TRUPANION INC., 10-Q filed on 11/4/2016
Quarterly Report
Document and Entity Information Document
9 Months Ended
Sep. 30, 2016
Oct. 26, 2016
Entity Information [Line Items]
 
 
Entity Registrant Name
TRUPANION INC. 
 
Entity Central Index Key
0001371285 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2016 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
29,253,857 
Condensed Consolidated Statement of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Income Statement [Abstract]
 
 
 
 
Revenue
$ 48,359 
$ 37,865 
$ 136,890 
$ 106,762 
Claims expenses
34,253 
26,604 
97,323 
75,442 
Other cost of revenue
5,606 
4,670 
15,497 
13,361 
Gross profit
8,500 
6,591 
24,070 
17,959 
Sales and marketing
3,892 
4,128 
11,296 
11,312 
Technology Services Costs
2,339 
3,005 
6,790 
8,683 
General and administrative
3,811 
4,067 
11,028 
11,760 
Total operating expenses
10,042 
11,200 
29,114 
31,755 
Operating loss
(1,542)
(4,609)
(5,044)
(13,796)
Interest expense
66 
14 
137 
298 
Other expense (income), net
16 
(39)
Income (Loss) from Continuing Operations before Income Taxes, Extraordinary Items, Noncontrolling Interest
(1,624)
(4,627)
(5,142)
(14,102)
Income tax expense
13 
16 
31 
102 
Net loss
$ (1,637)
$ (4,643)
$ (5,173)
$ (14,204)
Net loss per share: Basic and diluted (per share)
$ (0.06)
$ (0.17)
$ (0.18)
$ (0.52)
Weighted average shares used to compute net loss per share: Basic and diluted (in shares)
28,732,417 
27,755,310 
28,362,084 
27,564,975 
Condensed Consolidated Statement of Comprehensive Income Statement (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net loss
$ (1,637)
$ (4,643)
$ (5,173)
$ (14,204)
Foreign currency translation adjustments
(96)
(274)
204 
(347)
Change in unrealized losses on available-for-sale securities
25 
29 
33 
(12)
Other comprehensive (loss) income, net of taxes
(71)
(245)
237 
(359)
Comprehensive Income (Loss), Net of Tax, Attributable to Parent
$ (1,708)
$ (4,888)
$ (4,936)
$ (14,563)
Condensed Consolidated Balance Sheet (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Cash and cash equivalents
$ 20,626 
$ 17,956 
Short-term Investments
28,720 
25,288 
Accounts and other receivables
10,286 
8,196 
Prepaid expenses and other assets
1,919 
2,193 
Total current assets
61,551 
53,633 
Investments in fixed maturities, at fair value
2,500 
2,388 
Equity Method Investments
289 
300 
Property and equipment, net
9,188 
9,719 
Other long term assets
4,894 
4,854 
Other Assets, Noncurrent
89 
23 
Total assets
78,511 
70,917 
Accounts payable
1,284 
1,289 
Accrued liabilities
3,489 
4,189 
Claims reserve
8,362 
6,274 
Deferred Revenue, Current
13,171 
11,042 
Deferred Tax Liabilities, Net, Current
169 
169 
Other payables
987 
654 
Total current liabilities
27,462 
23,617 
Long-term debt
3,969 
Deferred tax liabilities
1,433 
1,433 
Other liabilities
858 
511 
Total liabilities
33,722 
25,561 
Common stock: $0.00001 par value per share
Preferred Stock, Value, Outstanding
Additional paid-in capital
127,213 
122,844 
Accumulated other comprehensive loss
(265)
(502)
Accumulated deficit
(79,558)
(74,385)
Treasury stock, at cost
(2,601)
(2,601)
Stockholders' Equity Attributable to Parent
44,789 
45,356 
Total liabilities and stockholders' equity
$ 78,511 
$ 70,917 
Condensed Consolidated Balance Sheet Condensed Consolidated Balance Sheet Parentheticals (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Liabilities, Current
$ 27,462 
$ 23,617 
Held-to-maturity Securities, Fair Value
28,720 
25,288 
Available-for-sale Securities, Amortized Cost Basis
$ 2,521 
$ 2,442 
Common Stock [Member]
 
 
Common Stock, Par or Stated Value Per Share
$ 0 
$ 0 
Common Stock, Shares Authorized
100,000,000 
200,000,000 
Common Stock, Shares, Issued
29,870,771 
29,017,168 
Common Stock, Shares, Outstanding
29,249,792 
28,396,189 
Preferred Stock [Member]
 
 
Preferred Stock, Par or Stated Value Per Share
$ 0 
$ 0 
Preferred Stock, Shares Authorized
10,000,000 
10,000,000 
Preferred Stock, Shares Issued
Preferred Stock, Shares Outstanding
Treasury Stock [Member]
 
 
Treasury Stock, Shares
620,979 
620,979 
Condensed Consolidated Statement of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Statement of Cash Flows [Abstract]
 
