Goosehead Insurance, Inc.
For the period ended Sep 30, 2025. Filed Oct 23, 2025.
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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.
Sep 30, 2025 · Filed Oct 23, 2025
Contents
Item 1. Condensed Consolidated Financial Statements (Unaudited)
| Page | ||
|---|---|---|
| Condensed Consolidated Statements of Operations | 6 | |
| Condensed Consolidated Balance Sheets | 7 | |
| Condensed Consolidated Statements of Stockholders' Equity | 8 | |
| Condensed Consolidated Statements of Cash Flows | 11 | |
| Notes to the Condensed Consolidated Financial Statements | 13 | |
| Note 1 | Organization | 13 |
| Note 2 | Summary of significant accounting policies | 13 |
| Note 3 | Revenues | 16 |
| Note 4 | Franchise fees receivable | 19 |
| Note 5 | Allowance for uncollectible agency fees | 19 |
| Note 6 | Property and equipment | 20 |
| Note 7 | Intangible assets | 20 |
| Note 8 | Debt | 20 |
| Note 9 | Income taxes | 22 |
| Note 10 | Stockholders' equity | 23 |
| Note 11 | Noncontrolling interest | 31 |
| Note 12 | Equity-based compensation | 32 |
| Note 13 | Dividends | 32 |
| Note 14 | Segment information | 32 |
| Note 15 | Litigation | 33 |
| Note 16 | Related Party Transactions | 33 |
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Revenues: | ||||
| Commissions and agency fees | $34,454 | $30,942 | $101,953 | $88,782 |
| Franchise revenues | 55,819 | 46,862 | 157,563 | 131,076 |
| Interest income | 162 | 231 | 530 | 725 |
| Total revenues | 90,435 | 78,035 | 260,046 | 220,583 |
| Operating Expenses: | ||||
| Employee compensation and benefits | 48,725 | 43,217 | 147,447 | 127,898 |
| General and administrative expenses | 17,109 | 15,201 | 59,316 | 49,236 |
| Bad debts | 501 | 565 | 1,457 | 2,345 |
| Depreciation and amortization | 2,823 | 2,614 | 8,275 | 7,814 |
| Total operating expenses | 69,158 | 61,597 | 216,495 | 187,293 |
| Income from operations | 21,277 | 16,438 | 43,551 | 33,290 |
| Other Income: | ||||
| Interest expense | (5,974) | (2,060) | (18,100) | (5,529) |
| Other income (expense) | (209) | 544 | 774 | (5,742) |
| Income before taxes | 15,094 | 14,922 | 26,225 | 22,019 |
| Tax expense (benefit) | 2,404 | 2,315 | 2,606 | (3,272) |
| Net income | 12,690 | 12,607 | 23,619 | 25,291 |
| Less: net income attributable to noncontrolling interests | 4,782 | 5,048 | 8,219 | 9,720 |
| Net income attributable to Goosehead Insurance, Inc. | $7,908 | $7,559 | $15,400 | $15,571 |
| Earnings per share: | ||||
| Basic | $0.31 | $0.31 | $0.61 | $0.63 |
| Diluted | $0.29 | $0.29 | $0.56 | $0.58 |
| Weighted average shares of Class A common stock outstanding | ||||
| Basic | 25,149 | 24,293 | 25,053 | 24,689 |
| Diluted | 38,014 | 37,942 | 38,365 | 38,269 |
Condensed Consolidated Balance Sheets
(In thousands, except per share amounts)
| September 30, | December 31, | |
|---|---|---|
| 2025 | 2024 | |
| Assets | ||
| Current Assets: | ||
| Cash and cash equivalents | $51,587 | $54,280 |
| Restricted cash | 2,933 | 3,693 |
| Commissions and agency fees receivable, net | 12,310 | 31,375 |
| Receivable from franchisees, net | 11,977 | 11,077 |
| Prepaid expenses | 14,276 | 8,139 |
| Total current assets | 93,083 | 108,564 |
| Receivable from franchisees, net of current portion | 3,078 | 3,469 |
| Property and equipment, net of accumulated depreciation | 21,868 | 24,101 |
| Right-of-use asset | 32,521 | 37,420 |
| Intangible assets, net of accumulated amortization | 34,373 | 25,075 |
| Deferred income taxes, net | 212,632 | 193,478 |
| Other assets | 6,041 | 5,546 |
| Total assets | $403,596 | $397,653 |
| Liabilities and Stockholders’ Equity | ||
| Current Liabilities: | ||
| Accounts payable and accrued expenses | $25,045 | $22,891 |
| Premiums payable | 2,933 | 3,693 |
| Lease liability | 6,659 | 6,535 |
| Contract liabilities | 3,401 | 3,275 |
| Note payable | 2,993 | 10,063 |
| Liabilities under tax receivable agreement | 7,117 | — |
| Total current liabilities | 48,148 | 46,457 |
| Lease liability, net of current portion | 50,992 | 54,536 |
| Note payable, net of current portion | 290,004 | 82,251 |
| Contract liabilities, net of current portion | 14,084 | 15,191 |
| Liabilities under tax receivable agreement, net of current portion | 171,088 | 160,142 |
| Total liabilities | 574,316 | 358,577 |
| Class A common stock, $0.01 par value per share - 300,000 shares authorized, 24,967 shares issued and outstanding as of September 30, 2025, 24,668 shares issued and outstanding as of December 31, 2024 | 250 | 247 |
| Class B common stock, $0.01 par value per share - 50,000 shares authorized, 11,935 issued and outstanding as of September 30, 2025, 12,620 shares issued and outstanding as of December 31, 2024 | 119 | 126 |
| Additional paid-in capital | 40,440 | 58,917 |
| Accumulated deficit | (145,787) | (15,401) |
| Total stockholders' equity | (104,978) | 43,889 |
| Noncontrolling interests | (65,742) | (4,813) |
| Total equity | (170,720) | 39,076 |
| Total liabilities and equity | $403,596 | $397,653 |
Condensed Consolidated Statements of Stockholders' Equity
(In thousands)
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A Common stock | Class B Common Stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance January 1, 2025 | 24,668 | 12,620 | $247 | $126 | $58,917 | $(15,401) | $43,889 | $(4,813) | $39,076 |
| Dividends declared | — | — | — | — | — | (145,786) | (145,786) | — | (145,786) |
| Distributions | — | — | — | — | — | — | — | (59,232) | (59,232) |
| Net income | — | — | — | — | — | 2,342 | 2,342 | 304 | 2,646 |
| Exercise of stock options | 241 | — | 3 | — | 6,588 | — | 6,591 | 3,936 | 10,527 |
| Equity-based compensation | — | — | — | — | 4,136 | — | 4,136 | 2,100 | 6,236 |
| Activity under employee stock purchase plan | 1 | — | — | — | 70 | — | 70 | 37 | 107 |
| Redemption of LLC Units | 145 | (145) | 1 | (1) | (697) | — | (697) | 697 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 911 | — | 911 | — | 911 |
| Balance March 31, 2025 | 25,055 | 12,475 | $251 | $125 | $69,925 | $(158,845) | $(88,544) | $(56,971) | $(145,515) |
| Distributions | — | — | — | — | — | — | — | (1,886) | (1,886) |
| Share Repurchases | (6) | — | — | — | (344) | — | (344) | (185) | (529) |
| Net income | — | — | — | — | — | 5,150 | 5,150 | 3,133 | 8,283 |
| Exercise of stock options | 33 | — | — | — | 946 | — | 946 | 538 | 1,484 |
| Equity-based compensation | — | — | — | — | 4,041 | — | 4,041 | 1,976 | 6,017 |
| Activity under employee stock purchase plan | 1 | — | — | — | 71 | — | 71 | 37 | 108 |
| Redemption of LLC Units | 268 | (268) | 3 | (3) | (1,353) | — | (1,353) | 1,353 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 1,444 | — | 1,444 | — | 1,444 |
| Balance June 30, 2025 | 25,351 | 12,207 | $254 | $122 | $74,730 | $(153,695) | $(78,589) | $(52,005) | $(130,594) |
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A Common stock | Class B Common Stock | Additional paid in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance June 30, 2025 | 25,351 | 12,207 | $254 | $122 | $74,730 | $(153,695) | $(78,589) | $(52,005) | $(130,594) |
