Trupanion, Inc.

Q2 2026 total revenue was $392.9 million, up 11% year over year. Subscription revenue was $276.7 million, up 14%, and other business revenue was $116.2 million, up 4%. Total monthly average revenue per pet was $87.44, up 9%. Total subscription pets were 1,125,000 as of June 30, up 5% year over year, and trailing 12-month retention was 98.37% versus 98.29% a year ago. Subscription business cost of paying veterinary invoices was $194.3 million, with value proposition at 70.2% versus 71.1% last year. Subscription adjusted operating income was $41.4 million, up 24%, and total adjusted operating income was $43.3 million, also up 24%; subscription AOI margin was 15% versus 13.8%. Net income was $6.8 million, or $0.16 per diluted share, versus $9.4 million, or $0.22 last year, noting last year included a one-time $7.8 million gain. Operating cash flow was $21 million, capex was $1.8 million, and free cash flow was $19.2 million; cash and short-term investments ended at $398.5 million and debt at $106.9 million. For 2026, management now expects total revenue of $1.584 billion to $1.601 billion, subscription revenue of $1.124 billion to $1.133 billion, and total adjusted operating income of $176 million to $184 million. Third-quarter 2026 guidance is total revenue of $399 million to $405 million, subscription revenue of $284 million to $287 million, and total adjusted operating income of $44 million to $47 million.

Margi Tooth said the quarter showed the earnings power of Trupanion’s model, with AOI and cash generation funding growth investments. She emphasized that pet acquisition, conversion, retention, product enhancements, and technology investments are all aimed at building long-term value, including a new digital offering planned for the first half of the current strategic plan. Her tone was confident and disciplined, with repeated references to strong execution, operating leverage, and the company’s ability to invest across the highest-return opportunities.

Fawwad Qureshi walked through the quarter’s financial improvement, including 11% revenue growth, 24% subscription AOI growth, and free cash flow of $19.2 million. He highlighted lower spending ratios in the subscription business, with variable expenses at 9% of subscription revenue and fixed expenses at 5.8%, and noted strong balance-sheet flexibility with $398.5 million in cash and short-term investments against $106.9 million of debt. He also pointed to the $44 million dividend from APIC, bringing total excess capital unlocked to about $130 million over three years, and tied that strength to the $100 million buyback authorization and continued debt paydown.

Analysts focused on veterinary inflation, the use and intent of the share repurchase authorization, and how much of the gross-add strength came from the flagship product versus partner channels. Management said veterinary inflation remains in the double-digit range, though it has come down from prior years and is still feeding into pricing. On capital allocation, management said the buyback is another tool alongside growth investment, debt reduction, and use of surplus capital, while on product mix they said gross-add strength came mainly from the core product and that the new deductible/coinsurance rollout is still early but already improving conversion and affordability.