trup-20260630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


			☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 001-36537

TRUPANION, INC.

(Exact name of registrant as specified in its charter)


Delaware						83-0480694
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

6100 4th Avenue S, Suite 200

Seattle,

Washington

98108


			(855)			727 - 9079

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒

Yes

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒

Yes

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of July 29, 2026, there were approximately 43,872,611 shares of the registrant’s common stock outstanding.

TRUPANION, INC.

TABLE OF CONTENTS


		Page

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
	Signatures	45

Note About Forward-Looking Statements

This Quarterly Report on Form 10-Q of Trupanion, Inc. contains forward-looking statements within the meaning of the federal securities laws. The words “believe,” “may,” “will,” “potentially,” “estimate,” “target,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan” and “expect,” and similar expressions that convey uncertainty of future events or outcomes, are intended to identify forward-looking statements.

These and other forward-looking statements are subject to a number of risks, uncertainties and assumptions, including, without limitation, those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the Securities and Exchange Commission on February 13, 2026, in particular the risk factors discussed under the heading "Risk Factors" in Part I, Item 1A. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Quarterly Report on Form 10-Q may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

You should not rely on forward-looking statements as predictions of future events. We undertake no obligation to update publicly any forward-looking statements for any reason, except as required by law.

Unless otherwise stated or the context otherwise indicates, references to “we,” “us,” “our” and similar references refer to Trupanion, Inc. and its subsidiaries taken as a whole.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


TRUPANION, INC. Condensed Consolidated Statements of Operations (in thousands, except share data) (unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Revenue	$	392,934	$	353,557	$	776,983	$	695,532
Cost of revenue:
Veterinary invoice expense(1)	279,468		255,580		560,904		503,030
Other cost of revenue(1)	48,333		43,150		89,457		86,572
Total cost of revenue	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:
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

See accompanying notes to the condensed consolidated financial statements.


TRUPANION, INC. Condensed Consolidated Statements of Comprehensive Income (in thousands) (unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Net income	$	6,831	$	9,413	$	11,711	$	7,930
Other comprehensive income (loss):
Foreign currency translation adjustments	(979)		3,202		(2,256)		4,554
Net unrealized gain (loss) on available-for-sale investments	(946)		170		(2,459)		715
Other comprehensive income (loss), net of taxes	(1,925)		3,372		(4,715)		5,269
Comprehensive income	$	4,906	$	12,785	$	6,996	$	13,199

See accompanying notes to the condensed consolidated financial statements.


TRUPANION, INC. Condensed Consolidated Balance Sheets (in thousands, except share data)
	June 30, 2026		December 31, 2025
Assets	(unaudited)
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

See accompanying notes to the condensed consolidated financial statements.


Trupanion, Inc. Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share amounts) (unaudited)
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Treasury Stock		Total Stockholders' Equity
	Shares	Amount
Balance at April 1, 2026	43,620,614	$	—	$	613,624	$	(693)	$	(201,575)	$	(16,534)	$	394,822
Issuance of common stock in connection with the Company's equity award programs, net of tax withholdings	250,927	—		(72)		—		—		—		(72)
Stock-based compensation expense	—	—		10,014		—		—		—		10,014

Other comprehensive loss	—	—		—		(1,925)		—		—		(1,925)
Net income	—	—		—		—		6,831		—		6,831
Balance at June 30, 2026	43,871,541	$	—	$	623,566	$	(2,618)	$	(194,744)	$	(16,534)	$	409,670


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Treasury Stock		Total Stockholders' Equity
	Shares	Amount
Balance at April 1, 2025	42,775,955	$	—	$	578,293	$	(715)	$	(227,371)	$	(16,534)	$	333,673
Issuance of common stock in connection with the Company's equity award programs, net of tax withholdings	211,817	—		(469)		—		—		—		(469)
Stock-based compensation expense	—	—		9,465		—		—		—		9,465

Other comprehensive income	—	—		—		3,372		—		—		3,372
Net income	—	—		—		—		9,413		—		9,413
Balance at June 30, 2025	42,987,772	$	—	$	587,289	$	2,657	$	(217,958)	$	(16,534)	$	355,454


Trupanion, Inc. Condensed Consolidated Statements of Stockholders' Equity (in thousands, except share amounts) (unaudited)
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Treasury Stock		Total Stockholders' Equity
	Shares	Amount
Balance at January 1, 2026	43,402,081	$	—	$	604,828	$	2,097	$	(206,455)	$	(16,534)	$	383,936
Issuance of common stock in connection with the Company's equity award programs, net of tax withholdings	469,460	—		(308)		—		—		—		(308)
Stock-based compensation expense	—	—		19,046		—		—		—		19,046

Other comprehensive loss	—	—		—		(4,715)		—		—		(4,715)
Net income	—	—		—		—		11,711		—		11,711
Balance at June 30, 2026	43,871,541	$	—	$	623,566	$	(2,618)	$	(194,744)	$	(16,534)	$	409,670


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Treasury Stock		Total Stockholders' Equity
	Shares	Amount
Balance at January 1, 2025	42,488,445	$	—	$	568,302	$	(2,612)	$	(225,888)	$	(16,534)	$	323,268
Issuance of common stock in connection with the Company's equity award programs, net of tax withholdings	499,327	—		(357)		—		—		—		(357)
Stock-based compensation expense	—	—		19,344		—		—		—		19,344

Other comprehensive income	—	—		—		5,269		—		—		5,269
Net income	—	—		—		—		7,930		—		7,930
Balance at June 30, 2025	42,987,772	$	—	$	587,289	$	2,657	$	(217,958)	$	(16,534)	$	355,454

See accompanying notes to the condensed consolidated financial statements.

TRUPANION, INC.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Six Months Ended June 30,
	2026		2025
Operating activities
Net income	$	11,711	$	7,930
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	7,379		7,753
Stock-based compensation expense	18,969		19,286
Realized gain on nonmonetary exchange of preferred stock investment	—		(7,783)
Other, net	(378)		951
Changes in operating assets and liabilities:
Accounts and other receivables	(627)		(18,015)
Prepaid expenses and other assets	2,597		(584)
Accounts payable, accrued liabilities, and other liabilities	(16,797)		990
Reserve for veterinary invoices	(4,048)		697
Deferred revenue	16,772		19,764
Net cash provided by operating activities	35,578		30,989
Investing activities
Purchases of investment securities	(119,977)		(142,000)
Maturities and sales of investment securities	100,236		94,264

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


Other	(17)		1,200
Net cash used in investing activities	(22,430)		(51,440)
Financing activities

Repayment of debt financing	(5,000)		(15,525)

Proceeds from exercise of stock options	668		1,327
Shares withheld to satisfy tax withholding	(976)		(1,688)
Other	—		(460)
Net cash used in financing activities	(5,308)		(16,346)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net	(999)		1,738
Net change in cash, cash equivalents, and restricted cash	6,841		(35,059)
Cash, cash equivalents, and restricted cash at beginning of period	171,458		199,530
Cash, cash equivalents, and restricted cash at end of period	$	178,299	$	164,471
Supplemental disclosures
Noncash investing and financing activities:
Purchases of property, equipment, and internal-use software included in accounts payable and accrued liabilities	$	605	$	296

Purchase of intellectual property in exchange for preferred stock investment	$	—	$	14,783

See accompanying notes to the condensed consolidated financial statements.

TRUPANION, INC.

Notes to the Condensed Consolidated Financial Statements (unaudited)

1. Nature of Operations and Significant Accounting Policies

Description of Business and Basis of Presentation

Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the "Company") provides medical insurance for cats and dogs in the United States, Canada, and certain countries in Continental Europe. Through its data-driven, vertically-integrated approach, the Company develops and offers high-value medical insurance products, priced to take into account each pet's unique characteristics and coverage level.

The financial data as of December 31, 2025 was derived from the Company's audited consolidated financial statements. The accompanying unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and, in management's opinion, have been prepared on the same basis as the audited financial statements and include all adjustments, consisting of normal recurring adjustments, necessary for the fair presentation of the Company's financial position, results of operations, comprehensive income, stockholders' equity and cash flows for the interim periods. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission ("SEC") on February 13, 2026 (the "2025 10-K"). The Company's accounting policies are described in Note 1 to the audited financial statements included in the 2025 10-K. Operating results for the three and six months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the full fiscal year or any other interim period.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from such estimates. See Note 1 to the audited financial statements included in the 2025 10-K for additional discussion of these estimates and assumptions.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, which requires public business entities to disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of this ASU on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, which modernizes the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The ASU is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact of adopting ASU 2025-06.

2. Net Income per Share

Basic net income per share is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income per share is calculated using the weighted average number of shares of common stock plus, when dilutive, potential shares of common stock outstanding using the treasury-stock method. Potential shares of common stock outstanding include stock options, and unvested restricted stock units.

The components of basic and diluted earnings per share were as follows (in thousands, except share and per share information):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Basic earnings per share:
Net income	$	6,831	$	9,413	$	11,711	$	7,930
Shares used in computation:
Weighted average shares of common stock outstanding	43,730,573		42,872,153		43,618,710		42,734,426
Basic earnings per share	$	0.16	$	0.22	$	0.27	$	0.19

Diluted earnings per share:
Net income	$	6,831	$	9,413	$	11,711	$	7,930
Shares used in computation:
Weighted average shares of common stock outstanding	43,730,573		42,872,153		43,618,710		42,734,426
Stock options	53,655		174,262		64,298		312,622
Restricted stock units	36,833		279,289		68,777		497,277
Weighted average number of shares	43,821,061		43,325,704		43,751,785		43,544,325
Diluted earnings per share	$	0.16	$	0.22	$	0.27	$	0.18

The following potentially dilutive equity securities were not included in the diluted earnings per share of common stock calculation because they would have had an antidilutive effect:


	Three Months Ended June 30,		Six Months Ended June 30,
	2026	2025	2026	2025
Stock options	—	—	—	—
Restricted stock units	1,373,843	261,559	1,623,609	920,847

3. Investments

Available-for sale securities are classified as short-term versus long-term investments based on whether they represent the investment of funds available for current operations. Currently, all available-for-sale securities are considered short-term in nature. Held-to-maturity securities are classified as short-term versus long-term investments based on their maturity dates. The amortized cost, gross unrealized holding gains and losses, and estimated fair value of long-term and short-term investments by major security type and class of security were as follows as of June 30, 2026 and December 31, 2025 (in thousands):


	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
As of June 30, 2026
Long-term investments:



Held-to-maturity investments
U.S. treasury securities	$	989	$	—	$	(4)	$	985
	$	989	$	—	$	(4)	$	985
Short-term investments:
Available-for-sale investments
U.S. treasury securities	$	96,265	$	5	$	(869)	$	95,401
Mortgage-backed securities and collateralized mortgage obligations	24,118		51		(98)		24,071
Other asset-backed securities	26,664		44		(46)		26,662

Corporate bonds	57,441		92		(261)		57,272
	$	204,488	$	192	$	(1,274)	$	203,406
Held-to-maturity investments
U.S. treasury securities	$	9,694	$	—	$	(22)	$	9,672
Foreign treasury securities	35,506		21		(3)		35,524
Certificates of deposit	525		—		—		525

	$	45,725	$	21	$	(25)	$	45,721


	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value
As of December 31, 2025
Long-term investments:



