Form 8-K

8-K — TRUPANION, INC.

Accession: 0001371285-26-000171

Filed: 2026-08-05

Period: 2026-08-05

CIK: 0001371285

SIC: 6324 (HOSPITAL & MEDICAL SERVICE PLANS)

Item: Results of Operations and Financial Condition

Item: Other Events

Item: Financial Statements and Exhibits

Documents

8-K — trup-20260805.htm (Primary)

EX-99.1 (ex991q22026.htm)

GRAPHIC (trulogoenrgb2018a02.jpg)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: trup-20260805.htm · Sequence: 1

trup-20260805

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 5, 2026

TRUPANION, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-36537

83-0480694

(State or other jurisdiction of

incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

6100 4th Avenue S, Suite 200

Seattle, Washington 98108

(Address of principal executive offices, including zip code)

(855) 727 - 9079

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol Name of each exchange on which registered

Common stock, $0.00001 par value per share TRUP The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 5, 2026, the Company issued a press release regarding the Company's financial results for the quarter ended June 30, 2026. A copy of this press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 8.01 Other Events.

In June 2026, the Company's Board of Directors (the "Board") approved a share repurchase program (the "Program") pursuant to which the Company is authorized to repurchase up to an aggregate of $100.0 million of its outstanding shares of common stock, with no expiration date. The Company is not obligated to repurchase any specific number or dollar amount of shares under the Program, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company's compliance with the PNC credit facility, available cash, cash flow from operations, stock price, general economic, business and market conditions, and alternative investment opportunities.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit No. Description

99.1

Press release regarding financial results issued by Trupanion, Inc. dated August 5, 2026

104 Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

TRUPANION, INC.

By:

/s/ Fawwad Qureshi

Name: Fawwad Qureshi

Title: Chief Financial Officer

Date: August 5, 2026

EX-99.1

Filename: ex991q22026.htm · Sequence: 2

Document

Exhibit 99.1

Trupanion Reports Second Quarter 2026 Results

Authorizes Share Repurchase Program

SEATTLE, WA. August 5, 2026 -- Trupanion, Inc. (Nasdaq: TRUP), a leading provider of medical insurance for cats and dogs, today announced financial results for the second quarter ended June 30, 2026.

“We continue to execute on the priorities that matter most by growing margin, improving the economics of new enrollments, and investing our capital with discipline,” said Margi Tooth, Chief Executive Officer and President of Trupanion. “As our business continues to compound, we have more opportunities to allocate capital where we believe it will create lasting shareholder value.”

Second Quarter 2026 Financial and Business Highlights

•Total revenue was $392.9 million, an increase of 11% compared to the second quarter of 2025.

•Total enrolled pets (including pets from our other business segment) was 1,633,131 at June 30, 2026, a decrease of 2% over June 30, 2025.

•Subscription business revenue was $276.7 million, an increase of 14% compared to the second quarter of 2025.

•Subscription enrolled pets was 1,124,548 at June 30, 2026, an increase of 5% over June 30, 2025.

•Net income was $6.8 million, or $0.16 per basic and diluted share, compared to net income of $9.4 million, or $0.22 per basic and diluted share, in the second quarter of 2025.

•Adjusted EBITDA was $19.8 million, compared to adjusted EBITDA of $16.6 million in the second quarter of 2025.

•Operating cash flow was $21.0 million and free cash flow was $19.2 million in the second quarter of 2026. This compared to operating cash flow of $15.0 million and free cash flow of $12.0 million in the second quarter of 2025.

First Six Months 2026 Financial and Business Highlights

•Total revenue was $777.0 million, an increase of 12% compared to the first six months of 2025.

•Subscription business revenue was $546.1 million, an increase of 15% compared to the first six months of 2025.

•Net income was $11.7 million, or $0.27 per basic and diluted share, compared to net income of $7.9 million, or $0.19 per basic and $0.18 per diluted share, in the first six months of 2025.

•Adjusted EBITDA was $37.1 million, compared to adjusted EBITDA of $28.8 million in the first six months of 2025.

•Operating cash flow was $35.6 million and free cash flow was $32.9 million in the first six months of 2026. This compared to operating cash flow of $31.0 million and free cash flow of $26.1 million in the first six months of 2025.

