Trupanion Inc (TRUP) 2025 Q2 法說會逐字稿

Good day, and welcome to the Trupanion Second Quarter 2025 Earnings Conference Call. (Operator Instructions) Please note this event is being recorded.

大家好，歡迎參加 Trupanion 2025 年第二季財報電話會議。（操作員指示）請注意，此事件正在被記錄。

I would now like to turn the conference over to Gil Melchior, Director of Investor Relations. Please go ahead.

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 Second Quarter 2025 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 accompany today's discussion, which will be made available on our Investor Relations website under the Quarterly Earnings tab.

下午好，歡迎參加 Trupanion 2025 年第二季財務業績電話會議。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，我們附上了今天討論的幻燈片演示，該演示將在我們的投資者關係網站的“季度收益”選項卡下提供。

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. 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 Forms 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、定價和獸醫行業通膨的聲明。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）詳細討論了這些和其他風險和不確定性。

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 EBITDA and free cash flow. 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. These non-GAAP measures are in addition to and not a 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.

今天的簡報包含管理層用來評估公司業績的非 GAAP 財務指標，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，它指的是新寵物購買和開發費用之前的非 GAAP 營業收入或利潤率。除非另有說明，所有利潤和費用均以非公認會計準則為基礎列示，且不包括股票薪酬費用和折舊費用。這些非公認會計準則 (non-GAAP) 指標是對根據美國公認會計準則 (US GAAP) 編制的財務績效指標的補充，而非替代。鼓勵投資者查看這些非 GAAP 財務指標與最直接可比較的 GAAP 結果的對帳情況，可在今天的新聞稿中找到。

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. I will now hand over the call to Margi.

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。網站上也將提供重播。我現在將電話交給瑪姬。

Thank you, Gil, and good afternoon, everyone. I'll briefly touch on our financial highlights, and we'll provide more context after Fawwad completes his detailed review of our Q2 results.

謝謝你，吉爾，大家下午好。我將簡要介紹我們的財務亮點，在 Fawwad 完成對我們第二季業績的詳細審查後，我們將提供更多背景資訊。

I'm delighted to share that Q2 was one of the strongest financial quarters in the history of Trupanion, underscored by consistent top line growth, robust margin expansion and strengthening retention. Within our subscription segment, revenue rose 16% year-over-year and adjusted operating income increased 45% to over $33 million for the quarter. This translates to a 13.8% subscription adjusted operating margin, up 280 basis points versus the prior year period, performance well ahead of plan.

我很高興地告訴大家，第二季是 Trupanion 史上最強勁的財務季度之一，其特點是持續的營收成長、強勁的利潤率擴張和不斷增強的保留率。在我們的訂閱部門，本季營收年增 16%，調整後營業收入成長 45%，達到 3,300 多萬美元。這意味著，調整後的訂閱營業利潤率為 13.8%，比去年同期上升了 280 個基點，業績遠超計畫。

We were able to deploy 16% more into pet acquisition in the quarter as we continue on the pathway to return to prior investment levels, setting up pet growth for the years to come. These results reflect the team's operational rigor and continued discipline related to execution, honoring our value proposition, member experience and commitment to the veterinary industry. It's highly encouraging to see the results of that work reflected in our performance.

隨著我們繼續恢復到先前的投資水平，我們在本季度能夠將 16% 的資金投入到寵物收購中，為未來幾年的寵物成長做好準備。這些結果反映了團隊的營運嚴謹性和與執行相關的持續紀律，尊重我們的價值主張、會員體驗和對獸醫行業的承諾。看到這項工作的成果反映在我們的表現中，我們感到非常鼓舞。

Let me now turn it over to Fawwad to walk us through the numbers in more detail.

現在讓我把時間交給 Fawwad，讓他更詳細地向我們介紹這些數字。

Thanks, Margi, and good afternoon, everyone. Today, I will share additional details around our second quarter performance as well as provide our outlook for the third quarter and full year 2025. Total revenue for the quarter was $353.6 million, up 12% year-over-year. Within our subscription business, revenue was $242.2 million, up 16% year-over-year.

謝謝，瑪吉，大家下午好。今天，我將分享我們第二季業績的更多細節，並提供我們對第三季和 2025 年全年的展望。本季總營收為 3.536 億美元，年增 12%。我們的訂閱業務收入為 2.422 億美元，年增 16%。

Total subscription pets increased 4% year-over-year to over 1,066,000 pets as of June 30. This includes over 56,000 pets in Europe, a majority of which are currently underwritten through an MGA structure. Average monthly retention for the trailing 12 months was 98.29%, down versus the second quarter last year, which was 98.34%. On a trailing three-month basis, retention was 98.4%, up from the second quarter last year and up sequentially from the first quarter this year.

截至 6 月 30 日，訂閱寵物總數年增 4%，達到 1,066,000 餘隻。其中包括歐洲的 56,000 多隻寵物，其中大多數目前透過 MGA 結構承保。過去 12 個月的平均每月留存率為 98.29%，低於去年第二季的 98.34%。過去三個月，留任率為 98.4%，高於去年第二季度，也比今年第一季上升。

The subscription business cost of paying veterinary invoices was $172.1 million, resulting in a value proposition of 71.1%, a healthy improvement from 74.1% in the prior year period. The quarter benefited from prior period development of $1.4 million or approximately 60 basis points of revenue. As a percentage of subscription revenue, variable expenses were 9.1%, down from 9.5% a year ago. Fixed expenses as a percentage of revenue were 6%, up from 5.3% in the prior year period and down sequentially from 6.2% in Q1. This is in line with our expectations, and we continue to expect expense leverage as we transition to our wholly owned insurance entity for our Canadian business.