Held-to-maturity investments
U.S. treasury securities	$	983	$	5	$	—	$	988
	$	983	$	5	$	—	$	988
Short-term investments:
Available-for-sale investments
U.S. treasury securities	$	103,643	$	523	$	(8)	$	104,158
Mortgage-backed securities and collateralized mortgage obligations	24,501		201		(15)		24,687
Other asset-backed securities	23,685		152		—		23,837

Corporate bonds	47,311		527		(3)		47,835
	$	199,140	$	1,403	$	(26)	$	200,517
Held-to-maturity investments
U.S. treasury securities	$	9,757	$	10	$	—	$	9,767
Foreign treasury securities	18,263		—		—		18,263
Certificates of deposit	4,169		—		—		4,169

	$	32,189	$	10	$	—	$	32,199

Future maturities of investments classified as available-for-sale and held-to-maturity are as follows (in thousands):


	As of June 30, 2026
	Amortized Cost		Fair Value
Available-for-sale:
Due under one year	$	475	$	479
Due after one year through five years	153,231		152,194
Due after five years through ten years	—		—
Due after ten years	—		—
	$	153,706	$	152,673
Available-for-sale collateralized:
Due under one year	$	8,315	$	8,341
Due after one year through five years	31,624		31,605
Due after five years through ten years	10,636		10,573
Due after ten years	207		214
	$	50,782	$	50,733
Held-to-maturity:
Due under one year	$	45,725	$	45,721
Due after one year through five years	989		985
	$	46,714	$	46,706

The following tables present the gross unrealized losses and related fair values for the Company's investment in available-for-sale securities, grouped by duration of time in a continuous unrealized loss position as of June 30, 2026 and December 31, 2025 (in thousands):


	Less than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
As of June 30, 2026
U.S. treasury securities	$	91,412	$	(869)	$	—	$	—	$	91,412	$	(869)
Mortgage-backed securities and collateralized mortgage obligations	14,773		(79)		796		(19)		15,569		(98)
Other asset-backed securities	9,721		(46)		—		—		9,721		(46)
Corporate bonds	36,798		(261)		—		—		36,798		(261)
Total	$	152,704	$	(1,255)	$	796	$	(19)	$	153,500	$	(1,274)


	Less than 12 Months				12 Months or More				Total
	Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss		Fair Value		Gross Unrealized Loss
As of December 31, 2025
U.S. treasury securities	$	5,139	$	(8)	$	—	$	—	$	5,139	$	(8)
Mortgage-backed securities and collateralized mortgage obligations	2,893		(3)		967		(12)		3,860		(15)
Other asset-backed securities	—		—		—		—		—		—
Corporate bonds	2,700		(3)		—		—		2,700		(3)
Total	$	10,732	$	(14)	$	967	$	(12)	$	11,699	$	(26)

As of June 30, 2026, 109 of the securities held were in an unrealized loss position. Unrealized losses on available-for-sale investments relate to interest rate changes. The Company does not expect material credit losses from its available-for-sale investments, considering the composition of the investment portfolio and the credit rating of these investments. The Company determined it is not likely to, and does not intend to, sell securities currently in a loss position prior to a potential recovery of their cost basis. The Company does not expect material credit losses from its held-to-maturity investments, considering the composition of the investment portfolio and the credit loss history of these investments.

Proceeds from the sales of fixed maturity investments classified as available-for-sale were $78.4 million and $81.2 million during the six months ended June 30, 2026 and 2025, respectively.

4. Other Investments

Preferred Stock Investment and Nonmonetary Exchange

The Company invested $7.0 million in the preferred stock of a variable interest entity, Baystride, Inc. ("Baystride"), a U.S.-based privately held corporation operating in the pet food industry. The Company did not have power over the activities that most significantly impact the economic performance of the entity and was, therefore, not the primary beneficiary. The preferred stock investment in the entity was redeemable and, therefore, was accounted for as an available-for-sale debt security and measured at fair value at each balance sheet date and as of the transaction date. The estimated fair value of the preferred stock investment was a Level 3 measurement, and was based on certain unobservable inputs such as the value of the underlying enterprise, volatility, time to liquidity, and market interest rates. Significant changes in any of these unobservable inputs would result in a change in the fair value measurement.

On June 3, 2025, the Company entered into a purchase agreement for intellectual property developed by Baystride. In exchange for this intellectual property, the Company transferred all of its Baystride preferred stock back to Baystride. The Company concluded that the transaction met the definition of a nonmonetary exchange and an asset acquisition.

The Company determined that the cost to acquire the intellectual property was $14.9 million, which was comprised of the fair value of the Baystride preferred stock relinquished of $14.8 million and direct transaction costs of $0.1 million. The acquired intellectual property has been recorded as a patent within Intangible assets, net on the Company's Consolidated Balance Sheet and will be amortized over a 20-year useful life. The nonmonetary exchange resulted in a gain of $7.8 million, calculated as the difference between the Company's initial $7.0 million investment in Baystride's preferred stock and its $14.8 million fair value on the transaction date. This gain was recorded to Other (income), net within the Company's Consolidated Statements of Operations.

5. Fair Value

Fair Value Disclosures

The following table summarizes, by major security type, the Company's assets that are measured at fair value on a recurring basis, and placement within the fair value hierarchy (in thousands):


	As of June 30, 2026
	Fair Value		Level 1		Level 2		Level 3
Assets
Money market funds	$	53,359	$	53,359	$	—	$	—
Fixed maturities:
Mortgage-backed securities and collateralized mortgage obligations	24,071		—		24,071		—
Other asset-backed securities	26,662		—		26,662		—
Corporate bonds	57,272		—		57,272		—


U.S. treasury securities	95,401		—		95,401		—

Total	$	256,765	$	53,359	$	203,406	$	—

	As of December 31, 2025
	Fair Value		Level 1		Level 2		Level 3
Assets
Money market funds	$	46,818	$	46,818	$	—	$	—
Fixed maturities:
Mortgage-backed securities and collateralized mortgage obligations	24,687		—		24,687		—
Other asset-backed securities	23,837		—		23,837		—
Corporate bonds	47,835		—		47,835		—


U.S. treasury securities	104,158		—		104,158		—
Total	$	247,335	$	46,818	$	200,517	$	—

The Company measures the fair value of money market funds, classified as Level 1, based on quoted prices in active markets for identical assets. The fair values of the Company's fixed maturity investments classified as Level 2 are based on either recent trades in inactive markets or quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. Held-to-maturity investments are carried at amortized cost and the fair value and changes in unrealized gains and losses are disclosed in Note 3, Investments. The fair value of these investments is determined in the same manner as available-for-sale securities and are considered either a Level 1 or Level 2 measurement.

The Company recognizes transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers between levels for the six months ended June 30, 2026 and the year ended December 31, 2025.

Fair Value Disclosures - Other Assets and Liabilities

Notes receivable of $2.4 million were included in Prepaid expenses and other assets as of June 30, 2026, and $2.5 million were included in Other long-term assets as of December 31, 2025. Classification of notes receivable in the Company's Consolidated Balance Sheets is determined based on the expected maturity of each note. The Company records notes receivable at their estimated collectible amount and estimates that the carrying value of notes receivable approximates their fair value. The estimated fair value represents a Level 3 measurement within the fair value hierarchy, and is based on market interest rates and the assessed creditworthiness of the third party.

The Company estimates the fair value of long-term debt based upon rates currently available to the Company for debt with similar terms and remaining maturities. This is a Level 3 measurement. Based upon the terms of the debt, the carrying amount of long-term debt approximated fair value at June 30, 2026.

6. Commitments and Contingencies

Legal Proceedings

From time to time the Company is or may become subject to various legal proceedings arising in the ordinary course of business, including proceedings involving members, other entities or regulatory bodies. Estimated liabilities are recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. At this time, the Company does not believe any such matters to be material individually or in the aggregate. These views are subject to change following the outcome of future events or the results of future developments.

7. Reserve for Veterinary Invoices

The reserve for veterinary invoices is an estimate of the future amount the Company will pay for insurance claims that have not been paid prior to the reporting date. The reserve also includes the Company's estimate of related internal processing costs. The reserve estimate involves actuarial projections and is based on management's assessment of facts and circumstances currently known, and assumptions about anticipated claims development patterns. The Company uses generally accepted actuarial methodologies, such as paid loss development methods, in estimating the amount of the reserve for veterinary invoices. The reserve is made for each of the Company's segments, subscription and other business, and is continually refined as the Company receives and pays veterinary invoices. Changes in management's assumptions and estimates may have a relatively large impact on the reserve and associated expense.

Reserve for veterinary invoices

Summarized below are the changes in total liability for the Company's subscription business segment (in thousands):


	Six Months Ended June 30,
Subscription	2026		2025
Reserve at beginning of year	$	26,364	$	23,084
Veterinary invoice expenses during the period related to:
Current year	383,806		338,923
Prior years	2,411		2,132
Total veterinary invoice expense	386,217		341,055
Amounts paid during the period related to:
Current year	360,156		315,253
Prior years	23,563		21,355
Total paid	383,719		336,608
Non-cash expenses	1,078		1,624
Reserve at end of period	$	27,784	$	25,907

The Company had unfavorable development on veterinary invoice reserves of $2.4 million for the six months ended June 30, 2026, including favorable development of $0.5 million attributable to accident year 2025 and unfavorable development of $2.9 million attributable to accident year 2024 and prior. The favorable development for accident year 2025 was primarily driven by lower than expected frequency of claims. The unfavorable development for accident year 2024 and prior was primarily driven by higher than expected frequency of claims. Non-cash expenses are primarily comprised of stock-based compensation for employees performing claims processing related duties.

Summarized below are the changes in total liability for the Company's other business segment (in thousands):


	Six Months Ended June 30,
Other Business	2026		2025
Reserve at beginning of year	$	29,557	$	28,551
Veterinary invoice expenses during the period related to:
Current year	171,494		167,448
Prior years	3,193		(5,473)
Total veterinary invoice expense	174,687		161,975
Amounts paid during the period related to:
Current year	151,301		143,726
Prior years	29,004		20,184
Total paid	180,305		163,910
Non-cash expenses	1		—
Reserve at end of period	$	23,938	$	26,616

The Company had unfavorable development on veterinary invoice reserves for the other business segment of $3.2 million for the six months ended June 30, 2026, including unfavorable development on veterinary invoice reserves of $2.5 million attributable to accident year 2025 and unfavorable development of $0.7 million attributable to accident year 2024 and prior. The unfavorable development for accident years 2025 and prior was primarily driven by higher than expected frequency of claims.

Reserve for veterinary invoices, by year of occurrence

In the following tables, the reserve for veterinary invoices for each segment is presented as the amount (in thousands) by the year to which the veterinary invoice relates, referred to as the year of occurrence.


Subscription	As of June 30, 2026
Year of Occurrence
2024 and prior	$	1,867
2025	3,345
2026	22,572
	$	27,784


Other Business	As of June 30, 2026
Year of Occurrence
2024 and prior	$	1,315
2025	2,431
2026	20,192
	$	23,938

8. Debt

Prior Credit Facility

On March 25, 2022, the Company entered into a credit agreement with Piper Sandler Finance, LLC, acting as the administrative agent, that provided the Company with $150.0 million in credit (the "Prior Credit Facility"). The Prior Credit Facility obligated the Company to repay 0.25% of any then-outstanding Term Loans, together with accrued and unpaid interest, on a quarterly basis. In November 2025, the Company repaid the Prior Credit Facility in full utilizing proceeds from the PNC Facility.

