Q3 FY2026
Filed Nov 5, 2026Trupanion Q3 2026: total revenue up 11% to $405,593 thousand, net income $9,282 thousand, adjusted EBITDA $20,755 thousand, and $25.0 million of buybacks
Total revenue grew 11% and subscription revenue grew 14% year over year. GAAP operating income, net income and EPS all rose, operating cash flow and free cash flow were higher than in the prior-year quarter, and the company repurchased $25.0 million of stock. Total enrolled pets fell 2%, and the other business segment's adjusted operating income declined.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenue (three months ended Sep. 30, 2026)GAAP | $405.6M | – | 11% |
| Subscription business revenue (three months ended Sep. 30, 2026)GAAP | $287.9M | – | 14% |
| Other business revenue (three months ended Sep. 30, 2026)GAAP | $117.7M | – | – |
| Subscription cost of revenue (three months ended Sep. 30, 2026)GAAP | $226.9M | – | – |
| Other business cost of revenue (three months ended Sep. 30, 2026)GAAP | $109.2M | – | – |
| Total cost of revenue (three months ended Sep. 30, 2026)GAAP | $336.1M | – | – |
| Technology and development expense (three months ended Sep. 30, 2026)GAAP | $12.51M | – | – |
| General and administrative expense (three months ended Sep. 30, 2026)GAAP | $19.44M | – | – |
| New pet acquisition expense (three months ended Sep. 30, 2026)GAAP | $24.18M | – | – |
| Depreciation and amortization (three months ended Sep. 30, 2026)GAAP | $3.83M | – | – |
| Total operating expenses (three months ended Sep. 30, 2026)GAAP | $59.96M | – | – |
| Operating income (three months ended Sep. 30, 2026)GAAP | $9.54M | – | – |
| Interest expense (three months ended Sep. 30, 2026)GAAP | $1.82M | – | – |
| Other (income), net, as presented (three months ended Sep. 30, 2026)GAAP | −$2.52M | – | – |
| Income tax expense (three months ended Sep. 30, 2026)GAAP | $964K | – | – |
| Net income (three months ended Sep. 30, 2026)GAAP | $9.28M | – | – |
| Net income per share, basic (three months ended Sep. 30, 2026)GAAP | $0.21 | – | – |
| Net income per share, diluted (three months ended Sep. 30, 2026)GAAP | $0.21 | – | – |
| Adjusted EBITDA (three months ended Sep. 30, 2026)non-GAAP | $20.75M | – | – |
| Total adjusted operating income (three months ended Sep. 30, 2026)non-GAAP | $47.01M | – | – |
| Total business adjusted operating income, % of revenue (three months ended Sep. 30, 2026)non-GAAP | 11.6% | – | – |
| Subscription operating income (three months ended Sep. 30, 2026)GAAP | $11.46M | – | – |
| Subscription adjusted operating income (three months ended Sep. 30, 2026)non-GAAP | $45.38M | – | – |
| Subscription adjusted operating income, % of subscription revenue (three months ended Sep. 30, 2026)non-GAAP | 15.8% | – | – |
| Other business operating loss (three months ended Sep. 30, 2026)GAAP | −$1.91M | – | – |
| Other business adjusted operating income (three months ended Sep. 30, 2026)non-GAAP | $1.64M | – | – |
| Subscription cost of paying veterinary invoices, % of subscription revenue (three months ended Sep. 30, 2026)non-GAAP | 69.7% | – | – |
| Subscription variable expenses, % of subscription revenue (three months ended Sep. 30, 2026)non-GAAP | 8.7% | – | – |
| Subscription acquisition cost, % of subscription revenue (three months ended Sep. 30, 2026)non-GAAP | 8.1% | – | – |
| Fixed expenses, % of total revenue (three months ended Sep. 30, 2026)non-GAAP | 5.8% | – | – |
| Net cash provided by operating activities (three months ended Sep. 30, 2026)GAAP | $30.71M | – | – |
| Free cash flow (three months ended Sep. 30, 2026)other | $28.46M | – | – |
| Total revenue (nine months ended Sep. 30, 2026)GAAP | $1.18B | – | 11% |
| Subscription business revenue (nine months ended Sep. 30, 2026)GAAP | $834.0M | – | 15% |
| Other business revenue (nine months ended Sep. 30, 2026)GAAP | $348.5M | – | – |
| Total cost of revenue (nine months ended Sep. 30, 2026)GAAP | $986.5M | – | – |
