Goosehead Insurance, Inc.
For the period ended Mar 31, 2025. Filed Apr 24, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 24, 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-Q
Period ended 2024-09-30; filed 2024-10-24.
0001726978-24-000101
Item 2. Management’s discussion and analysis of financial condition and results of operationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-24.
0001726978-25-000056
Item 2. 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 158 previous paragraphs and 163 current paragraphs.
99 unchanged; 47 reworded; 16 added; 12 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 11 previous and 10 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 revenue increased 17% from the first quarter of 2024 to $75.6 million
Current report
•Core Revenue* increased by 17% from the first quarter of 2024 to $69.1 million
Current report
•Policies in Force increased 13% from March 31, 2024 to 1,729,000 at March 31, 2025
Current report
•Total operating franchises decreased 5% from March 31, 2024 to 1,098 at March 31, 2025
Current report
For the three months ended March 31, 2025 revenue increased 17% to $75.6 million from $64.5 million for the three months ended March 31, 2024.
Current report
New Business Commissions increased by $0.1 million, or 1%, to $5.8 million for the three months ended March 31, 2025 from $5.7 million for the three months ended March 31, 2024. The increase during the three months ended March 31, 2025 was primarily driven by an increase in the number of Corporate sales agents, offset by product challenges in Texas where our corporate network still has large exposure.
Current report
Revenue from Contingent Commissions increased by $1.8 million, to $4.5 million for the three months ended March 31, 2025 from $2.7 million for the three months ended March 31, 2024. The increase during the three months ended March 31, 2025 was primarily attributable to an increase in Total Written Premium and receiving and qualifying for additional Contingent Commissions.
Current report
Employee compensation and benefits expenses increased by $6.2 million, or 15%, to $48.3 million for the three months ended March 31, 2025 from $42.1 million for the three months ended March 31, 2024. The increase was primarily related to investments in corporate producers and our service and technology functions.
Current report
Tax benefit
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
Ancillary Revenue increased by $1.8 million to $4.9 million for the three months ended March 31, 2025 from $3.1 million for the three months ended March 31, 2024. The increase was primarily attributable to an increase in Total Written Premium and receiving and qualifying for additional Contingent Commissions.
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
For the three months ended March 31, 2025, Adjusted EBITDA Margin was 21% compared to 18% for the three months ended March 31, 2024 as a result of expenses growing at a slower pace than our growth in Total Revenue.
Current report
Credit agreements
Current report
On January 8, 2025, the Company entered into a credit agreement (the "2025 Credit Agreement") providing for an aggregate $300 million term notes payable (the "2025 Initial Term Loan") and $75 million revolving credit facility (the "2025 Revolving Credit Facility"). The 2025 Initial Term Loan matures on January 8, 2032 and the 2025 Revolving Credit Facility matures on January 8, 2030. This credit agreement replaces the prior Second Amended and Restated Credit Agreement, dated July 21, 2021, which was repaid with the proceeds of the 2025 Initial Term Loan and terminated. Loans under the 2025 Credit Agreement will bear interest at a rate of Term SOFR plus 3.50%. The term note is payable in quarterly installments of $0.8 million, with a balloon payment of $279.8 million on January 8, 2032. The 2025 Credit Agreement is secured by all property owned, leased or operated by the Company except for certain excluded assets
Removed paragraphs (12)
Previous report
•Total revenue increased 10% from the third quarter of 2023 to $78.0 million
Previous report
•Core Revenue* increased by 16% from the third quarter of 2023 to $73.5 million
Previous report
•Policies in Force increased 12% from September 30, 2023 to 1,636,000 at September 30, 2024
Previous report
•Total franchises decreased 27% compared to the prior-year period to 1,149; total operating franchises decreased 13% from September 30, 2023 to 1,116 at September 30, 2024
Previous report
For the three months ended September 30, 2024 revenue increased 10% to $78.0 million from $71.0 million for the three months ended September 30, 2023. For the nine months ended September 30, 2024 revenue increased 11% to $220.6 million from $198.3 million for the nine months ended September 30, 2023.
