter.

本季度，我們部署了 820 萬美元的調整後營業收入，而去年同期為 540 萬美元。這筆支出與收購大約 35,000 只新的訂閱寵物以及主要圍繞同店銷售和轉化建立團隊的投資有關。我們很高興看到本季度末轉換率的小幅提高，這一趨勢一直持續到第三季度。

As our adjusted operating income expands, we intend to deploy greater amounts of capital as long as we can achieve our targeted internal rates of return and remain free cash flow positive. We estimate our internal rate of return at 34% for the quarter, in line with our 30% to 40% target. Internal rate of return is how we measure the return on our pet acquisition spend for a single average pet. Additional details behind this calculation can be found in our quarterly earnings supplement on our Investor Relations website.

隨著我們調整後營業收入的增加，只要我們能夠實現我們的目標內部回報率並保持自由現金流為正，我們打算部署更多的資本。我們估計本季度的內部回報率為 34%，符合我們 30% 至 40% 的目標。內部回報率是我們衡量單個普通寵物的寵物收購支出回報率的方式。此計算背後的更多詳細信息可以在我們的投資者關係網站上的季度收益補充中找到。

Adjusted EBITDA was $1.3 million for the quarter compared to $2 million in the prior year period.

本季度調整後的 EBITDA 為 130 萬美元，而去年同期為 200 萬美元。

Our net loss was $1.9 million or a $0.06 loss per basic and diluted share compared to a net loss of $0.4 million or a $0.01 loss per basic and diluted share in the prior year period.

我們的淨虧損為 190 萬美元，即每股基本股和稀釋股虧損 0.06 美元，而去年同期為淨虧損 40 萬美元，即每股基本股和稀釋股虧損 0.01 美元。

In the second quarter, free cash flow was $2 million. Operating cash flow was $2.9 million, up from negative $0.5 million in the prior year period.

第二季度，自由現金流為 200 萬美元。經營現金流為 290 萬美元，高於去年同期的負 50 萬美元。

At June 30, we had $92.1 million in cash, cash equivalents and short-term investments and $19.1 million of long-term debt.

截至 6 月 30 日，我們擁有 9210 萬美元的現金、現金等價物和短期投資，以及 1910 萬美元的長期債務。

I'll now turn to our outlook for the third quarter and full year 2019. For the third quarter of 2019, revenue is expected to be in the range of $97 million to $98 million, representing 25% year-over-year growth at the midpoint.

我現在將談談我們對 2019 年第三季度和全年的展望。2019 年第三季度，收入預計在 9700 萬美元至 9800 萬美元之間，中間值同比增長 25%。

For the full year, we are increasing our revenue guidance range to reflect our performance in the first half of the year and increased visibility into the second half. As a result, we now expect revenue for the full year to be in the range of $378 million to $381 million, representing 25% year-over-year growth at the midpoint.

對於全年，我們正在增加我們的收入指導範圍，以反映我們上半年的業績並提高下半年的知名度。因此，我們現在預計全年收入將在 3.78 億美元至 3.81 億美元之間，中點同比增長 25%。

Embedded in our revenue guidance for 2019 is ARPU growth in line with historical averages of 5% to 6%. We now estimate other business revenue to be around $60 million for the year.

我們 2019 年的收入指引中嵌入了 ARPU 增長，符合 5% 至 6% 的歷史平均水平。我們現在估計今年的其他業務收入約為 6000 萬美元。

At our forecasted revenue levels, we continue to expect adjusted operating income for the year of around $45 million. We estimate allowable acquisition spend in the range of $32 million to $38 million, within our targeted IRR range of 30% to 40%.

根據我們預測的收入水平，我們繼續預計今年調整後的營業收入約為 4500 萬美元。我們估計允許的收購支出在 3200 萬美元到 3800 萬美元之間，在我們 30% 到 40% 的目標 IRR 範圍內。

Also please keep in mind that our revenue projections are subject to conversion rate fluctuations between the U.S. and Canadian currencies. For our third quarter and full year guidance, we used a 76% conversion rate in our projections, which was the approximate rate at the end of June.

另請注意，我們的收入預測受美國和加拿大貨幣之間的匯率波動影響。對於我們的第三季度和全年指導，我們在預測中使用了 76% 的轉換率，這是 6 月底的近似值。

Thank you for your time today. I will now turn the call back over to Darryl.

謝謝你今天的時間。我現在將把電話轉回 Darryl。

Thanks, Trish. Before we open it up for Q&A, I want to highlight that we've recently updated the date of our 2020 Annual Shareholder Meeting, which will now be held on June 11, 2020, here at our Seattle headquarters.

謝謝，崔西。在我們公開問答之前，我想強調一下，我們最近更新了 2020 年年度股東大會的日期，該會議現在將於 2020 年 6 月 11 日在我們的西雅圖總部舉行。

Shareholder participation is critical to the success of this event, and we've updated the date based on shareholder feedback. We want to make the meeting accessible to all interested shareholders and are providing you with this notice to assist in your planning. Additional details will be forthcoming on our Investor Relations website.

股東參與對於此次活動的成功至關重要，我們已根據股東反饋更新了日期。我們想讓所有感興趣的股東都能參加這次會議，並向您提供此通知以協助您進行計劃。更多詳細信息將在我們的投資者關係網站上公佈。

And with that, we'll open it up for questions. Operator?

有了這個，我們將打開它來提問。操作員？

(Operator Instructions) Our first question here is from Shweta Khajuria from RBC Capital Markets. We'll go on to the next question here from Andrew Cooper from Raymond James.

（操作員說明）我們這裡的第一個問題來自 RBC Capital Markets 的 Shweta Khajuria。我們將繼續 Raymond James 的 Andrew Cooper 提出的下一個問題。

I guess first for me, this isn't the first quarter we've seen, to your point, a little bit of movement in the claims expense as a percent of revenue. But just any color you could give on was there anything in particular that jumped out or anything that makes you confident that the trend from basically 3Q '18 that has been gradually taken a little bit higher is more just quarter-to-quarter lumpiness than anything else relative to the goal of 70%.

我想首先對我來說，這不是我們看到的第一季度，就您的觀點而言，索賠費用佔收入的百分比有所變化。但是你可以給出的任何顏色是否有任何特別突出的東西或任何讓你相信基本上從 18 年第 3 季度開始逐漸走高的趨勢比任何東西都更只是季度到季度的波動else相對於70%的目標。

Yes. Andrew, this is Tricia. I can give a little bit more color. At a high-level, particularly within a single quarter, your characteristic of lumpiness or variability is correct. When it comes to claims as a percentage of revenue, it's really a factor of how is claims per pet increasing based on how ARPU, which is a per-pet number, is increasing.

是的。安德魯，這是特里西婭。我可以給多一點顏色。在高層次上，特別是在一個季度內，您的塊狀或可變性特徵是正確的。當談到索賠佔收入的百分比時，這實際上是每隻寵物的索賠如何增加的一個因素，基於每隻寵物的 ARPU 是如何增加的。

And they don't always in a single quarter increase at the same rate. For example, in Q2, claims increased at 7%, while ARPU increased closer to 5%. For the full year-to-date, they are both increasing at 5%, so they're in line.

