Trupanion Inc (TRUP) 2024 Q3 法說會逐字稿

Good day and welcome to the Trupanion third quarter, 2024 earnings conference call. (Operator instructions)

美好的一天，歡迎參加 Trupanion 2024 年第三季財報電話會議。（操作員說明）

Please also note that today's event is being recorded. I would now like to turn the conference over to Gilbert, Director of Investor relations. Please go ahead.

另請注意，今天的活動正在錄製中。我現在想將會議交給投資者關係總監吉爾伯特。請繼續。

Good afternoon and Welcome to Trupanion first quarter, 2024 financial results conference call participating on today's call are Margaret Tooth, Chief Executive Officer and President and throughout Fawwad Qureshi, Chief Financial Officer for ease of reference. We have included a slide presentation to accompany today's discussion which will be made available on our investor relations website on our quarterly earnings tab.

下午好，歡迎參加 Trupanion 2024 年第一季財務業績電話會議，為方便參考，執行長兼總裁 Margaret Tooth 以及財務長 Fawwad Qureshi 出席了今天的電話會議。我們在今天的討論中附上了幻燈片演示，該演示將在我們的投資者關係網站的季度收益選項卡上提供。

Before we begin, please be advised that remarks today will contain forward-looking statements, all statements other than statements of historical facts are forward-looking statements. These include but are not limited to statements regarding our future operations, key operating metrics, opportunities and financial performance, pricing and veterinary industry, inflation and our ability to immediate our material weaknesses.

在我們開始之前，請注意，今天的言論將包含前瞻性陳述，除歷史事實陳述之外的所有陳述均為前瞻性陳述。這些包括但不限於有關我們未來營運、關鍵營運指標、機會和財務表現、定價和獸醫行業、通貨膨脹以及我們解決重大弱點的能力的聲明。

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 including today's earnings release as well as the company's most recent reports including Forms 10-K, 10-Q, 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有重大差異。對這些以及其他風險和不確定性的詳細討論包括今天的收益發布以及公司的最新報告，包括向美國證券交易委員會提交的 10-K、10-Q 和 8-K 表格。

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

今天的簡報引用了管理層用來評估公司業績的非公認會計準則財務指標，包括但不限於支付獸醫發票的成本、可變費用、固定費用調整後的營業收入獲取成本、內部收益率、調整後的息稅折舊攤提前利潤和自由現金流。

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 and development expenses unless otherwise noted, all margins and expenses will be presented on a non-GAAP basis and excluding stock based compensation, expense and depreciation expense.

當我們使用「調整後營業收入或利潤率」這個術語時，它是指我們在新寵物收購和開發費用之前的非公認會計原則營業收入或利潤率，除非另有說明，所有利潤和費用都將以非公認會計原則列報，且不包括股票報酬、費用和折舊費用。

These non-GAAP measures are in addition to another substitute for measures of financial performance prepared in accordance with the US GAAP. 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 press investor relations website under the quarterly earnings tab.

這些非公認會計原則衡量標準是根據美國公認會計原則制定的財務績效衡量標準的另一種替代方法。我們鼓勵投資者審查這些非公認會計原則財務指標與最直接可比較的公認會計原則結果的對帳情況，這些結果可以在今天的新聞稿或新聞投資者關係網站的季度收益選項卡下找到。

Lastly, I would like to remind everyone that today's conference call is also available via webcast on n Trupanion's investor relations website. A replay will also be available on the site with that. I'll hand it over to Margi.

最後，我想提醒大家，今天的電話會議也可以透過 n Trupanion 的投資人關係網站進行網路直播。網站上也將提供重播。我會把它交給瑪吉。

Thanks Gil and good afternoon, everyone. I'm pleased to share the results of a very strong quarter. Most notably growth in our subscription adjusted operating income accelerated by 66% over the prior year period. Our subscription adjusted operating margin reached 14% in the quarter. The highest level since quarter one of 2022 which represents a 390 basis point year over year improvement.

謝謝吉爾，大家下午好。我很高興與大家分享一個非常強勁的季度的成果。最值得注意的是，我們的認購調整後營業收入比去年同期成長了 66%。本季我們的訂閱調整後營業利益率達 14%。這是自 2022 年第一季以來的最高水平，年比提高了 390 個基點。

The biggest driver of this result was the achievement of our value proposition to 71% a milestone. We were pleased to reach against the backdrop of the greatest veterinary inflation seen in a generation over the past 18 months as inflation rolled through hospitals across North America, the team has been working hard to restore the margins in our core subscription business.

這項結果的最大動力是我們的價值主張實現了 71%，這是一個里程碑。我們很高興在過去 18 個月內出現了一代人以來最嚴重的獸醫通膨的背景下，通貨膨脹席捲了北美各地的醫院，該團隊一直在努力恢復我們核心訂閱業務的利潤率。

Getting back on track required us to take some significant rate increases to return to our target value proposition and put back on our acquisition investments until our pricing and the cost of care were more closely aligned with strong levels of rate. Now being earned through our book and ongoing expense discipline across the operations. We are well positioned to achieve a 15% subscription adjusted operating margin for Q4.

回到正軌需要我們大幅提高費率，以回到我們的目標價值主張，並重新投入收購投資，直到我們的定價和照護成本與強勁的費率水準更加一致。現在是透過我們的帳本和整個營運中持續的費用紀律來賺取的。我們完全有能力在第四季實現 15% 的訂閱調整後營運利潤率。

As a reminder, our goal is to achieve a 15% adjusted operating margin within our subscription business on an annual basis. This has been our guiding objective for many years and as we move ever closer, it will continue to be our target to ensure that as a low cost operator, we can offer our members lifetime coverage at the highest value proposition in the market.

提醒一下，我們的目標是每年在我們的訂閱業務中實現 15% 的調整後營業利潤率。多年來，這一直是我們的指導目標，隨著我們越來越接近這一目標，確保作為低成本運營商，我們能夠以市場上最高的價值主張為會員提供終身保險，這將繼續成為我們的目標。

It takes collective commitment from the teams to operate so close to our long term model P&L and after months of significant margin pressure, we are now approaching a sustainable margin position and turning to growth from a position of strength.

團隊的集體承諾才能如此接近我們的長期模型損益表，在經歷了幾個月的巨大利潤壓力後，我們現在正在接近可持續的利潤狀況，並從強勢地位轉向成長。

Our operating model requires us to be efficient, lean, vertically integrated and focused. This allows us to reduce frictional costs which in turn creates a white glove member experience high lifetime value and greater sums of capital to spend on growth. Acceleration our biggest markets today, Canada and the United States are still dramatically under penetrated at approximately 4%.

我們的營運模式要求我們有效率、精益、垂直整合和專注。這使我們能夠減少摩擦成本，從而使白手套會員體驗到高終身價值和更多的資本用於成長。加速我們今天最大的市場，加拿大和美國的滲透率仍然嚴重不足，約 4%。

The opportunity is enormous and with the humanization of our pets continuing the demand and need to enable access to care increases with it. Back to our results revenue for our subscription segment grew 20% in Q3. In terms of our cost of paying veterinary invoices while the trends in July were slightly better than anticipated August and September were roughly aligned with prior quarters, leaving the full quarter reflecting a minor deceleration of about 1% point versus the first half of the year.

機會是巨大的，隨著我們的寵物不斷人性化，獲得照護的需求和需求也隨之增加。回到我們的業績，我們的訂閱部門營收在第三季成長了 20%。就我們支付獸醫發票的成本而言，雖然 7 月的趨勢略好於預期，但 8 月和 9 月與前幾季大致一致，整個季度與上半年相比略有下降約 1%。

As a result, we continue to assume 15% veterinary inflation over the last 12 months, about half of our book has received a pricing increase of 20% or more and retention for this group continues to perform well and is trending up year over year. Despite many receiving consecutive double digit adjustments to their new monthly premium, we credit this improvement largely to the focus of the team evolving communications and enhancing member experience.

因此，我們繼續假設過去 12 個月獸醫通膨率為 15%，大約一半的書籍價格上漲了 20% 或更多，而該群體的保留率繼續表現良好，並且呈逐年上升趨勢。儘管許多人的新每月保費連續兩位數調整，但我們將這項改進主要歸功於團隊對發展溝通和增強會員體驗的關注。

Our attention for those with increases below 20% also perform well. Despite a larger proportion of members now experiencing price increases in the [high-teens], the strength in both cohorts demonstrates the value and resilience of our product and our member experience. Our efforts now are shifting back to the retention of our members in their first year which is trending below our expectations.

