Goosehead Insurance(US:GSHD)2024-10-24 00:30Revenue Growth - Total revenue increased by 10% to $78.0 million for Q3 2024, compared to $71.0 million in Q3 2023[74] - Core Revenue rose by 16% to $73.5 million in Q3 2024, up from $63.1 million in Q3 2023[74] - Total Written Premiums increased by 28% to $1.03 billion in Q3 2024, compared to $0.80 billion in Q3 2023[74] - New Business Revenue grew 8% to $15.2 million for the three months ended September 30, 2024, and grew 6% to $45.0 million for the nine months ended September 30, 2024[105] - Renewal Revenue increased by 19% to $58.3 million for the three months ended September 30, 2024, and by 20% to $160.7 million for the nine months ended September 30, 2024[106] - Core Revenue increased by 16% to $73.5 million for the three months ended September 30, 2024, and by 17% to $205.8 million for the nine months ended September 30, 2024[108] Profitability - Net income for Q3 2024 was $12.6 million, a 16% increase from $11.3 million in Q3 2023[74] - Adjusted EBITDA grew by 17% to $26.1 million in Q3 2024, representing 34% of total revenues[74] - Net income for the three months ended September 30, 2024, was $12.6 million, an increase of 11.8% from $11.3 million in the same period of 2023[117] - Adjusted EBITDA for the three months ended September 30, 2024, was $26.1 million, representing a margin of 34%, compared to $22.4 million and a margin of 32% in the same period of 2023[117] - Basic earnings per share (GAAP) for the three months ended September 30, 2024, was $0.31, up from $0.29 in the same period of 2023[118] - The adjusted EPS (non-GAAP) for the three months ended September 30, 2024, was $0.50, compared to $0.46 in the same period of 2023[118] Expenses - Total operating expenses increased to $61.6 million in Q3 2024, up from $57.4 million in Q3 2023[82] - Employee compensation and benefits expenses increased by $3.8 million, or 10%, to $43.2 million for the three months ended September 30, 2024, compared to $39.4 million for the same period in 2023[91] - General and administrative expenses increased by $0.4 million, or 2%, to $15.2 million for the three months ended September 30, 2024, from $14.8 million in the prior year[92] - Interest income decreased by $0.1 million, or 28%, to $0.2 million for the three months ended September 30, 2024, from $0.3 million for the same period in 2023[90] - Tax expense increased by $1.6 million for the three months ended September 30, 2024, to $2.3 million from $0.7 million for the same period in 2023[97] - Bad debts decreased by $0.2 million, or 29%, to $0.6 million for the three months ended September 30, 2024, from $0.8 million for the same period in 2023[93] Policies and Sales - Policies in Force increased by 12% to 1,636,000 as of September 30, 2024, compared to the previous year[74] - Corporate sales headcount rose by 45% to 458 as of September 30, 2024[74] - Total franchises decreased by 27% to 1,149 compared to the prior-year period[74] - Renewal Commissions accounted for 26% of Core Revenue in Q3 2024, totaling $20.2 million[80] - Renewal Commissions increased by $1.2 million, or 6%, to $20.2 million for the three months ended September 30, 2024, compared to $19.0 million for the same period in 2023[86] - New Business Commissions rose by $0.1 million, or 2%, to $6.2 million for the three months ended September 30, 2024, from $6.1 million in the prior year[86] Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2024, was $59.0 million, an increase of 58.0% from $37.4 million in the same period of 2023[123] - Cash and cash equivalents at the end of the period on September 30, 2024, were $50.1 million, up from $37.1 million at the end of September 30, 2023[122] - Net cash used for financing activities was $43.7 million for the nine months ended September 30, 2024, compared to $16.1 million in the same period of 2023, primarily due to stock repurchases[125] - Net cash used for investing activities decreased to $9.3 million for the nine months ended September 30, 2024, from $14.6 million in the same period of 2023, driven by reduced purchases of books of business[124] - The company expects its liquidity sources, including cash on hand and cash flows from operations, to be sufficient to meet its working capital requirements in the foreseeable future[126] Debt and Obligations - Total contractual obligations as of September 30, 2024, amount to $334,032,000, with $32,833,000 due within one year[131] - Debt obligations payable total $95,594,000, with $10,063,000 due within one year[131] - Interest expense for the period is $11,051,000, with $6,391,000 due within one year[131] - Liabilities under the tax receivable agreement total $160,697,000, with $4,948,000 due within one year[131] - The company has a share repurchase program authorized for up to $100 million of Class A common stock through March 31, 2025[132] Other Financial Metrics - Adjusted EBITDA increased by 17% to $26.1 million for the three months ended September 30, 2024, and by 12% to $62.5 million for the nine months ended September 30, 2024[112] - Adjusted EBITDA Margin was 34% for the three months ended September 30, 2024, compared to 32% for the same period in 2023[113] - Cost Recovery Revenue decreased by 40% to $1.6 million for the three months ended September 30, 2024, and by 39% to $6.0 million for the nine months ended September 30, 2024[110] - Ancillary Revenue decreased to $2.9 million for the three months ended September 30, 2024, down from $5.2 million for the same period in 2023[111] Client Metrics - The Net Promoter Score (NPS) decreased to 90 as of September 30, 2024, down from 92 as of September 30, 2023[103] - Client Retention decreased to 84% at September 30, 2024, compared to 86% at December 31, 2023, and 87% at September 30, 2023[104] Miscellaneous - The company amended its credit facilities on April 24, 2024, increasing term loan borrowings and revolving credit facility by $25 million each[131] - There have been no significant changes to critical accounting policies since the last annual report[134] - The company does not engage in off-balance sheet arrangements that expose it to additional liabilities[133] - There have been no material changes to market risk exposure as described in the previous annual report[136]