Previous report
New Business Commissions increased by $0.1 million, or 2%, to $6.2 million for the three months ended September 30, 2024 from $6.1 million for the three months ended September 30, 2023. New Business Commissions increased by $0.7 million, or 4%, to $18.6 million for the nine months ended September 30, 2024 from $17.9 million for the nine months ended September 30, 2023. The increase during the three and nine months ended September 30, 2024 was primarily driven by an increase in the number of Corporate sales agents.
Previous report
Revenue from Contingent Commissions decreased by $2.3 million to $2.5 million for the three months ended September 30, 2024 from $4.8 million for the three months ended September 30, 2023. Revenue from Contingent Commissions decreased by $3.3 million, to $7.4 million for the nine months ended September 30, 2024 from $10.7 million for the nine months ended September 30, 2023. The decrease during the three and nine months ended September 30, 2024 was primarily attributable to additional profitability requirements in order to earn a contingent bonus.
Previous report
Employee compensation and benefits expenses increased by $3.8 million, or 10%, to $43.2 million for the three months ended September 30, 2024 from $39.4 million for the three months ended September 30, 2023. Employee compensation and benefits expenses increased by $14.1 million, or 12%, to $127.9 million for the nine months ended September 30, 2024 from $113.8 million for the nine months ended September 30, 2023. The increase was primarily related to investments in corporate producers, partnership, technology, and service functions, and increases in equity-based compensation of 10% and 11% for the three and nine month periods related to stock options awarded during the year.
Previous report
Tax (benefit) expense
Previous report
Ancillary Revenue decreased by $2.3 million to $2.9 million for the three months ended September 30, 2024 from $5.2 million for the three months ended September 30, 2023. Ancillary Revenue decreased by $3.4 million to $8.8 million for the nine months ended September 30, 2024 from $12.2 million for the nine months ended September 30, 2023. The decrease was primarily attributable to additional profitability requirements in order to earn a contingent bonus.
Previous report
For the three months ended September 30, 2024, Adjusted EBITDA Margin was 34% compared to 32% for the three months ended September 30, 2023. For the nine months ended September 30, 2024, Adjusted EBITDA Margin was 28% compared to 28% for the nine months ended September 30, 2023 as a result of maintaining growth in expenses in proportion to growth in Total Revenue.
Previous report
Credit agreement
Reworded paragraphs (47)
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 to consumers a superior insurance experience. Our management team continues to own approximately 35% of the company, representing our commitment to the long-term success of the Company.
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
Financial Highlights for the Third Quarter of 2024:
Current wording
Financial Highlights for the First Quarter of 2025:
Previous wording
•Total Written Premiums placed increased 28% from the prior-year period to $1.03 billion
Current wording
•Total Written Premiums placed increased 22% from the prior-year period to $1.0 billion
Previous wording
•Net income increased by $1.3 million from the third quarter of 2023 to $12.6 million, or 16% of total revenues
Current wording
•Net income increased by $0.8 million from the first quarter of 2024 to $2.6 million, or 4% of total revenues
Previous wording
•Adjusted EBITDA* increased 17% from the third quarter of 2023 to $26.1 million, or 34% of total revenues
Current wording
•Adjusted EBITDA* increased 32% from the first quarter of 2024 to $15.5 million, or 21% of total revenues
Previous wording
•Basic and diluted earnings per share were $0.31 and $0.29, respectively, and Adjusted EPS* was $0.50 per share for the three months ended September 30, 2024
Current wording
•Basic and diluted earnings per share were $0.09 and $0.09, respectively, and Adjusted EPS* was $0.26 per share for the three months ended March 31, 2025
Previous wording
•Corporate sales headcount increased 45% from September 30, 2023 to 458 at September 30, 2024
Current wording
•Corporate sales headcount increased 46% from March 31, 2024 to 426 at March 31, 2025
Previous wording
◦As of September 30, 2024, 277 of these Corporate sales agents had less than one year of tenure and 181 had greater than one year of tenure
