Trupanion coasts in Q3 with veterinary hospital push delivering sales

Trupanion CEO Darryl Rawlings

Pet insurer Trupanion ($TRUP) started 2015 with big plans for growth, aiming to sign on more veterinary practices and hospitals to its flagship reimbursement service, Trupanion Express, to generate sales. Now the company is enjoying the fruits of its labor with increased third-quarter revenues fueled by more deals with veterinary hospitals and solid gains for its subscription service.

The Seattle, WA-based company brought in $37.9 million in revenues during Q3, a 25% hop over the same quarter last year. Trupanion also posted a loss of 17 cents per share but the Street expected that number. The company closed the quarter with 276,988 enrolled pets, a 25% jump year over year.

"I am thrilled with the execution of our team and I am excited about our positioning for the future," CEO Darryl Rawlings said during the company's Q3 earnings call. Trupanion now expects full-year revenue to be between $146.5 million and $148.5 million, a bit lower on the top end than the company's previous prediction of $150 million. The company is also forecasting a loss before interest, taxes, depreciation and amortization (EBITDA) of at least $10 million.

Part of Trupanion's plan for drumming up business rests on deals with veterinary practices and hospitals. Pet owners can sign up for insurance and file claims directly to the company themselves, but getting vets to sign onto the company's Trupanion Express service eases the process for pet owners by allowing vets to get reimbursed directly. That can cut down significantly on pet owners' immediate out-of-pocket burden.

At least for now, it looks like Trupanion's work is paying off. The company met its goal of signing on 350 veterinary hospitals by the end of 2015, and now expects to round out the year with 450 hospitals using its service, Rawlings said during the company's earnings call. Trupanion can partly thank its sales partner Territory Partners for that number, as the company delivers on its previous goal of sending more reps out into the field to drum up sales.

"For our members, Trupanion Express eliminates the reimbursement model where they have to self-finance veterinarian procedures, a necessary evil, in the traditional pet insurance industry," Rawlings said. "We are confident that direct pay will aid retention and over the long term be a growth driver for us."

Investors seem confident that Trupanion is poised for big things in the months to come. Shares of the company's stock rose 7% to $7.47 in morning trading the day after it announced earnings. But that number is still lower than Trupanion's July 2014 IPO price of $10 a share.

- read the release
- here's the earnings call transcript at Seeking Alpha (reg. req.)

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