| Operating income (nine months ended Sep. 30, 2026)GAAP | $20.70M | – | – |
| Interest expense (nine months ended Sep. 30, 2026)GAAP | $5.52M | – | – |
| Income tax expense (nine months ended Sep. 30, 2026)GAAP | $2.58M | – | – |
| Net income (nine months ended Sep. 30, 2026)GAAP | $20.99M | – | – |
| Net income per share, basic (nine months ended Sep. 30, 2026)GAAP | $0.48 | – | – |
| Net income per share, diluted (nine months ended Sep. 30, 2026)GAAP | $0.48 | – | – |
| Adjusted EBITDA (nine months ended Sep. 30, 2026)non-GAAP | $57.89M | – | – |
| Total business adjusted operating income, % of revenue (nine months ended Sep. 30, 2026)non-GAAP | 11.0% | – | – |
| Subscription adjusted operating income (nine months ended Sep. 30, 2026)non-GAAP | $125.2M | – | – |
| Subscription adjusted operating income, % of subscription revenue (nine months ended Sep. 30, 2026)non-GAAP | 15.0% | – | – |
| Other business adjusted operating income (nine months ended Sep. 30, 2026)non-GAAP | $5.35M | – | – |
| Net cash provided by operating activities (nine months ended Sep. 30, 2026)GAAP | $66.29M | – | – |
| Free cash flow (nine months ended Sep. 30, 2026)other | $61.37M | – | – |
| Total enrolled pets, including other business (at Sep. 30, 2026)other | 1,626,901 | – | -2% |
| Subscription enrolled pets (at Sep. 30, 2026)other | 1,145,160 | – | 6% |
| Monthly average revenue per pet (three months ended Sep. 30, 2026)other | $88.95 | – | – |
| Monthly average revenue per pet (nine months ended Sep. 30, 2026)other | $87.41 | – | – |
| Average pet acquisition cost (PAC) (three months ended Sep. 30, 2026)other | $279 | – | – |
| Average pet acquisition cost (PAC) (nine months ended Sep. 30, 2026)other | $297 | – | – |
| Average monthly retention (three months ended Sep. 30, 2026)other | 98.38% | – | – |
| Average monthly retention (nine months ended Sep. 30, 2026)other | 98.38% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Subscription business (three months ended Sep. 30, 2026)The release gives no segment driver. It prints subscription enrolled pets of 1,145,160, up 6% year over year, and monthly average revenue per pet of $88.95 against $82.01 in the prior-year quarter. Subscription operating income was $11,456 thousand against $7,826 thousand. | $287.9M | – | 14% |
| Other business (three months ended Sep. 30, 2026)The release gives no segment driver. Other business adjusted operating income was $1,635 thousand against $1,761 thousand, and the other business operating loss was $(1,913) thousand against $(1,967) thousand. Total enrolled pets, including the other business, fell 2% year over year. | $117.7M | – | – |
| Subscription business (nine months ended Sep. 30, 2026)The release gives no segment driver. Subscription adjusted operating income was $125,155 thousand against $102,487 thousand, and subscription operating income was $26,276 thousand against $13,410 thousand. | $834.0M | – | 15% |
| Other business (nine months ended Sep. 30, 2026)The release gives no segment driver. Other business adjusted operating income was $5,349 thousand against $4,367 thousand, and the other business operating loss was $(5,581) thousand against $(6,405) thousand. | $348.5M | – | – |
Capital returns
- Repurchases of common stock were $25,000 thousand in the three months ended Sep. 30, 2026 and $25,000 thousand in the nine months ended Sep. 30, 2026; the prior-year periods show none.
- During Q3 2026 the company repurchased approximately 0.8 million shares at an aggregate cost of approximately $25.0 million.
- In June 2026 the Board authorized a repurchase program of up to an aggregate of $100.0 million of common stock, with no expiration date. As of Sep. 30, 2026, approximately $75.0 million remained available.
- The release states that repurchase timing and amount depend on compliance with the PNC credit facility, available cash, cash flow from operations, stock price, and other conditions. The company is not obligated to repurchase any specific amount.