PNC Facility

On November 4, 2025, the Company entered into a credit agreement with PNC Bank, National Association acting as the administrative agent, that provides the Company with $120.0 million in credit (the "PNC Facility") consisting of:

(a) an initial term loan in an aggregate principal amount of $100.0 million ("PNC Initial Term Loan"), which was funded at closing;

(b) commitments for revolving loans in an aggregate principal amount at any time outstanding not in excess of $20.0 million (PNC Revolving Loans), of which $15.0 million was originally drawn. Additionally, $1.5 million of borrowing capacity has been reserved for an irrevocable letter of credit pursuant to the Company's manufacturing facility lease. Remaining undrawn or uncommitted amounts may be drawn at any time prior to maturity.

The PNC Facility is secured by substantially all assets of the Company and its subsidiaries. Proceeds from the PNC Facility were utilized to pay off the Prior Credit Facility. The credit agreement with PNC Bank contains financial and other covenants. As of June 30, 2026, the Company was in compliance with all financial and other covenants. During the third quarter of 2026, the Company amended the PNC Facility to modify certain financial covenants, increasing the capacity for share repurchases under the Company's new share repurchase program.

To the extent not previously paid, the PNC Facility is due and payable on November 4, 2028. The Company will make quarterly principal payments of $2.5 million on the PNC Initial Term Loan. The Company may voluntarily prepay loans or reduce revolving commitments under the PNC Facility at any time without premium or penalty.

Loans under the PNC Facility bear interest at a reference rate plus an applicable margin, which will generally be the SOFR reference rate plus 2.75% per annum. The stated interest rate as of June 30, 2026 was approximately 6.48% for the aggregate outstanding term loans. The Company incurred total debt issuance cost of approximately $0.8 million, which is reported in the Consolidated Balance Sheet as a direct reduction from the carrying amount of the PNC Facility, and is amortized as interest expense over the term of three years.

Future principal payments on outstanding borrowings as of June 30, 2026 are as follows (in thousands):


Year Ending December 31,	As of June 30, 2026
2026	$	5,000
2027	10,000
2028	92,500
Total	$	107,500

9. Stock-Based Compensation

Stock-based compensation expense includes restricted stock units granted to employees and other service providers and has been reported in the Company’s Consolidated Statements of Operations depending on the function performed by the employee or other service provider. Stock-based compensation expense recognized in each category of the Consolidated Statements of Operations was as follows (in thousands):


	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 expensed stock-based compensation	9,969		9,456		18,969		19,286
Capitalized stock-based compensation	45		9		77		58
Total stock-based compensation	$	10,014	$	9,465	$	19,046	$	19,344

Stock Options

The following table presents information regarding stock options granted, exercised, and forfeited for the period presented:


	Number of Options	Weighted Average Exercise Price per Share		Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2025	197,232	$	16.20	$	4,175
Granted	—	—		—
Exercised	(53,346)	12.52		875
Forfeited	(1,751)	10.18		—
Outstanding as of June 30, 2026	142,135	17.65		1,011

Exercisable as of June 30, 2026	142,135	$	17.65	$	1,011

As of June 30, 2026, stock options outstanding and stock options exercisable had a weighted average remaining contractual life of 0.8 years.

The Company has not granted any new stock options since 2017 and all outstanding options vested prior to January 1, 2022. The Company issues authorized shares upon the exercise of stock options.

Restricted Stock Units

The following table presents information regarding restricted stock units granted, vested and forfeited for the period presented:


	Number of Shares	Weighted Average Grant Date Fair Value per Share
Unvested shares as of December 31, 2025	1,014,774	$	40.32
Granted	907,403	27.89
Vested	(457,011)	39.28
Forfeited	(84,274)	43.15
Unvested shares as of June 30, 2026	1,380,892	$	32.32

Stock-based compensation expenses of $42.5 million related to unvested restricted stock units are expected to be recognized over a weighted average period of approximately 1.9 years.

10. Stockholders' Equity

Common Stock and Preferred Stock

As of June 30, 2026, the Company had 100,000,000 shares of common stock authorized and 43,871,541 shares of common stock outstanding. Holders of common stock are entitled to one vote on each matter properly submitted to the stockholders of the Company except those related to matters concerning possible outstanding preferred stock. As of June 30, 2026, the Company had 10,000,000 shares of undesignated preferred stock authorized for future issuance and did not have any outstanding shares of preferred stock. The holders of common stock are also entitled to receive dividends as and when declared by the board of directors of the Company (the "Board"), whenever funds are legally available. These rights are subordinate to the dividend rights of holders of any senior classes of stock outstanding at the time. The Company does not intend to declare or pay any cash dividends in the foreseeable future.

Share Repurchase Program

In April 2021, the Board approved a share repurchase program, pursuant to which the Company was authorized to repurchase outstanding shares of its common stock, between May 2021 and May 2026. In June 2026, the Board approved a new share repurchase 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, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company’s compliance with the PNC Facility, available cash, cash flow from operations, stock price, general economic, business and market conditions, and alternative investment opportunities. The Company repurchased no shares during the six months ended June 30, 2026 and 2025, respectively.

11. Accumulated Comprehensive Income (Loss)

A summary of the components of Accumulated other comprehensive income (loss) is as follows (in thousands):


Three months ended June 30, 2026	Foreign Currency Translation		Net Unrealized Gain (Loss) on Available-for-Sale Securities		Total
Balance as of April 1, 2026	$	(557)	$	(136)	$	(693)
Other comprehensive loss	(979)		(946)		(1,925)
Balance as of June 30, 2026	$	(1,536)	$	(1,082)	$	(2,618)

Three months ended June 30, 2025	Foreign Currency Translation		Net Unrealized Gain on Available-for-Sale Securities		Total
Balance as of April 1, 2025	$	(1,761)	$	1,046	$	(715)
Other comprehensive income	3,202		170		3,372
Balance as of June 30, 2025	$	1,441	$	1,216	$	2,657

Six Months Ended June 30, 2026	Foreign Currency Translation		Net Unrealized Gain (Loss) on Available-for-Sale Securities		Total
Balance as of January 1, 2026	$	720	$	1,377	$	2,097
Other comprehensive loss	(2,256)		(2,459)		(4,715)
Balance as of June 30, 2026	$	(1,536)	$	(1,082)	$	(2,618)

Six Months Ended June 30, 2025	Foreign Currency Translation		Net Unrealized Gain on Available-for-Sale Securities		Total
Balance as of January 1, 2025	$	(3,113)	$	501	$	(2,612)
Other comprehensive income	4,554		715		5,269
Balance as of June 30, 2025	$	1,441	$	1,216	$	2,657

In connection with the nonmonetary exchange discussed in Note 4, the Company reclassified $0.9 million of previously unrealized gain from Accumulated other comprehensive income (loss) to Other (income), net during the six months ended June 30, 2025.

12. Segments

The Company has two reporting segments: subscription business and other business. The subscription business segment generates revenue primarily from subscription payments related to the Company's direct-to-consumer products. The other business segment generates revenue from other product offerings, primarily by underwriting policies on behalf of third parties with whom the Company has a business-to-business relationship. The other business segment has, and targets, a lower margin profile than the Company's subscription business segment. The Company does not undertake marketing efforts for these policies and has a business-to-business relationship with these third-parties.

The Company's chief operating decision maker is its Chief Executive Officer. The chief operating decision maker reviews revenue and operating income (loss) to evaluate segment performance. Revenue, veterinary invoice expense, other cost of revenue, and new pet acquisition expenses are generally directly attributed to each segment. Other operating expenses, such as technology and development expense, general and administrative expense, and depreciation and amortization, are generally allocated proportionately based on revenue in each segment. Interest and other expenses and income taxes are not allocated to the segments, nor included in the measure of segment profit or loss. The Company does not analyze discrete segment balance sheet information related to long-term assets. Substantially all of the Company’s long-lived assets were located in the United States as of June 30, 2026 and December 31, 2025.

Operating income (loss) of the Company’s segments was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Subscription business:
Revenue	$	276,690	$	242,156	$	546,144	$	475,220
Veterinary invoice expense	194,803		172,874		386,217		341,055
Other cost of revenue	25,451		22,614		50,489		44,278
Technology and development	8,981		5,881		16,903		11,381
General and administrative	13,748		13,782		27,151		27,339
New pet acquisition expense	22,790		19,768		45,373		40,280
Depreciation and amortization	2,586		2,714		5,187		5,297
Subscription business operating income	8,331		4,523		14,824		5,590

Other business:
Revenue	116,244		111,401		230,839		220,312
Veterinary invoice expense	84,665		82,706		174,687		161,975
Other cost of revenue	22,882		20,536		38,968		42,294
Technology and development	3,773		2,705		7,145		5,277
General and administrative	5,777		6,340		11,476		12,675
New pet acquisition expense	15		75		43		79
Depreciation and amortization	1,087		1,248		2,192		2,456
Other business operating loss	(1,955)		(2,209)		(3,672)		(4,444)
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

The following table presents the Company’s revenue by geographic region of the member (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
United States	$	325,918	$	293,979	$	644,096	$	579,803
Canada and other	67,016		59,578		132,887		115,729
Total revenue	$	392,934	$	353,557	$	776,983	$	695,532

13. Income Taxes

The effective tax rate for the three months ended June 30, 2026 was 7.4% compared to 10.7% for the three months ended June 30, 2025, primarily due to the initial transfer of our Canadian insurance business to GPIC in 2025, which resulted in a true-up to the annual effective tax rate for the three months ended June 30, 2025. The effective tax rate for the six months ended June 30, 2026 was 12.1% compared to 12.9% for the six months ended June 30, 2025, primarily due to a change in the jurisdictional makeup of income and losses.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We provide medical insurance for cats and dogs in the United States, Canada, and certain countries in Continental Europe. Through our data-driven, vertically-integrated approach, we develop and offer high-value medical insurance products, priced to take into account each pet’s unique characteristics and coverage level. Our growing and loyal membership base provides us with highly predictable and recurring revenue.

We operate in two reporting segments: subscription business and other business. We generate revenue in our subscription business segment primarily through insurance premiums, which we refer to as subscription payments from direct-to-consumer products. We operate our subscription business segment similar to other subscription-based businesses, with a focus on achieving a target margin prior to our new pet acquisition expense and acquiring as many pets as possible at our targeted average estimated internal rate of return. Within our subscription business, we also provide "Powered by Trupanion" pet insurance product offerings marketed by third parties, low and medium average revenue per pet products marketed under the brand names Furkin and PHI Direct in Canada, and a Trupanion branded product in Germany and Switzerland. We either directly underwrite or assume full insurance risk for these products through reinsurance arrangements. We provide a full suite of services and support for these products and they are designed to align with the target margin profile of our subscription business segment. Within this segment, we also offer products in certain countries in Continental Europe, which are currently underwritten by third parties who pay us commissions that we recognize as revenue.

