Goosehead Insurance Inc
For the period ended Dec 31, 2024. Filed Mar 3, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 3, 2025
GSHD$55.55-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-22.
0001726978-24-000018
Item 7. Management’s discussion and analysis of financial condition and results of operationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-03.
0001726978-25-000016
Item 7. Management’s discussion and analysis of financial condition and results of operationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 192 previous paragraphs and 196 current paragraphs.
124 unchanged; 56 reworded; 16 added; 9 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 12 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
•Total Written Premiums Placed increased 29% from 2023 to $3.8 billion
Current report
•Policies in Force increased 13% from December 31, 2023 to 1,674,000 at December 31, 2024.
Current report
•Corporate sales headcount increased 39% from December 31, 2023 to 417 at December 31, 2024.
Current report
•Operating franchises decreased 10% from December 31, 2023 to 1,103 at December 31, 2024.
Current report
NPS has decreased modestly to 89 as of December 31, 2024 from 92 at December 31, 2023, primarily driven by rapid premium increases offset by our service team's consistent delivery.
Current report
Any diminished capacity of Carriers to place new business (including as a result of the recent wildfires in Southern California and hurricanes in Florida) could slow the growth of our New Business Revenue in the future.
Current report
Continued declines in client retention caused by increases in premium rates could slow the growth of our Renewal Revenue in the future.
Current report
Core Revenue increased by $40.7 million, or 17%, to $273.7 million for the year ended December 31, 2024 from $233.0 million for the year ended December 31, 2023. The primary drivers of the increase from December 31, 2023 to December 31, 2024 are more new policies written driven by increases in the number of sales agents and increased New Business Production per Agency, an increase in policies in the renewal term assisted by client retention of 84%, and rising premium rates.
Current report
Contingent Commissions are inherently volatile as they are based on carrier underwriting profitability and may be impacted by catastrophic losses resulting from natural or man-made disasters.
Current report
General and administrative expenses increased by $5.0 million, or 8%, to $67.1 million for 2024 from $62.1 million for 2023. This increase was primarily attributable to increased spending on software offset by a decrease in asset impairment charges.
Current report
Other income (expense)
Current report
Other income (expense) consists of remeasurements of our tax receivable agreement liability and interest income. Other income (expense) decreased by $7.1 million for 2024 to $(7.1) million, primarily due to remeasurements of our tax receivable agreement liability due to an increase in the effective tax rate resulting from changes in state apportionment and related state filing requirements, offset by interest income generated by cash held in interest-bearing checking accounts.
Current report
Tax expense (benefit)
Current report
Tax expense (benefit) decreased by $5.1 million, or 190%, to $(2.4) million for 2024 from $2.7 million for 2023. This decrease is primarily attributable to the deferred tax impact of changes in state apportionment and related state filing requirements.
Current report
Net cash provided by operating activities was $71.5 million for 2024 as compared to net cash provided by operating activities of $50.8 million for 2023. This increase in net cash provided by operating activities was primarily attributable to a $25.4 million increase in net income, with an $(15.0) million adjustment due to a non-cash loss on the remeasurement of our tax receivable agreement liability, and a $10.8 million lower decrease in our contract liabilities driven by fewer franchise terminations in 2024. These increases were partially offset by a $19.9 million increase in commissions and agency fees receivable, which is primarily related to an increase in contingent commissions receivable.
Current report
(4)On January 8, 2025, the Company closed on a $300 million term loan and retired our existing $93 million term loan. See "Note 9. Debt" in the consolidated financial statements.
Removed paragraphs (9)
Previous report
•Total Written Premiums Placed increased 34% from 2022 to $3.0 billion
Previous report
•Policies in Force increased 16% from December 31, 2022 to 1,486,000 at December 31, 2023.
Previous report
•Corporate sales headcount decreased 6% from December 31, 2022 to 300 at December 31, 2023.
Previous report
•Operating franchises decreased 13% from December 31, 2022 to 1,226 at December 31, 2023.