而且它們並不總是在一個季度內以相同的速度增長。例如，在第二季度，索賠增長了 7%，而 ARPU 增長接近 5%。從年初至今的全年來看，它們都以 5% 的速度增長，因此它們是一致的。

That being said, there's a couple -- in addition to just some variability with those dynamics, we're also getting, as we've talked about before, our patented software in more hospitals. We're processing 40% more claims through the hospital -- through that software this year than last year. And so that does provide, when it's accelerating, about a 1% headwind, as we've talked about previously. And we are okay with that trade-off.

話雖這麼說，但有一些——除了這些動態的一些可變性之外，正如我們之前談到的那樣，我們還在更多醫院獲得了我們的專利軟件。與去年相比，今年通過該軟件，我們通過醫院處理的索賠多了 40%。因此，正如我們之前談到的那樣，當它加速時，它確實提供了大約 1% 的逆風。我們可以接受這種權衡。

But we are trying to update and pull through pricing, which we hope to see in the back half of the year and into next year where our pricing would be increasing closer to 7%, while claims typically are increasing around 5% to help them make up that delta. So we're closer to the 70% cost of goods ratio rather than the 72% right now.

但我們正在努力更新和拉動定價，我們希望在今年下半年和明年看到，我們的定價將增加接近 7%，而索賠通常增加 5% 左右，以幫助他們向上那個三角洲。因此，我們現在更接近 70% 的商品成本比率，而不是 72%。

But like I mentioned in my prepared remarks, there's nothing about this single quarter that is overly concerning or an anomaly as opposed to variability. We still feel very comfortable that for the full year, we'll be between the 18% and the 21%.

但就像我在準備好的發言中提到的那樣，這個季度沒有什麼是過度關注或異常而不是可變性。我們仍然對全年保持在 18% 和 21% 之間感到非常滿意。

Okay. That's helpful. And then just one more kind of financial question and maybe another higher level, if I could. But as we think about the guide, the $5 million increase on the other business or the non-subscription business, but, obviously, tightening kind of a little bit more than that to the higher end, any color you could give on -- is that in the kind of core subscription business or more around tightening your expectations in the non-subscription business?

好的。這很有幫助。然後是另一種財務問題，如果可以的話，也許是另一個更高級別的問題。但是當我們考慮指南時，其他業務或非訂閱業務增加了 500 萬美元，但顯然，收緊的程度比更高端的要多一點，你可以給出的任何顏色 - 是是在核心訂閱業務方面還是更多地圍繞收緊您對非訂閱業務的期望？

Sure. It's a little bit of both. At a high level, we're halfway through the year. We have more -- got actuals for the first half and a lot more visibility going into the second half. So when it comes to the tightening of the range for the full year, it's really about visibility.

當然。兩者都有一點。在較高的水平上，我們今年已經過了一半。我們有更多 - 上半場的實際情況以及下半場的更多可見性。因此，當談到全年範圍的收緊時，這實際上與能見度有關。

We are raising $5 million related to the other business segment, and that really has to do with the fact that we have less visibility at the beginning of the year in that segment. And all areas of that segment are performing well. So we're flowing through, really, Q2 actuals that came in as well as our visibility that we have currently into the back half of the year.

我們正在籌集與其他業務部門相關的 500 萬美元，這確實與年初我們在該部門的知名度較低這一事實有關。該細分市場的所有領域都表現良好。因此，我們實際上正在經歷第二季度的實際情況，以及我們目前進入今年下半年的能見度。

The remaining $1 million that we flowed through in the outlook has to do with our core subscription business, which is also performing well. And it's mainly we have a lot more visibility into that business, so we wouldn't expect big variations there. But we're flowing through really Q2 and about a 500,000 -- we came in $500,000 above, and we're flowing that through into Q3 and Q4 as well. But overall, all segments are performing well.

我們在展望中流出的剩餘 100 萬美元與我們的核心訂閱業務有關，該業務也表現良好。主要是我們對該業務有了更多的了解，所以我們預計不會有很大的變化。但我們真正流經了第二季度和大約 500,000 - 我們的收入超過了 500,000 美元，我們也將其流入第三季度和第四季度。但總體而言，所有細分市場都表現良好。

Okay. Great. And then I'll just sneak in one more if I could and then jump back in the queue. But you mentioned some of the efforts on conversions that started to pay dividends in the later part of the quarter and into 3Q. But is there anything kind of in particular you could give us as to what's worked and what hasn't worked?

好的。偉大的。如果可以的話，我會再偷偷加入一個，然後跳回到隊列中。但是你提到了一些在本季度後期和第三季度開始支付股息的轉換努力。但是，關於哪些有效，哪些無效，您有什麼特別的可以告訴我們嗎？

And then how much of what you've done has been more in that testing bucket and not necessarily rolled out at full scale? So maybe you found something that could drive continued upside from where we were, even exiting the second quarter. Any kind of comments or color there would be great.

然後，您所做的有多少是在那個測試桶中進行的，而不一定是全面推出的？所以也許你發現了一些可以推動我們繼續上漲的東西，甚至退出第二季度。任何類型的評論或顏色都會很棒。

Sure. It's Darryl. I mean at a high level, we're looking at our -- the profits we have from our existing book growing over 40% this year from about $32 million to about $45 million, which is giving us the opportunity to be investing in some longer-term visions.

當然。是達里爾。我的意思是，在較高的層面上，我們正在審視我們 - 我們從現有賬簿中獲得的利潤今年增長了 40% 以上，從大約 3200 萬美元增加到大約 4500 萬美元，這讓我們有機會投資更長時間-長期願景。

I mean I've been operating this company for over 20 years and I can tell you, having access to these funds to invest in some really hard meaty things is just a privilege to have. And the teams we have working on it are doing a good job.

我的意思是，我經營這家公司已經 20 多年了，我可以告訴你，能夠獲得這些資金來投資一些真正堅硬的東西是一種特權。我們從事這項工作的團隊做得很好。

So conversion rates is definitely one of the areas that we're investing in. We're also investing in kind of getting our software in more veterinary hospitals and kind of same-store sales. We're investing in claims automation and investing in the areas around Nirvana, trying to have -- tighten up our churn and increase our refer and add a pet.

所以轉化率絕對是我們投資的領域之一。我們還在投資讓我們的軟件進入更多的獸醫院和同店銷售。我們正在投資索賠自動化並投資於 Nirvana 周圍的領域，試圖 - 加強我們的流失並增加我們的推薦並添加寵物。

Conversion is something that we are passionate about because we believe we're driving most of the leads in the category. And we would like to get a higher percentage of those people converting with Trupanion. And I use this analogy internally that buying our type of product is kind of like going to the grocery store and buying a can of tuna -- it's really hard to know what you get until you open it up.

