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What changed in Goosehead Insurance, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Goosehead Insurance, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+396 added−359 removedSource: 10-K (2026-02-19) vs 10-K (2025-03-03)

Top changes in Goosehead Insurance, Inc.'s 2025 10-K

396 paragraphs added · 359 removed · 334 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

90 edited+28 added−7 removed94 unchanged
Biggest changeThis allows us to provide value by finding the right coverage at the lowest price so that the client does not have to spend hours shopping for themselves. Knowledgeable sales and service agents Our clients benefit from the value of having a knowledgeable agent explain and evaluate coverages to help the client make smart insurance buying decisions.
Biggest changeKnowledgeable sales and service agents Our clients benefit from the value of having a knowledgeable agent explain and evaluate coverages to help the client make smart insurance buying decisions. Clients will have different insurance needs throughout their lifetime, and our model allows us to serve them at every stage of life.
Jones has received a wide variety of accolades for his leadership accomplishments, including being recognized as one of the Top Rated CEOs from among 13 more than 7,000 companies with less than 1,000 employees on Glassdoor’s “Employee’s Choice Award” in 2017. ◦ Mark Miller serves as the President and Chief Executive Officer for Goosehead. In addition, Mr.
Jones has received a wide variety of accolades for his leadership accomplishments, including being recognized as one of the Top Rated CEOs from among more than 7,000 companies with less than 1,000 employees on Glassdoor’s “Employee’s Choice Award” in 2017. ◦ Mark Miller serves as the President and Chief Executive Officer for Goosehead. In addition, Mr.
Each week we highlight a key skill around our products, sales processes, or professional development. We also host week-long onsite training courses at our corporate headquarters. We also regularly reach out to our employees and franchise partners by conducting in-person town halls across various geographic locations in the United States.
Each week, we highlight a key skill around our products, sales processes, or professional development. We also host week-long onsite training courses at our corporate headquarters. 19 We regularly reach out to our employees and franchise partners by conducting in-person town halls across various geographic locations in the United States.
Any waiver of the code for directors or executive officers may be made only by our Board of Directors or a board committee to which the board has delegated that authority and will be promptly disclosed to our shareholders as required by applicable U.S. federal securities laws and the corporate governance rules of the Nasdaq Global Select Market.
Any waiver of the code for directors or executive officers may be made only by our Board of Directors or a board 20 committee to which the board has delegated that authority and will be promptly disclosed to our shareholders as required by applicable U.S. federal securities laws and the corporate governance rules of the Nasdaq Global Select Market.
The Digital Agent, available across the U.S., is powered by key data integrations and a proprietary database. It automatically populates information about client's homes and vehicles during the quoting process and combines that information with millions of data points from two decades worth of Goosehead's expert agents’ quoting decisions and accumulated experiences.
The Digital Agent platform, available across the U.S., is powered by key data integrations and a proprietary database. It automatically populates information about a client's homes and vehicles during the quoting process and combines that information with millions of data points from two decades worth of Goosehead's expert agents’ quoting decisions and accumulated experiences.
Importantly, our integrated solution allows us to pivot quickly and upgrade our technology offering as market dynamics change. We believe our single, sales-oriented technology platform is differentiated relative to most insurance agency IT environments that utilize disparate accounting-driven agency management vendors and legacy mainframe systems across their operations.
Importantly, our integrated solution allows us to pivot quickly and upgrade our technology offering as market dynamics change. We believe our single, sales-oriented technology platform is differentiated relative to most insurance agency IT environments that utilize disparate accounting-driven agency management vendors and legacy systems across their operations.
The corporate sales function also serves as fertile recruiting ground for future regional territory managers within our franchise support team. 8 • Franchise owners benefit from lean startup costs as they do not require additional employees or a retail location to launch their agencies.
The corporate sales function also serves as fertile recruiting ground for future regional territory managers within our franchise support team. • Franchise owners benefit from lean startup costs as they do not require additional employees or a retail location to launch their agencies.
Jones served as Goosehead's Chief Executive Officer and Chairman since the Company's inception. Prior to co-founding Goosehead, Mr. Jones was a Senior Partner and Director at Bain & Company, a global management consulting firm, where he also served for many years as Global Head of Recruiting. Mr.
Jones served as Goosehead's Chief Executive Officer and Chairman since the Company's inception. Prior to co-founding Goosehead, Mr. Jones was a Senior 14 Partner and Director at Bain & Company, a global management consulting firm, where he also served for many years as Global Head of Recruiting. Mr.
Goosehead does not tolerate any form of discipline, reprisal, threats, intimidation, or other retaliatory conduct against an 18 employee for making a good faith complaint of a perceived incident of discrimination or harassment or for cooperating in an investigation by the company or any federal, state, or local agency of such a complaint.
Goosehead does not tolerate any form of discipline, reprisal, threats, intimidation, or other retaliatory conduct against an employee for making a good faith complaint of a perceived incident of discrimination or harassment or for cooperating in an investigation by the company or any federal, state, or local agency of such a complaint.
As illustrated in the charts below, the Company’s earnings rate on commissions generated by corporate sales remains constant at 100% of the commission amount for each term a policy remains in force, while its earnings rate on commissions generated by franchise sales increases by 150% from the initial term of the policy to the first renewal term.
As illustrated in the charts below, the Company’s earnings rate on commissions generated by corporate sales remains constant at 100% of the commission amount for each term a policy remains in force, while its earnings rate on commissions generated by franchise sales increases by 150% from the initial term of the policy to the first 10 renewal term.
In states with file-and-use laws, the insurer does not have to wait for the regulator’s approval to use a rate, but the rate must be filed with the regulatory authority prior to being used. In states with use-and-file laws, the insurer must file rates within a certain 17 period of time after the insurer begins to use them.
In states with file-and-use laws, the insurer does not have to wait for the regulator’s approval to use a rate, but the rate must be filed with the regulatory authority prior to being used. In states with use-and-file laws, the insurer must file rates within a certain period of time after the insurer begins to use them.
In recent years, several states considered new legislation or regulations regarding the compensation of brokers by Carriers. The proposals ranged in nature from new disclosure requirements to new duties on insurance agents and brokers in dealing with customers. Rate regulation.
In recent years, several states considered new legislation or regulations 18 regarding the compensation of brokers by Carriers. The proposals ranged in nature from new disclosure requirements to new duties on insurance agents and brokers in dealing with customers. Rate regulation.
We believe there is an opportunity to further expand productivity. We have historically deployed the intellectual capital accumulated in corporate (including sales practices, client relationship management practices, recruiting practices and technology) into franchisees to optimize new business production.
We believe there is opportunity to further expand productivity. We have historically deployed the intellectual capital accumulated in corporate (including sales practices, client relationship management practices, recruiting practices and technology) into franchisees to optimize new business production.
We are able to solve that by partnering with over 200 carriers and using technology to shop for our clients and quickly identify the Carrier who is targeting their segment of the market.
We are able to solve that by partnering with over 200 carriers and using technology to shop for our clients and quickly identify the carrier that is targeting their segment of the market.
Choice product platform Today’s insurance buyer expects choice; we believe that tomorrow’s insurance buyer will demand it. We believe that most clients currently buying through single-product platforms are either over-paying or not properly covered because 1) their current insurance company does not offer the appropriate coverage or 2) valuable coverages were removed to make the pricing competitive.
Choice product platform Today’s insurance buyer expects choice; we believe that tomorrow’s insurance buyer will demand it. We believe that most insurance buyers currently buying through single-product platforms are either over-paying or not properly covered because 1) their current insurance company does not offer the appropriate coverage or 2) valuable coverages were removed to make the pricing competitive.
They typically pay for expensive retail store-front locations and spend significant amounts of money on paper mailers and internet leads. This broken marketing model leads to high overhead costs and limited success. Additionally, these captive agents are working on outdated technology platforms and many have no economic interest in their book of business.
They typically pay for expensive retail store-front locations and spend significant amounts of money on paper mailers and internet leads. This broken marketing model leads to high overhead costs and limited success. Additionally, these captive agencies are working on outdated technology platforms and many have no economic interest in their book of business.
First, only having 5 one carrier to sell leads to lower close rates and client retention as these companies lack options to move the business to another Carrier.
First, only having one carrier to sell leads to lower close rates and client retention as these companies lack options to move the business to another carrier.
This growth will be further enhanced by our continued national expansion of franchisees. The pace of our national build-out will be aided by the regulatory approvals, product offering approvals and Carrier relationships we have already established across the continental United States. 14 Franchise tenure profile • Continue to develop innovative ways to drive productivity .
This growth will be further enhanced by our continued national expansion of franchisees. The pace of our national build-out will be aided by the regulatory approvals, product offering approvals and Carrier relationships we have already established across the continental United States. 15 Franchise tenure profile • Continue to develop innovative ways to drive productivity .
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only. 19
The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only. 21
Our service agents are also focused on selling additional insurance coverages to clients, which result in additional New Business Revenue. Our centralized service team spread across five service centers provides us with the ability to cover the U.S. time zones more broadly, and the ability to better manage business continuity risks.
Our service agents are also focused on selling additional insurance coverages to clients, which result in additional New Business Revenue. Our centralized service team spread across four service centers provides us with the ability to cover the U.S. time zones more broadly and better manage business continuity risks.
The largest Captive Agencies in the United States include Allstate Corporation, State Farm Mutual Automobile Insurance Company and Farmers Group, Inc. • Direct distribution (25% personal lines market share in 2023 according to the Independent Insurance Agents & Brokers of America, Inc.) . Certain Carriers market their products directly to clients.
The largest Captive Agencies in the United States include Allstate Corporation, State Farm Mutual Automobile Insurance Company and Farmers Group, Inc. • Direct distribution (25% personal lines market share in 2024 according to the Independent Insurance Agents & Brokers of America, Inc.) . Certain Carriers market their products directly to clients.
There are principally three types of businesses that sell personal lines products: • Independent agencies (39% personal lines market share in 2023 according to the Independent Insurance Agents & Brokers of America, Inc.) . Independent agencies are “independent” of any one Carrier and can offer insurance products from multiple Carriers to their clients.
There are principally three types of businesses that sell personal lines products: • Independent agencies (39% personal lines market share in 2024 according to the Independent Insurance Agents & Brokers of America, Inc.) . Independent agencies are “independent” of any one Carrier and can offer insurance products from multiple Carriers to their clients.
Finally, and most importantly, these agents are responsible for processing all of their client’s service needs in house; the more successful they are at sales, the quicker their growth stalls because of the time necessary to manage customer service work.
Finally, and most importantly, these agencies are responsible for processing all of their client’s service needs in house; the more successful they are at sales, the quicker their growth stalls because of the time necessary to manage customer service work.
We believe that we are one of the largest independent insurance agencies focused primarily on personal lines. • Captive Agencies (35% personal lines market share in 2023 according to the Independent Insurance Agents & Brokers of America, Inc.). Captive Agencies sell products for only one Carrier.