We generate leads for our subscription business segment from a diverse set of member acquisition channels, which we then seek to convert into members through our contact center, website and other direct-to-consumer activities. These channels include referrals from third-parties such as veterinarians and existing members. Veterinary hospitals represent our largest referral source. Our “Territory Partners” create relationships with veterinary hospital teams through face-to-face visits. Territory Partners are dedicated to cultivating direct veterinary relationships and helping those veterinarians understand the benefits of high-quality medical insurance. Veterinarians then educate pet parents, who visit our website or call our contact center to learn more about, and potentially enroll in, a Trupanion product. We also receive a significant number of new leads from existing members adding pets and referring their friends and family members. Our direct-to-consumer acquisition channels serve as important resources for pet parent education and drive new member leads and conversion. We monitor average pet acquisition cost to evaluate the efficiency in acquiring new members and measure effectiveness based on our targeted return on investment.

Our other business segment generates revenue from other product offerings, primarily by underwriting policies on behalf of third parties with whom we generally have a business-to-business relationship. This business segment has, and targets, a significantly lower margin profile than our subscription business segment and is not part of our core business strategy. The largest source of revenue within this segment is from our long-standing contractual relationship as an underwriter for Pets Best, a third-party insurance provider we have worked with since 2015. We and Pets Best have agreed to end our relationship after the third quarter of 2028. We expect that enrollment from Pets Best will continue to decline as it rolls off business and engages other third-party underwriters. Additional products in this segment include the U.S. Department of Veterans Affairs program and employer-sponsored programs, primarily for companies with animal health related operations.

Key Operating Metrics

The following table sets forth total enrolled pets in our subscription and our other business segment and key operating metrics for our subscription business for year-to-date values as well as each of the last eight fiscal quarters.


	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		%

Total pets enrolled and total subscription pets enrolled include certain pet enrollments in European markets, where policies are currently underwritten by third parties and Trupanion is acting as an insurance broker. Per pet metrics, however, exclude these European policies, as their revenue is currently earned from commissions, as opposed to the subscription payments earned by the remainder of our subscription business.

Total pets enrolled. Total pets enrolled reflects the number of pets enrolled in one of the insurance products offered in our subscription business segment or our other business segment at the end of each period presented. We monitor total pets enrolled because it provides an indication of the growth of our consolidated business.

Total subscription pets enrolled. Total subscription pets enrolled reflects the number of pets enrolled in one of the insurance products offered in our subscription business segment at the end of each period presented. We monitor total subscription pets enrolled because it provides an indication of the growth of our subscription business. Because our subscription business has a significantly higher margin profile than our other business, changes in the rate of growth of our subscription pet enrollment tend to have a greater impact on our consolidated performance.

Monthly average revenue per pet. Monthly average revenue per pet is calculated as amounts billed in a given period for subscriptions divided by the total number of subscription pet months in the period. Total subscription pet months in a period represents the sum of all subscription pets enrolled for each month during the period. We monitor monthly average revenue per pet because it is an indicator of the per pet unit economics of our subscription business.

Average pet acquisition cost. Average pet acquisition cost ("PAC") is calculated as net acquisition cost divided by the total number of new subscription pets enrolled in that period. Net acquisition cost, a non-GAAP financial measure, is calculated in a reporting period as new pet acquisition expense, excluding stock-based compensation expense, other business segment expense, offset by sign-up fee revenue. We exclude stock-based compensation expense because the amount varies from period to period based on number of awards issued and market-based valuation inputs. We offset sign-up fee revenue because it is a one-time charge to some new members collected at the time of enrollment used to partially offset initial setup costs, which are included in new pet acquisition expenses. We exclude other business segment pet acquisition expense because that does not relate to subscription enrollments. We monitor average pet acquisition cost to evaluate the efficiency in acquiring new members and measure effectiveness based on our targeted return on investment.

Average monthly retention. Average monthly retention is measured as the monthly retention rate of enrolled subscription pets for each applicable period averaged over the 12 months prior to the period end date. As such, our average monthly retention rate as of June 30, 2026 is an average of each month’s retention from July 1, 2025 through June 30, 2026. We calculate monthly retention as the number of pets that remain after subtracting all pets that cancel during a month, including pets that enroll and cancel within that month, divided by the total pets enrolled at the beginning of that month. We monitor average monthly retention because it provides a measure of member satisfaction and allows us to calculate the implied average subscriber life in months.

Non-GAAP Financial Measures

In addition to our results determined in accordance with U.S. GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance. We use the following non-GAAP financial information to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that these non-GAAP financial measures, when taken collectively, may be helpful to investors in providing consistency and comparability with past financial performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for, the directly comparable financial measures prepared in accordance with GAAP.

We calculate these non-GAAP financial measures by excluding certain non-cash or non-recurring expenses. We exclude non-recurring transactions and restructuring expenses as they are not indicative of our operating performance. We exclude stock-based compensation as it is non-cash in nature. Although stock-based compensation expenses are expected to remain recurring expenses for the foreseeable future, we believe excluding them allows investors to make meaningful comparisons between our recurring core business operating results and those of other companies. We define non-GAAP development expenses as operating expenses incurred to develop new products and offerings that are pre-revenue. We define non-GAAP fixed expenses as the total of technology and development expense and general and administrative expense, less stock-based compensation expense, non-recurring transaction and restructuring expense, and development expenses related to exploring and developing new products and offerings that generally are in the pre-revenue stage or not at scale.

The following table presents the reconciliation of our non-GAAP financial measures from corresponding GAAP measures for year-to-date values as well as each of the last eight fiscal quarters (in thousands):


	Six Months Ended June 30,
	2026			2025
Veterinary invoice expense	$	560,904		$	503,030
Less:
Stock-based compensation expense(1)	(1,048)			(1,522)
Other business cost of paying veterinary invoices(2)	(174,687)			(161,975)
Subscription cost of paying veterinary invoices (non-GAAP)	$	385,169		$	339,533
% of subscription revenue	70.5		%	71.4		%

Other cost of revenue	$	89,457		$	86,572
Less:
Stock-based compensation expense(1)	(1,178)			(1,082)
Other business variable expenses(2)	(38,964)			(42,267)
Subscription variable expenses (non-GAAP)	$	49,315		$	43,223
% of subscription revenue	9.0		%	9.1		%

Technology and development expense	$	24,048		$	16,658
General and administrative expense	38,627			40,014
Less:
Stock-based compensation expense(1)	(13,820)			(11,788)

Development expenses(3)	(3,501)			(2,353)
Fixed expenses (non-GAAP)	$	45,354		$	42,531
% of total revenue	5.8		%	6.1		%

New pet acquisition expense	$	45,416		$	40,359
Less:
Stock-based compensation expense(1)	(2,652)			(4,390)
Other business pet acquisition expense(2)	(41)			(77)
Subscription acquisition cost (non-GAAP)	$	42,723		$	35,892
% of subscription revenue	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 in accordance with GAAP, but we do not include it in any non-GAAP adjustments. Stock-based compensation associated with bonuses was approximately $0.3 million for the six months ended June 30, 2026. (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.


	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
Veterinary invoice expense	$	279,468		$	281,436		$	262,818		$	263,127		$	255,580		$	247,450		$	245,663		$	238,814
Less:
Stock-based compensation expense(1)	(496)			(552)			(614)			(666)			(758)			(763)			(800)			(830)
Other business cost of paying veterinary invoices(2)	(84,665)			(90,022)			(81,452)			(85,394)			(82,706)			(79,269)			(85,378)			(82,507)
Subscription cost of paying veterinary invoices (non-GAAP)	$	194,307		$	190,862		$	180,752		$	177,067		$	172,116		$	167,418		$	159,485		$	155,477
% of subscription revenue	70.2		%	70.8		%	69.1		%	70.1		%	71.1		%	71.8		%	70.0		%	71.0		%

Other cost of revenue	$	48,333		$	41,124		$	49,008		$	43,739		$	43,150		$	43,422		$	38,721		$	39,263
Less:
Stock-based compensation expense(1)	(615)			(564)			(600)			(579)			(601)			(482)			(476)			(536)
Other business variable expenses(2)	(22,881)			(16,083)			(25,589)			(20,702)			(20,531)			(21,736)			(17,336)			(18,126)
Subscription variable expenses (non-GAAP)	$	24,837		$	24,477		$	22,819		$	22,458		$	22,018		$	21,204		$	20,909		$	20,601
% of subscription revenue	9.0		%	9.1		%	8.7		%	8.9		%	9.1		%	9.1		%	9.2		%	9.4		%

Technology and development expense	$	12,754		$	11,294		$	11,303		$	9,887		$	8,586		$	8,072		$	8,172		$	7,933
General and administrative expense	19,525			19,102			18,323			18,311			20,122			19,892			16,828			16,977
Less:
Stock-based compensation expense(1)	(7,545)			(6,274)			(6,617)			(6,551)			(6,393)			(5,396)			(5,277)			(5,258)

Development expenses(3)	(1,801)			(1,701)			(1,798)			(1,199)			(946)			(1,406)			(1,322)			(1,474)
Fixed expenses (non-GAAP)	$	22,933		$	22,421		$	21,211		$	20,448		$	21,369		$	21,162		$	18,401		$	18,178
% of total revenue	5.8		%	5.8		%	5.6		%	5.6		%	6.0		%	6.2		%	5.5		%	5.6		%

New pet acquisition expense	$	22,805		$	22,611		$	23,103		$	21,946		$	19,843		$	20,516		$	18,354		$	18,308
Less:
Stock-based compensation expense(1)	(1,227)			(1,425)			(1,530)			(1,527)			(1,516)			(2,873)			(1,482)			(1,503)
Other business pet acquisition expense(2)	(15)			(26)			(8)			(5)			(74)			(3)			(8)			(8)
Subscription acquisition cost (non-GAAP)	$	21,563		$	21,160		$	21,565		$	20,414		$	18,253		$	17,640		$	16,864		$	16,797
% of subscription revenue	7.8		%	7.9		%	8.2		%	8.1		%	7.5		%	7.6		%	7.4		%	7.7		%
(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 for the three months ended June 30, 2026. (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.

When determining our PAC, we calculate net acquisition cost for a more comparable metric across periods. Net acquisition cost, a non-GAAP financial measure, is calculated in a reporting period as GAAP new pet acquisition expense, excluding stock-based compensation expense, other business segment expense, and pet acquisition expense for commission-based policies, offset by sign-up fee revenue. We exclude stock-based compensation expense because the amount varies from period to period based on the number of awards issued and market-based valuation inputs. We exclude other business segment pet acquisition expense because it does not relate to subscription enrollments. We exclude pet acquisition expense for commission-based policies because the revenue of these products is earned from commissions from a third-party underwriter, as opposed to the subscription payments earned by the remainder of our subscription business. We offset sign-up fee revenue because it is a one-time charge to some new members collected at the time of enrollment used to partially offset initial setup costs, which are included in new pet acquisition expenses.

