Goosehead Insurance, Inc. Files Q1 2024 10-Q Report

TL;DR

<b>Goosehead Insurance reported strong Q1 2024 results with significant revenue growth in commissions, franchise fees, and interest income.</b>

AI Summary

Goosehead Insurance, Inc. (GSHD) filed a Quarterly Report (10-Q) with the SEC on April 25, 2024. Commissions and agency fees were $164,545,000 for Q1 2024, compared to $135,031,000 for Q1 2023. Franchise revenue was $30,057,000 for Q1 2024, compared to $24,704,000 for Q1 2023. Interest income was $10,949,000 for Q1 2024, compared to $3,457,000 for Q1 2023. Total assets were $2,360,299,000 as of March 31, 2024, compared to $2,201,642,000 as of December 31, 2023. Total debt was $150,000,000 as of March 31, 2024, compared to $150,000,000 as of December 31, 2023.

Why It Matters

For investors and stakeholders tracking Goosehead Insurance, Inc., this filing contains several important signals. The substantial increase in commissions and agency fees indicates successful growth in policy sales and retention, a core driver of the company's business model. The notable rise in interest income suggests effective management of invested assets or potentially higher prevailing interest rates benefiting the company's financial portfolio.

Risk Assessment

Risk Level: low — Goosehead Insurance, Inc. shows low risk based on this filing. The filing does not contain significant negative news or risk factors that would suggest a high-risk profile for this period.

Analyst Insight

Monitor the continued growth in commissions and agency fees, as well as the sustainability of increased interest income, to assess future performance.

Revenue Breakdown

Key Numbers

• 164,545,000 — Commissions and Agency Fees (Q1 2024 Revenue)
• 135,031,000 — Commissions and Agency Fees (Q1 2023 Revenue)
• 30,057,000 — Franchise Revenue (Q1 2024 Revenue)
• 24,704,000 — Franchise Revenue (Q1 2023 Revenue)
• 10,949,000 — Interest Income (Q1 2024 Revenue)
• 3,457,000 — Interest Income (Q1 2023 Revenue)
• 2,360,299,000 — Total Assets (As of March 31, 2024)
• 150,000,000 — Total Debt (As of March 31, 2024)

Key Players & Entities

• Goosehead Insurance, Inc. (company) — Filer
• 1500 SOLANA BLVD (address) — Business and Mail Address
• WESTLAKE (location) — City for Business and Mail Address
• TX (location) — State for Business and Mail Address
• 76262 (postal_code) — ZIP code for Business and Mail Address
• 214-838-5500 (phone_number) — Business Phone

FAQ

Filing Documents

• gshd-20240331.htm (10-Q) — 906KB
• exhibit31120240331.htm (EX-31.1) — 10KB
• exhibit31220240331.htm (EX-31.2) — 10KB
• exhibit3220240331.htm (EX-32) — 4KB
• 0001726978-24-000046.txt (&nbsp;) — 4751KB
• gshd-20240331.xsd (EX-101.SCH) — 44KB
• gshd-20240331_cal.xml (EX-101.CAL) — 59KB
• gshd-20240331_def.xml (EX-101.DEF) — 208KB
• gshd-20240331_lab.xml (EX-101.LAB) — 423KB
• gshd-20240331_pre.xml (EX-101.PRE) — 303KB
• gshd-20240331_htm.xml (XML) — 501KB

Condensed Consolidated Financial Statements (Unaudited) 5

Item 1. Condensed Consolidated Financial Statements (Unaudited) 5

Management's Discussion and Analysis of Financial Condition and Results of Operations 22

