Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 01, 2018 | |
Entity [Abstract] | ||
Entity Registrant Name | TRUPANION, INC. | |
Entity Central Index Key | 1,371,285 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 33,419,934 |
Consolidated Statement of Opera
Consolidated Statement of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 78,164 | $ 63,118 | $ 221,316 | $ 176,122 |
Cost of Revenue [Abstract] | ||||
Veterinary invoice expense | 54,303 | 43,453 | 156,196 | 123,649 |
Other cost of revenue | 10,117 | 7,858 | 27,959 | 21,160 |
Gross profit | 13,744 | 11,807 | 37,161 | 31,313 |
Operating Expenses [Abstract] | ||||
Technology and Development | 2,299 | 2,471 | 6,761 | 7,196 |
General and administrative | 4,174 | 4,017 | 13,242 | 12,274 |
Sales and marketing | 6,365 | 4,862 | 18,005 | 13,323 |
Total operating expenses | 12,838 | 11,350 | 38,008 | 32,793 |
Operating income (loss) | 906 | 457 | (847) | (1,480) |
Interest expense | 336 | 124 | 887 | 370 |
Other (income) expense, net | (628) | (99) | (1,071) | (1,239) |
Income (Loss) before income taxes | 1,198 | 432 | (663) | (611) |
Income tax (benefit) expense | (7) | 26 | (11) | 54 |
Net income (loss) | $ 1,205 | $ 406 | $ (652) | $ (665) |
Net income (loss) per share [Abstract] | ||||
Earnings Per Share, Basic | $ 0.04 | $ 0.01 | $ (0.02) | $ (0.02) |
Earnings Per Share, Diluted | $ 0.03 | $ 0.01 | $ (0.02) | $ (0.02) |
Weighted Average Number of Shares Outstanding, Basic | 33,129,416 | 30,037,282 | 31,376,239 | 29,500,958 |
Weighted Average Number of Shares Outstanding, Diluted | 36,385,360 | 33,113,981 | 31,376,239 | 29,500,958 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income Statement - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 1,205 | $ 406 | $ (652) | $ (665) |
Foreign currency translation adjustments | 77 | 193 | (242) | 317 |
Net unrealized gain on available-for-sale debt securities | 0 | 1 | 0 | 9 |
Other comprehensive income (loss), net of taxes | 77 | 194 | (242) | 326 |
Comprehensive Income (Loss) | $ 1,282 | $ 600 | $ (894) | $ (339) |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Assets [Abstract] | ||
Cash and cash equivalents | $ 34,677 | $ 25,706 |
Short-term Investments | 39,422 | 37,590 |
Accounts and other receivables | 31,985 | 20,367 |
Prepaid expenses and other assets | 4,184 | 2,895 |
Total current assets | 110,268 | 86,558 |
Restricted Cash | 1,400 | 600 |
Long-Term Investments, at fair value | 3,545 | 3,237 |
Property and equipment, net | 69,998 | 7,868 |
Intangible assets, net | 8,084 | 4,972 |
Other Long-Term Assets | 6,580 | 2,624 |
Total assets | 199,875 | 105,859 |
Liabilities and Equity [Abstract] | ||
Accounts payable | 2,163 | 2,716 |
Accrued liabilities and other current liabilities | 12,006 | 7,660 |
Reserve for veterinary invoices | 14,216 | 12,756 |
Deferred Revenue | 32,848 | 22,734 |
Total current liabilities | 61,233 | 45,866 |
Long-term debt | 8,604 | 9,324 |
Deferred tax liabilities | 1,002 | 1,002 |
Other liabilities | 1,174 | 1,233 |
Total liabilities | 72,013 | 57,425 |
Common stock | 0 | 0 |
Preferred Stock | 0 | 0 |
Additional paid-in capital | 217,833 | 134,511 |
Accumulated other comprehensive loss | (334) | (92) |
Accumulated deficit | (83,436) | (82,784) |
Treasury stock, at cost | (6,201) | (3,201) |
Stockholders' Equity Attributable to Parent | 127,862 | 48,434 |
Total liabilities and stockholders' equity | $ 199,875 | $ 105,859 |
Consolidated Balance Sheet Cond
Consolidated Balance Sheet Condensed Consolidated Balance Sheet Parentheticals - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Common Stock [Member] | ||
Common Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Common Stock, Shares Authorized | 100,000,000 | 100,000,000 |
Common Stock, Shares, Issued | 34,171,653 | 30,778,796 |
Common Stock, Shares, Outstanding | 33,415,668 | 30,121,496 |
Preferred Stock [Member] | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.00001 | $ 0.00001 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Treasury Stock [Member] | ||
Treasury Stock, Shares | 755,985 | 657,300 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Net Cash Provided by Operating Activities [Abstract] | ||
Net loss | $ (652) | $ (665) |
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities [Abstract] | ||
Depreciation and Amortization | 3,027 | 3,208 |
Stock-based compensation expense | 3,553 | 2,564 |
Gain (Loss) on Sale of Equity Investments | 0 | (1,036) |
Other, Net | (237) | 243 |
Increase (Decrease) in Operating Assets [Abstract] | ||
Accounts and other receivables | 11,592 | 10,164 |
Prepaid expenses and other assets | 549 | 297 |
Accounts Payable, Accrued Liabilities, and Other Liabilities | 3,849 | 2,122 |
Claims Reserve | 1,484 | 1,639 |
Deferred revenue | 10,133 | 9,075 |
Net cash provided by operating activities | 9,016 | 6,689 |
Net Cash Provided by Investing Activities [Abstract] | ||
Payments to Acquire Investments | (29,567) | (20,704) |
Maturities of Investment Securities | 27,405 | 15,878 |
Payments to Acquire Other Investments | (3,000) | 0 |
Payments to Acquire Intangible Assets | (2,959) | 0 |
Proceeds from Sale of Equity Method Investments | 0 | 1,402 |
Purchases of property and equipment | (55,856) | (2,247) |
Payments for (Proceeds from) Other Investing Activities | (852) | (2,762) |
Net cash used in investing activities | (64,829) | (8,433) |
Net Cash Provided by Financing Activities [Abstract] | ||
Proceeds from Issuance or Sale of Equity | 65,690 | 0 |
Proceeds from exercise of stock options | 2,872 | 2,082 |
Payments Related to Tax Withholding for Share-based Compensation | (1,839) | (1,170) |
Proceeds from Warrant Exercises | 300 | 0 |
Proceeds from Debt, Net of Issuance Costs | 9,189 | 2,420 |
Repayments of Long-term Debt | (10,000) | 0 |
Proceeds from (Payments for) Other Financing Activities | (535) | (412) |
Net cash provided by financing activities | 65,677 | 2,920 |
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash, net | (93) | 436 |
Net Increase in Cash, Cash Equivalents, and Restricted Cash | 9,771 | 1,612 |
Cash, Cash Equivalents, and Restricted Cash at beginning of period | 26,306 | 24,237 |
Cash, Cash Equivalents, and Restricted Cash, End of Period | 36,077 | 25,849 |
Supplemental Cash Flow Information [Abstract] | ||
Redemption of Warrants Non-Cash; Common Stock | 3,000 | 0 |
Acquisition of Corporate Real Estate Non-Cash, Common Stock | 9,640 | 0 |
Purchases of property and equipment included in accounts payable and accrued liabilities | 165 | 531 |
Property and Equipment Acquired Under Capital Leases | $ 917 | $ 689 |
Nature of Operations and Summar
Nature of Operations and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Rental Income The Company records rental income within general and administrative expense in the Consolidated Statements of Operations. The Company recorded rental income of $0.4 million for the three and nine months ended September 30, 2018. The following table summarizes the Company's future rental payments from non-cancellable leases in place as of September 30, 2018 (in thousands): Year ending December 31: 2018 $ 497 2019 1,972 2020 1,224 2021 1,210 2022 1,173 2023 1,210 Thereafter 3,238 Total rental payments $ 10,524 |
Nature of Operations and Summary of Significant Accounting Policies | 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 throughout the United States, Canada and Puerto Rico. The financial data as of December 31, 2017 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 (loss) income, 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, 2018 (the 2017 10-K). The Company's accounting policies are described in Note 1 to the audited financial statements included in the 2017 10-K. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the full fiscal year or any other interim period. Follow-on Common Stock Offerings In June 2018, the Company completed a follow-on public offering (the June 2018 follow-on public offering) whereby the Company sold 2,090,909 shares of common stock (inclusive of 272,727 shares of common stock sold by the Company pursuant to the full exercise of the underwriters' option to purchase additional shares) at a price to the public of $33.00 per share. The Company received aggregate net proceeds from the June 2018 follow-on public offering of $65.7 million , after deducting underwriting discounts and commissions and offering expenses payable by the Company. The proceeds were primarily used to lower expenses through the purchase of real estate consisting of properties in use as corporate offices and leased to third parties. In addition, in August 2018, the Company issued 303,030 shares of common stock via a private placement to an accredited investor as a portion of the purchase price of the real estate. See Note 6, Acquisition of Corporate Real Estate. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. 