轉換是我們熱衷的事情，因為我們相信我們正在推動該類別中的大部分潛在客戶。我們希望這些人中有更高比例的人通過 Trupanion 進行轉化。我在內部使用這個類比，購買我們的產品有點像去雜貨店買一罐金槍魚——在你打開它之前很難知道你得到了什麼。

And we think Trupanion, with the broadest coverage, the highest target payout, what we think are the industry's best customer service is like opening a can of tuna and getting a big, solid piece of albacore.

我們認為 Trupanion 擁有最廣泛的覆蓋範圍、最高的目標支出，我們認為是業內最好的客戶服務，就像打開一罐金槍魚，得到一塊又大又結實的長鰭金槍魚。

You know that sometimes, you open a can of tuna and it's kind of watery, flaky stuff. And the conversion is really focused around being able to articulate the benefits of our product and being able to do that in multiple locations. And we think the more we educate the consumer, the higher percentage of them will make a better choice. And we're seeing some areas where we're seeing the impact of that.

你知道有時候，你打開一罐金槍魚，裡面是一種水樣的、片狀的東西。轉換的真正重點是能夠闡明我們產品的好處，並能夠在多個地點做到這一點。我們認為我們對消費者的教育越多，他們中做出更好選擇的比例就越高。我們在一些領域看到了它的影響。

Now you're asking the question, is there something we've done in test that we're going to able to run across, and I think you're implying do we think we're going to hit a light switch in Q3 and have a much higher conversion rate, which means more pets. And I would tell you that these are all smaller incremental changes, but the big thing for us is investing in more people to be focused on this area.

現在你問的問題是，我們在測試中做了什麼我們將能夠遇到的事情，我認為你是在暗示我們是否認為我們會在第三季度按下一個電燈開關並且有更高的轉化率，這意味著更多的寵物。我會告訴你，這些都是較小的增量變化，但對我們來說最重要的是投資更多的人來關注這個領域。

Our next question here is from Shweta Khajuria from RBC Capital Markets.

我們的下一個問題來自 RBC 資本市場的 Shweta Khajuria。

Couple of questions, please. So on same-store sales, could you please discuss the trends you've seen in same-store sales growth since you started integrating, deploying software with veterinary clinics? So if you were to isolate the impact, how impactful has automated claims been on same-store sales growth?

請問幾個問題。那麼在同店銷售方面，您能否討論一下自從您開始與獸醫診所集成、部署軟件以來，您在同店銷售增長中看到的趨勢？因此，如果您要孤立影響，自動化索賠對同店銷售增長有多大影響？

And then on second on acquisition spend, could you talk about what you're seeing with the 30% of the vet acquisition spend portion of your marketing spend? Last quarter, you called out 20% of that was what you call growth initiative, growth channels and the 10% was test spend. So what you're seeing there if it is more optimized now and if IRR is getting closer to 30% to 40% target.

然後關於收購支出的第二個問題，你能談談你在營銷支出中 30% 的獸醫收購支出部分看到了什麼嗎？上個季度，您指出其中 20% 是所謂的增長計劃、增長渠道，而 10% 是測試支出。那麼如果它現在更優化並且 IRR 越來越接近 30% 到 40% 的目標，那麼你在那裡看到的是什麼。

Well, thanks for the questions. So the first question was around same-store sales after deploying the software. And you were asking specifically in areas where we had more claims automation. Let me explain how this works. So we, today, have increased our software. We have -- in 50% more hospitals than we did last year.

好吧，謝謝你的問題。所以第一個問題是關於部署軟件後的同店銷售額。你在我們有更多索賠自動化的領域特別詢問。讓我解釋一下這是如何工作的。所以我們今天增加了我們的軟件。我們擁有的醫院比去年多 50%。

Every one of those invoices is going through our automation tool, 100% of them go through the automation tool and about 30% to 32% of them are actually being finalized or 100% done with automation. They are not done universally by hospital, so we don't have one hospital that has 100% automation, another one that has 0%. So we don't track the same-store sales by areas we have automation.

這些發票中的每一張都通過我們的自動化工具，其中 100% 通過自動化工具，其中大約 30% 到 32% 正在最終確定或 100% 通過自動化完成。它們並不是由醫院普遍完成的，所以我們沒有一家醫院擁有 100% 的自動化，另一家醫院的自動化率為 0%。因此，我們不會按我們擁有自動化的區域來跟踪同店銷售額。

We do know that same-store sales, and we've mentioned this in the last 2 shareholder meetings, where we have the software it's up about 40% from before we had the software. So net better customer experience. The automation, we're really excited about it; better for the consumer, it's better for the veterinarian. But we have not -- we don't have the ability to link directly to that factor.

我們確實知道同店銷售額，我們在最近的 2 次股東大會上提到了這一點，在那裡我們擁有該軟件，比我們擁有該軟件之前增長了約 40%。所以淨更好的客戶體驗。自動化，我們真的很興奮；對消費者更好，對獸醫也更好。但我們沒有 - 我們沒有能力直接鏈接到那個因素。

Your other question was really a breakdown of where we're spending our money. And I mentioned earlier that we have -- anticipate about $45 million we can invest while being cash flow positive this year. And we're trying to invest about 70% of it in our core investments. Those typically have an IRR of 35% to maybe 45%. And our goal is to -- that's about 70% of the mix.

你的另一個問題實際上是我們把錢花在哪裡的細目分類。我之前提到過，我們有 - 預計我們可以投資約 4500 萬美元，同時今年的現金流為正。我們正試圖將其中的大約 70% 投資於我們的核心投資。這些通常具有 35% 到 45% 的內部收益率。我們的目標是 - 這大約是組合的 70%。

Year-to-date, most of it has been in the growth factor, which has typically been about 20%, but this year, it has been closer to 25%, 26%, 27% year-to-date. And that's places where we have not yet optimized, and our IRRs there might be between 5% and, call it, 25%.

年初至今，大部分都在增長因素中，通常約為 20%，但今年迄今已接近 25%、26%、27%。那是我們尚未優化的地方，我們的 IRR 可能在 5% 到 25% 之間。

Big bulky areas for us there are building up more account managers to support hospitals that have the software, getting the software installed into most areas, that's still an area of learning as we're definitely not in a mature stage there. We're also investing a lot more in conversion. And we invest mainly there in people creating content and having that seen. We are seeing progress. As we mentioned earlier, we're excited.

對我們來說，龐大的領域是建立更多的客戶經理來支持擁有該軟件的醫院，將軟件安裝到大多數領域，這仍然是一個學習領域，因為我們在那裡絕對不處於成熟階段。我們還在轉化方面投入更多。我們主要投資於創造內容並讓人們看到的人。我們正在看到進步。正如我們之前提到的，我們很興奮。

And then the last bucket, we're trying to spend about 10% on innovation. These are areas that we have no idea what the internal rates of return are going to be or they may be very long-term projects. Year-to-date, we've been investing a smaller amount. And in the back half, we hope to invest a little bit more, but those could be partnering with different distribution channels or doing other potential expansions in the future. And that's how we kind of think about our total spend.

