Goosehead Insurance(US:GSHD)2023-04-28 01:51Financial Performance - Revenue for Q1 2023 increased by 40% to $58.0 million from $41.3 million in Q1 2022[80] - Total Written Premium growth was 41%, reaching $637.7 million in Q1 2023 compared to $450.9 million in Q1 2022[80] - Adjusted EBITDA surged 707% to $10.2 million, representing 18% of total revenues[80] - Core Revenue increased by 42% to $52.0 million in Q1 2023 from $36.5 million in Q1 2022[80] - Renewal Revenue surged by 59% to $38.6 million for the three months ended March 31, 2023, from $24.2 million for the same period in 2022, supported by an 88% client retention rate[115] - Basic earnings per share (GAAP) for Q1 2023 was $0.00, compared to a loss of $0.11 in Q1 2022; Adjusted EPS (non-GAAP) increased to $0.17 from $0.04[130] Policy and Franchise Metrics - Policies in Force rose by 23% to 1,354,000 as of March 31, 2023, compared to the previous year[80] - Total franchises decreased by 19% to 1,865, while operating franchises increased by 9% to 1,387[80] - Revenue from New Business Royalty Fees increased by $1.4 million, or 32%, to $5.7 million for the three months ended March 31, 2023, from $4.3 million for the same period in 2022, driven by a 9% increase in operating franchises to 1,387[96] - Revenue from Initial Franchise Fees rose by $0.8 million, or 33%, to $3.1 million for the three months ended March 31, 2023, attributed to higher franchise turnover during the quarter[97] Cost and Cash Flow - Net cash used for operating activities improved to $0.6 million in Q1 2023 from $5.2 million in Q1 2022, reflecting a decrease in net loss[134] - Net cash used for investing activities was $2.7 million in Q1 2023, slightly higher than $2.5 million in Q1 2022, driven by increased asset purchases[135] - Net cash used for financing activities rose to $0.9 million in Q1 2023 from $0.2 million in Q1 2022, primarily for repayment of notes payable[136] - Cash and cash equivalents as of March 31, 2023, were $24.6 million, with a net decrease in cash and cash equivalents of $4.2 million for the quarter[131][133] Obligations and Liquidity - Total contractual obligations as of March 31, 2023, amounted to $322.6 million, including $81.7 million in operating leases and $93.1 million in debt obligations[144] - The company anticipates sufficient liquidity from cash on hand, net working capital, and cash flows from operations to meet future commitments[137] - The company has a tax receivable agreement that requires payment of 85% of cash savings realized from tax benefits, with liabilities under this agreement totaling $129.2 million[144] Operational Changes - Corporate sales headcount decreased by 44% to 276 as of March 31, 2023[80] - Cost Recovery Revenue increased by $0.8 million, or 32%, to $3.5 million for the three months ended March 31, 2023, from $2.6 million for the same period in 2022, driven by an increase in franchise terminations[120] - The company recorded a rent expense of $2.0 million for Q1 2023, compared to $1.4 million for Q1 2022[144] - The company refinanced its credit facilities in July 2021, with a $100 million term loan and a $25 million revolving credit facility, of which nothing was drawn as of March 31, 2023[145]