Trupanion’s third quarter results were met with a negative market reaction, despite better-than-expected revenue growth. Management attributed the revenue gains to accelerated pet enrollment in its subscription segment and improved retention, which CEO Margaret Tooth described as “foundational to long-term value creation.” The company also highlighted record subscription margins and free cash flow generation. However, higher pet acquisition costs and increased investment in growth initiatives contributed to profitability missing Wall Street expectations. CFO Fawwad Qureshi acknowledged, “This year has really been more pricing driven,” indicating a reliance on price over volume for revenue gains.
Is now the time to buy TRUP? Find out in our full research report (it’s free for active Edge members).
Trupanion (TRUP) Q3 CY2025 Highlights:
- Revenue: $366.9 million vs analyst estimates of $362.3 million (12.1% year-on-year growth, 1.3% beat)
- Adjusted EPS: $0.77 vs analyst expectations of $0.89 (13.8% miss)
- Adjusted EBITDA: $19.56 million vs analyst estimates of $15.31 million (5.3% margin, 27.7% beat)
- Operating Margin: 1.6%, up from 0.5% in the same quarter last year
- Market Capitalization: $1.68 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Trupanion’s Q3 Earnings Call
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Brandon Vazquez (William Blair) asked how the company’s commercial strategy is shifting from defense to offense. CEO Margaret Tooth said Trupanion will now invest more aggressively in pet acquisition, leveraging its strong financial position to accelerate growth beyond retention improvements.
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Brandon Vazquez (William Blair) inquired about the balance between price-driven revenue and pet count growth for 2026. CFO Fawwad Qureshi said future growth should see greater contribution from increased pet count rather than pricing, with margin targets remaining steady.
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Katie Sakys (Autonomous Research) questioned the growth outlook for the European segment versus North America. Tooth replied that most investment currently targets North America, but as margins improve, Europe will see increased investment in future years.
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Katie Sakys (Autonomous Research) sought details on the BMO Insurance partnership’s expected impact. Tooth said the partnership will initially focus on Trupanion’s core product and will take time to contribute meaningfully to pet base growth.
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Wilma Jackson Burdis (Raymond James) asked about pricing expectations for 2026 amid changing veterinary inflation. Qureshi stated that inflation was stable this quarter, and future pricing will be adjusted as needed to maintain value but is unlikely to revert to earlier, lower inflation rates.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be watching (1) whether Trupanion’s stepped-up investment in pet acquisition translates into sustained increases in net pet growth, (2) the success of new partnerships such as BMO Insurance in expanding market presence and driving incremental enrollments, and (3) ongoing margin performance as acquisition costs rise and veterinary inflation fluctuates. Execution on refining group channel products and managing capital allocation will also be important areas of focus.
Trupanion currently trades at $38.80, down from $42.15 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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