我們對增幅低於 20% 的關注度也表現良好。儘管現在有較大比例的會員經歷了[高青少年]的價格上漲，但這兩個群體的實力證明了我們產品和會員體驗的價值和彈性。現在，我們的努力又回到了第一年的會員留存率上，而這個趨勢低於我們的預期。

Enhancement of this experience is underway and will continue as the size of this cohort should become larger over time. It's worth noting the nature of any member experience changes take time to take full effect across an entire cohort.

這種體驗的增強正在進行中，並將繼續下去，因為隨著時間的推移，該群體的規模將會變得更大。值得注意的是，任何會員體驗變化的性質都需要時間才能在整個群體中充分生效。

I'm pleased however, to share some tangible results today regarding the evolution of our technology platform with our claims migration nearly complete. We are seeing significantly improved service levels, continued increases in invoices paid directly to the hospital and record levels of claims automation. All key elements of an exceptional member experience.

不過，我很高興今天能分享一些關於我們技術平台發展的實際成果，我們的索賠遷移已接近完成。我們看到服務水準顯著提高，直接支付給醫院的發票持續增加，索賠自動化水準創歷史新高。卓越會員體驗的所有關鍵要素。

Additionally and importantly we saw efficiencies in our invoice processing costs which hit a new low as a percentage of subscription revenue. I am eager to see the benefits this new system will bring to oneyear attention and all aspects of our business and member experience.

此外，重要的是，我們看到了發票處理成本的效率，其占訂閱收入的百分比創下新低。我渴望看到這個新系統將為一年的關注以及我們業務和會員體驗的各個方面帶來的好處。

Now turning to our new pet growth in the third quarter, we spent $16.8 million an increase of 4% over the prior year period to enroll approximately 65,800 new subscription pets. This resulted in an average pet acquisition cost of $243 and an estimated internal rate of return of 36% of particular note this quarter, we saw a healthy sequential increase in the number of active hospitals defined as hospitals that enrolled at least one pet in the prior 90 days.

現在轉向第三季的新寵物成長，我們花費了 1,680 萬美元，比去年同期成長了 4%，註冊了大約 65,800 隻新訂閱寵物。這導致平均寵物採購成本為243 美元，預計內部回報率為36%，特別值得注意的是，本季度，我們看到活躍醫院數量出現健康的連續增長，定義為上一季度至少招收一隻寵物的醫院90 天。

Moving to our broader portfolio, our new initiatives including our powered by sweeter products with Chewy and Aflac, our medium and low ARPU products, Furkin and PHI Direct and our products in Continental Europe comprised approximately 15% of our gross new pet ads in the quarter and only 10% of our pet acquisition spend.

轉向更廣泛的產品組合，我們的新舉措包括 Chewy 和 Aflac 等更甜的產品、中低 ARPU 產品、Furkin 和 PHI Direct 以及我們在歐洲大陸的產品，約佔本季度新寵物廣告總額的 15%只占我們寵物購買支出的10%。

In September we launched our first Trupanion branded product in Europe to the $29 million pet parents in Germany and Switzerland. This launch opens the opportunity for us to bring Trupanion's unique high value product to another under penetrated market.

9 月，我們在歐洲向德國和瑞士價值 2,900 萬美元的寵物父母推出了首款 Trupanion 品牌產品。此次發布為我們提供了將 Trupanion 獨特的高價值產品帶入另一個尚未滲透的市場的機會。

As we now look forward, it will be important to gain momentum in new pet enrolments while we will not sacrifice our IRR and free cash flow targets to do so. We intend to deploy an increasing amount of our adjusted operating income to acquire pets in the upcoming quarters. After spending so little for the past 12 months, we expect the impact of dining up investment to take some time to truly accelerate growth.

正如我們現在展望的那樣，在新寵物註冊方面獲得動力非常重要，同時我們不會為此犧牲我們的內部報酬率和自由現金流目標。我們打算在未來幾季將更多的調整後營業收入用於購買寵物。在過去 12 個月的支出如此之少之後，我們預計，消耗投資的影響需要一段時間才能真正加速成長。

And we have room for improvement in our execution with an increasing lifetime value and the time and lag of our spending, we anticipate per pet spend to increase on a dollar basis as we ramp back up to higher pet ads. Our truly unique offering in the industry presents a much needed reliable solution in making pet care affordable

隨著生命週期價值的增加以及支出的時間和滯後性的增加，我們的執行力還有改進的空間，隨著我們恢復更高的寵物廣告，我們預計每隻寵物的支出將以美元為基礎增加。我們在業界真正獨特的產品提供了急需的可靠解決方案，使寵物護理變得經濟實惠

Our approach to comprehensive coverage specifically within the core [Chupan] product ensures pets receive the care they need without delay resulting in higher customer and veterinary satisfaction as well as exceptional lifetime value. We are proud to lead the industry. The company embraces its role as a leader in this category with purpose and passion and for years, we have been at the forefront of industry discussions to drive fundamental change to the way medical insurance for pets is perceived.

我們在核心 [Chupan] 產品中採取全面覆蓋的方法，確保寵物立即得到所需的護理，從而提高客戶和獸醫的滿意度以及卓越的終身價值。我們很自豪能夠引領業界。該公司懷著堅定的目標和熱情，致力於成為這一領域的領導者，多年來，我們一直走在行業討論的最前沿，推動人們對寵物醫療保險的看法發生根本性改變。

While still very much a fledging industry, we are seeing a shift in how we're viewed and regulated. Most notably with the adoption of model law across an increasing number of states in the US and the recent news of the NAIC changes to the underwriting risk factors applied to the risk based capital requirements calculation.

雖然仍然是一個新興行業，但我們看到人們對我們的看法和監管方式正在轉變。最值得注意的是，隨著美國越來越多的州採用示範法，以及最近 NAIC 變更應用於基於風險的資本要求計算的核保風險因素的消息。

This change alone is a huge development for us significantly lowering a barrier we experience historically and ultimately resulting in more funds to grow. These changes are the primary driver of our estimated capital requirements. Decreasing by 24%. Since the end of 2023 we anticipate there will be an additional reduction to our capital requirements next year from the already announced 2025 factors. These ongoing developments give us greater confidence in the long term recognition of our industry and the nature of its risks.

僅此一項變化對我們來說就是一個巨大的發展，顯著降低了我們歷史上遇到的障礙，並最終帶來更多的資金用於成長。這些變化是我們估計資本要求的主要驅動因素。減少24%。自 2023 年底以來，我們預計明年我們的資本要求將比已宣布的 2025 年因素進一步減少。這些持續的發展使我們對我們行業的長期認可及其風險的性質更有信心。

Before I hand over to forward, I would like to share news of a very meaningful milestone for Trupanion. In a short time, we expect to cross $3 billion in paid veterinary invoices within our subscription segment. It took us 20 years to pay out the first billion, a little less than three years to pay out the second and now less than two years to pay the third billion.

在我轉交轉送之前，我想分享一下有關 Trupanion 的一個非常有意義的里程碑的消息。在很短的時間內，我們預計訂閱領域的付費獸醫發票將突破 30 億美元。我們花了20年的時間支付了第一個10億，花了不到三年的時間支付了第二個10億，現在不到兩年就支付了第三個10億。

Crossing this milestone is a testament to the very real impact we are making and the breadth of our coverage, helping and saving countless pets lives. This achievement is not just a milestone it is a celebration of the purpose that drives Trupanion every day and a reminder of the progress we are making. With that I'll hand it over to Fawwad to provide a detailed overview of our Q3 results.

跨越這一里程碑證明了我們正在產生的真正影響和我們的覆蓋範圍，幫助和拯救了無數寵物的生命。這項成就不僅僅是一個里程碑，也是對每天推動 Trupanion 的目標的慶祝，並提醒我們正在取得的進展。接下來，我將把它交給 Fawwad，以提供我們第三季結果的詳細概述。

Thanks Margi and Good afternoon everyone today, I'll share additional details on our Q3 performance as well as provide our outlook for the fourth quarter and full year 2024 we had another strong quarter with total revenue and adjusted operating income coming in ahead of expectations. Total revenue for the quarter was $327.5 million up 15% year over year within our subscription business revenue was $219 million up 20% year over year total monthly average revenue per pet for the quarter was $74.27 up 13% over the prior year period.