Previous report
Core Revenue increased by $44.8 million, or 24%, to $233.0 million for the year ended December 31, 2023 from $188.2 million for the year ended December 31, 2022. The primary drivers of the increase are increased agent productivity, growth in premiums, high levels of client and premium retention, and the number of policies in the renewal term from December 31, 2022 to December 31, 2023.
Previous report
General and administrative expenses increased by $9.2 million, or 17%, to $62.1 million for 2023 from $52.9 million for 2022. This increase was primarily attributable to $3.6 million asset impairment charges related to internally developed software and impairment of two office locations the Company determined to sublease, increased spend on rent-related costs due to expansion of our corporate office space, and increased spending on software and professional services
Previous report
Tax expense
Previous report
Tax expenses increased by $0.2 million, or 8%, to $2.7 million for 2023 from $2.5 million for 2022. This increase is attributable to an increase in income before taxes offset by a decrease in state and local deferred taxes.
Previous report
Net cash provided by operating activities was $50.8 million for 2023 as compared to net cash provided by operating activities of $35.7 million for 2022. This increase in net cash provided by operating activities was primarily attributable to a $21.1 million increase in net income, an $8.4 million increase in cash provided by receivables from franchisees, a $4.5 million increase in cash provided by commissions and agency fees, and a $4.3 million increase in stock compensation expense offset by a $17.4 million decrease in cash provided by contract liabilities and a $4.0 million increase in prepaid expenses.
Reworded paragraphs (56)
Previous wording
We are a rapidly growing personal lines independent insurance agency, reinventing the traditional approach to distributing personal lines products and services throughout the United States. We were founded with one vision in mind—to provide consumers with superior insurance coverage at the best available price and in a timely manner. By leveraging our differentiated business model and innovative technology platform, we are able to deliver a superior insurance experience to our clients.
Current wording
We are a rapidly growing personal lines independent insurance agency, reinventing the traditional approach to distributing personal lines products and services throughout the United States. We were founded with one vision in mind—to provide clients with superior insurance coverage at the best available price and in a timely manner. By leveraging our differentiated business model and innovative technology platform, we are able to deliver a superior insurance experience to our clients.
Previous wording
•Total revenue increased 25% from 2022 to $261.3 million; Core Revenues*, a non-GAAP measure, of $233.0 million increased 24% over 2022
Current wording
•Total revenue increased 20% from 2023 to $314.5 million; Core Revenues*, a non-GAAP measure, of $273.7 million increased 17% over 2023
Previous wording
•Net income increased by $21.1 million from 2022 to $23.7 million, or 9% of total revenues
Current wording
•Net income increased by $25.4 million from 2023 to $49.1 million, or 16% of total revenues
Previous wording
•Adjusted EBITDA*, a non-GAAP measure, increased by 90% from 2022 to $69.8 million, or 27% of total revenues
Current wording
•Adjusted EBITDA*, a non-GAAP measure, increased by 43% from 2023 to $99.9 million, or 32% of total revenues
Previous wording
•Basic earnings per share was $0.59 and Adjusted EPS*, a non-GAAP measure, was $1.33 for the year ended December 31, 2023.
Current wording
•Basic earnings per share was $1.23 and Adjusted EPS*, a non-GAAP measure, was $1.99 for the year ended December 31, 2024.
Previous wording
◦As of December 31, 2023, 135 of these corporate sales agents had less than one year of tenure and 165 had greater than one year of tenure.
Current wording
◦As of December 31, 2024, 253 of these corporate sales agents had less than one year of tenure and 164 had greater than one year of tenure.
Previous wording
◦As of December 31, 2023, 183 operating franchises had less than one year of tenure and 1,043 operating franchisees had greater than one year of tenure.
Current wording
◦As of December 31, 2024, 90 operating franchises had less than one year of tenure and 1,013 operating franchisees had greater than one year of tenure.
Previous wording
•Continued penetration of Franchisees into existing markets. We will continue to market actively for new franchises in our established markets, which represent over 99% of the U.S. population. We are now licensed with the necessary state departments of commerce and insurance and registered as a franchisor in all 50 states in the U.S.