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 2017 10-K for additional discussion of these estimates and assumptions. Acquisition of Real Estate The Company’s real estate acquisition was determined to be an asset acquisition, with the purchase price allocated based on relative fair value of the assets acquired. Additionally, acquisition-related expenses were capitalized as part of the purchase price. The Company assessed fair value based on Level 3 inputs within the fair value framework, which included estimated cash flow projections that utilized appropriate discount rates, capitalization rates, renewal probability and available market information, which included market rental rates and market rent growth rates. Estimates of future cash flows were based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of the acquired property considers the value of the property as if it were vacant. The fair value of acquired “above- and below-” market leases was based on the estimated cash flow projections utilizing discount rates that reflected the risks associated with the leases acquired. The amount recorded was based on the present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the extended term for any leases with below-market renewal options. Other intangible assets acquired included amounts for in-place lease values that were based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. In estimating carrying costs, the Company included estimates of lost rents at market rates during the hypothetical expected lease-up periods, which were dependent on local market conditions. In estimating costs to execute similar leases, the Company considered leasing commissions, legal and other related costs. The results of operations related to our ownership of the building are included in the Company’s Consolidated Statements of Operations from the date of acquisition. Rental Income The Company records rental income within general and administrative expense in the Consolidated Statements of Operations. The Company recorded rental income of $0.4 million for the three and nine months ended September 30, 2018. The following table summarizes the Company's future rental payments from non-cancellable leases in place as of September 30, 2018 (in thousands): Year ending December 31: 2018 $ 497 2019 1,972 2020 1,224 2021 1,210 2022 1,173 2023 1,210 Thereafter 3,238 Total rental payments $ 10,524 Accumulated Other Comprehensive Loss There were no reclassifications out of accumulated other comprehensive loss during the three and nine months ended September 30, 2018 and 2017 . Income Taxes On December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act), making broad and complex changes to the Internal Revenue Code. The Company has made significant judgments and estimates in accordance with its interpretation of the Tax Act. As additional guidance on the Tax Act becomes available, the Company may adjust its interpretation of the requirements, which may result in a material change to income tax benefit or expense in the period in which the adjustment is made. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) amending the accounting for leases. The ASU requires recognition of lease assets and liabilities for operating leases on the consolidated balance sheets. This ASU is effective for fiscal years beginning after December 15, 2018 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2019 and is currently evaluating the impact the ASU will have on its consolidated financial statements pursuant to the purchase of real estate described in Note 6. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. This final rule is effective on November 5, 2018, for interim filings submitted thereafter. The SEC has provided relief to registrants that file Form 10-Q shortly after the final rule’s effective date, allowing presentation changes to take effect in the subsequent interim period. As such, t |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Earnings Per Share [Text Block] | Net Income (Loss) per Share Basic net income (loss) per share is computed using the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) 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, unvested restricted stock awards and restricted stock units, and warrants. The components of basic and diluted earnings per share were as follows (in thousands, except share and per share information): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Basic earnings per share: Net income (loss) $ 1,205 $ 406 $ (652 ) $ (665 ) Shares used in computation: Weighted average shares of common stock outstanding 33,129,416 30,037,282 31,376,239 29,500,958 Basic earnings per share $ 0.04 $ 0.01 $ (0.02 ) $ (0.02 ) Diluted earnings per share: Net income (loss) $ 1,205 $ 406 $ (652 ) $ (665 ) Shares used in computation: Weighted average shares of common stock outstanding 33,129,416 30,037,282 31,376,239 29,500,958 Stock options 2,663,375 2,618,567 — — Restricted stock awards and units 236,932 919 — — Warrants 355,637 457,213 — — Weighted average number of shares 36,385,360 33,113,981 31,376,239 29,500,958 Diluted earnings per share $ 0.03 $ 0.01 $ (0.02 ) $ (0.02 ) 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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options 3,647 480,360 3,234,932 4,118,884 Restricted stock awards and restricted stock units — — 439,798 234,758 Warrants — — 480,000 810,000 |
Investment Securities (Notes)
Investment Securities (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Investment [Text Block] | Long-term investments are classified as available-for-sale and short-term investments are classified as held-to-maturity. The following table summarizes the amortized cost, gross unrealized holding gains and losses, and estimates of fair value of fixed maturity investments (in thousands) as of September 30, 2018 and December 31, 2017 : Amortized Gross Gross Fair As of September 30, 2018 Long-term investments: Foreign deposits $ 2,545 $ — $ — $ 2,545 Municipal bond 1,000 — — 1,000 $ 3,545 $ — $ — $ 3,545 Short-term investments: U.S. Treasury securities $ 6,646 $ — $ (3 ) $ 6,643 Certificates of deposit 439 1 — 440 U.S. government funds 32,337 — — 32,337 $ 39,422 $ 1 $ (3 ) $ 39,420 Amortized Gross Gross Fair As of December 31, 2017 Long-term investments: Foreign deposits $ 2,237 $ — $ — $ 2,237 Municipal bond 1,000 — — 1,000 $ 3,237 $ — $ — $ 3,237 Short-term investments: U.S. Treasury securities $ 5,783 $ — $ (4 ) $ 5,779 Certificates of deposit 690 1 — 691 U.S. government funds 31,117 — — 31,117 $ 37,590 $ 1 $ (4 ) $ 37,587 Maturities of debt securities classified as available-for-sale were as follows (in thousands): September 30, 2018 Amortized Fair Available-for-sale: Due after one year through five years $ 3,545 $ 3,545 $ 3,545 $ 3,545 |
Investments [Text Block] | The following table summarizes the amortized cost, gross unrealized holding gains and losses, and estimates of fair value of fixed maturity investments (in thousands) as of September 30, 2018 and December 31, 2017 : Amortized Gross Gross Fair As of September 30, 2018 Long-term investments: Foreign deposits $ 2,545 $ — $ — $ 2,545 Municipal bond 1,000 — — 1,000 $ 3,545 $ — $ — $ 3,545 Short-term investments: U.S. Treasury securities $ 6,646 $ — $ (3 ) $ 6,643 Certificates of deposit 439 1 — 440 U.S. government funds 32,337 — — 32,337 $ 39,422 $ 1 $ (3 ) $ 39,420 Amortized Gross Gross Fair As of December 31, 2017 Long-term investments: Foreign deposits $ 2,237 $ — $ — $ 2,237 Municipal bond 1,000 — — 1,000 $ 3,237 $ — $ — $ 3,237 Short-term investments: U.S. Treasury securities $ 5,783 $ — $ (4 ) $ 5,779 Certificates of deposit 690 1 — 691 U.S. government funds 31,117 — — 31,117 $ 37,590 $ 1 $ (4 ) $ 37,587 |
Other Investments (Notes)
Other Investments (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
Investments and Other Noncurrent Assets [Text Block] | Other Investments Investment in Variable Interest Entity In July 2018, the Company purchased $3.0 million in preferred stock of a privately held corporation with a complementary business line. The Company does not have power over the activities that most significantly impact the economic performance of the variable interest entity and is, therefore, not the primary beneficiary. The Company's preferred stock is accounted for as an available-for-sale debt security. Through January 2020, the Company has agreed to purchase an additional $4.0 million in preferred stock of the variable interest entity, contingent upon the exercise of this option by the variable interest entity. The Company has the option to purchase the variable interest entity on the fifth anniversary of the initial preferred stock purchase. Additionally, the Company has extended a $2.5 million revolving line of credit to the variable interest entity. The Company's investment and amounts loaned under the line of credit are recorded in other long-term assets on the consolidated balance sheet. Investment in Joint Venture In September 2018, the Company acquired a non-controlling equity interest in a joint venture, whereby it has committed to licensing certain intellectual property and contributing up to $2.2 million |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures [Text Block] | Fair Value Investments 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 September 30, 2018 Fair Value Level 1 Level 2 Level 3 Assets Restricted cash $ 1,400 $ 1,400 $ — $ — Money market funds 4,741 4,741 — — Fixed maturities: Foreign deposits 2,545 2,545 — — Municipal bond 1,000 — 1,000 — Investment in variable interest entity 3,000 — — 3,000 Total $ 12,686 $ 8,686 $ 1,000 $ 3,000 As of December 31, 2017 Fair Value Level 1 Level 2 Level 3 Assets Restricted cash $ 600 $ 600 $ — $ — Money market funds 5,167 5,167 — — Fixed maturities: Foreign deposits 2,237 2,237 — — Municipal bond 1,000 — 1,000 — Total $ 9,004 $ 8,004 $ 1,000 $ — The Company measures the fair value of restricted cash, foreign deposits, and money market funds based on quoted prices in active markets for identical assets. The fair value of the municipal bond is 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. The estimated fair value of the Company's investment in the variable interest entity is a Level 3 measurement, and is based on market interest rates, the assessed creditworthiness of the entity, and the estimated fair value of the entity's common stock. As of September 30, 2018, the Company estimates that the purchase price approximates the fair value. Short-term investments are carried at amortized cost and the fair value is disclosed in Note 3, Investment Securities. The fair value of these investments is determined in the same manner as for available-for-sale securities and is considered a Level 1 measurement. Fair Value Disclosures The Company's other long-term assets balance included $3.1 million of notes receivable as of September 30, 2018 and $2.5 million of notes receivable as of December 31, 2017, recorded at its estimated collectible amount. The Company estimates that the carrying value of the note receivable approximates its 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 its 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 September 30, 2018 and December 31, 2017 |