謝謝Margi，今天大家下午好，我將分享有關我們第三季度業績的更多詳細信息，並提供我們對第四季度和2024 年全年的展望，我們又一個強勁的季度，總收入和調整後的營業收入超出了預期。該季度的總收入為 3.275 億美元，年增 15%，其中訂閱業務收入為 2.19 億美元，年增 20%。

Within our core Trupanion brand, ARPU expanded even faster at 14% year. Over year total subscription pets increased 6% year of year to over $1 million. 32,000 pets as of September 30th, this includes over 48,000 pets in Europe which are currently underwritten by third parties.

在我們的核心 Trupanion 品牌中，ARPU 成長速度更快，每年成長 14%。寵物訂閱總額年增 6%，達到 100 萬美元以上。截至 9 月 30 日，共有 32,000 隻寵物，其中包括歐洲目前由第三方承保的 48,000 多隻寵物。

Average monthly retention for the trailing 12 months was 98.29% down versus the third quarter last year, which was 98.55% on a trailing three month basis. Retention was down from the second quarter this year and approximately in line with the first quarter, the subscription business cost of paying veterinary invoices was $155.5 million resulting in a value proposition of 71% down from 75.9% in the prior year period.

過去 12 個月的平均月度留存率比去年第三季下降了 98.29%，過去三個月的平均留存率為 98.55%。保留率較今年第二季有所下降，與第一季大致一致，支付獸醫發票的訂閱業務成本為 1.555 億美元，導致價值主張比去年同期的 75.9% 下降了 71%。

We achieved our 71% target value proposition a quarter earlier than expected. The drivers of this improvement were margin expansion from our ongoing pricing actions continued efficiency in our cost of processing invoices and the trends in veterinary inflation that Margi referred to the quarter also benefited from prior period.

我們比預期提前一個季度實現了 71% 的目標價值主張。這項改善的驅動因素是我們正在進行的定價行動帶來的利潤率擴張、我們處理發票成本的持續效率以及 Margi 提到的本季度獸醫通膨趨勢也受益於上一時期。

Development of $0.5 million or approximately 20 basis points of revenue as a percentage of subscription revenue, variable expenses were 9.4% down from 9.5% a year ago. Fixed expenses as a percentage of revenue were 5.6% up from 4.4% in the prior year period. In line with our expectations, this is the result of ongoing investments in our technology and controls infrastructure.

開發費用為 50 萬美元，即收入佔訂閱收入的比例約為 20 個基點，變動費用為 9.4%，比一年前的 9.5% 下降。固定費用佔收入的比例為 5.6%，高於去年同期的 4.4%。與我們的預期一致，這是我們對技術和控制基礎設施持續投資的結果。

After the cost of paying veterinary invoices, variable expenses and fixed expenses, we calculate our adjusted operating income. Our subscription business delivered adjusted operating income of $30.8 million. an increase of 66% from last year. Subscription adjusted operating margin was 14% of subscription revenue. This is up from 10.1% in the prior year and represents approximately 390 basis points of margin expansion as pricing takes hold, this represents the highest adjusted operating margin in 2.5 years and the highest Q3 since 2021.

在支付獸醫發票成本、變動費用和固定費用後，我們計算調整後的營業收入。我們的訂閱業務調整後營業收入為 3,080 萬美元。比去年增長了66%。訂閱調整後營業利益率為訂閱收入的 14%。這高於前一年的 10.1%，隨著定價的確立，利潤率擴大了約 390 個基點，這是 2.5 年來的最高調整後營業利潤率，也是自 2021 年以來第三季的最高水準。

Now, I'll turn to our other business segment which is comprised of revenue from other products and services that generally have A to B component and a lower margin profile than our subscription business. Our other business revenue was $108.5 million for the quarter, an increase of 5% year over year. The decelerating growth within the segment is expected as one of our partners pets best continues to enroll pets with their new underwriter adjusted operating income for this segment was $1.8 million a decrease of 65% from last year driven by lower gross margin and higher fixed expenses.

現在，我將轉向我們的其他業務部門，該部門由其他產品和服務的收入組成，這些產品和服務通常具有 A 到 B 組成部分，利潤率低於我們的訂閱業務。本季我們的其他業務收入為 1.085 億美元，年增 5%。預計該細分市場的成長將放緩，因為我們的合作夥伴Pets Best 繼續招募寵物，其新承銷商調整後的該細分市場營業收入為180 萬美元，較去年下降65%，原因是毛利率較低和固定費用較高。

The lower gross margin is consistent with our revised agreement with pets best, which has lower capital requirements and a different margin profile in total adjusted operating income was $32.6 million in Q3 up 37% from Q3 last year and ahead of our expectations. In Q3 our higher margin subscription business comprised approximately 94% of our adjusted operating income.

較低的毛利率與我們與pets best 修訂後的協議一致，該協議的資本要求較低，且利潤率狀況不同，第三季度調整後營業收入總額為3260 萬美元，比去年第三季度增長37 %，超出了我們的預期。第三季度，我們的高利潤認購業務約佔調整後營業收入的 94%。

This is up from 84% for the full year in 2023 as Margi mentioned earlier, we acquired approximately 65,800 new subscription pets in the quarter and deployed $16.8 million to do so excluding the approximate 3,700 new European pets that are underwritten by a third party. This translated into an average pet acquisition cost of $243 per pet in the quarter up from $212 in the prior year period.

正如Margi 先前提到的，這一數字高於2023 年全年的84%，我們在本季度購買了約65,800 只新訂閱寵物，並為此部署了1,680 萬美元，不包括由第三方承保的約3,700 隻新歐洲寵物。這意味著本季每隻寵物的平均寵物採購成本為 243 美元，高於去年同期的 212 美元。

The estimated internal rates of return on this spend was 36% in the quarter in line with our targets of 30% to 40%. We also invested $1.5 million in the quarter in development costs. Stock based compensation expense was $8.1 million during the quarter. We reported net income for the quarter of $1.4 million or 3¢ per basic and diluted share compared to a net loss of $4 million or 10¢ per basic and diluted share in the prior year period.

本季這筆支出的估計內部報酬率為 36%，符合我們 30% 至 40% 的目標。本季我們也投資了 150 萬美元的開發成本。本季的股票補償費用為 810 萬美元。我們報告本季淨利潤為 140 萬美元，即每股基本股和稀釋股 3 美分，而去年同期淨虧損為 400 萬美元，即每股基本股和稀釋股 10 美分。

This represents a year over year improvement of $5.5 million in terms of cash flow operating cash flow was $15.3 million in the quarter compared to $11.4 million in the prior year period. Capital expenditures totaled $1.9million down from $4.4 million in Q3 last year. As a result, free cash flow was $13.4 million a $6.4 million improvement from the prior year's third quarter on our third quarter 2023 earnings call we introduced an annual free cash flow target at 2.5% of revenue.

這意味著現金流量年增了 550 萬美元，本季營運現金流量為 1,530 萬美元，而去年同期為 1,140 萬美元。資本支出總額為 190 萬美元，低於去年第三季的 440 萬美元。結果，自由現金流為 1,340 萬美元，比去年第三季提高了 640 萬美元，在 2023 年第三季財報電話會議上，我們提出了佔收入 2.5% 的年度自由現金流目標。

I am pleased to report that we are making fantastic progress towards this goal and have now generated $30million of free cash flow over the last four quarters. This represents an improvement of $48 million over the prior four quarters.

我很高興地向大家報告，我們在實現這一目標方面取得了巨大進展，在過去四個季度中已經產生了 3000 萬美元的自由現金流。這比前四個季度增加了 4800 萬美元。

Turning to the balance sheet, we ended the quarter with $293.1 million in cash and short term investments outside of our insurance entities, we held $36.4 million in cash and short term investments with an additional $15 million available under our credit facility.

轉向資產負債表，本季結束時，我們在保險實體之外擁有2.931 億美元的現金和短期投資，我們持有3,640 萬美元的現金和短期投資，另外還有1,500 萬美元的信貸額度可供使用。

At the end of the quarter, we maintained $274.6 million of capital surplus at our insurance subsidiaries which was $139.9 million more than the estimated risk based capital requirement of $134.7 million excess capital has increased by $75.8 million year-to-date due to the NIC changes that Margi spoke about the retained earnings in our insurance companies and the slowing growth in our other business.

截至本季末，我們的保險子公司維持了2.746 億美元的資本盈餘，比預計的基於風險的資本要求1.347 億美元多了1.399 億美元，由於NIC 的變化，今年迄今為止，超額資本增加了7580萬美元瑪吉談到了我們保險公司的留存收益和我們其他業務的成長放緩。

I'll now turn to our outlook we are increasing our full year revenue guidance which is now expected to be in the range of $1.281 billion to $1.286 billion, representing 16% growth at the midpoint. We are narrowing the range for subscription revenue which is now expected to be between $856 million and $858 million. The midpoint of the range is increasing and represents 20% growth year over year.

