Trupanion Inc (TRUP) 2024 Q4 法說會逐字稿

Good day and welcome to the Trupanion fourth quarter 2024 earnings call. (Operator Instructions).

大家好，歡迎參加 Trupanion 2024 年第四季財報電話會議。（操作員指令）。

Please note this event is being recorded. I would now like to turn the conference over to Gil Melchior, Director of Investor Relations. Please go ahead.

請注意，該事件正在被記錄。現在，我想將會議交給投資者關係總監 Gil Melchior。請繼續。

Good afternoon and welcome to Trupanion's fourth quarter and full year 2024 financial results conference call. Participating on today's call are Margi Tooth, Chief Executive Officer and President, and Fawwad Qureshi, Chief Financial Officer. For ease of reference, we've included a slide presentation to accompanies 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 年第四季和全年財務業績電話會議。參加今天電話會議的有執行長兼總裁 Margi Tooth 和財務長 Fawwad Qureshi。為了方便參考，我們在今天的討論中附上了一份幻燈片演示，該演示將在我們投資者關係網站的季度收益標籤上發布。

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 remediate our material weaknesses. 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 today's earnings release as well as the company's most recent reports, including Form 10-K, 10-Q, and 8-K filed with the Securities and Exchange Commission.

在我們開始之前，請注意，今天的評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補救重大缺陷的能力的聲明。這些聲明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。今天的收益報告以及公司最新的報告（包括向美國證券交易委員會提交的 10-K、10-Q 和 8-K 表格）中詳細討論了這些風險和其他風險和不確定因素。

Today's presentation contains references to non-gap financial measures that Trupanion 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 EBITDA, and free cash flow. When we use the term adjusted operating income or margin, it is intended to refer to a non-gap operating income or margin before new pet acquisition and development expenses. Unless otherwise noted, all margins and expenses will be presented on a non-gap basis and excluding stock-based compensation expense and depreciation expense. These non-gap 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-gap financial measures to the most directly comparable GAAP results, which can be found in today's press release. Lastly, I would like to remind everyone that today's conference call is also available via webcast on Trupanion's Investor Relations website. A replay will also be available on the site.

今天的演示中包含了 Trupanion 用來評估公司業績的非缺口財務指標的參考，包括但不限於：支付獸醫發票的成本、變動費用、固定費用、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。當我們使用「調整後的營業收入或利潤率」一詞時，其目的是指新寵物購買和開發費用之前的非差距營業收入或利潤率。除非另有說明，所有利潤和費用均以非缺口基礎列示，且不包括股票薪酬費用和折舊費用。這些非差距指標是根據美國公認會計準則編制的財務績效指標的補充和替代。鼓勵投資者審查這些非缺口財務指標與最直接可比較的 GAAP 結果的對帳表，可在今天的新聞稿中找到。最後，我想提醒大家，今天的電話會議也可以透過 Trupanion 投資人關係網站上的網路直播觀看。該網站還將提供重播。

I will now hand over the call to Margi.

我現在將電話轉給瑪姬。

Thank you, Gil, and hello everyone.

謝謝你，吉爾，大家好。

2024 is a significant year for Trupanion marked by strong operational and financial execution.

2024 年對 Trupanion 來說是重要的一年，其特點是營運和財務執行力強勁。

We started the year with ambitious goals to repair and expand our margins and fortify our balance sheet while simultaneously continuing to enroll pets with less pack spend. Against these guiding mandates, I'm pleased to report we delivered. Here are some of our 2024 highlights. Subscription revenue grew 20% year over year, and we drove meaningful margin expansion in the subscription business, achieving our industry-leading 71% value proposition for the second consecutive quarter. In the fourth quarter, we achieved the highest quarterly subscription adjusted operating margin in our history, more than doubling our margin from a quarterly low point in early 2023. For the full year of '24, adjusted operating income grew nearly 40% to a record $114 million. We also generated $39 million in free cash flow, an all-time high, with the vast majority of the improvement being driven by higher adjusted operating income.

我們以雄心勃勃的目標開啟了新的一年，即修復和擴大我們的利潤率、鞏固我們的資產負債表，同時繼續以更少的花費招收寵物。根據這些指導性要求，我很高興地報告，我們履行了這些要求。以下是我們 2024 年的一些亮點。訂閱營收年增20％，我們推動訂閱業務的利潤率大幅擴大，連續第二個季度實現行業領先的71％的價值主張。第四季度，我們實現了歷史上最高的季度訂閱調整後營業利潤率，較 2023 年初的季度最低點增長了一倍多。24年全年，調整後的營業收入成長近40%，達到創紀錄的1.14億美元。我們也創造了 3,900 萬美元的自由現金流，創歷史新高，其中絕大部分的成長是由更高的調整後營業收入所推動的。

In our large under penetrated market, our focus is on growing adjusted operating income and strategically reinvesting at high estimated internal rates of return to help more pets receive the care they need. Time and again, our team has demonstrated their ability to deliver on this objective, and 2024 was no exception.

在我們龐大的滲透率較低的市場中，我們的重點是增加調整後的營業收入，並以高預期內部收益率進行策略性再投資，以幫助更多的寵物獲得所需的照顧。我們的團隊一次又一次地證明了他們實現這一目標的能力，2024 年也不例外。

In line with our mission, we reached a major milestone early in the year, protecting more than 1 million cats and dogs, of which approximately 257,000 were added over the last 12 months. The vast majority of these coming from our flagship Trupanion branded products. Our consistent and proven ability to grow pet count in spite of our purposeful decision to reduce acquisition spend for five consecutive quarters directly illustrates the growing demand and need for our product in support of pet parents today.

為了完成我們的使命，我們在今年年初達到了一個重要的里程碑，保護了超過 100 萬隻貓狗，其中在過去 12 個月內增加了約 257,000 只。其中絕大多數來自我們的旗艦 Trupanion 品牌產品。儘管我們連續五個季度有意減少收購支出，但我們仍能持續增加寵物數量，這直接說明了當今對我們的產品的支持以及寵物父母的需求日益增長。

Trupanion's commitment to our members is at the heart of our business, and upholding our value proposition has been and will continue to be the driving force of our team.

Trupanion 對會員的承諾是我們業務的核心，堅持我們的價值主張一直是並將繼續是我們團隊的驅動力。

In 2024, we continued to invest meaningfully to improve our best in class member experience, including advancements in our software that eliminates the need for reimbursement. In doing so, we made significant progress across our claims experience with record levels of direct payment and speed of traditional claims payment, resulting in a claims inventory near to all-time lows.

2024 年，我們繼續進行有意義的投資，以改善我們一流的會員體驗，包括改進我們的軟體以消除報銷的需要。透過這樣做，我們在索賠經驗方面取得了重大進展，直接支付和傳統索賠支付速度達到了創紀錄的水平，導致索賠庫存接近歷史最低水平。

Just three months ago, we hit another milestone surpassing $3 billion in paid veterinary invoices, the last billion dollars being achieved in less than 24 months. This unmatched level of veterinary invoice support directly demonstrates the growing role Trupanion plays in solving the new normal in veterinary care. As we extend our support to an increasing number of pet parents, we remain focused on ensuring members feel confident in the value Trupanion provides.

就在三個月前，我們達到了另一個里程碑，已付獸醫費用超過了 30 億美元，上一個 10 億美元的達成僅用了不到 24 個月的時間。這種無與倫比的獸醫發票支援直接證明了 Trupanion 在解決獸醫護理新常態方面發揮著日益重要的作用。隨著我們向越來越多的寵物父母提供支持，我們仍然致力於確保會員對 Trupanion 提供的價值充滿信心。

While there is still work to be done refining our pricing across every cohort, such as making necessary rate adjustments where needed and maintaining rates where costs are stabilized, we have reached a solid foundation on which to build. We're pleased to now be largely in a phase of refinement, leading to lower average increases that make budgeting easier for our members. Of course, the real proof of our product is in our member attention.

