Financial Data and Key Metrics Changes - Total revenue grew 16% year over year to $90.4 million, with core revenue increasing 14% to $83.9 million [29] - Adjusted EBITDA for the quarter grew 14% to $29.7 million, with an adjusted EBITDA margin of 33% compared to 34% a year ago [33] - Client retention improved to 85%, up from 84% for four consecutive quarters [30] - Total written premiums for the quarter were $1.2 billion, up 15% from a year ago [31] Business Line Data and Key Metrics Changes - Franchise premiums were $976 million, an increase of 18%, while corporate premiums were $206 million, a 1% increase from a year ago [31] - Franchise producers at quarter end were 2,124, up 1% from a year ago, with producers per franchise growing 6% [23] - The corporate team generated new business commissions growth of 20% year over year, accelerating from 13% in the second quarter [26] Market Data and Key Metrics Changes - The industry has over $530 billion in total written premium annually, with the company growing from over $2 billion in premiums in 2022 to over $4 billion in 2025 [7] - The company still represents less than 1% of total market share, indicating significant growth potential [7] Company Strategy and Development Direction - The company aims to become the largest distributor of personal lines insurance in the U.S. and has identified five key strategic initiatives to support this goal [10] - The digital agent technology is expected to revolutionize personal lines insurance distribution, allowing for a more seamless client experience [15] - The company plans to invest between $25 million and $35 million annually in the digital agent platform for 2026 and 2027 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about entering a stable pricing cycle, which is expected to improve client retention and overall business efficiency [17] - The company anticipates continued acceleration in revenue growth and premium growth in 2026 [65] - Management highlighted the importance of technology investments and partnerships in driving future growth [20] Other Important Information - The company repurchased and retired 685,000 Class A shares, utilizing $58.7 million of its share repurchase authorization [34] - The company expects total revenues for 2025 to be between $350 million and $385 million, representing organic growth of 11% to 22% [34] Q&A Session Summary Question: Can you break out the margin profile of franchise versus corporate versus enterprise? - The enterprise sales business is expected to have a more impactful margin profile over the long term compared to corporate or franchise business [37] Question: How many carriers are involved in the digital agent? - Currently, there are about 12 carriers integrated with the digital agent, and major carriers are supportive of the integration [42][44] Question: What is the outlook for home sales and how does it affect written premium? - The housing market remains depressed, but the company is building a referral partner network to capture lead flow [47] Question: What is the expected growth in producer count? - Producer count is expected to grow consistently, with a focus on quality over quantity [54] Question: Why is the revenue trajectory not more upbeat? - The company is optimistic about the direction of the business, but is cautious due to the variability in contingent commissions [58] Question: What needs to happen to reach the high end of revenue guidance? - The contingent commissions are variable, and the company is optimistic about potential upside based on current market conditions [70] Question: How will the digital agent impact growth? - The digital agent is expected to allow for significant market penetration and could drive total written premium growth of over 40% in the next five years [76]

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]