 
Net loss
$ (5,173)
$ (14,204)
Depreciation and amortization
2,617 
1,800 
Stock-based compensation expense
2,215 
2,349 
Other Operating Income (Expense), Net
218 
(86)
Accounts and other receivables
(2,023)
(504)
Prepaid expenses and other assets
217 
(868)
Accounts payable
(31)
(329)
Accrued liabilities
(700)
53 
Increase (Decrease) in Claims Reserve and Loss Adjustment
2,043 
1,127 
Deferred revenue
2,079 
1,310 
Other payables
106 
(416)
Net cash provided by (used in) operating activities
1,568 
(9,768)
Payments to Acquire Held-to-maturity Securities
(15,992)
(16,082)
Proceeds from Sale and Maturity of Held-to-maturity Securities
12,577 
13,580 
Payments to Acquire Equity Method Investments
(300)
Purchases of property and equipment
(1,546)
(3,816)
(Payments for) Proceeds from Investments
(130)
Net cash used in investing activities
(5,091)
(6,618)
Payments Related to Tax Withholding for Share-based Compensation
(662)
(643)
Proceeds from exercise of stock options
2,736 
914 
Proceeds from (Repayments of) Debt
3,988 
(14,900)
Repayments of Long-term Capital Lease Obligations
(110)
Net cash provided by (used in) financing activities
5,952 
(14,629)
Effect of foreign exchange rates on cash, net
241 
(395)
Net change in cash and cash equivalents
2,670 
(31,410)
Cash and cash equivalents at beginning of period
17,956 
53,098 
Cash and cash equivalents at end of period
20,626 
21,688 
Income taxes paid
12 
117 
Interest paid
92 
155 
Increase in payables for property and equipment
81 
310 
Capital Lease Obligations Incurred
$ 615 
$ 0 
Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations and Summary of Significant Accounting Policies
Description of Business
Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) provides medical insurance plans for cats and dogs throughout the United States, Canada and Puerto Rico.
Basis of Presentation
The consolidated balance sheet data as of December 31, 2015 was derived from audited consolidated financial statements. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on February 17, 2016. The accompanying unaudited consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of its operations, as of and for the periods presented. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016, or for any other period.
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 reported amounts of assets and liabilities and disclosure of contingencies and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include the valuation of deferred tax assets, stock-based compensation, claims reserve, useful lives of software developed for internal use and income tax uncertainties. Actual results could differ from the estimates used in preparing the consolidated financial statements.
Accumulated Other Comprehensive Loss
There were no reclassifications out of accumulated other comprehensive loss during the three and nine months ended September 30, 2016 and 2015.
Recent Accounting Pronouncements
In May 2015, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) amending short-term insurance contract disclosures and requiring more detailed disclosures to enable users of financial statements to understand information relating to liabilities for unpaid claims and claims adjustment expenses. Additionally, the amendments will also require insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate these liabilities. This guidance is effective for annual reporting periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. Early adoption of this guidance is permitted, and must be applied retrospectively by providing comparative disclosures for each period presented. The Company plans to adopt this guidance as of December 31, 2016. The Company has determined that although this guidance will not impact the operating results, financial condition or cash flows, additional disclosures will be required in the Company's Form 10-K and Form 10-Q upon adoption.
In November 2015, the FASB issued an ASU amending the accounting for income taxes and requiring all deferred tax assets and liabilities be classified as non-current on the consolidated balance sheet. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The ASU may be adopted either prospectively or retrospectively. The Company plans to prospectively adopt this guidance as of January 1, 2017. The Company anticipates that this guidance will not have a material impact on the financial statements resulting from the reclassification of deferred taxes to non-current. The Company will continue to monitor the impact of this guidance.
In February 2016, the FASB issued an ASU amending the lease presentation guidance. The ASU requires organizations that lease assets to recognize the rights and obligations created by those leases on the balance sheet. 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. The Company is in the process of assessing the impact of this guidance.
In March 2016, the FASB issued an ASU amending the accounting for employee share-based payments, including income tax recognition and classification. The entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. Additionally, tax withholding of shares will be allowed up to the employees’ maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award. This ASU is effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2017. The Company has determined the guidance for estimating forfeitures does not currently have a material impact to the financial statements; however, the Company will continue to monitor the impact of this guidance.
In August 2016, the FASB issued an ASU which addresses eight specific cash flow issues intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for fiscal periods beginning after December 15, 2017 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2018. The Company is in the process of assessing the impact of this guidance.
Net Loss per Share
Earnings Per Share [Text Block]
Net Loss per Share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period. Excluded from the weighted-average number of shares outstanding are shares that have been issued and are subject to future vesting and unvested restricted stock. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. Potentially dilutive common stock equivalents are comprised of unvested restricted stock, stock options, and warrants. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.
The following potentially dilutive equity securities were not included in the diluted net loss per common share calculation because they would have had an antidilutive effect:
 
As of September 30,
 
2016
 
2015
Stock options
4,354,494

 
4,991,047

Restricted stock awards and units
355,329

 
474,522

Warrants
869,999

 
869,999

Investment Securities
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]
Investment Securities
The amortized cost, gross unrealized holding losses, and fair value of available-for-sale and short-term investments by major security type and class of security were as follows as of September 30, 2016 and December 31, 2015 (in thousands):
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of September 30, 2016
 