We believe that we are one of the largest independent insurance agencies focused primarily on personal lines. • Captive Agencies (35% personal lines market share in 2024 according to the Independent Insurance Agents & Brokers of America, Inc.). Captive Agencies sell products for only one Carrier.
Over the long-term, we believe these factors will enable us to avoid 12 the shrinking workforce challenges that many of our competitors face and win an even larger market share from other agencies. According to Independent Insurance Agents & Brokers of America, Inc., 33% of independent agencies anticipate a change of control within the next five years.
Over the long-term, we believe these factors will enable us to avoid the shrinking workforce challenges that many of our competitors face and win an even larger market share from other agencies. According to a 2024 report from Independent Insurance Agents & Brokers of America, Inc., 33% of independent agencies anticipate a change of control within the next five years.
We also generate Ancillary Revenue in the form of Contingent Commissions from Carriers related to the overall growth and loss performance of the Book of Business we have placed with them. Corporate sales is comprised of employed sales agents located in 12 sales offices across Texas, Illinois, Colorado, Ohio, Florida, North Carolina, and Arizona.
We also generate Ancillary Revenue in the form of Contingent Commissions from Carriers related to the overall growth and loss performance of the Book of Business we have placed with them. Corporate sales is comprised of employed sales agents located in 13 sales offices across Texas, Illinois, Colorado, Ohio, Florida, North Carolina, Arizona, and Tennessee.
Compared to the 2024 Best Practices Study, corporate sales agents with more than three years of tenure averaged 2.8x as much New Business Production per Agent (Corporate) as the industry best practice.
Compared to the 2024 Best Practices Study, corporate sales agents with more than three years of tenure averaged 2.5x as much New Business Production per Agent (Corporate) as the industry best practice.
Cost Recovery Revenue consists of non-refundable Initial Franchise Fees, which compensate us for the training and onboarding efforts to launch a new franchise location, and Interest Income related to Franchisees that elect the payment plan option for their Initial Franchise Fee. We started franchising in 2012 and have since expanded rapidly. Premiums in franchise sales grew 33% during 2024.
Cost Recovery Revenue consists of non-refundable Initial Franchise Fees, which compensate us for the training and onboarding efforts to launch a new franchise location, and Interest Income related to Franchisees that elect the payment plan option for their Initial Franchise Fee. We started franchising in 2012 and have since expanded rapidly. Premiums in franchise sales grew 20% during 2025.
This strategy allows them to spend much less on marketing and can yield dozens of high-quality clients referred directly to them, driving higher levels of productivity. All policy fulfillment and servicing is handled by our centralized service team, which retains our clients at 84%, unlocking the agent’s time to focus on new sales.
This strategy allows them to spend much less on marketing and can yield dozens of high-quality clients referred directly to them, driving higher levels of productivity. All policy fulfillment and servicing is handled by our centralized service team, which retains our clients at 85%, unlocking the agency’s time to focus on new sales.
Premiums in the personal lines insurance market have grown consistently with underlying insured values and the overall economy. 11 Personal lines products (2023) Personal lines premium trends ($billions) Source: S&P Global Market Intelligence and National Association of Insurance Commissioners Premium pricing within the P&C insurance industry has historically been cyclical, based on the underwriting capacity of the insurance industry and economic conditions.
Premiums in the personal lines insurance market have grown consistently with underlying insured values and the overall economy. 12 Personal lines products (2024) Personal lines premium trends ($billions) Source: S&P Global Market Intelligence and National Association of Insurance Commissioners Premium pricing within the P&C insurance industry has historically been cyclical, based on the underwriting capacity of the insurance industry and economic conditions.
As of December 31, 2024, 8% of our operating franchises had less than one year of tenure. Given the anticipated New Business productivity uplift that comes with more years of experience, and the elevated Royalty Fees on renewal business, we believe our franchise sales category is positioned for strong growth and margin expansion.
As of December 31, 2025, 9% of our operating franchises had less than one year of tenure. Given the anticipated New Business productivity uplift that comes with more years of experience, and the elevated Royalty Fees on renewal business, we believe our franchise sales category is positioned for strong growth and margin expansion.
Substantially all of our agents are recent college graduates, whereas 66% of personal lines agents in the industry are over 40 years old, according to Zippia. This gives us a significant advantage both in the short- and long-term. In the short-term, our agents have proven to be especially adept at learning new techniques and mastering new technologies.
The majority of our agents are recent college graduates, 13 whereas 66% of personal lines agents in the industry are over 40 years old, according to Zippia. This gives us a significant advantage both in the short- and long-term. In the short-term, our agents have proven to be especially adept at learning new techniques and mastering new technologies.
Our technology platform has been a key enabler of our rapid growth while also driving efficiencies. One of these efficiencies is service expenses. Our 2024 and 2023 service expenses as a percentage of gross commissions were 3.2x and 2.5x lower than the industry best practice according to the 2024 Best Practices Study, which uses 2023 data.
Our technology platform has been a key enabler of our rapid growth while also driving efficiencies. One of these efficiencies is service expenses. Our 2025 and 2024 service expenses as a percentage of gross commissions were 2.0x and 3.2x lower than the industry best practice according to the 2025 Best Practices Study, which uses 2024 data.
Carrier perspective Insurance carriers are seeking profitable growth, and their focus is on maximizing the ratio of client lifetime value to acquisition costs. Carriers who distribute through independent agents have lots of complexity and costs dealing with thousands of independent representatives with no standard training, different levels of expertise, and no quality control functions.
Carrier perspective Insurance carriers are seeking profitable growth, and their focus is on maximizing the ratio of client lifetime value to acquisition costs. Carriers who distribute through independent agents have many complexities and costs dealing with thousands of independent representatives with no standard training, different levels of expertise, and no quality control functions.
Compared to the 2024 Best Practices Study, franchise sales agents with more than three years of tenure averaged 1.9x as much New Business Production per Agent (Franchise) as the industry best practice. In franchise sales, we earn Core Revenue in the form of New Business Royalty Fees and Renewal Royalty Fees generated by the franchise location.
Compared to the 2024 Best Practices Study, franchise sales agents with more than three years of tenure averaged 2.0x as much New Business Production per Agent (Franchise) as the industry best practice. In franchise sales, we earn Core Revenue in the form of New Business Royalty Fees and Renewal Royalty Fees generated by the franchise location.
Our consistency in service personnel is due to a combination of the opportunities for professional advancement within the Company and the competitive wages we offer; average compensation for service team employees was over $51,000 in 2024. • Continue to invest in technology to drive efficiencies in all areas of our business.
Our consistency in service personnel is due to a combination of the opportunities for professional advancement within the Company and the competitive wages we offer; average compensation for service team employees was over $55,000 in 2025. • Continue to invest in technology to drive efficiencies in all areas of our business.
When agents join Goosehead, they immediately get access to sell a wide array of carriers so that they have product to accommodate most clients, which drastically improves close rates. Instead of expensive retail space and spending money on ineffective marketing strategies, they follow our proven go-to-market strategy by developing Referral Partner relationships.
When agents join Goosehead, they immediately get access to sell a wide array of carriers so that they have product to accommodate most clients, which drastically improves close rates. Instead of expensive retail space and investing in ineffective marketing strategies, they follow our proven go-to-market strategy by developing Referral Partner relationships.
We will continue to strive for a one-of-a-kind company culture and offer a competitive compensation and benefits package, which includes health insurance, a 401(k) plan, an Employee Stock Purchase Program, and the potential for option awards. As of December 31, 2024, we had approximately 1,580 full-time and no part-time employees.
We will continue to strive for a one-of-a-kind company culture and offer a competitive compensation and benefits package, which includes health insurance, a 401(k) plan, an Employee Stock Purchase Program, and the potential for option awards. As of December 31, 2025, we had approximately 1.6 thousand full-time and no part-time employees.
Compared to the 2024 Best Practices Study, which uses 2023 industry data, our corporate sales agents with more than three years of tenure averaged 2.8x as much New Business Production per Agent in both 2024 and 2023 as the industry best practice.
Compared to the 2025 Best Practices Study, which uses 2024 industry data, our corporate sales agents with more than three years of tenure averaged 2.5x as much New Business Production per Agent in 2025 and 2.8x in 2024 as the industry best practice.
We have proven that this system delivers superior results as demonstrated by agents, who with a few years tenure, are 2.8x more productive than industry best practice according to Reagan Consulting's 2024 Best Practices Study .
We have proven that this system delivers superior results as demonstrated by agents, who with a few years tenure, are 2.5x more productive than industry best practice according to Reagan Consulting's 2025 Best Practices Study .
As of December 31, 2024, our 10-year Total Written Premium CAGR was 42% and our 5-year Total Written Premium CAGR was 39%. 10 Source: Carrier provided information Industry trends We primarily compete in the United States personal lines insurance distribution industry. Personal lines products typically include home, auto, umbrella, motorcycle, flood and recreational insurance.
As of December 31, 2025, our 10-year Total Written Premium CAGR was 39% and our 5-year Total Written Premium CAGR was 33%. 11 Source: Carrier provided information Industry trends We primarily compete in the United States personal lines insurance distribution industry. Personal lines products typically include home, auto, umbrella, motorcycle, flood and recreational insurance.
We plan to continue to expand our recruiting to additional college campuses and engage in highly targeted internet recruiting campaigns as we grow. Our compensation package for sales agents is very competitive in comparison to other professional services and offers attractive long-term compensation opportunities. • National penetration of the Franchisees .
We plan to continue to expand our recruiting both on college campuses and targeted internet recruiting campaigns as we grow. Our compensation package for sales agents is very competitive in comparison to other professional services and offers attractive long-term compensation opportunities. • National penetration of the Franchisees .
Our 12 corporate-owned sales offices and 417 corporate sales agents serve as the blueprint for what is possible in the Goosehead model, and our corporate agents provide critical training and support to help the franchise agents reach their full potential.
Our 13 corporate-owned sales offices and 489 corporate sales agents serve as the blueprint for what is possible in the Goosehead model, and our corporate agents provide critical training and support to help the franchise agents reach their full potential.
Franchise sales agents with more than three years of tenure averaged 1.9x in 2024 and 1.8x in 2023 as much New Business Production per Agent (Franchise) as the industry best practice. 2024 New Business Revenue per agent by tenure ($000s) Source: Internal data for 2024; Carrier provided information; Reagan Consulting 2024 Best Practices Study (using 2023 data) (1) Represents industry best practice per Reagan Consulting; does not include Unvalidated Producers; most industry agents have tenures significantly longer than 2 to 3 years.