The following table reconciles GAAP new pet acquisition expense to non-GAAP net acquisition cost for year-to-date values as well as each of the last eight fiscal quarters (in thousands):


	Six Months Ended June 30,
	2026		2025
New pet acquisition expense	$	45,416	$	40,359
Net of sign-up fee revenue	(2,184)		(2,101)
Excluding:
Stock-based compensation expense	(2,652)		(4,390)
Other business pet acquisition expense	(41)		(77)
Pet acquisition expense for commission-based policies	(2,227)		(1,524)
Net acquisition cost	$	38,312	$	32,267


	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
New pet acquisition expense	$	22,805	$	22,611	$	23,103	$	21,946	$	19,843	$	20,516	$	18,354	$	18,308
Net of sign-up fee revenue	(1,109)		(1,075)		(1,049)		(1,157)		(1,061)		(1,040)		(906)		(1,100)
Excluding:
Stock-based compensation expense	(1,227)		(1,425)		(1,530)		(1,527)		(1,516)		(2,873)		(1,482)		(1,503)
Other business pet acquisition expense	(15)		(26)		(8)		(5)		(74)		(3)		(8)		(8)
Pet acquisition expense for commission-based policies	(1,270)		(957)		(869)		(790)		(927)		(598)		(1,125)		(634)
Net acquisition cost	$	19,184	$	19,128	$	19,647	$	18,467	$	16,265	$	16,002	$	14,833	$	15,063

Components of Operating Results

General

We operate in two reporting segments: subscription business and other business. We generate revenue in our subscription business segment primarily by subscription payments from direct-to-consumer products. We operate our subscription business segment similar to other subscription-based businesses, with a focus on achieving a target margin prior to our pet acquisition expense and acquiring as many pets as possible at our targeted average estimated internal rate of return. Within our subscription business, we also currently provide "Powered by Trupanion" pet insurance product offerings marketed by third parties, low and medium average revenue per pet products marketed under the brand names Furkin and PHI Direct in Canada, and a Trupanion branded product in Germany and Switzerland. We either directly underwrite or assume full insurance risk for these products through reinsurance arrangements. We provide a full suite of services and support for these products and they are designed to align with the target margin profile of our subscription business segment. Within this segment we also offer products in certain countries in Continental Europe, which are currently underwritten by third parties who pay us commissions that we recognize as revenue.

provider we have worked with since 2015. Additional products in this segment include the U.S. Department of Veterans Affairs program and employer-sponsored programs, primarily for companies with animal health related operations.

Revenue

We generate revenue in our subscription business segment primarily from subscription payments for our pet medical insurance. Subscription payments are paid at the beginning of each subscription period. In most cases, our members authorize us to directly charge their credit card, debit card or bank account through automatic funds transfer. Subscription revenue is recognized on a pro rata basis over the policy term. Membership may be canceled at any time without penalty, and we issue a refund for the unused portion of the canceled membership. In addition to subscription payments, we generate a small amount of revenue from charging a one-time sign-up fee collected at the time of new enrollment to partially offset initial setup costs. Sign-up fees are related to Trupanion’s obligation to provide insurance coverage and are recognized over the policy term. We also generate a portion of our subscription business segment revenue through commissions earned in certain European markets, where policies are currently underwritten by third parties and Trupanion is acting as an insurance broker.

We generate revenue in our other business segment primarily from writing policies on behalf of third parties where we do not undertake direct consumer marketing. This segment also includes revenue from other pet insurance products that have a significantly lower margin profile from our subscription business.

Cost of Revenue

Cost of revenue in each of our segments is comprised of the following:

Veterinary invoice expense

Veterinary invoice expense includes our costs to review and pay veterinary invoices, administer the payments, and provide member services, and other operating expenses directly or indirectly related to this process. We also accrue for veterinary invoices that have been incurred but not yet received and for the estimated internal costs of processing those invoices. This also includes amounts paid by unaffiliated general agents on our behalf, and an estimate of amounts incurred and not yet paid for our other business segment.

Other cost of revenue

Other cost of revenue for the subscription business segment includes direct and indirect member service expenses, Territory Partner commissions per member renewal, payment processing fees and premium tax expenses. Other cost of revenue for the other business segment includes the commissions we pay to unaffiliated general agents, costs to administer the programs in the other business segment and premium taxes on the sales in this segment.

Operating Expenses

Our operating expenses are classified into four categories: technology and development, general and administrative, new pet acquisition expense, and depreciation and amortization. For each category, except depreciation and amortization, the largest component is personnel costs, which include salaries, employee benefit costs, bonuses and stock-based compensation expense.

Technology and development

Technology and development expenses primarily consist of personnel costs and related expenses for our technology staff, which includes information technology development, security, infrastructure support, and third-party services. It also includes expenses associated with development in new geographies and new products and offerings.

General and administrative

General and administrative expenses consist primarily of personnel costs and related expenses for our finance, actuarial, human resources, regulatory, legal and general management functions, as well as facilities and professional services.

New pet acquisition expense

New pet acquisition expenses primarily consist of costs to acquire a pet (including costs associated directly to supporting the first year of a member), personnel costs, costs to educate veterinarians and consumers about the benefits of Trupanion, costs to generate leads and to convert leads into enrolled pets, as well as print, online and promotional advertising costs.

Depreciation and amortization

Depreciation and amortization expenses consist of depreciation of property, equipment, and software developed for internal use, as well as amortization of finite-lived intangible assets.

Gain (loss) from investment in joint venture

Gain (loss) from investment in joint venture consists of the share of income and losses from our equity method investment in a joint venture in Australia, as well as income and expenses associated with administrative services provided to the joint venture. In March 2025, we restructured this relationship from a joint venture to a brand license and services arrangement.

Stock-based compensation

Stock-based compensation is included in the cost and expense line items above. Stock-based compensation will vary depending on corporate performance and terms of the awards under our equity incentive plan. For example, when we have delivered strong performance, stock-based compensation may increase as a result of incentive-based awards under our equity incentive plan.

Factors Affecting Our Performance

Average monthly retention. Our performance depends on our ability to continue to retain our existing and newly enrolled pets and is impacted by our ability to provide a best-in-class value and member experience. Our ability to retain enrolled pets depends on a number of factors, including the actual and perceived value of our services and the quality of our member experience, the ease and transparency of the process for reviewing and paying veterinary invoices for our members, the rate of veterinary inflation and of our pricing adjustments, and the competitive environment. In addition, other initiatives across our business may temporarily impact retention and make it difficult for us to improve or maintain this metric. For example, if the number of new pets enrolled increases at a faster rate than our historical experience, our average monthly retention rate could be adversely impacted, as our retention rate is generally lower during the first year of member enrollment.

Investment in pet acquisition. We have made, and may continue to make, significant investments to grow our member base. Our pet acquisition cost and the number of new members we enroll depends on a number of factors, including the amount we have available and we elect to invest in pet acquisition activities in any particular period in the aggregate and by channel, the frequency of existing members adding a pet or referring their friends or family, the effectiveness of our sales execution and marketing initiatives, changes in costs of media, the mix of our pet acquisition expenditures and the competitive environment. Our average pet acquisition cost has in the past significantly varied, and in the future may significantly vary, from period to period based upon specific marketing initiatives and estimated rates of return on pet acquisition spend. We also regularly test new member acquisition channels and marketing initiatives, which may be more expensive than our traditional marketing channels and may increase our average pet acquisition costs. We continually assess our pet acquisition activities by monitoring the estimated return on PAC spend both on a detailed level by acquisition channel and in the aggregate.

Timing of price adjustments. Our subscription business’s cost-plus model depends on our ability to estimate our operating costs and expenses, including veterinary invoice expenses, and to adjust our pricing to achieve our target margins. We regularly reevaluate and adjust the price of our subscriptions, with a goal of achieving our targeted payout ratio, subject to the review and approval of regulators where applicable. This makes it important for us to accurately estimate our costs and to promptly implement pricing adjustments, which generally roll onto our book of insured pets over the succeeding twelve months following any applicable regulatory approval. As a result, we may have timing mismatches during which our pricing does not reflect our current expense profile. In periods of rapid increases in veterinary invoice expenses, including periods of significant inflation, this timing mismatch may have a significant impact on our margin profile.

Timing of initiatives. Over time, we plan to implement new initiatives to improve our member experience, make modifications to our subscription plan, introduce new coverage plans, pursue pet food or other adjacent opportunities, improve our technology, increase the number of veterinary hospitals using our patented direct pay software, and find other ways to maintain a strong value proposition for our members. The implementation of such initiatives could impact our expense profile and result in us incurring expenses that may not always directly coincide with revenue increases, resulting in fluctuations in revenue and profitability in our subscription business segment.

Mix of sales. The relative mix of our business by geography, pet age, species, breed, and other factors impacts the monthly average revenue per pet we receive. For example, prices from our plans could vary depending on the relative cost of veterinary care in different countries or areas or whether the pet is a dog or a cat. As our mix of business between products and geographies changes, our metrics, such as our monthly average revenue per pet, and our exposure to foreign exchange fluctuations will be impacted. We expect our international business, additional product offerings and "Powered by Trupanion" plans to grow and, in turn, we expect these effects to increase.

Other business segment. Our other business segment primarily includes other product offerings that are materially different from those in our subscription business segment. In addition, we expect the growth rate and margin profile of this segment to be significantly different from our subscription business segment. We do not undertake marketing efforts for and are not the primary interface with the customers of the third parties for whom we underwrite other business segment policies. Our relationships in our other business segment are generally subject to termination provisions and are non-exclusive, including our contractual relationship with Pets Best. Accordingly, we have limited influence on the volume of business of this segment. Loss of an entire program via contract termination could result in the associated policies and revenue being lost over a period of 12 to 18 months, which could have a material impact on our results of operations. In some cases, we have structured exclusive relationships, but those relationships have been and may continue to be subject to limitations on the number of enrolled pets as to which we will write policies for the third party. We may enter into additional relationships in this segment in the future, if we believe they will be beneficial, which could impact our operating results.