支付獸醫發票的訂閱業務成本為 1.721 億美元，價值主張為 71.1%，較去年同期的 74.1% 有顯著改善。本季受益於前期 140 萬美元的發展，或約 60 個基點的收入。佔訂閱收入的百分比為 9.1%，低於一年前的 9.5%。固定支出佔收入的百分比為 6%，高於去年同期的 5.3%，但低於第一季的 6.2%。這符合我們的預期，隨著我們的加拿大業務向全資保險實體轉型，我們將繼續預期費用槓桿。

Our subscription business delivered adjusted operating income of $33.4 million, an increase of 45% from last year and contributed 96% of our total AOI for the quarter. Subscription adjusted operating margin was 13.8%, up from 11% in the prior year and represents approximately 280 basis points of margin expansion.

我們的訂閱業務實現了 3,340 萬美元的調整後營業收入，比去年增長了 45%，並佔本季總 AOI 的 96%。訂閱調整後的營業利益率為 13.8%，高於上年的 11%，代表利潤率擴大約 280 個基點。

Now I'll turn to our other business segment, which is comprised of revenue from other products and services that have a lower margin profile than our subscription business. Our other business revenue was $111.4 million for the quarter, an increase of 5% year-over-year. We expect growth for this segment to continue to decelerate as we are no longer enrolling new pets in the majority of US states for our largest partner in this segment.

現在我將談談我們的其他業務部門，該部門由利潤率低於我們的訂閱業務的其他產品和服務的收入組成。本季我們的其他業務收入為 1.114 億美元，年增 5%。我們預計該領域的成長將繼續減速，因為我們不再為該領域的最大合作夥伴在美國大多數州招募新寵物。

Adjusted operating income for this segment was $1.4 million or 1.3% of revenue. In total, adjusted operating income was $34.8 million in Q2, up 40% from Q2 last year. We deployed $18.3 million of this AOI to acquire approximately 62,700 new subscription pets. Excluding the pets that are underwritten through an MGA structure, this translated into an average pet acquisition cost of $276 per pet in the quarter, up from $231 in the prior year period. The estimated internal rate of return on this spend was 30% in the quarter.

該部門調整後的營業收入為 140 萬美元，佔營收的 1.3%。整體而言，第二季調整後的營業收入為 3,480 萬美元，較去年第二季成長 40%。我們動用了其中的 1,830 萬美元來購買約 62,700 隻新的訂閱寵物。不包括透過 MGA 結構承保的寵物，這意味著本季每隻寵物的平均購買成本為 276 美元，高於去年同期的 231 美元。本季該支出的預期內部報酬率為 30%。

We invested $0.9 million in the quarter in development costs. Stock-based compensation expense was $9.3 million. During the quarter, we also recorded a one-time gain of $7.8 million on our preferred stock in base drive as part of an exchange of our preferred interest for intellectual property related to our food initiative. As a result, net income for the quarter improved to $9.4 million or $0.22 per basic and diluted share as compared to a net loss of $5.9 million or $0.14 per basic and diluted share in the prior year period. In terms of cash flow, operating cash flow was $15 million in the quarter compared to $6.9 million in the prior year period. Capital expenditures totaled $3 million, largely consistent with Q2 last year. As a result, free cash flow was $12 million, up from $4 million last year. Over the last four quarters, free cash flow reached $61.3 million.

本季我們投資了 90 萬美元用於開發成本。股票薪酬費用為 930 萬美元。在本季度，我們還記錄了基礎驅動優先股的 780 萬美元一次性收益，這是我們用優先權益交換與食品計畫相關的智慧財產權的一部分。因此，本季淨收入增至 940 萬美元，即每股基本收益和稀釋收益均為 0.22 美元，去年同期的淨虧損為 590 萬美元，即每股基本收益和稀釋收益均為 0.14 美元。就現金流而言，本季經營現金流為 1,500 萬美元，去年同期為 690 萬美元。資本支出總計 300 萬美元，與去年第二季基本持平。因此，自由現金流從去年的 400 萬美元增加到 1,200 萬美元。過去四個季度，自由現金流達到 6,130 萬美元。

Turning to the balance sheet. We ended the quarter with $319.6 million in cash and short-term investments. Our largest insurance entity, APIC, continues to be strongly capitalized, which in the quarter enabled us to pay an extraordinary dividend to our operating company of $26 million. We used approximately $15 million of the proceeds to pay down debt, ending the quarter with a reduced debt balance of $116.4 million and plan to use the remaining $11 million for growth investments and strategic initiatives.

轉向資產負債表。本季末，我們的現金和短期投資為 3.196 億美元。我們最大的保險實體 APIC 繼續擁有雄厚的資本，這使我們能夠在本季向我們的營運公司支付 2,600 萬美元的特別股息。我們使用了約 1,500 萬美元的收益來償還債務，本季末債務餘額減少至 1.164 億美元，並計劃將剩餘的 1,100 萬美元用於成長投資和戰略計畫。

Now I'll turn to our outlook. For the full year of 2025, we are raising our guidance to account for Q2 overperformance, updated assumptions for the second half as well as favorable conversion rate movements. We now expect total revenue in the range of $1.417 billion to $1.434 billion. Subscription revenue is now expected to be in the range of $983 million to $992 million, representing approximately 15% year-over-year growth at the midpoint. We now expect total adjusted operating income to be in the range of $141 million to $151 million. We are raising both ends of the range and the new midpoint represents 28% year-over-year growth. For the third quarter of 2025, total revenue is expected to be in the range of $359 million to $365 million. Subscription revenue is expected to be in the range of $251 million to $254 million, representing approximately 15% year-over-year growth at the midpoint. Total adjusted operating income is expected to be in the range of $37 million to $40 million. This represents approximately 18% growth year-over-year at the midpoint.

