TRUPANION INC., 10-Q filed on 11/5/2015
Quarterly Report
Document and Entity Information Document
9 Months Ended
Sep. 30, 2015
Entity Information [Line Items]
 
Entity Registrant Name
TRUPANION INC. 
Entity Central Index Key
0001371285 
Current Fiscal Year End Date
--12-31 
Entity Filer Category
Non-accelerated Filer 
Document Type
10-Q 
Document Period End Date
Sep. 30, 2015 
Document Fiscal Year Focus
2015 
Document Fiscal Period Focus
Q3 
Amendment Flag
false 
Entity Common Stock, Shares Outstanding
28,250,985 
Condensed Consolidated Statement of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Income Statement [Abstract]
 
 
 
 
Revenue
$ 37,865 
$ 30,312 
$ 106,762 
$ 84,042 
Claims expenses
26,604 
21,808 
75,442 
57,819 
Other cost of revenue
4,670 
4,059 
13,361 
11,872 
Gross profit
6,591 
4,445 
17,959 
14,351 
Sales and marketing
4,128 
2,934 
11,312 
8,390 
Technology Services Costs
3,005 
2,532 
8,683 
7,285 
General and administrative
4,067 
4,385 
11,760 
10,463 
Total operating expenses
11,200 
9,851 
31,755 
26,138 
Operating loss
(4,609)
(5,406)
(13,796)
(11,787)
Interest expense
14 
5,155 
298 
6,623 
Other expense (income), net
(2,066)
(1,545)
Loss before income taxes
(4,627)
(8,495)
(14,102)
(16,865)
Income tax expense
16 
14 
102 
36 
Net loss
$ (4,643)
$ (8,509)
$ (14,204)
$ (16,901)
Net loss per share: Basic and diluted (per share)
$ (0.17)
$ (0.41)
$ (0.52)
$ (2.09)
Weighted average shares used to compute net loss per share: Basic and diluted (in shares)
27,755,310 
20,857,126 
27,564,975 
8,092,287 
Condensed Consolidated Statement of Comprehensive Income Statement (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net loss
$ (4,643)
$ (8,509)
$ (14,204)
$ (16,901)
Foreign currency translation adjustments
(274)
25 
(347)
49 
Change in unrealized losses on available-for-sale securities
29 
17 
(12)
112 
Other comprehensive (loss) income, net of taxes
(245)
42 
(359)
161 
Total comprehensive loss
$ (4,888)
$ (8,467)
$ (14,563)
$ (16,740)
Condensed Consolidated Balance Sheet (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Cash and cash equivalents
$ 21,688 
$ 53,098 
Short-term Investments
23,203 
22,371 
Accounts and other receivables
8,344 
7,887 
Prepaid expenses and other assets
2,157 
1,299 
Total current assets
55,392 
84,655 
Investments in fixed maturities, at fair value
2,420 
942 
Equity Method Investments
300 
Property and equipment, net
9,614 
7,862 
Other long term assets
4,799 
4,847 
Other Assets, Noncurrent
29 
Total assets
72,554 
98,306 
Accounts payable
1,451 
1,962 
Accrued liabilities
4,327 
4,607 
Claims reserve
6,188 
5,107 
Deferred Revenue, Current
10,604 
9,345 
Other payables
668 
1,523 
Total current liabilities
23,238 
22,544 
Long-term debt
14,900 
Deferred tax liabilities
1,495 
1,495 
Other liabilities
412 
92 
Total liabilities
25,145 
39,031 
Common stock: $0.00001 par value per share
Preferred Stock, Value, Outstanding
Additional paid-in capital
121,741 
119,045 
Accumulated other comprehensive loss
(348)
11 
Accumulated deficit
(71,383)
(57,180)
Treasury stock, at cost
2,601 
2,601 
Stockholders' Equity Attributable to Parent
47,409 
59,275 
Total liabilities, redeemable convertible preferred stock, and stockholders' deficit
$ 72,554 
$ 98,306 
Condensed Consolidated Balance Sheet Condensed Consolidated Balance Sheet Parentheticals (USD $)
Sep. 30, 2015
Dec. 31, 2014
Common Stock [Member]
 