 
 
 
 
       Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,521

 
$

 
$
1,521

              Municipal bond
1,000

 
(21
)
 
979

 
$
2,521

 
$
(21
)
 
$
2,500

       Short-term investments:
 
 
 
 
 
              U.S. Treasury securities
$
5,786

 
$

 
$
5,786

              Certificates of deposit
708

 

 
708

              U.S. government funds
22,226

 

 
22,226

 
$
28,720


$


$
28,720

 
 
 
 
 
 
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of December 31, 2015
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,442

 
$

 
$
1,442

Municipal bond
1,000

 
(54
)
 
946

 
$
2,442


$
(54
)

$
2,388

Short-term investments:
 
 
 
 
 
U.S. Treasury securities
$
5,683

 
$

 
$
5,683

Certificates of deposit
1,551

 

 
1,551

U.S. government funds
18,054

 

 
18,054

 
$
25,288


$


$
25,288


Maturities of debt securities classified as available-for-sale were as follows (in thousands):
 
September 30, 2016
 
Amortized
Cost
 
Fair
Value
Available-for-sale:
 
 
 
Due under one year
$

 
$

Due after one year through five years
1,521

 
1,521

Due after five years through ten years
1,000

 
979

Due after ten years

 

 
$
2,521

 
$
2,500


The Company had one investment with an unrealized loss of less than $0.1 million and a fair value of $1.0 million at September 30, 2016, and an unrealized loss of $0.1 million and a fair value of $0.9 million at December 31, 2015. The debt security has been in the unrealized loss position for more than 12 months. The Company has assessed the bond for credit impairment and has determined that there is no intent to sell this bond and it is likely that it will hold the investment for a period of time sufficient to allow for a recovery. Furthermore, future payments on this bond are insured by a financial guarantee insurer. Therefore, the Company believes that the unrealized loss on this bond constitutes a temporary impairment.
Fair Value
Fair Value Disclosures [Text Block]
Fair Value
The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.
When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:
Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.
Level 2 inputs: Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.
Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.
The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis (in thousands):
 
As of September 30, 2016
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Foreign deposits
$
1,521

 
$
1,521

 
$

 
$

Municipal bond
979

 

 
979

 

Money market funds
7,325

 
7,325

 

 

Total
$
9,825

 
$
8,846

 
$
979

 
$

 
 
 
 
 
 
 
 
 
As of December 31, 2015
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Foreign deposits
$
1,442

 
$
1,442

 
$

 
$

Municipal bond
946

 

 
946

 

Money market funds
7,545

 
7,545

 

 

Total
$
9,933

 
$
8,987

 
$
946

 
$


The Company estimates fair value for 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, 2016.
The Company’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers between levels for the three and nine months ended September 30, 2016 and 2015.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments:
Investment securities: Long-term investments classified as available-for-sale are measured using quoted market prices when quoted market prices are available. If quoted market prices in active markets for identical assets are not available to determine fair value, then the Company uses quoted prices of similar instruments and other significant inputs derived from observable market data obtained from third-party data providers. Short-term investments are carried at amortized cost and the fair value is disclosed in Note 3. Fair value is determined in the same manner as available-for-sale securities and is considered a Level 2 measurement.
Debt
Debt Disclosure [Text Block]
Debt
The Company has a revolving line of credit with a bank, which is secured by any and all interest the Company has in assets that are not otherwise restricted. The revolving line of credit bears a variable interest rate equal to the greater of 4.5%, or 1.25% plus the prime rate. Interest expense is due monthly on the outstanding principal amount with all amounts outstanding under the revolving line of credit due upon maturity in July 2018, or such extended maturity date if the revolving line of credit is automatically renewed. The revolving line of credit auto-renews annually unless canceled by the bank. The credit agreement requires the Company to comply with various financial and non-financial covenants. As of September 30, 2016, the Company was in compliance with all covenants. This facility also currently has a compensating balance requirement of $0.5 million and an irrevocable standby letter of credit totaling $1.1 million, which reduces the amount available on the line of credit. As of September 30, 2016, the Company had $14.4 million available under its revolving line of credit.
Borrowings on the revolving line of credit are limited to the lesser of $20.0 million in 2016 and 2015, and the total amount of cash and securities held by the Company's subsidiary, American Pet Insurance Company (APIC), less up to $3.0 million for obligations the Company may have outstanding for other ancillary services in the future. As of September 30, 2016, the Company had $4.0 million outstanding under this facility.
Commitment and Contingencies
Commitments and Contingencies Disclosure [Text Block]
Commitments and Contingencies
During 2016, the Company entered into strategic marketing and service provider agreements, as well as other agreements with various parties. As of the September 30, 2016, these agreements resulted in an increase in future commitments from December 31, 2015 of $0.8 million for the remainder of 2016, $0.6 million in 2017 and $0.3 million in 2018.
During 2016, the Company entered into a capital lease agreement. As of September 30, 2016, this agreement resulted in an increase in future commitments of $0.1 million for the remainder of 2016, $0.3 million in 2017 and $0.2 million in 2018.
The outcomes of the Company’s legal proceedings are inherently unpredictable, subject to significant uncertainties, and could be material to the Company's operating results and cash flows for a particular period. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability beyond previously accrued amounts has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter.
Stock-based Compensation
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Stock-Based Compensation
The following table presents information regarding stock options granted, exercised and forfeited for the periods presented:
 