| Dividends declared | — | — | — | — | — | — | — | — | — |
| Distributions | — | — | — | — | — | — | — | (2,094) | (2,094) |
| Share Repurchases | (685) | — | (7) | — | (38,355) | — | (38,362) | (20,314) | (58,676) |
| Net income | — | — | — | — | — | 7,908 | 7,908 | 4,782 | 12,690 |
| Exercise of stock options | 28 | — | — | — | 808 | — | 808 | 469 | 1,277 |
| Equity-based compensation | — | — | — | — | 3,777 | — | 3,777 | 1,810 | 5,587 |
| Activity under employee stock purchase plan | 1 | — | — | — | 62 | — | 62 | 33 | 95 |
| Redemption of LLC Units | 272 | (272) | 3 | (3) | (1,577) | — | (1,577) | 1,577 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 995 | — | 995 | — | 995 |
| Balance September 30, 2025 | 24,967 | 11,935 | $250 | $119 | $40,440 | $(145,787) | $(104,978) | $(65,742) | $(170,720) |
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A Common stock | Class B Common Stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance January 1, 2024 | 24,966 | 12,954 | $250 | $130 | $73,413 | $(45,827) | $27,966 | $(11,180) | $16,786 |
| Distributions | — | — | — | — | — | — | — | (42) | (42) |
| Net income (loss) | — | — | — | — | — | 1,814 | 1,814 | (5) | 1,809 |
| Exercise of stock options | 65 | — | 1 | — | 1,212 | — | 1,213 | 650 | 1,863 |
| Equity-based compensation | — | — | — | — | 4,864 | — | 4,864 | 2,493 | 7,357 |
| Activity under employee stock purchase plan | 2 | — | — | — | 96 | — | 96 | 50 | 146 |
| Redemption of LLC Units | 196 | (196) | 2 | (2) | (169) | — | (169) | 169 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 322 | — | 322 | — | 322 |
| Balance March 31, 2024 | 25,230 | 12,758 | $252 | $128 | $79,738 | $(44,013) | $36,106 | $(7,865) | $28,240 |
| Distributions | — | — | — | — | — | — | — | (2,346) | (2,346) |
| Share repurchases | (1,045) | — | (10) | — | (41,569) | — | (41,579) | (22,054) | (63,633) |
| Net income | — | — | — | — | — | 6,198 | 6,198 | 4,677 | 10,875 |
| Exercise of stock options | 7 | — | — | — | 159 | — | 159 | 86 | 245 |
| Equity-based compensation | — | — | — | — | 4,373 | — | 4,373 | 2,259 | 6,632 |
| Activity under employee stock purchase plan | 2 | — | — | — | 82 | — | 82 | 46 | 128 |
| Redemption of LLC Units | 10 | (10) | — | — | (35) | — | (35) | 35 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 126 | — | 126 | — | 126 |
| Balance June 30, 2024 | 24,205 | 12,748 | $242 | $127 | $42,874 | $(37,815) | $5,430 | $(25,162) | $(19,733) |
| Dividends declared | — | — | — | — | — | — | — | — | — |
| Distributions | — | — | — | — | — | — | — | (2,084) | (2,084) |
| Share repurchases | — | — | — | — | 81 | — | 81 | 42 | 123 |
| Net income | — | — | — | — | — | 7,559 | 7,559 | 5,048 | 12,607 |
| Exercise of stock options | 138 | — | 1 | — | 2,536 | — | 2,537 | 1,466 | 4,003 |
| Equity-based compensation | — | — | — | — | 4,654 | — | 4,654 | 2,439 | 7,093 |
| Activity under employee stock purchase plan | 1 | — | — | — | 66 | — | 66 | 36 | 102 |
| Redemption of LLC Units | 26 | (26) | — | — | (49) | — | (49) | 49 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 135 | — | 135 | — | 135 |
| Balance September 30, 2024 | 24,369 | 12,722 | $244 | $127 | $50,297 | $(30,256) | $20,413 | $(18,166) | $2,245 |
Condensed Consolidated Statements of Cash Flows
(In thousands)
| Nine Months Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Cash flows from operating activities: | ||
| Net income | $23,619 | $25,291 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 9,329 | 8,149 |
| Loss on disposal of fixed assets | 5 | — |
| Loss on debt extinguishment | 804 | — |
| Impairment expense | 4,694 | 347 |
| Bad debt expense | 1,457 | 2,345 |
| Equity-based compensation | 17,840 | 21,082 |
| Impacts of tax receivable agreement | 157 | 11,394 |
| Deferred income taxes | 2,102 | (8,576) |
| Noncash lease activity | (2,342) | (2,715) |
| Cloud computing arrangement implementation costs | (513) | (684) |
| Changes in operating assets and liabilities: | ||
| Receivable from franchisees | (835) | 3,558 |
| Commissions and agency fees receivable | 18,085 | 2,139 |
| Prepaid expenses | (6,136) | 2,188 |
| Other assets | 1,005 | 317 |
| Accounts payable and accrued expenses | 315 | 2,260 |
| Contract liabilities | (981) | (8,052) |
| Net cash provided by operating activities | 68,605 | 59,043 |
| Cash flows from investing activities: | ||
| Issuance of notes receivable to franchisees | (75) | (300) |
| Proceeds from notes receivable to franchisees | 229 | 44 |
| Capitalized software development costs | (9,405) | (8,465) |
| Cash consideration paid for asset acquisitions | (2,782) | — |
| Purchase of property and equipment | (2,794) | (557) |
| Net cash used for investing activities | (14,827) | (9,278) |
| Cash flows from financing activities: | ||
| Customer premiums, net | (1,064) | 86 |
| Debt issuance costs | (7,944) | (621) |
| Repayment of note payable | (100,952) | (6,906) |
| Proceeds from notes payable | 306,374 | 25,000 |
| Proceeds from the issuance of Class A common stock | 13,599 | 6,398 |
| Repurchases of Class A common stock | (58,245) | (63,184) |
| Member distributions and dividends | (208,999) | (4,473) |
| Net cash used for financing activities | (57,231) | (43,700) |
| Net increase (decrease) in cash and cash equivalents, and restricted cash | (3,453) | 6,065 |
| Cash and cash equivalents, and restricted cash, beginning of period | 57,973 | 44,047 |
| Cash and cash equivalents, and restricted cash, end of period | $54,520 | $50,112 |
| Nine Months Ended September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Supplemental disclosures of cash flow data: | ||
| Cash paid during the period for interest | $16,068 | $5,186 |
| Cash paid for income taxes | 939 | 860 |
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
- Organization
Goosehead Insurance, Inc. (“GSHD”) is the sole managing member of Goosehead Financial, LLC (“GF”) and has the sole voting power and control of management of GF. Accordingly, GSHD consolidates the financial results of GF and reports noncontrolling interest in GSHD’s condensed consolidated financial statements.
GF was organized on January 1, 2016 as a Delaware Limited Liability Company and is headquartered in Westlake, TX.
GSHD (collectively with its consolidated subsidiaries, the “Company”) provides personal and commercial property and casualty insurance brokerage services for its clients through a network of corporate-owned agencies and franchise units across the nation.
The Company had 13 and 13 corporate-owned locations in operation at September 30, 2025 and 2024, respectively. Franchisees are provided access to Carrier Appointments, product training, technology infrastructure, client service centers and back office services. During the three months ended September 30, 2025 and 2024, the Company onboarded 34 and 30 franchise locations, respectively, and had 1,068 and 1,116 operating franchise locations as of September 30, 2025 and 2024, respectively. No franchises were purchased during the three and nine months ended September 30, 2025 and 2024.