 
Common Stock, Par or Stated Value Per Share
$ 0 
$ 0 
Common Stock, Shares Authorized
200,000,000 
200,000,000 
Common Stock, Shares, Issued
28,898,227 
28,451,920 
Common Stock, Shares, Outstanding
28,277,248 
27,830,941 
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, 2015
Sep. 30, 2014
Statement of Cash Flows [Abstract]
 
 
Net loss
$ (14,204)
$ (16,901)
Depreciation and amortization
1,800 
1,234 
Amortization of Financing Costs and Discounts
5,033 
Warrant income
(1,574)
Stock-based compensation expense
2,349 
3,194 
Other, net
(91)
56 
Accounts and other receivables
(504)
(828)
Prepaid expenses and other current assets
(868)
(456)
Accounts payable
(329)
151 
Accrued liabilities
53 
(398)
Increase (Decrease) in Liability for Claims and Claims Adjustment Expense Reserve
1,127 
(201)
Deferred revenue
1,310 
823 
Other payables, net
(416)
167 
Net cash used in operating activities
(9,768)
(9,700)
Payments to Acquire Investments
(16,082)
(26,455)
Proceeds from Sale, Maturity and Collection of Investments
13,580 
23,239 
Payments to Acquire Equity Method Investments
(300)
Purchases of property and equipment
(3,816)
(4,013)
Net cash used in investing activities
(6,618)
(7,229)
Decrease in Restricted Cash
3,000 
Payments Related to Tax Withholding for Share-based Compensation
(643)
Proceeds from exercise of stock options
914 
161 
Proceeds from Lines of Credit
17,000 
Proceeds from line of credit
(14,900)
(32,103)
Proceeds from Issuance Initial Public Offering
72,946 
Net cash (used in) provided by financing activities
(14,629)
61,004 
Effect of foreign exchange rates on cash, net
(395)
55 
Net change in cash and cash equivalents
(31,410)
44,130 
Cash and cash equivalents at beginning of period
53,098 
14,939 
Cash and cash equivalents at end of period
21,688 
59,069 
Income taxes paid
117 
Interest paid
155 
1,372 
Warrants Issued in Conjunction with Debt Issuance
1,123 
Increase in payables for property and equipment
310 
488 
Increase in payables for deferred financing costs
136 
Cashless exercise of preferred stock warrants
$ 0 
$ 1,270 
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) is a direct-to-consumer monthly subscription service provider of a medical plan for cats and dogs throughout the United States, Canada and Puerto Rico.
Basis of Presentation
The consolidated balance sheet data as of December 31, 2014 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, 2014 included in the Company’s Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on February 24, 2015. 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, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or for any other period.
Reclassifications
Certain prior year amounts have been reclassified within the Company’s consolidated financial statements from their original presentation to conform to the current period presentation. In addition, amounts in note 9 related to segments have been recast to reflect a change in the composition of the Company’s segments as described in note 9.
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 and useful lives of software developed for internal use. Actual results could differ from the estimates used in preparing the consolidated financial statements.
Advertising
Advertising costs are expensed as incurred, with the exception of television advertisements, which are expensed the first time each advertisement is aired.
Accumulated Other Comprehensive Loss
There were no reclassifications out of accumulated other comprehensive loss during the three and nine months ended September 30, 2015 and 2014.
Insurance Operations
Effective January 1, 2015, the Company formed a segregated account in Bermuda as part of Wyndham Insurance Company (SAC) Limited (WICL), and entered into a revised fronting and reinsurance arrangement with Omega General Insurance Company (Omega) to include its newly formed segregated account. The Company maintains all risk with the business written in Canada and consolidates the entity in its financial statements. Contractual requirements restrict dividends from this entity until after 2016, at which time dividends will be allowed subject to the Segregated Accounts Company Act of 2000, which allows for dividends only to the extent that the entity remains solvent and the value of its assets remain greater than the aggregate of its liabilities and its issued share capital and share premium accounts.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (ASU) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Insurance contracts are excluded from the scope of this new guidance. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted, and must be applied retrospectively or modified retrospectively. The Company does not believe this ASU will have a material impact on its consolidated financial statements.
In May 2015, the FASB issued an 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 in 2016.
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 convertible preferred stock, warrants for the purchase of convertible preferred stock and common stock, exchangeable shares, unvested restricted stock, restricted stock units, and stock options. 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 are not included in the diluted net loss per common share calculation because they would have had an antidilutive effect:
 
