Goosehead Insurance Q2 2024 Update

TL;DR

**GSHD Q2 2024: Commissions & Fees Up, Interest Income Steady. All good.**

AI Summary

Goosehead Insurance, Inc. filed its 10-Q for the period ending June 30, 2024. The filing covers the second quarter and first half of the year, detailing financial performance and operational updates. Key financial metrics such as commissions, agency fees, and interest income are reported for the relevant periods.

Why It Matters

This filing provides investors with a detailed look at Goosehead Insurance's financial health and operational performance during the second quarter of 2024, impacting investment decisions.

Risk Assessment

Risk Level: medium — The filing contains standard financial disclosures for a public company, but the insurance sector can be subject to regulatory and economic risks.

Key Numbers

• 2024 Q2 — Reporting Period (Second quarter of 2024 financial performance)
• 2024-01-01 to 2024-06-30 — Year-to-Date Period (First half of 2024 financial performance)

Key Players & Entities

• Goosehead Insurance, Inc. (company) — Filer of the 10-Q
• 20240630 (date) — End of reporting period
• 20240725 (date) — Filing date

FAQ

Filing Documents

• gshd-20240630.htm (10-Q) — 1220KB
• exhibit31120240630.htm (EX-31.1) — 10KB
• exhibit31220240630.htm (EX-31.2) — 10KB
• exhibit3220240630.htm (EX-32) — 4KB
• 0001726978-24-000069.txt ( ) — 5390KB
• gshd-20240630.xsd (EX-101.SCH) — 43KB
• gshd-20240630_cal.xml (EX-101.CAL) — 61KB
• gshd-20240630_def.xml (EX-101.DEF) — 204KB
• gshd-20240630_lab.xml (EX-101.LAB) — 426KB
• gshd-20240630_pre.xml (EX-101.PRE) — 303KB
• gshd-20240630_htm.xml (XML) — 630KB

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 24

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures About Market Risk 39

Item 3. Quantitative and Qualitative Disclosures About Market Risk 39

Controls and Procedures 39

Item 4. Controls and Procedures 39 Part II

Legal Proceedings 40

Item 1. Legal Proceedings 40

Risk Factors 40

Item 1A. Risk Factors 40

Unregistered Sales of Equity Securities and Use of Proceeds 40

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 40

Defaults Upon Senior Securities 40

Item 3. Defaults Upon Senior Securities 40

Mine Safety Disclosures 40

Item 4. Mine Safety Disclosures 40

Other Information 40

Item 5. Other Information 40

Exhibits 41

Item 6. Exhibits 41

SIGNATURES

SIGNATURES 41 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 10 Notes to the Condensed Consolidated Financial Statements 11 Note 1 Organization 11 Note 2 Summary of significant accounting policies 11 Note 3 Revenues 14 Note 4 Franchise fees receivable 16 Note 5 Allowance for uncollectible agency fees 17 Note 6 Property and equipment 17 Note 7 Intangible assets 18 Note 8 Debt 18 Note 9 Income taxes 19 Note 10 Stockholder's equity 20 Note 11 Non-controlling interest 22 Note 12 Equity-based compensation 23 Note 13 Litigation 23 5 Goosehead Insurance, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Revenues: Commissions and agency fees $ 31,619 $ 31,173 $ 57,840 $ 56,657 Franchise revenues 46,225 37,687 84,214 69,761 Interest income 244 417 494 814 Total revenues 78,088 69,277 142,548 127,232 Operating Expenses: Employee compensation and benefits 42,551 37,483 84,681 74,365 General and administrative expenses 16,855 17,332 34,035 33,188 Bad debts 653 900 1,780 2,555 Depreciation and amortization 2,632 2,372 5,200 4,465 Total operating expenses 62,691 58,087 125,696 114,573 Income from operations 15,397 11,190 16,852 12,659 Other Income: Interest expense ( 1,982 ) ( 1,709 ) ( 3,469 ) ( 3,440 ) Other income (expense) 441 — ( 6,286 ) — Income before taxes 13,856 9,481 7,097 9,219 Tax (benefit) expense 2,981 2,301 ( 5,587 ) 2,220 Net income 10,875 7,180 12,684 6,999 Less: net income attributable to non-controlling interests 4,677 3,514 4,672 3,414 Net income attributable to Goosehead Insurance, Inc. $ 6,198 $ 3,666 $ 8,012 $ 3,585 Earnings per share: Basic $ 0.25 $ 0.15 $ 0.3