現在我將談談我們的展望，我們正在提高全年收入指導，目前預計在 12.81 億美元至 12.86 億美元之間，中間值增長 16%。我們正在縮小訂閱收入的範圍，目前預計在 8.56 億美元至 8.58 億美元之間。該範圍的中點正在增加，年增 20%。

We are also increasing our adjusted operating income guidance to take into account our over performance in the third quarter. Our total adjusted operating income for the full year is now expected to be between $114 million and $117 million. This raises the midpoint of the range representing 38% year over year growth for the fourth quarter of 2024.

考慮到我們第三季的超額業績，我們也提高了調整後的營業收入指引。目前，我們全年調整後營業收入總額預計在 1.14 億美元至 1.17 億美元之間。這提高了該範圍的中點，即 2024 年第四季同比增長 38%。

Total revenues are expected to be in the range of $333 million to $338 million. Representing 13% year over year growth at the midpoint. Subscription revenue is expected to be in the range of $227 million to $229 million or 19% year rear growth at the midpoint total adjusted operating income is expected to be in the range of $35 million to $38 million.

總收入預計在 3.33 億美元至 3.38 億美元之間。中間值年增 13%。訂閱收入預計在 2.27 億美元至 2.29 億美元之間，年增長率為 19%，調整後總營業收入預計在 3,500 萬美元至 3,800 萬美元之間。

We continue to target a 15% subscription adjusted operating margin for Q4. As a reminder, our revenue projections are subject to conversion rate, movements predominantly between the US and Canadian currencies for the fourth quarter of 2024 we used a 74% conversion rate in our projections which was the approximate rate at the end of September. With that, I'll hand it back to Margi

我們繼續將第四季的認購調整後營運利潤率目標定為 15%。提醒一下，我們的營收預測受匯率影響，2024 年第四季主要是美元和加拿大貨幣之間的波動，我們在預測中使用了 74% 的匯率，這是 9 月底的近似匯率。有了這個，我會把它還給瑪姬

Thank you for Fawwad. Before we move to questions, we would like to thank the investors and analysts that made the trip over to Seattle to join us at our investor day in September. It was a valuable opportunity for us to hear about the key risks and questions to the top of mind for investors. We hope you found the occasion to hear from our team. Equally valuable with that. We'll open it up for questions.

謝謝你的福瓦德。在開始提問之前，我們要感謝專程前往西雅圖參加 9 月投資人日活動的投資人和分析師。對我們來說，這是一個寶貴的機會，可以了解投資者最關心的主要風險和問題。我們希望您有機會聽取我們團隊的意見。與此同樣有價值。我們將打開它供提問。

Thank you. We will now begin the question and answer session to ask a question.

謝謝。我們現在開始問答環節來提問。

(Operator instructions)

（操作員說明）

Maria Ripps, Canaccord Genuity.

瑪麗亞·里普斯，Canaccord Genuity。

Great. Thank you so much for taking my questions first. So I know you're not providing 2025 guidance at this point but what are some key considerations as we sort of think about adjusted uprate income margin for next year, given sort of better than expected trends here in the near term and if inflation sort of remains consistent or maybe even decelerate a little bit from here, could we see sort of subscription adjusted to our margin, sort of exceed your 15% target?

偉大的。非常感謝您先回答我的問題。因此，我知道您目前並未提供 2025 年的指導，但考慮到近期的趨勢好於預期，並且如果通膨率在保持一致，甚至可能從這裡開始稍微減速，我們是否可以看到某種訂閱根據我們的利潤進行調整，有點超過您15% 的目標？

Yeah, this is what I can take the question. Thanks for asking. Yeah, a couple of things just in terms of the way we are thinking about 2025. So of course, we are going through the process of planning 2025. Now, that will end as we close out the year and then we will provide the formal guidance and in our Q4 call.

是的，這就是我可以回答的問題。謝謝你的詢問。是的，有幾件事是我們對 2025 年的看法。當然，我們正在經歷 2025 年規劃的過程。現在，這將在我們結束今年時結束，然後我們將在第四季度的電話會議中提供正式的指導。

I think a couple of things that we are looking at that are macro factors of course given that pricing has led from a source of revenue perspective, majority of our revenue growth this year pricing and seeing the retention maintain and stabilize that is going to be an important factor and then obviously from an expense management perspective, we have done a very good job.

我認為我們正在考慮的一些事情當然是宏觀因素，因為定價是從收入來​​源的角度來看的，今年我們大部分收入增長的定價以及保留率的維持和穩定將是一個重要因素，顯然從費用管理的角度來看，我們做得非常好。

This quarter in particular, we came in very close to what we had expected from a fixed and variable expense perspective. So you know maintaining the discipline around that are also going to be factors and then of course there is things that are outside of our control. The largest being inflation.

特別是本季度，我們從固定和可變費用的角度來看非常接近我們的預期。所以你知道，維持紀律也是因素之一，當然有些事情是我們無法控制的。最大的是通貨膨脹。

Got it. That's very helpful and then a quick follow up. So I if you continue to ramp your pad acquisition, what portion of the incremental spend sort of it should be allocated to sort of onboarding more territory partners versus digital or any other channels and then are there any sort of channels or geographies that you are leaning into more aggressively than you have done in the past?

知道了。這非常有幫助，然後是快速跟進。因此，如果您繼續增加您的 pad 採購，那麼增量支出的哪一部分應該分配給更多地區合作夥伴而不是數位或任何其他管道，然後您是否傾向於任何類型的管道或地區比過去更加積極主動？

Yeah. Hi, Maria. So when we think about the increase in our pet acquisition dollars, we will be really focused largely on the conversion element of what we are doing. So we have been generating some really nice lead volume from the vet channel and other channels that have worked within our ecosystem for some time.

是的。嗨，瑪麗亞。因此，當我們考慮寵物收購資金的增加時，我們將真正主要關注我們正在做的事情的轉換元素。因此，我們已經從獸醫渠道和在我們的生態系統中運行了一段時間的其他渠道產生了一些非常好的潛在客戶量。

Territory partners, we have a very big group of territory partners. I think it is a record size that we have today. So not looking to expand that group of individuals, but we will be looking at deploying a lot more from a digital perspective and looking to help drive education in terms of why Trupanion, why insurance and helping to inform people as they make that conscious decision and any channels we are going to lead into from a differently to historical activity, not really.

地域合作夥伴，我們有一個非常大的地域合作夥伴群體。我認為這是我們今天所擁有的創紀錄的規模。因此，我們不打算擴大這一人群，但我們將考慮從數位角度進行更多部署，並尋求幫助推動教育，讓人們了解為什麼選擇Trupanion、為什麼選擇保險，並幫助人們在做出有意識的決定時獲得訊息，我們要從不同於歷史活動的任何管道中引入任何管道，實際上並非如此。

And we will just incrementally start pushing but from a lead perspective a conversion point of view and then looking at that first year as well. So across the board, those pen acquisition dollars will start to build up in a number of different areas as we look to expand that pet camp.

我們將逐步開始推動，但從領先的角度來看，轉換的觀點，然後也看看第一年。因此，總的來說，隨著我們尋求擴大寵物陣營，這些筆收購資金將開始在許多不同領域累積。

John Barnidge, Piper Sandler.

約翰·巴尼奇，派珀·桑德勒。

Good afternoon, thank you for the opportunity. Could you maybe walk us through some of these capital relief from NIC changes in pet insurance? And what your expectation is to that impact. You talked about factors being changed for next year and has the growth penalty been removed? Trying to understand that a bit better? Thank you.

下午好，謝謝你給我這個機會。您能否向我們介紹一下 NIC 寵物保險變化帶來的一些資本減免？以及您對這種影響的期望是什麼。您談到明年的因素會發生變化，成長懲罰是否已被取消？試圖更好地理解這一點？謝謝。

Yeah, I can take that. Thanks for the question. So a couple of things we talked in our last quarter call about the NIC factor changes and just the overall increase in our excess relatively required the required level. So we began the year $64 million over capitalized relative to that requirement and we are now just share of $140 million $139.9 million was a reported number.