然後是最後一個桶，我們試圖在創新上花費大約 10%。這些領域我們不知道內部回報率是多少，或者它們可能是非常長期的項目。今年迄今為止，我們一直在投資較小的金額。在後半部分，我們希望投資更多一點，但這些可能會與不同的分銷渠道合作，或者在未來進行其他潛在的擴張。這就是我們對總支出的看法。

Our next question is from Mark Argento from Lake Street Capital Markets.

我們的下一個問題來自 Lake Street Capital Markets 的 Mark Argento。

Darryl, Trish, just a follow-up on the -- I know you just -- you had mentioned California, that you're in the process of trying to reach an agreement there after Washington. I know you had mentioned kind of immaterial from a financial perspective and also from a business perspective, but are you moving towards just kind of a blanket if you're a Territory Partner, you're going to be licensed at this point? Or what -- how do you think about the regulatory environment in regards to the latest settlements?

Darryl、Trish，只是跟進——我知道你剛才提到了加利福尼亞，你正試圖在華盛頓之後在那里達成協議。我知道您從財務角度和業務角度都提到了某種無關緊要的東西，但是如果您是區域合作夥伴，您是否正在朝著某種毯子邁進，此時您將獲得許可？或者 - 您如何看待有關最新和解的監管環境？

Well, I'm glad you asked the question, Mark, because California and Washington are not at all related. I know because of the timing of it, people may think it is. But California is related to call center licensing, which is a legacy issue that first showed up around 2013 and '14, where we had an audit where we were previously informed and told by experts, lawyers and departments of insurance that based on our product profile, we did not need to get them licensed.

好吧，我很高興你問這個問題，馬克，因為加利福尼亞和華盛頓根本沒有關係。我知道由於它的時機，人們可能會認為它是。但是加利福尼亞州與呼叫中心許可有關，這是一個遺留問題，最早出現在 2013 年和 14 年左右，當時我們進行了一次審計，之前專家、律師和保險部門根據我們的產品概況通知並告知我們，我們不需要讓他們獲得許可。

When they listened to the types of calls we were taking, there was a lot of competitive questions and their thought that that crossed the line into solicitation and, therefore, we needed to get them licensed. We agreed to do that, but we did not get them licensed in a timely manner, and that is why we are getting penalized. And quite frankly, we deserve those penalties. We should have moved quicker. It was not good execution in that time frame.

當他們聽取我們接聽的電話類型時，有很多競爭性問題，他們認為這越界成了招攬，因此，我們需要讓他們獲得許可。我們同意這樣做，但我們沒有及時獲得許可，這就是我們受到處罰的原因。坦率地說，我們應得這些處罰。我們應該行動得更快。在那個時間範圍內執行得不好。

Washington was not related to call center licensing. It was related into 3 different buckets, and so they were not related.

華盛頓與呼叫中心許可無關。它與 3 個不同的桶相關，因此它們不相關。

The California area is an area that we're letting you guys know because it's a legacy issue. I talked about it in the 2018 shareholder letter, and we expect to get this behind us shortly.

加利福尼亞地區是一個我們要讓你們知道的地區，因為這是一個遺留問題。我在 2018 年的股東信中談到了這一點，我們希望很快就能解決這個問題。

That's helpful. And then just, Trish, one quick -- in terms of the other line item here. I think you talked to $60 million for 2019. That's probably up roughly, what, 50%. I think in the quarter, it was just over 50% year-over-year. What's driving the growth there? And should we anticipate that segment continue to grow at that pace? And what's going on, I guess, that's spurring that level of growth?

這很有幫助。然後，Trish，就這裡的另一個項目而言，一個快速的。我想你談到了 2019 年的 6000 萬美元。這可能大約增加了 50%。我認為在本季度，同比增長略高於 50%。是什麼推動了那裡的增長？我們是否應該期望該細分市場繼續以這種速度增長？我想是什麼原因刺激了這種增長水平？

Sure. I mean there's 4 different buckets in there as a reminder, and they are all growing nicely, so it's not necessarily one versus another. We've got our partnership with the Veteran Affairs where we ensure their service dogs for veterans. And so that is growing nicely. We've got things related to our employer benefit programs where the employer pays at least a portion of it. That is growing nicely.

當然。我的意思是那裡有 4 個不同的桶作為提醒，它們都長得很好，所以不一定是一個對另一個。我們與退伍軍人事務部建立了合作夥伴關係，確保他們為退伍軍人提供服務犬。因此，它的增長很好。我們有與我們的雇主福利計劃相關的事情，雇主至少支付其中的一部分。那成長得很好。

And then we're underwriting others. And while one partner is rolling off a bit, the other one is continuing to add to their book of business. And that one started with us in 2017, so it's still building on and causing year-over-year growth rates to be quite outsized as well as their business is performing well.

然後我們承保其他人。雖然一個合作夥伴正在逐漸減少，但另一個合作夥伴正在繼續增加他們的業務。那是從 2017 年開始與我們合作的，所以它仍在繼續發展，並導致同比增長率非常高，而且他們的業務表現良好。

And so it's all part of our core strategy, as you have different channels as well as products so that we're positioned well in the overall market. And in general, the overall market is growing nicely as well.

因此，這都是我們核心戰略的一部分，因為您擁有不同的渠道和產品，因此我們在整體市場中處於有利地位。總的來說，整個市場也增長良好。

So when it comes to our expectations, the growth rates you're seeing right now, in general, we expect to continue and be around 50% for the full year based on our guidance. Absent things coming on or off or building up when it comes to long-term outlook, we would imagine that segment to grow around industry growth, unless we announce something different, which would be more in like the 15% to 20% range currently.

因此，當談到我們的預期時，您現在看到的增長率，總的來說，根據我們的指導，我們預計全年將繼續增長並保持在 50% 左右。就長期前景而言，如果沒有出現或關閉或積累的情況，我們可以想像該部分將圍繞行業增長增長，除非我們宣布一些不同的東西，目前的增幅在 15% 到 20% 之間。

Our next question is from Kevin Ellich from Craig-Hallum.

我們的下一個問題來自 Craig-Hallum 的 Kevin Ellich。

Just Trish, sorry to keep asking about the guidance here, but just so I understand and make sure I got the numbers right. Maybe I did the math wrong, but -- so excluding the other business, if we look at the subscription revenue, it effectively looks like that revenue guidance was taken down a little bit for the full year. Is that correct? And if so, what's driving that?

只是 Trish，很抱歉一直在這裡詢問指導，但只是為了讓我理解並確保我得到正確的數字。也許我算錯了，但是 - 所以排除其他業務，如果我們看一下訂閱收入，實際上看起來全年的收入指導有所下調。那是對的嗎？如果是這樣，是什麼推動了它？

It should be that it would be, the midpoint, it was coming up by $1 million for the full year. It shouldn't be coming down. Yes, just there have been higher performance, yes.