現在我來談談我們的展望。對於 2025 年全年，我們將上調預期，以反映第二季的超額表現、下半年的最新假設以及有利的轉換率變動。我們現在預計總收入將在 14.17 億美元至 14.34 億美元之間。目前預計訂閱收入將在 9.83 億美元至 9.92 億美元之間，中間值年增約 15%。我們現在預計調整後的總營業收入將在 1.41 億美元至 1.51 億美元之間。我們正在提高該範圍的兩端，新的中點代表著同比增長 28%。2025 年第三季度，總營收預計在 3.59 億美元至 3.65 億美元之間。預計訂閱收入將在 2.51 億美元至 2.54 億美元之間，中間值年增約 15%。預計調整後總營業收入將在 3,700 萬美元至 4,000 萬美元之間。這意味著中期同比增長約 18%。

As a reminder, our revenue projections are subject to conversion rate movements predominantly between the US and Canadian currencies. For our third quarter and full year guidance, we used a 73% conversion rate in our projections. Let me now pass it back to Margi.

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。對於我們的第三季和全年指導，我們在預測中使用了 73% 的轉換率。現在讓我把它交還給瑪姬。

Thank you, Fawwad. Our financial results and guidance for the year demonstrate that Trupanion is positioned exceptionally well for the future. I am so proud of the team and thank them for their focus and discipline over the last 12 months and for their unwavering support of the veterinary industry. We understand the current pressures within the veterinary field and the ongoing challenge to strike a careful balance to support the practice of best medicine while enabling access to care. Most recently, we've observed a modest but clear deceleration trend in our cost of goods, giving us confidence to marginally decrease our operating assumptions related to veterinary invoice trends for the second half of this year.

謝謝你，Fawwad。我們今年的財務表現和指導表明 Trupanion 的未來發展定位非常良好。我為這個團隊感到驕傲，並感謝他們在過去 12 個月的專注和紀律，以及對獸醫行業的堅定支持。我們了解獸醫領域目前面臨的壓力以及持續面臨的挑戰，即在支持最佳醫療實踐的同時獲得醫療服務。最近，我們觀察到商品成本呈現溫和但明顯的減速趨勢，這使我們有信心略微降低今年下半年與獸醫發票趨勢相關的營運假設。

Our results today show that we have now caught up with the cost of veterinary care with our value proposition restored to target. This allows us to deliver a strong and sustainable offering to our members while generating the adjusted operating income needed for Trupanion to reinvest, ensuring more pets get the care they need. Results of this caliber do not come through pricing alone.

我們今天的結果表明，我們現在已經趕上了獸醫護理的成本，我們的價值主張恢復到了目標。這使我們能夠為會員提供強大且可持續的服務，同時產生 Trupanion 再投資所需的調整後營業收入，確保更多寵物得到所需的照顧。這種水準的結果並非僅靠定價就能實現。

Our longer-term investments in technology are beginning to pay dividends by improving our cost to process invoices, increasing the penetration of our direct payment software at veterinary hospitals and creating efficiencies across the organization, all while enhancing our overall member experience. The combination of this improved experience and industry-leading coverage is driving our impressive retention of 98.4% for the quarter, especially for those with pricing changes of over 20%, which far exceeded expectations. This rebounding level of retention demonstrates the exceptional and measurable durability of our product and the value realized by our members.

我們對科技的長期投資開始獲得回報，它改善了我們處理發票的成本，提高了我們的直接支付軟體在獸醫院的普及率，提高了整個組織的效率，同時增強了我們整體會員的體驗。這種改進的體驗和行業領先的覆蓋範圍相結合，推動我們本季度的保留率達到了令人印象深刻的 98.4%，特別是對於那些價格變化超過 20% 的客戶，這遠遠超出了預期。這種回彈率證明了我們產品的卓越和可衡量的耐用性以及我們的會員所實現的價值。

Furthermore, we've been disciplined with our acquisition efforts and have been very focused on ensuring the right pets at the appropriate level of investment, which long term will be a foundational driver of healthy margins and a more resilient member experience. This quarter's results serve as tangible proof of this discipline and will serve as a catalyst for compounding growth as we continue to lean more aggressively into the opportunity in front of us.

此外，我們在收購方面一直非常嚴格，並且非常注重確保以適當的投資水平收購合適的寵物，從長遠來看，這將成為健康利潤率和更具彈性的會員體驗的基礎驅動力。本季的業績是這項原則的有力證明，並將成為複合成長的催化劑，因為我們將繼續更積極地抓住眼前的機會。

In closing, we enter the second half of 2025 from a position of financial strength and an exciting point in our growth journey. We're buoyed by our continued efficiency and motivated by a highly resilient member base whose retention rate and thus lifetime value continues to increase. Most crucially, the team is ready to deploy our AOI to enable high-quality, sustainable growth for the years to come. With a vast global addressable market ahead of us and a business model compounding at high and proven internal rates of return, we are uniquely positioned to grow and to scale with confidence. With that, we'll open it up for questions.

最後，我們將以財務實力雄厚和成長歷程中令人興奮的時刻進入 2025 年下半年。我們為持續的效率而感到振奮，並受到高度彈性的會員基礎的激勵，其保留率和終身價值持續增加。最重要的是，團隊已準備好部署我們的 AOI，以實現未來幾年的高品質、永續成長。我們面前有廣闊的全球目標市場，並且擁有高且經過驗證的內部收益率複合業務模式，因此我們擁有獨特的優勢，可以充滿信心地實現成長和擴大規模。接下來，我們將開始回答問題。

(Operator Instructions) John Barnidge, Piper Sandler.