Franchise sales agents with more than three years of tenure averaged 2.0x in 2025 and 1.9x in 2024 as much New Business Production per Agent (Franchise) as the industry best practice. 7 2025 New Business Revenue per agent by tenure ($000s) Source: Internal data for 2025; Carrier provided information; Reagan Consulting 2025 Best Practices Study (which uses 2024 data) (1) Represents industry best practice per Reagan Consulting; does not include Unvalidated Producers; most industry agents have tenures significantly longer than 2 to 3 years.
Total Written Premium, which we believe is the best leading indicator of future revenue growth because it drives our future Core Revenue and gives us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions, grew 29% to $3.8 billion in 2024, up from $3.0 billion in 2023.
Total Written Premium, which we believe is the best leading indicator of future revenue growth because it drives our future Core Revenue and gives us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions, grew 17% to $4.4 billion in 2025, up from $3.8 billion in 2024.
As of December 31, 2024, we have operating franchises in 44 states covering over 98% of the total US population. We expect to continue growing our market share within these states as we sign and launch new franchises, and as those franchises ramp up their new business production over the course of 2-3 years.
As of December 31, 2025, we have operating franchises in 43 states covering over 97% of the total US population. We expect to continue growing our market share within these states as we sign and launch new franchises, and as those franchises ramp up their new business production over the course of 2-3 years.
This has enabled our agents to generate approximately 2.8x as much new business as top performing personal lines agents after three years, according to the 2024 Best Practices Study.
This has enabled our agents to generate approximately 2.5x as much new business as top performing personal lines agents after three years, according to the 2025 Best Practices Study.
Our service centers handle all of our client service and renewals and have achieved a highly differentiated level of service as indicated by our NPS scores of 89 in 2024 and 92 in 2023.
Our service centers handle all of our client service and renewals and have achieved a highly differentiated level of service as indicated by our NPS scores of 77 in 2025 and 89 in 2024.
Our differentiated business model and innovative technology platform have enabled us to deliver insurance customers a superior experience, as evidenced by our 89 Net Promoter Score, which is 4.0x the 2024 Industry Average according to Qualtrics XM Institute.
Our differentiated business model and innovative technology platform have enabled us to deliver insurance customers a superior experience, as evidenced by our 77 Net Promoter Score, which is 3.5x the 2024 Industry Average according to Qualtrics XM Institute.
Including all producers in franchise sales in 2024, New Business Production per Agency was $80 thousand for franchises with less than 1 year of tenure and $115 thousand for franchises with more than one year of tenure. 7 Corporate sales Corporate sales consists of company-owned and financed operations with employees who are hired, trained and managed by us.
Including all producers in franchise sales in 2025, New Business Production per Agency was $66 thousand for franchises with less than 1 year of tenure and $138 thousand for franchises with more than one year of tenure. Corporate sales Corporate sales consists of company-owned and financed operations with employees who are hired, trained and managed by us.
Our high degree of client satisfaction drove our 84% Client Retention rate during 2024, which we believe to be among the highest in the industry. Our retention rate is even stronger on a premium basis. In 2024, we retained 98% of the premiums we distributed in 2023.
Our high degree of client satisfaction drove our 85% Client Retention rate during 2025, which we believe to be among the highest in the industry. Our retention rate is even stronger on a premium basis. In 2025, we retained 90% of the premiums we distributed in 2024.
In addition to recruiting current insurance agents with a superior value proposition, we are also bringing in sales and marketing savvy professionals who are attracted to the recession-resistant and residual economics offered by a career in insurance. The value and opportunity we provide to agents has led to our growth to 1,103 operating franchise locations.
In addition to recruiting current insurance agents with a superior value proposition, we are also bringing in sales and marketing-savvy professionals who are attracted to the recession-resistant and residual economics offered by a career in insurance. The value and opportunity we provide to agents has resulted in a network of 1,009 operating franchise locations.
In addition, many agents will lose their ability to write certain lines of business in some areas due to underwriting rules from the carrier – this is especially true after a catastrophic loss in the agent’s city or county. Low close rates are also due to the agents’ outdated and ineffective marketing playbook.
In addition, agencies risk losing their ability to write certain lines of business in some areas due to underwriting rules from the carrier – this is especially true after a catastrophic loss in the agency’s city or county. Low close rates are also due to the agents’ outdated and ineffective marketing playbook.
Compared to the 2024 Best Practices Study, corporate sales agents with more than three years of tenure averaged 2.8x as much New Business Production per Agent (Corporate) as the industry best practice; franchise sales agents with more than three years of tenure averaged 1.9x as much New Business Production per Agent (Franchise) as the industry best practice.
Compared to the 2025 Best Practices Study, corporate sales agents with more than three years of tenure averaged 2.5x as much New Business Production per Agent (Corporate) as the industry best practice; franchise sales agents with more than three years of tenure averaged 2x as much New Business Production per Agent (Franchise) as the industry best practice.
Goosehead’s Digital Agent provides a best-in-class way to shop for personal insurance — allowing clients to find the right coverage at the best price. The platform provides a simple, transparent, and efficient way to get insurance quotes.
Goosehead’s Digital Agent platform provides a best-in-class way to shop for personal insurance — allowing clients to find the right coverage at the best price.
Our Client Retention effort is led by our service centers, which had a 2024 NPS score of 89, leading to an 84% Client Retention rate and 98% premium retention rate in 2024. The key to maintaining these NPS scores and Client Retention rates is the consistency of personnel in our service centers.
Our Client Retention effort is led by our service centers, which had a 2025 NPS score of 77, leading to an 85% Client Retention rate and 90% premium retention rate in 2025. The key to maintaining these NPS scores and Client Retention rates is the consistency of personnel in our service centers.
In 2024, New Business Production per Agent in corporate sales was $66 thousand for agents with less than 1 year of tenure and $115 thousand for agents with more than one year of tenure.
In 2025, New Business Production per Agent in corporate sales was $61 thousand for agents with less than 1 year of tenure and $107 thousand for agents with more than one year of tenure.
The combination of expanding total producer count, leveraging technology, and maintaining our commitment to service led to revenue growth of 20% and Total Written Premium growth of 29% in 2024.
The combination of expanding total producer count, leveraging technology, and maintaining our commitment to service led to revenue growth of 16% and Total Written Premium growth of 17% in 2025.
We manage our service centers with the goal to maximize NPS, which we believe maximizes retention. This differentiated level of service has enabled us to earn an NPS of 89 in 2024, a modest decrease from 92 in 2023 and 4.0x the 2024 industry average, according to Qualtrics XM Institute and Bain & Company, Inc.
We manage our service centers with the goal of maximizing NPS, which we believe maximizes retention. This differentiated level of service has enabled us to earn an NPS of 77 in 2025, a decrease from 89 in 2024 yet 3.5x the 2024 industry average, according to Qualtrics XM Institute and Bain & Company, Inc.
Major slowdowns in the various housing markets Goosehead serves could impact our ability to generate new business. 16 Additionally, an increase in interest rates may decrease the number of home closing transactions, which could negatively impact our ability to generate new business.
Seasonality The majority of our new accounts are sourced by referral sources tied to home closing transactions. Major slowdowns in the various housing markets Goosehead serves could impact our ability to generate new business. Additionally, an increase in interest rates may decrease the number of home closing transactions, which could negatively impact our ability to generate new business.
At Sabre, he held multiple operating and finance positions and was instrumental in the company’s initial public offering and its subsequent $5 billion privatization transaction. ◦ Mark E. Jones, Jr. joined Goosehead in 2016 as Controller, was promoted to Vice President - Finance in 2020, and Chief Financial Officer in 2022. Mr.
At Sabre, he held multiple operating and finance positions and was instrumental in the company’s initial public offering and its subsequent $5 billion privatization transaction. ◦ Mark E. Jones, Jr. services as the Chief Financial Officer and Chief Operating Officer for Goosehead. Mr.
Our 2024 average commission rate on new business premium was 14% and on renewal business premium was 12%. Commission rates can vary across Carriers, states and lines of business, and typically range from 10% to 20%. Many “insuretech” carriers saw the complexity of working with traditional agents and have sought to build models that eliminate the role of the agent.
Commission rates can vary across carriers, states and lines of business, and typically range from 10.0% to 20.0%. Many “insuretech” carriers saw the complexity of working with traditional agents and have sought to build models that eliminate the role of the agent.
Total operating franchises decreased by 10% to 1,103 in 2024 from 1,226 in 2023, an improvement in franchise turnover compared to the 13% decrease in 2023 from 1,413 in 2022. Growing total operating franchises is an important growth lever for the business.
Total operating franchises decreased by 9% to 1,009 in 2025 from 1,103 in 2024, an improvement in franchise turnover compared to the 10% decrease in 2024 from 1,226 in 2023. Franchise sales agent count grew 1% in 2025 compared to 2024. Growing total franchise sales agents is an important growth lever for the business.
As they have grown, many have realized that the market still prefers to work with an agent (according to the Independent Insurance Agents & Brokers of America, Inc.), and that Goosehead allows them to reach that segment of the market without all the traditional complexity. We now distribute for many of the insuretechs, increasing the breadth of our product portfolio.
As they have grown, many have realized that the market still prefers to work with an agent (according to the Independent Insurance Agents & Brokers of America, Inc.), and that Goosehead allows them to reach that segment of the market without many of the traditional complexities.
Agents are encouraged to procure new clients through both relationships with Referral Partners and traditional channels (friends, family, client referrals, inbound inquiries and outbound inquiries), and we give them proprietary tools and technology to leverage our years of experience in successfully executing this go-to-market strategy. The Company represents over 200 Carriers, of which 54 provide national coverage.
Agents in both corporate sales and franchise sales are primarily responsible for acquiring new clients. Agents are encouraged to procure new clients through both relationships with Referral Partners and traditional channels (friends, family, client referrals, inbound inquiries and outbound inquiries), and we give them proprietary tools and technology to leverage our years of experience in successfully executing this go-to-market strategy.
These highly successful corporate agents have performed well as agency owners. Owning a Goosehead franchise has become a viable and lucrative career path for top agents, which we believe helps Goosehead recruit top talent in the industry. Franchise sales Franchise sales consists of operations that are owned and managed by Franchisees.
Owning a Goosehead franchise has become a viable and lucrative career path for top corporate agents, which we believe helps Goosehead recruit top talent in the industry. 8 Franchise sales Franchise sales is the backbone of our distribution network and consists of operations that are owned and managed by Franchisees.
We believe that the primary factors determining our competitive position with other organizations in our industry are the quality of the services we render, the technology we use, the diversity of products we offer, superior human capital, and the overall costs to our clients.
We believe that the primary factors determining our competitive position with other organizations in our industry are the quality of the services we render, the technology we use, the diversity of products we offer, superior human capital, and the overall costs to our clients. 17 A number of Carriers directly sell insurance, primarily to individuals, and do not pay commissions to third-party agents and brokers.