As of September 30,
 
2015
 
2014
Stock options
4,991,047

 
5,082,500

Restricted stock awards and units
474,522

 
595,665

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, 2015 and December 31, 2014 (in thousands):
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of September 30, 2015
 
 
 
 
 
       Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,490

 
$

 
$
1,490

              Municipal bond
1,000

 
(70
)
 
930

 
$
2,490

 
$
(70
)
 
$
2,420

       Short-term investments:
 
 
 
 
 
              U.S. Treasury securities
$
5,682

 
$

 
$
5,682

              Certificates of deposit
1,581

 

 
1,581

              U.S. government funds
15,940

 

 
15,940

 
$
23,203


$


$
23,203

 
 
 
 
 
 
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of December 31, 2014
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Municipal bond
$
1,000

 
$
(58
)
 
$
942

 
$
1,000


$
(58
)

$
942

Short-term investments:
 
 
 
 
 
U.S. Treasury securities
$
5,677

 
$

 
$
5,677

Certificates of deposit
800

 

 
$
800

U.S. government funds
15,894

 

 
$
15,894

 
$
22,371


$


$
22,371


Maturities of debt securities classified as available-for-sale were as follows (in thousands):
 
September 30, 2015
 
Amortized
Cost
 
Fair
Value
Available-for-sale:
 
 
 
Due under one year
$

 
$

Due after one year through five years
1,490

 
1,490

Due after five years through ten years
1,000

 
930

Due after ten years

 

 
$
2,490

 
$
2,420


The Company had one investment with an unrealized loss of $0.1 million and a fair value of $0.9 million at September 30, 2015 and December 31, 2014, respectively. 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, 2015
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Foreign deposits
$
1,490

 
$
1,490

 
$

 
$

Municipal bond
930

 

 
930

 

Money market funds
10,412

 
10,412

 

 

Total
$
12,832

 
$
11,902

 
$
930

 
$

 
 
 
 
 
 
 
 
 
As of December 31, 2014
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Municipal bond
$
942

 
$

 
$
942

 
$

Money market funds
44,575

 
44,575

 

 

Total
$
45,517

 
$
44,575

 
$
942

 
$


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 December 31, 2014.
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, 2015 and 2014.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments:
Investment securities: Debt securities 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 5.0% or 1.5% 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 2017. The credit agreement requires the Company to comply with various financial and non-financial covenants. This facility also currently has a compensating balance requirement of $1.6 million.
Borrowings on the revolving line of credit are limited to the lesser of $20.0 million in 2015 and 2014, and the total amount of cash and securities held by 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. During the first quarter of 2015, the Company repaid its borrowings under this facility, and as of September 30, 2015, had no outstanding amounts under this facility.
The Company entered into a new lease agreement during the three months ended September 30, 2015 which required the Company to issue a security deposit in the form of an irrevocable standby letter of credit totaling $1.1 million which expires in August 2016 and renews annually thereafter. This amount reduces the Company's available revolving line of credit. As of September 30, 2015, the Company had $18.4 million available under its revolving line of credit.
Commitment and Contingencies
Commitments and Contingencies Disclosure [Text Block]
Commitments and Contingencies
During 2015, the Company has entered into strategic marketing and service provider agreements, as well as other agreements with various parties. As of the September 30, 2015, these agreements resulted in an increase in future commitments of $0.5 million in the fourth quarter of 2015, $2.0 million in 2016 and $0.7 million in 2017.
During the third quarter of 2015, the Company entered into a lease agreement for a building located in Seattle, Washington. The initial, 10-year term of the lease is expected to commence in April 2016 and expire in March 2026. The Company is obligated to pay a total of $21.0 million in rent over the 10-year term.
The Company received an inquiry from the Washington State Office of the Insurance Commissioner (OIC) in December 2012 concerning whether subsidiaries of the Company were properly licensed, and whether certain of its employees were properly licensed, under Washington law. A regulatory examination took place during the third and fourth quarters of 2014. On September 22, 2015, the OIC issued its report and requesting a response from the Company within 90 days of its date. The Company is currently in the process of responding to this report. As of September 30, 2015 and December 31, 2014, the Company had accrued liabilities of $0.4 million and $0.2 million, respectively, for this matter. Adverse outcomes beyond recorded amounts are reasonably possible. At this stage in the matter, however, the Company is unable to estimate a possible loss or range of possible loss beyond amounts accrued.
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.
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. Prior to January 1, 2015, certain enrollments not marketed directly to consumers were included in the subscription business segment as they were not segregated in reporting used by the chief operating decision maker. As of January 1, 2015, the Company began reporting these pets in its other business segment due to the characteristics of this business being similar to other arrangements within the other business segment. In addition, the chief operating decision maker began using information related to the subscription business segment excluding these pets in order to evaluate the Company's business and operations and make decisions. As such, these pets have been considered a part of the other business segment after January 1, 2015. Prior period segment information presented below has been recast to reflect this change.
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,
 