雖然我們仍有工作要做，以完善每個群體的定價，例如在需要時進行必要的費率調整以及在成本穩定的情況下維持費率，但我們已經奠定了堅實的基礎。我們很高興現在基本上已經進入了完善階段，從而降低了平均增幅，使我們的會員更容易制定預算。當然，我們產品的真正證明在於我們的會員關注。

And as we close the year, we saw continued strengthening across all retention cohorts, especially with members receiving a rate increase of over 20%, where most of our business sits today. In fact, fourth quarter retention for this cohort was among the highest rate of retention for over two years.

在年底之際，我們看到所有留存群體的業績持續增強，尤其是會員的費率上漲了 20% 以上，而這正是我們目前大部分業務所處的階段。事實上，該群體第四季的保留率是兩年多來最高的。

With rate flow normalizing, we've been adjusting our attention efforts to span across our entire member base, including those in their first year, and with rate changes of less than 20%, and we're encouraged by the early improvements this focus is making.

隨著利率流正常化，我們一直在調整關注點，涵蓋整個會員群體，包括第一年會員，利率變化不到 20%，這一重點正在帶來的早期改進讓我們感到鼓舞。

Thanks to our strong growth and marginal expansion, we saw a 45% increase in our per pet profit, even with the anticipated pullback in retention. This expansion is what increases our allowable per pet acquisition costs, ultimately setting the stage for greater investment in pet growth.

由於我們強勁的成長和邊際擴張，儘管預計保留率會有所下降，但我們每隻寵物的利潤仍增加了 45%。這次擴張增加了我們允許的每隻寵物的收購成本，最終為加大對寵物成長的投資奠定了基礎。

With regards to hospital performance, we ended 2024 with strong veterinary need volume, an all-time high in veterinary hospitals using our direct payment solution, and over 15,000 active hospitals. Building on this foundation, we took a significant stride forward during the year with the launch of our veterinary first strategy in international markets with the introduction of the Trupanion brand in Europe. Pet parents in Germany and Switzerland, which is home to approximately 12,000 veterinary hospitals, will now have access to Trupanion's high value product and unreplicated vet direct payment solution.

在醫院業績方面，截至 2024 年，我們的獸醫需求量強勁，使用我們的直接支付解決方案的獸醫院數量創歷史新高，活躍醫院數量超過 15,000 家。在此基礎上，我們在今年邁出了重要一步，啟動了在國際市場上獸醫優先策略，並在歐洲推出了 Trupanion 品牌。德國和瑞士擁有約 12,000 家獸醫醫院，這些國家的寵物主人現在可以享受 Trupanion 的高價值產品和無與倫比的獸醫直接支付解決方案。

We have also continued our minor investment into newer products and channels with the purpose of reaching pet parents where they are in partnership with household brands to connect with those with differing consumer needs. In our large under penetrated market, these opportunities enhance our long term growth potential and with it our intrinsic value.

我們也持續對新產品和通路進行小額投資，目的是透過與家居品牌合作來接觸寵物主人，與具有不同消費者需求的人建立聯繫。在我們龐大的滲透率較低的市場中，這些機會增強了我們的長期成長潛力，從而提高了我們的內在價值。

To summarize, 2024 was a very strong financial year and a turning point for the company. We made meaningful progress and achieved what we set out to do. We've developed a solid and scalable foundation financially and operationally.

總而言之，2024 年是財務表現非常強勁的一年，也是公司的轉捩點。我們取得了有意義的進展並實現了我們設定的目標。我們在財務和營運方面已經建立了堅實且可擴展的基礎。

So now we'll turn our attention to the year ahead, the final year of our 60-month plan.

現在我們將注意力轉向未來的一年，也就是我們 60 個月計畫的最後一年。

In 2025, we anticipate steady sustainable growth in our subscription business. We expect margins to continue to expand and rate changes to normalize, driving increased profit per pet and improved retention. We'll step up our pet acquisition investment in tandem, gradually increasing spend as the year progresses.

2025 年，我們預計訂閱業務將穩步永續成長。我們預計利潤率將繼續擴大，利率變化將正常化，從而推動每隻寵物的利潤增加和保留率提高。我們將增加對寵物收購的投資，隨著時間的推移逐步增加支出。

Our confidence in our margin trajectory is reinforced by recent trends in veterinary inflation, which continue to align with our expectations. Veterinarians typically raise prices at the start of the year, contributing to a seasonal step up in costs that drives stronger margin performance in the second half of the year. While early into 2025, we're seeing this pattern play out and anticipate a similar yet improved margin journey throughout the next 12 months.

近期獸醫通膨趨勢持續符合我們的預期，這增強了我們對利潤率走勢的信心。獸醫通常會在年初提高價格，導致成本季節性上漲，從而推動下半年利潤率表現更強勁。到 2025 年初，我們將看到這種模式逐漸顯現，並預計未來 12 個月的利潤率將出現類似但有所改善的趨勢。

At the same time, the progress made over the last quarter, increasing active hospitals and veterinary leads, has reinforced our confidence in our team's ability to accelerate pet growth as we ramp up acquisition investment. Our approach to this acquisition spend is designed to reinforce conversations happening within the hospital, creating a brand halo effect that benefits not just the veterinary channel, but all channels. This investment also plays a key role in improving retention, particularly among first year members by reinforcing the value of trepan in post-enrollment. Having scaled back in this area over the past year, we're beginning to rebuild momentum and brand awareness.

同時，上個季度取得的進展，增加了活躍的醫院和獸醫線索，增強了我們對團隊在加大收購投資的同時加速寵物成長的能力的信心。我們對此次收購支出的方法旨在加強醫院內部的對話，創造一種品牌光環效應，不僅使獸醫管道受益，而且使所有管道受益。這項投資還在提高會員保留率方面發揮關鍵作用，尤其是對於第一年會員，因為它強化了入院後環鑽手術的價值。在過去的一年裡，我們在這一領域進行了縮減，現在我們開始重建發展動能和品牌知名度。

Similar to prior years, the majority of our pet acquisition dollars will be reinvested into growing our core Trupanion brand in North America. This remains the foundation of our business and our primary growth engine.

與前幾年類似，我們的大部分寵物收購資金將被重新投資於在北美發展我們的核心 Trupanion 品牌。這仍然是我們業務的基礎和主要成長引擎。

Underpinning our anticipated growth is our commitment to ongoing investment in our systems and infrastructure. In 2025, we expect to build on the use of new technology designed to elevate the member experience, retire legacy platforms, and strengthen our control framework to ensure long-term scalability and effectiveness.

我們預期成長的基礎是我們對系統和基礎設施持續投資的承諾。2025 年，我們希望利用新技術來提升會員體驗，淘汰舊平台，並加強我們的控制框架，以確保長期的可擴展性和有效性。

Along these lines, I'm pleased to share that as part of our 2024 audit, we are on track to remediate the two previously identified material weaknesses. This progress towards a successful resolution highlights the diligent efforts of our team in strengthening internal controls and implementing sustainable processes. I want to take a moment to recognize the tremendous work and dedication from everyone involved.

沿著這個思路，我很高興地告訴大家，作為 2024 年審計的一部分，我們正在按計劃糾正之前發現的兩個重大缺陷。這項成功解決問題的進展凸顯了我們的團隊在加強內部控制和實施永續流程方面所做的不懈努力。我想花點時間來讚揚所有參與者的出色工作和奉獻精神。

In total, if we achieve the growth goal shared today by the end of our 60-month plan, we would expect our compound annual revenue growth rate to be 23%, robust and just shy of our 25% goal. Growth in adjusted operating income would be near to 20%. This last metric, if delivered, will be a significant achievement given the margin erosion caused by veterinary inflation following the pandemic.