While it is difficult to quantify the impact on our business from individuals purchasing insurance over the Internet, we believe this risk is generally isolated to personal lines customers with single-line auto insurance coverage, which represent a small portion of our overall business. Seasonality The majority of our new accounts are sourced by referral sources tied to home closing transactions.
In addition, the Internet continues to be a source for direct placement of personal lines insurance business. While it is difficult to quantify the impact on our business from individuals purchasing insurance over the Internet, we believe this risk is generally isolated to personal lines customers with single-line auto insurance coverage, which represent a small portion of our overall business.
By delivering a better client experience, offering a more compelling business opportunity to agents, and driving more value to carrier partners, we have seen growth and profitability as reflected in our financial performance.
This value enables Goosehead to have a very competitive carrier portfolio, ensuring that clients find the best solution and increasing agents’ close rates. By delivering a better client experience, offering a more compelling business opportunity to agents, and driving more value to carrier partners, we have seen growth and profitability as reflected in our financial performance.
This distribution is composed of Franchisees and sales agents that they hire as employees in their franchised businesses. Our Franchise Agreement has a ten-year term and governs the terms under which we operate together, defining, among other things, the Initial Franchise Fee, Royalty Fees and other costs a Franchisee pays.
Our Franchise Agreement has a ten-year term and governs the terms under which we operate together, defining, among other things, the Initial Franchise Fee, Royalty Fees and other costs a Franchisee pays.
The Initial Franchise Fee, which is non-refundable after training, covers our costs to recruit, train, onboard, and support the Franchisee for the first year. Franchisees are also required to pay a monthly Royalty Fee, which entitles the Franchisee to continue to operate.
Franchisees are required to pay an Initial Franchise Fee that varies depending on the state in which the franchise will be located. The Initial Franchise Fee, which is non-refundable after training, covers our costs to recruit, train, onboard, and support the Franchisee for the first year.
This growth has been driven by several factors including (1) our team’s ability to recruit talented agents to our platform; (2) our agents’ leveraging of Goosehead's sales blueprint and proprietary technology leading to higher levels of productivity in winning new business; and (3) our service centers’ ability to retain renewal business. 6 Our Go-to-Market Strategy Our business model allows both our corporate and franchise sales agents to concentrate on sales and marketing activities related to acquiring new clients and issuing new policies, thus growing New Business Revenue and Renewal Revenue more rapidly than in other systems.
This growth has been driven by several factors including (1) our team’s ability to recruit talented agents to our platform; (2) our agents’ leveraging of Goosehead's sales blueprint and proprietary technology leading to higher levels of productivity in winning new business; and (3) our service centers’ ability to retain renewal business.
As of December 31, 2024, we have 1,103 franchises operating which represents a 10% decrease in 2024 compared to 2023.
As of December 31, 2025, we have 1,009 franchises operating which represents a 9% decrease in 2025 compared to 2024. Franchise sales agent count grew 1% in 2025 compared to 2024.
Clients will have different insurance needs throughout their lifetime, and our model allows us to serve them at every stage of life. While there are other independent agents who also provide choice, we believe that they lack the scale, depth of talent, and technology of Goosehead, leading to a poorer client experience.
While there are other independent agents who also provide choice, we believe that they lack the scale, depth of talent, and technology of Goosehead, leading to a poorer client experience.
The Royalty Fee is derived from a percentage of gross commissions on insurance policies in their initial term (20%) and renewal terms (50%). Franchise owners are not entitled to an exclusive territory and may solicit sales from any location within the state in which they operate, subject to certain internal restrictions.
Franchise owners are not entitled to an exclusive territory and may solicit sales from any location within the state in which they operate, subject to certain internal restrictions.
The Digital Agent combines millions of data points, which includes Goosehead's proprietary quoting data over hundreds of thousands of transactions from 20+ years of experience, to bring clients actual quotes specific to their needs. Clients can then bind these quotes through a short call with one of our local licensed agents with expertise in the client's specific market.
The Digital Agent combines millions of data points, which includes Goosehead's proprietary quoting data over millions of transactions from 20+ years of experience, to bring clients actual quotes specific to their needs.
The Company also earns and records New Business Royalty Fees revenue equal to 20% of the New Business Commissions and Agency Fees generated by franchise sales and incurs fixed and variable fulfillment and administrative costs. 9 Each subsequent term that a policy renews, both corporate sales and franchise sales generate Renewal Commissions by assisting the customer to make effective a renewal policy that satisfies the customer’s current insurance coverage needs.
Each subsequent term that a policy renews, both corporate sales and franchise sales generate Renewal Commissions by assisting the customer to make effective a renewal policy that satisfies the customer’s current insurance coverage needs.
Distributing through Goosehead allows Carriers to see higher retention rates and have a better client experience when compared with other distribution channels, increasing the client lifetime value for the carrier. This value enables Goosehead to have a very competitive carrier portfolio, ensuring that clients find the best solution and increasing agents’ close rates.
We now distribute for many of the insuretechs, increasing the breadth of our product portfolio. Distributing through Goosehead allows Carriers to see higher retention rates and have a better client experience when compared with other distribution channels, 6 increasing the client lifetime value for the carrier.
We've made investments in technology to outrun our competitors, and we will continue to find opportunities to utilize technology to widen the gap between us and any nascent competition. 15 Markets & marketing We primarily compete in the approximately $453 billion (according to S&P Global Market Intelligence) U.S. personal lines P&C industry.
We've made investments in technology to outrun our competitors, and we will continue to find opportunities to utilize technology to widen the gap between us and any nascent competition.
Additionally, in contrast to the traditional insurance agency model, we separate the sales function from the service function, thus enabling agents to focus on selling, and service personnel to focus on delivering superior client service. This model has helped drive best-in-class net promoter scores for client service, 4.0x the 2024 P&C industry average according to Qualtrics XM Institute.
Additionally, in contrast to the traditional insurance agency model, we separate the sales function from the service function, thus enabling agents to focus on selling, and service personnel to focus on delivering superior client service.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSecurity breaches, cyberattacks or other similar incidents with respect to our or our vendors' information processing systems may damage our reputation and negatively impact client retention and carrier, franchise, and Referral Partner relationships. • We rely on the availability and performance of information technology services provided by third parties. • Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm or legal liability. • Damage to our reputation could have a material adverse effect on our business. • Increasing scrutiny and changing expectations from investors, clients and our employees with respect to our corporate responsibility and stakeholder interest practices may impose additional costs on us or expose us to new or additional risks. • Climate risks, including the risk of an economic crisis, risks associated with the physical effects of climate change and disruptions caused by the transition to a low-carbon economy, could adversely affect our business, results of operations and financial condition. • Our inability to retain or hire qualified employees, as well as the loss of any of our executive officers, could negatively impact our ability to retain existing business and generate new business. • Pandemics or other outbreaks of contagious diseases and efforts to mitigate their spread have had, and could in the future have, widespread impacts on the way we operate. • Non-compliance with or changes in laws, regulations or licensing requirements applicable to us could restrict our ability to conduct our business. • Changes in our accounting estimates and assumptions could negatively affect our financial position and operating results. • We derive a significant portion of our commission revenues from a limited number of Carriers, the loss of which would result in additional expense and loss of market share. • Our business may be harmed if we lose our relationships with Carriers, fail to maintain good relationships with Carriers, become dependent upon a limited number of Carriers or fail to develop new Carrier relationships 20 • The failure by Mark Jones and Robyn Jones to maintain either a minimum voting interest in us or the ability to elect or designate for election at least a majority of our board of directors could trigger a change of control default under our Credit Agreement. • We may require additional debt financing in the future, which may not be available or may be available only on unfavorable terms.
Biggest changeSecurity breaches, cyberattacks or other similar incidents with respect to our or our third-party service providers' or vendors' information processing systems or facilities may damage our reputation and negatively impact client retention and carrier, franchise, and Referral Partner relationships. • Our inability to successfully recover should we experience a disaster or other business continuity problem could cause material financial loss, loss of human capital, regulatory actions, reputational harm, or legal liability. • If we are unable to effectively apply technology and related tools to drive value for our clients or gain internal efficiencies and effective internal controls, our operating results, client relationships, growth, and compliance programs could be adversely affected. • Damage to our reputation could have a material adverse effect on our business. • Increasing scrutiny and changing expectations from investors, clients, and our employees with respect to our corporate responsibility and stakeholder interest practices may impose additional costs on us or expose us to new or additional risks. • Our inability to retain or hire qualified employees, as well as the loss of any of our executive officers, could negatively impact our ability to retain existing business and generate new business. • The occurrence of natural or man-made disasters could result in declines in business and increases in claims that could adversely affect our financial condition, results of operations and cash flows. • Non-compliance with or changes in laws, regulations, or licensing requirements applicable to us could restrict our ability to conduct our business. • Changes in our accounting estimates and assumptions could negatively affect our financial position and operating results. • We derive a significant portion of our commission revenues from a limited number of Carriers, the loss of which would result in additional expense and loss of market share. 22 • Our business may be harmed if we lose our relationships with Carriers, fail to maintain good relationships with Carriers, become dependent upon a limited number of Carriers, or fail to develop new Carrier relationships • The failure by Mark Jones and Robyn Jones to maintain either a minimum voting interest in us or the ability to elect or designate for election at least a majority of our board of directors could trigger a change of control default under our Credit Agreement. • We may require additional debt financing in the future, which may not be available or may be available only on unfavorable terms.
Depending on the function involved, such errors may also lead to business disruption, processing inefficiencies, the loss of or damage to intellectual property through a security breach, the loss of confidential proprietary or personal data (including sensitive personal data) through a security breach, or otherwise.
Depending on the function involved, such errors may also lead to business disruption, processing inefficiencies, the loss of or damage to intellectual property through a security breach, or the loss of confidential proprietary or personal data (including sensitive personal data) through a security breach, or otherwise.
We could potentially lose key executives, personnel, client data or experience material adverse interruptions to our operations or delivery of services to clients in a disaster recovery scenario. We may experience additional disruption due to system upgrades, outages or an increase in remote work.
We could potentially lose key executives, personnel, or client data or experience material adverse interruptions to our operations or delivery of services to clients in a disaster recovery scenario. We may experience additional disruption due to system upgrades, outages, or an increase in remote work.
Such risks include the investment of significant time and resources; the possibility that these efforts will be not be successful; the possibility that marketplace does not accept our products or services, or that we are unable to retain clients that adopt our new products or services; and the risk of additional liabilities associated with these efforts.
Such risks include the investment of significant time and resources; the possibility that these efforts will not be successful; the possibility that marketplace does not accept our products or services, or that we are unable to retain clients that adopt our new products or services; and the risk of additional liabilities associated with these efforts.
We are subject to complex and evolving laws, rules, regulations industry standards and contractual obligations relating to the collection, use, retention, security, transfer, disclosure and other processing of personal information. These laws, rules, regulations, industry standards and contractual obligations apply to transfers of information among our affiliates, as well as to transactions we enter into with third-party vendors.