（操作員指示）約翰·巴尼奇、派珀·桑德勒。

You're talking about a clear deceleration trend in the elevated input costs and then it seems like growth is returning. Isn't the loss ratio typically more elevated seasonally in the first half of the year due to the calendar? That wasn't really the case here this year. And given that seasonal makeup, should we be expecting the loss ratio to further improve from here beyond the targeted 71% margin?

您談到了投入成本上升的明顯減速趨勢，但隨後似乎又恢復了成長。由於日曆的原因，上半年的損失率不是通常會隨著季節變化而更高嗎？今年的情況並非如此。考慮到季節性因素，我們是否應該預期損失率將從現在開始進一步改善，超過目標 71% 的利潤率？

Yes. John, thanks for the question. So I'll start off and then pass over to Fawwad as well. From our perspective, typically, we do see a seasonal lift in Q1, Q2. And as we take more rate through the year, we'll see that, that rate start to realize and therefore, brings down that cost of goods. That hasn't been the case this quarter. As we noted, we've seen a mild deceleration, which is encouraging. And at the moment, that's kind of what we're assuming in within our operating assumptions. So that being equal, we would expect to see that reflected in our guidance, which is what Fawwad shared earlier. Fawwad, anything to add?

是的。約翰，謝謝你的提問。因此我將首先發言，然後把發言權交給 Fawwad。從我們的角度來看，通常我們確實會看到第一季和第二季的季節性成長。隨著我們全年利率的提高，我們會看到利率開始實現，從而降低商品成本。本季情況並非如此。正如我們所指出的，我們看到了輕微的減速，這是令人鼓舞的。目前，這正是我們在營運假設中所假設的。因此，在平等的基礎上，我們希望看到這一點反映在我們的指導中，這也是 Fawwad 之前分享的。Fawwad，還有什麼要補充的嗎？

Yes. The only thing I'd add is just from an inflation perspective. In the quarter, we saw a little bit of an abatement of inflation down about 1%. So baked into our guidance for second half is an assumption that, that 1% continues. And in the prepared remarks, I mentioned that we had about 60 basis points of favorable development in Q2.

是的。我唯一要補充的只是從通貨膨脹的角度來看。本季度，我們看到通貨膨脹率略有下降，下降了約 1%。因此，我們對下半年的預測是，1% 的成長率將持續下去。我在準備好的發言中提到，我們在第二季度取得了約 60 個基點的良好發展。

Great. And my follow-up question, can you maybe talk a little bit more about the food initiative benefit that you talked about in your prepared remarks? Are we closer to that business launching?

偉大的。我的後續問題是，您能否再多談談您在準備好的發言中提到的食品計劃的好處？我們距離這項業務的啟動是否更近了？

Yes. I think we took a step in a positive direction. This business is still nascent. We're just beginning, but this was an opportunity for us to acquire IP. The company had made an investment in a partner called (inaudible) some years ago. And so being able to get access to an IP, that's a foundational element for this business. And the business is still in the very early stages, but this IP is a critical foundation. It's a building block that will be important for the business. We're very optimistic about this business. We think it has significant potential over time.

是的。我認為我們朝著積極的方向邁出了一步。這項業務仍處於起步階段。我們才剛起步，但這對我們來說是一個獲取智慧財產權的機會。幾年前，該公司對一家名為（聽不清楚）的合作夥伴進行了投資。因此，能夠獲得 IP 是這項業務的基礎要素。雖然業務仍處於非常早期的階段，但這個 IP 是一個關鍵的基礎。這是對企業至關重要的基石。我們對這項業務非常樂觀。我們認為隨著時間的推移它具有巨大的潛力。

Jon Block, Stifel.

喬恩·布洛克（Jon Block），斯蒂費爾（Stifel）。

Margi, the slides sort of come out late, so I'm trying to run some math. But I have PAC up about 20% year-over-year, but the gross adds down low-single digits year-over-year and just a real sort of stagnant gross adds over the past five quarters or so. So can you explain the inability to accelerate gross adds despite spending more and more on each pet in an industry that's arguably a growth industry where we hear some 20%, 30%, 40% growth numbers from some of your competitors?

瑪吉，幻燈片出來得有點晚，所以我試著做了一些數學計算。但是，我的 PAC 同比增長了約 20%，但總收入同比下降了個位數，並且在過去五個季度左右，總收入增長處於停滯狀態。那麼，您能否解釋為什麼在一個可以說是成長型的行業中，儘管您在每隻寵物身上花費了越來越多的錢，卻無法加速總收入的增長，我們從一些競爭對手那裡聽到了 20%、30% 或 40% 的增長率？

Jon, thanks for the question. So I would say overall, when we think about growth, our gross adds are right in line with expectations as our guidance shows. For the last year, we've been really focusing on how do we refine our approach to ensure that we're priced appropriately for each pet. So a year ago, we talked about as pricing flows through, we'll target those pets that have the right pricing and the higher lifetime value, which means we haven't been growing for quantity, but we've been growing for quality, if you will. So when you think about what that means, essentially, it's looking at pets that will deliver the highest lifetime value. And that's from the vet channel from other net, which we're seeing performing really well.

喬恩，謝謝你的提問。因此，總的來說，當我們考慮成長時，我們的總增幅與預期完全一致，正如我們的指導所示。在過去的一年裡，我們一直在關注如何改進我們的方法，以確保每隻寵物的定價合理。因此，一年前，我們談到隨著價格的變動，我們將瞄準那些價格合適且終身價值更高的寵物，這意味著我們的增長不是數量的增長，而是質量的增長，如果你願意的話。因此，當您思考這意味著什麼時，本質上，它就是尋找能夠提供最高終身價值的寵物。這是來自其他網路的獸醫頻道的數據，我們發現它的表現非常好。

The LVP of our core book of business is higher today than it was a year ago. And I think that's reflected in the bottom line. And you can see that we've been working on the pets we've been adding for the last year have been consistently at a higher LVP level, which ultimately makes it more sustainable. When we think about focusing on those, just to put that in perspective, what it means in reality is we're turning off some of the less profitable channels.