•At June 30, 2026, the Company held $398.5 million in cash and short-term investments with an additional $3.5 million available under its credit facility.

Extraordinary Dividend and Share Repurchase Authorization

In July 2026, the New York Department of Financial Services approved an extraordinary dividend of $44 million to be paid to Trupanion by its wholly-owned subsidiary, American Pet Insurance Company.

The Board has authorized a share repurchase program, pursuant to which the Company may repurchase up to an aggregate of $100.0 million of its outstanding shares of common stock, with no expiration date. The Company is not obligated to repurchase any specific number or dollar amount of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company’s compliance with the PNC credit facility, available cash, cash flow from operations, stock price, general economic, business and market conditions, and alternative investment opportunities.

Conference Call

Trupanion’s management will host a conference call today to review its second quarter 2026 results. The call is scheduled to begin shortly after 1:30 p.m. PT/ 4:30 p.m. ET. A live webcast will be accessible through the Investor Relations section of Trupanion’s website at https://investors.trupanion.com/ and will be archived online for 3 months upon completion of the conference call. Participants can access the conference call by dialing 1-844-676-1342 (United States) or 1-412-634-6683 (International). A telephonic replay of the call will also be available after the completion of the call, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 10210053.

About Trupanion

Trupanion is a leader in medical insurance for cats and dogs throughout the United States, Canada, and certain countries in Continental Europe with over 1,100,000 pets currently enrolled. For 26 years, Trupanion has given pet owners peace of mind so they can focus on their pet's recovery, not financial stress. Trupanion is committed to providing pet parents with the highest value in pet medical insurance with unlimited payouts on eligible expenses for the life of their pets. With its patented process, Trupanion is the only North American provider with the technology to pay veterinarians directly in seconds at the time of checkout. Trupanion is listed on NASDAQ under the symbol "TRUP". The company was founded in 2000 and is headquartered in Seattle, WA. Trupanion policies are issued, in the United States, by its wholly-owned insurance entity American Pet Insurance Company or ZPIC Insurance Company and, in Canada, by its wholly-owned insurance entity GPIC Insurance Company or by Accelerant Insurance Company of Canada. For more information, please visit trupanion.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 relating to, among other things, expectations, plans, prospects and financial results for Trupanion, including, but not limited to, its expectations regarding its ability to continue to grow its enrollments and revenue, repurchase shares of its common stock, and otherwise execute its business plan. These forward-looking statements are based upon the current expectations and beliefs of Trupanion’s management as of the date of this press release, and are subject to certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. All forward-looking statements made in this press release are based on information available to Trupanion as of the date hereof, and Trupanion has no obligation to update these forward-looking statements.

In particular, the following factors, among others, could cause results to differ materially from those expressed or implied by such forward-looking statements: the ability to achieve or maintain profitability and/or appropriate levels of cash flow in future periods; the ability to keep growing our membership base and revenue; the accuracy of assumptions used in determining appropriate member acquisition expenditures; the severity and frequency of claims; the ability to maintain high retention rates; the accuracy of assumptions used in pricing medical plan subscriptions and the ability to accurately estimate the impact of new products or offerings on claims frequency; actual claims expense exceeding estimates; regulatory and other constraints on the ability to institute, or the decision to otherwise delay, pricing modifications in response to changes in actual or estimated claims expense; the effectiveness and statutory or regulatory compliance of our Territory Partner model and of our Territory Partners, veterinarians and other third parties in recommending medical plan subscriptions to potential members; the ability to retain existing Territory Partners and increase the number of Territory Partners and active hospitals; compliance by us and those referring us members with laws and regulations that apply to our business, including the sale of a pet medical plan; the ability to maintain the security of our data; fluctuations in currency exchange rates; the ability to protect our proprietary and member information; the ability to maintain our culture and team; the ability to maintain the requisite amount of risk-based capital; our ability to implement and maintain effective controls; the ability to protect and enforce Trupanion’s intellectual property rights; the ability to successfully implement our alliance with Aflac; the ability to continue key contractual relationships with third parties; developments relating to our writing of policies for unaffiliated third parties, including Pets Best; the extent to which we consummate our share repurchase plan and related impacts; third-party claims including litigation and regulatory actions; the ability to recognize benefits from investments in new solutions and enhancements to Trupanion’s technology platform and website; our ability to retain key personnel; and deliberations and determinations by the Trupanion board based on the future performance of the company or otherwise.

