Group 1 - 3G Capital has taken a new position in Alphabet (GOOG) and Microsoft (MSFT) [1] - The fund has also initiated a position in Broadcom (AVGO) [1] - 3G Capital trimmed its position in Goosehead Insurance (GSHD) and Coupang (CPNG) [1] - The fund exited its position in monday.com (MNDY) [1]

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 ...