Current wording
◦As of March 31, 2025, 254 of these Corporate sales agents had less than one year of tenure and 172 had greater than one year of tenure
Previous wording
◦As of September 30, 2024, 93 operating Franchisees had less than one year of tenure and 1,023 operating Franchisees had greater than one year of tenure
Current wording
◦As of March 31, 2025, 100 operating Franchisees had less than one year of tenure and 998 operating Franchisees had greater than one year of tenure
Previous wording
During the three months ended September 30, 2024, despite continued macroeconomic headwinds, primarily related to product availability, the condition of the housing market, and severe weather events that temporarily impacted our production in several large states, revenue increased by 10% to $78.0 million from $71.0 million for the three months ended September 30, 2023. For the nine months ended September 30, 2024, revenue increased by 11% to $220.6 million from $198.3 million for the nine months ended September 30, 2023. Total Written Premium, which we believe is the best leading indicator of future revenue, increased to $1.03 billion for the three months ended September 30, 2024 from $0.80 billion for the three months ended September 30, 2023. Total Written Premium increased 29% for the nine months ended September 30, 2024 to $2.85 billion from $2.21 billion for the nine months ended September 30, 2023. Total Written Premiums drive our current and future Core Revenue and give us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions.
Current wording
For the three months ended March 31, 2025, revenue increased by 17% to $75.6 million from $64.5 million for the three months ended March 31, 2024. Total Written Premium, which we believe is the best leading indicator of future revenue, increased 22% for the three months ended March 31, 2025 to $1.0 billion from $0.82 billion for the three months ended March 31, 2024. Total Written Premiums drive our current and future Core Revenue and give us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions.
Previous wording
The following is a discussion of our consolidated results of operations for each of the three and nine months ended September 30, 2024 and 2023. This information is derived from our accompanying condensed consolidated financial statements prepared in accordance with GAAP.
Current wording
The following is a discussion of our consolidated results of operations for each of the three months ended March 31, 2025 and 2024. This information is derived from our accompanying condensed consolidated financial statements prepared in accordance with GAAP.
Previous wording
The following table summarizes our results of operations for the three and nine months ended September 30, 2024 and 2023(in thousands):
Current wording
The following table summarizes our results of operations(in thousands):
Previous wording
Renewal Commissions increased by $1.2 million, or 6%, to $20.2 million for the three months ended September 30, 2024 from $19.0 million for the three months ended September 30, 2023. Renewal Commissions increased by $3.4 million, or 6%, to $56.8 million for the nine months ended September 30, 2024 from $53.4 million for the nine months ended September 30, 2023. The increase during the three and nine months ended September 30, 2024 was primarily attributable to an increase in the number of policies in the renewal term from September 30, 2023 to September 30, 2024 and premium rate increases.
Current wording
Renewal Commissions increased by $1.0 million, or 6%, to $17.0 million for the three months ended March 31, 2025 from $16.0 million for the three months ended March 31, 2024. The increase during the three months ended March 31, 2025 was primarily attributable to an increase in the number of policies in the renewal term from March 31, 2024 to March 31, 2025, assisted by client retention of 84%, and premium rate increases.
Previous wording
Revenue from Agency Fees remained stable at $2.0 million for the three months ended September 30, 2024 from $2.0 million for the three months ended September 30, 2023. Revenue from Agency Fees decreased by $0.6 million, or 9%, to $6.0 million for the nine months ended September 30, 2024 from $6.6 million for the nine months ended September 30, 2023. The decrease in Agency Fees during the nine months ended September 30, 2024 was primarily attributable to a decrease in the number of policies written where an Agency Fee was charged.