For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the Securities and Exchange Commission (SEC), including but not limited to, Trupanion’s Annual Report on Form 10-K for the year ended December 31, 2025 and any subsequently filed reports on Forms 10-Q, 10-K and 8-K. All documents are available through the SEC’s Electronic Data Gathering Analysis and Retrieval system at https://www.sec.gov or the Investor Relations section of Trupanion’s website at https://investors.trupanion.com.

Non-GAAP Financial Measures

Trupanion’s stated results include certain non-GAAP financial measures. These non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in its industry as other companies in its industry may calculate or use non-GAAP financial measures differently. In addition, there are limitations in using non-GAAP financial measures because the non-GAAP financial measures are not prepared in accordance with GAAP, may be different from non-GAAP financial measures used by other companies and exclude expenses that may have a material impact on Trupanion’s reported financial results. The presentation and utilization of non-GAAP financial measures is not meant to be considered in isolation or as a substitute for the directly comparable financial measures prepared in accordance with GAAP. Trupanion urges its investors to review the reconciliation of its non-GAAP financial measures to the most directly comparable GAAP financial measures in its consolidated financial statements, and not to rely on any single financial or operating measure to evaluate its business. These reconciliations are included below and on Trupanion’s Investor Relations website.

Because of varying available valuation methodologies, subjective assumptions and the variety of equity instruments that can impact a company’s non-cash expenses, Trupanion believes that providing various non-GAAP financial measures that exclude stock-based compensation expense and depreciation and amortization expense allows for more meaningful comparisons between its operating results from period to period. Trupanion offsets new pet acquisition expense with sign-up fee revenue in the calculation of net acquisition cost because it collects sign-up fee revenue from new members at the time of enrollment and considers it to be an offset to a portion of Trupanion’s new pet acquisition expense. Trupanion believes this allows it to calculate and present financial measures in a consistent manner across periods. Trupanion’s management believes that the non-GAAP financial measures and the related financial measures derived from them are important tools for financial and operational decision-making and for evaluating operating results over different periods of time.

Trupanion, Inc.

Condensed Consolidated Statements of Operations

(in thousands, except share data)

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

(unaudited)

Revenue:

Subscription business $ 276,690 $ 242,156 $ 546,144 $ 475,220

Other business 116,244 111,401 230,839 220,312

Total revenue 392,934 353,557 776,983 695,532

Cost of revenue:

Subscription business 220,254 195,488 436,706 385,333

Other business 107,547 103,242 213,655 204,269

Total cost of revenue(1), (2)

327,801 298,730 650,361 589,602

Operating expenses:

Technology and development(1)

12,754 8,586 24,048 16,658

General and administrative(1)

19,525 20,122 38,627 40,014

New pet acquisition expense(1)

22,805 19,843 45,416 40,359

Depreciation and amortization 3,673 3,962 7,379 7,753

Total operating expenses 58,757 52,513 115,470 104,784

Loss from investment in joint venture — — — (305)

Operating income 6,376 2,314 11,152 841

Interest expense 1,832 3,682 3,707 6,893

Other (income), net (2,829) (11,914) (5,884) (15,154)

Income before income taxes 7,373 10,546 13,329 9,102

Income tax expense 542 1,133 1,618 1,172

Net income $ 6,831 $ 9,413 $ 11,711 $ 7,930

Net income per share:

Basic $ 0.16 $ 0.22 $ 0.27 $ 0.19

Diluted $ 0.16 $ 0.22 $ 0.27 $ 0.18

Weighted average shares of common stock outstanding:

Basic 43,730,573 42,872,153 43,618,710 42,734,426

Diluted 43,821,061 43,325,704 43,751,785 43,544,325

(1)Includes stock-based compensation expense as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Veterinary invoice expense $ 505 $ 774 $ 1,065 $ 1,544

Other cost of revenue 620 605 1,189 1,094

Technology and development 2,865 1,470 4,372 2,621

General and administrative 4,738 5,047 9,631 9,575

New pet acquisition expense 1,241 1,560 2,712 4,452

Total stock-based compensation expense $ 9,969 $ 9,456 $ 18,969 $ 19,286

(2)The breakout of cost of revenue between veterinary invoice expense and other cost of revenue is as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Veterinary invoice expense $ 279,468 $ 255,580 $ 560,904 $ 503,030