Acquisition of Corporate Real E
Acquisition of Corporate Real Estate (Notes) | 9 Months Ended |
Sep. 30, 2018 | |
Acquisition of Corporate Real Estate [Abstract] | |
Real Estate Disclosure [Text Block] | Acquisition of Corporate Real Estate In June 2018, the Company entered into a Real Estate Purchase and Sale Agreement (Real Estate Purchase Agreement) with Benaroya Capital Company, L.L.C to purchase certain properties (Properties) as defined within the Real Estate Purchase Agreement, located at 6100 Fourth Avenue South, Seattle, Washington, which is the site of the Company's corporate headquarters. The purchase closed in August 2018 and the Company paid consideration consisting of $55.0 million in cash and 303,030 shares of common stock with an estimated fair value of $9.6 million . The issued shares carry registration rights (as to which the Company filed a registration statement on Form S-3, File No. 333-226752) and are subject to a lock-up period that continues to and includes June 25, 2020. The fair value of the issued shares was estimated as of the closing date for the real estate acquisition using the Black-Scholes option pricing model and the following assumptions: August 9, 2018 Assumptions Fair Value Risk free interest rate 2.5 % Expected volatility 36.72 % Expected life (years) 1.88 Expected dividend yield — % The purchase price was allocated to the following assets based on estimates of their relative fair value (in thousands): Building and improvements $ 46,379 Land and improvements 15,833 Lease-related intangible assets 2,959 The building, building improvements, and land are recorded within property and equipment, net, on the consolidated balance sheet. The properties are generally carried at cost less accumulated depreciation and amortization. The Company computes depreciation and amortization using the straight-line method over the estimated useful lives of the assets. The Company believes the useful lives of the building and building improvements is 39 years and the land improvements will be depreciated over a useful life of 10 years. The lease-related intangible assets relate to in-place lease agreements and will be amortized over a weighted-average useful life of 5.1 years. Amortization is expected to be approximately $0.5 million |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt Disclosure [Text Block] | Debt In June 2018, the Company amended its credit agreement, increasing its borrowing capacity from $30.0 million to $50.0 million , extending the maturity date to June 2021, and increasing the required amount of restricted cash. The facility is secured by any and all interests in the Company's assets that are not otherwise restricted. Interest on the revolving line of credit is payable monthly at the greater of 4.5%, or 1.25% plus the prime rate ( 6.50% at September 30, 2018 ). The credit agreement includes other ancillary services and letters of credit of up to $4.5 million , and requires a deposit of restricted cash of $1.4 million . As of September 30, 2018 , the Company was in compliance with all financial and non-financial covenants required by the credit agreement. Borrowings on the revolving line of credit are limited to the lesser of $50.0 million and the total amount of cash and securities held by the Company's insurance subsidiaries (American Pet Insurance Company and Wyndham Insurance Company (SAC) Limited Segregated Account AX). As of September 30, 2018 , available borrowing capacity on the line of credit was $28.9 million , with an outstanding balance of $0.4 million for ancillary services and letters of credit, and borrowings under the facility of $8.8 million , recorded net of financing fees of $0.2 million |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | Commitments and Contingencies Litigation From time to time, the Company is subject to litigation matters and claims arising from the ordinary course of business. The Company records a provision for a liability relating to legal matters when it is both probable that a material 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. Obligation to Purchase Additional Preferred Stock of Variable Interest Entity In connection with its July 2018 investment in a variable interest entity (see Note 4), the Company agreed to invest an additional $4.0 million |
Claims Reserve
Claims Reserve | 9 Months Ended |
Sep. 30, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract] | |
Supplementary Insurance Information, for Insurance Companies Disclosure [Text Block] | Reserve for Veterinary Invoices The reserve for veterinary invoices is an estimate of the future amount the Company will pay for veterinary invoices that are dated as of, or prior to, its balance sheet 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 patterns, including expected future trends in the number of veterinary invoices the Company will receive and the average cost of those 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 to the reserve and associated expense. Reserve for veterinary invoices Summarized below are the changes in the total liability for the Company's subscription business segment (in thousands): Nine Months Ended September 30, Subscription 2018 2017 Reserve at beginning of year $ 11,059 $ 8,538 Veterinary invoices during the period related to: Current year 139,504 113,833 Prior years 364 (85 ) Total veterinary invoice expense 139,868 113,748 Amounts paid during the period related to: Current year 128,233 104,501 Prior years 9,836 7,533 Total paid 138,069 112,034 Non-cash expenses 497 306 Reserve at end of period $ 12,361 $ 9,946 The Company's reserve for the subscription business segment increased from $11.1 million at December 31, 2017 to $12.4 million at September 30, 2018 . This change was comprised of $139.9 million in expense recorded during the period less $138.1 million in payments of veterinary invoices. The $139.9 million in veterinary invoice expense incurred includes an adjustment of $0.4 million to the reserves relating to prior years, which is the result of ongoing analysis of recent payment trends. For the nine months ended September 30, 2017 , the Company decreased prior year reserves by $0.1 million as a result of analysis of payment trends. Summarized below are the changes in total liability for the Company's other business segment (in thousands): Nine Months Ended September 30, Other Business 2018 2017 Reserve at beginning of year $ 1,697 $ 983 Veterinary invoices during the period related to: Current year 16,632 10,074 Prior years (304 ) (173 ) Total veterinary invoice expense 16,328 9,901 Amounts paid during the period related to: Current year 14,822 8,786 Prior years 1,348 789 Total paid 16,170 9,575 Non-cash expenses — — Reserve at end of period $ 1,855 $ 1,309 The Company’s reserve for the other business segment increased from $1.7 million at December 31, 2017 to $1.9 million at September 30, 2018 . This change was comprised of $16.3 million in expense recorded during the period less $16.2 million in payments of veterinary invoices. The $16.3 million in veterinary invoice expense incurred includes a reduction of $0.3 million to the reserves relating to prior years, which is the result of ongoing analysis of recent payment trends. For the nine months ended September 30, 2017 , the Company decreased prior year reserves by $0.2 million as a result of analysis of payment trends. 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 year the veterinary invoice relates to, referred to as the year of occurrence. Subscription As of September 30, 2018 Year of Occurrence 2016 $ 408 2017 1,179 2018 10,774 $ 12,361 Other Business As of September 30, 2018 Year of Occurrence 2017 $ 44 2018 1,811 $ 1,855 |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | Stock-Based Compensation and Stockholders' Equity Stock-based Compensation Stock-based compensation expense includes stock options, restricted stock awards, and restricted stock units granted to employees and non-employees and has been reported in the Company’s consolidated statements of operations depending on the function performed by the employee or non-employee. Stock-based compensation expense recognized in the consolidated statements of operations was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Veterinary invoice expense $ 153 $ 101 $ 421 $ 260 Other cost of revenue 96 69 277 172 Technology and development 58 57 167 166 General and administrative 634 503 1,708 1,416 Sales and marketing 358 165 980 550 Total stock-based compensation $ 1,299 $ 895 $ 3,553 $ 2,564 As of September 30, 2018 , for all employees, the Company had 564,647 unvested stock options and 439,798 unvested restricted stock awards and restricted stock units that are expected to vest. Stock-based compensation expense of $3.6 million related to unvested stock options and $8.0 million related to unvested restricted stock awards and restricted stock units, expected to be recognized over a weighted average period of approximately 2.1 years and 2.7 years, respectively. Stock Options A summary of the Company's stock option activity is as follows: Number Of Options Weighted Average Exercise Price per Share Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2017 4,006,399 $ 7.16 $ 88,578 Granted — — Exercised (695,452 ) 4.19 22,213 Forfeited (76,015 ) 15.26 Outstanding as of September 30, 2018 3,234,932 $ 7.61 $ 90,967 Exercisable as of September 30, 2018 2,666,951 $ 5.88 $ 79,606 As of September 30, 2018 , stock options outstanding and stock options exercisable had a weighted average remaining contractual life of 4.9 years and 4.2 years, respectively. Restricted Stock Awards and Restricted Stock Units A summary of the Company’s restricted stock award and restricted stock unit activity is as follows: Number of Weighted Average Unvested shares as of December 31, 2017 256,842 $ 4.77 Granted 339,856 28.33 Vested (136,330 ) 8.05 Forfeited (20,570 ) 28.25 Unvested shares as of September 30, 2018 439,798 $ 22.20 Stockholders’ Equity In the June 2018 follow-on public offering, the Company sold 2,090,909 shares of common stock (inclusive of 272,727 shares of common stock sold by the Company pursuant to the full exercise of the underwriters' option to purchase additional shares) at a price to the public of $33.00 per share. The Company received aggregate net proceeds of $65.7 million , after deducting underwriting discounts and commissions and offering expenses payable by the Company. As a part of the purchase of real estate described in Note 6, an additional 303,030 shares of common stock were issued via a private placement during August 2018. During the nine months ended September 30, 2018, 330,000 of the Company's outstanding warrants were exercised. As of September 30, 2018, warrants to purchase 480,000 shares of the Company's common stock at $10.00 |