Number Of Options
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
 
 
 
 
(in thousands)
December 31, 2015
4,871,949

 
$
3.71

 
$
29,644

Granted
630,773

 
13.24

 
 
Exercised
(894,572
)
 
3.06

 
9,269

Forfeited
(253,656
)
 
7.79

 
 
September 30, 2016
4,354,494

 
4.99

 
51,855

 
 
 
 
 
 
Vested and exercisable at September 30, 2016
3,197,604

 
$
2.95

 
$
44,595

As of September 30, 2016, the stock options outstanding had a remaining contractual life of 5.9 years.
Stock-based compensation expense includes stock options and restricted stock awards and units granted to employees and non-employees and has been reported in the Company’s statements of operations in claims expenses, other cost of revenue, sales and marketing, technology and development, and general and administrative expenses depending on the function performed by the employee or non-employee. The Company measures compensation expense on a straight-line basis except for restricted stock with a performance condition which is measured on a graded vesting schedule. The remaining 350,631 shares of unvested restricted stock measured on a graded vesting schedule are expected to vest over the remaining service term of approximately 3.0 years.
As of September 30, 2016, the Company had unrecognized stock-based compensation expense of $5.9 million, which is expected to vest over a weighted-average period of approximately 2.6 years. As of September 30, 2016, the Company had 1,122,183 unvested stock options and 355,329 restricted stock awards and units that are expected to vest. No net tax benefits related to the stock-based compensation costs have been recognized since the Company’s inception. The expense recognized in each category is provided in the table below:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
 
(in thousands)
Claims expenses
$
74

 
$
58

 
$
189

 
$
160

Other cost of revenue
9

 
10

 
26

 
35

Sales and marketing
172

 
102

 
419

 
342

Technology and development
67

 
97

 
158

 
311

General and administrative
454

 
482

 
1,423

 
1,501

Total stock-based compensation expense
$
776

 
$
749

 
$
2,215

 
$
2,349

Segments
Segment Reporting Disclosure [Text Block]
Segments
The Company operates in two segments: subscription business and other business. The subscription business segment includes monthly subscriptions related to the Company’s medical plan which are marketed directly to consumers, while the other business segment includes all other business which 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,
 
2016
 
2015
 
2016
 
2015
Revenue:
 
 
 
 
 
 
 
Subscription business
$
44,629

 
$
34,420

 
$
125,934

 
$
96,684

Other business
3,730

 
3,445

 
10,956

 
10,078

 
48,359

 
37,865

 
136,890

 
106,762

Claims expenses:
 
 
 
 
 
 
 
Subscription business
32,088

 
24,455

 
90,709

 
69,352

Other business
2,165

 
2,149

 
6,614

 
6,090

 
34,253

 
26,604

 
97,323

 
75,442

Other cost of revenue:
 
 
 
 
 
 
 
Subscription business
4,344

 
3,691

 
12,084

 
10,220

Other business
1,262

 
979

 
3,413

 
3,141

 
5,606

 
4,670

 
15,497

 
13,361

Gross profit:
 
 
 
 
 
 
 
Subscription business
8,197

 
6,274

 
23,141

 
17,112

Other business
303


317

 
929

 
847

 
8,500


6,591

 
24,070

 
17,959

Sales and marketing:
 
 
 
 
 
 
 
Subscription business
3,829

 
4,112

 
11,140

 
11,240

Other business
63

 
16

 
156

 
72

 
3,892

 
4,128

 
11,296

 
11,312

Technology and development
2,339

 
3,005

 
6,790

 
8,683

General and administrative
3,811

 
4,067

 
11,028

 
11,760

Operating loss
$
(1,542
)

$
(4,609
)
 
$
(5,044
)
 
$
(13,796
)