應該是，中點，全年增加 100 萬美元。應該不會降是的，只是有更高的性能，是的。

Okay. I guess I've got that mistaken. My bad. And then, Darryl, going back to the other question that Mark asked about California, but you also commented about the licensing of Territory Partners in Washington -- in the state of Washington. What's the plan with other states? Is it going to be a case-by-case example? Or do you plan to kind of if a Territory Partner wants to become licensed, are you going to allow them to do that? And I guess, to that point, what's the incremental cost for you guys? And have you seen any impact on the productivity?

好的。我想我弄錯了。我的錯。然後，Darryl，回到 Mark 提出的關於加利福尼亞的另一個問題，但你也評論了華盛頓州的 Territory Partners 的許可。與其他州的計劃是什麼？這將是一個個案的例子嗎？或者，如果區域合作夥伴想要獲得許可，您是否打算允許他們這樣做？我想，到那時，你們的增量成本是多少？您是否看到對生產力的任何影響？

Great question. So Territory Partners, right now, over 25% of them are already licensed. We required them to be licensed any time they are dealing directly with consumers, and we've gone through that process. The cost of it is minimal. It's a couple hundred dollars a year for Territory Partners, so it's -- it doesn't have a major impact.

很好的問題。因此，現在，超過 25% 的 Territory Partners 已經獲得許可。我們要求他們在直接與消費者打交道時必須獲得許可，我們已經完成了這個過程。它的成本是最低的。對於 Territory Partners 來說，每年只需幾百美元，所以它沒有產生重大影響。

We have -- as this category continues to grow, regulation may ebb and change based on the category's growth. And we think we're at the forefront of having those conversations. If individual states would prefer that a Territory Partner be licensed, then we'll totally be supportive of that and get them licensed.

我們已經——隨著這一類別的持續增長，監管可能會根據該類別的增長而起伏和變化。我們認為我們處於進行這些對話的最前沿。如果個別州希望領土合作夥伴獲得許可，那麼我們將完全支持並獲得許可。

We've had ongoing conversations for years, and they have not historically. That's why we have not historically required all of them to do it. But we'll keep an eye on it. And if any states want us to make that change, we will. And if it becomes a trend, then we would get everybody.

多年來，我們一直在進行對話，但歷史上並沒有。這就是為什麼我們在歷史上沒有要求所有人都這樣做。但我們會密切關注它。如果有任何州希望我們做出改變，我們會的。如果它成為一種趨勢，那麼我們將吸引所有人。

Okay. So -- but no impact on productivity from what you've seen so far.

好的。所以 - 但從您目前所見來看，對生產力沒有影響。

No, it's not a material impact on productivity. It's -- basically, it takes about a week for a Territory Partner to go through the process, and it's something that we're very good at.

不，這不會對生產力產生實質性影響。基本上，區域合作夥伴需要大約一周的時間來完成這個過程，這是我們非常擅長的事情。

If the industry ever gets to the point that a sales force calling on veterinarians is required to be licensed, that would be a net good thing for us. It certainly is not there today. Licensing, things specific to our category, the more that happens is more of a moat for the business for us because this is what we specialize in and what we do.

如果該行業達到要求拜訪獸醫的銷售人員獲得許可的地步，那對我們來說將是一件好事。它今天肯定不存在。許可，特定於我們類別的事情，發生的越多，對我們的業務來說就越是護城河，因為這是我們的專長和工作。

So we embrace regulation as long as it's doing what the regulators do, which is to try to make sure that consumers have high visibility in what they're getting, so there's transparency. That people are getting good, equal value proposition, which we believe we're targeting the highest sustainable level in the industry, all with great customer experience.

所以我們接受監管，只要它在做監管者所做的事情，這是為了確保消費者對他們所得到的東西有很高的知名度，所以有透明度。人們正在獲得良好的、平等的價值主張，我們相信我們的目標是行業中最高的可持續水平，所有這些都具有良好的客戶體驗。

Got it. Okay. That's helpful. And then while we're talking about it, can you talk about how the initiatives to improve same-store sales conversion and retention are going? And what are the long-term targets? And how much do you plan to spend, Darryl?

知道了。好的。這很有幫助。然後，在我們談論它的同時，您能否談談提高同店銷售轉化率和保留率的舉措進展如何？長期目標是什麼？你打算花多少錢，達里爾？

Well, the long-term targets in all of them are better than they are today. I wish I could give you a specific number. Let's take retention, for example. We're already at 98.5% a month, and that includes pet death. We've historically had the broadest coverage at the highest payout ratio.

好吧，他們所有的長期目標都比現在好。我希望我能給你一個具體的數字。讓我們以保留為例。我們已經達到每月 98.5%，其中包括寵物死亡。我們歷來以最高的支付率擁有最廣泛的覆蓋範圍。

We believe we've got the best customer experience. We're paying hospitals directly. We're 24/7. We think we're priced more effectively, more accurately by more subcategories. We think we're leading the category in that area. There isn't a huge amount of upside. I mean it's not going to go from 98.5% to 101%. Maybe the highest outside perfection on retention might be 99%, but I'll take every tenth that I can get.

我們相信我們擁有最好的客戶體驗。我們直接向醫院付款。我們是 24/7。我們認為我們的定價更有效，更多子類別更準確。我們認為我們在該領域處於領先地位。沒有很大的上漲空間。我的意思是它不會從 98.5% 上升到 101%。也許保留率的最高外部完美可能是 99%，但我會盡我所能。

I also think about areas like conversion. We look at our conversion rate on a blended. We look at how many people get a quote online, how many people get a quote on the telephone, how many people end up enrolling. And we know that we have a much higher conversion rate on the phone. So we know that when a consumer receives the right accurate information at the right time that we can convert over 40% of people.

我也在考慮轉換等領域。我們在混合上查看我們的轉化率。我們會查看有多少人在網上獲得報價，有多少人通過電話獲得報價，有多少人最終註冊。而且我們知道我們在電話上的轉化率要高得多。所以我們知道，當消費者在正確的時間收到正確的準確信息時，我們可以轉化超過 40% 的人。

We're -- we've got a long delta between all of our pets converting at 40%, and if we were to get to that level, we'll be growing at much faster rates. That's not our internal target. But every 1% improvement in our blended conversion rate is helpful.

我們——我們所有寵物的轉化率為 40% 之間有很長的增量，如果我們要達到這個水平，我們的增長速度會快得多。那不是我們的內部目標。但是我們的混合轉化率每提高 1% 都是有幫助的。

We told people of the shareholder letter -- our Shareholder Meeting that our blended conversion rate has been about 13%. So if it goes from 13% to 14% or 14% to 15% or 15% to 18%, those types of percentages, if you -- they can make a real big impact on the business.

我們在股東信中告訴人們——我們的股東大會，我們的混合轉化率約為 13%。因此，如果它從 13% 到 14% 或 14% 到 15% 或 15% 到 18%，這些類型的百分比，如果你 - 它們可以對業務產生真正的重大影響。

(Operator Instructions) The next question here is from Greg Gibas from Northland Capital.