Segments
Segments | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Segments The Company has two segments: subscription business and other business. The subscription business segment includes monthly subscription fees related to the Company’s medical insurance which is marketed directly to consumers, while the other business segment includes all other business that is not directly marketed to consumers. The chief operating decision maker uses two measures to evaluate segment performance: revenue and gross profit. Additionally, other operating expenses, such as sales and marketing expenses, are allocated to each segment and evaluated when material. 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. Revenue and gross profit of the Company’s segments were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue: Subscription business $ 67,421 $ 56,493 $ 192,805 $ 159,363 Other business 10,743 6,625 28,511 16,759 78,164 63,118 221,316 176,122 Veterinary invoice expense: Subscription business 48,285 39,761 139,868 113,748 Other business 6,018 3,692 16,328 9,901 54,303 43,453 156,196 123,649 Other cost of revenue: Subscription business 6,468 5,454 18,232 15,304 Other business 3,649 2,404 9,727 5,856 10,117 7,858 27,959 21,160 Gross profit: Subscription business 12,668 11,278 34,705 30,311 Other business 1,076 529 2,456 1,002 13,744 11,807 37,161 31,313 Technology and development 2,299 2,471 6,761 7,196 General and administrative 4,174 4,017 13,242 12,274 Sales and marketing: Subscription business 6,266 4,811 17,730 13,161 Other business 99 51 275 162 6,365 4,862 18,005 13,323 Operating income (loss) $ 906 $ 457 $ (847 ) $ (1,480 ) The following table presents the Company’s revenue by geographic region of the member (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 United States $ 63,517 $ 50,506 $ 178,957 $ 141,946 Canada 14,647 12,612 42,359 34,176 Total revenue $ 78,164 $ 63,118 $ 221,316 $ 176,122 Substantially all of the Company’s long-lived assets were located in the United States as of September 30, 2018 and December 31, 2017 |
Nature of Operations and Summ_2
Nature of Operations and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Description and Basis of Presentation [Text Block] | Description of Business and Basis of Presentation Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) provides medical insurance for cats and dogs throughout the United States, Canada and Puerto Rico. The financial data as of December 31, 2017 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 (loss) income, 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, 2018 (the 2017 10-K). The Company's accounting policies are described in Note 1 to the audited financial statements included in the 2017 10-K. Operating results for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the full fiscal year or any other interim period. Follow-on Common Stock Offerings In June 2018, the Company completed a follow-on public offering (the June 2018 follow-on public offering) whereby the Company sold 2,090,909 shares of common stock (inclusive of 272,727 shares of common stock sold by the Company pursuant to the full exercise of the underwriters' option to purchase additional shares) at a price to the public of $33.00 per share. The Company received aggregate net proceeds from the June 2018 follow-on public offering of $65.7 million , after deducting underwriting discounts and commissions and offering expenses payable by the Company. The proceeds were primarily used to lower expenses through the purchase of real estate consisting of properties in use as corporate offices and leased to third parties. In addition, in August 2018, the Company issued 303,030 shares of common stock via a private placement to an accredited investor as a portion of the purchase price of the real estate. See Note 6, Acquisition of Corporate Real Estate. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. 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 2017 10-K for additional discussion of these estimates and assumptions. Acquisition of Real Estate The Company’s real estate acquisition was determined to be an asset acquisition, with the purchase price allocated based on relative fair value of the assets acquired. Additionally, acquisition-related expenses were capitalized as part of the purchase price. The Company assessed fair value based on Level 3 inputs within the fair value framework, which included estimated cash flow projections that utilized appropriate discount rates, capitalization rates, renewal probability and available market information, which included market rental rates and market rent growth rates. Estimates of future cash flows were based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of the acquired property considers the value of the property as if it were vacant. The fair value of acquired “above- and below-” market leases was based on the estimated cash flow projections utilizing discount rates that reflected the risks associated with the leases acquired. The amount recorded was based on the present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the extended term for any leases with below-market renewal options. Other intangible assets acquired included amounts for in-place lease values that were based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. In estimating carrying costs, the Company included estimates of lost rents at market rates during the hypothetical expected lease-up periods, which were dependent on local market conditions. In estimating costs to execute similar leases, the Company considered leasing commissions, legal and other related costs. |
Basis of Accounting, Policy [Policy Text Block] | The financial data as of December 31, 2017 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 (loss) income, 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, 2018 (the 2017 10-K). The Company's accounting policies are described in Note 1 to the audited financial statements included in the 2017 10-K. Operating results for the three and nine months ended September 30, 2018 |
Use of Estimates [Policy Text Block] | Use of EstimatesThe preparation of consolidated financial statements in conformity with U.S. 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 2017 10-K for additional discussion of these estimates and assumptions. |
Investment, Policy [Policy Text Block] | Acquisition of Real Estate The Company’s real estate acquisition was determined to be an asset acquisition, with the purchase price allocated based on relative fair value of the assets acquired. Additionally, acquisition-related expenses were capitalized as part of the purchase price. The Company assessed fair value based on Level 3 inputs within the fair value framework, which included estimated cash flow projections that utilized appropriate discount rates, capitalization rates, renewal probability and available market information, which included market rental rates and market rent growth rates. Estimates of future cash flows were based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of the acquired property considers the value of the property as if it were vacant. The fair value of acquired “above- and below-” market leases was based on the estimated cash flow projections utilizing discount rates that reflected the risks associated with the leases acquired. The amount recorded was based on the present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the extended term for any leases with below-market renewal options. Other intangible assets acquired included amounts for in-place lease values that were based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. In estimating carrying costs, the Company included estimates of lost rents at market rates during the hypothetical expected lease-up periods, which were dependent on local market conditions. In estimating costs to execute similar leases, the Company considered leasing commissions, legal and other related costs. |
Comprehensive Income, Policy [Policy Text Block] | Accumulated Other Comprehensive Loss There were no reclassifications out of accumulated other comprehensive loss during the three and nine months ended September 30, 2018 and 2017 |
Income Tax, Policy [Policy Text Block] | Income TaxesOn December 22, 2017, the U.S. government enacted the Tax Cuts and Jobs Act (Tax Act), making broad and complex changes to the Internal Revenue Code. The Company has made significant judgments and estimates in accordance with its interpretation of the Tax Act. As additional guidance on the Tax Act becomes available, the Company may adjust its interpretation of the requirements, which may result in a material change to income tax benefit or expense in the period in which the adjustment is made. |