We are subject to complex and evolving laws, regulations, rules, industry standards, and contractual obligations relating to the collection, use, retention, security, transfer, disclosure, and other processing of personal information. These laws, regulations, rules, industry standards, and contractual obligations apply to transfers of information among our affiliates, as well as to transactions we enter into with third-party vendors.
Our certificate of incorporation and by-laws provide for, among other things: • Until the Substantial Ownership Requirement is no longer met, the Pre-IPO LLC Members may designate a majority of the nominees for election to our board of directors, including the nominee for election to serve as Chairman of our board of directors; • at any time after the Substantial Ownership Requirement is no longer met, there will be: ◦ restrictions on the ability of our stockholders to call a special meeting and the business that can be conducted at such meeting or to act by written consent; ◦ supermajority approval requirements for amending or repealing provisions in the certificate of incorporation and by-laws; ◦ a division of the board of directors into three classes of directors, with each class as equal in number as possible, serving staggered three-year terms, and such directors may only be removed for cause and by the affirmative vote of holders of 75% of the total voting power of our outstanding shares of common stock, voting together as a single class; • our ability to issue additional shares of Class A common stock and to issue preferred stock with terms that the board of directors may determine, in each case without stockholder approval (other than as specified in our certificate of incorporation); • the absence of cumulative voting in the election of directors; and • advance notice requirements for stockholder proposals and nominations.
Our certificate of incorporation and by-laws provide for, among other things: • Until the Substantial Ownership Requirement is no longer met, the Pre-IPO LLC Members may designate a majority of the nominees for election to our board of directors, including the nominee for election to serve as Chairman of our board of directors; 45 • At any time after the Substantial Ownership Requirement is no longer met, there will be: ◦ restrictions on the ability of our stockholders to call a special meeting and the business that can be conducted at such meeting or to act by written consent; ◦ supermajority approval requirements for amending or repealing provisions in the certificate of incorporation and by-laws; ◦ a division of the board of directors into three classes of directors, with each class as equal in number as possible, serving staggered three-year terms, and such directors may only be removed for cause and by the affirmative vote of holders of 75% of the total voting power of our outstanding shares of common stock, voting together as a single class; • Our ability to issue additional shares of Class A common stock and to issue preferred stock with terms that the board of directors may determine, in each case without stockholder approval (other than as specified in our certificate of incorporation); • The absence of cumulative voting in the election of directors; and • Advance notice requirements for stockholder proposals and nominations.
We entered into a tax receivable agreement on May 1, 2018 with the Pre-IPO LLC Members that provides for the payment by us to the Pre-IPO LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of (i) any increase in tax basis in Goosehead Insurance, Inc.’s assets resulting from (a) the purchase of LLC Units from any of the Pre-IPO LLC Members using the net proceeds from any future offering, (b) redemptions or exchanges by the Pre-IPO LLC Members of LLC Units for shares of our Class A common stock or (c) payments under the tax receivable agreement and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreement.
We entered into a tax receivable agreement on May 1, 2018 with the Pre-IPO LLC Members that provides for the payment by us to the Pre-IPO LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize as a result of (i) any increase in tax basis in Goosehead 44 Insurance, Inc.’s assets resulting from (a) the purchase of LLC Units from any of the Pre-IPO LLC Members using the net proceeds from any future offering, (b) redemptions or exchanges by the Pre-IPO LLC Members of LLC Units for shares of our Class A common stock or (c) payments under the tax receivable agreement and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreement.
As the sole managing member of Goosehead Financial, LLC, we intend to cause Goosehead Financial, LLC to make distributions to the Pre-IPO LLC Members and us, in amounts sufficient to cover all applicable taxes payable by us and the Pre-IPO LLC members and any payments we are obligated to make under the tax receivable agreement we entered into as part of the reorganization transactions and to fund dividends to our stockholders in accordance with our dividend policy, to the extent our board of directors declares such dividends.
As the sole managing member of Goosehead Financial, LLC, we intend to cause Goosehead Financial, LLC to make distributions to the Pre-IPO LLC Members and us, in amounts sufficient to cover all applicable taxes payable by us and the Pre-IPO LLC members and any payments we are obligated to make under the tax receivable agreement we entered into as part of the 42 reorganization transactions and to fund dividends to our stockholders in accordance with our dividend policy, to the extent our board of directors declares such dividends.
In addition, because the Pre-IPO LLC Members will have the ability to designate a majority of the nominees for election to our board of directors, including the nominee for election to serve as Chairman of our board of directors until the Substantial Ownership Requirement is no longer met, the Pre-IPO LLC Members will be able to control us as long as they hold at least 10% of the aggregate number of outstanding shares of our common stock.
In addition, because the Pre-IPO LLC Members will have the ability to designate a majority of the nominees for election to our board of directors, including the nominee for election to serve as Chairman of our board of directors until the Substantial Ownership Requirement is no longer met, the Pre-IPO LLC 43 Members will be able to control us as long as they hold at least 10% of the aggregate number of outstanding shares of our common stock.
The economic activity that impacts property and casualty insurance is most closely correlated with employment levels, corporate revenue and asset values. In addition, an increase in client preference for car- and ride-sharing 21 services, as opposed to automobile ownership, may result in a long-term reduction in the number of vehicles per capita, and consequently the automobile insurance industry.
The economic activity that impacts property and casualty insurance is most closely correlated with employment levels, corporate revenue, and asset values. In addition, an increase in client preference for car- and ride-sharing services, as opposed to automobile ownership, may result in a long-term reduction in the number of vehicles per capita, and consequently the automobile insurance industry.
If a client is not 27 satisfied with our services, it could cause us to incur additional costs and impair profitability or lose the client relationship altogether, which may negatively impact other clients’ perception regarding us. Our success is also dependent on maintaining a good reputation with existing and potential employees, investors, regulators and the communities in which we operate.
If a client is not satisfied with our services, it could cause us to incur additional costs and impair profitability or lose the client relationship altogether, which may negatively impact other clients’ perception regarding us. Our success is also dependent on maintaining a good reputation with existing and potential employees, investors, regulators, and the communities in which we operate.
For example, Franchisees or agents may become dissatisfied with the amount of contractual fees owed under franchise or other applicable arrangements, particularly in the event that we decide to increase fees further. They may disagree with certain network-wide policies and procedures, including policies such as those dictating brand standards or affecting their marketing efforts.
For example, Franchisees or agents may become dissatisfied with the amount of contractual fees owed under franchise or other applicable arrangements, particularly 36 in the event that we decide to increase fees further. They may disagree with certain network-wide policies and procedures, including policies such as those dictating brand standards or affecting their marketing efforts.
To the extent that we do not distribute such excess cash as dividends on our Class A common stock and instead, for example, hold such cash balances or lend them to Goosehead Financial, LLC, the Pre-IPO LLC Members would benefit from any value attributable to such cash balances as a result of their ownership of Class A 40 common stock following a redemption or exchange of their LLC Units.
To the extent that we do not distribute such excess cash as dividends on our Class A common stock and instead, for example, hold such cash balances or lend them to Goosehead Financial, LLC, the Pre-IPO LLC Members would benefit from any value attributable to such cash balances as a result of their ownership of Class A common stock following a redemption or exchange of their LLC Units.
In addition, the tax receivable agreement provides that, upon certain mergers, asset sales or other forms of business combination, or certain other changes of control, our obligations or our successor’s obligations with 42 respect to tax benefits would be based on certain assumptions, including that we or our successor would have sufficient taxable income to fully utilize the increased tax deductions and tax basis and other benefits covered by the tax receivable agreement.
In addition, the tax receivable agreement provides that, upon certain mergers, asset sales or other forms of business combination, or certain other changes of control, our obligations or our successor’s obligations with respect to tax benefits would be based on certain assumptions, including that we or our successor would have sufficient taxable income to fully utilize the increased tax deductions and tax basis and other benefits covered by the tax receivable agreement.
Our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm, damaged client relationships, or legal liability. Our insurance 26 coverage with respect to natural disasters is limited and is subject to deductibles and coverage limits.
Our inability to successfully recover should we experience a disaster or other business continuity problem, could materially interrupt our business operations and cause material financial loss, loss of human capital, regulatory actions, reputational harm, damaged client relationships, or legal liability. Our insurance coverage with respect to natural disasters is limited and is subject to deductibles and coverage limits.
Negative public perception, adverse publicity or negative comments in social media, including as a result of actions taken by companies we acquire before acquisition, could damage our reputation, or harm our relationships with regulators and the communities in which we operate, if we do not, or are not perceived to, adequately address these issues.
Negative public perception, adverse publicity, or negative comments in social media, including as a result of actions taken by companies we acquire before acquisition, could damage our reputation or harm our relationships with regulators and the communities in which we operate if we do not, or are 30 not perceived to, adequately address these issues.
If we cannot service our indebtedness, we may have to take actions such as selling 31 assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions, and investments, any of which could impede the implementation of our business strategy or prevent us from entering into transactions that would otherwise benefit our business.
If we cannot service our indebtedness, we may have to take actions such as selling assets, seeking additional equity or reducing or delaying capital expenditures, strategic acquisitions, and investments, any of which could impede the implementation of our business strategy or prevent us from entering into transactions that would otherwise benefit our business.
Further, while we strive to publish and prominently display privacy policies that are accurate, comprehensive, and compliant with applicable laws, regulations, rules and industry standards, we cannot ensure that our privacy policies and other statements regarding our practices will be sufficient to protect us from claims, proceedings, liability or 39 adverse publicity relating to data privacy or cybersecurity.
Further, while we strive to publish and prominently display privacy policies that are accurate, comprehensive, and compliant with applicable laws, regulations, rules and industry standards, we cannot ensure that our privacy policies and other statements regarding our practices will be sufficient to protect us from claims, proceedings, liability or adverse publicity relating to data privacy or cybersecurity.
Some Carriers have agreed with regulatory authorities to end the payment of 23 Contingent Commissions on insurance products, which could impact our commissions that are based on the volume, consistency and profitability of business generated by us. We cannot predict the impact that any new laws, rules or regulations may have on our business and financial results.
Some Carriers have agreed with regulatory authorities to end the payment of Contingent Commissions on insurance products, which could impact our commissions that are based on the volume, consistency and profitability of business generated by us. We cannot predict the impact that any new laws, rules, or regulations may have on our business and financial results.
Given the unpredictability of E&O claims and of litigation that could flow from them, it is possible that an adverse outcome in a particular matter could have a material adverse effect on our results of operations, financial condition or cash flow in a given quarterly or annual period. Our business is dependent upon information processing systems.
Given the unpredictability of E&O claims and of litigation that could flow from them, it is possible that an adverse outcome in a particular matter could have a material adverse effect on our results of operations, financial condition, or cash flow in a given quarterly or annual period. Our business is dependent upon information processing systems and facilities.