2015
 
2014
 
2015
 
2014
Revenue:
 
 
 
 
 
 
 
Subscription business
$
34,420

 
$
27,112

 
$
96,684

 
$
74,885

Other business
3,445

 
3,200

 
10,078

 
9,157

 
37,865

 
30,312

 
106,762

 
84,042

Claims expenses:
 
 
 
 
 
 
 
Subscription business
24,455

 
20,269

 
69,352

 
53,750

Other business
2,149

 
1,539

 
6,090

 
4,069

 
26,604

 
21,808

 
75,442

 
57,819

Other cost of revenue:
 
 
 
 
 
 
 
Subscription business
3,691

 
2,782

 
10,220

 
7,961

Other business
979

 
1,277

 
3,141

 
3,911

 
4,670

 
4,059


13,361


11,872

Gross profit:
 
 
 
 
 
 
 
Subscription business
6,274

 
4,061


17,112


13,174

Other business
317


384


847


1,177

 
6,591


4,445


17,959


14,351

Sales and marketing:
 
 
 
 
 
 
 
Subscription business
4,112

 
2,819

 
11,240

 
8,296

Other business
16

 
115

 
72

 
94

 
4,128

 
2,934

 
11,312

 
8,390

Technology and development
3,005

 
2,532

 
8,683

 
7,285

General and administrative
4,067

 
4,385

 
11,760

 
10,463

Operating loss
$
(4,609
)

$
(5,406
)

$
(13,796
)

$
(11,787
)

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,
 
2015
 
2014
 
2015
 
2014
United States
$
30,009

 
$
22,609

 
$
83,607

 
$
62,430

Canada
7,856

 
7,703

 
23,155

 
21,612

Total revenue
$
37,865

 
$
30,312


$
106,762

 
$
84,042


Substantially all of the Company’s long-lived assets were located in the United States as of September 30, 2015.
Nature of Operations and Summary of Significant Accounting Policies (Policies)
Description of Business
Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) is a direct-to-consumer monthly subscription service provider of a medical plan for cats and dogs throughout the United States, Canada and Puerto Rico.
Basis of Presentation
The consolidated balance sheet data as of December 31, 2014 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, 2014 included in the Company’s Annual Report on Form 10-K, filed with the U.S Securities and Exchange Commission on February 24, 2015. 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, 2015 are not necessarily indicative of the results that may be expected for the year ending December 31, 2015, or for any other period.
Reclassifications
Certain prior year amounts have been reclassified within the Company’s consolidated financial statements from their original presentation to conform to the current period presentation. In addition, amounts in note 9 related to segments have been recast to reflect a change in the composition of the Company’s segments as described in note 9.
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 and useful lives of software developed for internal use. Actual results could differ from the estimates used in preparing the consolidated financial statements.
Advertising
Advertising costs are expensed as incurred, with the exception of television advertisements, which are expensed the first time each advertisement is aired.
Accumulated Other Comprehensive Loss
There were no reclassifications out of accumulated other comprehensive loss during the three and nine months ended September 30, 2015 and 2014.
Insurance Operations
Effective January 1, 2015, the Company formed a segregated account in Bermuda as part of Wyndham Insurance Company (SAC) Limited (WICL), and entered into a revised fronting and reinsurance arrangement with Omega General Insurance Company (Omega) to include its newly formed segregated account. The Company maintains all risk with the business written in Canada and consolidates the entity in its financial statements. Contractual requirements restrict dividends from this entity until after 2016, at which time dividends will be allowed subject to the Segregated Accounts Company Act of 2000, which allows for dividends only to the extent that the entity remains solvent and the value of its assets remain greater than the aggregate of its liabilities and its issued share capital and share premium accounts.
Recent Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (ASU) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Insurance contracts are excluded from the scope of this new guidance. The guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted, and must be applied retrospectively or modified retrospectively. The Company does not believe this ASU will have a material impact on its consolidated financial statements.
In May 2015, the FASB issued an 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 in 2016.
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 are not included in the diluted net loss per common share calculation because they would have had an antidilutive effect:
 