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,
 
2016
 
2015
 
2016
 
2015
United States
$
38,799

 
$
30,009

 
$
110,024

 
$
83,607

Canada
9,560

 
7,856

 
26,866

 
23,155

Total revenue
$
48,359

 
$
37,865

 
$
136,890

 
$
106,762


Substantially all of the Company’s long-lived assets were located in the United States as of September 30, 2016 and December 31, 2015.
Nature of Operations and Summary of Significant Accounting Policies (Policies)
Description of Business
Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) provides medical insurance plans for cats and dogs throughout the United States, Canada and Puerto Rico.
Basis of Presentation
The consolidated balance sheet data as of December 31, 2015 was derived from audited consolidated financial statements. The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on February 17, 2016. The accompanying unaudited consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of its operations, as of and for the periods presented. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016, or for any other period.
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 reported amounts of assets and liabilities and disclosure of contingencies and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include the valuation of deferred tax assets, stock-based compensation, claims reserve, useful lives of software developed for internal use and income tax uncertainties. Actual results could differ from the estimates used in preparing the consolidated financial statements.
Accumulated Other Comprehensive Loss
There were no reclassifications out of accumulated other comprehensive loss during the three and nine months ended September 30, 2016 and 2015.
Recent Accounting Pronouncements
In May 2015, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) amending short-term insurance contract disclosures and requiring more detailed disclosures to enable users of financial statements to understand information relating to liabilities for unpaid claims and claims adjustment expenses. Additionally, the amendments will also require insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate these liabilities. This guidance is effective for annual reporting periods beginning after December 15, 2015 and interim periods beginning after December 15, 2016. Early adoption of this guidance is permitted, and must be applied retrospectively by providing comparative disclosures for each period presented. The Company plans to adopt this guidance as of December 31, 2016. The Company has determined that although this guidance will not impact the operating results, financial condition or cash flows, additional disclosures will be required in the Company's Form 10-K and Form 10-Q upon adoption.
In November 2015, the FASB issued an ASU amending the accounting for income taxes and requiring all deferred tax assets and liabilities be classified as non-current on the consolidated balance sheet. The ASU is effective for reporting periods beginning after December 15, 2016, with early adoption permitted. The ASU may be adopted either prospectively or retrospectively. The Company plans to prospectively adopt this guidance as of January 1, 2017. The Company anticipates that this guidance will not have a material impact on the financial statements resulting from the reclassification of deferred taxes to non-current. The Company will continue to monitor the impact of this guidance.
In February 2016, the FASB issued an ASU amending the lease presentation guidance. The ASU requires organizations that lease assets to recognize the rights and obligations created by those leases on the balance sheet. 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. The Company is in the process of assessing the impact of this guidance.
In March 2016, the FASB issued an ASU amending the accounting for employee share-based payments, including income tax recognition and classification. The entity may make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest or account for forfeitures when they occur. Additionally, tax withholding of shares will be allowed up to the employees’ maximum individual tax rate in the relevant jurisdiction without resulting in liability classification of the award. This ASU is effective for fiscal years beginning after December 15, 2016 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2017. The Company has determined the guidance for estimating forfeitures does not currently have a material impact to the financial statements; however, the Company will continue to monitor the impact of this guidance.
In August 2016, the FASB issued an ASU which addresses eight specific cash flow issues intended to reduce diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This ASU is effective for fiscal periods beginning after December 15, 2017 including interim periods within that reporting period, with early adoption permitted. The Company plans to adopt this guidance as of January 1, 2018. The Company is in the process of assessing the impact of this guidance.
Net Loss per Share (Tables)
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 net loss per common share calculation because they would have had an antidilutive effect:
 
As of September 30,
 
2016
 
2015
Stock options
4,354,494

 
4,991,047

Restricted stock awards and units
355,329

 
474,522

Warrants
869,999

 
869,999

Investment Securities Available-for-Sale (Tables)
The amortized cost, gross unrealized holding losses, and fair value of available-for-sale and short-term investments by major security type and class of security were as follows as of September 30, 2016 and December 31, 2015 (in thousands):
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of September 30, 2016
 
 
 
 
 
       Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,521

 
$

 
$
1,521

              Municipal bond
1,000

 
(21
)
 
979

 
$
2,521

 
$
(21
)
 
$
2,500

       Short-term investments:
 
 
 
 
 
              U.S. Treasury securities
$
5,786

 
$

 
$
5,786

              Certificates of deposit
708

 

 
708

              U.S. government funds
22,226

 

 
22,226

 
$
28,720


$


$
28,720

 
 
 
 
 
 
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of December 31, 2015
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,442

 
$

 
$
1,442

Municipal bond
1,000

 
(54
)
 
946

 
$
2,442


$
(54
)

$
2,388

Short-term investments:
 
 
 
 
 
U.S. Treasury securities
$
5,683

 
$

 
$
5,683

Certificates of deposit
1,551

 

 
1,551

U.S. government funds
18,054

 

 
18,054

 
$
25,288


$


$
25,288

Maturities of debt securities classified as available-for-sale were as follows (in thousands):
 
September 30, 2016
 
Amortized
Cost
 
Fair
Value
Available-for-sale:
 
 
 
Due under one year
$

 
$

Due after one year through five years
1,521

 
1,521

Due after five years through ten years
1,000

 
979

Due after ten years

 

 
$
2,521

 
$
2,500

Fair Value (Tables)
Fair value, asset & liabilities measured on recurring basis [Table Text Block]
The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis (in thousands):
 
As of September 30, 2016
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Foreign deposits
$
1,521

 
$
1,521

 
$

 
$

Municipal bond
979

 

 
979

 

Money market funds
7,325

 
7,325

 

 

Total
$
9,825

 
$
8,846

 
$
979

 
$

 
 
 
 
 
 
 
 
