Goosehead Insurance Q3 2024 10-Q Filed

TL;DR

**GSHD Q3 10-Q is IN! Revenue figures for commissions, franchise, and interest income are now public.**

AI Summary

Goosehead Insurance, Inc. filed its 10-Q for the period ending September 30, 2024. The filing details financial performance, including commissions and agency fees, franchise revenue, and interest income for the third quarter and the first nine months of 2024, compared to the same periods in 2023. Specific dollar amounts for these revenue streams are provided within the document.

Why It Matters

This filing provides investors with an update on Goosehead Insurance's financial health and operational performance, crucial for understanding its current market position and future prospects.

Risk Assessment

Risk Level: medium — The filing contains detailed financial data and operational updates that could significantly impact the company's stock price, requiring careful analysis by investors.

Key Numbers

• 2024 Q3 — Reporting Period (Covers the third quarter of 2024)
• 2023 Q3 — Prior Year Period (For comparison with the current quarter)
• 2024 Nine Months — Year-to-Date Period (Covers January 1 to September 30, 2024)
• 2023 Nine Months — Prior Year YTD (For comparison with the current year-to-date)

Key Players & Entities

• Goosehead Insurance, Inc. (company) — Filer of the 10-Q report
• 2024-09-30 (date) — End of the reporting period
• 2024-10-24 (date) — Date the filing was made

FAQ

Filing Documents

• gshd-20240930.htm (10-Q) — 1343KB
• exhibit31120240930.htm (EX-31.1) — 10KB
• exhibit31220240930.htm (EX-31.2) — 10KB
• exhibit3220240930.htm (EX-32) — 4KB
• 0001726978-24-000101.txt ( ) — 5589KB
• gshd-20240930.xsd (EX-101.SCH) — 43KB
• gshd-20240930_cal.xml (EX-101.CAL) — 61KB
• gshd-20240930_def.xml (EX-101.DEF) — 205KB
• gshd-20240930_lab.xml (EX-101.LAB) — 429KB
• gshd-20240930_pre.xml (EX-101.PRE) — 304KB
• gshd-20240930_htm.xml (XML) — 665KB

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 26

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 26

Quantitative and Qualitative Disclosures About Market Risk 41

Item 3. Quantitative and Qualitative Disclosures About Market Risk 41

Controls and Procedures 41

Item 4. Controls and Procedures 41 Part II

Legal Proceedings 42

Item 1. Legal Proceedings 42

Risk Factors 42

Item 1A. Risk Factors 42

Unregistered Sales of Equity Securities and Use of Proceeds 42

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42

Defaults Upon Senior Securities 42

Item 3. Defaults Upon Senior Securities 42

Mine Safety Disclosures 42

Item 4. Mine Safety Disclosures 42

Other Information 42

Item 5. Other Information 42

Exhibits 43

Item 6. Exhibits 43

SIGNATURES

SIGNATURES 43 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. Corporate Agent Productivity: The New Business Revenue collected related to corporate sales, divided by the average number of full-time corporate sales agents for the same period. This calculation excludes interns, part-time sales agents and partial full-time equivalent sales managers. 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. Fra

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 11 Notes to the Condensed Consolidated Financial Statements 12 Note 1 Organization 12 Note 2 Summary of significant accounting policies 12 Note 3 Revenues 15 Note 4 Franchise fees receivable 17 Note 5 Allowance for uncollectible agency fees 18 Note 6 Property and equipment 18 Note 7 Intangible assets 19 Note 8 Debt 19 Note 9 Income taxes 20 Note 10 Stockholder's equity 22 Note 11 Non-controlling interest 24 Note 12 Equity-based compensation 25 Note 13 Litigation 25 5 Goosehead Insurance, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenues: Commissions and agency fees $ 30,942 $ 31,980 $ 88,782 $ 88,637 Franchise revenues 46,862 38,729 131,076 108,490 Interest income 231 321 725 1,135 Total revenues 78,035 71,030 220,583 198,262 Operating Expenses: Employee compensation and benefits 43,217 39,436 127,898 113,801 General and administrative expenses 15,201 14,831 49,236 48,019 Bad debts 565 797 2,345 3,352 Depreciation and amortization 2,614 2,352 7,814 6,817 Total operating expenses 61,597 57,416 187,293 171,989 Income from operations 16,438 13,614 33,290 26,273 Other Income: Interest expense ( 2,060 ) ( 1,617 ) ( 5,529 ) ( 5,057 ) Other income (expense) 544 — ( 5,742 ) — Income before taxes 14,922 11,997 22,019 21,216 Tax (benefit) expense 2,315 724 ( 3,272 ) 2,944 Net income 12,607 11,273 25,291 18,272 Less: net income attributable to non-controlling interests 5,048 4,339 9,720 7,753 Net income attributable to Goosehead Insurance, Inc. $ 7,559 $ 6,934 $ 15,571 $ 10,519 Earnings per share: Bas