Current wording
•Continued penetration of Franchisees into existing markets. We will continue to market actively for new franchises in our established markets, which represent over 98% of the U.S. population. We are now licensed with the necessary state departments of commerce and insurance and registered as a franchisor in all 50 states in the U.S.
Previous wording
•Continued retention of existing Book of Business. We have made significant progress in recent years in Client Retention metrics, and maintaining these high levels of Client Retention is key to future profitability.
Current wording
•Continued retention of existing Book of Business. We have navigated macroeconomic challenges to maintain high levels of Client Retention. Client Retention is key to future profitability.
Previous wording
•Increases in interest rates. Our variable rate debt, including our Credit Agreement, exposes us to interest rate risk. If interest rates were to increase, as they have increased recently, our debt service obligations on our variable rate indebtedness would increase even if the amount borrowed remained the same. To the extent that interest rate risk materializes and is not fully mitigated, the resulting increase in interest expense could have a material adverse effect on our results of operations.
Current wording
•Increases in interest rates. Our variable rate debt, including our Credit Agreement, exposes us to interest rate risk. If interest rates were to increase, our debt service obligations on our variable rate indebtedness would increase even if the amount borrowed remained the same. To the extent that interest rate risk materializes and is not fully mitigated, the resulting increase in interest expense could have a material adverse effect on our results of operations.
Previous wording
In 2023, revenue increased by 25% to $261.3 million from $209.4 million in 2022. Total Written Premium growth, which is the best indicator of future revenue growth, increased 34% to $3.0 billion in 2023 from $2.2 billion in 2022. Total Written Premiums Placed drive our current and future Core Revenue and gives us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions. Our various revenue streams do not equally contribute to the long-term value of Goosehead. For instance, Renewal Revenue and Renewal Royalty Fees are more predictable and have higher margin profiles, thus are higher quality revenue streams for the Company. Alternatively, Contingent Commissions, while high margin, are unpredictable and dependent on insurance company underwriting and forces of nature and thus are lower quality revenue for the Company. Our revenue streams can be viewed in three distinct categories: Core Revenue, Cost Recovery Revenue, and Ancillary Revenue, which are non-GAAP measures. A reconciliation of Core Revenue, Cost Recovery Revenue, and Ancillary Revenue to total revenue, the most directly comparable financial measures presented in accordance with GAAP, are set forth in the "Key performance indicators" section of Management’s discussion and analysis of financial condition and results of operations of this Form 10-K.
Current wording
In 2024, revenue increased by 20% to $314.5 million from $261.3 million in 2023. Total Written Premium growth, which is the best indicator of future revenue growth, increased 29% to $3.8 billion in 2024 from $3.0 billion in 2023. Total Written Premiums Placed drive our current and future Core Revenue and give us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions. Our various revenue streams do not equally contribute to the long-term value of Goosehead. For instance, Renewal Revenue and Renewal Royalty Fees are more predictable and have higher margin profiles, thus are higher quality revenue streams for the Company. Alternatively, Contingent Commissions, while high margin, are unpredictable and dependent on insurance company underwriting and forces of nature and thus are lower quality revenue for the Company. Our revenue streams can be viewed in three distinct categories: Core Revenue, Cost Recovery Revenue, and Ancillary Revenue, which are non-GAAP measures. A reconciliation of Core Revenue, Cost Recovery Revenue, and Ancillary Revenue to total revenue, the most directly comparable financial measures presented in accordance with GAAP, are set forth in the "Key performance indicators" section of Management’s discussion and analysis of financial condition and results of operations of this Form 10-K.