Other cost of revenue 48,333 43,150 89,457 86,572

Total cost of revenue $ 327,801 $ 298,730 $ 650,361 $ 589,602

Trupanion, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share data)

June 30, 2026 December 31, 2025

(unaudited)

Assets

Current assets:

Cash and cash equivalents $ 149,360 $ 138,024

Short-term investments 249,131 232,706

Accounts and other receivables, net of allowance for credit losses of $2,886 at June 30, 2026 and $1,311 at December 31, 2025

302,191 301,945

Prepaid expenses and other assets 18,760 18,387

Total current assets 719,442 691,062

Restricted cash 28,939 33,434

Long-term investments 989 983

Property, equipment, and internal-use software, net 101,425 104,844

Intangible assets, net 23,344 24,102

Other long-term assets 18,047 21,237

Goodwill 38,625 39,382

Total assets $ 930,811 $ 915,044

Liabilities and stockholders’ equity

Current liabilities:

Accounts payable $ 11,965 $ 16,445

Accrued liabilities and other current liabilities 44,638 56,509

Reserve for veterinary invoices 51,722 55,921

Deferred revenue 287,156 270,935

Long-term debt - current portion 10,000 10,000

Total current liabilities 405,481 409,810

Long-term debt 96,909 101,784

Deferred tax liabilities 639 1,510

Other liabilities 18,112 18,004

Total liabilities 521,141 531,108

Stockholders’ equity:

Common stock: $0.00001 par value per share, 100,000,000 shares authorized; 44,899,727 and 43,871,541 issued and outstanding at June 30, 2026; 44,430,267 and 43,402,081 shares issued and outstanding at December 31, 2025

— —

Preferred stock: $0.00001 par value per share, 10,000,000 shares authorized; no shares issued and outstanding — —

Additional paid-in capital 623,566 604,828

Accumulated other comprehensive income (loss) (2,618) 2,097

Accumulated deficit (194,744) (206,455)

Treasury stock, at cost: 1,028,186 shares at June 30, 2026 and December 31, 2025

(16,534) (16,534)

Total stockholders’ equity 409,670 383,936

Total liabilities and stockholders’ equity $ 930,811 $ 915,044

Trupanion, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

(unaudited)

Operating activities

Net income $ 6,831 $ 9,413 $ 11,711 $ 7,930

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization 3,673 3,962 7,379 7,753

Stock-based compensation expense 9,969 9,456 18,969 19,286

Realized gain on nonmonetary exchange of preferred stock investment — (7,783) — (7,783)

Other, net (164) 601 (378) 951

Changes in operating assets and liabilities:

Accounts and other receivables 2,408 (2,050) (627) (18,015)

Prepaid expenses and other assets 643 (380) 2,597 (584)

Accounts payable, accrued liabilities, and other liabilities 1,529 (536) (16,797) 990

Reserve for veterinary invoices (4,891) (1,710) (4,048) 697

Deferred revenue 986 4,051 16,772 19,764

Net cash provided by operating activities 20,984 15,024 35,578 30,989

Investing activities

Purchases of investment securities (72,095) (101,125) (119,977) (142,000)

Maturities and sales of investment securities 51,358 61,022 100,236 94,264

Purchases of property, equipment, and internal-use software (1,825) (2,977) (2,672) (4,904)

Other 19 613 (17) 1,200

Net cash used in investing activities (22,543) (42,467) (22,430) (51,440)

Financing activities

Repayment of debt financing (2,500) (15,187) (5,000) (15,525)

Proceeds from exercise of stock options 408 303 668 1,327

Shares withheld to satisfy tax withholding (480) (774) (976) (1,688)

Other — (230) — (460)

Net cash used in financing activities (2,572) (15,888) (5,308) (16,346)

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net (442) 1,792 (999) 1,738

Net change in cash, cash equivalents, and restricted cash (4,573) (41,539) 6,841 (35,059)

Cash, cash equivalents, and restricted cash at beginning of period 182,872 206,010 171,458 199,530

Cash, cash equivalents, and restricted cash at end of period $ 178,299 $ 164,471 $ 178,299 $ 164,471

The following tables set forth our key operating metrics.