Any intellectual property claims, with or without merit, could be expensive, take significant time and divert management’s resources, time and attention from other business concerns. Moreover, other companies, including our competitors, may have the capability to dedicate substantially greater resources to enforce their intellectual property rights and to defend claims that may be brought against them.
Any intellectual property claims, with or without merit, could be expensive, take significant time and divert management’s resources, time, and attention from other business concerns. Moreover, other companies, including our competitors, may have the capability to dedicate substantially greater resources to enforce their intellectual property and other proprietary rights and to defend claims that may be brought against them.
We cannot ensure that any limitations of liability provisions in our agreements with customers, vendors and other third parties with which we do business would be enforceable or 38 adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim in connection with a security breach, cyberattack or other similar incident.
We cannot ensure that any limitations of liability provisions in our agreements with customers, vendors and other third parties with which we do business would be enforceable or adequate or would otherwise protect us from any liabilities or damages with respect to any particular claim in connection with a security breach, cyberattack or other similar incident.
If we are not able to successfully attract, retain and motivate our employees, whether as a result of an insufficient number of qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees, our business, financial condition, results of operations and reputation could be materially and adversely affected.
If we are not able to successfully attract, retain and motivate our employees, whether as a result of an insufficient number of 31 qualified applicants, difficulty in recruiting new employees, or inadequate resources to train, integrate, and retain qualified employees, our business, financial condition, results of operations and reputation could be materially and adversely affected.
Even if a license is available to us, it could be non-exclusive 37 thereby giving our competitors and other third parties access to the same technologies licensed to us, and we may be required to pay significant upfront fees, milestone payments or royalties, which would increase our operating expenses.
Even if a license is available to us, it could be non-exclusive thereby giving our competitors and other third parties access to the same technologies licensed to us, and we may be required to pay significant upfront fees, milestone payments or royalties, which would increase our operating expenses.
Defending or enforcing our trademark rights, branding practices and other intellectual property could result in the expenditure of significant resources and divert the attention of management, which in turn may materially and adversely affect our business and operating results, even if such defense or enforcement is ultimately successful.
Defending or enforcing our trademark rights, branding practices and other intellectual property and other proprietary rights could result in the expenditure of significant resources and divert the attention of management, which in turn may materially and adversely affect our business and operating results, even if such defense or enforcement is ultimately successful.
While we maintain some of our critical information technology systems, we are also dependent on third party service providers, including Salesforce.com, to provide important information technology services relating to, among other things, agency management services, sales and service support, electronic communications and certain finance functions.
While we maintain some of our critical information technology systems, we are also dependent on third-party service providers and vendors, including Salesforce.com, to provide important information technology services and systems relating to, among other things, agency management services, sales and service support, electronic communications, and certain finance functions.
The failure of our Franchisees to operate their franchises successfully could have a material adverse effect on us, 34 our reputation, our brand and our ability to attract prospective Franchisees and could materially adversely affect our business, financial condition or results of operations. Our Franchisees and agents could take actions that could harm our business.
The failure of our Franchisees to operate their franchises successfully could have a material adverse effect on us, our reputation, our brand, and our ability to attract prospective Franchisees and could materially adversely affect our business, financial condition, or results of operations. Our Franchisees and agents could take actions that could harm our business.
Any such loss or delay in payment could have a material and adverse effect on a Franchisee’s ability to satisfy its obligations under its Franchise Agreement, including its ability to make payments for contractual fees or to indemnify us. Franchise nonrenewal. Each Franchise Agreement has an expiration date.
Any such 37 loss or delay in payment could have a material and adverse effect on a Franchisee’s ability to satisfy its obligations under its Franchise Agreement, including its ability to make payments for contractual fees or to indemnify us. Franchise nonrenewal. Each Franchise Agreement has an expiration date.
The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual property, data privacy and cybersecurity, client protection, trade and export controls, competition, and equal opportunity laws, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations.
The technologies underlying AI and its uses are subject to a variety of laws and regulations, including intellectual 29 property, data privacy and cybersecurity, client protection, trade and export controls, competition, and equal opportunity laws and regulations, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations.
We are also required to make certain judgments and estimates that affect the disclosed and recorded amounts of revenues and expenses related to accounting under Topic 606. We periodically evaluate our assumptions, estimates and judgment. We base our estimates and judgments on historical experience and other assumptions that we believe are reasonable under the circumstances.
We are also required to make certain judgments and estimates that affect the disclosed and recorded amounts of revenues and expenses related to accounting under Topic 606. We periodically evaluate our assumptions, estimates and judgment. We base our estimates and judgments on 34 historical experience and other assumptions that we believe are reasonable under the circumstances.
Any such changes may trigger a change of control event that could 33 result in us being forced to repay the outstanding sums owed under our Credit Agreement. If any such event occurs, this may negatively affect our financial condition and operating results.
Any such changes may trigger a change of control event that could result in us being forced to repay the outstanding sums owed under our Credit Agreement. If any such event occurs, this may negatively affect our financial condition and operating results.
If these stockholders sell substantial amounts of shares of Class A common 43 stock in the public market (including any shares of Class A common stock issued upon redemption or exchange of LLC Units), or the market perceives that such sales may occur, the market price of our shares of Class A common stock could be adversely affected.
If these stockholders sell substantial amounts of shares of Class A common stock in the public market (including any shares of Class A common stock issued upon redemption or exchange of LLC Units), or the market perceives that such sales may occur, the market price of our shares of Class A common stock could be adversely affected.
While we endeavor to purchase coverage that is appropriate to our assessment of our risk, we are unable to predict with certainty the frequency, nature or magnitude of claims for direct or consequential damages or whether our errors and omissions insurance will cover such claims.
While we endeavor to purchase coverage that is appropriate to our assessment of our risk, we are unable to predict with certainty the 27 frequency, nature, or magnitude of claims for direct or consequential damages or whether our errors and omissions insurance will cover such claims.
A substantial unsatisfied judgment against us or one of our subsidiaries could result in bankruptcy, which would materially and adversely affect our business, financial condition and results of operations. We may not be able to manage growth successfully.
A substantial unsatisfied judgment against us or one of our subsidiaries could result in bankruptcy, which would materially and adversely affect our business, financial condition, and results of operations. 38 We may not be able to manage growth successfully.
The outcome of such actions cannot be predicted, and such claims or actions could have a material adverse effect on our business, financial condition and results of operations. We are subject to laws and regulations, as well as regulatory investigations.
The outcome of such actions cannot be 25 predicted, and such claims or actions could have a material adverse effect on our business, financial condition, and results of operations. We are subject to laws and regulations, as well as regulatory investigations.
As our operations evolve, we will need to continue to make investments in new and enhanced information systems. As our information system providers revise and upgrade their hardware, software and equipment technology, we may encounter difficulties in integrating these new technologies into our business.
As our operations evolve, we will need to continue to make investments in new and enhanced information systems and facilities. As our information system providers revise and upgrade their hardware, software, and equipment technology, we may encounter difficulties in integrating these new technologies into our business.
We may be required to expend significant additional resources to modify protective measures, to investigate and remediate vulnerabilities or other exposures or to make required notifications. We rely on the availability and performance of information technology services provided by third parties.
We may be required to expend significant additional resources to modify protective measures, to investigate and remediate vulnerabilities or other exposures, or to make required notifications. We rely on the availability and performance of information technology services and systems provided by third parties.
Our board of directors will take into account general economic and business conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, including restrictions and covenants contained in our debt agreements, business prospects and other factors that our board of directors 44 considers relevant.
Our board of directors will take into account general economic and business conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, including restrictions and covenants contained in our debt agreements, business prospects and other factors that our board of directors considers relevant.
Carriers may be unwilling to allow us to sell their existing or new insurance products or may amend our agreements with them, for a variety of reasons, including for competitive or regulatory reasons or because of a reluctance to distribute their products through our platform.
Carriers may be unwilling to allow us to sell their existing or new insurance products or may amend our agreements with them, for a variety of reasons, including for competitive or regulatory reasons or because of a reluctance to distribute their 35 products through our platform.
If such challenges were to be successful, it could limit our ability to prevent others from using similar marks or designs may ultimately result in a reduced distinctiveness of our brand in the minds of clients.
If such challenges were to be successful, it could limit our ability to prevent others from using similar marks or designs, which may ultimately result in a reduced distinctiveness of our brand in the minds of clients.
If the service providers to which we outsource these functions do not perform effectively, we may not be able to achieve the expected cost savings and may have to incur additional costs to correct errors made by such service providers.
If the service providers and vendors to which we outsource these functions do not perform effectively, we may not be able to achieve the expected cost savings and may have to incur additional costs to correct errors made by such service providers and vendors.
In the course of providing financial services, we may electronically store, transmit or otherwise process personal information (including sensitive personal information), such as social security numbers or credit card or bank information, of clients or employees of clients.
In the course of providing financial services, we may electronically store, retrieve, transmit, or otherwise process personal information (including sensitive personal information), such as social security numbers or credit card or bank information, of clients or employees of clients.
The FTC requires that franchisors make extensive disclosure to prospective Franchisees but does not require registration. A number of states require 35 registration and/or disclosure in connection with franchise offers and sales.
The FTC requires that franchisors make extensive disclosure to prospective Franchisees but does not require registration. A number of states require registration and/or disclosure in connection with franchise offers and sales.
Interruption or loss of our information processing capabilities or adverse consequences from implementing new or enhanced systems could have a material adverse effect on our business, financial condition and results of operations.
Interruption or loss of our information processing capabilities or adverse consequences from implementing new or enhanced systems and facilities could have a material adverse effect on our business, financial condition, and results of operations.
Regulatory review or the issuance of interpretations of existing laws and regulations may result in the enactment of new laws and regulations that could 30 adversely affect our operations or our ability to conduct business profitably.
Regulatory review or the issuance of interpretations of existing laws and regulations may result in the enactment of new laws and regulations that could adversely affect our operations or our ability to conduct business profitably.
Meanwhile, third parties may assert intellectual property-related claims against us, including claims of infringement, misappropriation or other violation of their intellectual property, which may be costly to defend, could require the payment of damages, legal fees, settlement payments, royalty payments and other costs or damages, including treble damages if we are found to have willfully infringed certain types of intellectual property, and could limit our ability to use or offer certain technologies, products or other intellectual property.
Meanwhile, third parties may assert intellectual property-related claims against us, including claims of infringement, misappropriation, or other violation of their intellectual property and other proprietary rights, which may be costly to defend, could require the payment of damages, legal fees, settlement payments, royalty payments and other costs or damages, including treble damages if we are found to have willfully infringed certain types of intellectual property, and could limit our ability to use or offer certain technologies, products or other intellectual property.
Consequently, inflation is expected to increase our operating expenses over time and may adversely impact our results of operating cash flow. Moreover, during inflationary periods, interest rates have historically increased, which would have a direct effect on the interest expense in case we decide to refinance our existing long-term borrowings, in particular the Credit Agreement, or incur any additional indebtedness.