總的來說，如果我們在 60 個月計畫結束時實現今天所分享的成長目標，我們預計我們的複合年收入成長率將達到 23%，強勁成長，略低於我們的 25% 的目標。調整後的營業收入成長將接近20%。考慮到疫情後獸醫價格上漲導致的利潤率下降，這項指標如果能夠實現，將是一項重大成就。

Exiting 2025, we expect strong fundamental performance across key metrics, including retention, ARPU, and margin, with a gradual step up in pet growth. Growth in these metrics, along with the expansion in our active hospital base and same source sales, is central to our business model and long-term value creation. By continuing to drive these core metrics, we aim to create even greater value in the year ahead, setting the stage for the same momentum in 2026 and beyond.

展望 2025 年，我們預期在關鍵指標（包括留存率、ARPU 和利潤率）方面將表現強勁，寵物成長率也將逐步提升。這些指標的成長，以及我們活躍醫院基礎和相同來源銷售的擴大，對我們的商業模式和長期價值創造至關重要。透過繼續推動這些核心指標，我們旨在在未來一年創造更大的價值，為 2026 年及以後的同樣勢頭奠定基礎。

While we still have time to run on our current strategic journey, I go into this final year with tremendous gratitude to the team that has made these results possible. Time and again, this team has demonstrated their commitment to our members and those in our ecosystem, and with it built a strong track record of success.

雖然我們仍有時間繼續推進當前的策略之旅，但我懷著對實現這些成果的團隊的無限感激進入最後一年。這個團隊一次又一次地展示了他們對我們的成員和生態系統中的承諾，並由此建立了良好的成功記錄。

With that, I'll hand the call over to Fawwad.

說完這些，我將把電話交給 Fawwad。

Thanks, Margi, and good afternoon, everyone. Today I will share additional details around our fourth quarter performance as well as provide our outlook for the first quarter and full year 2025.

謝謝，瑪吉，大家下午好。今天，我將分享我們第四季業績的更多細節，並提供我們對 2025 年第一季和全年的展望。

Total revenue for the quarter was $337.3 million, up 14% year over year. Within our subscription business, revenue was $227.8 million, up 19% year over year and up 20% on a constant currency basis. Total monthly average revenue per pet for the quarter was $76.02 up 13% over the prior year period.

本季總營收為 3.373 億美元，年增 14%。我們的訂閱業務收入為 2.278 億美元，年增 19%，以固定匯率計算成長 20%。本季每隻寵物的每月平均總收入為 76.02 美元，比去年同期成長 13%。

Within our core Trupanion brand, ARPU expanded even faster at 14% year over year and 15% on a constant currency basis, marking our highest rate of growth in the company's history.

在我們的核心 Trupanion 品牌中，ARPU 成長速度更快，年增 14%，以固定匯率計算成長 15%，創下公司歷史上的最高成長率。

Total subscription pets increased 5% year over year to over 1,041,000 pets as of December 31. This includes over 51,000 pets in Europe, a majority of which are currently underwritten by third parties.

截至 12 月 31 日，訂閱寵物總數年增 5%，達到超過 1,041,000 隻寵物。其中包括歐洲的 51,000 多隻寵物，其中大多數目前由第三方承保。

Average monthly retention for the trailing 12 months was 98.25% down versus last year, which was 98.49%. On a trailing three month basis, retention was up sequentially from Q3.

過去 12 個月的平均月留存率為 98.25%，而去年同期為 98.49%。從過去三個月來看，留存率較第三季持續上升。

The subscription business cost of paying veterinary invoices was $159.5 million resulting in a value proposition of 70%, an improvement from 72.7% in the prior year period.

支付獸醫發票的訂閱業務成本為 1.595 億美元，價值主張為 70%，高於去年同期的 72.7%。

The drivers of this improvement were margin expansion from our ongoing pricing actions and continued efficiency in our cost of processing invoices. These improvements more than offset adverse development from prior periods in the quarter totaling 0.7 million or approximately 30 basis points of revenue.

這項改善的驅動因素是我們持續的定價行動帶來的利潤率擴大以及我們處理發票的成本持續高效。這些改進足以抵消本季前期總計 70 萬美元或約 30 個基點的收入不利影響。

As a percentage of subscription revenue, variable expenses were 9.2%, down from 9.6% a year ago. We have made significant investments in technology and are now realizing efficiencies in our contact center on top of the cost improvements in invoice processing I just mentioned.

作為訂閱收入的百分比，變動費用為 9.2%，低於一年前的 9.6%。我們在技術方面進行了大量投資，現在，除了我剛才提到的發票處理成本改進之外，我們的聯絡中心還實現了效率的提高。

Fixed expenses as a percentage of revenue were 5.5%, up from 4.7% in the prior year period in line with our expectations. This is the result of significant additional investments in internal controls, technology, and SOS compliance.

固定支出佔收入的百分比為 5.5%，高於去年同期的 4.7%，符合我們的預期。這是對內部控制、技術和 SOS 合規性進行大量額外投資的結果。

In that regard, we have made substantial progress in remediating the two material weaknesses identified in the 2023 audit. While the final outcome will be determined upon completion of the 2024 audit, we remain on track to remediate these two items, and we expect to file our 10-K on schedule. I would like to extend my gratitude to everyone at Trupanion for their dedication and hard work throughout this process.

在這方面，我們在補救2023年審計中發現的兩個重大缺陷方面取得了實質進展。雖然最終結果將在 2024 年審計完成後確定，但我們仍在按計劃補救這兩項問題，並有望按時提交 10-K 報告。我要向 Trupanion 的所有人在整個過程中的奉獻和辛勤工作表示感謝。

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 $35 million, an increase of 40% from last year.

在支付獸醫發票、變更費用和固定費用後，我們計算調整後的營業收入。我們的訂閱業務實現了 3,500 萬美元的調整後營業收入，比去年增長了 40%。

Subscription adjusted operating margin was 15.3% of subscription revenue. This is up from 13% in the prior year and represents approximately 230 basis points of margin expansion. This represents the highest subscription adjusted operating margin in our company's history.

訂閱調整後的營業利益率為訂閱收入的15.3%。這比上年的 13% 有所上升，意味著利潤率擴大了約 230 個基點。這是我們公司史上最高的認購調整後營業利益率。

Now I'll turn to our other business segment which is comprised of revenue from other products and services that generally have a B2B component and a lower margin profile than our subscription business. Our other business revenue was $109.5 million for the quarter, an increase of 5% year over year. We expect growth for this segment to continue to decelerate as one of our partners, Pets Best, has completed its transition to a new underwriter in the majority of US states, and we are no longer enrolling new pets in those geographies.

現在我將談談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 B2B 組件，並且利潤率低於我們的訂閱業務。本季我們的其他業務收入為 1.095 億美元，年增 5%。我們預計該部門的成長將繼續減速，因為我們的合作夥伴之一 Pets Best 已在美國大多數州完成了向新承保人的過渡，並且我們不再在這些地區招收新的寵物。

Adjusted operating income for this segment was $0.8 million. Adjusted operating margin for this segment was 0.8%, down from 2.4% last year. Margin for the quarter was inclusive of a $0.9 million accounts receivable write down. If we were to exclude this one-off expense, adjusted operating margin would have been approximately in line with the first three quarters of 2024. In total, adjusted operating income was $35.8 million in Q4, up 30% from Q4 last year and in line with our expectations.

該部門調整後的營業收入為 80 萬美元。該部門調整後營業利益率為 0.8%，低於去年的 2.4%。本季的利潤包括 90 萬美元的應收帳款減記。如果我們排除這筆一次性費用，調整後的營業利潤率將與 2024 年前三個季度大致持平。整體而言，第四季調整後的營業收入為 3,580 萬美元，較去年同期成長 30%，符合我們的預期。

We acquired approximately 60,200 new subscription pets in the quarter and deployed $16.9 million to do so, excluding the pets that are underwritten by a third party, this translated into an average pet acquisition cost of $261 per pet in the quarter, up from $217 in the prior year period. The estimated internal rate of return on the spend was 32% in the quarter, in line with our target of 30% to 40%.