是的，我可以接受。謝謝你的提問。因此，我們在上個季度的電話會議中討論了有關 NIC 因素變化的一些事情，以及我們超額的整體成長相對需要達到所需的水平。因此，今年年初我們的資本相對於這項要求多出了 6,400 萬美元，而現在我們只佔了 1.4 億美元的份額，報告數字為 1.399 億美元。

So we effectively doubled relative to the requirement. I spoke about it last quarter in terms of contributions. The NAIC factor change has been the most significant driver along with the decline in the growth rate of pets best.

因此，我們相對於要求實際上增加了一倍。我上個季度談到了貢獻。隨著寵物成長率的下降，NAIC 因素的變化是最重要的驅動因素。

If you think about sort of proportional contribution the change in the requirements, think of that as a little more than half and then the remaining part a little less than a half is the retained profit, as we continue to grow the business per the requirements of our MG agreement we contribute and so it's a combination of those two I think I can speak specifically to the factor changes to give a little bit of context on those.

如果您考慮需求變化的比例貢獻，可以將其視為略多於一半，然後剩餘部分略小於一半是留存利潤，因為我們繼續根據需求增長業務我們貢獻了我們的MG 協議，所以它是這兩者的結合，我想我可以具體談論因素變化，以提供一些背景資訊。

So there are more impactful changes related to if you look at the specific guidelines their lines, both four and line eight, these are updates that don't occur every year. These were more infrequent, there are annual changes that happen and that's noted on line one.

因此，如果您查看第四行和第八行的具體指南，您會發現更多有影響力的變化，這些更新並不是每年都會發生。這些情況較為罕見，每年都會發生變化，第一行已註明。

So if you look at the disclosure and then sort of the specific documentation around it that hopefully gives you a little more illumination in terms of the change. It's the line four and the line eight changes again, those don't happen regularly. Those were the biggest contributors to the reduction in the requirement.

因此，如果您查看披露內容，然後對其周圍的具體文件進行排序，希望能為您提供有關更改的更多說明。四號線和八號線又變了，這些不定期發生。這些是需求減少的最大貢獻者。

Thank you for that, and then my follow up question, is there any update on the material we can from the early in the year? And are you able to size the remediation cost in the quarter for that? Thank you.

謝謝您，然後我的後續問題是，我們從今年年初開始獲得的材料是否有任何更新？您能否估算本季的補救成本？謝謝。

Yeah, there's a couple of things I can say about that now that we have progressed through the year. You know as a reminder to everyone as part of the 2023 annual audit, we did have a finding of two material weaknesses auditors provide two opinions. They provide one on controls and one on financials. In our case, the issues were on the control side.

是的，既然我們已經在這一年中取得了進展，我可以說幾件事。您知道，作為 2023 年年度審計的一部分，我們確實發現了兩個重大缺陷，審計人員提供了兩種意見。他們提供了一份關於控制的資訊和一份關於財務的資訊。在我們的案例中，問題出在控制方面。

As we've spoken about, we've taken this extremely seriously. It's remained a top priority throughout the year. You see the increase in fixed expense both year over year and looking back over the last two quarters, that's been investments we've made to enhance our controls regimen and obviously proceed with the remediation process.

正如我們所說，我們非常重視這一點。這仍然是全年的首要任務。您將看到固定費用逐年增加，回顧過去兩個季度，這是我們為加強控制方案而進行的投資，並且顯然正在繼續進行補救過程。

We brought PWC and also to help advise. When you think about this process we're going through, there are really three phases. The first is you define the scope. I try to determine what systems are in scope and what systems are out of scope. The second is to actually design those controls and then the third, which is the phase we are in right now is to operate those controls and depending on the type of control, they have to be in place for a period of time.

我們帶來了普華永道，也來幫忙提供建議。當你思考我們正在經歷的這個過程時，你會發現其實分成三個階段。首先是定義範圍。我嘗試確定哪些系統在範圍內以及哪些系統超出範圍。第二個是實際設計這些控件，然後第三個階段，即我們現在所處的階段，是操作這些控件，並且根據控件的類型，它們必須放置一段時間。

In some cases, they have to operate successfully for months. In some cases, they, their quarterly controls. We are in that third phase. I would say our scoping and design phases, those are largely complete and you know we expect to receive the UY audit opinion sometime in February commensurate with the filing of our 10-K. The only other thing I would say is longer term and I have spoken about it before.

在某些情況下，他們必須成功運作數月。在某些情況下，他們進行季度控制。我們正處於第三階段。我想說的是，我們的範圍界定和設計階段已經基本完成，您知道我們預計會在 2 月的某個時候收到與我們 10-K 提交相稱的 UY 審計意見。我要說的唯一一件事是長期的，我之前已經談過這一點。

I think it's important to emphasize that we look at this not just as an investment in the remediation of these issues but actually an investment in building an infrastructure of controls that will position the company to be able to grow what we hope is the next billion of revenue and so on an ongoing basis.

我認為有必要強調的是，我們不僅將其視為對修復這些問題的投資，而且實際上是對構建控制基礎設施的投資，該基礎設施將使公司能夠實現我們希望的下一個十億美元的增長。

This is going to be something that we are going to maintain fixed expenses have been elevated as a result of that and I think one of the things that is good about or remarkable about the model PNL is because we set budgets as a percent of revenue, fixed expense of 5%. It gives us an opportunity to grow into that expense base and so we will be looking to do that over the coming year.

這將是我們將維持固定支出因此而增加的事情，我認為損益模型的優點之一是因為我們將預算設定為收入的百分比，固定費用為5%。它為我們提供了擴大支出基礎的機會，因此我們將在來年尋求這樣做。

Brandon Vazquez, William Blair.

布蘭登·巴斯克斯，威廉·布萊爾。

Hi, Thanks for taking the question. I wanted to follow up on maybe the 2025 question but I will ask it a little bit differently given now that a lot of some of your important operating metrics are stabilized some of them improving like profitability you can kind of start to turn the wheels back on and the growth algorithm here.

您好，感謝您提出問題。我想跟進 2025 年的問題，但考慮到現在您的許多重要營運指標已經穩定，其中一些指標正在改善，例如盈利能力，您可以開始重新啟動，因此我會提出稍微不同的問題以及這裡的增長演算法.

So the question being, can you talk to us a little bit more about the sequential cadence of when you start to spend some of that money? Where do we see it in the P&L? And how long does it take to start seeing some of that impacting the P&L over the coming quarters and into 25?

所以問題是，你能和我們多談談你什麼時候開始花一些錢的順序節奏嗎？我們在損益表中哪裡可以看到它？需要多長時間才能開始看到這些因素對未來 25 個季度的損益表產生影響？

Yeah. Hi Brandon. So thanks for the question. As we are excited this past quarter. It's the first quarter and six, we have been able to increase our pet acquisition spend as a margin has bounced back out from compression and really pleased to be in a position now to start accelerating that pet count to your point.

是的。嗨布蘭登。謝謝你的提問。因為我們對上個季度感到興奮。這是第一季和第六季度，我們已經能夠增加我們的寵物收購支出，因為利潤率已從壓縮中反彈，並且非常高興現在能夠開始加速寵物數量達到您的水平。

What we would expect to see is a little bit of time for that incremental pack investment to start to drive the market both from an education perspective, but also not forgetting the overall lead generation and the first year attention we turned down our spend. If we look back at the historical performance, we turned down our spend for the first time in Q1 of 2023 it took us four quarters before that spend really started to lose its efficacy in the market.

我們期望看到的是，增量包投資需要一點時間來開始從教育角度推動市場，但也不要忘記整體領先一代和我們拒絕支出的第一年關注。如果我們回顧歷史表現，我們在 2023 年第一季首次減少了支出，我們花了四個季度的時間才真正開始在市場上失去效力。

We would expect to see a similar build back up again in terms of the delay from the initial tax spend and then helping to really kind of move the funnel and so I would expect in time to see that pet count start to build nicely as we have more investment in the market. The great news is we have the tailwind of the ARPU today.

我們預計在最初的稅收支出延遲方面會再次看到類似的增長，然後有助於真正推動漏斗，因此我預計寵物數量會像我們現在一樣開始良好地增長更多的市場投資。好消息是我們今天的 ARPU 有所提升。

We have the loss ratio right where it needs to be in terms of that 71%. So we are now moving into a period where those adjusted operating income dollars are greater, it allows us to deploy more to invest. We will do so very diligently as we have addressed before within our guardrails. And with our 2.5% free cash flow target of revenue as well. So overall, I think it's going to take us a little bit of time, but I would fully expect higher pet count in the in 2025 as we increase those dollars over time.