Consequently, inflation is expected to increase our operating expenses over time and may adversely impact our results of operating cash flow. Moreover, during inflationary periods, interest rates have historically increased, which would have a direct effect on the interest expense if we decide to refinance our existing long-term borrowings, in particular the Credit Agreement, or incur any additional indebtedness.
In the course of litigation, or as a preventative measure, such competitors and other third parties may attempt to challenge the scope of our rights or invalidate our intellectual property.
In the course of litigation, or as a preventative measure, such competitors and other third parties may attempt to challenge the scope of our rights or invalidate our intellectual property and other proprietary rights.
Risks relating to ownership of our Class A common stock • Future sales, or the possibility of future sales, of a substantial number of our shares of Class A common stock could adversely affect the price of our shares of Class A common stock. • We may not be able to successfully maintain effective internal controls over financial reporting. • We expect that our stock price will be volatile, which could cause the value of your investment to decline, and you may not be able to resell your shares at or above your investment price.
Risks relating to ownership of our Class A common stock • Future sales, or the possibility of future sales, of a substantial number of our shares of Class A common stock could adversely affect the price of our shares of Class A common stock. • We may not be able to successfully maintain effective internal controls over financial reporting. • We expect that our stock price will be volatile, which could cause the value of your investment to decline, and you may not be able to resell your shares at or above your investment price. 23 Risks relating to our business.
Data privacy and cybersecurity are also areas of increasing state legislative focus and we are, or may in the future become, subject to various state laws and regulations regarding data privacy and cybersecurity.
Data privacy and cybersecurity are also areas of increasing state legislative and regulatory focus, and we are, or may in the future become, subject to various state laws and regulations regarding data privacy and cybersecurity.
In addition, many of the businesses that we acquire and develop will likely have significantly smaller scales of operations prior to the implementation of our growth strategy.
In addition, many of the businesses that we acquire and develop will likely have significantly smaller scales of operations prior 33 to the implementation of our growth strategy.
The Credit Agreement dated January 8, 2025 ("the Credit Agreement") governing our debt contains covenants that, among other things, restrict our ability to make certain restricted payments, incur additional debt, engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates, change our business or make investments and require us to comply with certain financial covenants.
The Credit Agreement dated January 8, 2025 (as amended, "the Credit Agreement") governing our debt contains covenants that, among other things, restrict our ability to make certain restricted payments, incur additional debt, engage in certain asset sales, mergers, acquisitions or similar transactions, create liens on assets, engage in certain transactions with affiliates, change our business or make investments and require us to comply with certain financial covenants.
Improper disclosure of confidential, personal or proprietary information, whether due to human error, misuse of information by employees or vendors, or as a result of security breaches, cyberattacks or other similar incidents with respect to our or our vendors’ systems, could result in regulatory scrutiny, legal liability or reputational harm, and could have an adverse effect on our business or operations.
Improper disclosure of confidential, personal or proprietary information, whether due to human error, misuse of information by employees or vendors, or as a result of security breaches, cyberattacks or other similar incidents with respect to our or our service providers' or vendors’ systems, could result in regulatory scrutiny, legal liability or reputational harm, and could have an adverse effect on our business or operations.
In extreme cases, revocation of a subsidiary’s authority to do business in one or more jurisdictions could result from failure to comply with regulatory requirements. In extreme cases, revocation of a subsidiary’s authority to do business in one or more jurisdictions could result from failure to comply with regulatory requirements.
In extreme cases, revocation of a subsidiary’s authority to do business in one or more jurisdictions could result from failure to comply with 32 regulatory requirements. In extreme cases, revocation of a subsidiary’s authority to do business in one or more jurisdictions could result from failure to comply with regulatory requirements.
Moreover, while we generally perform cybersecurity due diligence on our key vendors, because we do not control our vendors and our ability to monitor their cybersecurity is limited, we cannot ensure the cybersecurity measures they take will be sufficient to protect any information we share with them.
Moreover, while we generally perform cybersecurity due diligence on our key service providers and vendors, because we do not control our service providers and vendors and our ability to monitor their cybersecurity is limited, we cannot ensure the cybersecurity measures they take will be sufficient to protect any information we share with them.
As a public company, we are required to maintain effective internal control over financial reporting. While management has certified that our internal control over financial reporting was effective as of December 31, 2024, because internal control over financial reporting is complex, there can be no assurance that our internal control over financial reporting will be effective in the future.
As a public company, we are required to maintain effective internal control over financial reporting. While management has certified that our internal control over financial reporting was effective as of December 31, 2025, because internal control over financial reporting is complex, there can be no assurance that our internal control over financial reporting will be effective in the future.
Approximately 12.9 million shares of our Class A common stock and LLC Units (which may be redeemed or exchanged for a corresponding number of shares of Class A common stock) are held by the Pre-IPO LLC Members, the Goosehead Management Holders and Texas Wasatch Holders.
Approximately 12.2 million shares of our Class A common stock and LLC Units (which may be redeemed or exchanged for a corresponding number of shares of Class A common stock) are held by the Pre-IPO LLC Members, the Goosehead Management Holders, and Texas Wasatch Holders.
While we or our third-party service providers have not experienced any significant disruption, failure or breach impacting our or their information technology systems, any such disruption, failure or breach could adversely affect our business, financial condition, reputation and results of operations.
While we or our third-party service providers or vendors have not experienced any significant disruption, failure, or breach impacting our or their information 28 technology systems, any such disruption, failure, or breach could adversely affect our business, financial condition, reputation, and results of operations.
Failure to obtain, maintain, protect, defend or enforce our intellectual property rights, or allegations that we have infringed, misappropriated or otherwise violated the intellectual property rights of others, could harm our reputation, ability to compete effectively, financial condition and business.
Failure to obtain, maintain, protect, defend, or enforce our intellectual property and other proprietary rights, or allegations that we have infringed, misappropriated, or otherwise violated the intellectual property and other proprietary rights of others, could harm our reputation, ability to compete effectively, financial condition and business.
Although we maintain policies, procedures and technical safeguards designed to protect the security and privacy of confidential, personal and proprietary information, we cannot eliminate the risk of human error or guarantee our safeguards against employee, vendor or third-party malfeasance.
Although we maintain policies, procedures and technical safeguards designed to protect the security and privacy of confidential, personal, and proprietary information, we cannot eliminate the risk of human error or guarantee our safeguards against employee, service provider, vendor, or third-party malfeasance.
The occurrence of any security breach, cyberattack or other similar incident with respect to our or our vendors’ systems, or our failure to make adequate or timely disclosures to the public, regulators, law enforcement agencies or affected individuals, as applicable, following any such event, could cause harm to our reputation, subject us to additional regulatory scrutiny, expose us to civil litigation, fines, damages or injunctions or subject us to notification obligations or liability under applicable data privacy, cybersecurity and other laws, rules and regulations, resulting in increased costs or loss of commissions and fees, any of which could have a material adverse effect on our business, financial condition and results of operations.
The occurrence of any security breach, cyberattack or other similar incident with respect to our or our service providers' or vendors’ systems, or our failure to make adequate or timely disclosures to the public, regulators, law enforcement agencies or affected individuals, as applicable, following any such event, could cause harm to our reputation, subject us to additional regulatory scrutiny, expose us to civil litigation, fines, damages or injunctions or subject us to notification obligations or liability under applicable data privacy, cybersecurity and other laws, regulations, rules, industry standards, and contracts, resulting in increased costs or loss of commissions and fees, any of which could have a material adverse effect on our business, financial condition, and results of operations.
However, there can be no assurance that we will be successful in enforcing these contracts. In addition, on January 5, 2023, the FTC voted to publish a proposed rule that, if given effect, would impose a near-complete ban on employers offering, entering, and maintaining non-compete agreements with their workers, by defining such arrangements as per se methods of unfair competition.
However, there can be no assurance that we will be successful in enforcing these contracts. In addition, in the past, the FTC voted to publish a proposed rule that, if given effect, would impose a near-complete ban on employers offering, entering, and maintaining non-compete agreements with their workers, by defining such arrangements as per se methods of unfair competition.
Furthermore, climate change may pose physical risks to our business, since it may exacerbate the frequency and intensity of unfavorable weather conditions, such as fires, hurricanes, tornadoes, drought, water shortages, rainfall, unseasonably warm. Overall, climate change, its effects and the resulting, unknown impact could have a material adverse effect on our financial condition and results of operations.
Furthermore, climate change may pose physical risks to our business, since it may exacerbate the frequency and intensity of unfavorable weather conditions, such as fires, hurricanes, tornadoes, drought, water shortages, rainfall, and unseasonal warmth. Overall, climate change, its effects, and the resulting unknown impact could have a material adverse effect on our financial condition and results of operations.
If we do not successfully build and maintain a strong brand, our business could be materially harmed or result in an inability to grow or maintain our brand. Infringement, misappropriation, dilution or other violation of our intellectual property by third parties could harm our business.
If we do not successfully build and maintain a strong brand, our business could be materially harmed or result in an inability to grow or maintain our brand. Infringement, misappropriation, or other violation of our intellectual property and other proprietary rights by third parties could harm our business.
Due to applicable laws regulations, rules, industry standards or contractual obligations, we may be held responsible for security breaches, cyberattacks or other similar incidents attributed to our vendors as they relate to the information we share with them.
Due to applicable laws, regulations, rules, industry standards or contractual obligations, we may be held responsible for security breaches, cyberattacks or other similar incidents attributed to our service providers and vendors as they relate to the information we share with them.
Any actual or perceived failure to adhere to, or successfully implement processes in response to, changing legal or regulatory requirements in this area could result in legal liability, including litigation, regulatory fines, penalties or other sanctions, damage to our reputation in the marketplace, and other adverse impacts.
Any actual or perceived failure to adhere to, or successfully implement process in response to, changing legal or regulatory requirements in this area could result in legal liability, including 41 litigation, regulatory fines, penalties, or other sanctions, damage to our reputation in the marketplace, and other adverse impacts.
Should we experience a local or regional disaster or other business continuity problem, such as an earthquake, hurricane, terrorist attack, pandemic, protest or riot, security breach, cyberattack or other similar incident, power loss, telecommunications failure or other natural or man-made disaster, our continued success will depend, in part, on the availability of personnel, office facilities, and the proper functioning of computer, telecommunication and other related systems and operations.
Should we experience a local or regional disaster or other business continuity problem, such as an earthquake, hurricane, terrorist attack, public health crises such as the COVID-19 pandemic, protest or riot, security breach, cyberattack or other similar incident, power loss, telecommunications failure, or other natural or man-made disaster, our continued success will depend, in part, on the availability of personnel, office facilities, and the proper functioning of computer, telecommunication and other related systems and operations.
