Goosehead Insurance(US:GSHD)2025-10-23 01:13Revenue 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]