我們核心業務的 LVP 目前比一年前更高。我認為這反映在底線上。您可以看到，我們一直致力於使去年添加的寵物始終處於更高的 LVP 水平，最終使其更具可持續性。當我們考慮關注這些問題時，從這個角度來看，這實際上意味著我們正在關閉一些利潤較低的管道。

So things like wellness versus insurance, things where we know we're not priced appropriately sustainably, we're not going to grow there to add a pet. We're going to grow there to put the right pet on the book. And then we've been spending more on retention, which has really been our main focus for the last year. So that's working really well considering the rate increases that have come through. I think that shows up in our net pet growth. So it's up for two consecutive quarters now.

因此，對於健康和保險之類的產品，我們知道它們的定價不合理且可持續，因此我們不會為了養寵物而擴大規模。我們將在那裡成長，把合適的寵物寫進書裡。我們在保留客戶方面投入了更多資金，這實際上是我們去年關注的重點。考慮到已經實現的利率上調，這項措施確實效果很好。我認為這體現在我們的寵物淨增長上。現在已經連續兩季上漲。

Core Trupanion is performing ahead in the blended mix, which is incredibly encouraging. And we'll continue to build on the investment. I think the key thing for us now is we have the money to grow. We've got that nice free cash flow, and we're starting to deploy more. We saw that pet. The PAC was up 16% year-over-year, which is encouraging, and we expect that to continue into the back half of this year.

Core Trupanion 在混合中表現領先，這令人難以置信地鼓舞人心。我們將繼續加大投資。我認為現在對我們來說最重要的是我們有足夠的資金來實現發展。我們擁有良好的自由現金流，我們開始部署更多。我們看到了那隻寵物。PAC 年增 16%，這是令人鼓舞的，我們預計這種勢頭將持續到今年下半年。

Okay. That was helpful. But maybe I'll just follow up and continue on that same theme. I mean, if I remember, I think it was September of last year, so about a year ago, we were out at the Analyst Day. I might have my months a little bit off, but it was roughly 12 months ago. And at that time, you were conveying that we were going to start to see a pickup in overall gross adds. You were getting the MLR back in place. It's been in place now for some time or back around where you wanted after the hyperinflationary time.

好的。這很有幫助。但也許我只是跟進並繼續討論同一主題。我的意思是，如果我沒記錯的話，我想那是去年九月，大約一年前，我們參加了分析師日。我可能已經休息了幾個月，但那已經是大約 12 個月前的事了。當時，您傳達的訊息是，我們將開始看到整體新增量回升。您正在讓 MLR 回到原位。它現在已經存在了一段時間，或者在惡性通貨膨脹時期之後回到了你想要的狀態。

So like what's changed, right? I mean, that's what you were conveying 12 months ago that, in my view, clearly hasn't played out. I know you're still beating the drum on the profitability, the lifetime value per pet. I mean that's just going up because you're taking more price and price. So like can you talk to us about what you saw 10 or 11 months ago that I don't think has really played out? And then when should we expect real growth in gross adds, which I think is the ultimate driver of arguably the long-term value of the company in a growth market?

那麼發生了什麼變化，對嗎？我的意思是，這就是你 12 個月前所傳達的，但在我看來，顯然還沒有實現。我知道你仍在大力宣傳獲利能力和每隻寵物的終身價值。我的意思是，價格只會不斷上漲，因為你收取的價格越來越高。那麼，您能否與我們談談您在 10 或 11 個月前看到的但我認為尚未真正發生的事情？那麼，我們什麼時候該期待總新增量能實現真正的成長呢？我認為這是公司在成長型市場中長期價值的最終驅動力？

Yes. I mean growth comes through a number of different areas for us. Nothing has changed in terms of our expectations, and nothing has changed in terms of that mentality around growth and gross net adds ultimately. When we think about what we were trying to do beginning of -- it was September last year, you're right.

是的。我的意思是，我們的成長來自於多個不同的領域。我們的預期沒有任何改變，最終圍繞著成長和淨增額的心態也沒有任何改變。當我們思考我們一開始試圖做的事情時——那是去年九月，你是對的。

So in terms of the timing, 12 months ago, it was the first quarter in a number of quarters, we actually started to increase our PAC spend again in Q4, Q1 and now Q2 is our biggest step-up, which is encouraging and gives us more room to move. We expect to see that a modest pickup in the second half of this year, which is right in line with expectations that we set at the beginning of this year. And as we move into the following quarters and years, you expect to see more and more of that turnaround.

因此就時間而言，12 個月前，這是多個季度中的第一個季度，我們實際上在第四季度、第一季度開始再次增加 PAC 支出，現在第二季度是我們增幅最大的季度，這令人鼓舞，並為我們提供了更多的行動空間。我們預計今年下半年會出現溫和回升，這與我們今年年初設定的預期一致。隨著我們進入接下來的幾個季度和幾年，你會看到越來越多的轉變。

So we're still, from a PAC perspective, 25% down on those big quarters where we were spending close to $20 million a year, and that was back in 2022. So as we build that back up to that level, we expect to see more from a brand halo effect, which will help us from a more rapid growth build. But the plan this year was always to see modest pickup in the back half of the year, and that remains the case today.