As of September 30,
 
2015
 
2014
Stock options
4,991,047

 
5,082,500

Restricted stock awards and units
474,522

 
595,665

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, 2015 and December 31, 2014 (in thousands):
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of September 30, 2015
 
 
 
 
 
       Available-for-sale:
 
 
 
 
 
Foreign deposits
$
1,490

 
$

 
$
1,490

              Municipal bond
1,000

 
(70
)
 
930

 
$
2,490

 
$
(70
)
 
$
2,420

       Short-term investments:
 
 
 
 
 
              U.S. Treasury securities
$
5,682

 
$

 
$
5,682

              Certificates of deposit
1,581

 

 
1,581

              U.S. government funds
15,940

 

 
15,940

 
$
23,203


$


$
23,203

 
 
 
 
 
 
 
Amortized
Cost
 
Gross
Unrealized
Holding
Losses
 
Fair
Value
As of December 31, 2014
 
 
 
 
 
Available-for-sale:
 
 
 
 
 
Municipal bond
$
1,000

 
$
(58
)
 
$
942

 
$
1,000


$
(58
)

$
942

Short-term investments:
 
 
 
 
 
U.S. Treasury securities
$
5,677

 
$

 
$
5,677

Certificates of deposit
800

 

 
$
800

U.S. government funds
15,894

 

 
$
15,894

 
$
22,371


$


$
22,371

Maturities of debt securities classified as available-for-sale were as follows (in thousands):
 
September 30, 2015
 
Amortized
Cost
 
Fair
Value
Available-for-sale:
 
 
 
Due under one year
$

 
$

Due after one year through five years
1,490

 
1,490

Due after five years through ten years
1,000

 
930

Due after ten years

 

 
$
2,490

 
$
2,420

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, 2015
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Foreign deposits
$
1,490

 
$
1,490

 
$

 
$

Municipal bond
930

 

 
930

 

Money market funds
10,412

 
10,412

 

 

Total
$
12,832

 
$
11,902

 
$
930

 
$

 
 
 
 
 
 
 
 
 
As of December 31, 2014
 
Fair Value
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
Municipal bond
$
942

 
$

 
$
942

 
$

Money market funds
44,575

 
44,575

 

 

Total
$
45,517

 
$
44,575

 
$
942

 
$

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, 2014
5,112,556

 
$
3.19

 
$
21,116

Granted
615,273

 
7.78

 
 
Exercised
(514,431
)
 
1.78

 
3,167

Forfeited
(222,351
)
 
8.71

 
 
September 30, 2015
4,991,047

 
3.65

 
20,674

 
 
 
 
 
 
Vested and exercisable at September 30, 2015
3,589,654

 
$
2.28

 
$
19,306

As of September 30, 2015, the stock options outstanding had a remaining contractual life of 6.34 years.
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, 2014
5,112,556

 
$
3.19

 
$
21,116

Granted
615,273

 
7.78

 
 
Exercised
(514,431
)
 
1.78

 
3,167

Forfeited
(222,351
)
 