本季度，我們新訂閱了約 60,200 隻寵物，並投入了 1,690 萬美元（不包括由第三方承保的寵物），這相當於本季度每隻寵物的平均訂閱成本為 261 美元，高於去年同期的 217 美元。本季支出的預期內部報酬率為 32%，與我們 30% 至 40% 的目標一致。

We also invested $1.3 million in the quarter in development costs. Non-cash expenses in the quarter included $8 million in stock-based compensation, as well as a $5.3 million goodwill impairment charge related to our European businesses. This impairment was taken after completing a detailed business review in which medium-term profit and cash forecasts were lower than previously assumed. We remain excited about our long term prospects in Europe.

本季我們也投資了 130 萬美元用於開發成本。本季的非現金支出包括 800 萬美元的股票薪酬，以及與歐洲業務相關的 530 萬美元的商譽減損費用。在完成詳細的業務審查後，中期利潤和現金預測低於先前的假設，因此進行了此項減損。我們對歐洲的長期前景仍然感到興奮。

As a result, we reported net income for the quarter of $1.7 million or $0.04 per basic and diluted share compared to a net loss of $2.2 million or $0.05 per basic and diluted share in the prior year period.

因此，我們報告本季淨收入為 170 萬美元，即每股基本收益和稀釋收益均為 0.04 美元，而去年同期的淨虧損為 220 萬美元，即每股基本收益和稀釋收益均為 0.05 美元。

In terms of cash flow, operating cash flow was $23.7 million in the quarter compared to $17.5 million in the prior year period. Capital expenditures total $1.9 million, down from $4 million in Q4 last year. As a result, free cash flow was $21.8 million, and $8.3 million improvement from the prior year's fourth quarter. On our third quarter of 2023 earnings call, we introduced an annual free cash flow target at 2.5% of revenue. We exceeded this goal in 2024 by generating free cash flow of $38.6 million, a margin of 3%. This represents an improvement of $38.2 million over the prior year and puts us in a very strong position to further increase our investments into pet acquisition.

在現金流方面，本季營運現金流為 2,370 萬美元，而去年同期為 1,750 萬美元。資本支出總計 190 萬美元，低於去年第四季的 400 萬美元。結果，自由現金流為 2,180 萬美元，比去年同期第四季增加了 830 萬美元。在 2023 年第三季的財報電話會議上，我們提出了年度自由現金流目標，佔營收的 2.5%。2024 年，我們超額完成了這個目標，產生了 3,860 萬美元的自由現金流，利潤率為 3%。這比前一年增加了 3,820 萬美元，使我們有非常有利的地位進一步增加對寵物收購的投資。

Turning to the balance sheet, we ended the quarter with $307.4 million in cash and short-term investments. At the end of the quarter, we maintained $288 million of capital surplus at our insurance subsidiaries. Our largest insurance entity, APIC, maintained $245.5 million of capital surplus, which was $140.2 million above the company action level risk-based capital requirements. This excess capital has increased by $78.2 million since year in 2023 due to changes in underwriting risk factors used in the calculation of risk-based capital requirements by the NAIC, the retained earnings within APIC, and the slowing growth in our other business.

談到資產負債表，我們本季結束時的現金和短期投資為 3.074 億美元。截至本季末，我們的保險子公司仍維持 2.88 億美元的資本盈餘。我們最大的保險實體 APIC 維持了 2.455 億美元的資本盈餘，高出公司行動水準基於風險的資本要求 1.402 億美元。由於 NAIC 在計算基於風險的資本要求時使用的承保風險因素的變化、APIC 內的留存收益以及我們其他業務的增長放緩，自 2023 年以來，這筆超額資本增加了 7820 萬美元。

Now, I'll turn to our outlook. For the full year of 2025, we expect revenue in the range of $1.379 billion to $1.414 billion. We expect subscription revenue in the range of $961 million to $984 million, representing approximately 14% year over year growth at the midpoint and approximately 15% on a constant currency basis. We expect total adjusted operating income to be in the range of $120 million to $140 million or 14% year over year growth at the midpoint.

現在，我將談談我們的展望。我們預計 2025 年全年營收將在 13.79 億美元至 14.14 億美元之間。我們預計訂閱收入將在 9.61 億美元至 9.84 億美元之間，以中間值計算年增約 14%，以固定匯率計算成長約 15%。我們預計調整後的總營業收入將在 1.2 億美元至 1.4 億美元之間，或年增 14%。

We expect fixed expenses to increase as a percentage of revenue in 2025 due to higher underwriting fees in Canada and continued investments in technology and compliance, but remain committed to our model P&L over the medium and long term.

由於加拿大承銷費用的提高以及對技術和合規性的持續投資，我們預計到 2025 年固定支出佔收入的百分比將增加，但我們仍致力於中長期的模型損益表。

As in 2024, we expect to generate higher margin in our subscription business in the second half versus the first half, and our deployment of pet acquisition dollars should mirror the seasonality. With that as context, I'll move to our Q1 outlook. Total revenue is expected to be in the range of $334 million to $340 million. Subscription revenue is expected to be in the range of $230 million to $233 million. This represents 15% year over year growth at the midpoint and 17% on a constant currency basis. Total adjusted operating income is expected to be in the range of $26 million to $29 million. This represents nearly 29% growth year over year at the midpoint.

與 2024 年一樣，我們預計下半年訂閱業務的利潤率將高於上半年，我們對寵物收購資金的部署應該反映季節性。基於此背景，我將轉向我們的第一季展望。預計總收入在 3.34 億美元至 3.4 億美元之間。預計訂閱收入在 2.3 億美元至 2.33 億美元之間。以中點計算，年增 15%，以固定匯率計算，成長 17%。調整後的總營業收入預計在 2,600 萬美元至 2,900 萬美元之間。這意味著同比中位數增長近 29%。

As a reminder, our revenue projections are subject to conversion rate movements predominantly between the US and Canadian currencies. For our first quarter and full year guidance, we used a 69% conversion rate in our projections, which was the approximate rate at the end of January.

提醒一下，我們的收入預測主要受美元和加拿大貨幣之間的匯率變動影響。對於第一季和全年的指引，我們在預測中使用了 69% 的轉換率，這是 1 月底的大致轉換率。

Let me now pass it back to Margi.

現在讓我將它交還給瑪姬。

Thank you, Fawwad.

謝謝你，Fawwad。

Before we move to questions, I'd like to underscore a comment Fawwad made earlier. The last quarter of 2024 marked the highest subscription adjusted operating margin in the history of Trupanion. Well, as a growth business, we're always focused on achieving new highs. This one comes with some significant pride and a return to more normalized rate flow for our member base. I fully expect this improvement will benefit our member experience that in turn will enhance our retention rates and member referrals, which, along with increased ARPU and margin expansion, will increase our perpet profit throughout the year. This gives me confidence that as a business and a team we will exit 2025 with the highest per pet profit and expanding allowable pack we have ever seen, giving us the opportunity to return to our historical growth rates in our under penetrated market.

在我們開始提問之前，我想強調 Fawwad 之前所發表的評論。2024 年最後一個季度標誌著 Trupanion 歷史上最高的認購調整後營業利潤率。作為一家成長型企業，我們始終專注於創造新高。此次收購讓我們感到非常自豪，並為我們的會員基礎帶來了更正常化的費率流。我完全相信這種改進將有利於我們的會員體驗，從而提高我們的保留率和會員推薦率，再加上增加的 ARPU 和利潤率擴大，將增加我們全年的永久利潤。這讓我有信心，作為一家企業和一支團隊，到 2025 年，我們將實現有史以來每隻寵物利潤最高、允許飼養數量不斷擴大的目標，這也讓我們有機會在滲透率較低的市場中恢復歷史增長率。

Over 95% of pet parents have yet to make a choice about insurance. The opportunity is enormous, and we will be very well placed for growth.

超過 95% 的寵物主人尚未做出保險選擇。這個機會是巨大的，我們將為成長做好充分準備。

With that, I'll turn it over for questions.