New Accounting Pronouncements, Policy [Policy Text Block] | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) amending the accounting for leases. The ASU requires recognition of lease assets and liabilities for operating leases on the consolidated balance sheets. This ASU is effective for fiscal years beginning after December 15, 2018 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2019 and is currently evaluating the impact the ASU will have on its consolidated financial statements pursuant to the purchase of real estate described in Note 6. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders' equity for interim financial statements. This final rule is effective on November 5, 2018, for interim filings submitted thereafter. The SEC has provided relief to registrants that file Form 10-Q shortly after the final rule’s effective date, allowing presentation changes to take effect in the subsequent interim period. As such, t |
Other Investments Investment in
Other Investments Investment in Variable Interest Entity (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
Variable Interest Entity Disclosure [Text Block] | Investment in Variable Interest Entity In July 2018, the Company purchased $3.0 million in preferred stock of a privately held corporation with a complementary business line. The Company does not have power over the activities that most significantly impact the economic performance of the variable interest entity and is, therefore, not the primary beneficiary. The Company's preferred stock is accounted for as an available-for-sale debt security. Through January 2020, the Company has agreed to purchase an additional $4.0 million in preferred stock of the variable interest entity, contingent upon the exercise of this option by the variable interest entity. The Company has the option to purchase the variable interest entity on the fifth anniversary of the initial preferred stock purchase. Additionally, the Company has extended a $2.5 million |
Other Investments Investment _2
Other Investments Investment in Joint Venture (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | Investment in Joint Venture In September 2018, the Company acquired a non-controlling equity interest in a joint venture, whereby it has committed to licensing certain intellectual property and contributing up to $2.2 million |
Fair Value Notes Receivable (Po
Fair Value Notes Receivable (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | The Company's other long-term assets balance included $3.1 million of notes receivable as of September 30, 2018 and $2.5 million of notes receivable as of December 31, 2017, recorded at its estimated collectible amount. The Company estimates that the carrying value of the note receivable approximates its 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 its 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 September 30, 2018 and December 31, 2017 |
Fair Value Fair Value (Policies
Fair Value Fair Value (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments, Policy [Policy Text Block] | The Company measures the fair value of restricted cash, foreign deposits, and money market funds based on quoted prices in active markets for identical assets. The fair value of the municipal bond is 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. The estimated fair value of the Company's investment in the variable interest entity is a Level 3 measurement, and is based on market interest rates, the assessed creditworthiness of the entity, and the estimated fair value of the entity's common stock. As of September 30, 2018, the Company estimates that the purchase price approximates the fair value. Short-term investments are carried at amortized cost and the fair value is disclosed in Note 3, Investment Securities. The fair value of these investments is determined in the same manner as for available-for-sale securities and is considered a Level 1 measurement. |
Acquisition of Corporate Real_2
Acquisition of Corporate Real Estate Real Estate (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Acquisition of Corporate Real Estate [Abstract] | |
Property, Plant and Equipment, Policy [Policy Text Block] | The building, building improvements, and land are recorded within property and equipment, net, on the consolidated balance sheet. The properties are generally carried at cost less accumulated depreciation and amortization. The Company computes depreciation and amortization using the straight-line method over the estimated useful lives of the assets. The Company believes the useful lives of the building and building improvements is 39 years and the land improvements will be depreciated over a useful life of 10 years. The lease-related intangible assets relate to in-place lease agreements and will be amortized over a weighted-average useful life of 5.1 years. Amortization is expected to be approximately $0.5 million |
Claims Reserve Claims Reserve (
Claims Reserve Claims Reserve (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract] | |
Liability Reserve Estimate, Policy [Policy Text Block] | Reserve for Veterinary InvoicesThe reserve for veterinary invoices is an estimate of the future amount the Company will pay for veterinary invoices that are dated as of, or prior to, its balance sheet 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 patterns, including expected future trends in the number of veterinary invoices the Company will receive and the average cost of those 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 to the reserve and associated expense. |
Segments Segments (Policies)
Segments Segments (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting, Policy [Policy Text Block] | The Company has two segments: subscription business and other business. The subscription business segment includes monthly subscription fees related to the Company’s medical insurance which is marketed directly to consumers, while the other business segment includes all other business that is not directly marketed to consumers. The chief operating decision maker uses two measures to evaluate segment performance: revenue and gross profit. Additionally, other operating expenses, such as sales and marketing expenses, are allocated to each segment and evaluated when material. 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. |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share, Basic and Diluted [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The components of basic and diluted earnings per share were as follows (in thousands, except share and per share information): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Basic earnings per share: Net income (loss) $ 1,205 $ 406 $ (652 ) $ (665 ) Shares used in computation: Weighted average shares of common stock outstanding 33,129,416 30,037,282 31,376,239 29,500,958 Basic earnings per share $ 0.04 $ 0.01 $ (0.02 ) $ (0.02 ) Diluted earnings per share: Net income (loss) $ 1,205 $ 406 $ (652 ) $ (665 ) Shares used in computation: Weighted average shares of common stock outstanding 33,129,416 30,037,282 31,376,239 29,500,958 Stock options 2,663,375 2,618,567 — — Restricted stock awards and units 236,932 919 — — Warrants 355,637 457,213 — — Weighted average number of shares 36,385,360 33,113,981 31,376,239 29,500,958 Diluted earnings per share $ 0.03 $ 0.01 $ (0.02 ) $ (0.02 ) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | 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 September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Stock options 3,647 480,360 3,234,932 4,118,884 Restricted stock awards and restricted stock units — — 439,798 234,758 Warrants — — 480,000 810,000 |
Investment Securities Available
Investment Securities Available-for-Sale (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Investments [Abstract] | |
Investment [Table Text Block] | The following table summarizes the amortized cost, gross unrealized holding gains and losses, and estimates of fair value of fixed maturity investments (in thousands) as of September 30, 2018 and December 31, 2017 : Amortized Gross Gross Fair As of September 30, 2018 Long-term investments: Foreign deposits $ 2,545 $ — $ — $ 2,545 Municipal bond 1,000 — — 1,000 $ 3,545 $ — $ — $ 3,545 Short-term investments: U.S. Treasury securities $ 6,646 $ — $ (3 ) $ 6,643 Certificates of deposit 439 1 — 440 U.S. government funds 32,337 — — 32,337 $ 39,422 $ 1 $ (3 ) $ 39,420 Amortized Gross Gross Fair As of December 31, 2017 Long-term investments: Foreign deposits $ 2,237 $ — $ — $ 2,237 Municipal bond 1,000 — — 1,000 $ 3,237 $ — $ — $ 3,237 Short-term investments: U.S. Treasury securities $ 5,783 $ — $ (4 ) $ 5,779 Certificates of deposit 690 1 — 691 U.S. government funds 31,117 — — 31,117 $ 37,590 $ 1 $ (4 ) $ 37,587 |
Available-for-sale Securities [Table Text Block] | Maturities of debt securities classified as available-for-sale were as follows (in thousands): September 30, 2018 Amortized Fair Available-for-sale: Due after one year through five years $ 3,545 $ 3,545 $ 3,545 $ 3,545 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value, asset & liabilities measured on recurring basis [Table Text Block] | 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 September 30, 2018 Fair Value Level 1 Level 2 Level 3 Assets Restricted cash $ 1,400 $ 1,400 $ — $ — Money market funds 4,741 4,741 — — Fixed maturities: Foreign deposits 2,545 2,545 — — Municipal bond 1,000 — 1,000 — Investment in variable interest entity 3,000 — — 3,000 Total $ 12,686 $ 8,686 $ 1,000 $ 3,000 As of December 31, 2017 Fair Value Level 1 Level 2 Level 3 Assets Restricted cash $ 600 $ 600 $ — $ — Money market funds 5,167 5,167 — — Fixed maturities: Foreign deposits 2,237 2,237 — — Municipal bond 1,000 — 1,000 — Total $ 9,004 $ 8,004 $ 1,000 $ — |
Acquisition of Corporate Real_3
Acquisition of Corporate Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Acquisition of Corporate Real Estate [Abstract] | |
Business Acquisition, Purchase Price Allocation, Buildings [Table Text Block] | The purchase price was allocated to the following assets based on estimates of their relative fair value (in thousands): Building and improvements $ 46,379 Land and improvements 15,833 Lease-related intangible assets 2,959 |
