Goosehead Insurance (GSHD) Q2 2024 earnings summary

Executive summary

• Total revenue for Q2 2024 increased 13% year-over-year to $78.1 million, with core revenue up 20% to $73.4 million.

• Net income rose to $10.9 million from $7.2 million a year ago, representing 14% of total revenues; EPS increased to $0.25 from $0.15.

• Total written premiums surged 30% to $999 million, and policies in force rose 11% to 1.59 million.

• New business productivity per franchise increased 54% year-over-year, with same-store sales up 29%.

• Leadership transition to new CEO completed smoothly, with a continued focus on growth, technology, and agent productivity.

Financial highlights

• Adjusted EBITDA was $24.7 million, up from $23.1 million a year ago, with a 32% margin.

• Cash and cash equivalents at June 30, 2024, were $23.6 million; unused credit line of $74.8 million.

• Outstanding term note payable was $98.1 million as of June 30, 2024.

• Client retention was 84%; premium retention rate was 99%.

• Net income for Q2: $10.9 million (vs. $7.2 million prior year); Adjusted EPS: $0.43.

Outlook and guidance

• 2024 total written premiums expected between $3.62–$3.82 billion (22–29% growth); total revenues projected at $290–$310 million (11–19% growth).

• Adjusted EBITDA margin expected to expand for full year 2024, with most margin improvement anticipated in Q4.

• No improvement in housing market assumed in guidance; any upside would be incremental.

• Management expects current liquidity sources to be sufficient for foreseeable working capital and commitments.

• Focus remains on organic growth, operating expense management, and capital allocation for share repurchases and debt service.