Document

Trupanion announced today the successful completion of a debt transaction that further enhances the company’s financial flexibility and long-term growth capacity. As part of this transaction, Trupanion entered into a new credit agreement with PNC Bank, N.A., a member of the PNC Financial Services Group, Inc. (NYSE: PNC), one of the largest diversified financial services institutions in the United States. The new three-year $120 million credit facility was used to repay the prior credit facility and has a lower interest rate, which provides additional savings to support Trupanion’s strategic initiatives and operational investments.

“This new lower-cost credit facility, established with a trusted financial institution like PNC Bank, marks another important step in strengthening our capital structure,” said Fawwad Qureshi, Chief Financial Officer of Trupanion. “It provides us with greater flexibility to allocate capital toward opportunities that drive long-term shareholder value. This transaction reflects the progress we’ve made in strengthening our balance sheet over the last two years and positions us well for continued investment in sustainable growth.”

Trupanion’s management will host a conference call today to review its third quarter 2025 results. The call is scheduled to begin shortly after 1:30 p.m. PT/ 4:30 p.m. ET. A live webcast will be accessible through the Investor Relations section of Trupanion’s website at https://investors.trupanion.com/ and will be archived online for 3 months upon completion of the conference call. Participants can access the conference call by dialing 1-844-676-1342 (United States) or 1-412-634-6683 (International). A telephonic replay of the call will also be available after the completion of the call, by dialing 1-844-512-2921 (United States) or 1-412-317-6671 (International) and entering the replay pin number: 10203296.

Trupanion is a leader in medical insurance for cats and dogs throughout the United States, Canada, and certain countries in Continental Europe with over 1,000,000 pets currently enrolled. For over two decades, Trupanion has given pet owners peace of mind so they can focus on their pet's recovery, not financial stress. Trupanion is committed to providing pet parents with the highest value in pet medical insurance with unlimited payouts for the life of their pets. With its patented process, Trupanion is the only North American provider with the technology to pay veterinarians directly in seconds at the time of checkout. Trupanion is listed on NASDAQ under the symbol "TRUP". The company was founded in 2000 and is headquartered in Seattle, WA. Trupanion policies are issued, in the United States, by its wholly-owned insurance entity American Pet Insurance Company or ZPIC Insurance Company and, in Canada, by Accelerant Insurance Company of Canada or GPIC Insurance Company. Policies are sold and administered in Canada by Canada Pet Health Insurance Services, Inc. dba Trupanion 309-1277 Lynn Valley Road, North Vancouver, BC V7J 0A2 and in the United States by Trupanion Managers USA, Inc. (CA license No. 0G22803, NPN 9588590). Canada Pet Health Insurance Services, Inc. is a registered damage insurance agency and claims adjuster in Quebec #603927. For more information, please visit trupanion.com.

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

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

For a detailed discussion of these and other cautionary statements, please refer to the risk factors discussed in filings with the Securities and Exchange Commission (SEC), including but not limited to, Trupanion’s Annual Report on Form 10-K for the year ended December 31, 2024 and any subsequently filed reports on Forms 10-Q, 10-K and 8-K. All documents are available through the SEC’s Electronic Data Gathering Analysis and Retrieval system at https://www.sec.gov or the Investor Relations section of Trupanion’s website at https://investors.trupanion.com.

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

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


Trupanion, Inc. Condensed Consolidated Statements of Operations (in thousands, except share data)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(unaudited)
Revenue:
Subscription business	$	252,697	$	218,986	$	727,917	$	628,738
Other business	114,223		108,470		334,535		319,639
Total revenue	366,920		327,456		1,062,452		948,377
Cost of revenue:
Subscription business	200,766		177,365		586,098		525,237
Other business	106,100		100,712		310,370		297,265
Total cost of revenue(1), (2)	306,866		278,077		896,468		822,502
Operating expenses:
Technology and development(1)	9,887		7,933		26,545		23,083
General and administrative(1)	18,311		16,977		58,325		46,903
New pet acquisition expense(1)	21,946		18,308		62,305		53,025
Depreciation and amortization	4,051		4,381		11,804		12,542
Total operating expenses	54,195		47,599		158,979		135,553
Loss from investment in joint venture	—		(34)		(305)		(184)
Operating income (loss)	5,859		1,746		6,700		(9,862)
Interest expense	2,790		3,820		9,683		11,071
Other (income), net	(3,530)		(3,538)		(18,684)		(9,601)
Income (loss) before income taxes	6,599		1,464		15,701		(11,332)
Income tax (benefit) expense	726		39		1,898		(43)
Net income (loss)	$	5,873	$	1,425	$	13,803	$	(11,289)