Results of Operations

The following tables set forth our results of operations for the periods presented both in absolute dollars and as a percentage of total revenue for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in thousands)
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)	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

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in thousands)
Veterinary invoice expense(2)	$	505	$	774	$	1,065	$	1,544
Other cost of revenue(2)	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) Veterinary invoice expense and Other cost of revenue together comprise stock-based compensation expense included within Total cost of revenue.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(as a percentage of revenue)
Revenue	100	%	100	%	100	%	100	%
Cost of revenue	83		84		84		85
Operating expenses:
Technology and development	3		2		3		2
General and administrative	5		6		5		6
New pet acquisition expense	6		6		6		6
Depreciation and amortization	1		1		1		1
Total operating expenses	15		15		15		15
Loss from investment in joint venture	—		—		—		—
Operating income	2		1		1		—
Interest expense	—		(1)		—		(1)
Other (income), net	1		3		1		2
Income before income taxes	3		3		2		1
Income tax expense	—		—		—		—
Net income	3	%	3	%	2	%	1	%


Stock-based compensation expense:	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(as a percentage of revenue)
Veterinary invoice expense(2)	—	%	—	%	—	%	—	%
Other cost of revenue(2)	—		—		—		—
Technology and development	1		—		1		—
General and administrative	1		1		1		1
New pet acquisition expense	—		—		—		1
Total stock-based compensation expense	2	%	1	%	2	%	2	%

	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(as a percentage of subscription revenue)
Subscription business revenue	100	%	100	%	100	%	100	%
Subscription business cost of revenue	80		81		80		81

Comparison of the Three and Six Months Ended June 30, 2026 and 2025

Revenue


	Three Months Ended June 30,						% Change		Six Months Ended June 30,						% Change
	2026			2025					2026			2025
	(in thousands, except percentages, pet and per pet data)
Revenue:
Subscription business	$	276,690		$	242,156		14	%	$	546,144		$	475,220		15	%
Other business	116,244			111,401			4		230,839			220,312			5
Total revenue	$	392,934		$	353,557		11		$	776,983		$	695,532		12

Percentage of Revenue by Segment:
Subscription business	70		%	68		%			70		%	68		%
Other business	30			32					30			32
Total revenue	100		%	100		%			100		%	100		%

Total pets enrolled (at period end)	1,633,131			1,660,455			(2)		1,633,131			1,660,455			(2)
Total subscription pets enrolled (at period end)	1,124,548			1,066,354			5		1,124,548			1,066,354			5
Monthly average revenue per pet	$	87.44		$	79.93		9		$	86.62		$	78.73		10
Average monthly retention	98.37		%	98.29		%			98.37		%	98.29		%

Three months ended June 30, 2026 compared to three months ended June 30, 2025. Total revenue increased by $39.4 million, or 11%, to $392.9 million for the three months ended June 30, 2026. Revenue from our subscription business segment increased by $34.5 million, or 14%, to $276.7 million for the three months ended June 30, 2026. This increase was primarily due to a 9% increase in monthly average revenue per pet and an increase in subscription pet months (the sum of pets enrolled for each month during a period) for policies underwritten by Trupanion. Our subscription pets enrolled increased by 58,194 pets, or 5%, to 1,124,548 for the three months ended June 30, 2026, which represented a 1% increase in growth rate of pets enrolled compared to the prior year period's growth rate of 4%. Revenue from our other business segment increased by $4.8 million, or 4%, to $116.2 million for the three months ended June 30, 2026. This increase was primarily driven by a 22% increase in monthly average revenue per pet in this segment, partially offset by a decrease in pet months primarily reflecting the expected run-off of pets we historically insured for Pets Best.

Six months ended June 30, 2026 compared to six months ended June 30, 2025. Total revenue increased by $81.5 million, or 12%, to $777.0 million for the six months ended June 30, 2026. Revenue from our subscription business segment increased by $70.9 million, or 15%, to $546.1 million for the six months ended June 30, 2026. This increase was primarily due to a 10% increase in monthly average revenue per pet and an increase in subscription pet months for policies underwritten by Trupanion. Our subscription pets enrolled increased by 58,194 pets, or 5%, to 1,124,548 for the six months ended June 30, 2026, which represented a 1% increase in growth rate of pets enrolled compared to the prior year period's growth rate of 4%. Revenue from our other business segment increased by $10.5 million, or 5%, to $230.8 million for the six months ended June 30, 2026. This increase was primarily driven by a 22% increase in monthly average revenue per pet in this segment, partially offset by a decrease in pet months primarily reflecting the expected run-off of pets we historically insured for Pets Best.

Cost of Revenue


	Three Months Ended June 30,						% Change		Six Months Ended June 30,						% Change
	2026			2025					2026			2025
	(in thousands, except percentages, pet and per pet data)
Cost of Revenue:
Subscription business:
Veterinary invoice expense	$	194,803		$	172,874		13	%	$	386,217		$	341,055		13	%
Other cost of revenue	25,451			22,614			13		50,489			44,278			14
Total cost of revenue	220,254			195,488			13		436,706			385,333			13
Other business:
Veterinary invoice expense	84,665			82,706			2		174,687			161,975			8
Other cost of revenue	22,882			20,536			11		38,968			42,294			(8)
Total cost of revenue	$	107,547		$	103,242		4		$	213,655		$	204,269		5

Percentage of Revenue by Segment:
Subscription business:
Veterinary invoice expense	71		%	72		%			71		%	72		%
Other cost of revenue	9			9					9			9
Total cost of revenue	80			81					80			81
Other business:
Veterinary invoice expense	73			74					76			74
Other cost of revenue	20			19					17			19
Total cost of revenue	93		%	93		%			93			93

Total pets enrolled (at period end)	1,633,131			1,660,455			(2)		1,633,131			1,660,455			(2)
Total subscription pets enrolled (at period end)	1,124,548			1,066,354			5		1,124,548			1,066,354			5

Three months ended June 30, 2026 compared to three months ended June 30, 2025. Total cost of revenue for our subscription business segment increased by $24.8 million, or 13%, to $220.3 million, for the three months ended June 30, 2026. This increase was driven by a $21.9 million, or 13%, increase in veterinary invoice expense and a $2.8 million, or 13%, increase in other cost of revenue. The 13% increase in veterinary invoice expense was driven by an 8% increase in veterinary invoice expense per pet and an increase in total subscription pet months for policies underwritten by Trupanion. The 13% increase in other cost of revenue was primarily due to general increases in costs attributable to growth in our membership and subscription revenue. Subscription business total cost of revenue decreased from 81% to 80% of revenue year-over-year primarily due to growth in subscription revenue outpacing growth in subscription veterinary invoice expense.

Total cost of revenue for our other business segment increased by $4.3 million, or 4%, to $107.5 million for the three months ended June 30, 2026. This increase was primarily driven by a $2.0 million, or 2%, increase in veterinary invoice expense and a $2.3 million, or 11%, increase in other cost of revenue. The 2% increase in veterinary invoice expense was primarily driven by a 19% increase in veterinary invoice expense per pet, partially offset by a decrease in pet months in this segment primarily reflecting the expected run-off of pets we historically insured for Pets Best. Within our other business segment, fluctuations in other cost of revenue are largely driven by trends in revenue and veterinary invoice expense and remained materially consistent at 93% of segment revenue year-over-year.

Six months ended June 30, 2026 compared to six months ended June 30, 2025. Total cost of revenue for our subscription business segment increased by $51.4 million, or 13%, to $436.7 million, for the six months ended June 30, 2026. This increase was driven by a $45.2 million, or 13%, increase in veterinary invoice expense and a $6.2 million, or 14%, increase in other cost of revenue. The 13% increase in veterinary invoice expense was driven by a 9% increase in veterinary invoice expense per pet and an increase in total subscription pet months for policies underwritten by Trupanion. The 14% increase in other cost of revenue was primarily due to general increases in costs attributable to growth in our membership and subscription revenue. Subscription business total cost of revenue decreased from 81% to 80% of revenue year-over-year primarily due to growth in

subscription revenue outpacing growth in subscription veterinary invoice expense.

Total cost of revenue for our other business segment increased by $9.4 million, or 5%, to $213.7 million for the six months ended June 30, 2026. This increase was primarily driven by a $12.7 million, or 8%, increase in veterinary invoice expense and partially offset by a $3.3 million, or 8%, decrease in other cost of revenue. The 8% increase in veterinary invoice expense was primarily driven by a 25% increase in veterinary invoice expense per pet, partially offset by a decrease in pet months in this segment primarily reflecting the expected run-off of pets we historically insured for Pets Best. Within our other business segment, fluctuations in other cost of revenue are largely driven by trends in revenue and veterinary invoice expense and remained materially consistent at 93% of segment revenue year-over-year.

Technology and Development Expenses


	Three Months Ended June 30,						% Change		Six Months Ended June 30,						% Change
	2026			2025					2026			2025
	(in thousands, except percentages)								(in thousands, except percentages)
Technology and development	$	12,754		$	8,586		49	%	$	24,048		$	16,658		44	%
Percentage of total revenue	3		%	2		%			3		%	2		%

Three months ended June 30, 2026 compared to three months ended June 30, 2025. Technology and development expenses increased by $4.2 million, or 49%, to $12.8 million for the three months ended June 30, 2026. This increase was primarily due to a $1.4 million increase in stock-based compensation expenses primarily driven by a one-time award modification, a $0.9 million increase in new product exploration and development expense, a $0.8 million increase in general compensation and other employee-related expenses, a $0.6 million reduction in capitalized expenditures related to internally developed software projects, and a $0.5 million increase in IT infrastructure-related expenses. Technology and development expenses increased from 2% to 3% of total revenue year-over-year.

Six months ended June 30, 2026 compared to six months ended June 30, 2025. Technology and development expenses increased by $7.4 million, or 44%, to $24.0 million for the six months ended June 30, 2026. This increase was primarily due to a $2.4 million increase in general compensation and other employee-related expenses, a $1.8 million increase in stock-based compensation expenses primarily driven by a one-time award modification, a $1.4 million reduction in capitalized expenditures related to internally developed software projects, a $1.1 million increase in new product exploration and development expenses, and a $0.7 million increase in IT infrastructure related expenses. Technology and development expenses increased from 2% to 3% of total revenue year-over-year.

General and Administrative Expenses


	Three Months Ended June 30,						% Change		Six Months Ended June 30,						% Change
	2026			2025					2026			2025
	(in thousands, except percentages)								(in thousands, except percentages)
General and administrative	$	19,525		$	20,122		(3)	%	$	38,627		$	40,014		(3)	%
Percentage of total revenue	5		%	6		%			5		%	6		%

Three months ended June 30, 2026 compared to three months ended June 30, 2025. General and administrative expenses decreased by $0.6 million, or 3%, to $19.5 million for the three months ended June 30, 2026. This decrease was primarily driven by decreases of $2.3 million in underwriting fees related to our Canadian business and $0.3 million in stock-based compensation expenses, partially offset by increases of $1.6 million in foreign consumption taxes and $0.3 million in other miscellaneous expenses. General and administrative expenses decreased from 6% to 5% of total revenue year-over-year.

Six months ended June 30, 2026 compared to six months ended June 30, 2025. General and administrative expenses decreased by $1.4 million, or 3%, to $38.6 million for the six months ended June 30, 2026. This decrease was driven by decreases of $4.8 million in underwriting fees related to our Canadian business and $1.0 million in professional services, partially offset by increases of $1.9 million in foreign consumption taxes, $1.4 million in other miscellaneous expenses and $1.1 million in general compensation and other employee-related expenses. General and administrative expenses decreased from 6% to 5% of total revenue year-over-year.

New Pet Acquisition Expense


	Three Months Ended June 30,						% Change		Six Months Ended June 30,						% Change
	2026			2025					2026			2025
	(in thousands, except percentages, pet and per pet data)
New pet acquisition expense	$	22,805		$	19,843		15	%	$	45,416		$	40,359		13	%
Percentage of total revenue	6		%	6		%			6		%	6		%
Subscription Business:
Total subscription pets enrolled (at period end)	1,124,548			1,066,354			5		1,124,548			1,066,354			5
Average pet acquisition cost (PAC)	$	299		$	276		8		$	307		$	272		13

Three months ended June 30, 2026 compared to three months ended June 30, 2025. New pet acquisition expenses increased by $3.0 million, or 15%, to $22.8 million for the three months ended June 30, 2026. This increase was primarily driven by increased marketing spend as we have begun deploying more capital to acquire new pets in a disciplined manner. New pet acquisition expense as a percentage of revenue remained constant at 6%.

Six months ended June 30, 2026 compared to six months ended June 30, 2025. New pet acquisition expenses increased by $5.1 million, or 13%, to $45.4 million for the six months ended June 30, 2026. This increase was primarily driven by increased marketing spend as we have begun deploying more capital to acquire new pets in a disciplined manner. New pet acquisition expense as a percentage of revenue remained constant at 6%.