因此，從 PAC 的角度來看，我們仍然比那些大季度下降了 25%，當時我們每年的支出接近 2,000 萬美元，那是在 2022 年。因此，當我們重新回到這個水平時，我們期望看到更多的品牌光環效應，這將有助於我們實現更快的成長。但今年的計畫始終是希望在下半年實現溫和回升，今天依然如此。

Brandon Vazquez, William Blair.

布蘭登·巴斯克斯、威廉·布萊爾。

Congrats on the quarter. Maybe I'll ask somewhat of a similar question, but I'll attack it a little bit different. Maybe for Margi and Fawwad, for both of you. As we look at the kind of the sequentials from here and we go into the back half of the year, help us think about the mix of subscription business. Let's just focus on that subscription business growth that's coming from price versus coming from pet subscription growth or the number of pets and then really what that base means for our models as we go into 2026.

恭喜本季取得佳績。也許我會問一個類似的問題，但我會用稍微不同的方式來處理它。也許對 Margi 和 Fawwad 來說，對你們倆來說都是如此。當我們從這裡查看連續性並進入下半年時，這有助於我們思考訂閱業務的組合。讓我們只專注於來自價格的訂閱業務成長，而不是來自寵物訂閱成長或寵物數量的成長，然後看看這個基礎對於我們進入 2026 年的模式意味著什麼。

Yes, I can help with the mix part. So in the quarter, if you break the 16% year-over-year revenue growth for subscription, about 11% came from ARPU and about 5% came from pets. That's roughly consistent with what we saw in Q1. What we said at the beginning of the year, and it remains what we're on track for, is for pets to contribute at a higher level than they are today as a percent of contribution to revenue growth and ARPU to contribute less.

是的，我可以幫忙混合部分。因此，在本季度，如果以訂閱收入年增 16% 計算，其中約 11% 來自 ARPU，約 5% 來自寵物。這與我們在第一季看到的情況大致一致。我們在年初就說過，而且我們仍在按照計劃進行，那就是寵物對收入成長的貢獻將比現在更高，而 ARPU 的貢獻將減少。

So ARPU peaked in Q4 of '23. That was our assumption at the time and that has largely played out in Q1 and Q2. So I'm looking at the second half of the year, I would expect to see more contribution from pets, less contribution from ARPU on a relative basis. Pricing will still be the way, but pet count will come up.

因此，ARPU 在 23 年第四季達到高峰。這是我們當時的假設，並且在很大程度上在第一季和第二季得到了體現。因此，展望下半年，我預期寵物的貢獻會更大，而 ARPU 的貢獻相對較少。定價方式仍將維持不變，但寵物數量將會增加。

And just a quick follow-up on that, Fawwad. Like sequentially, can gross new adds, I think this is part of what John was trying to ask earlier, PAC spend has been ramping up for a couple of quarters now. Do you think sequentially, we can start to expect that gross new adds in the core business can increase in the back half of this year?

接下來我再簡單跟進一下這個問題，Fawwad。就像連續增加新內容一樣，我認為這是約翰之前試圖問的部分問題，PAC 支出已經連續幾季增加。您是否認為，我們可以連續預期今年下半年核心業務新增總量將會增加？

Yes. Our expectation is back half of the year gross adds will be positive. In terms of the specific timing on quarterization, I would think about the timing of the PAC spend, the point that Margi made. So we had talked last year about very gradually increasing the PAC spend. We increased it modestly in Q3 of last year, about 4%, about 8% in Q4. We only just in Q1 began to increase in double digits. On total dollar spend, it's still less than what we were spending a couple of years ago in the first half. So we're happy to be able to redeploy those dollars. But from a second half perspective, yes, our assumption and our model is that first half will turn positive.

是的。我們預計今年下半年總增量將為正值。關於季度化的具體時間，我會考慮 PAC 支出的時間，這是 Margi 提出的觀點。因此，我們去年曾討論過逐步增加 PAC 支出。我們在去年第三季小幅提高了約4％，第四季提高了約8％。我們在第一季才開始實現兩位數的成長。就總支出而言，這仍然低於幾年前上半年的支出。因此我們很高興能夠重新部署這些資金。但從下半年的角度來看，是的，我們的假設和模型是上半年將轉為正數。

Okay. And Margi, maybe just a quick update on PHI and Furkin. Any progress that you can update with us there and potential timing of a broader launch for either one of those products, especially in the US.

好的。Margi，也許我只是想快速更新 PHI 和 Furkin 的情況。您可以向我們更新任何進展情況，以及這兩款產品更廣泛推出的潛在時間，尤其是在美國。

Yes. Thank you. We've got a lot of learnings from these products. They've been in market now in Canada for around four years. So a fair amount of time. We've actually invested small amounts of money into these products. So they're not consuming a huge amount of capital, but they're giving us a lot of learnings. So we're taking those learnings we're building on them.

是的。謝謝。我們從這些產品中學到了很多。他們目前已在加拿大市場銷售了大約四年。所以這是相當長的時間。我們實際上已經在這些產品上投入了少量資金。因此，他們並沒有消耗大量的資金，但卻給了我們許多經驗教訓。因此，我們正在吸取這些經驗教訓並在此基礎上繼續發展。

As we've mentioned before, we've been focusing on the highest LVP product, which in turn means we've turned down some focus on these smaller products because we're looking at the core Trupanion. But as we recognize the market grows, it's evolving. We think there's absolutely a place from the learnings that we found that we can redeploy those into the US market more broadly.

