Goosehead Insurance(US:GSHD)2022-04-27 22:04Revenue Growth - Total revenue increased by 32% from Q1 2021 to $41.3 million in Q1 2022[20] - Core Revenue increased by 37% from Q1 2021 to $36.5 million in Q1 2022[20] - Total Written Premiums placed increased by 41% from the prior-year period to $450.9 million[20] - Total Written Premium grew by 41% to $450.9 million for the three months ended March 31, 2022, compared to $318.9 million for the same period in 2021[12] - Core Revenue increased by $9.8 million, or 37%, to $36.5 million for the three months ended March 31, 2022, driven by increases in operating franchises and client retention[124] - Total core revenue reached $36,505 million, up 36.7% from $26,700 million year-over-year[135] Policy and Franchise Growth - Policies in Force increased by 39% from March 31, 2021, to 1,097,000 at March 31, 2022[20] - Total franchises increased by 41% compared to the prior year period to 2,298[20] - Policies in Force increased by 39% to 1,097,000 as of March 31, 2022, compared to 788,000 as of March 31, 2021[14] - Initial Franchise Fees increased by $0.9 million, or 60%, to $2.3 million for the three months ended March 31, 2022, due to a 41% increase in total franchises to 2,298[3] - New Business Royalty Fees rose by $1.1 million, or 36%, to $4.3 million for the three months ended March 31, 2022, attributed to a 28% increase in the total number of operating franchises to 1,268[2] Commission and Revenue Streams - Renewal Commissions increased by 32% to $10.2 million in Q1 2022 from $7.8 million in Q1 2021[96] - New Business Commissions increased by 16% to $5.4 million in Q1 2022 from $4.6 million in Q1 2021[97] - Renewal Royalty Fees increased by $5.3 million, or 60%, to $14.0 million for the three months ended March 31, 2022, driven by an increase in client retention to 89%[1] Financial Performance - Adjusted EBITDA decreased by 41% to $1.3 million, or 3% of total revenues in Q1 2022[20] - Adjusted EBITDA decreased by $0.9 million, or 41%, to $1.3 million for the three months ended March 31, 2022, primarily due to increased General and Administrative expenses[130] - Adjusted EBITDA Margin was 3% for the three months ended March 31, 2022, down from 7% for the same period in 2021, influenced by rising expenses and decreased revenue from Contingent Commissions[132] - The company reported a net loss of $5,383 million for Q1 2022, compared to a net loss of $1,089 million in Q1 2021[137] - Net cash used for operating activities was $5,154 million in Q1 2022, a decrease of $13,042 million compared to a net cash provided of $7,888 million in Q1 2021[141] - Cash and cash equivalents at the end of Q1 2022 were $22,679 million, down from $31,955 million at the end of Q1 2021[141] Client Retention and Service - Client Retention remained constant at 89% as of March 31, 2022, reflecting the service team's focus on delivering high service levels[118] Tax and Accounting - The company will record an increase in deferred tax assets based on enacted federal and state tax rates at the date of redemption or exchange[155] - The company estimates that it will not realize the full benefit of the deferred tax asset, leading to a potential reduction with a valuation allowance[155] - The company will record 85% of the estimated realizable tax benefit as an increase to the liability due under the tax receivable agreement[155] - There have been no significant changes to the company's critical accounting policies as disclosed in the Annual Report on Form 10-K[156] - There have been no material changes to the company's exposure to market risks as described in the Annual Report on Form 10-K[158] Liquidity and Obligations - The company’s liquidity sources include cash on hand of $21.2 million as of March 31, 2022, and cash flows from operations[139] - Total contractual obligations as of March 31, 2022, amounted to $284,994 million, with operating leases accounting for $66,090 million[152] - The company expects to fund its working capital requirements and commitments through cash on hand, net working capital, and cash flows from operations[145] - The company’s adjusted EPS for Q1 2022 was $0.04, compared to $0.03 in Q1 2021[138]