（操作員說明）這裡的下一個問題來自 Northland Capital 的 Greg Gibas。

First, if I could follow up on the pet acquisition spend question. Was wondering if you could break down pet acquisition spend in terms of how much was directed towards lead and conversion teams versus the direct-to-consumer side. And can you maybe talk about how this mix is expected to change over time?

首先，我能否跟進寵物收購支出問題。想知道您是否可以根據針對領導和轉換團隊與直接面向消費者方面的金額來分解寵物收購支出。你能談談這種組合會如何隨著時間的推移而改變嗎？

Yes. Well, it's interesting. You actually asked the question how we break everything into lead and conversion. And direct-to-consumer, many people imagine that, that is a lead generator. We actually do not believe or have not seen that to be the case. Our direct-to-consumer approach is really increasing the conversion rates from our already quality leads that we're getting from the veterinarians.

是的。好吧，這很有趣。您實際上問了我們如何將所有內容分解為潛在客戶和轉化的問題。而直接面向消費者，很多人都認為這是潛在客戶生成器。我們實際上不相信或沒有看到情況會如此。我們直接面向消費者的方法確實提高了我們從獸醫那裡獲得的高質量線索的轉化率。

Remember, we're not trying to enroll -- or our target audience is not the 180 million cats and dogs today. Our target audience is the new pets being entered in a household, which are often puppies and kittens, but they also could be a 4- or 5-year-old dog being adopted from a shelter. And we think the time to get somebody enrolled in our product is in the first 3 to 6 months of that pet being in the household.

請記住，我們並不是要註冊——或者我們的目標受眾不是今天的 1.8 億貓狗。我們的目標受眾是新進入家庭的寵物，通常是小狗和小貓，但也可能是從收容所領養的 4 歲或 5 歲的狗。我們認為讓某人註冊我們產品的時間是在該寵物進入家庭的前 3 到 6 個月內。

And what we find, when we layer on D2C, is we don't get a higher number of those leads. What we do see is that, sometimes, in a market where we have a high percentage of our software and more partnering hospitals, that we get a higher conversion rate of those leads that we're already getting. And right now, our pet acquisition cost is broken about 50% lead and about 50% conversion. If you went back a couple of years, it was about 70% leads, 30% conversion. And the we're investing more and more on the conversion side.

我們發現，當我們在 D2C 上分層時，我們並沒有獲得更多的潛在客戶。我們確實看到的是，有時，在我們擁有高比例軟件和更多合作醫院的市場中，我們已經獲得的那些潛在客戶的轉化率更高。而現在，我們的寵物獲取成本已突破約 50% 的領先優勢和約 50% 的轉化率。如果你回到幾年前，大約有 70% 的潛在客戶，30% 的轉化率。而且我們在轉換方面的投資越來越多。

If I was to look at my crystal ball in the years ahead, our leads get -- we get scale on our leads and our growth where we're exceeding our subscription business and it's growing faster year-over-year has been driven by increased leads. They become more and more efficient. Conversion costs are not an area that we think get more efficient, but an area that we have more deployable cash. We think they can make a big impact.

如果我在未來幾年看我的水晶球，我們的潛在客戶會得到——我們的潛在客戶規模和我們的增長超過了我們的訂閱業務，而且它的同比增長速度更快，這是由增加的驅動的導致。他們變得越來越有效率。轉換成本不是我們認為更有效率的領域，而是我們擁有更多可部署現金的領域。我們認為它們可以產生重大影響。

Great. That's really helpful. And then second for me was just with respect to your international expansion recently announced, roughly, how long should we expect it to take for Australian operations to ramp up? And can you provide some details on why Hollard Insurance decided to partner with you guys in a market where they already have a presence? And I guess, also, where do you expect that current 6% penetration in that market to go eventually?

偉大的。這真的很有幫助。然後對我來說第二個是關於你最近宣布的國際擴張，粗略地說，我們應該期望澳大利亞業務增加需要多長時間？你能否提供一些細節，說明為什麼 Hollard Insurance 決定與你們在他們已經存在的市場中合作？而且我想，您預計該市場目前 6% 的滲透率最終會走向何方？

Well, Australia is early days for us. So we look at the Australian market in a couple of different ways. One is, long term, we have aspirations to be a global player. And we felt going into a market that speaks the same language, that acts very similar to our Canadian market, although penetration rates are higher, is an easier place for us to expand than to try to jump into China.

好吧，澳大利亞對我們來說還處於早期階段。因此，我們以幾種不同的方式看待澳大利亞市場。一是，從長遠來看，我們有成為全球參與者的願望。我們覺得進入一個使用相同語言、行為與我們的加拿大市場非常相似的市場，雖然滲透率更高，但對我們來說擴張比試圖進入中國更容易。

So we went into Australia. We did not want it to be a distraction to our core North American business, so we decided to partner with a local partner that had expertise. And that local partner felt like there was a void in the market on having a product designed to be reviewed and recommended by veterinarians. And that's how we're positioned, and that's why we partnered with the partner that we did.

所以我們去了澳大利亞。我們不希望它分散我們在北美的核心業務，因此我們決定與具有專業知識的本地合作夥伴合作。那個當地合作夥伴認為市場上存在一種設計為由獸醫審查和推薦的產品的空白。這就是我們的定位，這就是我們與合作夥伴合作的原因。

And where we're at today is we're in a handful of hospitals. It's literally like a dozen. And we are just working out the bugs to see how many leads we get, what are the conversion rates, what's the retention rates. We also want to understand our customer experience, make sure that we've got all of our ducks in the row.

而我們今天所處的位置是我們在少數幾家醫院裡。它實際上就像一打。我們只是在解決錯誤，看看我們獲得了多少線索，轉化率是多少，保留率是多少。我們還想了解我們的客戶體驗，確保我們已經做好了準備。

And we're going to keep -- we will not expand the number of hospitals until we feel confident that we're really good at understanding those numbers. And then, over time, we'll try to get out from the dozen hospitals. And long term, there's about 3,000 hospitals in Australia that can be our market.

我們將繼續——我們不會擴大醫院的數量，直到我們確信我們真的很擅長理解這些數字。然後，隨著時間的推移，我們將嘗試從十幾家醫院中脫身。從長遠來看，澳大利亞大約有 3,000 家醫院可以成為我們的市場。

And I will -- I'm encouraged to say that our intuition was correct, that veterinarians and consumers are embracing our products, that they like it. It's not a big surprise for us, but we've got a lot of learning ahead and we've got the time to do it. Just for those watching our financials, the pet count does not show up in our total pet count. We have a separate line item for this investment.

我會 - 我很高興地說我們的直覺是正確的，獸醫和消費者正在接受我們的產品，他們喜歡它。這對我們來說並不是什麼大驚喜，但我們還有很多東西要學，我們有時間去做。對於那些關注我們財務的人來說，寵物數量不會出現在我們的寵物總數中。對於這項投資，我們有一個單獨的項目。

Our next question is from Jon Block from Stifel.