Business Combination, Consideration Transferred [Table Text Block] | In June 2018, the Company entered into a Real Estate Purchase and Sale Agreement (Real Estate Purchase Agreement) with Benaroya Capital Company, L.L.C to purchase certain properties (Properties) as defined within the Real Estate Purchase Agreement, located at 6100 Fourth Avenue South, Seattle, Washington, which is the site of the Company's corporate headquarters. The purchase closed in August 2018 and the Company paid consideration consisting of $55.0 million in cash and 303,030 shares of common stock with an estimated fair value of $9.6 million . The issued shares carry registration rights (as to which the Company filed a registration statement on Form S-3, File No. 333-226752) and are subject to a lock-up period that continues to and includes June 25, 2020. The fair value of the issued shares was estimated as of the closing date for the real estate acquisition using the Black-Scholes option pricing model and the following assumptions: August 9, 2018 Assumptions Fair Value Risk free interest rate 2.5 % Expected volatility 36.72 % Expected life (years) 1.88 Expected dividend yield — % |
Claims Reserve (Tables)
Claims Reserve (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract] | |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block] | Summarized below are the changes in the total liability for the Company's subscription business segment (in thousands): Nine Months Ended September 30, Subscription 2018 2017 Reserve at beginning of year $ 11,059 $ 8,538 Veterinary invoices during the period related to: Current year 139,504 113,833 Prior years 364 (85 ) Total veterinary invoice expense 139,868 113,748 Amounts paid during the period related to: Current year 128,233 104,501 Prior years 9,836 7,533 Total paid 138,069 112,034 Non-cash expenses 497 306 Reserve at end of period $ 12,361 $ 9,946 The Company's reserve for the subscription business segment increased from $11.1 million at December 31, 2017 to $12.4 million at September 30, 2018 . This change was comprised of $139.9 million in expense recorded during the period less $138.1 million in payments of veterinary invoices. The $139.9 million in veterinary invoice expense incurred includes an adjustment of $0.4 million to the reserves relating to prior years, which is the result of ongoing analysis of recent payment trends. For the nine months ended September 30, 2017 , the Company decreased prior year reserves by $0.1 million as a result of analysis of payment trends. Summarized below are the changes in total liability for the Company's other business segment (in thousands): Nine Months Ended September 30, Other Business 2018 2017 Reserve at beginning of year $ 1,697 $ 983 Veterinary invoices during the period related to: Current year 16,632 10,074 Prior years (304 ) (173 ) Total veterinary invoice expense 16,328 9,901 Amounts paid during the period related to: Current year 14,822 8,786 Prior years 1,348 789 Total paid 16,170 9,575 Non-cash expenses — — Reserve at end of period $ 1,855 $ 1,309 The Company’s reserve for the other business segment increased from $1.7 million at December 31, 2017 to $1.9 million at September 30, 2018 . This change was comprised of $16.3 million in expense recorded during the period less $16.2 million in payments of veterinary invoices. The $16.3 million in veterinary invoice expense incurred includes a reduction of $0.3 million to the reserves relating to prior years, which is the result of ongoing analysis of recent payment trends. For the nine months ended September 30, 2017 , the Company decreased prior year reserves by $0.2 million |
IBRN plus expected development on reported claims[Table Text Block] | In the following tables, the reserve for veterinary invoices for each segment is presented as the amount (in thousands) by year the veterinary invoice relates to, referred to as the year of occurrence. Subscription As of September 30, 2018 Year of Occurrence 2016 $ 408 2017 1,179 2018 10,774 $ 12,361 Other Business As of September 30, 2018 Year of Occurrence 2017 $ 44 2018 1,811 $ 1,855 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | Stock-based compensation expense includes stock options, restricted stock awards, and restricted stock units granted to employees and non-employees and has been reported in the Company’s consolidated statements of operations depending on the function performed by the employee or non-employee. Stock-based compensation expense recognized in the consolidated statements of operations was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Veterinary invoice expense $ 153 $ 101 $ 421 $ 260 Other cost of revenue 96 69 277 172 Technology and development 58 57 167 166 General and administrative 634 503 1,708 1,416 Sales and marketing 358 165 980 550 Total stock-based compensation $ 1,299 $ 895 $ 3,553 $ 2,564 As of September 30, 2018 , for all employees, the Company had 564,647 unvested stock options and 439,798 unvested restricted stock awards and restricted stock units that are expected to vest. Stock-based compensation expense of $3.6 million related to unvested stock options and $8.0 million related to unvested restricted stock awards and restricted stock units, expected to be recognized over a weighted average period of approximately 2.1 |
Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the Company's stock option activity is as follows: Number Of Options Weighted Average Exercise Price per Share Aggregate Intrinsic Value (in thousands) Outstanding as of December 31, 2017 4,006,399 $ 7.16 $ 88,578 Granted — — Exercised (695,452 ) 4.19 22,213 Forfeited (76,015 ) 15.26 Outstanding as of September 30, 2018 3,234,932 $ 7.61 $ 90,967 Exercisable as of September 30, 2018 2,666,951 $ 5.88 $ 79,606 As of September 30, 2018 , stock options outstanding and stock options exercisable had a weighted average remaining contractual life of 4.9 years and 4.2 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | A summary of the Company’s restricted stock award and restricted stock unit activity is as follows: Number of Weighted Average Unvested shares as of December 31, 2017 256,842 $ 4.77 Granted 339,856 28.33 Vested (136,330 ) 8.05 Forfeited (20,570 ) 28.25 Unvested shares as of September 30, 2018 439,798 $ 22.20 |
Stock-based Compensation Stockh
Stock-based Compensation Stockholder's Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Class of Warrant or Right [Line Items] | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | During the nine months ended September 30, 2018, 330,000 of the Company's outstanding warrants were exercised. As of September 30, 2018, warrants to purchase 480,000 shares of the Company's common stock at $10.00 |
Stock-based Compensation Follow
Stock-based Compensation Follow-on Public Offering (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Follow-on Public Offering, June 2018 [Table Text Block] | In the June 2018 follow-on public offering, the Company sold 2,090,909 shares of common stock (inclusive of 272,727 shares of common stock sold by the Company pursuant to the full exercise of the underwriters' option to purchase additional shares) at a price to the public of $33.00 per share. The Company received aggregate net proceeds of $65.7 million |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Revenue and Gross Profit from Segments [Table Text Block] | Revenue and gross profit of the Company’s segments were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenue: Subscription business $ 67,421 $ 56,493 $ 192,805 $ 159,363 Other business 10,743 6,625 28,511 16,759 78,164 63,118 221,316 176,122 Veterinary invoice expense: Subscription business 48,285 39,761 139,868 113,748 Other business 6,018 3,692 16,328 9,901 54,303 43,453 156,196 123,649 Other cost of revenue: Subscription business 6,468 5,454 18,232 15,304 Other business 3,649 2,404 9,727 5,856 10,117 7,858 27,959 21,160 Gross profit: Subscription business 12,668 11,278 34,705 30,311 Other business 1,076 529 2,456 1,002 13,744 11,807 37,161 31,313 Technology and development 2,299 2,471 6,761 7,196 General and administrative 4,174 4,017 13,242 12,274 Sales and marketing: Subscription business 6,266 4,811 17,730 13,161 Other business 99 51 275 162 6,365 4,862 18,005 13,323 Operating income (loss) $ 906 $ 457 $ (847 ) $ (1,480 ) |
Revenue from External Customers by Geographic Areas [Table Text Block] | The following table presents the Company’s revenue by geographic region of the member (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 United States $ 63,517 $ 50,506 $ 178,957 $ 141,946 Canada 14,647 12,612 42,359 34,176 Total revenue $ 78,164 $ 63,118 $ 221,316 $ 176,122 |
Nature of Operations and Summ_3
Nature of Operations and Summary of Significant Accounting Policies (Details) Narrative - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Organization and Basis of Presentation [Line Items] | |||
Common Stock, Shares, Issued | 2,090,909 | ||
Common Stock, Shares, Issued to Underwriter | 272,727 | ||
Shares Issued, Price Per Share | $ 33 | $ 33 | |
Proceeds from Issuance or Sale of Equity | $ 65,690 | $ 0 | |
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax | $ 0 | $ 0 | |
Common Stock, Shares, Issued via Private Placement | 303,030 | ||
Proceeds from Rents Received | $ 400 | $ 400 |
Nature of Operations and Summ_4
Nature of Operations and Summary of Significant Accounting Policies Rental Income (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | |
Rental Income [Abstract] | ||
Operating Leases, Future Minimum Payments Receivable, Current | $ 497 | $ 497 |
Proceeds from Rents Received | 400 | 400 |
Operating Leases, Future Minimum Payments Receivable, Current | 1,972 | 1,972 |
Operating Leases, Future Minimum Payments, Due in Two Years | 1,224 | 1,224 |
Operating Leases, Future Minimum Payments, Due in Three Years | 1,210 | 1,210 |
Operating Leases, Future Minimum Payments, Due in Four Years | 1,173 | 1,173 |
Operating Leases, Future Minimum Payments, Due in Five Years | 1,210 | 1,210 |