正如我們之前提到的，我們一直專注於最高 LVP 產品，這反過來意味著我們減少了對這些較小產品的關注，因為我們正在關注核心 Trupanion。但隨著我們認識到市場在成長，它也在不斷發展。我們認為，從我們的經驗中絕對可以發現我們可以將這些經驗更廣泛地重新部署到美國市場。

So as our PAC investment steps up longer term, we have the optionality to deploy that against different marketing segments and market segments. So we're fine-tuning our learnings. We'll build on them in time, and we won't share more for competitive reasons, but we're well positioned for growth across the ecosystem, and these products have definitely helped bolster our education there.

因此，隨著我們的 PAC 投資長期增加，我們可以選擇針對不同的行銷部門和市場部門進行部署。因此我們正在微調我們的學習成果。我們會及時在此基礎上進行開發，出於競爭原因，我們不會分享更多信息，但我們已做好在整個生態系統中實現增長的準備，這些產品無疑有助於加強我們在那裡的教育。

(Operator Instructions) Katie Sakys, Autonomous Research.

（操作員指示）凱蒂·薩基斯（Katie Sakys），自主研究。

I'd like to circle back to some comments you've made, Margi, on retention previously. I think we discussed expecting to see a little bit of the headwind abate in 2Q and 3Q. And I can appreciate that on a sequential basis, there's been a modest improvement there. But thinking about that cadence of improvement, I mean, should we expect to see more significant improvement in 3Q? And where are you guys really trying to end the year at in terms of retention?

瑪吉，我想回顧一下你之前對保留所做的一些評論。我想我們討論過預計第二季和第三季逆風會減弱。我可以理解，從連續性來看，那裡已經有了適度的改善。但考慮到這種改善的節奏，我的意思是，我們是否應該期待在第三季看到更顯著的改善？那麼，從留存率來看，你們今年的最終目標是什麼呢？

Yes. Thanks for the question, Katie. Retention for the quarter was strong. I mean I think kind of the sequential movement based on -- when you think about how much of a compounding increase most of our members have received, we're really pleased to see that move in a positive direction. I'd expect us to continue in this direction for the foreseeable future as we work on our learnings.

是的。謝謝你的提問，凱蒂。本季的保留率很高。我的意思是，我認為這種連續的運動是基於——當你想到我們的大多數成員獲得了多少複合增長時，我們真的很高興看到這種運動朝著積極的方向發展。我希望我們在可預見的未來繼續朝著這個方向努力，不斷學習。

We keep building on hopefully having that tailwind of consistently lower pricing increases we've now caught up. So when we think about our value proposition, we're at that value proposition today. So the times where we were playing catch-up initially and then having to kind of really put that rate above 20% are behind us. So seeing that from a member perspective and their experiences are going to be a lot softer.

我們將繼續努力，希望能趕上價格持續走低的趨勢。因此，當我們思考我們的價值主張時，我們今天就處於這個價值主張之中。因此，我們最初努力追趕，然後必須將利率提高到 20% 以上的時代已經過去了。因此，從會員的角度來看，他們的體驗將會變得更加柔和。

So in terms of budgetability, which is what we aim to be, we see a nice tailwind in front of us there. So I'd expect it to continue moving in a positive direction. We've got a long way to go. We've got a lot of opportunity in front of us given that this was -- a high was 98.8%. That's something that we're always going to strive to do again, but it's going to take a long time to get there. We'll just keep moving forward. And I would say the strength of the over and the under 20% buckets give us a lot of encouragement.

因此，就預算能力而言（這也是我們的目標），我們看到了良好的順風動能。因此我預計它將繼續朝著正面的方向發展。我們還有很長的路要走。鑑於這一比例高達 98.8%，我們面前有很多機會。我們會一直努力再次實現這一目標，但要實現這一目標還需要很長時間。我們只會繼續前進。我想說的是，超過或低於 20% 的球桶的力量給了我們很大的鼓勵。

Okay. Maybe going at this from a different direction. You've previously discussed having almost half of the book kind of priced ahead of where it needs to be. What's the strategy with those customers looking into the back half of the year? I mean can they expect to see price decreases? And if so, I mean, how much of a tailwind can we expect that to be to retention overall? And subsequently, how much of a headwind might that be to ARPU in the back half of the year?

好的。也許可以從不同的方向來考慮這個問題。您之前曾討論過，幾乎有一半的書的定價都高於應有的水平。對於這些客戶，你們針對下半年的策略是什麼？我的意思是他們能預期看到價格下降嗎？如果是這樣，我的意思是，我們可以預期這對整體保留率有多大幫助？那麼，這對下半年的 ARPU 會造成多大的阻礙呢？

Yes. I mean our pricing is set for the back half of the year. So we're not going to be adjusting any rates that our members are going to be seeing right now because we set them around a year to 18 months in advance. This is really talking about 2026 and beyond as we look at those overall trends. In terms of pricing ahead, when we price ahead -- we always price ahead. We're always thinking about what is the projected cost of that risk of that pet every -- for the next 12 months.

是的。我的意思是我們的定價是針對今年下半年制定的。因此，我們不會調整我們的會員現在看到的任何利率，因為我們已經提前一年到一年半的時間設定了這些利率。當我們看這些總體趨勢時，這實際上是在談論 2026 年及以後的情況。就提前定價而言，當我們提前定價時——我們總是提前定價。我們一直在思考未來 12 個月內該寵物的風險預計成本是多少。

So we feel like we're now in good shape, which means we're going to see a lot softer increases for members on a regular basis moving forward because we've hit that value proposition overall. And what that means is you -- there may be some areas that have a price decrease. There will be a lot of areas that have a significantly reduced increase for 2026 and beyond as we've caught up with that price. Our value proposition goal is still to maintain that 71%. We're not going to change that and deviate it.