8.71

 
 
September 30, 2015
4,991,047

 
3.65

 
20,674

 
 
 
 
 
 
Vested and exercisable at September 30, 2015
3,589,654

 
$
2.28

 
$
19,306

As of September 30, 2015, the stock options outstanding had a remaining contractual life of 6.34 years.
Stock-based compensation expense includes stock options and restricted stock 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 467,508 shares of unvested restricted stock measured on a graded vesting schedule are expected to vest over the remaining service term of approximately 4 years.
As of September 30, 2015, the Company had unrecognized stock-based compensation of $6.1 million related to stock options and restricted stock held by employees and non-employees, which is expected to vest over a weighted-average period of approximately 2.65 years. As of September 30, 2015, the Company had 1,359,351 unvested stock options and 474,522 restricted stock awards 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,
 
2015
 
2014
 
2015
 
2014
 
(in thousands)
Claims expenses
$
58

 
$
60

 
$
160

 
$
168

Other cost of revenue
10

 
18

 
35

 
55

Sales and marketing
102

 
115

 
342

 
408

Technology and development
97

 
110

 
311

 
306

General and administrative
482

 
1,698

 
1,501

 
2,257

Total stock-based compensation
$
749

 
$
2,001

 
$
2,349

 
$
3,194

The expense recognized in each category is provided in the table below:
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2015
 
2014
 
2015
 
2014
 
(in thousands)
Claims expenses
$
58

 
$
60

 
$
160

 
$
168

Other cost of revenue
10

 
18

 
35

 
55

Sales and marketing
102

 
115

 
342

 
408

Technology and development
97

 
110

 
311

 
306

General and administrative
482

 
1,698

 
1,501

 
2,257

Total stock-based compensation
$
749

 
$
2,001

 
$
2,349

 
$
3,194

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,
 
2015
 
2014
 
2015
 
2014
Revenue:
 
 
 
 
 
 
 
Subscription business
$
34,420

 
$
27,112

 
$
96,684

 
$
74,885

Other business
3,445

 
3,200

 
10,078

 
9,157

 
37,865

 
30,312

 
106,762

 
84,042

Claims expenses:
 
 
 
 
 
 
 
Subscription business
24,455

 
20,269

 
69,352

 
53,750

Other business
2,149

 
1,539

 
6,090

 
4,069

 
26,604

 
21,808

 
75,442

 
57,819

Other cost of revenue:
 
 
 
 
 
 
 
Subscription business
3,691

 
2,782

 
10,220

 
7,961

Other business
979

 
1,277

 
3,141

 
3,911

 
4,670

 
4,059


13,361


11,872

Gross profit:
 
 
 
 
 
 
 
Subscription business
6,274

 
4,061


17,112


13,174

Other business
317


384


847


1,177

 
6,591


4,445


17,959


14,351

Sales and marketing:
 
 
 
 
 
 
 
Subscription business
4,112

 
2,819

 
11,240

 
8,296

Other business
16

 
115

 
72

 
94

 
4,128

 
2,934

 
11,312

 
8,390

Technology and development
3,005

 
2,532

 
8,683

 
7,285

General and administrative
4,067

 
4,385

 
11,760

 
10,463

Operating loss
$
(4,609
)

$
(5,406
)

$
(13,796
)

$
(11,787
)
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,
 
2015
 
2014
 
2015
 
2014
United States
$
30,009

 
$
22,609

 
$
83,607

 
$
62,430

Canada
7,856

 
7,703

 
23,155

 
21,612

Total revenue
$
37,865

 
$
30,312


$
106,762

 
$
84,042

Nature of Operations and Summary of Significant Accounting Policies (Details) OCI (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
 
 
 
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax
 
 
$ 0 
$ 0 
 
Accumulated other comprehensive loss: unrealized loss on available for sale securities
(70,000)
 
(70,000)
 
(58,000)
Unrealized foreign currency gain (loss)
$ (274,000)
$ 25,000 
$ (347,000)
$ 49,000 
 
Net Loss per Share (Details) Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number
4,991,047 
5,112,556 
5,082,500 
Unvested restricted stock, expected to vest
474,522 
 