 
As of December 31, 2015
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Foreign deposits
$
1,442

 
$
1,442

 
$

 
$

Municipal bond
946

 

 
946

 

Money market funds
7,545

 
7,545

 

 

Total
$
9,933

 
$
8,987

 
$
946

 
$

Stock-based Compensation (Tables)
The following table presents information regarding stock options granted, exercised and forfeited for the periods presented:
 
Number Of Options
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
 
 
 
 
(in thousands)
December 31, 2015
4,871,949

 
$
3.71

 
$
29,644

Granted
630,773

 
13.24

 
 
Exercised
(894,572
)
 
3.06

 
9,269

Forfeited
(253,656
)
 
7.79

 
 
September 30, 2016
4,354,494

 
4.99

 
51,855

 
 
 
 
 
 
Vested and exercisable at September 30, 2016
3,197,604

 
$
2.95

 
$
44,595

As of September 30, 2016, the stock options outstanding had a remaining contractual life of 5.9 years.
The expense recognized in each category is provided in the table below:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
 
(in thousands)
Claims expenses
$
74

 
$
58

 
$
189

 
$
160

Other cost of revenue
9

 
10

 
26

 
35

Sales and marketing
172

 
102

 
419

 
342

Technology and development
67

 
97

 
158

 
311

General and administrative
454

 
482

 
1,423

 
1,501

Total stock-based compensation expense
$
776

 
$
749

 
$
2,215

 
$
2,349

Stock-Based Compensation
The following table presents information regarding stock options granted, exercised and forfeited for the periods presented:
 
Number Of Options
 
Weighted-Average Exercise Price
 
Aggregate Intrinsic Value
 
 
 
 
 
(in thousands)
December 31, 2015
4,871,949

 
$
3.71

 
$
29,644

Granted
630,773

 
13.24

 
 
Exercised
(894,572
)
 
3.06

 
9,269

Forfeited
(253,656
)
 
7.79

 
 
September 30, 2016
4,354,494

 
4.99

 
51,855

 
 
 
 
 
 
Vested and exercisable at September 30, 2016
3,197,604

 
$
2.95

 
$
44,595

As of September 30, 2016, the stock options outstanding had a remaining contractual life of 5.9 years.
Stock-based compensation expense includes stock options and restricted stock awards and units granted to employees and non-employees and has been reported in the Company’s statements of operations in claims expenses, other cost of revenue, sales and marketing, technology and development, and general and administrative expenses depending on the function performed by the employee or non-employee. The Company measures compensation expense on a straight-line basis except for restricted stock with a performance condition which is measured on a graded vesting schedule. The remaining 350,631 shares of unvested restricted stock measured on a graded vesting schedule are expected to vest over the remaining service term of approximately 3.0 years.
As of September 30, 2016, the Company had unrecognized stock-based compensation expense of $5.9 million, which is expected to vest over a weighted-average period of approximately 2.6 years. As of September 30, 2016, the Company had 1,122,183 unvested stock options and 355,329 restricted stock awards and units that are expected to vest. No net tax benefits related to the stock-based compensation costs have been recognized since the Company’s inception. The expense recognized in each category is provided in the table below:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
 
(in thousands)
Claims expenses
$
74

 
$
58

 
$
189

 
$
160

Other cost of revenue
9

 
10

 
26

 
35

Sales and marketing
172

 
102

 
419

 
342

Technology and development
67

 
97

 
158

 
311

General and administrative
454

 
482

 
1,423

 
1,501

Total stock-based compensation expense
$
776

 
$
749

 
$
2,215

 
$
2,349

Segments (Tables)
Revenue and gross profit of the Company’s segments were as follows (in thousands):
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Revenue:
 
 
 
 
 
 
 
Subscription business
$
44,629

 
$
34,420

 
$
125,934

 
$
96,684

Other business
3,730

 
3,445

 
10,956

 
10,078

 
48,359

 
37,865

 
136,890

 
106,762

Claims expenses:
 
 
 
 
 
 
 
Subscription business
32,088

 
24,455

 
90,709

 
69,352

Other business
2,165

 
2,149

 
6,614

 
6,090

 
34,253

 
26,604

 
97,323

 
75,442

Other cost of revenue:
 
 
 
 
 
 
 
Subscription business
4,344

 
3,691

 
12,084

 
10,220

Other business
1,262

 
979

 
3,413

 
3,141

 
5,606

 
4,670

 
15,497

 
13,361

Gross profit:
 
 
 
 
 
 
 
Subscription business
8,197

 
6,274

 
23,141

 
17,112

Other business
303


317

 
929

 
847

 
8,500


6,591

 
24,070

 
17,959

Sales and marketing:
 
 
 
 
 
 
 
Subscription business
3,829

 
4,112

 
11,140

 
11,240

Other business
63

 
16

 
156

 
72

 
3,892

 
4,128

 
11,296

 
11,312

Technology and development
2,339

 
3,005

 
6,790

 
8,683

General and administrative
3,811

 
4,067

 
11,028

 
11,760

Operating loss
$
(1,542
)