我們的下一個問題來自 Stifel 的 Jon Block。

This is Tom on for Jon. I guess to start off on marketing spend in your 3 different buckets. Can you maybe share some of the specific initiatives that might be moving up the chains, so from either the test bucket to growth or growth to core?

這是湯姆替喬恩。我想開始在你的 3 個不同桶中進行營銷支出。您能否分享一些可能正在提升鏈條的具體舉措，例如從測試桶到增長或增長到核心？

Yes, I can. I would say, several years ago, we were innovating around TV and radio, and then it went into the growth category and kind of some established market. So we were trying different channels, different times of the day, different messaging. And then in certain markets where we are more penetrated, we are getting internal rates of return based on that conversion rate lift. And in some of those markets, they're now moved into core.

我可以。我會說，幾年前，我們圍繞電視和廣播進行創新，然後它進入了增長類別和一些成熟市場。所以我們嘗試了不同的渠道、一天中的不同時間、不同的消息傳遞。然後在我們滲透率更高的某些市場中，我們獲得了基於轉化率提升的內部回報率。在其中一些市場中，它們現在已進入核心市場。

Now I would tell you, D2C in general is more in the growth mode, and there's a lot of markets that we do not think we are ready: we do not have enough buy-in from veterinarians; there's not a high enough penetration rate of our software; we have not been in the marketplace long enough. But that's kind of how it runs through.

現在我要告訴你，D2C 總體上更處於增長模式，有很多市場我們認為我們還沒有準備好：我們沒有足夠的獸醫支持；我們的軟件普及率不夠高；我們進入市場的時間還不夠長。但這就是它的運行方式。

I would tell you another one was signing account managers to be contacting veterinarian hospitals between our Territory Partner visits. That started off as an innovation several years ago. I would say that's firmly in the growth mode today. Internal rates of return are below 30% but above 5% or 10%. And we are going to keep fine-tuning in that and growing that [T moat]. And I would imagine in 3 to 4 years, that will definitely be in core spend and, hopefully, a little sooner.

我會告訴你另一個正在簽約的客戶經理在我們的區域合作夥伴訪問之間聯繫獸醫醫院。幾年前，這開始是一項創新。我會說這在今天是堅定的增長模式。內部收益率低於 30%，但高於 5% 或 10%。我們將繼續對此進行微調並擴大 [T 型護城河]。我想在 3 到 4 年內，這肯定會出現在核心支出中，而且希望能早一點。

Great. That's helpful. And I guess to quickly pivot to churn. The year 1 rate of around 97%, how are the initiatives proceeding to reduce that? And how long does it take for some of them to take effect?

偉大的。這很有幫助。而且我想快速轉向流失。第 1 年的比率約為 97%，如何採取措施來降低這一比率？其中一些需要多長時間才能生效？

Well, that was something that I highlighted in my shareholder letter last year, which is I broke churn down into the categories, things like pet death and reasons why somebody is canceling, like failed payments or they're unsatisfied.

好吧，這是我去年在股東信中強調的一點，我將流失分為幾類，比如寵物死亡和有人取消的原因，比如付款失敗或他們不滿意。

But I also looked at a different view, and that view was to say, how many people churn in the first year before they've had a rate renewal? How many people churn if their rate renewal is within a typical band, which is less than 20%, typically 5% to 6% year-over-year?

但我也看到了一個不同的觀點，那個觀點是說，有多少人在他們有利率更新之前的第一年流失？如果他們的續訂率在低於 20%，通常為 5% 至 6% 的典型範圍內，那麼有多少人會流失？

And for those people, as we're fine-tuning our pricing by more subcategories and we've been doing this for years and will continue in the years ahead, when we're pricing more accurately by more subcategories, and rates are changing by more than 20%, what is the impact?

對於這些人，我們正在通過更多子類別微調我們的定價，我們已經這樣做了很多年，並將在未來幾年繼續這樣做，屆時我們將通過更多子類別更準確地定價，並且費率會隨著超過20%，有什麼影響？

And what you talked about was in the first year, we have the highest turn of churn, the highest number of pets churning at about 97% month over month. The initiatives that we're trying to work on are more about upfront education.

你說的是在第一年，我們的流失率最高，寵物流失率最高，月環比約為 97%。我們正在努力開展的舉措更多是關於前期教育。

Some people churn in the first year because they thought we were going to cover a wellness exam. Some people churn because their dog got hit by a car an hour before they enrolled, and they were hoping that we would cover them. Other people churn because they were expecting something different, that maybe -- for example, maybe a deductible works in a different way or some others. So upfront education is the main area.

有些人在第一年流失，因為他們認為我們要進行健康檢查。有些人流失是因為他們的狗在入學前一個小時被車撞了，他們希望我們能為他們提供保險。其他人流失是因為他們期待不同的東西，例如，也許免賠額以不同的方式或其他一些方式起作用。因此，前期教育是主要領域。

We have seen glimmers of improvements in those areas, areas that we're encouraged by. But as I mentioned earlier, trying to make any improvements in these when we have a blended 98.5% is really hard. I mean we think we're leading the category. We think we have been for a long time. These are the buckets we're focused on.

我們已經在這些領域看到了改進的曙光，這些領域令我們感到鼓舞。但正如我之前提到的，當我們擁有 98.5% 的混合率時，試圖在這些方面做出任何改進是非常困難的。我的意思是我們認為我們處於領先地位。我們認為我們已經很久了。這些是我們關注的桶。

The initiatives we have, we'll keep at them probably for the next couple of years and see if we can move the needle. And if we're making progress, we'll keep doing it. And if we can't make any progress, we'll deploy funds in other ways.

我們擁有的舉措，我們可能會在接下來的幾年內保持下去，看看我們是否能有所作為。如果我們正在取得進展，我們將繼續這樣做。如果我們不能取得任何進展，我們將以其他方式部署資金。

Our next question is from David Westenberg from Guggenheim.

我們的下一個問題來自古根海姆的 David Westenberg。

So just going back to the theme of gross profit. I know that when you're kind of aiming to price, I know you'd much rather lean on giving the consumer. And I know it also ebbs and flows. But in this particular case, what were maybe some of the factors that got it a little bit higher than that target range, whether it be mix of maybe more in healthy pets, higher claims?

所以回到毛利的主題。我知道當你的目標是定價時，我知道你更願意依靠給消費者。我知道它也會潮起潮落。但在這種特殊情況下，可能是哪些因素使其略高於該目標範圍，是否可能是健康寵物的混合，更高的索賠？

And then, subsequently, would there be maybe a sort of a catch-up pricing? I know that [after] revenue, pet was up about 7%. So I mean, maybe, you already did it. I know you increased monthly, but just a little bit more color there.

然後，隨後，可能會有一種追趕定價嗎？我知道 [在] 收入之後，寵物上漲了大約 7%。所以我的意思是，也許，你已經做到了。我知道你每月都在增加，但只是顏色多了一點。

Well, I don't think it's overly complicated. I mean our cost of goods have gone up 5%. They averaged 5% to 6% for the last 15 years. Our ARPU went up 5% year-to-date. If they're staying the same, that would keep us at about a 72%. Our target is 70%.