Current wording
Revenue from Agency Fees increased by $0.3 million, or 17%, to $2.2 million for the three months ended March 31, 2025 from $1.9 million for the three months ended March 31, 2024. The increase in Agency Fees during the three months ended March 31, 2025 was primarily attributable to an increase in the average fee charged, as well as an increase in the number of policies written where an agency fee was charged.
Previous wording
Revenue from Renewal Royalty Fees increased by $8.0 million, or 27%, to $38.1 million for the three months ended September 30, 2024 from $30.0 million for the three months ended September 30, 2023. Revenue from Renewal Royalty Fees increased by $23.6 million, or 29%, to $104.0 million for the nine months ended September 30, 2024 from $80.3 million for the nine months ended September 30, 2023. The increase in revenue from Renewal Royalty Fees during the three and nine months ended September 30, 2024 was primarily attributable to an increase in the number of policies in the renewal term and rising premium rates.
Current wording
Revenue from Renewal Royalty Fees increased by $8.2 million, or 28%, to $37.2 million for the three months ended March 31, 2025 from $29.1 million for the three months ended March 31, 2024. The increase in revenue from Renewal Royalty Fees during the three months ended March 31, 2025 was primarily attributable to an increase in the number of policies in the renewal term, assisted by client retention of 84%, and rising premium rates.
Previous wording
Revenue from New Business Royalty Fees increased by $1.1 million, or 18%, to $7.0 million for the three months ended September 30, 2024 from $5.9 million for the three months ended September 30, 2023. Revenue from New Business Royalty Fees increased by $2.6 million, or 14%, to $20.4 million for the nine months ended September 30, 2024 from $17.8 million for the nine months ended September 30, 2023. The increase in revenue from New Business Royalty Fees during the three and nine months ended September 30, 2024 was primarily attributable to an increase in franchise productivity and rising premium rates.
Current wording
Revenue from New Business Royalty Fees increased by $0.7 million, or 11%, to $6.9 million for the three months ended March 31, 2025 from $6.2 million for the three months ended March 31, 2024. The increase in revenue from New Business Royalty Fees during the three months ended March 31, 2025 was primarily attributable to an increase in franchise productivity and rising premium rates.
Previous wording
Revenue from Initial Franchise Fees decreased by $1.0 million, or 42%, to $1.4 million for the three months ended September 30, 2024 from $2.4 million for the three months ended September 30, 2023. Revenue from Initial Franchise Fees decreased by $3.5 million, or 40%, to $5.3 million for the nine months ended September 30, 2024 from $8.8 million for the nine months ended September 30, 2023. The primary reason for this decrease was lower turnover of franchises during the period, which avoids accelerated recognition of Initial Franchise Fees for terminated franchises.
Current wording
Revenue from Initial Franchise Fees decreased by $0.9 million, or 40%, to $1.3 million for the three months ended March 31, 2025 from $2.2 million for the three months ended March 31, 2024. The primary reason for this decrease was lower turnover of franchises during the period, which avoids accelerated recognition of Initial Franchise Fees for terminated franchises.
Previous wording
Interest income decreased by $0.1 million, or 28%, to $0.2 million for the three months ended September 30, 2024 from $0.3 million for the three months ended September 30, 2023. Interest income decreased by $0.4 million, or 36%, to $0.7 million for the nine months ended September 30, 2024 from $1.1 million for the nine months ended September 30, 2023. The decrease was primarily attributable to fewer average Franchise Agreements signed under the payment plan option.
Current wording
Interest income decreased by $0.1 million, or 24%, to $0.2 million for the three months ended March 31, 2025 from $0.3 million for the three months ended March 31, 2024. The decrease was primarily attributable to fewer franchises operating under the payment plan option during the period.
