3G Capital took a new position in Alphabet (GOOG) (GOOGL), Microsoft (MSFT), Broadcom (AVGO), trimmed its position in Goosehead Insurance (GSHD) and Coupang (CPNG), while exiting monday.com (MNDY) among its Q3 moves. The fund disclosed the information in its latest 13F ...

Core Insights - Goosehead Insurance, Inc. (NASDAQ:GSHD) is recognized for its innovative approach in the personal lines insurance sector, utilizing technology to enhance customer experience and streamline operations [1] - The stock has recently experienced a monthly loss of 1.24% and a 9.65% decline over the last 10 days, indicating a potential undervaluation and a possible entry point for investors [2][6] - Analysts project a significant stock price increase of 60.20%, driven by the company's strategic initiatives for market expansion and shareholder value enhancement [3] - The company holds a Piotroski Score of 8, reflecting strong financial health and a solid foundation for growth [4][6] - Analysts have set a target price of $107.4 for GSHD, indicating substantial upside potential for investors [5][6]

Revenue Growth - Total revenue increased by 16% year-over-year to $90.4 million for Q3 2025, compared to $78.0 million in Q3 2024[130] - Core Revenue rose by 14% year-over-year to $83.9 million for Q3 2025, up from $73.5 million in Q3 2024[130] - Total Written Premiums increased by 15% year-over-year to $1.2 billion for Q3 2025, compared to $1.03 billion in Q3 2024[130] - Total Written Premiums for the nine months ended September 30, 2025, increased by 18% to $3.4 billion from $2.85 billion for the same period in 2024[131] - Total Written Premium for the three months ended September 30, 2025 was $1,181.8 million, a 15% increase from $1,028.7 million in the same period of 2024[159] - Total Written Premium for the nine months ended September 30, 2025 was $3,357.9 million, an 18% increase from $2,846.4 million in the same period of 2024[159] Income and Profitability - Net income for Q3 2025 was $12.7 million, a 1% increase from $12.6 million in Q3 2024, representing 14% of total revenues[130] - Net income for the nine months ended September 30, 2025, was $23.6 million, compared to $25.3 million for the same period in 2024[189] - Adjusted EBITDA grew by 14% year-over-year to $29.7 million, accounting for 33% of total revenues in Q3 2025[130] - Adjusted EBITDA for the nine months ended September 30, 2025, was $74.4 million, with an Adjusted EBITDA margin of 28.6%[189] - Adjusted EPS for the nine months ended September 30, 2025, was $1.22, compared to $1.20 for the same period in 2024[190] - Adjusted EBITDA increased by 14% to $29.7 million for the three months ended September 30, 2025, from $26.1 million in the prior year[182] - Adjusted EBITDA Margin was 33% for the three months ended September 30, 2025, compared to 34% for the same period in 2024[184] Revenue Sources - New Business Revenue for the three months ended September 30, 2025 grew 22% to $18.5 million, compared to $15.2 million for the same period in 2024[167] - Renewal Revenue increased by 12% to $65.4 million for the three months ended September 30, 2025, up from $58.3 million in the prior year[170] - Revenue from Agency Fees increased by $0.7 million, or 36%, to $2.7 million for the three months ended September 30, 2025, and by $1.8 million, or 30%, to $7.9 million for the nine months ended September 30, 2025[143] - Revenue from Contingent Commissions increased by $2.1 million to $4.5 million for the three months ended September 30, 2025, and by $6.1 million to $13.5 million for the nine months ended September 30, 2025[144] - Revenue from Renewal Royalty Fees increased by $7.6 million, or 20%, to $45.7 million for the three months ended September 30, 2025, and by $24.4 million, or 23%, to $128.3 million for the nine months ended September 30, 2025[146] - Revenue from New Business Royalty Fees increased by $1.3 million, or 18%, to $8.3 million for the three months ended September 30, 2025, and by $2.6 million, or 13%, to $23.0 million for the nine months ended September 30, 2025[147] Expenses and Liabilities - Employee compensation and benefits expenses increased by $5.5 million, or 13%, to $48.7 million for the three months ended September 30, 2025, and by $19.5 million, or 15%, to $147.4 million for the nine months ended September 30, 2025[150] - Interest expense increased by $3.9 million, or 190%, to $6.0 million for the three months ended September 30, 2025, and by $12.6 million, or 227%, to $18.1 million for the nine months ended September 30, 2025[154] - Total contractual obligations as of September 30, 2025, amount to $678,946,000, with $41,460,000 due in less than 1 year[209] - Debt obligations payable total $299,251,000, with $284,288,000 maturing in more than 5 years[209] - Interest expense is projected at $132,532,000, with $26,206,000 due in more than 5 years[209] - Liabilities under the tax receivable agreement total $178,206,000, with $101,979,000 due in more than 5 years[209] Operational Metrics - Policies in Force increased by 13% year-over-year to 1,853,000 as of September 30, 