$
(4,609
)
 
$
(5,044
)
 
$
(13,796
)
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,
 
2016
 
2015
 
2016
 
2015
United States
$
38,799

 
$
30,009

 
$
110,024

 
$
83,607

Canada
9,560

 
7,856

 
26,866

 
23,155

Total revenue
$
48,359

 
$
37,865

 
$
136,890

 
$
106,762

Nature of Operations and Summary of Significant Accounting Policies (Details) Narrative (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Dec. 31, 2015
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
 
 
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax
$ 0 
$ 0 
$ 0 
$ 0 
 
Accumulated other comprehensive loss: unrealized loss on available for sale securities
100,000 
 
100,000 
 
100,000 
Unrealized foreign currency gain (loss)
$ (96,000)
$ (274,000)
$ 204,000 
$ (347,000)
 
Net Loss per Share (Details) Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
Sep. 30, 2016
Dec. 31, 2015
Sep. 30, 2016
Equity Option [Member]
Sep. 30, 2015
Equity Option [Member]
Sep. 30, 2016
Restricted Stock Units (RSUs) [Member]
Sep. 30, 2015
Restricted Stock Units (RSUs) [Member]
Sep. 30, 2016
Warrant [Member]
Sep. 30, 2015
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number
4,354,494 
4,871,949 
4,354,494 
4,991,047 
 
 
 
 
Restricted stock, outstanding
 
 
 
 
355,329 
474,522 
 
 
Common shares attributable to dilutive effect of warrants
 
 
 
 
 
 
869,999 
869,999 
Investment Securities (Details) Investment Schedule (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
$ 28,720 
$ 25,288 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
28,720 
25,288 
Available-for-sale securities, amortized cost
2,521 
2,442 
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax
21 
54 
Available-for-sale securities, gross unrealized holding losses
(100)
(100)
Marketable Securities, Noncurrent
2,500 
2,388 
Available-for-sale securities, fair value
2,500 
2,388 
Deposits [Member]
 
 
Investment [Line Items]
 
 
Available-for-sale securities, amortized cost
1,521 
1,442 
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax
 
Available-for-sale securities, gross unrealized holding losses
 
Marketable Securities, Noncurrent
1,521 
1,442 
Available-for-sale securities, fair value
1,521 
1,442 
Municipal Bonds [Member]
 
 
Investment [Line Items]
 
 
Available-for-sale securities, amortized cost
1,000 
1,000 
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax
21 
54 
Marketable Securities, Noncurrent
979 
946 
Available-for-sale securities, fair value
979 
946 
U.S. Treasury securities
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
5,786 
5,683 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
5,786 
5,683 
Certificates of deposit
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
708 
1,551 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
708 
1,551 
US government debt securities
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
22,226 
18,054 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
$ 22,226 
$ 18,054 
Investment Securities (Details) Narrative (USD $)
Sep. 30, 2016
Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
 
 
Accumulated other comprehensive loss: unrealized loss on available for sale securities
$ 100,000 
$ 100,000 
Available-for-sale Securities, Debt Maturities, Year Six Through Ten, Fair Value
979,000 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value
$ 1,000,000 
$ 900,000 
Investment Securities (Details) Held-to-Maturity (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
 
 
Held-to-maturity securities, amortized cost
$ 28,720 
$ 25,288 
Held-to-maturity securities, fair value
$ 28,720 
$ 25,288 
Investment Securities (Details) Available-for-Sale (USD $)
Sep. 30, 2016
Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
$ 1,000,000 
$ 900,000 
Available-for-sale securities, debt maturities, next twelve months, amortized cost basis
 
Available-for-sale securities, debt maturities, next twelve months, fair value
 
Available-for-sale securities, debt maturities, year two through five, amortized cost basis
1,521,000 
 
Available-for-sale securities, debt maturities, year two through five, fair value
1,521,000 
 
Available-for-sale securities, debt maturities, year six through ten, amortized cost basis
1,000,000 
 
Available-for-sale securities, debt maturities, year six through ten, fair value
979,000 
 
Available-for-sale securities, debt maturities, after ten years, amortized cost basis
 
Available-for-sale securities, debt maturities, after ten years, fair value
 
Available-for-sale securities, amortized cost
2,521,000 
2,442,000 
Available-for-sale securities, debt maturities, fair value
$ 2,500,000 
 
Fair Value (Details) Unobservable (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2016
Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
$ 2,500 
$ 2,388 
Assets, Fair Value Disclosure
9,825 
9,933 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair Value Disclosure
8,846 
8,987 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair Value Disclosure
979 
946 
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair Value Disclosure
Money Market Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Cash and Cash Equivalents, Fair Value Disclosure
7,325 
7,545 
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
7,325 
7,545 
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
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
Municipal bond
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
979 
946 
Municipal bond |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
Municipal bond |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
979 
946 
Municipal bond |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
Deposits [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
1,521 
1,442 
Deposits [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
1,521 
1,442 
Deposits [Member] |
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
Deposits [Member] |
Fair Value, Inputs, Level 3 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
$ 0 
$ 0 
Fair Value (Details) Narrative (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Fair Value Disclosures [Abstract]
 