All intercompany accounts and transactions have been eliminated in consolidation.
- Summary of Significant Accounting Policies
Basis of Presentation
The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all of the annual disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). However, in the opinion of management, these statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated balance sheets at September 30, 2025 and December 31, 2024, and the condensed consolidated statements of operations, stockholders' equity and cash flows for the three and nine months ended September 30, 2025 and 2024. The interim period condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements that are included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that can be expected for the entire year. The Company experiences seasonal fluctuations of its revenue due to the timing of contingent commission revenue recognition and trends in housing market activity.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates as more information becomes known.
Intangible Assets
Intangible assets are stated at cost less accumulated amortization and reflect amounts paid for the Company’s web domain, computer software costs, and purchased books of business (customer accounts). The web domain is amortized over a useful life offifteen years, computer software costs are amortized over a useful life ofthree toten years, and books of business (customer accounts) are amortized over a useful life ofeight years.
Asset Impairment
The Company reviews all of its identifiable assets for impairment periodically and whenever events or changes in business circumstances indicate that the carrying value of the assets may not be recoverable. In reviewing identifiable assets, if the undiscounted future cash flows were less than the carrying amount of the respective
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
assets, an indicator of impairment would exist, and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of general and administrative expenses.
Based on a review of tangible assets during the three months ended June 30, 2025, the Company identified three office leases that would be exited or subleased and completed a recoverability assessment for assets at those locations. Based on the results of the recoverability assessment, the Company determined that the undiscounted cash flows of the assets were below their carrying values for each location. As a result, the Company compared the fair values of the assets to their carrying values and recorded an impairment expense of $1.6 million for property and equipment and $3.1 million for right-of-use asset for the amount the carrying values exceeded the fair values. The Company determined the fair values by estimating sublease cash flows based on market rates for similar properties and discounted them using the Company's internal borrowing rate.
Based on a review of tangible assets during the three months ended March 31, 2024, the Company identifiedone office lease that would be subleased and completed a recoverability assessment for assets at that location. Based on the results of the recoverability assessments, the Company determined that the undiscounted cash flows of the assets were below their carrying values. As a result, the Company compared the fair values of the assets to their carrying values and recorded an impairment expense of $0.1 million for property and equipment and $0.2 million for right-of-use asset for the amount the carrying values exceeded the fair values. The Company determined the fair values by estimating sublease cash flows based on market rates for similar properties and discounted them using the Company's internal borrowing rate.
Income Taxes
The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax (benefit) expense in the period of enactment.
Cash and Cash Equivalents, and Restricted Cash
The Company holds premiums received from the insured, but not yet remitted to the Carrier, in a fiduciary capacity. Premiums received but not yet remitted included in restricted cash were $2.9 million and $2.6 million as of September 30, 2025 and 2024, respectively.
The following is a reconciliation of our cash and cash equivalents and restricted cash balances as presented in the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024(in thousands):
| September 30, | ||
|---|---|---|
| 2025 | 2024 | |
| Cash and cash equivalents | $51,587 | $47,544 |
| Restricted cash | 2,933 | 2,568 |
| Cash and cash equivalents, and restricted cash | $54,520 | $50,112 |
The Company earns interest on its cash balance that is held in interest-bearing checking accounts. During the three and nine months ended September 30, 2025, the Company recognized $0.7 million and $2.5 million in interest income within Other income (expense) in the Condensed Consolidated Statements of Operations. $0.5 million and $1.0 million interest income was recognized during the three and nine months ended September 30, 2024. As of September 30, 2025, the Company did not have any cash equivalents.
Accounting pronouncements not yet adopted
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard requires the Company to provide further disaggregated income tax disclosures for specific categories on the effective tax rate reconciliation, as well as additional information about federal, state/local and foreign income taxes. The standard also requires the Company to annually disclose its income taxes paid (net
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
of refunds received), disaggregated by jurisdiction. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The standard is to be applied on a prospective basis, although optional retrospective application is permitted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.
In November 2024, the FASB issued ASU No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Suptopic 220-40): Disaggregation of Income Statement Expenses. The amendment requires additional disclosures of certain costs and expenses within the notes to the financial statements. Additionally, in January 2025, the FASB issued ASU No. 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Suptopic 220-40): Clarifying the Effective Date, which clarified that the updates are effective for annual reporting periods beginning after December 15, 2026, and interim periods thereafter. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.
In July 2025, the FASB issued ASU No. 2025-05, Financial Instruments—Credit Losses—(Topic 326)—Measurement of Credit Losses for Account Receivable and Contract Assets. The amendments provide for a practical expedient that an entity may assume that conditions as of the balance sheet date remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. The guidance is effective for annual reporting periods beginning after December 15, 2025, and should be applied prospectively. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40)—Targeted Improvements to the Accounting for Internal-Use Software. The amendments improve the accounting for costs related to internal-use software. The new guidance eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. When evaluating if a project is probable to be completed, significant development uncertainty must be assessed. Additionally, disclosures for property, plant and equipment will be required for all capitalized software costs. The guidance is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted as of the beginning of an annual reporting period. Upon adoption, the guidance may be applied prospectively, retrospectively or using a modified transition approach. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
- Revenue
Commissions and fees
The Company earns commissions, which are paid as a percentage of the policy premiums placed by the Company, by performing its obligation to identify, place, and make effective insurance coverage on behalf of its customer, the insured. The Company defines the term of the policy as the contractual period the policy provides insurance coverage to the insured, which is typically one year or less. Commissions earned for the placement of the initial policy term for a given insurance product are recorded as New Business Commissions. New Business Commissions are earned at a point in time on the effective date of the policy, which is when the customer’s unilateral right to cancel the policy without consideration expires, as the Company has no further performance obligations for the initial term once the policy is placed and made effective.
After the initial policy term for a given insurance product, the Company earns Renewal Commissions by assisting the customer to make effective a renewal policy that satisfies the customer’s current insurance coverage needs. The Company performs this obligation by monitoring the customer’s policy to ensure a renewal is offered by the carrier and that the client promptly pays the premium. Alternatively, based on the needs of the customer, the Company may assist the customer to adjust coverage terms to satisfy its current insurance coverage needs or the Company may assist the customer to re-shop the insurance coverage to identify, place, and make effective a policy that better meets those needs. Renewal Commissions are earned at a point in time upon the effective date of the renewal policy term or upon the effective date of the replacement policy identified, placed, and made effective for the customer, which is when the customer’s unilateral right to non-renew the policy expires, as the Company has no further performance obligations for that renewal policy term.
The transaction price for commissions revenue is set as an estimate of the variable consideration to be received for the current policy term. This estimate includes the fixed consideration due based on the contractual terms of the current policy and adjustments for estimates of modifications of the contractual terms of the current policy and/or termination of the policy before the end of the current term. This variable consideration is constrained to the extent that it is probable there will not be a significant reversal of revenue.
For Agency Fees, the Company enters into a contract with the insured, in which the Company's performance obligation is to place an insurance policy. The transaction price of the agency fee is set at the time the sale is agreed upon, and is included in the contract. Agency Fee revenue is recognized at a point in time, which is the effective date of the policy.
Contingent commission revenue is generated from contracts between the Company and insurance carriers, for which the Company is compensated for certain growth, profitability, or other performance-based metrics. The performance obligations for contingent commissions will vary by contract, but generally include the Company increasing profitable written premium with the insurance carrier. The transaction price for contingent commissions is estimated based on all available information and is recognized over time as the Company completes its performance obligations, as the underlying policies are placed, net of a constraint.