595,665 
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, 2015
Dec. 31, 2014
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
$ 23,203 
$ 22,371 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
23,203 
22,371 
Available-for-sale securities, amortized cost
2,490 
1,000 
Available-for-sale securities, gross unrealized holding losses
70 
58 
Available-for-sale securities, fair value
2,420 
942 
Deposits [Member]
 
 
Investment [Line Items]
 
 
Available-for-sale securities, amortized cost
1,490 
 
Available-for-sale securities, gross unrealized holding losses
 
Available-for-sale securities, fair value
1,490 
 
Municipal Bonds [Member]
 
 
Investment [Line Items]
 
 
Available-for-sale securities, amortized cost
1,000 
1,000 
Available-for-sale securities, gross unrealized holding losses
70 
58 
Available-for-sale securities, fair value
930 
942 
U.S. Treasury securities
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
5,682 
5,677 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
5,682 
5,677 
Certificates of deposit
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
1,581 
800 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
1,581 
800 
US government debt securities
 
 
Investment [Line Items]
 
 
Held-to-maturity securities, amortized cost
15,940 
15,894 
Held-to-maturity securities, gross unrealized holding losses
Held-to-maturity securities, fair value
$ 15,940 
$ 15,894 
Investment Securities (Details) Narrative (USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
 
 
Available-for-sale securities, continuous unrealized loss position, fair value
$ 0.1 
$ 0.1 
Available-for-sale securities, debt maturities, fair value
$ 0.9 
$ 0.9 
Investment Securities (Details) Held-to-Maturity (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
 
 
Held-to-maturity securities, amortized cost
$ 23,203 
$ 22,371 
Held-to-maturity securities, fair value
$ 23,203 
$ 22,371 
Investment Securities (Details) Available-for-Sale (USD $)
Sep. 30, 2015
Dec. 31, 2014
Investments, Debt and Equity Securities [Abstract]
 
 
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value
$ 100,000 
$ 100,000 
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
1,490,000 
 
Available-for-sale securities, debt maturities, year two through five, fair value
1,490,000 
 
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
930,000 
 
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
2,490,000 
1,000,000 
Available-for-sale securities, debt maturities, fair value
$ 900,000 
$ 900,000 
Fair Value (Details) Unobservable (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
$ 2,420 
$ 942 
Assets, Fair Value Disclosure
12,832 
45,517 
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair Value Disclosure
11,902 
44,575 
Fair Value, Inputs, Level 2 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Assets, Fair Value Disclosure
930 
942 
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
10,412 
44,575 
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
10,412 
44,575 
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
930 
942 
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
930 
942 
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
1,490 
 
Deposits [Member] |
Fair Value, Inputs, Level 1 [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Noncurrent
1,490 
 
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 
 
Fair Value (Details) Narrative (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Fair Value Hierarchy [Abstract]
 
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net
$ 0 
Fair Value (Details) Rollforward of Level 3 (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Fair Value Disclosures [Abstract]
 
 
Fair value adjustment of warrants
$ 0 
$ (1,574)
Debt (Details) Narrative (USD $)
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Debt Instrument [Line Items]
 
 
Line of credit facility, interest rate description
greater of 5.0% or 1.5% plus the prime rate 
 
Compensating balance
$ 1,600,000 
 
Line of Credit Facility, Maximum Amount Outstanding During Period
20,000,000 
20,000,000 
Line of Credit Facility, Ancillary Services
3,000,000 
 
Line of Credit, Current
 
Letters of Credit Outstanding, Amount
1,100,000 
 
Line of Credit Facility, Remaining Borrowing Capacity
$ 18,400,000 
 
Commitment and Contingencies (Details) Narrative (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Sep. 30, 2015
Dec. 31, 2014
Commitments and Contingencies Disclosure [Abstract]
 
 
 
 
 
Long-term Purchase Commitment, Amount
$ 0.7 
$ 2.0 
$ 0.5 
 
 
Operating Leases, Future Minimum Payments Due
 
 
 
21.0 
 
Loss contingency accrual
 
 
 
$ 0.4 
$ 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, 2015
Dec. 31, 2014
Sep. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
 
