Goosehead Insurance (GSHD) Q3 2024 earnings summary

Executive summary

• Achieved record profitability and surpassed $1 billion in written premium for the first time in a single quarter, a 28% year-over-year increase and a tenfold rise since IPO in 2018.

• Total revenue for Q3 2024 increased 10% year-over-year to $78 million, with net income up 12% to $12.6 million and adjusted EPS at $0.50.

• Franchise and agent productivity improved due to operational discipline, technology investment, and enhanced recruiting standards; corporate agent headcount grew 45% year-over-year.

• Policies in force rose 12% to approximately 1,636,000, with client retention stabilizing at 84%.

• Franchise network health improved, with lower exits and higher quality new franchisees, though total operating franchises declined 13%.

Financial highlights

• Q3 2024 revenue was $78 million (+10% YoY); core revenue reached $73.5 million (+16% YoY); adjusted EBITDA rose 17% to $26.1 million (34% margin).

• Net income margin was 16% for the quarter; basic and diluted EPS were $0.31 and $0.29, respectively.

• Cash and cash equivalents at quarter end were $47.5 million; unused credit line of $74.8 million and $36.8 million available for share repurchases.

• Operating cash flow increased 58% to $59 million; net cash from operations for nine months was $59 million.

• Share repurchases totaled $63.5 million year-to-date, with $36.8 million remaining under the current authorization.

Outlook and guidance

• Full-year 2024 written premiums expected between $3.7 billion and $3.82 billion (25–29% growth); revenues projected at $295–$310 million (13–19% growth).

• Adjusted EBITDA margin anticipated to expand for the full year and in future years.

• Management expects continued improvement in client retention and policy growth rates through 2025.

• Liquidity sources are expected to be sufficient for foreseeable needs.