- Repayment of debt financing was $(2,500) thousand in Q3 2026 and $(7,500) thousand in the nine months ended Sep. 30, 2026, against $(188) thousand and $(15,713) thousand in the prior-year periods.
- The release states a $15.0 million repayment on the PNC revolving credit facility in October 2026.
What drove it
- The CEO describes the quarter as having record cash flow and increased profitability, and cites the seventh consecutive quarter of improvement in retention.
- The release reports average monthly retention of 98.38% for Q3 2026, against 98.37% at Jun. 30, 2026 and 98.33% at Sep. 30, 2025.
- Subscription business revenue rose 14% in Q3 while subscription enrolled pets rose 6%, and monthly average revenue per pet rose from $82.01 to $88.95.
- Subscription cost of paying veterinary invoices, as a percent of subscription revenue, was 69.7% against 70.1%. The release does not state a cause for this change.
- Average pet acquisition cost was $279 in Q3 2026, against $299 at Jun. 30, 2026 and $290 at Sep. 30, 2025. The release does not explain the movement.
- Adjusted EBITDA rose to $20,755 thousand from $19,562 thousand, and free cash flow rose to $28,464 thousand from $23,936 thousand.
Concerns
- Total enrolled pets, including the other business, were 1,626,901 at Sep. 30, 2026, down 2% from 1,654,414. They were also below 1,633,131 at Jun. 30, 2026.
- Other business adjusted operating income fell to $1,635 thousand from $1,761 thousand in Q3. Its variable expenses rose to 19.4% of other business revenue from 18.1%.
- New pet acquisition expense rose to $24,179 thousand from $21,946 thousand, and GAAP operating income in the other business segment remained a loss of $(1,913) thousand.
- Other business cost of paying veterinary invoices, as a percent of other business revenue, was 73.4% against 74.8% in Q3, but the nine-month figure was 75.0% against 73.9%.
- Cash and short-term investments of $396.8 million are reported alongside $94,472 thousand of long-term debt and $10,000 thousand of current debt. Available credit capacity is $3.5 million before the October 2026 repayment and $18.5 million after it.
What to watch
- Whether total enrolled pets, which fell 2% year over year, return to growth. Subscription enrolled pets grew 6%.
- Whether average pet acquisition cost stays below the $299 printed for Jun. 30, 2026, given the rise in new pet acquisition expense.
- Whether the retention trend the CEO cites continues, with average monthly retention at 98.38%.
- The other business segment's adjusted operating income and its variable expense ratio, which rose to 19.4% from 18.1%.
- Use of the remaining $75.0 million repurchase authorization, and the cash position after the $15.0 million October 2026 PNC repayment.
- The forward-looking statements name the Aflac alliance and Pets Best policy writing as factors. The release does not quantify either.
Balance sheet and cash flow
- At Sep. 30, 2026 the company held $396.8 million in cash and short-term investments, with an additional $3.5 million available under its credit facility. After the October 2026 repayment, available capacity is $18.5 million, as stated in the release.
- Cash and cash equivalents were $170,355 thousand at Sep. 30, 2026, against $138,024 thousand at Dec. 31, 2025. Short-term investments were $226,482 thousand against $232,706 thousand.
- Long-term debt, current portion, was $10,000 thousand at Sep. 30, 2026 and $10,000 thousand at Dec. 31, 2025. Long-term debt was $94,472 thousand against $101,784 thousand.
- Deferred revenue was $290,155 thousand at Sep. 30, 2026, against $270,935 thousand at Dec. 31, 2025.
- Total assets were $921,619 thousand at Sep. 30, 2026, against $915,044 thousand at Dec. 31, 2025. Total stockholders' equity was $399,203 thousand against $383,936 thousand.
- Purchases of property, equipment and internal-use software were $(2,247) thousand in Q3 2026 against $(5,302) thousand, and $(4,919) thousand in the nine months against $(10,206) thousand.
- Net change in cash, cash equivalents and restricted cash was $21,209 thousand in Q3 2026 against $24,438 thousand, and $28,050 thousand for the nine months against $(10,621) thousand.
- Cash, cash equivalents and restricted cash at the end of Sep. 30, 2026 was $199,508 thousand, against $188,909 thousand a year earlier.