說完這些，我會把它轉交給大家提問。

We will now begin the question and answer session.

我們現在開始問答環節。

(Operator Instructions). The first question comes from Brandon Vazquez with William Blair. Please go ahead.

（操作員指令）。第一個問題來自 William Blair 的 Brandon Vazquez。請繼續。

Hi everyone, thanks for taking the question. Maybe if I can start first on guidance, can follow up, maybe you can talk to us a little bit about the progression of how a subscriber growth may go throughout the year, because I know we've talked in the past about how pack spend needs to pick up and then there's a little bit of a delay behind that. So maybe just a little more context on the rest of the three quarters there that we didn't get if I could just to make sure we have the models kind of lined up.

大家好，感謝您提出這個問題。也許我可以先從指導開始，然後進行跟進，也許您可以跟我們談談全年訂戶增長的進展情況，因為我知道我們過去曾討論過套餐支出需要如何增加，然後在這背後存在一些延遲。因此，如果可以的話，也許我可以稍微多介紹一下我們沒有得到的其餘三個季度的背景信息，以確保我們的模型已經排列好。

Yeah, thanks for the question.

是的，謝謝你的提問。

Let me give you a couple of dimensions in terms of guidance and kind of the thinking behind it. Obviously it's grounded in the '24 results which give us a lot of confidence in terms of being able to continue to grow margin, expand margin as we get into 2025. I think as you pointed out, the thing that we're really excited about is all of the work we did in 2024 to increase financial capacity through free cash flow. It now gives us the ability to invest those dollars.

讓我從指導角度和背後的思考角度給你幾個面向。顯然，這是以 24 年的業績為基礎的，這給了我們很大的信心，讓我們能夠在 2025 年繼續增加利潤，擴大利潤率。我認為正如您所指出的，我們真正興奮的是我們在 2024 年透過自由現金流增加財務能力所做的所有工作。現在我們有能力投資這些美元。

Two years in a row, the company has reduced total PAC dollars, obviously out of necessity. That's been really unusual. If you look at the company's history, I think over the last 10 years there was only one year where it was flat, as Margi said, and we'd say constantly we're a growth company. So we're going to deploy pack investment at increasing rates as we go through the year.

連續兩年，該公司減少了 PAC 資金總額，這顯然是出於必要。這確實很不尋常。如果你回顧一下公司的歷史，我認為在過去的 10 年裡只有一年是持平的，正如 Margi 所說的那樣，我們一直說我們是一家成長型公司。因此，我們將在今年內以越來越快的速度部署投資。

Our objective or our goal is to try to approach the level of investment that we hit in 2022 on a total dollar basis that was about $80 million and that would be a significant step up in investment. So it'll be gradual. It'll always be within the guardrails. We want to be prudent as we deploy that capital, but having the financial capacity, having generated the free cash flow, that's given us choices, and we're in a position where when we see great opportunities for investment and obviously we're seeing those, we can invest.

我們的目的或目標是努力達到我們在 2022 年達到的約 8000 萬美元的總投資水平，這將是投資的重大進步。所以這將是漸進的。它會始終在護欄內。我們希望在部署資本時保持謹慎，但有了財務能力，有了自由現金流，我們就有了選擇，當我們看到巨大的投資機會時，顯然我們看到了這些機會，我們就可以進行投資。

So it'll be a progression through the year. I think if you look at next, in terms of how much pricing has contributed, how much petco has contributed. Coming out of last year in Q4, it was about 60% pricing, about 40% related to pet count. So we have been increasing pets even over the last two years.

所以這將是全年的一個進步。我認為，如果您接下來看一下，就定價貢獻了多少而言，Petco 貢獻了多少。從去年第四季的數據來看，約 60% 與定價有關，約 40% 與寵物數量有關。因此，過去兩年來，我們飼養寵物的數量一直在增加。

Gross has been north of half a million, but we have a standard that we've set where we want to continuously grow. And so we're looking for more so in the second half of next year for pet count to contribute more than it would in the first half, and that's as a result of deploying those dollars.

總銷量已經超過 50 萬，但是我們已經設定了標準，希望能夠持續成長。因此，我們預計明年下半年寵物數量的貢獻將比上半年更大，這是部署這些資金的結果。

Right, maybe on a on a similar but slightly different angle on that topic of growth of the year. Margi, you made a comment about being in record number of hospitals now sometimes they use that as kind of a gauge of accounts that are bought in on the Trupanion kind of model here. What does that mean? What are you guys seeing in terms of that leads given that's kind of your leading indicator of as you put more money towards pack. You kind of go to those that leads to close more, so talk to us a little bit about that leads. Anything you can quantify there would be very helpful.

好的，也許在關於年度成長的話題上有一個類似但略有不同的角度。Margi，你評論說現在醫院的數量創下了紀錄，他們有時用這一點來衡量採用 Trupanion 模型的帳戶數量。這意味著什麼？鑑於這是您在包裝上投入更多資金的領先指標，您在這方面看到了什麼？您可以去找那些可以促成更多成交的人，所以請和我們稍微談談這些線索。任何能夠量化的東西都會非常有幫助。

Yeah, thanks for the question, Brandon. You're absolutely right. If we see the hospital activity increasing and really our goal is to continue to expand on that quarter over quarter. What that does is it means. We're really getting to all those pet parents as they go for their wellness visits. They meet the vet for the first time and they have that introduction of Trupanion.

是的，謝謝你的提問，布蘭登。你完全正確。如果我們看到醫院活動不斷增加，我們真正的目標就是繼續逐季擴大規模。它的作用就是這個意思。我們確實在為所有進行健康檢查的寵物主人提供服務。他們第一次見到獸醫，並介紹了 Trupanion。

What we're seeing is in Q4, our vet leads overall were up 30% year over year, so really strong lead generation from that moat, which is our territory partners, as people that are going into hospitals and having that conversation.

我們看到，在第四季度，我們的獸醫線索總體同比增長了 30%，因此，從這條護城河（即我們的區域合作夥伴）獲得的線索生成能力確實非常強勁，因為他們會去醫院與獸醫進行對話。

What we're now focused on and to lean into Fawwad's point there is deploying those pet acquisition dollars to really reinforce the conversion element of Trupanion. So why is pet insurance important to start with in a very under penetrated market today, we're still focusing on that education level. We're still helping people to understand what the cost of care is for their pet, and then from there reinforcing from a brand perspective.

我們現在關注的重點以及傾向於 Fawwad 的觀點是部署那些寵物購買資金來真正強化 Trupanion 的轉換元素。那麼，為什麼在當今滲透率很低的市場中，寵物保險如此重要呢？我們仍然專注於教育程度。我們仍在幫助人們了解照顧寵物的費用，然後從品牌的角度強化。

So the increase in acquisition dollars will allow. us to really dip into that bigger brand effect which we expect will help to pull those leads through the funnel. The great news is for us. Our vet volume has always, our lead volume has always been high throughout the year, where we saw a get to at the end of Q4 and again kind of looking good and healthy in January. It's really a case now for us to take that opportunity to redeploy those packs to help to step up that growth curve.

因此，收購金額的增加將會允許。我們真正深入更大的品牌效應中，我們期望這將有助於將這些潛在客戶吸引到管道中。對我們來說這是個好消息。我們的獸醫數量、我們的領先數量在全年一直很高，我們在第四季度末看到了增長，並且在一月份再次看起來良好而健康。現在我們確實應該抓住機會重新部署這些資源包，以幫助加快成長曲線。

And the next question comes from Jonathan Block with Stifel. Please go ahead.

下一個問題來自 Stifel 的 Jonathan Block。請繼續。

Thanks guys. Good afternoon. Just the first one, the 2024 gross ads were, quite honestly, pretty far below, well below us, and they've been modest for an extended period of time now. So are you, what do you think this is? Is this like, a lead problem, a conversion problem? Maybe if you could just give a little bit more detail and then more specifically when you expect that to really pick up and let in 2025.