因此，我們覺得我們現在的狀況很好，這意味著我們將會看到會員的定期成長更加溫和，因為我們總體上已經達到了這一價值主張。這意味著有些地區的價格可能會下降。由於我們已經達到了這個價格，到 2026 年及以後，許多地區的漲幅將大幅下降。我們的價值主張目標仍是維持71%。我們不會改變或偏離這一點。

So what it means is we will be going through in a far more granular level to refine our value proposition, not just from a geography perspective, but breed and age, which is what we used to do historically prior to those big inflationary periods. In our business, retention is a primary growth lever, and we're really excited about momentum on this front. And considering those compounding increases experience, we're now in a position to move forward. And there is a tailwind in front of us, and we're operating from a very healthy margin position.

所以這意味著我們將在更細緻的層面上完善我們的價值主張，不僅從地理角度，而且從品種和年齡角度，這也是我們在那些大通膨時期之前曾經做過的事情。在我們的業務中，保留是主要的成長槓桿，我們對這方面的發展勢頭感到非常興奮。考慮到這些複合增加的經驗，我們現在可以繼續前進了。我們面前有順風，而且我們的利潤率狀況非常健康。

Wilma Burdis, Raymond James.

威爾瑪伯迪斯、雷蒙詹姆斯。

How is the other income, which was $12 million, which contributed at least partly to the large net EPS beat?

其他收入（1200 萬美元）如何至少部分促成了淨 EPS 的大幅成長？

Yes. So thanks for the question. Yes, that was related to the one-time gain that we got from the exchange of our preferred stock in base ride. So that's what I was describing earlier. We returned our preferred stock to base ride in exchange for IP. That IP is going to be used for lands map.

是的。感謝您的提問。是的，這與我們從基本乘數優先股交換中獲得的一次性收益有關。這就是我之前描述的。我們將優先股回饋給BaseRide，以換取IP。該 IP 將用於土地地圖。

Got you. And then understanding the margin appears to be near the targets and obviously very solid, but do you expect 15% inflation will continue to recur next year? And how are you guys thinking about rate even with the margin being in a good position because just levels of inflation have been high. So how do you think about that going forward?

明白了。然後了解到利潤率似乎接近目標並且顯然非常穩固，但您是否預計明年通膨率會繼續達到 15％？即使利潤率處於良好狀態，你們如何看待利率，因為通貨膨脹水準一直很高。那麼，您如何看待未來的發展呢？

Yes. So what we're seeing right now, as Fawwad mentioned, is definitely a deceleration in inflation. So we've seen that trend over the last few months, and we said we would share more as that came through, and we have done and we'll continue to do so. So we're obviously monitoring this very closely. I expect given the challenges in the veterinary industry that we may see further moderation.

是的。因此，正如 Fawwad 所提到的，我們現在看到的是通貨膨脹肯定在放緩。所以我們在過去幾個月看到了這種趨勢，我們說過我們會分享更多信息，我們已經這樣做了，並將繼續這樣做。因此我們顯然正在密切監視此事。鑑於獸醫行業面臨的挑戰，我預計我們可能會看到進一步的緩和。

We're not seeing that yet, but we will tell you and we'll take that into account. As we think about 2026, we're using that assumption, that operating assumption with that slight deceleration in our rates for next year and beyond. So that will mean that there will still be increases coming through because the cost of goods will continue to go up, and therefore, that will be justified in our numbers. But if it needs to abate further, then we will take the necessary steps to ensure that happens for our members that we honor that value prop.

我們還沒有看到這一點，但我們會告訴你，並考慮到這一點。當我們考慮 2026 年時，我們會使用這個假設，即營運假設，以及明年及以後利率略微下降的情況。所以這意味著價格仍將上漲，因為商品成本將繼續上漲，因此，從我們的數據來看，這是合理的。但如果需要進一步減輕，那麼我們將採取必要措施，確保我們的會員能夠尊重這個價值主張。

This concludes the question-and-answer session. I would like to turn the conference back over to Margi Tooth for any closing remarks.

問答環節到此結束。我想將會議交還給 Margi Tooth 做最後發言。

Thank you, Debbie, and thank you, everyone, for joining the call today and for the questions. As hopefully, you heard, we're very pleased with the strong results we shared today, and we look forward to building on this momentum in the coming months and the quarters ahead. With this in mind, we invite you to our upcoming Investor Day, which will be held here in Seattle, Washington on September 17, which is just six weeks away. The event annually provides a unique opportunity for our investors to connect with our team and hear from all of the leaders across the business. So registration and additional details can be found on the Investor Relations website. So please do go there and check that out.

謝謝你，黛比，也謝謝大家今天參加電話會議並提出問題。正如您所聽到的，我們對今天分享的強勁業績感到非常滿意，並期待在未來幾個月和未來幾季繼續保持這一勢頭。考慮到這一點，我們邀請您參加我們即將舉行的投資者日，該活動將於 9 月 17 日在華盛頓州西雅圖舉行，距此僅六週。該活動每年都會為我們的投資者提供一個獨特的機會，讓他們與我們的團隊聯繫並聽取整個企業領導人的意見。因此，您可以在投資者關係網站上找到註冊和其他詳細資訊。所以請一定要去那裡檢查一下。

So in closing, we're now in the third quarter of the year. We have just five months left to run in our 60-month plan. The team is executing really well. We've improved the financial health of the business immeasurably over the last year. And based on the guidance you heard today, our adjusted operating income will have compounded 21% over the last five years. Thank you for your time and for your questions today.

總而言之，我們現在已經進入今年的第三季。我們的 60 個月計畫只剩下 5 個月了。該團隊的表現確實非常好。在過去的一年裡，我們的財務狀況得到了極大的改善。根據您今天聽到的指導，我們的調整後營業收入在過去五年中將成長 21%。感謝您今天的時間和提問。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。