2025[130] - Corporate sales headcount rose by 14% year-over-year to 523 as of September 30, 2025[130] - Total operating franchises decreased by 4% year-over-year to 1,068 as of September 30, 2025[130] - Total Franchise agents increased by 1% year-over-year to 2,124 as of September 30, 2025[130] - As of September 30, 2025, Goosehead had 1.9 million Policies in Force, representing an 11% increase from 1.7 million as of December 31, 2024[161] - Client Retention improved to 85% as of September 30, 2025, up from 84% at both December 31, 2024 and September 30, 2024[165] Cash Flow and Financing - Net cash provided by operating activities increased to $68.6 million for the nine months ended September 30, 2025, up from $59.0 million in 2024, reflecting a $15.9 million increase in cash received for commissions and agency fees[198] - Net cash used for investing activities rose to $14.8 million for the nine months ended September 30, 2025, compared to $9.3 million in 2024, driven by increased purchases of books of business and property[199] - Net cash used for financing activities was $57.2 million for the nine months ended September 30, 2025, compared to $43.7 million in 2024, primarily due to a $300 million term loan issuance[200] - As of September 30, 2025, cash and cash equivalents totaled $51.6 million, a decrease from $54.5 million at the end of the previous period[192] - The company entered into a $300 million credit agreement on January 8, 2025, with a maturity date of January 8, 2032[193] - The company expects liquidity sources to be sufficient to fund working capital requirements and meet commitments in the foreseeable future[201] - The company anticipates primary liquidity needs will include capital for organic growth, operating expenses, and share repurchases[202] - The company has a new credit agreement for $300 million in term loans and a $75 million revolving credit facility, with no amounts drawn as of September 30, 2025[210] - A share repurchase program was approved for up to $100 million of Class A common stock, set to expire on May 1, 2026[211] Accounting and Risk - There have been no significant changes to critical accounting policies since the last annual report[213] - No material changes to market risk exposure have been reported since the previous fiscal year[215] - The company does not engage in off-balance sheet arrangements that expose it to additional liabilities[212] - The decline in premium retention was primarily due to moderating premium rate increases, which could impact future revenue growth[165]

Core Insights - Goosehead Insurance reported revenue of $90.44 million for the quarter ended September 2025, reflecting a year-over-year increase of 15.9% [1] - The earnings per share (EPS) for the quarter was $0.46, down from $0.50 in the same quarter last year [1] - The reported revenue fell short of the Zacks Consensus Estimate of $92.39 million, resulting in a surprise of -2.11% [1] - The company experienced an EPS surprise of -2.13%, with the consensus EPS estimate being $0.47 [1] Key Company Metrics - Total Core Revenue was reported at $83.87 million, compared to the average estimate of $86.32 million, marking a year-over-year change of +14.1% [4] - Ancillary Revenue from Contingent Commissions was $4.54 million, slightly below the average estimate of $4.68 million, with a year-over-year increase of +82.4% [4] - Total Cost Recovery Revenue was $1.54 million, compared to the average estimate of $1.6 million, representing a year-over-year decline of -6.2% [4] - Total Ancillary Revenue reached $5.02 million, below the average estimate of $5.46 million, with a year-over-year increase of +74.6% [4] - Core Revenue from Agency Fees was $2.71 million, exceeding the average estimate of $2.56 million, reflecting a year-over-year increase of +36.5% [4] - Other Franchise Revenues amounted to $0.48 million, below the average estimate of $1.05 million, with a year-over-year change of +23.9% [4] - Initial Franchise Fees in Cost Recovery Revenue were $1.38 million, slightly above the average estimate of $1.3 million, showing a year-over-year decline of -2.3% [4] - Interest Income in Cost Recovery Revenue was $0.16 million, below the average estimate of $0.17 million, with a year-over-year decline of -29.9% [4] - New Business Royalty Fees in Core Revenue were $8.28 million, exceeding the average estimate of $7.94 million, with a year-over-year increase of +18.3% [4] - New Business Commissions in Core Revenue were $7.53 million, below the average estimate of $8 million, reflecting a year-over-year increase of +20.5% [4] - Renewal Royalty Fees in Core Revenue were $45.69 million, slightly above the average estimate of $45.32 million, with a year-over-year increase of +20% [4] - Renewal Commissions in Core Revenue were $19.67 million, below the average estimate of $21.6 million, representing a year-over-year decline of -2.7% [4] Stock Performance - Goosehead's shares have returned -11.8% over the past month, contrasting with the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Goosehead Insurance (GSHD) reported quarterly earnings of $0.46 per share, missing the Zacks Consensus Estimate of $0.47 per share, and down from $0.5 per share a year ago, representing an earnings surprise of -2.13% [1] - The company posted revenues of $90.44 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 2.11%, but up from $78.04 million year-over-year [2] - Goosehead shares have declined approximately 36.4% year-to-date, contrasting with the S&P 500's gain of 14.