謝謝大家。午安.舉第一個例子，坦白說，2024 年的廣告總收入遠低於我們，而且這種低迷狀態已經持續了很長一段時間了。那你也是嗎，你認為這是什麼？這是否是引導問題或轉換問題？也許您可以提供更詳細的信息，然後更具體地說明您預計什麼時候會真正實現成長，並在 2025 年實現。

Yeah, hi, Jon, thanks for the question. So for 2024, our big focus, we really had three goals going into the year. The first was margin expansion. Second, free cash flow, and third, balance sheet strength and really kind of reinforcing that financial strength of the company. We achieved all three of those goals, and that margin expansion was absolutely at the top of that list.

是的，嗨，喬恩，謝謝你的提問。因此，對於 2024 年，我們的重點是，我們今年確實有三個目標。首先是利潤率擴大。第二，自由現金流；第三，資產負債表實力，真正增強了公司的財務實力。我們實現了所有這三個目標，而利潤率擴大絕對是最重要的。

When we think about what that means for us, it allows us now to pivot to our 2025 goals, which are really very clear for us as a business. One is improving conversion, the second is improving retention. Both of them will help to ultimately drive that higher lifetime value.

當我們思考這對我們意味著什麼時，它讓我們現在能夠轉向我們的 2025 年目標，這對我們一家企業來說確實非常明確。一是提高轉換率，二是提高留存率。兩者最終都將有助於提高終身價值。

So as we think about marginal expansion now, where our focus has been as a business hasn't been on let's convert more pets in 2024, it's been about those top three goals. We're now pivoting to what Trupanion has historically done very normally. It's in our DNA in terms of helping to convert people, helping to understand why Trupanion.

因此，當我們現在考慮邊際擴張時，我們作為企業的重點並不是讓我們在 2024 年轉化更多的寵物，而是圍繞這三個最重要的目標。我們現在正轉向 Trupanion 歷史上非常正常所做的事情。從幫助改變人們、幫助理解 Trupanion 的原因來看，這是我們的 DNA。

We have a very high lead volume coming into the business and that hasn't really shifted significantly over the last 18 months as we pull back our pack spend. What we did pull back was the dollars that really helped to drive us through the funnel, to drive that pet parent in places where they are. So that might be above the line media. It's more social media, it's more getting the eyeballs into the content that we're providing and producing that hasn't been something that we've been investing in, even in Q4.

我們的業務中潛在客戶數量非常高，而且在我們減少包裝支出的 18 個月中，這一數字並沒有顯著變化。我們收回的資金確實幫助我們完成了這一目標，並把寵物主人送到了他們所在的地方。所以這可能是高於標準的媒體。它更多的是社交媒體，它更多是為了吸引人們關注我們提供和製作的內容，而這並不是我們一直在投資的東西，即使在第四季度也是如此。

While we did see a step up in the back half of the year of our pet acquisition spend, it wasn't meaningful enough to really to really move the needle. We're now building that up nicely. We have some higher lifetime value coming through. It increases our level pack and as those pack dollars build and reinforce, I would expect over the next two quarters to start to see that move nicely. As Fawwad mentioned, at the back half of this year is really where we expect to see the elevation of those pack dollars and really have them starting to compound for us.

雖然我們確實看到下半年寵物購買支出增加，但這還不足以真正產生影響。我們現在正在順利地建立它。我們獲得了更高的終身價值。它提高了我們的水平包，並且隨著這些包美元的積累和加強，我預計在接下來的兩個季度將開始看到良好的走勢。正如 Fawwad 所提到的那樣，今年下半年我們確實有望看到這些包裹金額的上升，並真正開始為我們帶來複合收益。

That was great. Thank you and maybe just a little bit of a two part follow up the subscription revenue guidance I've got 972 at the midpoint, also a little bit below us. I might have missed what you said. Did you say driven 60% price, 40% pets? I, my apologies. I didn't know if that was for '25 or prior years. Maybe you can clarify. Because I am curious on the split between, call it the ARPU contribution and pet growth specific to 2025, and then Margi, I hate to go back to the pet ads or the gross ads, but at some point, the dynamic needs to shift right from being overly dependent on ARPU to more pets. I'm just curious, when we think about the gross ads like do you need those lower ARPU plans to be more successful and get at scale so you can do a better job competing for call it the more cost sensitive consumer on the margin. Thanks.

那很棒。謝謝，也許只是兩部分跟進訂閱收入指導，我的中間值是 972，也略低於我們。我可能沒有註意到你所說的內容。您是說 60% 受價格驅動，40% 受寵物驅動嗎？我，很抱歉。我不知道那是 25 年的，還是之前幾年的。也許你可以澄清一下。因為我對 2025 年 ARPU 貢獻和寵物成長之間的差異很好奇，然後是 Margi，我不想回到寵物廣告或總廣告的話題，但在某個時候，動態需要從過度依賴 ARPU 轉向更多的寵物。我只是很好奇，當我們考慮總廣告時，你是否需要那些較低的 ARPU 計劃來獲得更大的成功並擴大規模，以便你能夠更好地競爭對成本更敏感的消費者。謝謝。

Yeah, just to touch on the point that I made, and I mentioned also in the call last time, it's an approximate mix of how much is pricing contributing versus how much is gross ads contributing to revenue, and that was a '24 comment, so a full year '24.

是的，只是想談談我提出的觀點，我在上次電話會議中也提到過，這是定價貢獻與廣告總收入貢獻的大致組合，這是 24 年的評論，所以是全年 24 年。

And then --

進而--

Sorry, what about for '25?

抱歉，'25 呢？

Yeah, we haven't necessarily given guidance specifically down to that level of granularity. I think what I can say is, obviously as we're looking to increase the pack investment, the historical has been the opposite. It's more pet count driven than pricing driven.

是的，我們不一定提供具體到這種詳細程度的指導。我想說的是，顯然，當我們想要增加包裝投資時，歷史的情況卻恰恰相反。它更多地取決於寵物數量而不是價格。

Ultimately we want to get back to that. I would expect that mixed dynamic to shift, how much is going to depend on the pace with which we deploy that pack dollar. That's going to be the dependency.

最終，我們希望回到那個狀態。我預期這種混合動態將會轉變，轉變的程度將取決於我們部署資金的速度。這就是依賴關係。

Okay, I'll just jump in here and, excuse me, quickly speak to the lower plan. So at a high level, Jon, I think the biggest opportunity we have as a business today is really helping to really drive our conversion rate.

好的，我直接跳到這裡，抱歉，我快速地講一下下面的計劃。所以從高層次上講，喬恩，我認為我們今天作為一家企業所面臨的最大機會是真正幫助提高我們的轉換率。

So as we think about where are the biggest opportunities, we already have the leads coming through from our territory partners. Now what we're doing is adding the ability to spend more to drive conversion. Our phone conversion right now is at an all-time high.

因此，當我們思考哪裡存在最大的機會時，我們已經從區域合作夥伴那裡獲得了線索。現在我們正在做的是增加花費來推動轉換的能力。我們現在的電話轉換率達到了歷史最高水準。

Despite all of the rate increases and the new pet poo that we have, so we have the content and we have the ability to engage. This is a product that has to be sold. This is a product people need to understand because it's designed for the life of the pet.

儘管價格有所上漲，而且還有新的寵物糞便，但我們仍然有內容，並且有能力吸引人們。這是一個必須要銷售的產品。這是人們需要了解的產品，因為它是為寵物的生活而設計的。

So we're doing some testing on this now. We've really only kicked off over the last few weeks, so you'll see some early iterations on the website trying to explain the difference between the Trupanion pricing model and our competition because when pet parents see Trupanion, they're not necessarily going to see a like for like product and we need to do a much better job of articulating this.