Previous wording
General and administrative expenses increased by $0.4 million, or 2%, to $15.2 million for the three months ended September 30, 2024 from $14.8 million for the three months ended September 30, 2023. The increase was primarily attributable to increased spending on software offset by more efficient spend on travel and marketing. General and administrative expenses increased by $1.2 million, or 3%, to $49.2 million for the nine months ended September 30, 2024 from $48.0 million for the nine months ended September 30, 2023. This increase was primarily attributable to increased spending on software offset by a decrease in asset impairment charges and professional services.
Current wording
General and administrative expenses increased by $0.4 million, or 2%, to $17.6 million for the three months ended March 31, 2025 from $17.2 million for the three months ended March 31, 2024. This increase was primarily attributable to increased spending on technologies and professional services, offset by a decrease in asset impairment charges.
Previous wording
Bad debts decreased by $0.2 million, or 29%, to $0.6 million for the three months ended September 30, 2024 from $0.8 million for the three months ended September 30, 2023. Bad debts decreased by $1.0 million, or 30%, to $2.3 million for the nine months ended September 30, 2024 from $3.4 million for the nine months ended September 30, 2023. The decrease during the three and nine months ended September 30, 2024 was primarily attributable to lower turnover of franchises during the periods.
Current wording
Bad debts decreased by $0.7 million, or 64%, to $0.4 million for the three months ended March 31, 2025 from $1.1 million for the three months ended March 31, 2024. The decrease during the three months ended March 31, 2025 was primarily attributable to lower turnover of franchises during the periods.
Previous wording
Depreciation and amortization increased by $0.3 million, or 11%, to $2.6 million for the three months ended September 30, 2024 from $2.4 million for the three months ended September 30, 2023. Depreciation and amortization increased by $1.0 million, or 15%, to $7.8 million for the nine months ended September 30, 2024 from $6.8 million for the nine months ended September 30, 2023. This increase during the three and nine months ended September 30, 2024 was primarily attributable to increased spending on software development since September 30, 2023.
Current wording
Depreciation and amortization increased by $0.1 million, or 4%, to $2.7 million for the three months ended March 31, 2025 from $2.6 million for the three months ended March 31, 2024. This increase during the three months ended March 31, 2025 was primarily attributable to increased spending on software development since March 31, 2024.
Previous wording
Interest expense increased by $0.4 million for the three months ended September 30, 2024, to $2.1 million from $1.6 million for the three months ended September 30, 2023. Interest expense increased $0.5 million to $5.5 million for the nine months ended September 30, 2024 from $5.1 million for the nine months ended September 30, 2023. The primary driver of the increase during the three and nine months ended September 30, 2024 was an increase in total borrowings outstanding during the periods.
Current wording
Interest expense increased $4.3 million to $5.8 million for the three months ended March 31, 2025 from $1.5 million for the three months ended March 31, 2024. The primary driver of the increase during the three months ended March 31, 2025 was an increase in total borrowings outstanding during the periods.
Previous wording
Other income (expense) consists of remeasurements of our TRA liability and interest income. Other income (expense) increased by $0.5 million for the three months ended September 30, 2024 as a result of interest income generated by cash held in interest-bearing checking accounts. Other income (expense) decreased by $5.7 million for the nine months ended September 30, 2024 primarily due to remeasurements of our TRA liability due to an increase in the effective tax rate resulting from changes in state apportionment and related state filing requirements.
Current wording
Other income (expense) consists of remeasurements of our TRA liability, interest earned on cash balances, and loss on debt extinguishment. Other income (expense) increased by $6.9 million for the three months ended March 31, 2025 primarily due to remeasurements of our TRA liability during the three months ended March 31, 2024 due to changes in state apportionment and related state filing requirements.
Previous wording
Tax expense increased by $1.6 million for the three months ended September 30, 2024, to $2.3 million from expense of $0.7 million for the three months ended September 30, 2023 primarily due to an increase in income before taxes. Tax (benefit) expense decreased by $6.2 million for the nine months ended September 30, 2024 to a benefit of $3.3 million from expense of $2.9 million for nine months ended September 30, 2023. This is primarily due to the deferred tax impact of changes in state apportionment and related state filing requirements.