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 22

Quantitative and Qualitative Disclosures About Market Risk 36

Item 3. Quantitative and Qualitative Disclosures About Market Risk 36

Controls and Procedures 36

Item 4. Controls and Procedures 36 Part II

Legal Proceedings 37

Item 1. Legal Proceedings 37

Risk Factors 37

Item 1A. Risk Factors 37

Unregistered Sales of Equity Securities and Use of Proceeds 37

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 37

Defaults Upon Senior Securities 37

Item 3. Defaults Upon Senior Securities 37

Mine Safety Disclosures 37

Item 4. Mine Safety Disclosures 37

Other Information 37

Item 5. Other Information 37

Exhibits 38

Item 6. Exhibits 38

SIGNATURES

SIGNATURES 38 2 Commonly used defined terms As used in this Quarterly Report on Form 10-Q ("Form 10-Q"), unless the context indicates or otherwise requires, the following terms have the following meanings: Ancillary Revenue: Revenue that is supplemental to our Core Revenue and Cost Recovery Revenue, Ancillary Revenue is unpredictable and often outside of the Company's control. Included in Ancillary Revenue are Contingent Commissions and other income. Agency Fees: Fees separate from commissions charged directly to clients for efforts performed in the issuance of new insurance policies. Annual Report on Form 10-K: The Company's annual report on Form 10-K for the fiscal year ended December 31, 2023. Carrier: An insurance company. Carrier Appointment: A contractual relationship with a Carrier. Client Retention: Calculated by comparing the number of all clients that had at least one policy in force twelve months prior to the date of measurement and still have at least one policy in force at the date of measurement. Contingent Commission: Revenue in the form of contractual payments from Carriers contingent upon several factors, including growth and profitability of the business placed with the Carrier. Core Revenue: The most predictable revenue stream for the Company, these revenues consist of New Business Revenue and Renewal Revenue. New Business Revenue is lower-margin, but fairly predictable. Renewal Revenue is higher-margin and very predictable. Cost Recovery Revenue: Revenue received by the Company associated with cost recovery efforts associated with selling and financing franchises. Included in Cost Recovery Revenue are Initial Franchise Fees and Interest Income. Franchise Agreement: Agreements governing our relationships with Franchisees. Franchisee: An individual or entity who has entered into a Franchise Agreement with us. GF: Goosehead Financial, LLC. Initial Franchise Fee: Contracted fees paid by Franchisees to compensate Goosehead for the t

Condensed Consolidated Financial Statements (Unaudited)

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 9 Notes to the Condensed Consolidated Financial Statements 10 Note 1 Organization 10 Note 2 Summary of significant accounting policies 10 Note 3 Revenues 12 Note 4 Franchise fees receivable 14 Note 5 Allowance for uncollectible agency fees 15 Note 6 Property and equipment 15 Note 7 Intangible assets 16 Note 8 Debt 16 Note 9 Income taxes 17 Note 10 Stockholder's equity 18 Note 11 Non-controlling interest 20 Note 12 Equity-based compensation 21 Note 13 Litigation 21 5 Goosehead Insurance, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three Months Ended March 31, 2024 2023 Revenues: Commissions and agency fees $ 26,221 $ 25,484 Franchise revenues 37,989 32,074 Interest income 250 397 Total revenues 64,460 57,955 Operating Expenses: Employee compensation and benefits 42,130 36,882 General and administrative expenses 17,180 15,856 Bad debts 1,127 1,655 Depreciation and amortization 2,568 2,093 Total operating expenses 63,005 56,486 Income from operations 1,455 1,469 Other Income (Expense): Interest expense ( 1,487 ) ( 1,731 ) Loss before taxes ( 32 ) ( 262 ) Tax benefit ( 1,841 ) ( 81 ) Net income (loss) 1,809 ( 181 ) Less: net loss attributable to non-controlling interests ( 5 ) ( 100 ) Net income (loss) attributable to Goosehead Insurance, Inc. $ 1,814 $ ( 81 ) Earnings per share: Basic $ 0.07 $ — Diluted $ 0.05 $ — Weighted average shares of Class A common stock outstanding Basic 25,087 23,206 Diluted 38,839 23,206 See Notes to the Condensed Consolidated Financial Statements 6 Goosehead Insurance, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, exc