Six Months Ended June 30,

2026 2025

Total Business:

Total pets enrolled (at period end) 1,633,131 1,660,455

Subscription Business:

Total subscription pets enrolled (at period end) 1,124,548 1,066,354

Monthly average revenue per pet $ 86.62 $ 78.73

Average pet acquisition cost (PAC) $ 307 $ 272

Average monthly retention 98.37 % 98.29 %

Three Months Ended

Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 Mar. 31, 2025 Dec. 31, 2024 Sep. 30, 2024

Total Business:

Total pets enrolled (at period end) 1,633,131 1,637,665 1,647,565 1,654,414 1,660,455 1,667,637 1,677,570 1,688,903

Subscription Business:

Total subscription pets enrolled (at period end) 1,124,548 1,105,783 1,096,173 1,082,412 1,066,354 1,052,845 1,041,212 1,032,042

Monthly average revenue per pet $ 87.44 $ 85.79 $ 83.56 $ 82.01 $ 79.93 $ 77.53 $ 76.02 $ 74.27

Average pet acquisition cost (PAC) $ 299 $ 315 $ 320 $ 290 $ 276 $ 267 $ 261 $ 243

Average monthly retention 98.37 % 98.35 % 98.34 % 98.33 % 98.29 % 98.28 % 98.25 % 98.29 %

The following table reflects the reconciliation of cash provided by operating activities to free cash flow (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Net cash provided by operating activities $ 20,984 $ 15,024 $ 35,578 $ 30,989

Purchases of property, equipment, and internal-use software (1,825) (2,977) (2,672) (4,904)

Free cash flow $ 19,159 $ 12,047 $ 32,906 $ 26,085

The following table reflects the reconciliation between GAAP and non-GAAP measures (in thousands except percentages):

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Veterinary invoice expense $ 279,468 $ 255,580 $ 560,904 $ 503,030

Less:

Stock-based compensation expense(1)

(496) (758) (1,048) (1,522)

Other business cost of paying veterinary invoices(2)

(84,665) (82,706) (174,687) (161,975)

Subscription cost of paying veterinary invoices (non-GAAP) $ 194,307 $ 172,116 $ 385,169 $ 339,533

% of subscription revenue 70.2 % 71.1 % 70.5 % 71.4 %

Other cost of revenue $ 48,333 $ 43,150 $ 89,457 $ 86,572

Less:

Stock-based compensation expense(1)

(615) (601) (1,178) (1,082)

Other business variable expenses(2)

(22,881) (20,531) (38,964) (42,267)

Subscription variable expenses (non-GAAP) $ 24,837 $ 22,018 $ 49,315 $ 43,223

% of subscription revenue 9.0 % 9.1 % 9.0 % 9.1 %

Technology and development expense $ 12,754 $ 8,586 $ 24,048 $ 16,658

General and administrative expense 19,525 20,122 38,627 40,014

Less:

Stock-based compensation expense(1)

(7,545) (6,393) (13,820) (11,788)

Development expenses(3)

(1,801) (946) (3,501) (2,353)

Fixed expenses (non-GAAP) $ 22,933 $ 21,369 $ 45,354 $ 42,531

% of total revenue 5.8 % 6.0 % 5.8 % 6.1 %

New pet acquisition expense $ 22,805 $ 19,843 $ 45,416 $ 40,359

Less:

Stock-based compensation expense(1)

(1,227) (1,516) (2,652) (4,390)

Other business pet acquisition expense(2)

(15) (74) (41) (77)

Subscription acquisition cost (non-GAAP) $ 21,563 $ 18,253 $ 42,723 $ 35,892

% of subscription revenue 7.8 % 7.5 % 7.8 % 7.6 %

(1) Trupanion employees may elect to take restricted stock units in lieu of cash payment for their bonuses. We account for such expense as stock-based compensation according to GAAP, but we do not include it in any non-GAAP adjustments. Stock-based compensation associated with bonuses was approximately $0.1 million and $0.3 million for the three and six months ended June 30, 2026, respectively.

(2) Excludes the portion of stock-based compensation expense attributable to the other business segment

(3) Consists of costs related to product exploration and development that are pre-revenue and historically have been insignificant.

