"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.
"I suspect we are currently entering a sustained new market environment for valuations, where the cost of capital will return closer to historical norms and a risk premium will return and stay for a while."
More notes from the latest letter/transcript.
2/16 Dotdash +Meredith
"When we consider acquisitions or investments one of the questions we ask ourselves is how long until we’ll know whether the investment worked...With the Meredith acquisition, we ought to know by the second year whether the acquisition was a winner."
3/16 "We will no longer govern ongoing print decisions by whether an advertiser is willing to advertise, but by whether a reader is willing to purchase"
Narrative driven valuation is a double-edged sword; SFN-related chatter led to a huge rally not so long ago, and now it puts SHOP in a penalty box.
Here's my notes.
2/ SHOP's GMV and topline momentum continues to sustain far longer than anyone perhaps assumed 3-5 years ago.
2021 take rates, my go-to metric to assess upside here, was the highest in the last 5 years; although very gradual improvement, it's a step in the right direction.
3/ "More than 14,000 merchants on Shopify Plus with approximately 4,000 of these coming on in 2021"
"In 2021, nearly 600 million shoppers made a purchase from Shopify merchant, up nearly 31%
from 2020."
After three years, I returned to Bangladesh and spent the last three months here. Although admittedly I felt like an outsider in the beginning, Bangladesh felt like my natural habitat just after a couple of days.
2/7 The familiar taste of delicious dishes, the ever so mild winter, warm smiles from the friendly faces, and the the constant cacophony of life made me feel home.
The idea of home, however, has evolved to be a more esoteric topic for me. Bangladesh is where I feel comfortable.
3/7 But it's the confinement of comfort I have always dreaded that can stop me from reaching my potential.
From my late high school days in Bangladesh, I have philosophically become more "American".
It was supposed to be a pretty difficult week since I "lost" (unrealized) a bunch of money following earnings last week. But in reality, I felt very engrossed, and energized.
It was a textbook reminder why I actively invest in the first place.
2/11 Why do I actively invest?
Investing is my lens to understand the world. With my money on the line, the stakes are as high as it can possibly go.
3/11 Investing allows and forces me to study the past, observe the present, and ruminate the future of the companies that are shaping the world.
Market was in such a dour mood before the earnings that even an okay-ish quarter and guidance drove the stock +15% AH.
For the first time, international sales declined in any quarter YoY 😯
I know, I know tough comp. Here's my notes.
2/12 First, here's the breakdown of sales and operating income by NA, international, and AWS. Also, a breakdown by segment. For the first time, advertising revenue was disclosed.
3/12 2020 was extraordinary for $AMZN, so 2-yr/3-yr CAGR is more reflective of underlying health.
Q4: AMZN 2-yr CAGR is still at ~25%. AWS is accelerating growth. Ads 2-yr CAGR ~47%. Hard to complain.
AWS incremental operating margin mid-30s. But a wild swing for AMZN, ex-AWS.
If someone gave me the call transcript and press release a day before and asked me how do you think the market would react, I would probably say +5%?
In reality, stock went down 22% AH, then recovered to -10%. Investing is hard.
Let's dig in.
2/17 So what spooked the market initially? It's the soft Q1 MAU guidance. After adding 64 mn, 74 mn, and 61 mn MAU in the last 3 yrs, SPOT guided only 12 mn MAU add in 1Q'22. On a run-rate basis, that's material deceleration of MAU add.
Market HATES unprofitable decel narrative.
3/17 Why do I think market's initial reaction was misguided?
"we do not anticipate any material changes in the trajectory for net growth in MAUs and subs in 2022 when compared to the net growth we experienced in 2021."