我們的損失率正好達到 71%。因此，我們現在正進入一個調整後的營業收入更高的時期，這使我們能夠部署更多的投資。我們將非常勤奮地這樣做，正如我們之前在我們的護欄內所解決的那樣。我們還有 2.5% 的自由現金流收入目標。因此，總的來說，我認為這將花費我們一點時間，但我完全預計 2025 年寵物數量會更高，因為我們會隨著時間的推移增加這些資金。

Okay, great. Thank you. And then maybe as my follow up Margi, you had made a comment about I think it was the month of July was trending a little bit lower or more favorable to you guys in terms of that inflation. So just curious if you could talk a little bit of what are you seeing in the markets right now is kind of an interesting comment that things were a little lower and then they rebounded and then also just to follow up on that is like did that impact the P&L for either a good guy or a bad guy in the quarter that we should just keep in mind? Thank you.

好的，太好了。謝謝。然後，也許作為我的後續 Margi，您發表了評論，我認為 7 月的通膨趨勢有點低或更有利。因此，我很好奇，您是否可以談談您現在在市場上看到的情況，這是一個有趣的評論，即價格稍低，然後反彈，然後也只是跟進，就像這種影響一樣我們應該記住的季度中好人或壞人的損益表？謝謝。

Yeah, sure. So in July, as I did mention, as you are right, Brandon, that we did see a different cadence in terms of our invoices, our cost of care that didn't maintain at a lower level for August and September, which netted out being slightly lower than our 15% for the full quarter. We haven't seen enough data to suggest that we should be adjusting our assumption when it comes to inflation and so we're still seeing a 15% as we cruise into 20 into Q4.

是的，當然。因此，正如我在7 月提到的那樣，布蘭登，你是對的，我們確實在發票方面看到了不同的節奏，我們的護理成本在8 月和9 月並沒有維持在較低水平，這抵消了略低於我們整個季度的 15%。我們還沒有看到足夠的數據表明我們應該在通膨方面調整我們的假設，因此當我們進入第四季度的 20 月時，我們仍然看到 15% 的通膨率。

Largely anticipate that is because of the problem that Trupanion's product solves that people are going into the hospitals and they are using, they are not waiting for their pet to be seen. So it's what we would expect and one of the audience we are working with I think in terms of the impact in the P&L quarter that naturally leads into the loss ratio we hit that 71 that was ahead of expectations, which is good and we would expect as we go into the back half of the year with got some nice a flow through.

很大程度上預計這是因為 Trupanion 的產品解決了人們進入醫院並使用的問題，他們不是在等待他們的寵物被看到。因此，這是我們所期望的，也是我們正在合作的受眾之一，我認為就損益季度的影響而言，自然會導致損失率達到71，超出了預期，這是很好的，也是我們所期望的當我們進入下半年時，我們會經歷一些美好的事情。

We have seen as we said, we would that build up of the offer growth at record levels. So given that is still flowing through and into Q4, then we feel very good about the rest of this quarter.

正如我們所說，我們希望報價成長能夠達到創紀錄的水平。因此，考慮到這一情況仍在流經並進入第四季度，我們對本季度剩餘時間感覺非常好。

Josh Shanker, Bank of America.

喬許‧尚克，美國銀行。

Yeah, Thank you for taking my call. Good afternoon to everyone.

是的，謝謝你接我的電話。大家下午好。

I want to talk about our retention a little bit and, sometimes give us some detail about retention by cohort. I'm wondering if the percentage of Trupanion customers who are receiving a 20% or greater increase has gone up from where it went a year ago and if you can talk to your projections about when you think the retention should bottom and begin to go the other.

我想稍微談談我們的留存狀況，有時會給我們一些關於群組留存的細節。我想知道獲得 20% 或更高增幅的 Trupanion 客戶比例是否比一年前有所上升，以及您是否可以談談您的預測，了解您認為保留率何時會觸底並開始下降其他。

Yeah. Hi Josh. Ultimately, you know we are quite pleased with the retention performance and to your point, we have always looked at the cohorts for attention in three different buckets to really help us articulate the message at that point in time for our member with such a high rate flow coming through frankly, at unprecedented levels we would have expected to shift down and we have seen that for sure through the course of these rate increases.

是的。嗨喬許。最終，您知道我們對保留表現非常滿意，並且就您的觀點而言，我們一直在三個不同的桶中關注群組的關注，以真正幫助我們在那個時間點以如此高的比率向我們的會員闡明資訊坦率地說，我們預計流量將以前所未有的水平下降，並且透過這些利率上漲的過程，我們肯定看到了這一點。

Though just to sort of put it in perspective we have added around $10 million in revenue from those rates that we have gained back over the past four quarters which has offset the $2 million or so that we would otherwise have retained, have we not pushed those rates through? But ultimately as a cost plus model, we need to make sure we are pricing appropriately.

儘管從長遠來看，我們從過去四個季度獲得的費率中增加了約 1000 萬美元的收入，這抵消了我們本應保留的 200 萬美元左右，但我們是否沒有推動這些收入率通過？但最終作為成本加成模型，我們需要確保定價適當。

I think in terms of the number of people in that bucket, there is around 50% of our members that have had a 20% plus increase and to put that into perspective for you in 2022 that number was 7.6% of our book. So massive shift in people getting that higher rate increase and for many of them, it's been a compounding increase.

我認為，就該類別的人數而言，我們大約有 50% 的會員增加了 20% 以上，到 2022 年，這個數字占我們帳簿的 7.6%。人們獲得了更高的利率增幅，發生瞭如此巨大的轉變，對他們中的許多人來說，這是一個複合增長。

So I say as we look towards the tail end of this quarter and into Q1 of 2025 that number in that upper bucket is starting to reduce which would give me confidence that as we move back into what is more of a traditional renewal cycle of under 20% increase we would see our retention rate improve with that and you know, we have been through a lot over the last couple of years, the members are stuck with us.

所以我說，當我們展望本季末和 2025 年第一季時，上層的數量開始減少，這讓我有信心，當我們回到 20 以下的傳統更新周期時% 的增長，我們會看到我們的保留率隨之提高，你知道，過去幾年我們經歷了很多，會員們都和我們在一起了。

I think it's testament to the value that we create for them when we provide them and you know, as the average size increase drops to say 15% versus 25% I would expect retention to improve with it.

我認為這證明了我們在提供這些產品時為他們創造的價值，而且你知道，隨著平均規模增加下降到 15% 與 25%，我預計保留率會隨之提高。

And I'm not trying to force you to give me a number. But from what I said, it seemed to be you are saying that about 50% saw the 20% rate increase this quarter, that would be marginally less in four Quarter and then one Quarter after we might be here at the peak of the most amount of people getting the biggest increase.

我並不是想強迫你給我一個電話號碼。但從我所說的來看，你似乎是在說，本季度大約有50% 的人看到了20% 的利率增長，在我們可能達到最高金額的峰值之後的第四季度和下一個季度，這一數字會略有減少。

That's absolutely right. Yeah.

這是絕對正確的。是的。

Okay, Thank you. That's very good clarifying. Appreciate it.

好的，謝謝。這是非常好的澄清。欣賞它。

Thank you.

謝謝。

Jon Block, Stifel Financial Corp.

喬恩‧布洛克 (Jon Block)，Stifel 金融公司

Great. Thanks guys. Good afternoon. Maybe I'll start, I think it was the other North American products at 6,400 gross ads. In the slides it still shows not at scale yet. Margi maybe you can just help what is the variable to help you with the returns? I think the retention rate there is 95% and change. So is it that is got to get 97, 98 the packs158. Does that need to go down to 125 or 130? You know, what's the key there to sort of help you get those suite of products off the returns and to sort of the 30% to 40% [IR] guard rails and if you are willing to tell us the timing behind obtaining that would, that would be great and then I will have a follow up.

偉大的。謝謝你們。午安.也許我會開始，我認為這是廣告總額為 6,400 個的其他北美產品。在幻燈片中，它仍然沒有按比例顯示。Margi 也許你可以幫忙，什麼變數可以幫助你獲得回報？我認為那裡的保留率是95%並且有變化。那麼就是要得到97、98包158。是否需要降至 125 或 130？你知道，幫助你從退貨中獲得這些產品套件並獲得 30% 到 40% [IR] 護欄的關鍵是什麼，如果你願意告訴我們獲得這一目標的時間，那太好了，然後我將進行跟進。

Yeah. Sure. Hi Jon. So when we think about the, the, the other North American subscription products, you hit the nail on the head. First of all, we have got to make sure that we have got the retention rate. We deliberately kept anchoring back that pack investment. So we could actually see how good is that member experience. It's obviously very different for all of those different products than the core Trupanion product.