Operating Leases, Future Minimum Payments Receivable, Thereafter | 3,238 | 3,238 |
Operating Leases, Future Minimum Payments Receivable | $ 10,524 | $ 10,524 |
Net Loss per Share (Details) Sc
Net Loss per Share (Details) Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Employee Stock Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,647 | 480,360 | 3,234,932 | 4,118,884 |
Restricted Stock Units (RSUs) [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 439,798 | 234,758 |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 480,000 | 810,000 |
Net Loss per Share Computation
Net Loss per Share Computation of Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | ||||
Net Income (Loss) Available to Common Stockholders, Basic | $ 1,205 | $ 406 | $ (652) | $ (665) |
Weighted Average Number of Shares Outstanding, Basic | 33,129,416 | 30,037,282 | 31,376,239 | 29,500,958 |
Earnings Per Share, Basic | $ 0.04 | $ 0.01 | $ (0.02) | $ (0.02) |
Weighted Average Number of Shares Outstanding, Diluted | 36,385,360 | 33,113,981 | 31,376,239 | 29,500,958 |
Earnings Per Share, Diluted | $ 0.03 | $ 0.01 | $ (0.02) | $ (0.02) |
Employee Stock Option [Member] | ||||
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | ||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 2,663,375 | 2,618,567 | 0 | 0 |
Restricted Stock Units (RSUs) [Member] | ||||
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | ||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 236,932 | 919 | 0 | 0 |
Warrant [Member] | ||||
Schedule of Earnings Per Share, Basic and Diluted [Line Items] | ||||
Weighted Average Number Diluted Shares Outstanding Adjustment | 355,637 | 457,213 | 0 | 0 |
Investment Securities (Details)
Investment Securities (Details) Investment Schedule - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Investment [Line Items] | ||
Available-for-sale securities, amortized cost | $ 3,545 | |
Available-for-sale Securities, Gross Unrealized Gain | 0 | $ 0 |
Available-for-sale Securities, Gross Unrealized Loss | 0 | 0 |
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | 3,545 | 3,237 |
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 3,545 | 3,237 |
Short-term investments, amortized cost | 39,422 | 37,590 |
Short-term Investments, Gross Unrealized Holding Gains | 1 | 1 |
Short-term investments, gross unrealized holding losses | (3) | (4) |
Short-term Investments, fair value | 39,420 | 37,587 |
Deposits [Member] | ||
Investment [Line Items] | ||
Available-for-sale securities, amortized cost | 2,545 | 2,237 |
Available-for-sale Securities, Gross Unrealized Gain | 0 | 0 |
Available-for-sale Securities, Gross Unrealized Loss | 0 | 0 |
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 2,545 | 2,237 |
Municipal Bonds [Member] | ||
Investment [Line Items] | ||
Available-for-sale securities, amortized cost | 1,000 | 1,000 |
Available-for-sale Securities, Gross Unrealized Gain | 0 | 0 |
Available-for-sale Securities, Gross Unrealized Loss | 0 | 0 |
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 1,000 | 1,000 |
U.S. Treasury securities | ||
Investment [Line Items] | ||
Short-term investments, amortized cost | 6,646 | 5,783 |
Short-term Investments, Gross Unrealized Holding Gains | 0 | 0 |
Short-term investments, gross unrealized holding losses | (3) | (4) |
Short-term Investments, fair value | 6,643 | 5,779 |
Certificates of deposit | ||
Investment [Line Items] | ||
Short-term investments, amortized cost | 439 | 690 |
Short-term Investments, Gross Unrealized Holding Gains | 1 | 1 |
Short-term investments, gross unrealized holding losses | 0 | 0 |
Short-term Investments, fair value | 440 | 691 |
US government debt securities | ||
Investment [Line Items] | ||
Short-term investments, amortized cost | 32,337 | 31,117 |
Short-term Investments, Gross Unrealized Holding Gains | 0 | 0 |
Short-term investments, gross unrealized holding losses | 0 | 0 |
Short-term Investments, fair value | $ 32,337 | $ 31,117 |
Investment Securities (Detail_2
Investment Securities (Details) Available-for-Sale - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Available-for-sale Securities [Abstract] | ||
Available-for-sale securities, debt maturities, year two through five, amortized cost basis | $ 3,545 | |
Available-for-sale securities, debt maturities, year two through five, fair value | 3,545 | |
Available-for-sale securities, amortized cost | 3,545 | $ 3,237 |
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | $ 3,545 | $ 3,237 |
Other Investments (Details)
Other Investments (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Investments, All Other Investments [Abstract] | |
Purchase of Equity Interest | $ 3 |
Other Commitment | 2.2 |
Investment Company, Committed Capital | 4 |
Increase (Decrease) in Notes Receivables | $ 2.5 |
Fair Value (Details) Unobservab
Fair Value (Details) Unobservable - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash | $ 1,400,000 | $ 600,000 |
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 3,545,000 | 3,237,000 |
Noncontrolling Interest in Variable Interest Entity | 3,000,000 | |
Assets, Fair Value Disclosure | 12,686,000 | 9,004,000 |
Notes Receivable, Fair Value Disclosure | 3,100,000 | 2,500,000 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncontrolling Interest in Variable Interest Entity | 0 | |
Assets, Fair Value Disclosure | 8,686,000 | 8,004,000 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncontrolling Interest in Variable Interest Entity | 0 | |
Assets, Fair Value Disclosure | 1,000,000 | 1,000,000 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncontrolling Interest in Variable Interest Entity | 3,000,000 | |
Assets, Fair Value Disclosure | 3,000,000 | 0 |
Cash and Cash Equivalents [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash | 1,400,000 | 600,000 |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash | 1,400,000 | 600,000 |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash | 0 | 0 |
Cash and Cash Equivalents [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Restricted Cash | 0 | 0 |
Deposits [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 2,545,000 | 2,237,000 |
Cash and Cash Equivalents, Fair Value Disclosure | 4,741,000 | |
Deposits [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 2,545,000 | 2,237,000 |
Deposits [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 0 | 0 |
Deposits [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 0 | 0 |
Municipal bond | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | 1,000,000 | 1,000,000 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date | 1,000,000 | 1,000,000 |
Municipal bond | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, Single Maturity Date | 0 | 0 |
Municipal bond | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, Single Maturity Date | 1,000,000 | 1,000,000 |
Municipal bond | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities, Debt Maturities, Single Maturity Date | 0 | 0 |
Money Market Funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 5,167,000 | |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 4,741,000 | 5,167,000 |
Money Market Funds [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | 0 | 0 |
Money Market Funds [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 0 | $ 0 |
Fair Value (Details) Narrative
Fair Value (Details) Narrative - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Note Receivable, Fair Value [Abstract] | ||
Notes Receivable, Fair Value Disclosure | $ 3.1 | $ 2.5 |
Acquisition of Corporate Real_4
Acquisition of Corporate Real Estate (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | |
Fair Value Assumptions, Risk Free Interest Rate | 2.50% |
Fair Value Assumptions, Expected Volatility Rate | 36.72% |
Fair Value Assumptions, Expected Term | 1 year 10 months 17 days |
Payments to Acquire Buildings | $ 55 |
Fair Value Assumptions, Expected Dividend Rate | 0.00% |
Payments to Acquire Buildings, Shares | shares | 303,030 |
Payments to Acquire Buildings, Fair Value of Shares | $ 9.6 |
Acquisition of Corporate Real_5
Acquisition of Corporate Real Estate Purchase Price Allocation, Real Estate (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Leases, Acquired-in-Place [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Consideration Transferred | $ 2,959 |
Land and Land Improvements [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Consideration Transferred | 15,833 |
Building and Building Improvements [Member] | |
Business Acquisition [Line Items] | |
Business Combination, Consideration Transferred | $ 46,379 |
Acquisition of Corporate Real_6
Acquisition of Corporate Real Estate Property, Plant and Equipment (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Property, Plant and Equipment [Line Items] | |
Finite-Lived Intangible Assets, Net | 5 years 1 month 6 days |
Amortization of Intangible Assets | $ 0.5 |
Building and Building Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 39 years |
Land and Land Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Useful Life | 10 years |
Debt (Details) Narrative
Debt (Details) Narrative - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Mar. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Payments to Acquire Buildings | $ 55 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 50 | $ 30 |
Line of credit facility, interest rate description | greater of 4.5%, or 1.25% plus the prime rate | |
Line of Credit Facility, Interest Rate During Period | 6.50% | |
Line of Credit Facility, Ancillary Services and Letter of Credit | $ 4.5 | |
Restricted Cash and Cash Equivalents | 1.4 | |
Line of Credit Facility, Remaining Borrowing Capacity | 28.9 | |
Line of Credit Facility, Ancillary Services and Letter of Credit | 0.4 | |
Long-term Line of Credit | 8.8 | |
Line of Credit Financing Fee | $ 0.2 |
Commitment and Contingencies Ag
Commitment and Contingencies Agreement for the Purchase of Corporate Headquarter (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)shares | |