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.54 on revenues of $96.88 million, and for the current fiscal year, it is $1.77 on revenues of $358.72 million [7] - The estimate revisions trend for Goosehead was unfavorable prior to the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Zacks Industry Rank for Insurance - Multi line is currently in the top 25% of over 250 Zacks industries, suggesting that companies in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8] - Radian (RDN), another company in the same industry, is expected to report quarterly earnings of $0.95 per share, reflecting a year-over-year decline of -7.8%, with revenues anticipated at $316.6 million, down 0.8% from the previous year [9]

Financial Data and Key Metrics Changes - Total revenue grew 16% year-over-year to $90.4 million, with core revenue increasing 14% to $83.9 million [27] - Adjusted EBITDA rose 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [29] - Client retention improved to 85%, up from 84% for four consecutive quarters [27][28] Business Line Data and Key Metrics Changes - Franchise premiums totaled $976 million, up 18%, while corporate premiums were $206 million, a 1% increase [28] - Franchise producers at quarter end were 2,124, up 1% year-over-year, with producers per franchise growing 6% [22] - The corporate team achieved new business commissions growth of 20% year-over-year, accelerating from 13% in the previous quarter [24] Market Data and Key Metrics Changes - Total written premium for the quarter was $1.2 billion, a 15% increase from the previous year [28] - Policies in force grew 13% year-over-year to 1.9 million [28] - Contingent commissions for the quarter were $4.5 million, an increase of 82% compared to $2.5 million in the previous year [29] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified significant growth opportunities in a fragmented market [6][8] - Key strategic initiatives include expanding existing agencies, launching new franchises, and enhancing technology to improve client experience [9][10] - The digital agent technology is expected to revolutionize personal lines insurance distribution and drive significant growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to enhance operational efficiency and client satisfaction [16][27] - The company anticipates continued improvement in client retention and premium growth, with expectations for revenue contributions from new partnerships starting in 2026 [20][28] - The management highlighted the importance of technology investments and partnerships in driving future growth [19][22] Other Important Information - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [30] - Total debt outstanding was $299 million, with cash and cash equivalents at $51.6 million [30] - The company reiterated its full-year 2025 revenue guidance, expecting total revenues between $350 million and $385 million [30][31] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - Management indicated that the enterprise sales business will have a more impactful margin profile over the long term compared to corporate and franchise businesses [34] Question: How many carriers are currently on the digital agent? - There are about 12 carriers integrated with the digital agent, and management is in discussions with major carriers for further integration [37][38] Question: What is the outlook for home sales and how does it affect written premium? - Management noted that housing activity remains depressed, but the company is well-positioned to capture leads as the market improves [41] Question: What is the expected growth in producer count? - Management expects consistent growth in producer count, emphasizing the importance of quality over quantity in franchise performance [46] Question: Why is the revenue trajectory not more upbeat? - Management expressed optimism about the business direction but acknowledged ongoing challenges in the product market, which is gradually improving [51][55] Question: What needs to happen to reach the high end of the revenue outlook? - Management highlighted the variability of contingent commissions and the need for a stable product market to achieve higher revenue [66]

