Segments
The Company has two reporting segments: subscription business and other business. The subscription business segment generates revenue primarily from subscription payments related to the Company's direct-to-consumer products. The other business segment generates revenue from other product offerings, primarily by underwriting policies on behalf of third parties with whom the Company has a business-to-business relationship. The other business segment has, and targets, a lower margin profile than the Company's subscription business segment. The Company does not undertake marketing efforts for these policies and has a business-to-business relationship with these third-parties.
The Company's chief operating decision maker is its Chief Executive Officer. The chief operating decision maker reviews revenue and operating income (loss) to evaluate segment performance. Revenue, veterinary invoice expense, other cost of revenue, new pet acquisition expenses and goodwill impairment charges are generally directly attributed to each segment. Other operating expenses, such as technology and development expense, general and administrative expense, and depreciation and amortization, are generally allocated proportionately based on revenue in each segment. 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.
Operating income (loss) of the Company’s segments was as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Subscription business: | | | | | |
| Revenue | $ | 989,338 | | | $ | 856,521 | | | $ | 712,906 | |
| Veterinary invoice expense | 700,154 | | | 624,428 | | | 543,196 | |
| Other cost of revenue | 90,726 | | | 82,423 | | | 70,490 | |
| Technology and development | 26,016 | | | 20,822 | | | 13,765 | |
| General and administrative | 52,686 | | | 42,457 | | | 36,256 | |
| New pet acquisition expense | 85,269 | | | 71,240 | | | 77,172 | |
| Goodwill impairment charges | 1,129 | | | 5,299 | | | — | |
| Depreciation and amortization | 10,885 | | | 10,970 | | | 8,021 | |
| Subscription business operating income (loss) | 22,473 | | | (1,118) | | | (35,994) | |
| | | | | |
| Other business: | | | | | |
| Revenue | 449,967 | | | 429,163 | | | 395,699 | |
| Veterinary invoice expense | 328,821 | | | 324,720 | | | 287,859 | |
| Other cost of revenue | 88,593 | | | 75,315 | | | 76,044 | |
| Technology and development | 11,832 | | | 10,433 | | | 7,638 | |
| General and administrative | 23,962 | | | 21,274 | | | 23,951 | |
| New pet acquisition expense | 139 | | | 139 | | | 200 | |
| Depreciation and amortization | 4,951 | | | 5,496 | | | 4,453 | |
| Other business operating loss | (8,331) | | | (8,214) | | | (4,446) | |
| | | | | |
| Loss from investment in joint venture | (305) | | | (182) | | | (219) | |
| Total operating income (loss) | 13,837 | | | (9,514) | | | (40,659) | |
| Interest expense | 13,759 | | | 14,498 | | | 12,077 | |
| Other (income), net | (21,916) | | | (14,374) | | | (7,701) | |
| Income (loss) before income taxes | $ | 21,994 | | | $ | (9,638) | | | $ | (45,035) | |
The following table presents the Company’s revenue by geographic region of the member (in thousands):
| | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2025 | | 2024 | | 2023 |
| United States | $ | 1,197,807 | | | $ | 1,073,150 | | | $ | 935,312 | |
| Canada and other | 241,498 | | | 212,534 | | | 173,293 | |
| Total revenue | $ | 1,439,305 | | | $ | 1,285,684 | | | $ | 1,108,605 | |
Substantially all of the Company’s long-lived assets were located in the United States as of December 31, 2025 and 2024.
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.