Goosehead Insurance, Inc. (NASDAQ: GSHD) Q2 2025 Earnings | 07/24/2025

This is a summary of the Goosehead Insurance Q2 2025 Earnings Conference Call held on July 24, 2025.

Key Highlights from Q2 2025 Earnings Call

Goosehead Insurance discussed its performance in Q2 2025, highlighting strategic initiatives for growth despite a challenging market. The company is focused on expanding its distribution network, leveraging technology, and improving client retention and profitability.

Strategic Growth Initiatives

Agency Staffing Program (ASP):

• Since Q4 2022, the ASP has sourced over 500 producers for existing agencies, with 132 starting in 2025 and approximately 150 more slated for the rest of the year.

• This program helps agency owners recruit talented agents, allowing them to focus on lead capture and sales. An example provided was Troy Cropp, an agency owner who grew his franchise to nine producers (seven via ASP) with a $10 million+ premium book and over 6,500 policies in force.

Franchise Development:

• Veteran community program: Attracting former service members who possess grit, intelligence, and leadership, like Troy Cropp.

• MBA franchise development program: Offering business ownership to current or recent MBA graduates with an accelerated training program to encourage scaling beyond solo agent operations.

• Corporate sales department as a talent source: Corporate agents launching franchises are up to 10x more productive than the average new franchise launch and have a clear path to a seven-figure income.

Geographic Expansion:

• Successful launch of the Tempe, Arizona office, which is the most successful new office launch in many years.

• Plans to launch a Nashville, Tennessee office in Q4 2025.

Enterprise Sales and Partnerships Team:

• This new team generated 88% more new business in Q2 2025 compared to the prior year and grew 41% sequentially over Q1 2025.

• New strategic partnerships include:

  • Baird & Warner: A real estate firm in Illinois with over 2,000 realtors and 40 loan officers, launching a Goosehead franchise to integrate insurance into their 10,000+ annual transactions.

  • Fay Servicing: A large mortgage servicer, partnering with Goosehead to offer home insurance to their existing clients, with embedded lead flow.

Technology and AI Investment:

• Leveraging AI to:

  • Optimize client experience and reduce service costs. The cost of service delivery is expected to be less in the second half of 2025 than in the first half.

  • Create the "US first direct consumer marketplace" for a frictionless insurance shopping process, matching carrier risk appetite with client demand.

  • Drive client referrals and cross-sells through pinpoint marketing campaigns.

Q2 2025 Financial Results & Outlook

• Total Revenue: Grew 20% year-over-year to $94 million.

• Core Revenue: Grew 18% to $86.8 million.

• Adjusted EBITDA: Grew 18% to $29.2 million, with an adjusted EBITDA margin of 31% (28% excluding contingent commissions).

• Total Written Premiums: $1.2 billion, up 18% from a year ago.

  • Franchise premiums: $959 million, up 21%.

  • Corporate premiums: $217 million, up 6%.

• Corporate Agent Count: Ended Q2 with 479 total agents, up 53% year-over-year (379 traditional corporate sales agents and 100 enterprise sales agents).

• Corporate New Business Commissions: Growing at 13% compared to the prior year, the fastest growth in three years.

• Franchise Producers: 2,085 at quarter-end, up 5% from a year ago. Producers per franchise were 1.9, up 14%.

• Client Retention: 84%, showing consistent basis point rises.

• Contingent Commissions: $4.5 million, a 103% increase from $2.2 million in the previous year.

• Policies in Force: 1.8 million, a 13% increase year-over-year.

• Cash and Cash Equivalents: $92.4 million.

• Total Debt Outstanding: $299.3 million.

• Cash Flow from Operations: $28.9 million, a 53% increase year-over-year.

• Share Repurchases: Repurchased and retired 5,600 Class A shares.

• 2025 Guidance:

  • Total Revenue: Reiterated between $350 million and $385 million (organic growth of 11% to 22%).

  • Total Written Premiums: Revised to between $4.38 billion and $4.65 billion (organic growth of 15% to 22%). The adjustment reflects a near-term gap where premium increase moderation is outpacing client retention recovery, though the long-term revenue outlook remains strong due to improving average commission rates.

Market and Product Environment

• The challenging product market has made Goosehead a stronger company, building a scalable infrastructure and investing in human capital and technology.

• Product availability is improving, with national admitted carriers returning to markets.

• The auto market is "pretty wide open," and the home market is "improving dramatically" over the last six months, with carriers starting to offer incentives for growth.

• Commission rates are expected to increase as business shifts away from state-run insurers and non-admitted products back to the admitted market. A $4 million recovery of past due renewal commissions and royalty fees was achieved from an existing carrier partner, with an expected additional benefit of approximately $1.5 million in the second half of the year from an increased commission rate with this carrier.