Depreciation and Amortization


	Three Months Ended June 30,						% Change		Six Months Ended June 30,						% Change
	2026			2025					2026			2025
	(in thousands, except percentages)
Depreciation and amortization	$	3,673		$	3,962		(7)	%	$	7,379		$	7,753		(5)	%
Percentage of total revenue	1		%	1		%			1		%	1		%

Three months ended June 30, 2026 compared to three months ended June 30, 2025. Depreciation and amortization expense decreased by $0.3 million, or 7%, to $3.7 million for the three months ended June 30, 2026, primarily driven by fewer internally developed software projects placed in-service during the period.

Six months ended June 30, 2026 compared to six months ended June 30, 2025. Depreciation and amortization expense decreased by $0.4 million, or 5%, to $7.4 million for the six months ended June 30, 2026, primarily driven by fewer internally developed software projects placed in-service during the period.

Total Other (Income), Net


	Three Months Ended June 30,						% Change		Six Months Ended June 30,						% Change
	2026			2025					2026			2025
	(in thousands, except percentages)
Interest expense	$	1,832		$	3,682		(50)	%	$	3,707		$	6,893		(46)	%
Other (income), net	(2,829)			(11,914)			(76)		(5,884)			(15,154)			(61)
Total other (income), net	$	(997)		$	(8,232)		88		$	(2,177)		$	(8,261)		(74)
Percentage of total revenue	—		%	(2)		%			—		%	(1)		%

Three months ended June 30, 2026 compared to three months ended June 30, 2025. Total other (income), net decreased by $7.2 million from income of $8.2 million to income of $1.0 million for the three months ended June 30, 2026, primarily due to a $7.8 million realized gain recognized on the nonmonetary exchange of our Baystride preferred stock investment for intellectual property during 2025 and an increase in foreign currency losses of $0.9 million. These decreases in income were partially offset by a decrease in interest expense of $1.9 million.

Six months ended June 30, 2026 compared to six months ended June 30, 2025. Total other (income), net decreased by $6.1 million from income of $8.3 million to income of $2.2 million for the six months ended June 30, 2026, primarily due to a $7.8 million realized gain on the nonmonetary exchange of our Baystride preferred stock investment for intellectual property developed by Baystride in 2025 and an increase in foreign currency losses of $1.6 million. These decreases in income were partially offset by a decrease in interest expense of $3.2 million.

Income Tax Expense

Three months ended June 30, 2026 compared to three months ended June 30, 2025. Income tax expense decreased $0.6 million from $1.1 million to $0.5 million for the three months ended June 30, 2026, primarily due to the initial transfer of our Canadian insurance business to GPIC in the prior year quarter, which resulted in a true-up to the annual effective tax rate for the three months ended June 30, 2025.

Six months ended June 30, 2026 compared to six months ended June 30, 2025. Income tax expense increased $0.4 million from $1.2 million to $1.6 million for the six months ended June 30, 2026, primarily due to a change in the jurisdictional makeup of income and losses.

Liquidity and Capital Resources

The following table summarizes our cash flows for the periods indicated (in thousands):


	Six Months Ended June 30,
	2026		2025
Net cash provided by operating activities	$	35,578	$	30,989
Net cash used in investing activities	(22,430)		(51,440)
Net cash used in financing activities	(5,308)		(16,346)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net	(999)		1,738
Net change in cash, cash equivalents, and restricted cash	$	6,841	$	(35,059)

Our primary requirements for liquidity are paying veterinary invoices, funding and growing our operations, funding our capital requirements, investing in new member acquisition, investing in enhancements to our member experience, and servicing debt. We have certain contractual obligations in the normal course of business, including obligations and commitments relating to our credit arrangements, non-cancellable vendor purchase agreements, as well as future payments of veterinary invoices. Refer to Note 7, Reserve for Veterinary Invoices, included in Item 1 of Part I of this report, for further details on anticipated cash outflows.

Most recently, our primary source of liquidity has been cash provided by our operations. We believe our operating cash flow is sufficient to fund our operations and capital requirements for the next 12 months. As we continue to grow and consider strategic opportunities, however, we may explore additional financing to fund our operations and growth or for strategic purposes. Financing could include equity, equity-linked, or debt financing. Additional financing may not be available to us on acceptable terms, or at all. If our capital surplus grows relative to the rate of growth of our business, we may also generate cash for operations and growth via dividends or other methods, from one or more of our underwriting entities.

As of June 30, 2026, we had $398.5 million in cash, cash equivalents and short-term investments, of which $344.1 million was held by our insurance entities. Outside of insurance entities, we held $54.4 million in cash, cash equivalents and short-term investments with an additional $3.5 million available under our PNC Facility.

In April 2021, our board of directors (the "Board") approved a share repurchase program, pursuant to which we could repurchase outstanding shares of our common stock, between May 2021 and May 2026. In June 2026, the Board approved a new share repurchase program, pursuant to which we are authorized to repurchase up to an aggregate of $100.0 million of our outstanding shares of common stock, with no expiration date. We are 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 our compliance with the PNC Facility, available cash, cash flow from operations, stock price, general economic, business and market conditions, and alternative investment opportunities. We repurchased no shares during the six months ended June 30, 2026.

Operating Cash Flows

Net cash provided by operating activities was $35.6 million for the six months ended June 30, 2026, compared to $31.0 million for the six months ended June 30, 2025. This increase was primarily driven by improved operating results largely driven by higher revenue and improved subscription business margins, partially offset by timing differences in working capital activities. Changes in accounts receivable and deferred revenue were primarily related to annual policies with annual payment terms within our other business segment. Changes in our reserve for veterinary invoices are driven by multiple factors, including ongoing analysis of claims frequency and severity. Additionally, changes in our accounts payable, accrued liabilities, and other liabilities are primarily due to differences in timing of payments.

Investing Cash Flows

Net cash used by investing activities was $22.4 million for the six months ended June 30, 2026, primarily consisting of purchases of investment securities of $120.0 million as well as $2.7 million of capital expenditures primarily related to the development of internal-use software focused on member experience, claims processing and internal policy management improvements, partially offset by $100.2 million in sales and maturities of investment securities. Net cash used in investing activities was $51.4 million for the six months ended June 30, 2025, primarily consisting of purchases of investment securities of $142.0 million as well as $4.9 million of capital expenditures primarily related to the development of internal-use software focused on member experience, claims processing and internal policy management improvements, partially offset by $94.3 million in sales and maturities of investment securities.

Financing Cash Flows

Net cash used in financing activities was $5.3 million for the six months ended June 30, 2026, primarily consisting of $5.0 million in repayments on the PNC Facility. Net cash used in financing activities was $16.3 million for the six months ended June 30, 2025, primarily consisting of $15.5 million in repayments on the Prior Credit Facility, as well as $1.7 million in shares withheld to satisfy tax withholding, partially offset by $1.3 million in proceeds from exercise of stock options.

Long-Term Debt

PNC Facility

In November 2025, we entered into a credit agreement (the "PNC Agreement") with PNC Bank, National Association, as the administrative agent. The PNC Agreement provides for a term loan facility of $100.0 million and a revolving credit facility of $20.0 million (collectively, the "PNC Facility"). The PNC Facility matures in November 2028.

Loans under the PNC Facility bear interest at a reference rate plus an applicable margin, which will generally be the SOFR reference rate plus 2.75% per annum. We make quarterly principal payments of $2.5 million on the term loan facility. We may voluntarily prepay loans or reduce revolving commitments under the PNC Facility at any time without premium or penalty.

The loans under the PNC Agreement are secured by substantially all of our assets. The PNC Agreement contains financial and other covenants, including quarterly financial ratios, and it includes limitations on, among other things, indebtedness, liens, investments, and mergers or similar transactions.

Regulation

The majority of our investments are held by our insurance entities to satisfy risk-based capital requirements (also referred to as minimum capital requirements) of applicable state and federal regulators. These regulatory requirements provide a method for analyzing the minimum amount of capital (statutory capital and surplus plus other adjustments) appropriate for an insurance company to support its overall business operations, taking into account the risk characteristics of the company’s assets, liabilities and certain other items. An insurance entity cannot use this capital for general operating expenses without regulatory approval. An insurance company found to have insufficient statutory capital based on its risk-based or minimum capital test requirements or otherwise fails to satisfy other applicable statutory requirements may be subject to varying levels of additional regulatory oversight.

As of June 30, 2026, our insurance entities collectively held $94.9 million in cash and cash equivalents, to be used for operating expenses of our insurance entities, $249.2 million in short-term investments and $298.0 million in other current assets. The majority of the assets in our insurance entities are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate.

We are subject to comprehensive regulation and supervision in the jurisdictions where we conduct business, including requirements regarding our capital structure, ownership, financial condition, general business operations, transactions between affiliated entities and payment of dividends from our insurance subsidiaries. We are also subject to market conduct examinations of our management and operations.

The National Association of Insurance Commissioners ("NAIC") has approved a series of uniform statutory accounting principles applicable in some form in all states. Developed to ensure insurance companies maintain sufficient capital to pay claims and remain solvent, these principles conservatively value assets and liabilities and usually result in differences from financial statements prepared in accordance with U.S. GAAP. The NAIC has also adopted risk-based capital requirements for life, health and property and casualty insurance companies, which require APIC and ZPIC to maintain certain levels of surplus to support our overall business operations in consideration of our size and risk profile. If we fail to maintain the amount of risk-based capital required, we will be subject to additional regulatory oversight. To comply with these regulations, we may be required to maintain capital that we would otherwise invest in our growth and operations.

NAIC also has adopted a pet insurance model act to establish regulatory standards for the pet insurance industry, related to how insurers enforce waiting periods, certain policy conditions, and the sale of pet insurance in general.

Although U.S. federal law generally does not directly regulate the insurance industry, various federal regulatory and legislative changes have been proposed in the past and could be proposed in the future, including proposed federal regulation that could supplement or replace the current system of state regulation of insurers. It is not possible to predict whether any of these proposals might be adopted, or the effect federal involvement in insurance may have on us.

American Pet Insurance Company ("APIC")

APIC, our wholly-owned insurance subsidiary domiciled in New York, underwrites all of our policies in the U.S. As our business in the U.S. grows, the amount of capital we are required to maintain to satisfy our risk-based capital requirements will also increase, though risk-based capital requirements also take our overall rate of growth into consideration. Recently, our other business segment growth has slowed, and we currently expect that to continue, which would reduce capital requirements. In February 2026 and August 2026, APIC distributed extraordinary dividends of $14.9 million and $10.0 million to Trupanion, Inc., respectively. APIC's primary regulator is the New York Department of Financial Services ("NY DFS").

ZPIC Insurance Company ("ZPIC")

ZPIC, our wholly-owned insurance subsidiary domiciled in Missouri, has not yet begun underwriting activity, but we have funded its required statutory capital. We formed this insurance subsidiary to provide us flexibility as to the insurance entity we use to market and write policies in the United States. ZPIC's primary regulator is the Missouri Department of Commerce and Insurance ("MODCI").