Current wording
Tax benefit decreased by $6.9 million for the three months ended March 31, 2025 to a benefit of $1.7 million from a benefit of $8.6 million for three months ended March 31, 2024. This is primarily due to an increase in income before taxes and due to remeasurements of our deferred tax asset during the three months ended March 31, 2024 due to changes in state apportionment and related state filing requirements.
Previous wording
The following tables show Total Written Premium placed by corporate agents and franchisees for the three and nine months ended September 30, 2024 and 2023(in thousands).
Current wording
The following tables show Total Written Premium placed by corporate agents and franchisees for the three months ended March 31, 2025 and 2024(in thousands).
Previous wording
As of September 30, 2024, we had 1.6 million Policies in Force compared to 1.5 million as of December 31, 2023 and 1.5 million as of September 30, 2023, representing a 10% and 12% increase, respectively.
Current wording
As of March 31, 2025, we had 1.7 million Policies in Force compared to 1.7 million as of December 31, 2024 and 1.5 million as of March 31, 2024, representing a 3% and a 13% increase, respectively.
Previous wording
NPS has decreasedto 90 as of September 30, 2024, compared to 92 as of September 30, 2023.
Current wording
NPS has decreasedto 87 as of March 31, 2025, compared to 91 as of March 31, 2024.
Previous wording
Client Retention decreased modestly to 84% at September 30, 2024 when compared to 86% at December 31, 2023 and 87% at September 30, 2023. For the trailing twelve months ended September 30, 2024, we retained 99% of the premiums we distributed in the trailing twelve months ended September 30, 2023, which decreased modestly from the 101% premium retention at December 31, 2023. 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 of 84% at March 31, 2025 remained steady when compared to 84% at December 31, 2024, and decreased modestly compared to 85% at March 31, 2024. The modest decrease was impacted by premium rate increases yet supported by the service team’s continued focus on delivering highly differentiated service levels. For the trailing twelve months ended March 31, 2025, we retained 98% of the premiums we distributed in the trailing twelve months ended March 31, 2024, which remained flat from the 98% premium retention at December 31, 2024. 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.
Previous wording
For the three months ended September 30, 2024, New Business Revenue grew 8% to $15.2 million, from $14.0 million for the three months ended September 30, 2023. For the nine months ended September 30, 2024, New Business Revenue grew 6% to $45.0 million, from $42.4 million for the nine months ended September 30, 2023. Growth in New Business Revenue during the three and nine months ended September 30, 2024 was primarily driven by growth in Franchise productivity, an increase in the number of Corporate sales agents, and rising premium rates.
Current wording
For the three months ended March 31, 2025, New Business Revenue grew 8% to $14.9 million, from $13.8 million for the three months ended March 31, 2024. Growth in New Business Revenue during the three months ended March 31, 2025 was primarily driven by growth in Franchise productivity and rising premium rates.
Previous wording
For the three months ended September 30, 2024, Renewal Revenue grew 19% to $58.3 million, from $49.1 million for the three months ended September 30, 2023. For the nine months ended September 30, 2024, Renewal Revenue grew 20% to $160.7 million, from $133.7 million for the nine months ended September 30, 2023. Growth in Renewal Revenue during the three and nine months ended September 30, 2024 was primarily driven by Client Retention of 84% at September 30, 2024, and rising premium rates.
Current wording
For the three months ended March 31, 2025, Renewal Revenue grew 20% to $54.2 million, from $45.0 million for the three months ended March 31, 2024. Growth in Renewal Revenue during the three months ended March 31, 2025 was primarily driven by an increase in the number of policies in the renewal term, assisted by Client Retention of 84% at March 31, 2025, and rising premium rates.