Analysis
Trupanion reported Q3 2026 total revenue of $405,593 thousand, up 11% from $366,920 thousand in the prior-year quarter. Subscription business revenue was $287,900 thousand, up 14% from $252,697 thousand, and other business revenue was $117,693 thousand against $114,223 thousand. For the nine months, total revenue was $1,182,576 thousand, up 11%, and subscription revenue was $834,043 thousand, up 15%. The company's subscription line is growing faster than the business as a whole, and the release's key metrics show that growth coming with higher monthly average revenue per pet, $88.95 in Q3 against $82.01 a year earlier, alongside 6% growth in subscription enrolled pets.
Profitability improved on the company's own measures. GAAP operating income was $9,543 thousand against $5,859 thousand, and net income was $9,282 thousand, or $0.21 per basic and diluted share, against $5,873 thousand, or $0.14 basic and $0.13 diluted. Adjusted EBITDA was $20,755 thousand against $19,562 thousand. Total business adjusted operating income, a non-GAAP measure, was $47,010 thousand, or 11.6% of revenue, against $40,851 thousand, or 11.1%. Subscription adjusted operating income reached 15.8% of subscription revenue against 15.5%. The other business segment was weaker: its adjusted operating income fell to $1,635 thousand from $1,761 thousand, and its variable expenses were 19.4% of its revenue against 18.1%. The release does not explain these movements, so the reader should weigh the segment figures against the consolidated gains directly.
Cash generation and capital allocation were the main features of the quarter. Operating cash flow was $30,711 thousand against $29,238 thousand, and free cash flow was $28,464 thousand against $23,936 thousand. The company repurchased approximately 0.8 million shares for approximately $25.0 million, leaving about $75.0 million under the $100.0 million program authorized in June. Cash and short-term investments were $396.8 million at Sep. 30, 2026. Long-term debt, including the current portion, was $104,472 thousand in the sum of the two printed lines, but the release prints them separately, and the company disclosed a $15.0 million repayment on the PNC revolver in October 2026 that leaves $18.5 million of available capacity.
The volume data are mixed. Total enrolled pets fell 2% year over year to 1,626,901, and the release prints a decline from 1,633,131 at Jun. 30, 2026. Subscription pets rose to 1,145,160 from 1,082,412 a year earlier. Average monthly retention was 98.38%, against 98.33% in the prior-year quarter and 98.37% in Q2 2026. Average pet acquisition cost was $279 in Q3, below $299 in Q2 2026 and $290 in Q3 2025, while new pet acquisition expense rose to $24,179 thousand from $21,946 thousand. The filing does not give a cause for these changes.
The release contains no guidance, so no forward figures can be compared with a prior outlook. The reader's focus should be the sustainability of subscription growth, the trend in pet acquisition cost and enrolment in the other business, and the pace at which buybacks and debt repayment draw down the company's liquidity.
Management, verbatim
Our third-quarter results were strong, with record cash flow and increased profitability, the seventh consecutive quarter of improvement in retention, and continued progress on our key strategic initiatives,
Margi Tooth, Chief Executive Officer and President
As our business continues to compound, we are investing with discipline in organic growth, and this quarter we also repurchased approximately $25 million of our stock. Both reflect our confidence in the long-term value we are building for pet parents and shareholders.
Margi Tooth, Chief Executive Officer and President
Not in the filing
stated, not guessed- Company guidance for Q4 2026 or full-year 2026 was not provided.
- Prior-year change percentages for net income, GAAP EPS, operating income, adjusted EBITDA, operating cash flow and free cash flow were not printed.
- Prior-year change for other business revenue, cost of revenue and operating expense lines was not printed.
- Quarterly (Q2 2026) revenue, cost of revenue and operating income were not printed as line items in the release.
- Gross margin was not printed as a reported figure.
- Cash, cash equivalents and short-term investments at Sep. 30, 2025 were not printed.
- Share price reaction, consensus estimates and analyst expectations were not provided.
- The release does not state the causes of the decline in total enrolled pets, the change in average pet acquisition cost, or the other business segment's adjusted operating income change.
- Other (income), net and interest income were not given a year-over-year percentage change.
- No previous outlook was provided, so vs_prior_guidance is empty.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.