The following table reflects the reconciliation of GAAP measures to non-GAAP measures (in thousands, except percentages):

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Operating income $ 6,376 $ 2,314 $ 11,152 $ 841

Non-GAAP expense adjustments

Acquisition cost 21,578 18,327 42,764 35,969

Stock-based compensation expense(1)

9,883 9,268 18,698 18,782

Development expenses(2)

1,801 946 3,501 2,353

Depreciation and amortization 3,673 3,962 7,379 7,753

Loss from investment in joint venture — — — (305)

Total adjusted operating income (non-GAAP) $ 43,311 $ 34,817 $ 83,494 $ 66,003

Subscription Business:

Subscription operating income $ 8,331 $ 4,523 $ 14,824 $ 5,590

Non-GAAP expense adjustments

Acquisition cost 21,563 18,253 42,723 35,892

Stock-based compensation expense(1)

7,649 7,248 14,586 15,017

Development expenses(2)

1,268 648 2,461 1,610

Depreciation and amortization 2,586 2,714 5,187 5,297

Subscription adjusted operating income (non-GAAP) $ 41,397 $ 33,386 $ 79,781 $ 63,406

Other Business:

Other business operating loss $ (1,955) $ (2,209) $ (3,672) $ (4,444)

Non-GAAP expense adjustments

Acquisition cost 15 74 41 77

Stock-based compensation expense(1)

2,234 2,020 4,112 3,765

Development expenses(2)

533 298 1,040 743

Depreciation and amortization 1,087 1,248 2,192 2,456

Other business adjusted operating income (non-GAAP) $ 1,914 $ 1,431 $ 3,713 $ 2,597

(1) Trupanion employees may elect to take restricted stock units in lieu of cash payment for their bonuses. We account for such expense as stock-based compensation in accordance with GAAP, but we do not include it in any non-GAAP adjustments. Stock-based compensation associated with bonuses was approximately $0.1 million and $0.3 million for the three and six months ended June 30, 2026, respectively.

(2) Consists of costs related to product exploration and development that are pre-revenue and historically have been insignificant.

The following tables reflect the reconciliation of GAAP measures to non-GAAP measures (in thousands, except percentages):

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Subscription revenue $ 276,690 $ 242,156 $ 546,144 $ 475,220

Subscription cost of paying veterinary invoices 194,307 172,116 385,169 339,533

Subscription variable expenses 24,837 22,018 49,315 43,223

Subscription fixed expenses* 16,149 14,636 31,879 29,058

Subscription adjusted operating income (non-GAAP) $ 41,397 $ 33,386 $ 79,781 $ 63,406

Other business revenue $ 116,244 $ 111,401 $ 230,839 $ 220,312

Other business cost of paying veterinary invoices 84,665 82,706 174,687 161,975

Other business variable expenses 22,881 20,531 38,964 42,267

Other business fixed expenses* 6,784 6,733 13,475 13,473

Other business adjusted operating income (non-GAAP) $ 1,914 $ 1,431 $ 3,713 $ 2,597

Revenue $ 392,934 $ 353,557 $ 776,983 $ 695,532

Cost of paying veterinary invoices 278,972 254,822 559,856 501,508

Variable expenses 47,718 42,549 88,279 85,490

Fixed expenses* 22,933 21,369 45,354 42,531

Total business adjusted operating income (non-GAAP) $ 43,311 $ 34,817 $ 83,494 $ 66,003

As a percentage of revenue:

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Subscription revenue 100.0 % 100.0 % 100.0 % 100.0 %

