Financial Data and Key Metrics Changes - Total revenue grew 20% year-over-year to $94 million, with core revenue increasing 18% to $86.8 million and adjusted EBITDA rising 18% to $29.2 million, resulting in an adjusted EBITDA margin of 31% for the quarter [31][32][35] - Total written premiums reached $1.2 billion for the quarter, up 18% from a year ago, including franchise premiums of $959 million (up 21%) and corporate premiums of $217 million (up 6%) [33] - Adjusted EBITDA margin excluding contingent commissions was 28% [35] Business Line Data and Key Metrics Changes - Franchise producers at quarter end were 2,085, up 5% from a year ago, with producers per franchise growing 14% to 1.9 [27] - The top 200 franchises grew their new business by over 30% in the second quarter, with gross earnings also up 30% [28] - Corporate sales agents ended the quarter with 479 total agents, up 53% year-over-year, with corporate new business commissions growing at 13% compared to the prior year [26] Market Data and Key Metrics Changes - The corporate sales team is expanding into attractive markets, launching new offices in Arizona and Nashville, with a focus on high-potential geographies [13][14] - The enterprise sales and partnerships team produced 88% more new business in the second quarter compared to the previous year, growing 41% sequentially over the first quarter [25] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S., focusing on expanding its distribution network and enhancing technology to maintain industry leadership [6][7] - Strategic initiatives include the agency staffing program to recruit top talent, partnerships with established firms, and leveraging AI to optimize client experience and operational efficiency [8][15][18] - The company is transitioning from an insurance distribution organization aided by technology to a technology organization supported by insurance professionals [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the improving product environment, with more business flowing away from state-run plans and a clearer underwriting demand landscape [22][60] - Client retention is expected to improve, with a goal to reach a more normalized product environment that will enhance revenue generation [32][37] - The company anticipates continued growth in the second half of 2025, driven by new business commissions and improved client retention [97] Other Important Information - The company recovered $4 million of past due renewal commissions and royalty fees from a large carrier partner, with an expected benefit of approximately $1.5 million for the second half of the year [33][100] - A one-time non-cash impairment charge of $4.7 million was recorded related to changes in the real estate footprint [35] Q&A Session Summary Question: Can you quantify the upside to commissions as a percentage of written premiums? - Management noted a gradual decline in average commission rates due to a shift towards excess and surplus lines, but expects this trend to reverse as more national products become available [40][41] Question: Is the cost of servicing expected to decrease in the second half of the year? - Management confirmed that the total cost of the service department is expected to decrease, driven by AI improvements that enhance efficiency and client experience [44][45] Question: What is the outlook for premium retention and client retention? - Management indicated that while client retention is currently at 84%, it is improving, and they expect premium retention to align with client retention in the near future [75] Question: How does the direct channel relate to previous investments? - Management stated that previous investments have enabled the development of a direct-to-consumer interface, which will facilitate targeted client engagement with carriers [80][82] Question: Will the increased proportion of business from state funds impact contingent commissions? - Management clarified that state-run plans do not incentivize agents for contingent commissions, and a higher proportion of non-residual policies should lead to more opportunities for contingent commissions [83][87]