Trupanion Inc (NASDAQ:TRUP) Q4 2019 Earnings Conference Call - Final Transcript

Feb 13, 2020 • 04:30 pm ET

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Trupanion Inc (NASDAQ:TRUP) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Greetings, and welcome to the Trupanion Inc. Fourth Quarter and 2019 Results Call.

[Operator Instructions]

It is now my pleasure to introduce your host, Laura Bainbridge, Head of Corporate Communications for Trupanion. Thank you. You may begin.

Executive
Laura Bainbridge

Good afternoon, and welcome to Trupanion's fourth quarter and full-year 2019 financial results conference call.

Participating on today's call are Darryl Rawlings, Chief Executive Officer, and Tricia Plouf, Chief Financial Officer.

Before we begin, I would like to remind everyone that during today's conference call, we will make certain forward-looking statements regarding the future operations, opportunities and financial performance of Trupanion within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. 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 our earnings release, which can be found on our Investor Relations website as well as the company's most recent reports on Forms 10-K and 8-K filed with the Securities and Exchange Commission.

Today's presentation contains references to non-GAAP financial measures that management uses to evaluate the company's performance, including, without limitation, fixed expenses, variable 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. Unless otherwise noted, margins and expenses will be presented on a non-GAAP basis, which excludes 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 or on Trupanion's Investor Relations website under the Quarterly Earnings tab.

Lastly, I would like to remind everyone that today's call is also available via webcast on Trupanion's Investor Relations website. A replay will also be available on the site. With that, I will hand the call over to Darryl.

Executive
Darryl Rawlings

Thanks, Laura. Good afternoon, everyone.

2020 marks the start to a new decade, our 20th year at Trupanion. In those 20 years, we've delivered consistent growth while scaling our operating expenses. Today, we have over 650,000 total enrolled pets, 500,000 of which are covered by the Trupanion brand. In the last 20 years, we've held over 1 million pets in aggregate and paid out close to $1 billion in veterinary invoices. Of all of our accomplishments, this is the one I'm most proud of. At the end of the day, Trupanion exists to solve a problem. It is very difficult for pet owners to budget for veterinary care if and when their pet becomes sick or injured. When Trupanion was introduced nearly 20 years ago, we wanted to offer loving responsible pet