Previous wording
The Company's primary source of revenue is through the placement of insurance policies. We are paid a percentage of the premium from the Carriers in the form of New Business Commissions and, in states which allow it, we charge Agency Fees for the placement of the policy. For policies placed through franchise sales, we receive 20% of the commissions and fees received as New Business Royalties during the first term of the policy. All clients are serviced by our world-class service centers, allowing for predictable retention of our Book of Business, which has historically been 86%. All commissions received in corporate sales after the first term of the policy are recognized as Renewal Commissions, which are higher margin due to lower commissions and servicing costs. For all policies that renew related to franchise sales, we receive as Renewal Royalty Fees 50% of the commissions received from the Carrier, creating a mechanical increase in revenue of 129% if we renew at historical rates. Renewal Royalty Fees are higher margin compared to New Business Royalty Fees due to lower servicing costs on higher revenue. Because of the lower royalty fees on New Business Commissions as compared to Renewal Commissions, and because we are placing an increasing percentage of Total Written Premium in franchise sales, Core Revenue growth will lag that of Total Written Premium.
Current wording
The Company's primary source of revenue is through the placement of insurance policies. We are paid a percentage of the premium from the Carriers in the form of New Business Commissions and, in states which allow it, we charge Agency Fees for the placement of the policy. For policies placed through franchise sales, we receive 20% of the commissions and fees received as New Business Royalties during the first term of the policy. All clients are serviced by our world-class service centers, allowing for predictable retention of our Book of Business, which has historically been 84%. All commissions received in corporate sales after the first term of the policy are recognized as Renewal Commissions, which are higher margin due to lower commissions and servicing costs. For all policies that renew related to franchise sales, we receive as Renewal Royalty Fees 50% of the commissions received from the Carrier, creating a mechanical increase in revenue of 150% in the first renewal term. Renewal Royalty Fees are higher margin compared to New Business Royalty Fees due to lower servicing costs on higher revenue. Because of the lower royalty fees on New Business Commissions as compared to Renewal Commissions, and because we are placing an increasing percentage of Total Written Premium in franchise sales, Core Revenue growth will lag that of Total Written Premium.
Previous wording
Contingent Commissions can vary significantly from year-to-year and should be viewed over several years. Since 2021, revenue from Contingent Commissions have historically represented approximately 0.48% of Total Written Premium at year-end. Most of our Contingent Commissions are earned in the year prior to when they are received. For the year ended December 31, 2021, $9.9 million of Contingent Commissions were earned (above our historical average as a percentage of premium), of which $7.4 million was still receivable at December 31, 2021. For the year ended December 31, 2022, $7.7 million of Contingent Commissions were earned (below our historical average as a percentage of premium), of which $7.4 million was still receivable at December 31, 2022. For the year ended December 31, 2023, $13.7 million of Contingent Commissions were earned (below our historical average as a percentage of premium), of which $6.9 million was still receivable at December 31, 2023.
Current wording
Contingent Commissions can vary significantly from year-to-year and should be viewed over several years. Since 2022, revenue from Contingent Commissions have historically represented approximately 0.54% of Total Written Premium at year-end. Most of our Contingent Commissions are earned in the year prior to when they are received. For the year ended December 31, 2022, $7.7 million of Contingent Commissions were earned (below our historical average as a percentage of premium), of which $7.4 million was still receivable at December 31, 2022. For the year ended December 31, 2023, $13.7 million of Contingent Commissions were earned (below our historical average as a percentage of premium), of which $6.9 million was still receivable at December 31, 2023. For the year ended December 31, 2024, $31.4 million of Contingent Commissions were earned (above our historical average as a percentage of premium), of which $25.5 million was still receivable at December 31, 2024.
Previous wording
We are a distributor of insurance policies in a range of primarily personal lines of business including homeowner’s insurance, automotive, dwelling property insurance, flood, wind and earthquake insurance, excess liability or umbrella insurance, specialty lines insurance (motorcycle, recreational vehicle, and other insurance), commercial lines insurance (general liability, property and auto insurance for small businesses) and life insurance. The following table sets forth our Total Written Premium placed by line of business by amount and as a percentage of our Total Written Premium for the periods indicated (in thousands):
Current wording
We are a distributor of insurance policies in a range of primarily personal lines of business including homeowner’s insurance; automotive insurance; dwelling property insurance; flood, wind and earthquake insurance; excess liability or umbrella insurance; specialty lines insurance (motorcycle, recreational vehicle, and other insurance); commercial lines insurance (general liability, property and auto insurance for small businesses) and life insurance. The following table sets forth our Total Written Premium placed by line of business by amount and as a percentage of our Total Written Premium for the periods indicated (in thousands):
Previous wording
Due to our organic-focused growth strategy, virtually all of our investments in future growth are in people and certain technologies. Therefore, the majority of our investments are not capitalizable and are recognized immediately on our statement of operations.
