Thread by @borrowed_ideas

1/ $TRUP 4Q'21 Update

"Trupanion is the only company in the S&P 600 to deliver revenue growth in excess of 20% per year for every year over the past decade."

In fact, revenue accelerated in last 2 yrs, thanks to Covid tailwind.

Here's my notes.

2/ Subscription enrolled was highest in the last 5 years. Total enrolled pets now 1.1 Mn.

Avg. pet Retention now 79 months which led 10% LTV increase to $717 per pet

3/ "TruTopia, which measures the difference between members adding pets or referring friends and pets churning off was 0.29%, a 17 basis point improvement over 2020."

Growth runway seems robust as TRUP gets closer to TruTopia

TRUP deployed 56% more capital at ~36% IRR in '21

4/ But in Q4, TRUP enrolled 4k fewer pets than in 3Q. Why?

TRUP saw some similar impact of Omicron in Q4 as it did during Mar/Apr in 2020, but it gradually eased. Also, sounds like they also had some execution issues.

But it seems 1Q'22 so far tracking at 3Q'19 level

5/ TTM avg Monthly ARPU was $63.89, +3% YoY which was ahead of cost of invoice increase of +1.9% YoY

Goal is to keep cost of invoice as 71% of revenue and hit 15% operating margin. No plan to play with pricing to increase margins.

In Q4, they reduced price for 16% of pets.

6/ Management mentioned high confidence of achieving 25% growth in operating income.

A few questions on topline growth, but given that Operating income was slightly <15% in 2021 and they have no intention to raise margin, topline growth outlook is ~25% or less in 2022.

7/ More clarity on the deal with $CHWY

While I initially thought this deal as low margin "other business", it turns out to be core subscription biz which is very positive.

"Chewy products are designed exclusively for Chewy."

maybe some things are still different to core biz.

End/ Overall, decent quarter, but market was disappointed at the *implied* low to mid 20s topline revenue guidance.

My paywalled deep dive (Oct'21): mbi-deepdives.com/trup

I'll cover $IAC tomorrow.

*I meant to write 3Q'21, not 3Q'19

(It's getting late. Silly typo; not even 3Q'20 lol)