Financial Data and Key Metrics Changes - Total revenue grew 16% year-over-year to $90.4 million, with core revenue increasing 14% to $83.9 million [27] - Adjusted EBITDA rose 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [29] - Client retention improved to 85%, up from 84% for four consecutive quarters [28] Business Line Data and Key Metrics Changes - Franchise premiums reached $976 million, up 18%, while corporate premiums were $206 million, a 1% increase [28] - Franchise producers at quarter end were 2,124, up 1% year-over-year, with producers per franchise growing 6% [22] - The corporate team achieved new business commissions growth of 20% year-over-year, accelerating from 13% in the previous quarter [24] Market Data and Key Metrics Changes - Total written premium for the quarter was $1.2 billion, a 15% increase from the previous year [28] - Policies in force grew 13% year-over-year to 1.9 million [28] - Contingent commissions for the quarter were $4.5 million, an increase of 82% compared to $2.5 million in the previous year [29] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified significant growth opportunities in a fragmented market [6][8] - Key strategic initiatives include expanding existing agencies, launching new franchises, and enhancing technology to improve client experience [9][10] - The digital agent technology is expected to revolutionize personal lines insurance distribution and drive significant growth [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to enhance client retention and overall business efficiency [16][26] - The company anticipates continued acceleration in revenue growth and improvements in client retention as market conditions stabilize [27][30] - Management highlighted the importance of technology investments and partnerships in driving future growth [19][22] Other Important Information - The company has invested $10.9 million into the digital agent platform in 2025, with plans to invest between $25 million and $35 million in 2026 and 2027 [19] - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [30] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - Management indicated that the enterprise sales business will have a more impactful margin profile over the long term compared to corporate and franchise businesses [34] Question: How many carriers are on the digital agent right now? - Currently, there are about 12 carriers integrated with the digital agent, and major carriers are supportive of the initiative [37][38] Question: What are you seeing in home sales and how is that affecting written premium? - Management noted that housing activity remains depressed, but the company is well-positioned to capture leads as the market improves [41] Question: What is the expectation for producer count growth? - Management expects consistent producer count growth, focusing on quality and strategic geographic expansion [46] Question: Why is there a wide range in the full-year outlook? - The wide range is due to the variability of contingent commissions and the unpredictable nature of the market [66] Question: How will the digital agent impact future growth? - The digital agent is expected to allow the company to penetrate additional markets and significantly increase total written premium growth [68]

Financial Data and Key Metrics Changes - Total revenue grew 16% year-over-year to $90.4 million, with core revenue increasing 14% to $83.9 million [26] - Adjusted EBITDA rose 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [29] - Client retention improved to 85%, up from 84% for four consecutive quarters [26][27] Business Line Data and Key Metrics Changes - Franchise premiums totaled $976 million, up 18%, while corporate premiums were $206 million, a 1% increase [27] - Franchise producers at quarter end were 2,124, up 1% year-over-year, with producers per franchise growing 6% [20] - The corporate team achieved new business commissions growth of 20% year-over-year, accelerating from 13% in the second quarter [23] Market Data and Key Metrics Changes - Total written premium for the quarter was $1.2 billion, a 15% increase from the previous year [27] - Policies in force grew 13% year-over-year to 1.9 million, with the growth rate accelerating during the quarter [27] - Contingent commissions for the quarter were $4.5 million, an increase of 82% compared to $2.5 million in the previous year [28] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified significant growth opportunities in a fragmented market [5][6] - Key strategic initiatives include expanding existing agencies, launching new franchises, and enhancing technology to improve client experience [8][10] - The company is investing heavily in its digital agent platform, expecting it to drive substantial growth in total written premiums over the next five years [19][60] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to enhance client retention and overall business efficiency [14][25] - The company anticipates continued improvement in client retention and premium growth, with expectations for acceleration in 2026 [26][49] - Management highlighted the importance of technology investments and partnerships in driving future growth and improving service delivery [18][20] Other Important Information - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [30] - The company expects to invest between $25 million and $35 million annually in the digital agent platform for 2026 and 2027 [18] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - Management indicated that the enterprise sales business