Current wording
Due to our organic-focused growth strategy, virtually all of our investments in future growth are in people and technology. The majority of our investments are not capitalizable and are recognized immediately on our statement of operations, while investments in software are capitalized as intangible assets and recognized as expense over the useful life of the software.
Previous wording
General and administrative expenses. General and administrative expenses include technology, travel, accounting, legal and other professional fees, commissions, placement fees, office expenses, depreciation and other costs associated with our operations. Our occupancy-related costs and professional services expenses, in particular, generally increase or decrease in relative proportion to the number of our employees and the overall size and scale of our business operations.
Current wording
General and administrative expenses. General and administrative expenses include technology, travel, accounting, legal and other professional fees, placement fees, office expenses, depreciation and other costs associated with our operations. Our occupancy-related costs and professional services expenses, in particular, generally increase or decrease in relative proportion to the number of our employees and the overall size and scale of our business operations.
Previous wording
For the year ended December 31, 2023, we had $3.0 billion in Total Written Premium, representing a 34% increase, compared to $2.2 billion for the year ended December 31, 2022. The following table shows Total Written Premium by channel for the years ended 2023 and 2022(in thousands).
Current wording
For the year ended December 31, 2024, we had $3.8 billion in Total Written Premium, representing a 29% increase, compared to $3.0 billion for the year ended December 31, 2023. The following table shows Total Written Premium by channel for the years ended 2024 and 2023(in thousands).
Previous wording
As of December 31, 2023, we had 1,486,000 Policies in Force compared to 1,284,000 as of December 31, 2022, representing a 16% increase.
Current wording
As of December 31, 2024, we had 1,674,000 Policies in Force compared to 1,486,000 as of December 31, 2023, representing a 13% increase.
Previous wording
Client Retention decreased modestly to 86% at December 31, 2023 when compared to 88% at December 31, 2022, again driven by the service team’s continued focus on delivering highly differentiated service levels. Our retention rate is even stronger on a premium basis. In 2023, we retained 101% of the premiums we distributed in 2022, an increase from premium retention in 2022 of 100% primarily due to premium increases from our Carriers during the year. Our premium retention rate is higher than our Client Retention rate as a result of both premiums increasing year over year and additional coverages sold by our sales and service teams.
Current wording
Client Retention decreased modestly to 84% at December 31, 2024 when compared to 86% at December 31, 2023, impacted modestly by premium rate increases yet supported by the service team’s continued focus on delivering highly differentiated service levels. Our retention rate is even stronger on a premium basis, driven from increases in premium taken by our Carriers and additional coverages sold by our sales agents. In 2024, we retained 98% of the premiums we distributed in 2023, a decrease from premium retention in 2023 of 101%.
Previous wording
For the year ended December 31, 2023, New Business Revenue grew 3% to $54.8 million, from $53.3 million for the year ended December 31, 2022. Growth in New Business Revenue is primarily attributable to an increase in agent productivity and rising premium rates.
Current wording
For the year ended December 31, 2024, New Business Revenue grew 9% to $59.9 million, from $54.8 million for the year ended December 31, 2023. Growth in New Business Revenue is primarily attributable to increases in the number of sales agents, increased New Business Production per Agency, and rising premium rates.
Previous wording
Renewal Revenue is commissions received from the Carrier and Royalty Fees after the first term of a policy.
Current wording
Renewal Revenue is commissions received from the Carrier and Royalty Fees from franchises after the first term of a policy.
Previous wording
For the year ended December 31, 2023, Renewal Revenue grew 32% to $178.3 million, from $134.9 million for the year ended December 31, 2022. Growth in Renewal Revenue was driven primarily by Client Retention of 86% at December 31, 2023, and premium rate increases over the prior year. As our agent force matures, the policies they wrote in prior years begin to convert from New Business Revenue to more profitable Renewal Revenue.