The Company must estimate the amount of consideration that will be received such that a significant reversal of revenue is not probable. Contingent commissions represent a form of variable consideration associated with the placement and profitability of coverage, for which we earn commissions. Contingent commissions are estimated, with a constraint applied, and accrued in relation to the satisfaction of the performance obligations for the period over which the contract applies. The resulting effect on the timing of recognizing contingent commissions closely follows a similar pattern as our commissions and fees with any adjustments recognized when payments are received or as additional information that affects the estimate becomes available.
Franchise revenues
Franchise revenues include initial franchise fees and ongoing new and renewal royalty fees from franchisees.
Revenue from Initial Franchise Fees is generated from a contract between the Company and a franchisee. The Company's performance obligation is to provide initial training, onboarding, ongoing support and use of the Company's business operations over the period of the franchise agreement. The transaction price is set by the franchise agreement and revenue is recognized over time as the Company completes its performance obligations.
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
Initial franchise fees are recognized as revenue over the 10-year life of the franchise contract, beginning on the start date of the contract.
Revenue from New and Renewal Royalty Fees is recorded by applying the sales- and usage-based royalties exception. Under the sales- and usage-based exception, the Company recognizes revenue over time as a franchise places and makes effective a policy for an insured. The transaction price for the royalty fee for each policy made effective is set as the contractual royalty rate multiplied byan estimate of the commissions to be received by the franchise for the current term of the policy. This estimate includes the fixed consideration due based on the contractual terms of the current policy and adjustments for estimates of modifications of the contractual terms of the current policy and/or termination of the policy before the end of the current term. This variable consideration is constrained to the extent that it is probable there will not be a significant reversal of revenue.
Contract costs
Additionally, the Company has evaluated ASC Topic 340 - Other Assets and Deferred Cost (“ASC 340”) which requires companies to defer certain incremental cost to obtain customer contracts, and certain costs to fulfill customer contracts.
Incremental cost to obtain - The Company defers certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans for selling new franchise agreements. These incremental costs are deferred and amortized over a 10-year period, which is consistent with the term of the contract. The balance of cost to obtain is included with Other assets on the Condensed Consolidated Balance Sheets.
Costs to fulfill - The Company has evaluated the need to capitalize costs to fulfill customer contracts and has determined that there are no costs that meet the definition for capitalization under ASC 340.
Performance obligations satisfied in previous periods
During the nine months ended September 30, 2025, the Company recognized $3 million in Commissions and agency fees and $1 million in Franchise Revenues due to the release of the constraint on certain variable consideration related to policies placed and made effective in previous periods.
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
Disaggregation of Revenue
The following table disaggregates revenue by source(in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Type of revenue stream: | ||||
| Commissions and agency fees | ||||
| Renewal Commissions | $19,671 | $20,215 | $59,742 | $56,767 |
| New Business Commissions | 7,527 | 6,249 | 20,840 | 18,612 |
| Agency Fees | 2,714 | 1,989 | 7,861 | 6,036 |
| Contingent Commissions | 4,542 | 2,490 | 13,510 | 7,367 |
| Franchise revenues | ||||
| Renewal Royalty Fees | 45,687 | 38,070 | 128,312 | 103,951 |
| New Business Royalty Fees | 8,275 | 6,994 | 23,024 | 20,396 |
| Initial Franchise Fees | 1,380 | 1,413 | 3,969 | 5,288 |
| Other Franchise Revenues | 477 | 385 | 2,258 | 1,440 |
| Interest Income | 162 | 231 | 530 | 725 |
| Total Revenues | $90,435 | $78,035 | $260,046 | $220,583 |
| Timing of revenue recognition: | ||||
| Transferred at a point in time | $29,912 | $28,453 | $88,443 | $81,415 |
| Transferred over time | 60,523 | 49,582 | 171,603 | 139,168 |
| Total Revenues | $90,435 | $78,035 | $260,046 | $220,583 |
Contract Balances
The following table provides information about receivables, cost to obtain, and contract liabilities from contracts with customers(in thousands):
| September 30, 2025 | December 31, 2024 | Increase/(decrease) | |
|---|---|---|---|
| Cost to obtain franchise contracts(1) | $1,868 | $1,967 | $(99) |
| Commissions and agency fees receivable, net | 12,310 | 31,375 | (19,065) |
| Receivable from franchisees(2) | 15,055 | 14,546 | 509 |
| Contract liabilities(2)(3) | 17,485 | 18,466 | (981) |
(1) Cost to obtain franchise contracts is included in Other assets on the condensed consolidated balance sheets.
(2) Includes both the current and long term portion of this balance.
(3) Initial Franchise Fees to be recognized over the life of the contract.
The Company records Franchise Fees as contract liabilities on the Condensed Consolidated Balance Sheets when the agreement is executed. Contract liabilities are reduced as fees are recognized in revenue over the expected life of the franchise license. As the term of the franchise license is typicallyten years, substantially all of the franchise fee revenue recognized in the period ended September 30, 2025 was included in the contract liabilities balance as of December 31, 2024.
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
Significant changes in contract liabilities are as follows(in thousands):
| Contract liabilities at December 31, 2024 | $18,466 |
|---|---|
| Revenue recognized during the period | (3,969) |
| New deferrals(1) | 3,292 |
| Write offs(2) | (304) |
| Contract liabilities at September 30, 2025 | $17,485 |
(1) Initial Franchise Fees where the consideration is received from the franchisee for services which are to be transferred to the Franchisee over the expected life of the Franchise Agreement.
(2) Franchise Fees, net of recognized revenue, no longer deferred due to the termination of the Franchise Agreement.
- Franchise Fees Receivable
The balance of Franchise fees receivable included in Receivable from franchisees consisted of the following(in thousands):
| September 30, 2025 | December 31, 2024 | |
|---|---|---|
| Franchise fees receivable(1) | $5,293 | $6,263 |
| Less: Unamortized discount(1) | (1,130) | (1,671) |
| Less: Allowance for uncollectible franchise fees(1) | (35) | (35) |
| Net franchise fees receivable(1) | $4,128 | $4,557 |
(1) Includes both the current and long term portion of this balance.
Activity in the allowance for uncollectible franchise fees was as follows(in thousands):
| Balance at December 31, 2024 | $35 |
|---|---|
| Charges to bad debts | 129 |
| Write offs | (129) |
| Balance at September 30, 2025 | $35 |
| Balance at December 31, 2023 | $223 |
| Charges to bad debts | 402 |
| Write offs | (587) |
| Balance at September 30, 2024 | $38 |
- Allowance for Uncollectible Agency Fees
Activity in the allowance for uncollectible agency fees was as follows(in thousands):
| Balance at December 31, 2024 | $363 |
|---|---|
| Charges to bad debts | 979 |
| Write offs | (883) |
| Balance at September 30, 2025 | $459 |
| Balance at December 31, 2023 | $508 |
| Charges to bad debts | 1,165 |
| Write offs | (1,318) |
| Balance at September 30, 2024 | $355 |
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
- Property and equipment
Property and equipment consisted of the following(in thousands):
| September 30, 2025 | December 31, 2024 | |
|---|---|---|
| Furniture & fixtures | $11,422 | $10,369 |
| Computer equipment | 6,164 | 5,443 |
| Network equipment | 563 | 481 |
| Phone system | 220 | 227 |
| Leasehold improvements | 36,757 | 35,288 |
| Total | 55,126 | 51,808 |
| Less accumulated depreciation | (33,258) | (27,707) |
| Property and equipment, net | $21,868 | $24,101 |
Depreciation expense was $5.1 million and $5.5 million for nine months ended September 30, 2025 and 2024, respectively.
- Intangible assets
Intangible assets consisted of the following(in thousands):
| September 30, 2025 | December 31, 2024 | |
|---|---|---|
| Computer software & web domain | $34,145 | $24,475 |
| Books of business | 9,677 | 6,895 |
| Total | 43,822 | 31,369 |
| Less: accumulated amortization | (9,449) | (6,294) |
| Intangible assets, net | $34,373 | $25,075 |
Amortization expense was $3.2 million and $2.3 million for nine months ended September 30, 2025 and 2024, respectively.