will have a more impactful margin profile in the long term compared to corporate or franchise business, with franchise business still being the primary driver of total written premium [33][34] Question: How many carriers are currently on the digital agent? - Currently, there are about 12 carriers integrated with the digital agent, and management is in discussions with major carriers for further integration [36][37] Question: What is the outlook for home sales and how does it affect written premium? - Management noted that while housing activity remains depressed, the company is well-positioned to capture market share as housing activity improves [39][40] Question: What is the expected trajectory for client retention next year? - Management is optimistic about continued improvement in client retention, driven by investments in service delivery tools and a stable pricing environment [73] Question: Were there any one-time revenue adjustments this quarter? - Management confirmed there were no one-time revenue adjustments in the third quarter, and improvements in commission rates are ongoing [75]

Financial Data and Key Metrics Changes - Total revenue grew 16% year over year to $90.4 million, with core revenue increasing 14% to $83.9 million [29] - Adjusted EBITDA for the quarter grew 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [33] - Client retention improved to 85%, up from 84% for four consecutive quarters [30] - Total written premiums for the quarter were $1.2 billion, up 15% from a year ago [31] Business Line Data and Key Metrics Changes - Franchise premiums were $976 million, an increase of 18%, while corporate premiums were $206 million, a 1% increase from a year ago [31] - Franchise producers at quarter end were 2,124, up 1% from a year ago, with producers per franchise growing 6% [23] - The corporate team generated new business commissions growth of 20% year over year, accelerating from 13% in the second quarter [26] Market Data and Key Metrics Changes - The industry has over $530 billion in total written premium annually, with the company growing from over $2 billion in premiums in 2022 to over $4 billion in 2025 [7] - The company still represents less than 1% of total market share, indicating significant growth potential [7] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified five key strategic initiatives to support this goal [10] - The digital agent technology is expected to revolutionize personal lines insurance distribution, allowing for a more seamless client experience [15] - The company plans to invest between $25 million and $35 million annually in the digital agent platform for 2026 and 2027 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to improve client retention and overall business efficiency [17] - The company anticipates continued acceleration in revenue growth and premium growth in 2026 [65] - Management highlighted the importance of technology investments and partnerships in driving future growth [20] Other Important Information - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [34] - The company expects total revenues for 2025 to be between $350 million and $385 million, representing organic growth of 11% to 22% [34] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - The enterprise sales business is expected to have a more impactful margin profile over the long term compared to corporate or franchise business [37] Question: How many carriers are involved in the digital agent? - Currently, there are about 12 carriers integrated with the digital agent, and major carriers are supportive of the integration [42][44] Question: What is the outlook for home sales and how does it affect written premium? - The housing market remains depressed, but the company is building a referral partner network to capture lead flow [47] Question: What is the expected growth in producer count? - Producer count is expected to grow consistently, with a focus on quality over quantity [54] Question: Why is the revenue trajectory not more upbeat? - The company is optimistic about the direction of the business, but is cautious due to the variability in contingent commissions [58] Question: What needs to happen to reach the high end of revenue guidance? - The contingent commissions are variable, and the company is optimistic about potential upside based on current market conditions [70] Question: How will the digital agent impact growth? - The digital agent is expected to allow for significant market penetration and could drive total written premium growth of over 40% in the next five years [76]

GOOSEHEAD INSURANCE, INC. ANNOUNCES THIRD QUARTER 2025 RESULTS – Total Revenue Increased 16% and Core Revenue* Grew 14% over the Prior-Year Period – – Repurchased $58.7 million of shares for the Third Quarter at an Average Price of $85.58 – WESTLAKE, TEXAS – October 22, 2025 - Goosehead Insurance, Inc. ("Goosehead" or the "Company") (NASDAQ: GSHD), a rapidly growing independent personal lines insurance agency, today announced results for the third quarter ended September 30, 2025. "We continue to deliver st ...