Current wording
For the year ended December 31, 2024, Renewal Revenue grew 20% to $213.9 million, from $178.3 million for the year ended December 31, 2023. Growth in Renewal Revenue was driven primarily by Client Retention of 84% at December 31, 2024, and premium rate increases over the prior year. As our agent force matures, the policies they wrote in prior years begin to convert from New Business Revenue to more profitable Renewal Revenue.
Previous wording
Cost Recovery Revenue increased by $0.4 million, or 3%, to $12.7 million for the year ended December 31, 2023 from $12.3 million for the year ended December 31, 2022. The primary driver of the increase was an increase in terminations of franchises, which accelerates recognition of initial franchise fee revenue.
Current wording
Cost Recovery Revenue decreased by $5.1 million, or 40%, to $7.6 million for the year ended December 31, 2024 from $12.7 million for the year ended December 31, 2023. The primary driver of the decrease was a decrease in terminations of franchises, which resulted in less accelerated recognition of initial franchise fee revenue.
Previous wording
Ancillary Revenue increased by $6.6 million, or 74%, to $15.6 million for the year ended December 31, 2023 from $9.0 million for the year ended December 31, 2022. The primary drivers of the increase from December 31, 2022 to December 31, 2023 were improved loss ratios as well as growth in Total Written Premiums.
Current wording
Ancillary Revenue increased by $17.6 million, or 113%, to $33.2 million for the year ended December 31, 2024 from $15.6 million for the year ended December 31, 2023. The primary drivers of the increase from December 31, 2023 to December 31, 2024 were improved loss ratios as well as growth in Total Written Premiums leading to attaining higher Contingent Commissions.
Previous wording
Adjusted EBITDA increased by $33.2 million, or 90%, to $69.8 million for the year ended December 31, 2023, from $36.7 million for the year ended December 31, 2022, driven by a significant increase in core revenue and slower growth in both employee compensation and benefits and general and administrative expenses.
Current wording
Adjusted EBITDA increased by $30.1 million, or 43%, to $99.9 million for the year ended December 31, 2024, from $69.8 million for the year ended December 31, 2023, driven by a 17% increase in Core Revenue with slower growth of 13% in employee compensation and benefits excluding equity-based compensation and of 14% in general and administrative expenses excluding impairment as well as a $17.6 million increase in high-margin Contingent Commissions.
Previous wording
For the year ended December 31, 2023, Adjusted EBITDA Margin was 27% compared to 18% for the year ended December 31, 2022. The Adjusted EBITDA margin increase came from a significant increase in Core Revenue and slower growth in both employee compensation and benefits and general and administrative expenses.
Current wording
For the year ended December 31, 2024, Adjusted EBITDA Margin was 32% compared to 27% for the year ended December 31, 2023. The Adjusted EBITDA margin increase came from a 17% increase in Core Revenue with slower growth of 13% in employee compensation and benefits excluding equity-based compensation and of 14% in general and administrative expenses excluding impairment as well as a $17.6 million increase in high-margin Contingent Commissions.
Previous wording
Adjusted EPS is a supplemental measure of our performance, defined as earnings per share (the most directly comparable GAAP measure) before non-recurring or non-operating income and expenses, adjusted to assume a single class of stock (Class A) and assuming non-controlling interest does not exist. Adjusted EPS is a useful measure to management because it eliminates the impact of items that do not relate to business performance and helps compare companies that may not have a dual-share class structure.
Current wording
Adjusted EPS is a supplemental measure of our performance, defined as earnings per share (the most directly comparable GAAP measure) before non-recurring or non-operating income and expenses, adjusted to assume a single class of stock (Class A) and assuming noncontrolling interest does not exist. Adjusted EPS is a useful measure to management because it eliminates the impact of items that do not relate to business performance and helps compare companies that may not have a dual-share class structure.
Previous wording
Adjusted EPS increased by $0.78 to $1.33 for the year ended December 31, 2023, from $0.55 for the year ended December 31, 2022, driven by a significant increase in Core Revenue and slower growth in both employee compensation and benefits and general and administrative expenses.