- Debt
On July 21, 2021, the Company entered into the Second Amended and Restated Credit Agreement (the "Second Amended and Restated Credit Agreement") to refinance its $25 million revolving credit facility and $80 million term note payable to a $50 million revolving credit facility and $100 million term note payable in order to obtain a more favorable interest rate on the outstanding debt. The revolving credit facility and term note were collateralized by substantially all the Company’s assets, which includes rights to future commissions and royalties.
On April 26, 2023, the Company entered into Amendment No.1 of the Second Amended and Restated Credit Agreement, which provided that LIBOR should be replaced with SOFR.
On April 24, 2024, the Company entered into Amendment No. 2 of the Second Amended and Restated Credit Agreement, increasing the term note payable by $25 million and increasing the capacity of the revolving credit facility by $25 million to a total capacity of $75 million.
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
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
Credit Facility matures on January 8, 2030. The 2025 Credit Agreement replaced the Second Amended and Restated Credit Agreement, which was repaid with the proceeds of the 2025 Initial Term Loan and terminated.
The Company recorded $6.8 million of debt issuance costs and original issue discount related to the 2025 Initial Term Loan within Notes Payable and $1.8 million of debt issuance costs related to the 2025 Revolving Credit Facility within Other Assets in the condensed consolidated balance sheets.
On July 9, 2025, the Company entered into Amendment No. 1 to the 2025 Credit Agreement in order to refinance the outstanding balance of the 2025 Initial Term Loan with a new term loan facility (the "Term B-1 Facility"). The amendment reduced the applicable interest rate on our term loan borrowings under the facility by 0.50% to a rate of Term SOFR plus 3.00%. The Term B-1 Loan is payable in quarterly installments of $0.7 million, with a balloon payment of $280.5 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.
As of September 30, 2025, the Company hadnothing drawn against the revolving credit facility and had $75.0 million available to draw.
The Term B-1 Loan bears interest at a rate of Term SOFR plus 3.00%. The 2025 Revolving Credit Facility bears interest at Term SOFR plus a spread based onleverage ratio tiers as follows:
| Leverage Ratio | Interest Rate |
|---|---|
| < 1.50x | SOFR + 175 bps |
| ≥ 1.50x | SOFR + 200 bps |
| ≥ 2.50x | SOFR + 225 bps |
| ≥ 3.50x | SOFR + 250 bps |
Maturities of the term note payable for the next five years are as follows (in thousands):
| Amount | |
|---|---|
| 2025 | $748 |
| 2026 | 2,993 |
| 2027 | 2,993 |
| 2028 | 2,993 |
| 2029 | 2,993 |
| Thereafter | 286,530 |
| Total | $299,250 |
The 2025 Credit Agreement contains certain affirmative and negative covenants. Under these covenants, the Company is limited in the amount of additional debt incurred and distributions payable. The Company's maximum allowable trailing twelve months debt-to-EBITDA ratio, as defined by the 2025 Credit Agreement, is 5 x. Additionally, the 2025 Credit Agreement contains certain change of control provisions that, if breached, would trigger a default. As of September 30, 2025, the Company was in compliance with these covenants.
Because of both instruments’ variable interest rate, the note payable balance at September 30, 2025 and December 31, 2024, approximates fair value using Level 2 inputs, described below.
The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows:
Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets.
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
Level 2—Significant other observable inputs other than Level 1 prices such as quoted prices in markets that are not active, quoted prices for similar assets or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset.
Level 3—Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
- Income Taxes
GSHD is the sole managing member of GF, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, GF is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by GF is passed through to and included in the taxable income or loss of its members, including GSHD, on a pro rata basis. GSHD is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to GSHD's allocable share of income of GF.
Income tax expense (benefit)
Tax expense from income taxes was $2.4 million for the three months ended September 30, 2025 compared to tax expense of $2.3 million for the three months ended September 30, 2024. The effective tax rate was 16% for the three months ended September 30, 2025 compared to 16% for the three months ended September 30, 2024. Tax expense was $2.6 million for the nine months ended September 30, 2025 compared to tax benefit of $3.3 million for the nine months ended September 30, 2024. The effective tax rate was 10% for the nine months ended September 30, 2025 and (15)% for the nine months ended September 30, 2024. The change in tax expense/benefit and effective tax rate were primarily due to changes in state apportionment and related state filing requirements for the nine months ended September 30, 2024.
Deferred taxes
Deferred tax assets at September 30, 2025 were $212.6 million compared to $193.5 million at December 31, 2024. The primary contributing factors to the increase in deferred tax assets were additional redemptions of LLC Units of GF for shares of Class A common stock of GSHD during the nine months ended September 30, 2025.
Tax Receivable Agreement
GF 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 and corresponding Class B common stock for shares of Class A common stock occurs. Future taxable redemptions or exchanges are expected to result in tax basis adjustments to the assets of GF that will be allocated to the Company and thus produce favorable tax attributes. These tax attributes would not be available to GSHD in the absence of those transactions. The anticipated tax basis adjustments are expected to reduce the amount of tax that GSHD would otherwise be required to pay in the future.
GSHD entered into a tax receivable agreement ("TRA") with the Pre-IPO LLC Members on May 1, 2018 that provides for the payment by GSHD 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 GSHD actually realizes as a result of (i) any increase in tax basis in GSHD's assets and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreement.
During the three and nine months ended September 30, 2025, an aggregate of 271,725 and 684,558 LLC Units were redeemed by the Pre-IPO LLC Members for newly issued shares of Class A common stock. In connection with these redemptions, GSHD received 271,725 and 684,558 LLC Units, which resulted in an increase in the tax basis of its investment in GF subject to the provisions of the tax receivable agreement. The Company recognized a liability for the TRA Payments due to the Pre-IPO LLC Members, representing 85% of the aggregate tax benefits the Company expects to realize from the tax basis increases related to the redemptions of LLC Units, after concluding it was probable that such TRA Payments would be paid based on its estimates of future taxable income. As of September 30, 2025, the total amount of TRA Payments due to the Pre-IPO LLC Members under the tax receivable
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
agreement was $178.2 million, of which $7.1 million was current and included in Liabilities under tax receivable agreement within Current liabilities on the Condensed Consolidated Balance Sheets. Future exchanges of LLC Units for Class A common stock will result in additional TRA payments. Additionally, during the nine months ended September 30, 2024, the Company's effective tax rate increased due to changes in state apportionment and related state filing requirements. This resulted in a remeasurement of its TRA liability of $6.7 million, which has been reported in "Other income (expense)" on the Condensed Consolidated Statements of Operations.
Uncertain tax positions
GSHD has determined there areno material uncertain tax positions as of September 30, 2025.
The One Big Beautiful Bill Act of 2025
On July 4, 2025, United States Congress passed budget reconciliation bill H.R. 1, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent many of the provisions previously enacted as part of the 2017 Tax Cut and Jobs Act that were set to expire at the end of 2025 and includes other changes to certain U.S. corporate tax provisions. The OBBBA did not have a material impact on our condensed consolidated financial statements during the current period. We will continue to evaluate the impact of the legislative changes on future periods as additional guidance becomes available.
- Stockholders' Equity
Class A Common Stock
GSHD has a total of 24,967 thousand shares of its Class A common stock outstanding at September 30, 2025. Each share of Class A common stock holds economic rights and entitles its holder toone vote per share on all matters submitted to a vote of the stockholders of GSHD.
Class B Common Stock
GSHD has a total of 11,935 thousand shares of its Class B common stock outstanding at September 30, 2025. Each share of Class B common stock has no economic rights but entitles its holder toone vote per share on all matters submitted to a vote of the stockholders of GSHD.
Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to GSHD's shareholders for their vote or approval, except as otherwise required by applicable law, by agreement, or by GSHD's certificate of incorporation.