Net income (loss) per share:
Basic	$	0.14	$	0.03	$	0.32	$	(0.27)
Diluted	$	0.13	$	0.03	$	0.32	$	(0.27)
Weighted average shares of common stock outstanding:
Basic	43,076,695		42,233,903		42,849,769		42,076,998
Diluted	43,562,132		42,822,505		43,550,326		42,076,998

(1)Includes stock-based compensation expense as follows:	Three Months Ended September 30,				Nine Months Ended September 30,

	2025		2024		2025		2024
Veterinary invoice expense	$	677	$	847	$	2,221	$	2,625
Other cost of revenue	585		554		1,679		1,561
Technology and development	1,705		1,259		4,326		3,774
General and administrative	4,971		4,125		14,546		11,435
New pet acquisition expense	1,561		1,555		6,013		5,743
Total stock-based compensation expense	$	9,499	$	8,340	$	28,785	$	25,138

(2)The breakout of cost of revenue between veterinary invoice expense and other cost of revenue is as follows:
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Veterinary invoice expense	$	263,127	$	238,814	$	766,157	$	703,485
Other cost of revenue	43,739		39,263		130,311		119,017
Total cost of revenue	$	306,866	$	278,077	$	896,468	$	822,502


Trupanion, Inc. Condensed Consolidated Balance Sheets (in thousands, except share data)
	September 30, 2025		December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	154,773	$	160,295
Short-term investments	193,761		147,089
Accounts and other receivables, net of allowance for credit losses of $1,595 at September 30, 2025 and $1,117 at December 31, 2024	302,534		274,031
Prepaid expenses and other assets	16,963		15,912
Total current assets	668,031		597,327
Restricted cash	34,136		39,235
Long-term investments	981		373
Property, equipment, and internal-use software, net	104,683		102,191
Intangible assets, net	24,772		13,177
Other long-term assets	7,186		17,579
Goodwill	40,384		36,971
Total assets	$	880,173	$	806,853
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	12,760	$	11,532
Accrued liabilities and other current liabilities	43,577		33,469
Reserve for veterinary invoices	53,972		51,635
Deferred revenue	279,713		251,640
Long-term debt - current portion	750		1,350
Total current liabilities	390,772		349,626
Long-term debt	113,790		127,537
Deferred tax liabilities	2,252		1,946
Other liabilities	4,797		4,476
Total liabilities	511,611		483,585
Stockholders’ equity:
Common stock: $0.00001 par value per share, 100,000,000 shares authorized; 44,220,625 and 43,192,339 issued and outstanding at September 30, 2025; 43,516,631 and 42,488,445 shares issued and outstanding at December 31, 2024	—		—
Preferred stock: $0.00001 par value per share, 10,000,000 shares authorized; no shares issued and outstanding	—		—
Additional paid-in capital	595,802		568,302
Accumulated other comprehensive income (loss)	1,379		(2,612)
Accumulated deficit	(212,085)		(225,888)
Treasury stock, at cost: 1,028,186 shares at September 30, 2025 and December 31, 2024	(16,534)		(16,534)
Total stockholders’ equity	368,562		323,268
Total liabilities and stockholders’ equity	$	880,173	$	806,853


Trupanion, Inc. Condensed Consolidated Statements of Cash Flows (in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(unaudited)
Operating activities
Net income (loss)	$	5,873	$	1,425	$	13,803	$	(11,289)
Adjustments to reconcile net income (loss) to cash provided by operating activities:
Depreciation and amortization	4,051		4,381		11,804		12,542
Stock-based compensation expense	9,499		8,341		28,785		25,138
Realized gain on nonmonetary exchange of preferred stock investment	—		—		(7,783)		—
Other, net	215		(136)		1,164		(453)
Changes in operating assets and liabilities:
Accounts and other receivables	(9,912)		(3,794)		(27,927)		(22,020)
Prepaid expenses and other assets	44		101		(540)		2,398
Accounts payable, accrued liabilities, and other liabilities	10,026		1,377		11,017		(350)
Reserve for veterinary invoices	1,538		(3,934)		2,235		(6,469)
Deferred revenue	7,904		7,535		27,668		25,088
Net cash provided by operating activities	29,238		15,296		60,226		24,585
Investing activities
Purchases of investment securities	(41,020)		(26,125)		(183,021)		(107,375)
Maturities and sales of investment securities	43,563		26,089		137,827		81,767