Current wording
Adjusted EPS increased by $0.66 to $1.99 for the year ended December 31, 2024, from $1.33 for the year ended December 31, 2023, driven by a significant increase in income from operations driven by strong growth in Core Revenue and Contingent Commissions with slower growth in operating expenses and the repurchase of 1,045 thousand Class A shares as part of our share repurchase program.
Previous wording
(1) Net Income Margin is calculated as Net Income divided by Total Revenue ($23,696 / $261,276), ($2,630 / $209,390), and ($8,296 / $151,312) for the years ended December 31, 2023, 2022, and 2021.
Current wording
(1) Net Income Margin is calculated as Net Income divided by Total Revenue ($49,113 / $314,505), ($23,696 / $261,276), and ($2,630 / $209,390) for the years ended December 31, 2024, 2023, and 2022.
Previous wording
(2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue excluding other non-operating items ($69,818 / $261,276) for the year ended December 31, 2023, ($36,654 / $209,390) for the year ended December 31, 2022, and ($20,838 /$151,312) for the year ended December 31, 2021.
Current wording
(2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue excluding other non-operating items ($99,911 / $314,505) for the year ended December 31, 2024, ($69,817 / $261,276) for the year ended December 31, 2023, and ($36,654 /$209,390) for the year ended December 31, 2022.
Previous wording
(1) Calculated as equity-based compensation divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock outstanding during the period 2023 - [$24.0 million / ( 23.9 million + 13.8 million )] 2022 - [ $19.6 million / ( 21.0 million + 16.2 million )] 2021 - [ $7.3 million / ( 19.2 million + 17.7 million )]
Current wording
(1) Calculated as equity-based compensation divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock outstanding during the period 2024 - [$28.0 million / ( 24.7 million +12.7 million )] 2023 - [ $24.0 million / ( 23.9 million + 13.8 million )] 2022 - [ $19.6 million / ( 21.0 million + 16.2 million )]
Previous wording
(2) Calculated as impairment expense divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock [ $3.6 million / (23.9 million + 13.8 million )] for the year ended December 31, 2023. No impairment was recorded for the years ended December 31, 2022 and December 31, 2021.
Current wording
(2) Calculated as impairment expense divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock [ $0.3 million / ( 24.7 million + 12.7 million )] for the year ended December 31, 2024 and [ $3.6 million/ (23.9 million +13.8 million )]. No impairment was recorded for the year ended December 31, 2022.
Previous wording
In 2023, revenue increased by 25% to $261.3 million from $209.4 million in 2022.
Current wording
In 2024, revenue increased by 20% to $314.5 million from $261.3 million in 2023.
Previous wording
Commissions and agency fees consist of Core Revenue from New Business Commissions, Renewal Commissions, and Agency Fees, and Ancillary Revenue from Contingent Commissions generated from corporate sales and franchise sales and other income.
Current wording
Commissions and agency fees consist of Core Revenue from New Business Commissions, Renewal Commissions, and Agency Fees, and Ancillary Revenue from Contingent Commissions generated from corporate sales.
Previous wording
Renewal Commissions increased by $13.2 million, or 23%, to $70.7 million for the year ended December 31, 2023 from $57.5 million for the year ended December 31, 2022. This increase is primarily attributable to strong premium retention and more policies in the renewal term, offset by a slight decline in client retention to 86% at December 31, 2023 from 88% at December 31, 2022.
Current wording
Renewal Commissions increased by $4.2 million, or 6%, to $74.9 million for the year ended December 31, 2024 from $70.7 million for the year ended December 31, 2023. This increase is primarily attributable to an increase in the number of policies in the renewal term from December 31, 2023 to December 31, 2024, assisted by client retention of 84%, and premium rate increases.