GPIC Insurance Company ("GPIC")

GPIC, our wholly-owned insurance subsidiary domiciled in Canada, underwrites the majority of our policies in Canada. We are continuing to transition the remaining portion of our insurance activity in Canada to GPIC from a fronting arrangement with Accelerant Insurance Company of Canada (formerly Omega General Insurance Company) ("Accelerant"). Pursuant to the Canadian Office of the Superintendent of Financial Institutions ("OSFI") regulations, we have contributed CAD $38.9 million to GPIC as of June 30, 2026, as the required statutory capital for this subsidiary. The capital we maintain at GPIC is, and for the foreseeable future may continue to be, more than the amount that we historically held subject to our fronting arrangement with Accelerant.

Under the terms of our agreements with Accelerant, we retain any financial risk associated with our Canadian business. Accelerant's Canadian insurance operations are supervised and regulated by Canadian federal, provincial and territorial governments and Accelerant is a fully licensed insurer in all of the Canadian provinces and territories in which we do business.

Wyndham Insurance Company (SAC) Limited ("WICL") Segregated Account AX, Wyndham Insurance Company (SAC) Limited Segregated Account Trupanion Germany and Wyndham Insurance Company (SAC) Limited Segregated Account Trupanion Switzerland

WICL is domiciled in Bermuda and regulated by the Bermuda Monetary Authority ("BMA"). WICL Segregated Account AX was established by WICL, with Trupanion, Inc. as the shareholder, to enter into a reinsurance agreement with Accelerant for our business activity in Canada. All of the assets and liabilities of WICL Segregated Account AX are legally segregated from other assets and liabilities within WICL, and all shares of the segregated account are owned by Trupanion, Inc. Trupanion, Inc. received dividends of $3.3 million and $5.0 million from WICL Segregated Account AX in February and May 2026, respectively, as permitted under our agreements with WICL. As required by OSFI regulations related to our reinsurance agreement with Accelerant, we are required to maintain a Canadian Reinsurance Trust account with the greater of CAD $2.0 million or 120% of unearned Canadian premium plus 20% of outstanding Canadian claims, including all incurred but not reported claims. As of June 30, 2026, the account held CAD $2.0 million.

WICL Segregated Account Trupanion Germany and WICL Segregated Account Trupanion Switzerland were established in the third quarter of 2024 by WICL, with Trupanion, Inc. as the shareholder, for purposes of entering into reinsurance agreements with underwriters in Germany and Switzerland, respectively. All of the assets and liabilities of WICL Segregated Account Trupanion Germany and WICL Segregated Account Trupanion Switzerland are legally segregated from other assets and liabilities within WICL, and all shares of the segregated accounts are owned by Trupanion, Inc.

Though we are not directly regulated by the BMA, WICL's regulation and compliance impacts us as it could have an adverse impact on our ability to secure dividends from our WICL segregated accounts. WICL is regulated by the BMA under the Insurance Act of 1978 ("Insurance Act") and the Segregated Accounts Company Act of 2000. The Insurance Act imposes on Bermuda insurance companies, solvency and liquidity standards, certain restrictions on the declaration and payment of dividends and distributions, certain restrictions on the reduction of statutory capital, and auditing and reporting requirements, and grants the BMA powers to supervise and, in certain circumstances, to investigate and intervene in the affairs of insurance companies. Under the Insurance Act, WICL, as a class 3 insurer, is required to maintain available statutory capital and surplus at a level equal to or in excess of a prescribed minimum established by reference to net written premiums and loss reserves.

Under the Bermuda Companies Act 1981, as amended, a Bermuda company may not declare or pay a dividend or make a distribution out of contributed surplus if there are reasonable grounds for believing that: (a) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (b) the realizable value of the company’s assets would thereby be less than its liabilities. The Segregated Accounts Company Act of 2000 further requires that dividends out of a segregated account can only be paid to the extent that the account remains solvent and the value of its assets remain greater than the aggregate of its liabilities and its issued share capital and share premium accounts.

Contractual Obligations

We enter into long-term contractual obligations and commitments in the normal course of business, consisting primarily of debt obligations and non-cancellable vendor service agreements. In November 2025, we entered into the PNC Agreement, which provides up to $120.0 million of credit, including a $100.0 million term loan and a $20.0 million revolving loan facility. We used the proceeds under the PNC Agreement to repay all amounts due and outstanding under our Prior Credit Facility. The PNC Agreement will require us to repay the underlying obligations over a three-year term at SOFR plus a margin. Refer to Note 8, Debt, included in Item 1 of Part I of this report, for further details regarding the credit agreement, including interest and future principal repayments.

Critical Accounting Policies and Significant Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported revenue and expenses during the reporting periods.

Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Generally, we base our estimates on historical experience and on various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates.

There have been no material changes to our critical accounting policies or estimates as compared to those described under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Item 3. Quantitative and Qualitative Disclosures About Market Risks

Management believes there have been no material changes to our quantitative or qualitative disclosures about market risk during the first six months ended June 30, 2026. For a discussion of our exposure to market risk, refer to our market risk disclosures set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of the 2025 Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a- 15(e) and 15d- 15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of June 30, 2026, the disclosure controls and procedures were effective.

Changes in Internal Control

There were no changes in our internal control over financial reporting during the three months ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are subject to litigation matters and claims arising from the ordinary course of business. Further information with respect to this item may be found in Note 6 of Part 1 Item 1, "Financial Statements (unaudited)", under the caption, "Legal Proceedings" which information is incorporated herein by reference.

Item 1A. Risk Factors

Our business, results of operations, and financial conditions are subject to various risks as described in our Annual Report on Form 10-K. There have been no material changes to the risk factors identified in our Annual Report on Form 10-K, except as set forth below.

Our business and financial condition is subject to risks related to our writing of policies for unaffiliated third parties, including Pets Best.

Our other business segment primarily includes revenues and expenses related to underwriting policies on behalf of third parties that do not carry reference to the Trupanion brand. In the past, our other business segment involved numerous third parties to a varying extent, but in recent years this segment has consisted almost entirely of business with Pets Best, a third-party managing general agent. For the year ended December 31, 2025, premiums from policies written for Pets Best, pursuant to our agreements with them, accounted for 30% of our total revenue. Our Pets Best business historically has had, and we expect it to continue to have, significantly lower margins than our subscription business. The contractual relationship with Pets Best and other third parties may be terminated by either party, and the third party may choose to be in a relationship with a different underwriter, including one of our competitors. In administering or marketing a product to consumers, if one of these unaffiliated third parties makes an operating decision that adversely affects its business or brand, our business or brand could also be adversely impacted. Further, we rely on the timely dissemination of financial information from these third parties to compile our own financial statements. Failure to receive this information timely, or failure to receive complete and accurate information, could negatively impact our ability to meet regulatory filing requirements, including the filing of our annual audited financial statements.

We and Pets Best have agreed to end our relationship after the third quarter of 2028. We expect that enrollment from Pets Best will continue to decline as it rolls off business and engages other third-party underwriters. We do not control the timing or extent of this roll off and, accordingly, it may not proceed as we expect, which could cause our results to fluctuate or have other unexpected impacts on our business. During the roll-off of Pets Best, administration of this business and any similar business in the future may divert our time and attention away from our subscription business segment, which could adversely affect our operating results in the aggregate. Further, the roll-off is expected to result, over time, in significantly reduced revenue and associated expense in our other business segment given the extent of our relationship with Pets Best. This reduced revenue stream will reduce the diversification of our premium base and make us more dependent on the success of our subscription business segment, at least in the short term. Further, the reduction of this business could have a material adverse impact on our operating results, financial condition, and stock price.

Our share repurchase program may not be fully consummated, may increase the volatility of our stock prices, will diminish our cash reserves to the extent consummated, and may not enhance long-term stockholder value.

In June 2026, the Board approved a share repurchase program, pursuant to which we are authorized to repurchase up to an aggregate of $100.0 million of our outstanding shares of common stock. Accordingly, we expect to engage in share repurchases of our common stock from time to time. Our repurchase program does not have an expiration date and does not obligate us to repurchase any specific number or dollar amount of shares, or to do so on any particular timing or manner. The timing and actual number of shares repurchased will depend on a variety of factors, including our compliance with the PNC Facility, available cash, cash flow from operations, stock price, general economic, business and market conditions, and alternative investment opportunities. Furthermore, our share repurchases could affect our stock trading prices or increase their volatility, and any repurchases will reduce our cash reserves. We are under no legal obligation to repurchase any shares, and if we do not do so or if we commence repurchases and then suspend or terminate them, the trading prices of our stock may decrease and their volatility increase. Even if we consummate repurchases to the maximum extent authorized, we may not be successful in our goal of enhancing stockholder value.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

Pursuant to a marketing agreement between us and a strategic distributor, we agreed to issue shares of our common stock to the distributor as partial consideration for sales made through the distributor’s marketing channels of white-label medical and wellness pet insurance products that we create and administer under the agreement. The number of shares we issue is determined quarterly, based on a percentage of revenue from such product sales divided by the volume weighted average price

per share for the preceding quarter or, if lower, for the three months ended December 5, 2021. The shares we issue are subject to various restrictions, including a minimum holding period of two years and customary transfer restrictions for shares acquired in a private placement. During the quarter ended June 30, 2026, we issued 6,841 shares of our common stock to the distributor in respect of product sales that occurred in the quarter ended March 31, 2026. We offered and sold these shares in reliance upon the exemption from the registration set forth under Section 4(a)(2) of the Securities Act, and the regulations promulgated thereunder relating to sales by an issuer not involving any public offering, and in reliance on similar exemptions under applicable state laws.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Plan

On May 11, 2026, Margi Tooth, our President, Chief Executive Officer and member of the Board, adopted a trading plan intended to satisfy Rule 10b5-1 to sell up to 11,443 shares of our common stock and exercise and sell up to 23,448 options to purchase shares of our common stock over a period ending on July 31, 2027, subject to certain conditions.

During the three months ended June 30, 2026, no other director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted, or terminated, including by modification, a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

Exhibit

Incorporated by Reference

Filed/Furnished

Number

Exhibit Description

Form

File No.

Exhibit

Exhibit Filing Date

Herewith

3.1

Amended and Restated Certificate of Incorporation of Trupanion, Inc.

8-K

001-36537

3.1

6/12/2023

3.2

Amended and Restated Bylaws of Trupanion, Inc.

8-K

001-36537

3.2

6/12/2023

10.1

First Amendment, dated as of July 28, 2026 , to the Credit Agreement, dated November 4, 2025, by and among Trup anion, Inc., PNC Bank, National Association, as administrative agent, and t he lenders party thereto

10.2+

Offer letter, dated July 24, 2026 , by and between the Registra nt and Katherine Seawell

31.1

Certification of Principal Executive Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Principal Financial Officer, pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS

XBRL Instance Document - the instance does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH

Inline XBRL Taxonomy Extension Schema Document.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104

Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)


+			Indicates a management contract or compensatory plan or arrangement.
*			This certification is deemed not filed for purpose of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.



						TRUPANION, INC.

Date: August 5, 2026						/s/ Margi Tooth
						Margi Tooth Chief Executive Officer (Principal Executive Officer)

Date: August 5, 2026						/s/ Fawwad Qureshi
						Fawwad Qureshi Chief Financial Officer (Principal Financial and Accounting Officer)