Trupanion, Inc.

Good day and welcome to the Trupanion first quarter 2024 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Laura Bainbridge, Senior Vice President of Corporate Communications. Please go ahead.

Good afternoon and welcome to True Panion's first quarter 2024 financial results conference call. Participating on today's call are Daryl Rawlings, Chief Executive Officer and Chair of the Board, Margie Tooth, President, and Fawad Qureshi, Chief Financial Officer. For ease of reference, we've included a slide presentation to accompany today's discussion, which will be made available on our investor relations website under our quarterly earnings tab. Before we begin, please be advised that remarks today contain forward-looking statements. All statements other than statements of historical facts are forward-looking statements. These include, but are not limited to, statements regarding our future operations, opportunities, and financial performance, our ability to remediate our material weaknesses, and the company's CEO succession efforts. These statements involve a high degree of known and unknown risks and uncertainties that could cause actual results to differ materially from those discussed. A detailed discussion of these and other risks and uncertainties are included in today's earnings release, as well as the company's most recent reports on Forms 10-K and 8-K filed with the Securities and Exchange Commission. Today's presentation contains references to non-GAAP financial measures that management uses to evaluate the company's performance, including without limitation variable expenses, fixed expenses, adjusted operating income, acquisition costs, internal rate of return, adjusted EBITDA, and free cash flow. When we use the term adjusted operating income or margin, it is intended to refer to our non-GAAP operating income or margin before new pet acquisition and development expenses. Unless otherwise noted, margins and expenses will be presented on a non-GAAP basis, which excludes stock-based compensation expense and depreciation expense. These non-GAAP measures are an addition to and not a substitute for measures of financial performance prepared in accordance with the U.S. GAAP. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP results, which can be found in today's press release or on Trupanion's Investor Relations website under the Quarterly Earnings tab. Lastly, I would like to remind everyone that today's conference call is also available via webcast on Trupanion's Investor Relations website. A replay will also be available on the site. With that, I'll hand the call over to Daryl.

Thanks, Laura, and good afternoon. I'm honoured to speak to you in my final earnings call as CEO. Today, we announced Margie's appointment as CEO, effective August 1st. Speaking on behalf of myself and the board, we could not be more excited about this outcome. Today's announcement is a culmination of an involved multi-year process to identify my successor as CEO. Achieving this milestone ahead of the schedule reflects the board's unanimous support and confidence in Margie's ability to lead Trupanion forward. In the 10 years we've worked together, Margie has shown herself to be a proven leader with an adept ability to manage Trupanion's growth mandate. With her at the helm, I am confident in our continued success in our large under-penetrated market. Margie's track record extends beyond her time at Trupanion. She spent over seven years with UK's largest pet insurance provider, during which time the category saw tremendous growth, reaching approximately 25% penetration. She's leveraged that experience here at Trupanion, starting with specific areas of growth and expanding over time. Over the last 18 months, Margie has assumed oversight of every department at Trupanion, including overhauling key operational areas to drive improved efficiency and performance. and drive a culture of accountability, collaboration, and action. Since joining Trupanion, the category has grown threefold, with Trupanion the largest contributor to the category's growth for three consecutive years. At over $1 billion in revenue today, Trupanion is the largest player in North America. The veterinary community is the heart of our growth model, and our territory partners are an important link to that community. Margie, having wanted to be a veterinarian herself, holds great admiration for this community, and her understanding of our approach to market has strengthened our ties. Through our strong growth, Margie has led the team in deploying increasing amounts of capital at consistently strong internal rates of return. When Margie joined Trupanion, the funds we had to invest in new pet acquisition, what we now call our adjusted operating income, was just about $4 million. Since then, we've grown our adjusted operating income to over $80 million last year. Beyond the numbers, however, and most important to me is Margie's character. At Trupanion, we are nimble and courageous, curious and caring. We do what we say, we care for one another, and we simply work harder than most. Margie is all of these things. In short, she personifies the culture of Trupanion. Over the past several years, Margie has come to lead our over 1500 global team members. She has done so with compassion, humility, leads with trust, and is willing to make tough decisions when they need to be made. There is no one I trust more to lead Trupanion into our next phase of growth. It has been my privilege to serve as a resource to her over the past decade. As we've previously communicated, I am committed to continuing to serve as chair on the board for the next 10 years, if agreeable to shareholders. Margie co-authored this year's shareholder letter, which was published just a few weeks ago. For those that have not done so, we encourage you to read it as it provides more insights into how we think and act at Trupanion. This letter can be found on our investor relations website. With that, I'll hand it over to Margie to walk through the performance of the business.