Previous wording
Core Revenue increased by $10.4 million, or 16%, to $73.5 million for the three months ended September 30, 2024 from $63.1 million for the three months ended September 30, 2023. Core Revenue increased by $29.7 million, or 17%, to $205.8 million for the nine months ended September 30, 2024 from $176.1 million for the nine months ended September 30, 2023. The primary drivers of the increase during the three and nine months ended September 30, 2024 were more new policies written driven by an increase in Franchise productivity and the number of Corporate sales agents, a higher number of policies in the renewal term assisted by client retention of 84%, and rising premium rates.
Current wording
Core Revenue increased by $10.3 million, or 17%, to $69.1 million for the three months ended March 31, 2025 from $58.8 million for the three months ended March 31, 2024. The primary drivers of the increase during the three months ended March 31, 2025 was an increase in policies in their renewal term, assisted by Client Retention of 84%; more new policies written driven by an increase in Franchise productivity; and rising premium rates.
Previous wording
Cost Recovery Revenue decreased by $1.1 million, or 40%, to $1.6 million for the three months ended September 30, 2024 from $2.8 million for the three months ended September 30, 2023. The primary driver of the decrease was a decrease in total franchises. Cost Recovery Revenue decreased by $3.9 million, or 39%, to $6.0 million for the nine months ended September 30, 2024 from $9.9 million for the nine months ended September 30, 2023. The primary driver was a decrease in terminations of franchises, resulting in less acceleration of initial franchise fee revenue.
Current wording
Cost Recovery Revenue decreased by $1.0 million, or 39%, to $1.5 million for the three months ended March 31, 2025 from $2.5 million for the three months ended March 31, 2024. The primary driver was a decrease in terminations of franchises, resulting in less acceleration of initial franchise fee revenue.
Previous wording
Adjusted EBITDA increased by $3.7 million, or 17%, to $26.1 million for the three months ended September 30, 2024 from $22.4 million for the three months ended September 30, 2023. Adjusted EBITDA increased by $6.9 million, or 12%, to $62.5 million for the nine months ended September 30, 2024 from $55.7 million for the nine months ended September 30, 2023. The primary driver of the increase in Adjusted EBITDA during the three and nine months ended September 30, 2024 was growth in Total Revenue.
Current wording
Adjusted EBITDA increased by $3.8 million, or 32%, to $15.5 million for the three months ended March 31, 2025 from $11.7 million for the three months ended March 31, 2024. The primary driver of the increase in Adjusted EBITDA during the three months ended March 31, 2025 was growth in Total Revenue, slower growth in both Employee compensation and benefits and General and administrative expenses, and a decrease in Bad debts.
Previous wording
The following tables show a reconciliation from Total Revenues to Core Revenue, Cost Recovery Revenue, and Ancillary Revenue for the three and nine months ended September 30, 2024 and 2023(in thousands):
Current wording
The following tables show a reconciliation from Total Revenues to Core Revenue, Cost Recovery Revenue, and Ancillary Revenue(in thousands):
Previous wording
The following tables show a reconciliation from net income to Adjusted EBITDA and Adjusted EBITDA margin for the three and nine months ended September 30, 2024 and 2023(in thousands):
Current wording
The following tables show a reconciliation from net income to Adjusted EBITDA and Adjusted EBITDA margin(in thousands):
Previous wording
(1) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue ($26,145/$78,035), and ($22,425/$71,030) for the three months ended September 30, 2024 and 2023, respectively. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue ($62,533/$220,583), and ($55,669/$198,262) for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
(1) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue ($15.5 million/$75.6 million), and ($11.7 million/$64.5 million) for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
The following tables show a reconciliation from basic earnings per share to Adjusted EPS (non-GAAP basis) for the three and nine months ended September 30, 2024 and 2023. Note that totals may not sum due to rounding:
Current wording
The following tables show a reconciliation from basic earnings per share to Adjusted EPS. Note that totals may not sum due to rounding:
Previous wording
(1) Calculated as equity-based compensation divided by sum of weighted average Class A and Class B shares [$7.1 million/(24.3 million + 12.7 million)] for the three months ended September 30, 2024 and [$6.5 million/ (24.1 million + 13.6 million)] for the three months ended September 30, 2023. Calculated as equity-based compensation divided by sum of weighted average Class A and Class B shares [$21.1 million/(24.7 million + 12.8 million)] for the nine months ended September 30, 2024 and [$19.0 million/ (23.7 million + 14.0 million)] for the nine months ended September 30, 2023.
