Segments

12 Months Ended

Dec. 31, 2019

Segment Reporting Disclosure [Text Block]

Segments

The Company has two segments: subscription business and other business. The subscription business segment includes monthly subscription fees related to the Company’s medical insurance which is marketed directly to consumers, while the other business segment includes all other business that is not directly marketed to consumers.

The chief operating decision maker reviews revenue, gross profit, and operating income (loss) to evaluate segment performance. Revenue, veterinary invoice expense, other cost of revenue, and sales and marketing expenses are generally directly attributed to each segment. Other operating expenses, such as technology and development expense and general and administrative expense, are 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 were as follows (in thousands):



	Year Ended December 31,
	2019			2018			2017
Subscription business:
Revenue	$	321,163		$	263,738		$	218,354
Veterinary invoice expense	232,415			191,051			155,554
Other cost of revenue	29,724			24,941			21,329
Gross profit	59,024			47,746			41,471
Technology and development	8,427			8,024			8,789
General and administrative	17,539			15,761			15,135
Sales and marketing	35,037			24,622			18,886
Subscription business operating income (loss)	(1,979		)	(661		)	(1,339		)

Other business:
Revenue	62,773			40,218			24,313
Veterinary invoice expense	38,532			23,488			14,568
Other cost of revenue	18,341			13,110			8,166
Gross profit	5,900			3,620			1,579
Technology and development	1,647			1,224			979
General and administrative	3,428			2,403			1,685
Sales and marketing	414			377			218
Other business operating income (loss)	411			(384		)	(1,303		)
Gain (loss) from investment in joint venture	(352		)	—			—
Total operating income (loss)	$	(1,920	)	$	(1,045	)	$	(2,642	)

The following table presents the Company’s revenue by geographic region of the member (in thousands):



	Year Ended December 31,
	2019		2018		2017
United States	$	316,138	$	246,280	$	195,297
Canada	67,798		57,676		47,370
Total revenue	$	383,936	$	303,956	$	242,667

Substantially all of the Company’s long-lived assets were located in the United States as of December 31, 2019 and 2018.