嗯，我不認為它過於復雜。我的意思是我們的商品成本上漲了 5%。在過去的 15 年裡，他們平均為 5% 到 6%。年初至今，我們的 ARPU 增長了 5%。如果他們保持不變，那將使我們保持在 72% 左右。我們的目標是 70%。

We need -- as Trish mentioned earlier, we need our ARPU to be going up approximately 7% and our cost of goods to be going up 5% for us to make up that variance. And we also have a headwind as we deploy more of our software, which is about another 1 point. And as I mentioned earlier, we have our software in 50% more hospitals than we did this time last year, so we have to build that in.

我們需要 - 正如 Trish 之前提到的那樣，我們需要我們的 ARPU 上升約 7%，我們的商品成本上升 5% 才能彌補差異。隨著我們部署更多的軟件，我們也遇到了不利因素，這大約又增加了 1 分。正如我之前提到的，與去年這個時候相比，我們在醫院中使用軟件的醫院數量增加了 50%，因此我們必須將其內置。

And all of it's not instant. We've got -- it's dynamic and we've got to roll it out. The nice thing is our margin that we've been able to improve over the last about 3 or 4 years from what was about $12 million 3 or 4 years ago to $45 million this year means we've got the flexibility to get this right over time, while still being investing in the business, but our targets have not changed.

而這一切都不是即時的。我們已經 - 它是動態的，我們必須推出它。好消息是我們的利潤率在過去大約 3 或 4 年內得以改善，從 3 或 4 年前的大約 1200 萬美元增加到今年的 4500 萬美元，這意味著我們有足夠的靈活性來解決這個問題當時，雖然還在投資業務，但我們的目標沒有改變。

Got you. Okay. And then going back to on the cost side, your pet acquisition cost. Another quarter of above $200. And I understand that you're exploring the conversion channel and you've kind of -- now it's maybe more closer to 50% of the spending is in conversion. Now that you're kind of out there and exploring channels, is this kind of the normal expense rate you think you could see? Any kind of visibility on a go-forward basis in terms of pet acquisition cost.

明白了好的。然後回到成本方面，你的寵物收購成本。200 美元以上的四分之一。而且我知道你正在探索轉換渠道並且你有點 - 現在它可能更接近 50% 的支出用於轉換。既然你在外面探索渠道，你認為你能看到這種正常的費用率嗎？就寵物收購成本而言，任何一種在前進基礎上的可見性。

Yes. Dave, I mean, at a high level, we are using our calculated internal rates of return to inform how much we have available to spend. So to the extent that we can spend within our guardrails of 30% to 40% internal rates of return, if we feel we can do so effectively, we will.

是的。戴夫，我的意思是，在高層次上，我們正在使用我們計算的內部回報率來告知我們有多少可用於支出。因此，只要我們能在 30% 到 40% 的內部回報率的護欄內花錢，如果我們覺得我們可以有效地做到這一點，我們就會這樣做。

The biggest thing, and Darryl mentioned this earlier, that is different compared to last year and the year before that is in prior years, the pot of money available was much lower. And so almost all of the spend was going towards things that would enroll pets in that quarter. And now we, as we've talked about, are carving out around 30% of our spend to do things that are building out teams that are more long term in nature and thinking more long term and about the category and the growth.

最重要的是，Darryl 之前提到過這一點，與去年和前年不同，前幾年可用的資金要少得多。因此，幾乎所有的支出都用於在那個季度招收寵物。正如我們所討論的那樣，現在我們正在抽出大約 30% 的支出來做一些事情，這些事情正在建立本質上更長期的團隊，並從更長遠的角度考慮類別和增長。

So it's a little bit apples and oranges, but we are making sure we're within those guardrails of the 30% to 40% while we do this and also being cash flow positive. And with those in mind, we feel comfortable and are excited about the opportunities that we have ahead of us.

所以它有點蘋果和橘子，但我們確保在我們這樣做的同時處於 30% 到 40% 的護欄內，並且現金流量為正。考慮到這些，我們對擺在我們面前的機會感到自在和興奮。

Yes. I mean I'd just -- in the -- in my opening remarks, our goal is to drive revenue 20% to 30% year-over-year. We're right at the midpoint. Our goal is to expand our adjusted operating income, and we're doing that about 40% year-over-year, so we're excited about that.

是的。我的意思是我只是 - 在 - 在我的開場白中，我們的目標是將收入同比增長 20% 到 30%。我們正好在中點。我們的目標是擴大調整後的營業收入，我們的目標是同比增長約 40%，因此我們對此感到興奮。

And we want our internal rate of return between 30% and 30 -- 30% and 40%, and we're at about a 34% right now, so right at the midpoint. So we feel good about how the year is going and excited about where we're able to deploy this capital.

我們希望我們的內部回報率在 30% 到 30% 之間——30% 到 40%，而我們現在大約是 34%，所以正好在中間點。因此，我們對今年的進展情況感到滿意，並對我們能夠在哪裡部署這筆資金感到興奮。

Right. That was very helpful. And then just maybe the last one in terms of switching from e-mails to text messages. Can you maybe give us a little bit of progress? I know I think you gave some metrics at the Analyst Day about opening -- the opening of a text message being within minutes. Is this kind of the experience that you have? And just maybe a little bit of metrics on how that kind of initiatives are going in.

正確的。這很有幫助。然後可能只是最後一個關於從電子郵件切換到文本消息的問題。你能給我們一點進展嗎？我知道我認為你在分析師日給出了一些關於打開的指標——幾分鐘內打開一條短信。你有這樣的經歷嗎？也許還有一些關於這種舉措如何進行的指標。

So I think your question is -- one of the initiatives we're working on conversion is how do you get the right content to the person at the right time. And we are -- historically have been using a lot more e-mail. We're seeing e-mail rates over the years -- open rates have been declining and the speed in which people do that. I think that's -- we can all understand that as our inboxes get spammed full.

所以我認為你的問題是 - 我們正在致力於轉換的舉措之一是你如何在正確的時間向人們提供正確的內容。而且我們 - 歷史上一直在使用更多的電子郵件。多年來，我們看到了電子郵件率——打開率一直在下降，人們這樣做的速度也在下降。我認為那是——我們都可以理解，因為我們的收件箱被垃圾郵件塞滿了。

But we're finding other ways to communicate, so that's not only things like text, but it's going to be things like instant messaging on our website, other ways to drive people to the telephones. And we're still in test mode but we're encouraged by the results we've seen so far.

但是我們正在尋找其他溝通方式，所以這不僅是文本之類的東西，還包括我們網站上的即時消息，以及其他吸引人們打電話的方式。我們仍處於測試模式，但我們對迄今為止看到的結果感到鼓舞。

This concludes today's teleconference -- I'm sorry, this concludes the question-and-answer session as well as today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.

今天的電話會議到此結束-- 抱歉，問答環節和今天的電話會議到此結束。此時您可以斷開線路。再次感謝您的參與。