Purchases of property, equipment, and internal-use software	(5,302)		(1,914)		(10,206)		(7,858)


Other	437		490		1,639		1,552
Net cash used in investing activities	(2,322)		(1,460)		(53,761)		(31,914)
Financing activities


Repayment of debt financing	(188)		(338)		(15,713)		(1,013)
Proceeds from exercise of stock options	80		258		1,407		729
Shares withheld to satisfy tax withholding	(1,179)		(802)		(2,867)		(1,390)

Other	(154)		(157)		(614)		(609)
Net cash used in financing activities	(1,441)		(1,039)		(17,787)		(2,283)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net	(1,037)		481		701		19
Net change in cash, cash equivalents, and restricted cash	24,438		13,278		(10,621)		(9,593)
Cash, cash equivalents, and restricted cash at beginning of period	164,471		147,593		199,530		170,464
Cash, cash equivalents, and restricted cash at end of period	$	188,909	$	160,871	$	188,909	$	160,871


The following tables set forth our key operating metrics.

	Nine Months Ended September 30,
	2025			2024
Total Business:
Total pets enrolled (at period end)	1,654,414			1,688,903
Subscription Business:
Total subscription pets enrolled (at period end)	1,082,412			1,032,042
Monthly average revenue per pet	$	79.84		$	71.94
Average pet acquisition cost (PAC)	$	278		$	227
Average monthly retention	98.33		%	98.29		%


	Three Months Ended
	Sep. 30, 2025			Jun. 30, 2025			Mar. 31, 2025			Dec. 31, 2024			Sep. 30, 2024			Jun. 30, 2024			Mar. 31, 2024			Dec. 31, 2023
Total Business:
Total pets enrolled (at period end)	1,654,414			1,660,455			1,667,637			1,677,570			1,688,903			1,699,643			1,708,017			1,714,473
Subscription Business:
Total subscription pets enrolled (at period end)	1,082,412			1,066,354			1,052,845			1,041,212			1,032,042			1,020,934			1,006,168			991,426
Monthly average revenue per pet	$	82.01		$	79.93		$	77.53		$	76.02		$	74.27		$	71.72		$	69.79		$	67.07
Average pet acquisition cost (PAC)	$	290		$	276		$	267		$	261		$	243		$	231		$	207		$	217
Average monthly retention	98.33		%	98.29		%	98.28		%	98.25		%	98.29		%	98.34		%	98.41		%	98.49		%


The following tables reflect the reconciliation between GAAP and non-GAAP measures (in thousands except percentages):
	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Veterinary invoice expense	$	263,127		$	238,814		$	766,157		$	703,485
Less:
Stock-based compensation expense(1)	(666)			(830)			(2,188)			(2,535)
Other business cost of paying veterinary invoices(2)	(85,394)			(82,507)			(247,369)			(239,342)
Subscription cost of paying veterinary invoices (non-GAAP)	$	177,067		$	155,477		$	516,600		$	461,608
% of subscription revenue	70.1		%	71.0		%	71.0		%	73.4		%

Other cost of revenue	$	43,739		$	39,263		$	130,311		$	119,017
Less:
Stock-based compensation expense(1)	(579)			(536)			(1,661)			(1,479)
Other business variable expenses(2)	(20,702)			(18,126)			(62,969)			(57,713)
Subscription variable expenses (non-GAAP)	$	22,458		$	20,601		$	65,681		$	59,825
% of subscription revenue	8.9		%	9.4		%	9.0		%	9.5		%

Technology and development expense	$	9,887		$	7,933		$	26,545		$	23,083
General and administrative expense	18,311			16,977			58,325			46,903
Less:
Stock-based compensation expense(1)	(6,551)			(5,258)			(18,340)			(14,465)