Subscription cost of paying veterinary invoices 70.2 % 71.1 % 70.5 % 71.4 %

Subscription variable expenses 9.0 % 9.1 % 9.0 % 9.1 %

Subscription fixed expenses* 5.8 % 6.0 % 5.8 % 6.1 %

Subscription adjusted operating income (non-GAAP) 15.0 % 13.8 % 14.6 % 13.3 %

Other business revenue 100.0 % 100.0 % 100.0 % 100.0 %

Other business cost of paying veterinary invoices 72.8 % 74.2 % 75.7 % 73.5 %

Other business variable expenses 19.7 % 18.4 % 16.9 % 19.2 %

Other business fixed expenses* 5.8 % 6.0 % 5.8 % 6.1 %

Other business adjusted operating income (non-GAAP) 1.6 % 1.3 % 1.6 % 1.2 %

Revenue 100.0 % 100.0 % 100.0 % 100.0 %

Cost of paying veterinary invoices 71.0 % 72.1 % 72.1 % 72.1 %

Variable expenses 12.1 % 12.0 % 11.4 % 12.3 %

Fixed expenses* 5.8 % 6.0 % 5.8 % 6.1 %

Total business adjusted operating income (non-GAAP) 11.0 % 9.8 % 10.7 % 9.5 %

*Fixed expenses represent shared services that support both our subscription and other business segments and, as such, are generally allocated to each segment pro-rata based on revenues.

Adjusted operating income is a non-GAAP financial measure that adjusts operating income (loss) to remove the effect of acquisition cost, development expenses, non-recurring transaction or restructuring expenses, and gain (loss) from investment in joint venture. Non-cash items, such as goodwill impairment charges, stock-based compensation expense and depreciation and amortization, are also excluded. Acquisition cost, development expenses, gain (loss) from investment in joint venture, stock-based compensation expense, and depreciation and amortization are expected to remain recurring expenses for the foreseeable future, but are excluded from this metric to measure scale in other areas of the business. Management believes acquisition costs primarily represent the cost to acquire new subscribers and are driven by the amount of growth we choose to pursue based primarily on the amount of our adjusted operating income period over period. Accordingly, this measure is not indicative of our core operating income performance. We also exclude development expenses, gain (loss) from investment in joint venture, stock-based compensation expense, and depreciation and amortization because some investors may not view those items as reflective of our core operating income performance.

Management uses adjusted operating income and the margin on adjusted operating income to understand the effects of scale in its non-acquisition cost and development expenses and to plan future advertising expenditures, which are designed to acquire new pets. Management uses this measure as a principal way of understanding the operating performance of its business exclusive of acquisition cost and new product exploration and development initiatives. Management believes disclosure of this metric provides investors with the same data that the Company employs in assessing its overall operations and that disclosure of this measure may provide useful information regarding the efficiency of our utilization of revenues, return on advertising dollars in the form of new subscribers and future use of available cash to support the continued growth of our business.

The following tables reflect the reconciliation of adjusted EBITDA to net income (in thousands):

Six Months Ended June 30,

2026 2025

Net income $ 11,711 $ 7,930

Excluding:

Stock-based compensation expense(1)

18,698 18,782

Depreciation and amortization expense 7,379 7,753

Interest income (5,981) (5,940)

Interest expense 3,707 6,893

Income tax expense 1,618 1,172

Realized gain on nonmonetary exchange of preferred stock investment — (7,783)

Adjusted EBITDA $ 37,132 $ 28,807

Three Months Ended

Jun. 30, 2026 Mar. 31, 2026 Dec. 31, 2025 Sep. 30, 2025 Jun. 30, 2025 Mar. 31, 2025 Dec. 31, 2024 Sep. 30, 2024

Net income (loss) $ 6,831 $ 4,880 $ 5,630 $ 5,873 $ 9,413 $ (1,483) $ 1,656 $ 1,425

Excluding:

Stock-based compensation expense(1)

9,883 8,815 9,361 9,323 9,268 9,514 8,036 8,127

Depreciation and amortization expense 3,673 3,706 4,032 4,051 3,962 3,791 3,924 4,381

Interest income (2,983) (2,998) (3,115) (3,201) (3,105) (2,835) (2,999) (3,232)

Interest expense 1,832 1,875 4,076 2,790 3,682 3,211 3,427 3,820

Income tax expense 542 1,076 663 726 1,133 39 38 39

Goodwill impairment charges — — 1,129 — — — 5,299 —

Loss from equity method investment — — — — — — — (33)

Realized gain on nonmonetary exchange of preferred stock investment — — — — (7,783) — — —

Adjusted EBITDA $ 19,778 $ 17,354 $ 21,776 $ 19,562 $ 16,570 $ 12,237 $ 19,381 $ 14,527

Contacts:

Investors:

Laura Bainbridge, Senior Vice President, Corporate Communications

Gil Melchior, Director, Investor Relations

Investor.Relations@trupanion.com

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