因此我們現在正在對此進行一些測試。我們實際上只是在過去幾週才開始起步，所以您會在網站上看到一些早期的迭代，試圖解釋 Trupanion 定價模型和我們的競爭對手之間的差異，因為當寵物父母看到 Trupanion 時，他們不一定會看到類似的產品，我們需要更好地表達這一點。

Frankly, this is an ongoing thing that we need to really step up the pace for. I will say to your point that currently the other products those lower, the other swim lane products, so the PHI perkins of the world that we have, we introduce them to absolutely speak to other pet parents. So depending on where they are in their stage of life and what they're looking for, there's an opportunity for them.

坦白說，這是一個持續的過程，我們需要加強。我想說的是，目前其他的產品都是較低的，其他的泳道產品，所以我們擁有的 PHI perkins 產品，我們介紹它們是為了與其他寵物父母進行交流。因此，根據他們所處的人生階段和他們所尋找的東西，他們都會有機會。

They are tiny in terms of the contribution to us at the moment. We haven't focused on that because of margin compression. We've really pivoted to our core, but I would expect to see them play a bigger role over the coming years. It's not where we're going to be focused on '25. You should expect more growth in our core business and also kind of really reinforcing the reasons why Trupanion.

目前他們對我們的貢獻微不足道。由於利潤率壓縮，我們並沒有關注這一點。我們確實已經轉向了我們的核心，但我希望看到它們在未來幾年發揮更大的作用。這不是我們25年要關注的重點。您應該期待我們的核心業務取得更大的成長，同時也真正強化了 Trupanion 的理由。

So we haven't pushed that to a degree in '24 because of the other things we're focused on. As we move forward, we should see that list come through. And this is the same, we've always been the same price point. When we think about the delta between us and our competition, it's been the same consistently through this whole period. So I know that we've done it historically and as we've proven in '24 when this team focuses on goals, they deliver and I have no reason to believe that won't happen in '25.

因此，由於我們專注於其他事情，我們在 24 年沒有將其推向一定程度。隨著我們不斷前進，我們應該會看到這份名單的出現。這一點是一樣的，我們的價格點始終是一樣的。當我們思考我們與競爭對手之間的差距時，我們發現在整個時期內差距一直都是一樣的。所以我知道我們在歷史上已經做到了這一點，正如我們在24年所證明的那樣，當這支球隊專注於目標時，他們就會實現目標，我沒有理由相信這不會在25年發生。

Thanks guys for the color.

感謝你們的顏色。

Yeah, thank you.

是的，謝謝。

And the next question comes from Wilma Burdis with Raymond James. Please go ahead.

下一個問題來自雷蒙德詹姆斯 (Raymond James) 的威爾瑪伯迪斯 (Wilma Burdis)。請繼續。

Hey, good evening. Could you talk a little bit about the outlook for the 2025 adjustment operating margins just based on some quick calculations? I think it appears maybe a bit lower than I would have expected. Am I correct on my calculations, and could you just talk about what's driving that? Thank you.

嘿，晚上好。您能否根據一些快速計算，談談 2025 年調整營業利潤率的前景？我認為它可能比我預期的要低一些。我的計算正確嗎？您能講講造成這種情況的原因嗎？謝謝。

Yeah, I will, I can just give you some commentary just on kind of what is our guidance, what are our major guidance assumptions. I talked about the pack investment rolling through the year. The other big factor is inflation. So right now our assumption is inflation will continue at the levels exiting 2024. So we've talked about 15% and so we're still seeing that and expecting that to roll through next year.

是的，我可以給你一些評論，只是關於我們的指導是什麼，我們的主要指導假設是什麼。我談到了全年的包裹投資。另一個重要因素是通貨膨脹。因此，目前我們的假設是通膨將持續維持在 2024 年以後的水準。我們討論的是 15%，我們仍然看到這個數字，並預計明年將繼續成長。

Obviously if we see a reduction in inflation and abatement of that would be significant positive for us, but that's probably the biggest factor in terms of year over year improvement. We're still expecting margin expansion, but obviously it's going to be factored into we're dependent on the amount of inflation we see.

顯然，如果我們看到通貨膨脹的減少和緩解，對我們來說將是一個重大利好，但這可能是同比改善的最大因素。我們仍然預計利潤率會擴大，但顯然這將被考慮到我們依賴所看到的通貨膨脹量。

And then in terms of expenses just to kind of round out the P&L, we are expecting to see leverage across fixed and variable expense. Fixed will be up a bit in the first half, largely due to an uptick in our Canada underwriting fees. I talked about in our last call that we wanted to grow into our expense base, and that's absolutely part of our plan for 2025. So we will see combined fixed and variable, see some leverage as the year progresses.

然後，就費用而言，為了完善損益表，我們預期會看到固定費用和變動費用之間的槓桿作用。上半年固定費用將略有上漲，這主要是由於我們的加拿大承保費用上漲。我在上次電話會議上談到，我們希望擴大我們的支出基礎，這絕對是我們 2025 年計畫的一部分。因此，隨著時間的推移，我們將看到固定和可變的組合，並看到一些槓桿。

And then we're going to continue to target free cash flow generation, so we have our 2.5% free cash flow is a percent of revenue, as we talked about in the prepared remarks, we were able to achieve 3%. That's tremendously important for us. That gives us the capacity to be able to make the investments that we want to make. So we're going to continue to focus on that. And then the last thing I would say is there are some currency headwinds from Canada. It's approximately 1% for the full year in terms of subscription revenue growth. There are some of the dimensions of the guidance.

然後，我們將繼續以自由現金流的產生為目標，因此我們的自由現金流佔收入的百分比為 2.5%，正如我們在準備好的評論中談到的那樣，我們能夠實現 3%。這對我們來說非常重要。這使我們有能力進行我們想要進行的投資。因此我們將繼續關注這一點。我最後要說的是加拿大存在一些貨幣阻力。全年訂閱收入成長約為1%。這是該指導意見的一些維度。

And if I can add to that as well, when we think about our overall long term goal, our long term goal is still at 15%, and as Fawwad said, we are continuing to see marginal expansion through the year.

而且我還可以補充一點，當我們考慮我們的整體長期目標時，我們的長期目標仍然是 15%，正如 Fawwad 所說，我們今年將繼續看到邊際擴張。

Just to sort of put a finer point on that, our expectation is by the end of 2025, in a two year period, we will have expanded. Our margin by over 300 basis points. That's an 80% increase in a two year period. So it's significant for a margin of our size. And as it expands, keep in mind so is are allowable pact, so is our lifetime value, which is great for growth, which is ultimately where we're intending to get back to in the not too distant future. It's not perfectly at 15 for the full year. The reality is at this stage there's rates of inflation that are very different across the geographies that we're in.

為了更準確地說明這一點，我們預計到 2025 年底，在兩年內，我們將實現擴張。我們的利潤率超過300個基點。這意味著兩年內成長了 80%。因此，這對我們的規模利潤來說意義重大。隨著它的擴大，請記住，這是允許的協議，我們的終身價值也是如此，這對成長非常有益，這最終是我們打算在不久的將來回到的水平。全年並不是完美地達到 15 個。現實情況是，現階段，我們所在的不同地區的通貨膨脹率有很大差異。

At this point that now as we think about filing for rates throughout this year, we're in a state of refinement. So keep in mind the first half of 2025 is already benefiting from the rate changes we've pushed through in '24. The back half of the year is where we'll start to refine those prices, and that's really when you start to see the ultimately that retention kick in because you get a more even rate approval for pet parents, and we'd expect to see the majority of our book move into the under 20% rate increase, which we know is good for retention.

現在，當我們考慮全年的利率申請時，我們正處於完善的狀態。因此請記住，2025 年上半年已經受益於我們在 24 年推動的利率變化。今年下半年我們將開始優化這些價格，到那時您將真正開始看到最終的保留效果，因為您會獲得更均勻的寵物父母費率批准，並且我們預計大部分圖書的費率增幅將低於 20%，我們知道這對保留有利。

Okay, thank you. A quick follow up on that just it sounds touch on it, but what are you seeing as far as the pricing that's coming in?