Development expenses(3)	(1,199)			(1,474)			(3,551)			(4,307)
Fixed expenses (non-GAAP)	$	20,448		$	18,178		$	62,979		$	51,214
% of total revenue	5.6		%	5.6		%	5.9		%	5.4		%

New pet acquisition expense	$	21,946		$	18,308		$	62,305		$	53,025
Less:
Stock-based compensation expense(1)	(1,527)			(1,503)			(5,916)			(5,426)
Other business pet acquisition expense(2)	(5)			(8)			(82)			(31)
Subscription acquisition cost (non-GAAP)	$	20,414		$	16,797		$	56,307		$	47,568
% of subscription revenue	8.1		%	7.7		%	7.7		%	7.6		%
(1) Trupanion employees may elect to take restricted stock units in lieu of cash payment for their bonuses. We account for such expense as stock-based compensation according to GAAP, but we do not include it in any non-GAAP adjustments. Stock-based compensation associated with bonuses was approximately $0.2 million and $0.7 million for the three and nine months ended September 30, 2025, respectively. (2) Excludes the portion of stock-based compensation expense attributable to the other business segment (3) Consists of costs related to product exploration and development that are pre-revenue and historically have been insignificant.


The following tables reflect the reconciliation of GAAP measures to non-GAAP measures (in thousands, except percentages):
	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Operating income (loss)	$	5,859	$	1,746	$	6,700	$	(9,862)
Non-GAAP expense adjustments
Acquisition cost	20,419		16,805		56,389		47,599
Stock-based compensation expense(1)	9,323		8,127		28,105		23,905
Development expenses(2)	1,199		1,474		3,551		4,307
Depreciation and amortization	4,051		4,381		11,804		12,542

Loss from investment in joint venture	—		(34)		(305)		(184)
Total adjusted operating income (non-GAAP)	$	40,851	$	32,567	$	106,854	$	78,675

Subscription Business:
Subscription operating income (loss)	$	7,826	$	3,824	$	13,410	$	(4,109)
Non-GAAP expense adjustments
Acquisition cost	20,414		16,797		56,307		47,568
Stock-based compensation expense(1)	7,234		6,215		22,250		18,723
Development expenses(2)	826		986		2,433		2,855
Depreciation and amortization	2,790		2,929		8,087		8,315

Subscription adjusted operating income (non-GAAP)	$	39,090	$	30,751	$	102,487	$	73,352

Other Business:
Other business operating loss	$	(1,967)	$	(2,044)	$	(6,405)	$	(5,569)
Non-GAAP expense adjustments
Acquisition cost	5		8		82		31
Stock-based compensation expense(1)	2,089		1,912		5,855		5,182
Development expenses(2)	373		488		1,118		1,452
Depreciation and amortization	1,261		1,452		3,717		4,227

Other business adjusted operating income (non-GAAP)	$	1,761	$	1,816	$	4,367	$	5,323
(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 $0.2 million and $0.7 million for the three and nine months ended September 30, 2025, respectively.
(2) Consists of costs related to product exploration and development that are pre-revenue and historically have been insignificant.


The following tables reflect the reconciliation of GAAP measures to non-GAAP measures (in thousands, except percentages):
	Three Months Ended September 30,						Nine Months Ended September 30,

	2025			2024			2025			2024
Subscription revenue	$	252,697		$	218,986		$	727,917		$	628,738
Subscription cost of paying veterinary invoices	177,067			155,477			516,600			461,608
Subscription variable expenses	22,458			20,601			65,681			59,825
Subscription fixed expenses*	14,082			12,157			43,149			33,953
Subscription adjusted operating income (non-GAAP)	$	39,090		$	30,751		$	102,487		$	73,352

Other business revenue	$	114,223		108,470			$	334,535		$	319,639
Other business cost of paying veterinary invoices	85,394			82,507			247,369			239,342
Other business variable expenses	20,702			18,126			62,969			57,713
Other business fixed expenses*	6,366			6,021			19,830			17,261
Other business adjusted operating income (non-GAAP)	$	1,761		$	1,816		$	4,367		$	5,323