Correction of Prior Period Balances
Subsequent to the issuance of the Company’s quarterly report on Form 10-Q for the three and nine months ended September 30, 2024, the Company determined that it did not properly apply the guidance under ASC 810-10-45-23 in determining the allocation of activity related to the exercise of stock options, equity-based compensation, activity under employee stock purchase plan, and redemption of LLC Units. The Company also identified an error in the recording of deferred tax adjustments related to the Tax Receivable Agreement. The net impact of these misstatements was an overstatement of additional paid-in capital, an understatement of accumulated deficit, and an understatement of noncontrolling interest for all periods presented. As a result, the Company restated the prior period financial statements to correct the errors. Additionally, the Company has changed the condensed consolidated statement of stockholders' equity presentation to reflect the reallocation of noncontrolling interest within the specific line items resulting in reallocation instead of as a separate line item.
The Company evaluated the materiality of these misstatements from quantitative and qualitative perspectives and concluded the misstatements are not material to the prior periods. The amounts previously reported within the Company’s financial statements have been revised to reflect the corrected balances as presented below (in thousands):
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
Condensed Consolidated Statements of Stockholders' Equity
(in thousands)
As Previously Reported
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A common stock | Class B common stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance January 1, 2024 | 24,966 | 12,954 | $250 | $130 | $103,228 | $(47,056) | $56,552 | $(39,766) | $16,786 |
| Distributions | — | — | — | — | — | — | — | (42) | (42) |
| Net income (loss) | — | — | — | — | — | 1,814 | 1,814 | (5) | 1,809 |
| Exercise of stock options | 65 | — | 1 | — | 1,862 | — | 1,863 | — | 1,863 |
| Equity-based compensation | — | — | — | — | 7,357 | — | 7,357 | — | 7,357 |
| Activity under employee stock purchase plan | 2 | — | — | — | 146 | — | 146 | — | 146 |
| Redemption of LLC Units | 196 | (196) | 2 | (2) | (605) | — | (605) | 605 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 439 | — | 439 | (117) | 322 |
| Reallocation of noncontrolling interest | — | — | — | — | — | (217) | (217) | 217 | — |
| Balance March 31, 2024 | 25,230 | 12,758 | 252 | 128 | 112,428 | (45,459) | 67,349 | (39,109) | 28,240 |
| Distributions | — | — | — | — | — | — | — | (2,346) | (2,346) |
| Share repurchases | (1,045) | — | (10) | — | (41,953) | — | (41,963) | (21,670) | (63,633) |
| Net income | — | — | — | — | — | 6,198 | 6,198 | 4,677 | 10,875 |
| Exercise of stock options | 7 | — | — | — | 245 | — | 245 | — | 245 |
| Equity-based compensation | — | — | — | — | 6,632 | — | 6,632 | — | 6,632 |
| Activity under employee stock purchase plan | 2 | — | — | — | 128 | — | 128 | — | 128 |
| Redemption of LLC Units | 10 | (10) | — | — | (29) | — | (29) | 29 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 295 | — | 295 | (170) | 126 |
| Reallocation of noncontrolling interest | — | — | — | — | — | 912 | 912 | (912) | — |
| Balance June 30, 2024 | 24,205 | 12,748 | $242 | $127 | $77,748 | $(38,349) | $39,768 | $(59,501) | $(19,733) |
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A common stock | Class B common stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance June 30, 2024 | 24,205 | 12,748 | $242 | $127 | $77,748 | $(38,349) | $39,768 | $(59,501) | $(19,733) |
| Distributions | — | — | — | — | — | — | — | (2,084) | (2,084) |
| Share repurchases | — | — | — | — | 81 | — | 81 | 42 | 123 |
| Net income | — | — | — | — | — | 7,559 | 7,559 | 5,048 | 12,607 |
| Exercise of stock options | 138 | — | 1 | — | 4,001 | — | 4,003 | — | 4,003 |
| Equity-based compensation | — | — | — | — | 7,093 | — | 7,093 | — | 7,093 |
| Activity under employee stock purchase plan | 1 | — | — | — | 102 | — | 102 | — | 102 |
| Redemption of LLC Units | 26 | (26) | — | — | (114) | — | (114) | 114 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 95 | — | 95 | 40 | 135 |
| Reallocation of noncontrolling interest | — | — | — | — | — | (239) | (239) | 239 | — |
| Balance September 30, 2024 | 24,369 | 12,722 | $244 | $127 | $89,005 | $(31,029) | $58,347 | $(56,102) | $2,245 |
Adjustments
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A common stock | Class B common stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance January 1, 2024 | — | — | $— | $— | $(29,815) | $1,229 | $(28,586) | $28,586 | $— |
| Distributions | — | — | — | — | — | — | — | — | — |
| Net income (loss) | — | — | — | — | — | — | — | — | — |
| Exercise of stock options | — | — | — | — | (650) | — | (650) | 650 | — |
| Equity-based compensation | — | — | — | — | (2,493) | — | (2,493) | 2,493 | — |
| Activity under employee stock purchase plan | — | — | — | — | (50) | — | (50) | 50 | — |
| Redemption of LLC Units | — | — | — | — | 436 | — | 436 | (436) | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | (117) | — | (117) | 117 | — |
| Reallocation of noncontrolling interest | — | — | — | — | — | 217 | 217 | (217) | — |
| Balance March 31, 2024 | — | — | $— | $— | $(32,690) | $1,446 | $(31,243) | $31,244 | $— |
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A common stock | Class B common stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance March 31, 2024 | — | — | $— | $— | $(32,690) | $1,446 | $(31,243) | $31,244 | $— |
| Distributions | — | — | — | — | — | — | — | — | — |
| Share repurchases | — | — | — | — | 384 | — | 384 | (384) | — |
| Net income | — | — | — | — | — | — | — | — | — |
| Exercise of stock options | — | — | — | — | (86) | — | (86) | 86 | — |
| Equity-based compensation | — | — | — | — | (2,259) | — | (2,259) | 2,259 | — |
| Activity under employee stock purchase plan | — | — | — | — | (46) | — | (46) | 46 | — |
| Redemption of LLC Units | — | — | — | — | (6) | — | (6) | 6 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | (169) | — | (169) | 170 | — |
| Reallocation of noncontrolling interest | — | — | — | — | — | (912) | (912) | 912 | — |
| Balance June 30, 2024 | — | — | $— | $— | $(34,874) | $534 | $(34,338) | $34,339 | $— |
| Distributions | — | — | — | — | — | — | — | — | — |
| Share repurchases | — | — | — | — | — | — | — | — | — |
| Net income | — | — | — | — | — | — | — | — | — |
| Exercise of stock options | — | — | — | — | (1,465) | — | (1,466) | 1,466 | — |
| Equity-based compensation | — | — | — | — | (2,439) | — | (2,439) | 2,439 | — |
| Activity under employee stock purchase plan | — | — | — | — | (36) | — | (36) | 36 | — |
| Redemption of LLC Units | — | — | — | — | 65 | — | 65 | (65) | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 40 | — | 40 | (40) | — |
| Reallocation of noncontrolling interest | — | — | — | — | — | 239 | 239 | (239) | — |
| Balance September 30, 2024 | — | — | $— | $— | $(38,708) | $773 | $(37,934) | $37,936 | $— |
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
As Revised
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A common stock | Class B common stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance January 1, 2024 | 24,966 | 12,954 | $250 | $130 | $73,413 | $(45,827) | $27,966 | $(11,180) | $16,786 |
| Distributions | — | — | — | — | — | — | — | (42) | (42) |
| Net income (loss) | — | — | — | — | — | 1,814 | 1,814 | (5) | 1,809 |
| Exercise of stock options | 65 | — | 1 | — | 1,212 | — | 1,213 | 650 | 1,863 |
| Equity-based compensation | — | — | — | — | 4,864 | — | 4,864 | 2,493 | 7,357 |
| Activity under employee stock purchase plan | 2 | — | — | — | 96 | — | 96 | 50 | 146 |
| Redemption of LLC Units | 196 | (196) | 2 | (2) | (169) | — | (169) | 169 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 322 | — | 322 | — | 322 |
| Reallocation of noncontrolling interest | — | — | — | — | — | — | — | — | — |