好的，謝謝。快速跟進一下，這聽起來有點觸及問題，但就即將到來的定價而言，您看到了什麼？

It sounds like what you're seeing is that it's in line with the 15% you expected, but I just wanted to confirm that. And then I guess another piece of it, other revenue appears to be rolling off a bit slower than we expected in 2025. You kind of talked about the driver there. Thank you.

聽起來你看到的和你預期的 15% 一致，但我只是想確認這一點。然後我想另一個原因是，其他收入的成長速度似乎比我們預期的 2025 年慢一些。您剛才談到了那裡的司機。謝謝。

Yes, and from that perspective, right in line with our expectations, we are seeing 15 coming into the year and we're so far seeing that. We do expect Q1 is obviously the big cause of when people put their prices through from a hospital perspective, so we're monitoring it very closely, but nothing different to our expectations.

是的，從這個角度來看，這完全符合我們的預期，今年我們將迎來 15 家公司，到目前為止我們也看到了這種情況。我們確實預計，從醫院的角度來看，第一季顯然是人們制定價格的主要原因，因此我們正在密切關注它，但與我們的預期沒有什麼不同。

Yeah, then in terms of other revenue, we've talked about over the last four or five quarters, that business is in secular decline. We've had consecutive quarter over quarter reductions in pet months. We expect that's going to continue. It's largely ARPU driven, the reason for revenue still being up slightly, but yeah, the pace will be dependent on the pets rolling off, and I would expect that that will continue over the next couple of years as we roll off the book.

是的，就其他收入而言，我們在過去四、五個季度討論過，該業務正在長期下滑。我們的寵物月數已連續數季下降。我們預計這種情況將會持續下去。這主要是由 ARPU 驅動的，這是收入仍然略有上升的原因，但是，速度將取決於寵物的數量，我預計，隨著我們寵物數量的增加，這種情況將在未來幾年繼續下去。

But for the most part, the increase in revenue that you're seeing is ARPU driven. PetBest has gone through the same experience. We have, they've seen margin compression and have had to take pricing actions as a result.

但大多數情況下，您看到的營收成長是由 ARPU 推動的。PetBest 也經歷過同樣的經驗。我們知道，他們的利潤率受到壓縮，因此不得不採取定價行動。

Okay, thank you.

好的，謝謝。

The next question comes from John Barnidge with Piper Sandler. Please go ahead.

下一個問題來自 Piper Sandler 的 John Barnidge。請繼續。

Good afternoon. Thank you for the opportunity.

午安.感謝您給我這個機會。

When you talk about the normalization of price increases, I'd love to hear a bit more about that. There is a history of, your pricing increases on the anniversary, and there's a dynamic where the rent needs to earn it.

當您談到價格上漲正常化時，我很想聽聽更多相關內容。歷史上，租金會在周年紀念日上漲，而租金需要透過動態過程才能賺取這筆錢。

As we get into the second half of the year and that normalization, do you anticipate that earned rate increases for '25 will remain in excess of 15% throughout the year? Thank you.

隨著我們進入下半年並且正常化，您是否預計 2025 年的利率增幅將全年保持在 15% 以上？謝謝。

Yeah, thank you for the question, John. So we do expect to see rate increases remaining in excess of 15%. So we're as we think about the pricing flowing through the back half of this year, and again it does depend on what we're seeing in the first quarter that will dictate our pricing strategy in the back end of the year, but we expect it to be slightly elevated.

是的，謝謝你的提問，約翰。因此我們確實預期利率增幅仍將超過 15%。因此，我們正在考慮今年下半年的定價，這確實取決於我們在第一季看到的情況，這將決定我們年底的定價策略，但我們預計它會略有上漲。

That being said, it will be less than it has been over the last two years. So that's where we talk about the normalization of rates. It's getting to the realm of where our pet parents typically will sit and in theory will then help people to budget for the unexpected cost of pet care because they know what they're going to see from their monthly premium. That in turn will help from a retention perspective.

話雖如此，但還是會比過去兩年少。這就是我們談論利率正常化的地方。它已經進入了寵物父母通常所處的範圍，並且從理論上講，它將幫助人們預算寵物護理的意外費用，因為他們知道他們將從每月的保費中看到什麼。從保留的角度來看，這反過來會有所幫助。

In terms of the rate earning, we expect as that starts to come down, that mix of business potentially will shift slightly, but also that leans into our growth as well. So when we think about the geographies we're growing in, we're going to naturally see a bit of a mixed change anyway because we'll start growing more broadly across the geographies we're in today.

就利率收益而言，我們預計，隨著利率開始下降，業務組合可能會略有變化，但這也有利於我們的成長。因此，當我們考慮我們成長的地域時，我們自然會看到一些混合的變化，因為我們將開始在我們今天所在的地域範圍內更廣泛地成長。

Does that answer your question?

這回答了你的問題嗎？

It does. Thank you. And my final question on the on the goodwill write down, can you talk about how far off of the markers they were in the decision to write that down? Thank you.

是的。謝謝。我的最後一個問題是關於商譽減記，您能談談他們在決定減記時與基準值相差多遠嗎？謝謝。

Sure, yeah, so on the Goodwill impacts, through our normal process of evaluating Goodwill, so this pertains to Smart Paws and PetExpert, the two acquisitions and In the case of Smart Paws, I think one of the factors was just the delayed launch of Japan in Europe in Switzerland and Germany to the end of 2024. And so as a result we have to adjust the evaluation model accordingly. And then in the case of PetExpert, we're really, we are really trying to focus on fewer markets and as a result, put on hold growth plans in Poland.

當然，是的，關於商譽的影響，透過我們正常的商譽評估流程，這涉及 Smart Paws 和 PetExpert 這兩項收購，就 Smart Paws 而言，我認為其中一個因素是日本在歐洲瑞士和德國的推出推遲到 2024 年底。因此，我們必須相應地調整評估模型。就 PetExpert 而言，我們確實在努力專注於較少的市場，因此暫停了在波蘭的成長計畫。

We're still committed to the business. There are additional countries Czechia, Slovakia, Belgium. We just have to push those out because we felt. It's more appropriate to focus on the existing business, so those are the drivers of the Goodwill charge.

我們仍然致力於這項業務。其他國家包括捷克、斯洛伐克、比利時。我們只是必須把它們推開，因為我們感覺到了。更合適的做法是專注於現有業務，因此這些就是商譽費用的驅動因素。

How much of the $37 million that remains on the balance sheet is related to the two properties specifically? Thank you.

資產負債表上剩餘的3700萬美元中有多少具體與這兩處房產有關？謝謝。

Yeah, the majority of the goodwill that we have today is related to our Aquarium acquisition.

是的，我們今天擁有的大部分商譽都與我們的水族館收購有關。

The Smart Paws write down effectively reduced the goodwill on that to zero. There's still some remaining on PetExpert. It wasn't a complete write down.

Smart Paws 的減記實際上將其商譽降至零。PetExpert 上還剩餘一些。這並非完整的記錄。

And if I can just add, for mentioned in the in the earlier remarks, we're still very excited about this. So we're really eager to do is ensure that we're reinforcing our focus in areas where we see that we have the greatest opportunities today. The long term road map hasn't changed in terms of international expansion, and we're really happy to see that we've got that German and Swiss entry, market entry point in the back half of last year, which will help us to build this year.

而且我可以補充一下，正如之前的評論中提到的，我們對此仍然感到非常興奮。因此，我們真正渴望做的是確保我們加強對我們認為目前擁有最大機會的領域的關注。在國際擴張方面，長期路線圖並沒有改變，我們很高興看到我們已經在去年下半年進入了德國和瑞士的市場，這將有助於我們今年的發展。

This concludes our question and answer session. The conference has now concluded.

我們的問答環節到此結束。會議現已結束。

Thank you for attending today's presentation. You may now disconnect.

感謝您參加今天的演講。您現在可以斷開連線。