Revenue	$	366,920		$	327,456		$	1,062,452		$	948,377
Cost of paying veterinary invoices	262,461			237,984			763,969			700,950
Variable expenses	43,160			38,727			128,650			117,538
Fixed expenses*	20,448			18,178			62,979			51,214
Total business adjusted operating income (non-GAAP)	$	40,851		$	32,567		$	106,854		$	78,675

As a percentage of revenue:	Three Months Ended September 30,						Nine Months Ended September 30,
	2025			2024			2025			2024
Subscription revenue	100.0		%	100.0		%	100.0		%	100.0		%
Subscription cost of paying veterinary invoices	70.1		%	71.0		%	71.0		%	73.4		%
Subscription variable expenses	8.9		%	9.4		%	9.0		%	9.5		%
Subscription fixed expenses*	5.6		%	5.6		%	5.9		%	5.4		%
Subscription adjusted operating income (non-GAAP)	15.5		%	14.0		%	14.1		%	11.7		%

Other business revenue	100.0		%	100.0		%	100.0		%	100.0		%
Other business cost of paying veterinary invoices	74.8		%	76.1		%	73.9		%	74.9		%
Other business variable expenses	18.1		%	16.7		%	18.8		%	18.1		%
Other business fixed expenses*	5.6		%	5.6		%	5.9		%	5.4		%
Other business adjusted operating income (non-GAAP)	1.5		%	1.7		%	1.3		%	1.7		%

Revenue	100.0		%	100.0		%	100.0		%	100.0		%
Cost of paying veterinary invoices	71.5		%	72.7		%	71.9		%	73.9		%
Variable expenses	11.8		%	11.8		%	12.1		%	12.4		%
Fixed expenses*	5.6		%	5.6		%	5.9		%	5.4		%
Total business adjusted operating income (non-GAAP)	11.1		%	9.9		%	10.1		%	8.3		%

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

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

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


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

	Nine Months Ended September 30,
	2025		2024
Net income (loss)	$	13,803	$	(11,289)
Excluding:
Stock-based compensation expense(1)	28,105		23,906
Depreciation and amortization expense	11,804		12,542
Interest income	(9,141)		(9,412)
Interest expense	9,683		11,071

Income tax (benefit) expense	1,898		(43)

Loss from equity method investment	—		(33)
Realized gain on nonmonetary exchange of preferred stock investment	(7,783)		—
Adjusted EBITDA	$	48,369	$	26,742

	Three Months Ended
	Sep. 30, 2025		Jun. 30, 2025		Mar. 31, 2025		Dec. 31, 2024		Sep. 30, 2024		Jun. 30, 2024		Mar. 31, 2024		Dec. 31, 2023
Net income (loss)	$	5,873	$	9,413	$	(1,483)	$	1,656	$	1,425	$	(5,862)	$	(6,852)	$	(2,163)
Excluding:
Stock-based compensation expense(1)	9,323		9,268		9,514		8,036		8,127		8,381		7,398		6,636
Depreciation and amortization expense	4,051		3,962		3,791		3,924		4,381		4,376		3,785		3,029
Interest income	(3,201)		(3,105)		(2,835)		(2,999)		(3,232)		(3,135)		(3,045)		(2,842)
Interest expense	2,790		3,682		3,211		3,427		3,820		3,655		3,596		3,697
Income tax (benefit) expense	726		1,133		39		38		39		(44)		(38)		130
Goodwill impairment charges	—		—		—		5,299		—		—		—		—

Loss from equity method investment	—		—		—		—		(33)		—		—		—
Realized gain on nonmonetary exchange of preferred stock investment	—		(7,783)		—		—		—		—		—		—
Adjusted EBITDA	$	19,562	$	16,570	$	12,237	$	19,381	$	14,527	$	7,371	$	4,844	$	8,487
(1) Trupanion employees may elect to take restricted stock units in lieu of cash payment for their bonuses. We account for such expense as stock-based compensation according to GAAP, but we do not include it in any non-GAAP adjustments. Stock-based compensation associated with bonuses was approximately $0.2 million and $0.7 million for the three and nine months ended September 30, 2025, respectively.


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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net cash provided by operating activities	$	29,238	$	15,296	$	60,226	$	24,585
Purchases of property, equipment, and internal-use software	(5,302)		(1,914)		(10,206)		(7,858)
Free cash flow	$	23,936	$	13,382	$	50,020	$	16,727