Commitments and Contingencies Disclosure [Abstract] | |
Payments to Acquire Buildings | $ | $ 55 |
Payments to Acquire Buildings, Shares | shares | 303,030 |
Commitment and Contingencies Ob
Commitment and Contingencies Obligation for VIE (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Investment Company, Committed Capital | $ 4 |
Claims Reserve (Details) Claims
Claims Reserve (Details) Claims Loss Roll-forward - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Subscription business | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Claims Reserve | $ 12,361 | $ 9,946 | $ 11,059 | $ 8,538 |
Current Year Claims Incurred | 139,504 | 113,833 | ||
Prior Year Claims Incurred | 364 | (85) | ||
Total Claims Incurred | 139,868 | 113,748 | ||
Current Year Claims Paid | 128,233 | 104,501 | ||
Prior Years Claims Paid | 9,836 | 7,533 | ||
Total Claims Paid | 138,069 | 112,034 | ||
Claims expense non-cash | 497 | 306 | ||
Claims Reserve by Loss Year | ||||
Incurred but Not Reported (IBNR) Claims Liability | 12,361 | |||
Other business | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Claims Reserve | 1,855 | 1,309 | $ 1,697 | $ 983 |
Current Year Claims Incurred | 16,632 | 10,074 | ||
Prior Year Claims Incurred | (304) | (173) | ||
Total Claims Incurred | 16,328 | 9,901 | ||
Current Year Claims Paid | 14,822 | 8,786 | ||
Prior Years Claims Paid | 1,348 | 789 | ||
Total Claims Paid | 16,170 | 9,575 | ||
Claims expense non-cash | 0 | $ 0 | ||
Claims Reserve by Loss Year | ||||
Incurred but Not Reported (IBNR) Claims Liability | 1,855 | |||
Short-duration Insurance Contracts, Accident Year 2016 [Member] | Subscription business | ||||
Claims Reserve by Loss Year | ||||
Incurred but Not Reported (IBNR) Claims Liability | 408 | |||
Short-duration Insurance Contracts, Accident Year 2017 [Member] | Subscription business | ||||
Claims Reserve by Loss Year | ||||
Incurred but Not Reported (IBNR) Claims Liability | 1,179 | |||
Short-duration Insurance Contracts, Accident Year 2017 [Member] | Other business | ||||
Claims Reserve by Loss Year | ||||
Incurred but Not Reported (IBNR) Claims Liability | 44 | |||
Shortduration insurance contracts for accident year 2018 [Member] | Subscription business | ||||
Claims Reserve by Loss Year | ||||
Incurred but Not Reported (IBNR) Claims Liability | 10,774 | |||
Shortduration insurance contracts for accident year 2018 [Member] | Other business | ||||
Claims Reserve by Loss Year | ||||
Incurred but Not Reported (IBNR) Claims Liability | $ 1,811 |
Claims Reserve (Details) Narrat
Claims Reserve (Details) Narrative - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Subscription business | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Claims Reserve | $ 12,361 | $ 9,946 | $ 11,059 | $ 8,538 |
Total Claims Incurred | 139,868 | 113,748 | ||
Total Claims Paid | 138,069 | 112,034 | ||
Prior Year Claims Incurred | 364 | (85) | ||
Other business | ||||
Supplementary Insurance Information, by Segment [Line Items] | ||||
Claims Reserve | 1,855 | 1,309 | $ 1,697 | $ 983 |
Total Claims Incurred | 16,328 | 9,901 | ||
Total Claims Paid | 16,170 | 9,575 | ||
Prior Year Claims Incurred | $ (304) | $ (173) |
Claims Reserve Claims Reserve_2
Claims Reserve Claims Reserve (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Subscription business | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Claims Reserve | $ 12,361 | $ 9,946 | $ 11,059 | $ 8,538 |
Current Year Claims Incurred | 139,504 | 113,833 | ||
Prior Year Claims Incurred | 364 | (85) | ||
Current Year Claims Paid | 128,233 | 104,501 | ||
Prior Years Claims Paid | 9,836 | 7,533 | ||
Total Claims Paid | 138,069 | 112,034 | ||
Claims expense non-cash | 497 | 306 | ||
Total Claims Incurred | 139,868 | 113,748 | ||
Other business | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Claims Reserve | 1,855 | 1,309 | $ 1,697 | $ 983 |
Current Year Claims Incurred | 16,632 | 10,074 | ||
Prior Year Claims Incurred | (304) | (173) | ||
Current Year Claims Paid | 14,822 | 8,786 | ||
Prior Years Claims Paid | 1,348 | 789 | ||
Total Claims Paid | 16,170 | 9,575 | ||
Claims expense non-cash | 0 | 0 | ||
Total Claims Incurred | $ 16,328 | $ 9,901 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) Expense Category - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | $ 1,299 | $ 895 | $ 3,553 | $ 2,564 |
Claims expense | ||||
Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | 153 | 101 | 421 | 260 |
Other Cost of Revenue | ||||
Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | 96 | 69 | 277 | 172 |
Technology and development | ||||
Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | 58 | 57 | 167 | 166 |
General and administrative | ||||
Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | 634 | 503 | 1,708 | 1,416 |
Sales and marketing | ||||
Stock-based Compensation | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost | 358 | $ 165 | $ 980 | $ 550 |
Restricted Stock Units (RSUs) [Member] | ||||
Stock-based Compensation | ||||
Employee share-based compensation arrangement and non-employee, weighted average remaining vesting period | 2 years 8 months 12 days | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 8,000 | $ 8,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 439,798 | 439,798 | ||
Employee Stock Option [Member] | ||||
Stock-based Compensation | ||||
Employee share-based compensation arrangement and non-employee, weighted average remaining vesting period | 2 years 1 month 6 days | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 3,600 | $ 3,600 | ||
Employee share-based compensation arrangement by share-based payment award, options, nonvested, number of shares | 564,647 | 564,647 |
Stock-based Compensation (Det_2
Stock-based Compensation (Details) Options Granted, Exercised and Forfeited - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock-based compensation, options, outstanding, number of shares | 3,234,932 | 4,006,399 |
Stock-based compensation, options, granted, number of options | 0 | |
Stock-based compensation, options, exercised | (695,452) | |
Stock-based compensation, options, forfeited | (76,015) | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number | 2,666,951 | |
Stock-based compensation, options, outstanding, weighted-average exercise price | $ 7.61 | $ 7.16 |
Stock-based compensation, options, granted, weighted-average exercise price | 0 | |
Stock-based compensation, options, exercised, weighted-average exercise price | 4.19 | |
Stock-based compensation, options, forfeited, weighted-average exercise price | 15.26 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price | $ 5.88 | |
Stock-based compensation, options, outstanding, aggregate intrinsic value | $ 90,967 | $ 88,578 |
Stock-based compensation, options, exercised, aggregate intrinsic value | 22,213 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value | $ 79,606 | |
Remaining contractual life, share-based payments, weighted average | 4 years 10 months 24 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Weighted Average Remaining Contractual Term | 4 years 2 months 12 days |
Stock-based Compensation Restri
Stock-based Compensation Restricted Stock Awards (Details) - Restricted Stock [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | 439,798 | 256,842 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 339,856 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period | (20,570) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | (136,330) | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value | $ 22.20 | $ 4.77 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | 28.33 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | 28.25 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value | $ 8.05 |
Stock-based Compensation Stoc_2
Stock-based Compensation Stockholder Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Stockholders' Equity Attributable to Parent [Abstract] | ||
Stock Issued During Period, Shares, New Issues | 2,090,909 | |
Redemption of warrants | 330,000 | |
Class of Warrant or Right, Outstanding | 480,000 | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 10 | |
Common Stock, Shares, Issued to Underwriter | 272,727 | |
Shares Issued, Price Per Share | $ 33 | |
Proceeds from Issuance or Sale of Equity | $ 65,690 | $ 0 |
Common Stock, Shares, Issued via Private Placement | 303,030 |
Segments (Details) Business Seg
Segments (Details) Business Segment - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 78,164 | $ 63,118 | $ 221,316 | $ 176,122 |
Veterinary invoice expense | 54,303 | 43,453 | 156,196 | 123,649 |
Other cost of revenue | 10,117 | 7,858 | 27,959 | 21,160 |
Gross profit | 13,744 | 11,807 | 37,161 | 31,313 |
Sales and marketing | 6,365 | 4,862 | 18,005 | 13,323 |
Technology and Development | 2,299 | 2,471 | 6,761 | 7,196 |
General and administrative | 4,174 | 4,017 | 13,242 | 12,274 |
Operating income (loss) | 906 | 457 | (847) | (1,480) |
Subscription business | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 67,421 | 56,493 | 192,805 | 159,363 |
Veterinary invoice expense | 48,285 | 39,761 | 139,868 | 113,748 |
Other cost of revenue | 6,468 | 5,454 | 18,232 | 15,304 |
Gross profit | 12,668 | 11,278 | 34,705 | 30,311 |
Sales and marketing | 6,266 | 4,811 | 17,730 | 13,161 |
Other business | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 10,743 | 6,625 | 28,511 | 16,759 |
Veterinary invoice expense | 6,018 | 3,692 | 16,328 | 9,901 |
Other cost of revenue | 3,649 | 2,404 | 9,727 | 5,856 |
Gross profit | 1,076 | 529 | 2,456 | 1,002 |
Sales and marketing | $ 99 | $ 51 | $ 275 | $ 162 |
Segments (Details) Revenue by G
Segments (Details) Revenue by Geography - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 78,164 | $ 63,118 | $ 221,316 | $ 176,122 |
CANADA | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 14,647 | 12,612 | 42,359 | 34,176 |
UNITED STATES | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 63,517 | $ 50,506 | $ 178,957 | $ 141,946 |