是的。當然。嗨喬恩。因此，當我們想到其他北美訂閱產品時，您一語中的。首先，我們必須確保我們有保留率。我們故意繼續錨定該包投資。所以我們實際上可以看到會員體驗有多好。對於所有這些不同的產品來說，它顯然與核心 Trupanion 產品有很大不同。

So really learning how to build on a retention rate that doesn't lean into the vet channel and necessarily high use of that product. Similarly, as we look at pet acquisition, this is a different, each of them are different channels, the different distribution outlets for us. So leaning into how do we acquire those pets sufficiently, how do we do what many of our competitors do in the direct consumer space efficiently?

因此，真正學習如何建立不依賴獸醫管道的保留率以及對該產品的高使用率。同樣，當我們看寵物的收購時，這是不同的，每個人都有不同的管道，對我們來說有不同的分銷管道。那麼，我們如何才能充分地獲得這些寵物，我們如何有效地做許多競爭對手在直接消費領域所做的事情？

So we are still learning how to do it. I will tell you though as we have seen margin compression, we have really pulled back our spend in those areas as you can see so much less spend in 20 in Q3 than we had say a year ago and these products is we are really looking at taking that the margin that we have and reinvesting it where we get the highest rates of return, which today is in our core Trupanion products.

所以我們仍在學習如何做。我會告訴你，儘管我們看到了利潤壓縮，但我們確實縮減了在這些領域的支出，因為你可以看到第三季度20 的支出比我們一年前所說的要少得多，而這些產品是我們真正關注的利用我們擁有的利潤並將其重新投資到我們獲得最高回報率的地方，這就是我們今天的核心 Trupanion 產品。

So taking a little bit longer because of the margin compression to really kind of pull those levers from a growth perspective. With the other products that being said, it gives us options and choices and we are making some nice progress, but I don't anticipate seeing them ramp up in the next quarter or two as we really get to grips with the quarter planning growth instead.

因此，由於利潤壓縮，需要更長的時間才能真正從成長的角度拉動這些槓桿。說到其他產品，它為我們提供了選擇和選擇，我們正在取得一些不錯的進展，但我預計它們不會在下一兩個季度出現成長，因為我們真正開始應對季度規劃成長。

Got it. That was very helpful, Thank you. And then just the second question, the quarter, I guess it just depends on how you look at gross ads. But I have got your gross ads down modestly and that was down off a mid single digit comp. I think it's one of the first times you were down off a negative comp and I get it, you know, you guys have been somewhat more passive and you wanted to wait until the pricing was back before hitting the gas, but now the [MR] back, right? It's intact.

知道了。這非常有幫助，謝謝。然後是第二個問題，季度，我想這取決於你如何看待總廣告。但我已經適度降低了你們的廣告總收入，而且比中個位數下降了。我認為這是你們第一次因為負面補償而感到沮喪，我明白了，你們知道，你們有些更加被動，你們想等到價格恢復後再加油，但現在 [MR ] 回來了，對嗎？它完好無損。

So how do you think you fared versus market maybe over the past? I don't know 6 to12 months and more importantly, the question I get is why would it take 12 months for you to ramp back up? It seems like you are buying yourself a little bit of time and saying don't expect a whole lot.

那麼您認為過去與市場相比您的表現如何？我不知道 6 到 12 個月，更重要的是，我得到的問題是為什麼你需要 12 個月才能恢復？看起來你在為自己爭取一點時間，卻又說不要期待太多。

I mean, are you even insinuating late '25? You know you got the MLR back at 71 your capital requirements under are not under address. Why would it take almost a year until we start to see that? Really work its way through the gross ad number? Thank you.

我是說，你是在暗示 25 年底了嗎？您知道您在 71 時獲得了 MLR，您的資本要求未解決。為什麼我們要花近一年的時間才能看到這一點？真的能透過總廣告數量達成目標嗎？謝謝。

Yeah, so and this is the first quarter we have seen our pet acquisition spend grow after six quarters of it being flat or down frankly year over year. So it is the first time we have really kind of pushed more aggressively into pet acceleration. I will say that typically is a team that is has historically been focused on growth. When you pivot that team from being in a pretty much a defensive position to an offensive position, you are going to start to see some changes in how they deploy incremental pack dollars.

是的，這是我們看到我們的寵物收購支出在連續六個季度同比持平或下降之後出現增長的第一季。所以這是我們第一次真正更積極地推動寵物加速。我想說的是，這通常是一個歷來專注於成長的團隊。當你將球隊從防守位置轉向進攻位置時，你將開始看到他們如何部署增量包資金的一些變化。

So I will tell you that execution is as a challenge for any business and I think when you are growing quickly, making sure we are leaning into how do you take those incremental pack dollars and invest them wisely, invest them in the right areas at the right time. This is the first quarter, I'm really pleased that we are in a position now to take that as a tailwind and start to push in with more adjusted operating income spend.

所以我會告訴你，執行力對任何企業來說都是一個挑戰，我認為當你快速成長時，確保我們正在研究如何利用這些增量資金並明智地投資它們，將它們投資在正確的領域正確的時間。這是第一季度，我真的很高興我們現在能夠將其視為順風，並開始推動更多調整後的營業收入支出。

We to your point, we have a lot of runway ahead of us with both our capital and the adjusted operating income that we are generating, we will start to be more aggressive. I don't know if it will take a full year but the example I gave a little earlier is when we think about how long it took for that pack spend to really decelerate.

就你的觀點而言，憑藉我們的資本和我們產生的調整後的營業收入，我們還有很長的路要走，我們將開始更加積極進取。我不知道這是否需要一整年的時間，但我之前舉的例子是當我們考慮該包支出需要多長時間才能真正減速時。

There is an expectation, it will take a little bit of time for it to accelerate as we put the foot on the gas there. So we are definitely deploying more. We will continue to be more aggressive with that pack spend the first quarter in we were being incredibly measured with how we were deploying and where we were deploying, making sure we can understand what the impact of those incremental dollars are.

我們預計，當我們踩下油門時，它需要一點時間才能加速。所以我們肯定會部署更多。我們將在第一季繼續更積極地進行該包支出，因為我們對部署方式和部署位置進行了令人難以置信的衡量，以確保我們能夠了解這些增量資金的影響。

And as we go into the rest of this year and into 2025 we expect that number to get bigger in terms of an acquisition spend because we can and. With that, I'll anticipate the pet count to come.

隨著今年剩餘時間和 2025 年的到來，我們預計收購支出的數字會更大，因為我們可以做到。有了這個，我就會預期寵物的數量。

Katie Sakys, Autonomous Research

凱蒂·薩克斯（Katie Sakys），自主研究

Hi. Thank you. Good afternoon. I guess I wanted to circle back first to the timing on growth and maybe I will ask it a little bit differently and I think at the September Investor Day, Margi you had mentioned expectations to see the total pets enrolled number an inflection point at the beginning of 2025 and begin to grow again. So I am just kind of curious, it sounds like maybe that's not exactly the expectation anymore what has changed in the last, month and a half, two months to shift your view there.

你好。謝謝。午安.我想我想先回到成長的時機，也許我會問得有點不同，我認為在九月投資者日，瑪吉你提到了期望看到註冊的寵物總數在一開始是一個拐點2025年並開始再次增長。所以我只是有點好奇，聽起來也許這不再是過去、一個半月、兩個月裡發生的改變的期望，以改變你的觀點。

I would say the view has shifted and perhaps characterization of the September meeting, but definitely for us is we are learning how to redeploy some of the pet spend and just to kind of put that into more context, when we think about what the team has been doing for the last 18 months, they have been adding pets, but not at the pace that Trupanion is typically used to adding pets.

我想說的是，九月會議的觀點和特徵可能已經改變，但對我們來說，絕對是我們正在學習如何重新部署一些寵物支出，並且當我們思考團隊擁有什麼時，將其置於更多背景中在過去 18 個月裡，他們一直在添加寵物，但並沒有按照 Trupanion 通常添加寵物的速度進行。

So they have gone into quite a defensive mode in terms of, you know, how they are operating, how they are thinking about content, and how they are deploying pack dollars. So typically, we would have a combination of investment across the whole gamut of tactics and initiatives across the marketing suite of things. So whether that is display advertising, whether it is above the line, whether it is in person events, you name it.