| Balance March 31, 2024 | 25,230 | 12,758 | $252 | $128 | $79,738 | $(44,013) | $36,106 | $(7,865) | $28,240 |
| Distributions | — | — | — | — | — | — | — | (2,346) | (2,346) |
| Share repurchases | (1,045) | — | (10) | — | (41,569) | — | (41,579) | (22,054) | (63,633) |
| Net income | — | — | — | — | — | 6,198 | 6,198 | 4,677 | 10,875 |
| Exercise of stock options | 7 | — | — | — | 159 | — | 159 | 86 | 245 |
| Equity-based compensation | — | — | — | — | 4,373 | — | 4,373 | 2,259 | 6,632 |
| Activity under employee stock purchase plan | 2 | — | — | — | 82 | — | 82 | 46 | 128 |
| Redemption of LLC Units | 10 | (10) | — | — | (35) | — | (35) | 35 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 126 | — | 126 | — | 126 |
| Reallocation of noncontrolling interest | — | — | — | — | — | — | — | — | — |
| Balance June 30, 2024 | 24,205 | 12,748 | $242 | $127 | $42,874 | $(37,815) | $5,430 | $(25,162) | $(19,733) |
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
| Issued shares of Class A common stock | Issued shares of Class B common stock | Class A common stock | Class B common stock | Additional paid-in capital | Accumulated deficit | Total stockholders' equity | Noncontrolling interest | Total equity | |
|---|---|---|---|---|---|---|---|---|---|
| Balance June 30, 2024 | 24,205 | 12,748 | $242 | $127 | $42,874 | $(37,815) | $5,430 | $(25,162) | $(19,733) |
| Distributions | — | — | — | — | — | — | — | (2,084) | (2,084) |
| Share repurchases | — | — | — | — | 81 | — | 81 | 42 | 123 |
| Net income | — | — | — | — | — | 7,559 | 7,559 | 5,048 | 12,607 |
| Exercise of stock options | 138 | — | 1 | — | 2,536 | — | 2,537 | 1,466 | 4,003 |
| Equity-based compensation | — | — | — | — | 4,654 | — | 4,654 | 2,439 | 7,093 |
| Activity under employee stock purchase plan | 1 | — | — | — | 66 | — | 66 | 36 | 102 |
| Redemption of LLC Units | 26 | (26) | — | — | (49) | — | (49) | 49 | — |
| Deferred tax adjustments net of Tax Receivable Agreement liabilities | — | — | — | — | 135 | — | 135 | — | 135 |
| Reallocation of noncontrolling interest | — | — | — | — | — | — | — | — | — |
| Balance September 30, 2024 | 24,369 | 12,722 | $244 | $127 | $50,297 | $(30,256) | $20,413 | $(18,166) | $2,245 |
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
Earnings Per Share
The following table sets forth the calculation of basic earnings per share ("EPS") based on net income attributable to GSHD for the three and nine months ended September 30, 2025 and 2024, divided by the basic weighted average number of Class A common stock as of the three and nine months ended September 30, 2025 and 2024(in thousands, except per share amounts).
Diluted EPS of Class A common stock is computed by dividing net income attributable to GSHD by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.
Shares of the Company’s Class B common stock do not share in the earnings or losses attributable to Goosehead Insurance, Inc. and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock under the two-class method has not been presented. Shares of the Company’s Class B common stock are, however, considered potentially dilutive shares of Class A common stock because shares of Class B common stock, together with the related GF LLC Units, are exchangeable into shares of Class A common stock on aone-for-one basis. The Company calculates the effects of the conversion of Class B shares to Class A shares using the "if-converted" method and includes such effects in the calculation of diluted EPS if the effects are dilutive.
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
The following table summarizes the calculation of EPS for the three and nine months ended September 30, 2025 and 2024(in thousands):
| Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | |||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Numerator: | ||||
| Net income attributable to GSHD - Basic | $7,908 | $7,559 | $15,400 | $15,571 |
| Add: net income attributable to noncontrolling interests(1) | 4,782 | 5,048 | 8,219 | 9,720 |
| Less: income tax effect on income attributable to noncontrolling interests assuming conversion of Class B common shares(1) | (1,749) | (1,446) | (2,092) | (3,012) |
| Net income available to GSHD - Diluted | $10,941 | $11,161 | $21,527 | $22,279 |
| Denominator: | ||||
| Basic EPS | ||||
| Weighted average outstanding Class A common shares - Basic | 25,149 | 24,293 | 25,053 | 24,689 |
| Earnings per share of Class A common stock - Basic | $0.31 | $0.31 | $0.61 | $0.63 |
| Diluted EPS | ||||
| Weighted average outstanding Class A common shares - Basic | 25,149 | 24,293 | 25,053 | 24,689 |
| Effect of dilutive securities: | ||||
| Weighted average outstanding Class B common shares (if-converted)(1) | 12,052 | 12,733 | 12,321 | 12,782 |
| Stock options(2) | 813 | 916 | 991 | 797 |
| Weighted average outstanding Class A common shares - Diluted | 38,014 | 37,942 | 38,365 | 38,269 |
| Earnings per share of Class A common stock - Diluted | $0.29 | $0.29 | $0.56 | $0.58 |
(1) For the three and nine months ended September 30, 2025, the impact of the conversion of Class B common shares to Class A common shares calculated under the if-converted method was dilutive, and as such, (a)12,052 and 12,321 common shares (assuming the conversion of all outstanding class B common stock) were included in Weighted average outstanding Class A common shares - Diluted and (b) $3.0 million and $6.1 million of noncontrolling interest net income (after incremental tax effect from assuming conversion of all outstanding class B common stock), was added back to Net income attributable to GSHD - Basic to arrive at Net income available to GSHD - diluted. For the three and nine months ended September 30, 2024, the impact of the conversion of Class B common shares to Class A common shares calculated under the if-converted method was dilutive, and as such, (a)12,733 and 12,782 common shares (assuming the conversion of all outstanding class B common stock) were included in Weighted average outstanding Class A common shares - Diluted and (b) $3.6 million and $6.7 million of noncontrolling interest net income (after incremental tax effect from assuming conversion of all outstanding class B common stock), was added back to Net income attributable to GSHD - Basic to arrive at Net income available to GSHD - diluted.
(2) Dilutive stock options is computed using the treasury stock method, which are not participating securities.804 and 525 stock options were excluded from the computation of diluted earnings per share of Class A common stock for the three and nine months ended September 30, 2025 because the effect would have been anti-dilutive.751 and 1,098 stock options were excluded from the computation of diluted earnings per share of Class A common stock for the three and nine months ended September 30, 2024 because the effect would have been anti-dilutive.
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
Share Repurchase Program
On April 24, 2024, our board of directors approved a share repurchase program with authorization to purchase up to $100 million of our Class A common stock, which expired on March 31, 2025.
On April 23, 2025, our board of directors approved a new share repurchase program with authorization to purchase up to $100 million of our Class A common stock through May 1, 2026. The share repurchase program does not require the Company to acquire any dollar amount or number of shares of common stock and may be modified, suspended, or discontinued at any time. The timing, manner, price and amount of any repurchases will be determined at the discretion of management in accordance with applicable securities laws and other restrictions. Class A common stock acquired under the program will be retired upon repurchase. Additionally, for every repurchased share of Class A common stock, the Company will direct GF to repurchase, at the price paid to repurchase such share, and cancel an LLC unit of GF held by the Company.
