Goosehead Insurance(US:GSHD)2021-02-26 13:39Financial Performance - For the year ended December 31, 2020, total written premium grew by 45% to $1.07 billion from $739 million in 2019[28]. - The company achieved a net income of $18.8 million for the year ended December 31, 2020, an increase of $8.4 million over 2019[28]. - The company reported a 51% growth in revenue for the year ended December 31, 2020[28]. - Total written premium compound annual growth rate (CAGR) over 10 years was 37%, and 5-year premium CAGR was 45% as of December 31, 2020[37]. Client Retention and Satisfaction - Client retention rate was 88% during 2020, which is believed to be among the highest in the industry[22]. - The company's service centers achieved a Net Promoter Score (NPS) of 92 in 2020, up from 89 in 2019, significantly higher than the industry average[36]. - The company reported an 88% Client Retention rate and a 89% premium retention rate in 2020, supported by its service centers[66]. Business Channels and Growth - Corporate Channel accounted for 52% of total revenue in 2020, with a 47% increase in sales agent headcount and a 31% growth in premiums placed compared to the previous year[46][48]. - Franchise Channel generated 48% of total revenue in 2020, with premiums growing by 52% and a total of 1,468 franchises, including 891 operating and 577 in implementation, representing a 55% increase in total franchises[49][54]. - The company has expanded to 1,468 franchise locations, including 577 franchises under contract but not yet opened as of December 31, 2020[26]. Agent Performance and Productivity - Agents with more than three years of tenure in the Corporate Channel averaged 3.8 times more new business production per agent compared to industry best practices[30]. - Corporate Channel agents produced 3.8 times more new business per agent compared to industry best practices after three years, highlighting their productivity advantage[47][57]. - Franchise Channel agents with over three years of tenure averaged 2.3 times the new business production per agent compared to industry best practices, indicating strong performance[51][57]. Technology and Operational Efficiency - The company's proprietary technology allows agents to run quotes and place business in one simple phone call, enhancing client experience[21]. - The company's technology platform has resulted in service expenses being 3.2 times lower than the industry best practice, contributing to operational efficiencies[58]. - The company plans to continue investing in technology to enhance operational efficiencies and maintain a competitive edge[66]. Workforce and Culture - The company’s competitive advantage lies in its youthful workforce, with most Corporate Channel agents being recent college graduates, contrasting with an aging industry workforce[57]. - The average compensation for service team employees was over $47,000 in 2020, contributing to personnel consistency and high service quality[66]. - Goosehead Insurance, Inc. emphasizes a company culture grounded in integrity, teamwork, and exceptional service, which is crucial for its operational success[81][82]. Expansion Plans - The company plans to expand its Corporate Channel with new sales offices in Denver, San Antonio, Henderson, and another location in the Midwest in 2021[48]. - As of December 31, 2020, the company signed Franchise Agreements in 43 states, covering over 97% of the total U.S. population, with a potential franchise candidate pipeline of approximately 121,000[61]. IPO and Financial Structure - Goosehead Insurance, Inc. completed an initial public offering on May 1, 2018, issuing 9.8 million shares of Class A common stock at a price of $10.00 per share[85]. - Following the IPO, Goosehead Insurance, Inc. owned 37.3% of Goosehead Financial, LLC, while the Pre-IPO LLC Members owned the remaining 62.7%[86]. - As of December 31, 2020, Goosehead Insurance, Inc. owned 49.8% of Goosehead Financial, LLC, with non-controlling interest holders owning the remaining 50.2%[88]. Remote Work and Employee Management - The company transitioned its entire workforce to remote work in March 2020, with no negative impact on financial results or key performance indicators[83]. - By the end of Q3 2020, almost all employees were back in the office for at least 50% of the work week, implementing COVID-19 mitigation practices[84]. - The company’s recruiting team, consisting of 98 members, focuses on attracting motivated individuals for both Corporate and Franchise Channels[44]. Regulatory Compliance - The company is subject to federal and state privacy regulations, requiring the protection of customer information and notification policies[79].