Previous wording
New Business Commissions decreased by $0.7 million, or 3%, to $23.4 million for the year ended December 31, 2023 from $24.1 million for the year ended December 31, 2022. Revenue from Agency Fees decreased by $2.7 million, or 25%, to $8.2 million for the year ended December 31, 2023 from $10.9 million for the year ended December 31, 2022. This decrease in New Business Commissions and Agency Fees was primarily attributable to a decrease in total sales agent head count to 300 at December 31, 2023, from 320 at December 31, 2022, a 6% decrease.
Current wording
New Business Commissions increased by $1.2 million, or 5%, to $24.6 million for the year ended December 31, 2024 from $23.4 million for the year ended December 31, 2023. This increase in New Business Commissions was primarily attributable to an increase in total sales agent head count to 417 at December 31, 2024, from 300 at December 31, 2023, a 39% increase. Revenue from Agency Fees decreased by $0.1 million, or 1%, to $8.1 million for the year ended December 31, 2024 from $8.2 million for the year ended December 31, 2023. This decrease in Agency Fees was primarily attributable to slight decreases in both the percentage of policies written where an agency fee was charged and the average amount of an agency fee charge.
Previous wording
Revenue from Contingent Commissions increased by $6.1 million, or 79%, to $13.7 million for the year ended December 31, 2023, from $7.7 million for the year ended December 31, 2022. The increase is primarily attributable to growth in total written premiums as well as receiving and qualifying for additional contingent commissions.
Current wording
Revenue from Contingent Commissions increased by $17.6 million, or 128%, to $31.4 million for the year ended December 31, 2024, from $13.7 million for the year ended December 31, 2023. The increase is primarily attributable to growth in total written premiums as well as receiving and qualifying for additional Contingent Commissions.
Previous wording
Franchise Revenues consist of Core Revenues from Royalty Fees, Cost Recovery Revenues from Initial Franchise Fees, and Ancillary Revenues from Interest Income.
Current wording
Franchise Revenues consist of Core Revenues from Royalty Fees, Cost Recovery Revenues from Initial Franchise Fees, and Ancillary Revenues from Other Franchise Revenues.
Previous wording
Revenue from Renewal Royalty Fees increased by $30.2 million, or 39%, to $107.5 million, for the year ended December 31, 2023 from $77.3 million for the year ended December 31, 2022. The increase in revenue from Renewal Royalty Fees was primarily attributable to strong premium retention rate and more policies in the renewal term, offset by a slight decline in client retention to 86% at December 31, 2023 from 88% at December 31, 2022.
Current wording
Revenue from Renewal Royalty Fees increased by $31.4 million, or 29%, to $138.9 million, for the year ended December 31, 2024 from $107.5 million for the year ended December 31, 2023. The increase in revenue from Renewal Royalty Fees was primarily attributable to an increase in the number of policies in the renewal term from December 31, 2023 to December 31, 2024, assisted by client retention of 84%, and premium rate increases.
Previous wording
Revenue from New Business Royalty Fees increased by $4.9 million, or 27%, to $23.2 million for the year ended December 31, 2023 from $18.2 million for the year ended December 31, 2022. The increase in revenue from New Business Royalty Fees was driven primarily by an increase in agency productivity and rising premium rates.
Current wording
Revenue from New Business Royalty Fees increased by $4.0 million, or 17%, to $27.1 million for the year ended December 31, 2024 from $23.2 million for the year ended December 31, 2023. The increase in revenue from New Business Royalty Fees was driven primarily by an increase in New Business Production per Agency and rising premium rates.
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Previous report — wording carried elsewhere
NPS has increased modestly to 92 as of December 31, 2023 from 90 at December 31, 2022, primarily driven by the service team’s continued focus on delivering highly differentiated service levels.
Previous report — wording carried elsewhere
(3) making distributions to the Goosehead Management Holders and Texas Wasatch Holders; and (4) borrowings, interest payments and repayments under our Credit Agreement. As of December 31, 2023, our unrestricted cash and cash equivalents, and restricted cash was $44.0 million. We have used cash flow from operations primarily to pay compensation and related expenses, general, administrative and other expenses, and debt service.
Previous report — wording carried elsewhere
Issuer Purchases of Equity Securities — Dividend policy".