During the three and nine months ended September 30, 2025, the Company repurchased and retired 685 thousand and 691 thousand shares of Class A common stock for an aggregate $58.7 million and $59.2 million. During the three and nine months ended September 30, 2024, the Company repurchased and retired 0 and 1,045 thousand shares of Class A common stock for an aggregate $0.1 million and $63.5 million. All repurchases were made in open-market transactions and recorded at their aggregate transaction cost inclusive of commissions and excise taxes. As of September 30, 2025, the Company had remaining authorization under the share repurchase program to purchase up to approximately $40.8 million of the Company's Class A common stock.
- Noncontrolling interest
GSHD is the sole managing member of GF and, as a result, it consolidates the financial results of GF. GSHD reports a noncontrolling interest representing the economic interest in GF held by the other members of GF.
GF makes distributions to the LLC Unit holders on a pro rata basis to facilitate the LLC Unit holder's quarterly tax payments. For the three and nine months ended September 30, 2025, GF made distributions of $6.3 million and $11.6 million, of which $2.1 million and $4.0 million was made to Pre-IPO LLC Members. The remaining $4.2 million and $7.6 million was made to GSHD and was eliminated in consolidation.
Under the amended and restated Goosehead Financial, LLC Agreement, the Pre-IPO LLC Members have the right, from and after the completion of the Offering (subject to the terms of the amended and restated Goosehead Financial, LLC Agreement), to require GSHD to redeem all or a portion of their LLC Units for, at GSHD's election, newly-issued shares of Class A common stock on aone-for-one basis or a cash payment equal to the volume weighted average market price of one share of GSHD's Class A common stock for each LLC Unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the amended and restated Goosehead Financial, LLC Agreement. Additionally, in the event of a redemption request by a Pre-IPO LLC Member, GSHD may, at its option, effect a direct exchange of cash or Class A common stock for LLC Units in lieu of such a redemption. Shares of Class B common stock will be cancelled on aone-for-one basis if GSHD, at the election of a Pre-IPO LLC Member, redeems or exchanges LLC Units of such Pre-IPO LLC Member pursuant to the terms of the amended and restated Goosehead Financial, LLC Agreement. Except for transfers to GSHD pursuant to the amended and restated Goosehead Financial, LLC Agreement or to certain permitted transferees, the Pre-IPO LLC Members are not permitted to sell, transfer or otherwise dispose of any LLC Units or shares of Class B common stock.
During the three and nine months ended September 30, 2025, an aggregate of 272 thousand and 685 thousand LLC Units were redeemed by the noncontrolling interest holders. Pursuant to the GF LLC Agreement, GSHD issued 272 thousand and 685 thousand shares of Class A common stock in connection with these redemptions and received 272 thousand and 685 thousand LLC Interests, increasing GSHD's ownership interest in GF. Simultaneously, and in connection with these redemptions,272 thousand and 685 thousand shares of Class B common stock were surrendered and cancelled.
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
The following table summarizes the ownership interest in GF(in thousands):
| September 30, 2025 | ||
|---|---|---|
| LLC Units | Ownership % | |
| Number of LLC Units held by GSHD | 24,967 | 67.7% |
| Number of LLC Units held by noncontrolling interest holders | 11,935 | 32.3% |
| Number of LLC Units outstanding | 36,902 | 100.0% |
The weighted average ownership percentages for the applicable reporting periods are used to attribute net income to GSHD and the noncontrolling interest holders. The noncontrolling interest holders' weighted average ownership percentage for the three and nine months ended September 30, 2025 was 32.4% and 33.0%.
- Equity-Based Compensation
Stock option expense was $5.6 million and $17.8 million for the three and nine months ended September 30, 2025. Stock option expense was $7.1 million and $21.1 million for the three and nine months ended September 30, 2024.
- Dividends
On January 9, 2025, GF declared a special distribution of $175 million, which was paid in cash on January 31, 2025 to holders of record of LLC Units, including to GSHD, as of the close of business on January 21, 2025. The special distribution resulted in a payment of $59 million to our noncontrolling interest holders. On January 9, 2025, the board of directors of the Company declared a one-time special cash dividend of $5.91 to all holders of Class A common stock of GSHD as of the close of business on January 21, 2025, which was paid in cash on January 31, 2025 for a total of $146 million. $1.22 of the special cash dividend was funded by cash received by GSHD from prior tax distributions from GF that were in excess of the corporate income taxes payable by GSHD. The remaining $4.69 of the special cash dividend was funded by the cash received by the Company from the special distribution by GF.
Any future special cash dividends will be declared at the sole discretion of GF's managing member, with respect to GF, and the Company's board of directors, with respect to GSHD. In determining whether a future special cash dividend will be declared by the Company, the board of directors may, at its sole discretion, consider the following: the Company's financial condition and operating results, the Company's available cash and current and anticipated cash needs, the Company's capital requirements, any contractual, legal, tax and regulatory restrictions, general economic and business conditions, and such other factors or conditions as the board of directors deems relevant.
- Segment Information
The Company is organized into a single reportable segment: insurance distribution. The insurance distribution segment provides clients with access to home, auto, umbrella, motorcycle, flood, and other ancillary insurance products. The Company derives its revenue entirely from within the United States and manages business activities on a consolidated basis. The Company’s chief operating decision maker is its Chief Executive Officer.
The accounting policies of the insurance distribution segment are the same as those described in the summary of significant accounting policies. The chief operating decision maker uses net income, as reported on the Condensed Consolidated Statements of Operations, to assess performance and allocate resources for the insurance distribution segment. The significant segment expense categories regularly provided to the chief operating decision maker are
Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements(Unaudited)
the same as those included on the Condensed Consolidated Statements of Operations. The measure of segment assets is total assets as reported on the Condensed Consolidated Balance Sheets.
The chief operating decision maker uses net income to assess performance by examining period-over-period trends, benchmarking to the Company's competitors, and monitoring budget versus actual results. The chief operating decision maker uses net income to evaluate income generated from segment assets in deciding whether to reinvest profits into the segment or into other parts of the entity, such as for share repurchases or dividends.
- Litigation
From time to time, GSHD may be involved in various legal proceedings, lawsuits and claims incidental to the conduct of the Company's business. The Company records accruals for legal contingencies to the extent that it has concluded that it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, the Company does not record a liability, but instead discloses the nature and the amount of the claim, and an estimate of the loss or range of losses, if such an estimate can be made. In the opinion of the Company's management, the likely results of any ongoing legal matters are not expected, either individually or in the aggregate, to have a material adverse effect on the Company's financial position, results of operations or cash flows.
On November 10, 2022, a verified stockholder class action complaint for declaratory relief, captioned Mickey Dollens v. Goosehead Insurance, Inc., C.A. No. 2022-1018-JTL, was filed in the Court of Chancery of the State of Delaware (the “Dollens Action”), alleging certain corporate governance documents adopted by the Company were invalid under Delaware law. On August 8, 2023, the parties entered into a proposed settlement providing for certain non-monetary benefits to the class (i.e., revisions to the Company's Stockholder Agreement). Additionally, the plaintiffs have petitioned the Court for attorneys’ fees and litigation expenses. The matter is currently stayed. While there can be no assurance regarding the ultimate outcome of the petition, the Company believes a potential loss, if any, would not be material.
- Related Party Transactions
Mark Jones is the Co-Founder and Executive Chairman of the Company and holds a significant beneficial ownership of the Company’s voting common stock. Mr. Jones also serves as the Co-Founder and Chief Executive Officer of N5B Capital ("N5B"), a family investment office for Mark and Robyn Jones. In the third quarter of 2025, the Company entered into an agreement to reimburse N5B for expenses associated with Mr. Jones’ executive assistant. The estimated annual expense to the Company under this agreement is less than $140 thousand and will be recognized as incurred in the condensed consolidated statements of operations. The Company determined that the agreement is not material to its condensed consolidated financial statements.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.