Current wording
(1) Calculated as equity-based compensation divided by sum of weighted average Class A and Class B shares [$6.2 million/(24.8 million + 12.6 million)] for the three months ended March 31, 2025 and [$7.4 million/ (25.1 million + 12.9 million)] for the three months ended March 31, 2024.
Previous wording
(2) Calculated as impairment expense divided by sum of weighted average Class A and Class B shares [$0.3 million/(24.7 million + 12.8 million)] for the nine months ended September 30, 2024. Calculated as impairment expense divided by sum of weighted average Class A and Class B shares [$3.6 million/(23.7 million + 14.0 million)] for the nine months ended September 30, 2023. No impairment was recorded for the three months ended September 30, 2024 and 2023.
Current wording
(2) Calculated as impairment expense divided by sum of weighted average Class A and Class B shares [$0.3 million/(25.1 million + 12.9 million)] for the three months ended March 31, 2024. No impairment was recorded for the three months ended March 31, 2025.
Previous wording
We have managed our historical liquidity and capital requirements primarily through the receipt of revenues. Our primary cash flow activities involve: (1) generating cash flow from Commissions and Fees, which largely includes New Business Commissions, Renewal Commissions, and Agency Fees; (2) generating cash flow from Franchise Revenues operations, which largely includes Initial Franchise Fees and Royalty Fees; (3) borrowings, interest payments and repayments under our credit agreement; and (4) issuing shares of Class A common stock. As of September 30, 2024, our cash and cash equivalents balance was $47.5 million. We have used cash flow from operations primarily to pay compensation and related expenses, general, administrative and other expenses, debt service, special dividends, share repurchases, and distributions to our owners.
Current wording
We have managed our historical liquidity and capital requirements primarily through the receipt of revenues. Our primary cash flow activities involve: (1) generating cash flow from Commissions and Fees, which largely includes New Business Commissions, Renewal Commissions, and Agency Fees; (2) generating cash flow from Franchise Revenues operations, which largely includes Initial Franchise Fees and Royalty Fees; (3) borrowings, interest payments and repayments under our credit agreement; and (4) issuing shares of Class A common stock. As of March 31, 2025, our cash and cash equivalents balance was $70.2 million. We have used cash flow from operations primarily to pay compensation and related expenses, general, administrative and other expenses, debt service, special dividends, share repurchases, and distributions to our owners.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Holders of Goosehead Financial, LLC Units (other than Goosehead Insurance, Inc.) may, subject to certain conditions and transfer restrictions described above, redeem or exchange their LLC Units for shares of Class A common stock of Goosehead Insurance, Inc. on a one-for-one basis. Goosehead Financial, LLC intends to make an election under Section 754 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”) effective for each taxable year in which a redemption or exchange of LLC Units for shares of Class A common stock occurs, which is expected to result in increases to the tax basis of the assets of Goosehead Financial, LLC at the time of a redemption or exchange of LLC Units. The redemptions or exchanges are expected to result in increases in the tax basis of the tangible and intangible assets of Goosehead Financial, LLC. These increases in tax basis may reduce the amount of tax that Goosehead Insurance, Inc. would otherwise be required to pay in the future. We have entered into a tax receivable agreement with the Pre-IPO LLC Members that provides for the payment by us to the Pre-IPO LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of (i) any increase in tax basis in