 
 
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net
$ 0 
$ 0 
$ 0 
$ 0 
Debt (Details) Narrative (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Line of credit facility, interest rate description
greater of 4.5%, or 1.25% plus the prime rate 
 
Compensating balance
$ 0.5 
 
Line of Credit Facility, Maximum Amount Outstanding During Period
20.0 
20.0 
Line of Credit Facility, Ancillary Services
3.0 
 
Line of Credit, Current
4.0 
 
Letters of Credit Outstanding, Amount
1.1 
 
Line of Credit Facility, Remaining Borrowing Capacity
$ 14.4 
 
Commitment and Contingencies (Details) Narrative (USD $)
In Millions, unless otherwise specified
Sep. 30, 2016
Contractual Commitments
 
Six Months Ended December 31, 2016
$ 0.8 
Year Ended December 31, 2017
0.6 
Year Ended December 31, 2018
0.3 
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
 
Six Months Ended December 31, 2016
0.1 
Year Ended December 31, 2017
0.3 
Year Ended December 31, 2018
$ 0.2 
Stock-based Compensation (Details) Options Granted, Exercised and Forfeited (USD $)
In Thousands, except Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2016
Dec. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
Stock-based compensation, options, forfeited, weighted-average exercise price
$ 7.79 
 
Stock-based compensation, options, outstanding, number of shares
4,354,494 
4,871,949 
Stock-based compensation, options, outstanding, weighted-average exercise price
$ 4.99 
$ 3.71 
Stock-based compensation, options, outstanding, aggregate intrinsic value
$ 51,855 
$ 29,644 
Stock-based compensation, options, granted, number of options
630,773 
 
Stock-based compensation, options, granted, weighted-average exercise price
$ 13.24 
 
Stock-based compensation, options, exercised, weighted-average exercise price
$ 3.06 
 
Stock-based compensation, options, exercised
(894,572)
 
Stock-based compensation, options, exercised, aggregate intrinsic value
9,269 
 
Stock-based compensation, options, forfeited
(253,656)
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number
3,197,604 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price
$ 2.95 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value
$ 44,595 
 
Stock-based Compensation (Details) Expense Category (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
$ 776 
$ 749 
$ 2,215 
$ 2,349 
Claims expense
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
74 
58 
189 
160 
Other Expense [Member]
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
10 
26 
35 
Sales and marketing
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
172 
102 
419 
342 
Technology services costs [Member]
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
67 
97 
158 
311 
General and administrative
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
$ 454 
$ 482 
$ 1,423 
$ 1,501 
Stock-based Compensation (Details) Narrative (USD $)
In Millions, except Share data, unless otherwise specified
9 Months Ended 189 Months Ended
Sep. 30, 2016
Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense
 
$ 0 
Unvested Portion of Restricted Stock Grant with IPO Performance Condition
350,631 
350,631 
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized
$ 5.9 
$ 5.9 
Unvested RSUs with IPO Performance Condition, Remaining Vesting Period
3 years 
 
Remaining contractual life, share-based payments, weighted average
5 years 11 months 0 days 
 
Share-based compensation arrangement , non-employee, weighted average remaining vesting period
2 years 7 months 0 days 
 
Share-based compensation arrangement by share-based payment award, options, nonvested, number of shares
1,122,183 
1,122,183 
Segments (Details) Business Segment (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
$ 48,359 
$ 37,865 
$ 136,890 
$ 106,762 
Claims expenses
34,253 
26,604 
97,323 
75,442 
Other cost of revenue
5,606 
4,670 
15,497 
13,361 
Gross profit
8,500 
6,591 
24,070 
17,959 
Sales and marketing
3,892 
4,128 
11,296 
11,312 
Technology Services Costs
2,339 
3,005 
6,790 
8,683 
General and administrative
3,811 
4,067 
11,028 
11,760 
Operating loss
(1,542)
(4,609)
(5,044)
(13,796)
Subscription business
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
44,629 
34,420 
125,934 
96,684 
Claims expenses
32,088 
24,455 
90,709 
69,352 
Other cost of revenue
4,344 
3,691 
12,084 
10,220 
Gross profit
8,197 
6,274 
23,141 
17,112 
Sales and marketing
3,829 
4,112 
11,140 
11,240 
Other business
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
3,730 
3,445 
10,956 
10,078 
Claims expenses
2,165 
2,149 
6,614 
6,090 
Other cost of revenue
1,262 
979 
3,413 
3,141 
Gross profit
303 
317 
929 
847 
Sales and marketing
$ 63 
$ 16 
$ 156 
$ 72 
Segments (Details) Revenue by Geography (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2016
Sep. 30, 2015
Sep. 30, 2016
Sep. 30, 2015
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 48,359 
$ 37,865 
$ 136,890 
$ 106,762 
CANADA
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
9,560 
7,856 
26,866 
23,155 
UNITED STATES
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 38,799 
$ 30,009 
$ 110,024 
$ 83,607