Unvested restricted stock, expected to vest
474,522 
 
595,665 
Stock-based compensation, options, forfeited, weighted-average exercise price
$ 8.71 
 
 
Stock-based compensation, options, outstanding, number of shares
4,991,047 
5,112,556 
5,082,500 
Stock-based compensation, options, outstanding, weighted-average exercise price
$ 3.65 
$ 3.19 
 
Stock-based compensation, options, outstanding, aggregate intrinsic value
$ 20,674 
$ 21,116 
 
Stock-based compensation, options, granted, number of options
615,273 
 
 
Stock-based compensation, options, granted, weighted-average exercise price
$ 7.78 
 
 
Stock-based compensation, options, exercised, weighted-average exercise price
$ 1.78 
 
 
Stock-based compensation, options, exercised
(514,431)
 
 
Stock-based compensation, options, exercised, aggregate intrinsic value
3,167 
 
 
Stock-based compensation, options, forfeited
(222,351)
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Number
3,589,654 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Weighted Average Exercise Price
$ 2.28 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Exercisable, Aggregate Intrinsic Value
$ 19,306 
 
 
Stock-based Compensation (Details) Expense Category (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
$ 749 
$ 2,001 
$ 2,349 
$ 3,194 
Claims expense
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
58 
60 
160 
168 
Other Expense [Member]
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
10 
18 
35 
55 
Sales and marketing
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
102 
115 
342 
408 
Technology services costs [Member]
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
97 
110 
311 
306 
General and administrative
 
 
 
 
Stock-based Compensation
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
$ 482 
$ 1,698 
$ 1,501 
$ 2,257 
Stock-based Compensation (Details) Narrative (USD $)
In Millions, except Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
Unvested Portion of Restricted Stock Grant with IPO Performance Condition
467,508 
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized
$ 6.1 
Unvested RSUs with IPO Performance Condition, Remaining Vesting Period
4 years 
Remaining contractual life, share-based payments, weighted average
6 years 4 months 2 days 
Share-based compensation arrangement , non-employee, weighted average remaining vesting period
2 years 7 months 25 days 
Share-based compensation arrangement by share-based payment award, options, nonvested, number of shares
1,359,351 
Segments (Details) Business Segment (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
$ 37,865 
$ 30,312 
$ 106,762 
$ 84,042 
Claims expenses
26,604 
21,808 
75,442 
57,819 
Other cost of revenue
4,670 
4,059 
13,361 
11,872 
Gross profit
6,591 
4,445 
17,959 
14,351 
Sales and marketing
4,128 
2,934 
11,312 
8,390 
Technology Services Costs
3,005 
2,532 
8,683 
7,285 
General and administrative
4,067 
4,385 
11,760 
10,463 
Operating loss
(4,609)
(5,406)
(13,796)
(11,787)
Subscription business
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
34,420 
27,112 
96,684 
74,885 
Claims expenses
24,455 
20,269 
69,352 
53,750 
Other cost of revenue
3,691 
2,782 
10,220 
7,961 
Gross profit
6,274 
4,061 
17,112 
13,174 
Sales and marketing
4,112 
2,819 
11,240 
8,296 
Other business
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenue
3,445 
3,200 
10,078 
9,157 
Claims expenses
2,149 
1,539 
6,090 
4,069 
Other cost of revenue
979 
1,277 
3,141 
3,911 
Gross profit
317 
384 
847 
1,177 
Sales and marketing
$ 16 
$ 115 
$ 72 
$ 94 
Segments (Details) Revenue by Geography (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 37,865 
$ 30,312 
$ 106,762 
$ 84,042 
CANADA
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
7,856 
7,703 
23,155 
21,612 
UNITED STATES
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 30,009 
$ 22,609 
$ 83,607 
$ 62,430 
Equity Method Investment (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Equity Method Investments and Joint Ventures [Abstract]
 
 
Equity Method Investments
$ 300 
$ 0 
Equity Method Investment, Ownership Percentage
13.00% 
 
Equity Method Investment, Additional Information
300000 
 
Maximum ownership interest in equity method investment
28.00%