因此，他們在如何運作、如何考慮內容以及如何部署包資金方面已經進入了相當防禦的模式。因此，通常情況下，我們會對整個行銷策略和舉措進行投資組合。因此，無論是展示廣告，無論是線下廣告，或是現場活動，應有盡有。

We did it as we pulled all of that back, it takes a while to build that brand back up in the market. So what we are learning is the efficacy of the brand in 2023 as we started to peel back and pare down that pack spend, it took a long time for that really to wear down, which is great. That's also off the back of 36% consecutive quarters of increased pet acquisition spend.

當我們把所有這些都撤回時，我們就做到了這一點，需要一段時間才能在市場上重新建立該品牌。因此，我們正在了解的是品牌在 2023 年的功效，當我們開始剝離和削減包裝支出時，花了很長時間才真正磨損，這很棒。這也是寵物購買支出連續幾季增加 36% 的結果。

So when, when you turn that back off, I'm anticipating, it will take some time to go back up. We are going to do it in a measured way and Q3 was the first quarter. We were able to be a little more aggressive with our spending. We hit that 36% IRR I think the team did a very good job of managing that as we see the margin continue and get those results for Q3 where we are very happy with that [71%] that is been a lot of hard work and that [AOI] increase is huge for us.

因此，當你關閉它時，我預計，需要一些時間才能恢復。我們將以謹慎的方式做到這一點，第三季是第一季。我們能夠更加積極地支出。我們達到了36% 的IRR，我認為團隊在管理這一點方面做得非常好，因為我們看到利潤率持續上升，並獲得了第三季的結果，我們對此非常滿意[71%]，這是大量的努力工作， [AOI] 的增加對我們來說是巨大的。

It gives the tailwind to be a little bit more boisterous if you will with our pet acquisition spend in Q4 and also frankly in 2025. So it's not going to happen overnight because we are always deploying within those guardrails and that is not easy. Growth at this level is not, it is not something that you can just flick a switch and get turned on, but definitely from a brand building point of view, I would expect to see the compounding effect of that increased investment pay off into 2025.

如果您願意考慮我們在第四季度以及坦率地說 2025 年的寵物收購支出，那麼它會帶來更強勁的順風。所以這不會在一夜之間發生，因為我們總是在這些護欄內部署，這並不容易。這種水準的成長不是輕按一下開關就能啟動的，但絕對從品牌建立的角度來看，我預計到 2025 年，增加的投資回報將產生複合效應。

Okay. Fair enough and then I guess maybe touching on ARPU, I mean congrats to you guys, it is definitely picked up quite a bit this quarter that 13%. Is that something that we can expect to continue to see going into 2025 as we put numbers into our models?

好的。公平地說，然後我想也許會涉及 ARPU，我的意思是恭喜你們，本季度它肯定會有所回升，達到 13%。當我們將數字放入模型中時，我們可以期望在 2025 年繼續看到這種情況嗎？

Yeah, I think a couple things I could say on that. So as I stated earlier of course pricing has played the biggest role in terms of sources of revenue this year and some of that pricing is going to continue through through next year. I think our expectation is our po accelerates in Q4.

是的，我想對此我可以說幾句話。正如我之前所說，定價在今年的收入來源中發揮了最大的作用，其中一些定價將持續到明年。我認為我們的預期是我們的 PO 在第四季度加速。

And based on kind of the trends and the expectations we see from a forecasting standpoint. So I think you will see more contribution from our po and again not to talk about 2025 in detail, but our expectation would be that both pricing and pet count would be contributors and I feel good that you will get the tailwind from pricing increases, continue to go through provided that we can continue to be disciplined about retention.

基於我們從預測的角度看到的趨勢和期望。因此，我認為您會看到我們的PO 做出更多貢獻，並且不再詳細討論2025 年，但我們的期望是定價和寵物數量都會做出貢獻，我很高興您將從定價上漲中獲得順風，繼續前提是我們能夠繼續嚴格保留人才。

And then there is the potential as Barni talked about of re accelerating investment in growth and we feel good from a financial an overall capitalization standpoint that we have the ability we have the financial where with all to do that. So that is what we are thinking about.

正如巴尼所說，還有重新加速成長投資的潛力，從財務和整體資本的角度來看，我們感覺很好，我們有能力、有足夠的財務能力來做到這一點。這就是我們正在考慮的。

Wilma Jackson Burdis, Raymond James.

威爾瑪·傑克遜·布爾迪斯，雷蒙德·詹姆斯。

Good afternoon, everyone. Were there any one time benefits in the loss ratio in the Quarter in subscription.

大家下午好。本季認購虧損率是否有一次性收益。

Yeah. Hi Wilma. So in Q3, we did see a one-time benefit of about [500,000]. So think of it as 20 basis points of improvement. Just so you have the comparison. So in Q2, I talked about a $2.1 million benefit and that was about 100 basis points of improvement.

是的。嗨威爾瑪。因此，在第三季度，我們確實看到了約[500,000]。因此，可以將其視為 20 個基點的改進。只是為了讓你有比較。因此，在第二季度，我談到了 210 萬美元的收益，大約提高了 100 個基點。

Okay, thank you and then could you just talk a little bit about this core subscription loss ratio came down improved quite a bit quarter over quarter and then the other business moved the opposite direction. I understand the other business is sort of a flat margin, but may be just talk to us a little bit about the pieces there. Thanks.

好的，謝謝你，然後你能簡單談談這個核心訂閱損失率逐季度下降了很多，然後其他業務卻朝著相反的方向發展。我知道其他業務的利潤率很低，但可能只是與我們討論那裡的部分。謝謝。

So obviously, I' will start with the subscription. So, I obviously we have been pleased with the performance in the quarter. We are happy to have achieved the 71%. You know a quarter early, I think the we talked about the over performance is largely tied to performance in July. We saw lower overall frequency and then that trend abated somewhat as we went through the quarter.

顯然，我將從訂閱開始。所以，我顯然對本季的表現感到滿意。我們很高興達到了 71%。你知道提前一個季度，我認為我們談論的超額表現很大程度上與 7 月份的表現有關。我們看到整體頻率較低，然後隨著本季的進行，這種趨勢有所減弱。

So that was the biggest factor in terms of improvement. I think the other piece that we haven't talked about is continuing to drive claims expense processing down. This is something actually the company has been working on over the last couple of years and just driving efficiency there. So that's been a bright spot as well.

所以這是改進的最大因素。我認為我們沒有討論的另一件事是繼續減少索賠費用處理。這實際上是該公司過去幾年一直在努力的事情，只是為了提高效率。所以這也是一個亮點。

Part of that is the benefit of technology. So having completed or largely completed the transition to the vision claims platform that is been a contributor to higher productivity shifting to the other business. Yeah, so the loss ratio did increase, it was 71.2% last quarter went up again to 76.1% Pets best similar to what we have experienced is seeing inflation and putting pricing through.

其中一部分是技術的好處。因此，已經完成或基本上完成了向願景索賠平台的過渡，這有助於將更高的生產力轉移到其他業務。是的，所以損失率確實增加了，上個季度為 71.2%，再次上升至 76.1% Pets，這與我們所經歷的最相似的是看到通貨膨脹並通過定價。

In this case, we had a favorable reserve development in Q2, similar to what I talked about in the subscription business. Of course, for us as you recall are any changes to loss ratio including any impacts of reserving? They don't influence the margin we earn on the business because of course, the agreement is loss sensitive.

在這種情況下，我們在第二季的儲備金發展良好，類似於我在訂閱業務中談到的情況。當然，對我們來說，您記得損失率有什麼變化，包括預留的影響嗎？它們不會影響我們在業務中賺取的利潤，因為當然，協議對損失敏感。

So if loss ratio improves as it did last quarter, they participate in the upside. If loss ratio worsens, they experience the downside from a [AOI] standpoint. I spoke in Q1 when AOM was about 1.6% that we would largely be in that range going forward. So we are 1.6% in Q1, we were 1.7% last quarter. We were again 1.7% this quarter.

因此，如果損失率像上季那樣改善，他們就會參與上漲。如果損失率惡化，從 [AOI] 的角度來看，他們會經歷負面影響。我在第一季談到，當時 AOM 約為 1.6%，未來我們基本上將處於這個範圍內。第一季我們的成長率為 1.6%，上季我們的成長率為 1.7%。本季我們的成長率再次達到 1.7%。

Thank you. This concludes today's question and answer session and today's conference call, we thank you all for attending. Today's present. You may now disconnect your lines have a wonderful evening.

謝謝。今天的問答環節和電話會議到此結束，感謝大家的出席。今天的禮物。現在您可以斷開線路了，祝您度過一個美好的夜晚。