Successful challenges against us could require us to modify or discontinue our use of technology or business processes where such use is found to infringe, misappropriate or otherwise violate the rights of others, or require us to purchase costly licenses from third parties, which may not be available on commercially reasonable terms, or at all.
Successful challenges against us could require us to modify (which could require significant time and expense) or discontinue our use of technology or business processes where such use is found to infringe, misappropriate, or otherwise violate the rights of others, or require us to purchase costly licenses from third parties, which may not be available on commercially reasonable terms, or at all.
Ensuring that our collection, use, retention, protection, transfer, disclosure and other processing of personal information complies with applicable laws, regulations, rules and industry standards regarding data privacy and cybersecurity in relevant jurisdictions can increase operating costs, impact the development of new products or services, and reduce operational efficiency.
Ensuring that our collection, use, retention, security, transfer, disclosure, and other processing of personal information complies with applicable laws, regulations, rules, industry standards, and contractual obligations regarding data privacy and cybersecurity in relevant jurisdictions can increase operating costs, impact the development of new products or services, and reduce operational efficiency.
In 2022, two Carriers represented more than 10% of total revenue at 14% and 12%. Should any of these Carriers seek to terminate its arrangements with us, we could be forced to move our business to another Carrier and some additional expense and loss of market share could possibly result.
In 2023, two Carriers represented more than 10% of total revenue at 16% and 12%. Should any of these Carriers seek to terminate its arrangements with us, we could be forced to move our business to another Carrier and some additional expense and loss of market share could possibly result.
Consequently, the risk of a cybersecurity incident has increased, and as cybersecurity threats evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate or remediate any information security vulnerabilities, security breaches, cyberattacks or other similar incidents.
Consequently, the risk of a security breaches, cyberattacks, and other similar incident has increased, and as cybersecurity threats evolve, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate or remediate any information security vulnerabilities, including those arising from security breaches, cyberattacks or other similar incidents.
Risks relating to our organizational structure We are a holding company and our principal asset is our 66.2% ownership interest in Goosehead Financial, LLC, and we are accordingly dependent upon distributions from Goosehead Financial, LLC to pay dividends, if any, taxes, make payments under the tax receivable agreement and pay other expenses.
Risks relating to our organizational structure We are a holding company and our principal asset is our 67.4% ownership interest in Goosehead Financial, LLC, and we are accordingly dependent upon distributions from Goosehead Financial, LLC to pay dividends, if any, taxes, make payments under the tax receivable agreement and pay other expenses.
Any harm to our reputation could impact employees engagement and retention and the willingness of clients and Carriers to do business with us.
Any harm to our reputation could impact employee engagement and retention and the willingness of clients and Carriers to do business with us.
Moreover, cybersecurity threats are constantly evolving, which makes it more difficult to detect cybersecurity incidents, assess their severity or impact in a timely manner, and successfully defend against them. The Cybersecurity threats also may see their frequency increased, and effectiveness enhanced, by the use of AI.
Moreover, cybersecurity threats are constantly evolving, which makes it more difficult to detect security breaches, cyberattacks, and other similar incidents, assess their severity or impact in a timely manner, and successfully defend against them. The cybersecurity threats also may see their frequency increased, and effectiveness enhanced, by the use of AI.
At the federal level, we are subject to, among other laws, rules and regulations, the Gramm-Leach-Bliley Act ("GLBA"), which requires financial institutions, including insurers, to, among other things, periodically disclose their privacy policies and practices relating to sharing personal information and, in some cases, enables retail customers to opt out of the sharing of certain personal information with unaffiliated third parties.
At the federal level, we are subject to, among other laws, regulations, rules, and industry standards, the Gramm‑Leach‑Bliley Act (“GLBA”), which requires financial institutions, including insurers, to, among other things, periodically disclose their privacy policies and practices relating to sharing personal information and, in some cases, enable retail customers to opt out of the sharing of certain personal information with unaffiliated third parties.
Cybersecurity risks have significantly increased in recent years, in part, because of the proliferation of new technologies, the use of the internet and telecommunications technologies to exchange information and conduct transactions, and the increased sophistication and activities of computer hackers, organized crime, terrorists, and other external parties, including foreign state and state-sponsored actors.
Cybersecurity risks have significantly increased in recent years, in part, because of the proliferation of new technologies, the use of the internet and telecommunications technologies to exchange information and conduct transactions, and the increased sophistication and activities of computer hackers, organized crime, terrorists, and malicious insiders, and other threat actors, including malicious foreign state and state-sponsored actors.
Risks relating to our business. An overall decline in economic activity could have a material adverse effect on the financial condition and results of operations of our business.
An overall decline in economic activity could have a material adverse effect on the financial condition and results of operations of our business.
We derive a significant portion of our commission revenues from a limited number of Carriers, the loss of which would result in additional expense and loss of market share. In 2024, three Carriers represented more than 10% of total revenue at 19%, 15%, and 10%. In 2023, two Carriers represented more than 10% of total revenue at 16% and 12%.
We derive a significant portion of our commission revenues from a limited number of Carriers, the loss of which would result in additional expense and loss of market share. In 2025, two Carriers represented more than 10% of total revenue at 19% and 13%. In 2024, three Carriers represented more than 10% of total revenue at 19%, 15%, and 10%.
We have debt outstanding that could adversely affect our financial flexibility and subjects us to restrictions and limitations that could significantly impact our ability to operate our business. As of December 31, 2024, we had total consolidated debt outstanding of approximately $93.1 million, collateralized by substantially all of the Company’s assets, including rights to future commissions.
We have debt outstanding that could adversely affect our financial flexibility and subjects us to restrictions and limitations that could significantly impact our ability to operate our business. As of December 31, 2025, we had total consolidated debt outstanding of approximately $298.5 million collateralized by substantially all of the Company’s assets, including rights to future commissions.
These requirements apply to transfers of information among our affiliates, as well as to transactions we enter into with third-party vendors.
These requirements apply to transfers of information among our affiliates, as well as to transactions we enter into with third-party service providers and vendors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur General Counsel meets with the board of directors on at least a quarterly basis to review and discuss our cybersecurity and other information technology strategies and policies. In 2024, we did not identify any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition.
Biggest changeIn particular, the board of directors has entrusted the audit committee with oversight of our cybersecurity program and related risks. Our General Counsel meets with the audit committee of the board of directors on at least a quarterly basis to review and discuss our cybersecurity and other information technology strategies and policies.
Our cybersecurity team and cybersecurity committees utilize various tools and services to identify, monitor, assess and manage actual cybersecurity risk, including risks from cybersecurity threats associated with the use of third-party vendors and service providers.
Our cybersecurity team and cybersecurity committees utilize various tools and services designed to identify, monitor, assess and manage actual cybersecurity risk, including risks from cybersecurity threats associated with the use of third-party vendors and service providers.
Management, including our Managing Director, IT Security & Compliance and our cybersecurity committees, updates our General Counsel on the Company’s cybersecurity programs, material cybersecurity risks and mitigation strategies on a monthly basis.
Management, including our Director, IT Security & Compliance and our cybersecurity committees, updates our General Counsel on the Company’s cybersecurity programs, material cybersecurity risks and mitigation strategies on a monthly basis.
Our board of directors has ultimate oversight responsibility for our overall enterprise risk management and is responsible for ensuring that management has processes in place designed to identify, monitor and evaluate cybersecurity risks to which the Company is exposed and to implement processes and programs to manage cybersecurity risks and mitigate cybersecurity incidents.
Our board of directors has ultimate oversight responsibility for our overall enterprise risk management and is responsible for ensuring that management has processes in place designed to identify, monitor and evaluate cybersecurity risks to which the Company is exposed and to implement processes and programs to manage cybersecurity risks and mitigate and remediate cybersecurity threats and incidents.
Our General Counsel provides quarterly cybersecurity reports to the board of directors that cover, among other topics, third-party assessments of the Company’s cybersecurity programs and any updates to the Company’s cybersecurity programs and mitigation strategies, and other cybersecurity developments.
Our General Counsel provides quarterly cybersecurity reports to the audit committee of the board of directors that cover, among other topics, third-party assessments of the Company’s cybersecurity programs and any updates to the Company’s cybersecurity programs and mitigation strategies, and other cybersecurity developments.
The cybersecurity team also conducts regular vulnerability assessments, and our cybersecurity and risk management teams perform annual risk assessments. We utilize a third party to conduct regular risk assessments of our new and existing third-party services and providers and a separate vendor performs penetration testing annually.
The cybersecurity team also conducts regular vulnerability assessments, and our cybersecurity and risk management teams perform annual risk assessments. We utilize a third party to conduct regular risk assessments of our new and existing third-party vendors and service providers and a separate vendor performs penetration testing annually.
Our General Counsel will also provide updates on cybersecurity threats and incidents to the board of directors as part of our incident response processes, based on management’s assessment of risk.
Our General Counsel will also provide updates on cybersecurity threats and incidents to the audit committee and/or the board of directors as part of our incident response processes, based on management’s assessment of risk.
Our cybersecurity programs are under the direction of our Managing Director, IT Security & Compliance, who directs our cybersecurity team and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents.
Our cybersecurity programs are under the direction of our Director, IT Security & Compliance, who directs our cybersecurity team and oversees the prevention, detection, mitigation, and remediation of cybersecurity threats and incidents.
Our cybersecurity team, led by our Managing Director, IT Security & Compliance, is responsible for assessing and maintaining our cybersecurity risk management program. We also have two cybersecurity committees, which consist of cross-functional teams comprised of key business leaders and key technical leaders in the Company as well as the heads of our legal, governance, risk and compliance functions.
Our cybersecurity team, led by our Director, IT Security & Compliance, is responsible for assessing and maintaining our cybersecurity risk management program. We also have a cybersecurity committee, comprised of cross- 47 functional key business and technical leaders in the Company as well as the heads of our legal, governance, risk and compliance functions.
As discussed above, we also have two cybersecurity committees which consist of cross-functional teams comprised of 45 key business leaders and key technical leaders in the Company as well as the heads of our governance, risk and compliance functions. Each of our cybersecurity committees meets monthly to address cybersecurity risks.
As discussed above, we also have a cybersecurity committee, which consists of cross-functional key business and technical leaders in the Company as well as the heads of our governance, risk and compliance functions. Our cybersecurity committee meets monthly to address cybersecurity risks and evaluate our cybersecurity program.
However, despite our efforts, we cannot eliminate all risks from cybersecurity threats or incidents, or provide assurances that we have not experienced an undetected cybersecurity incident. For more information about these risks, please see “Risk Factors – Risks relating to intellectual property, data privacy and cybersecurity” in this annual report on Form 10-K.
For more information about these risks, please see “Risk Factors – Risks relating to intellectual property, data privacy and cybersecurity” in this annual report on Form 10-K. 48
Our Managing Director, IT Security & Compliance, is a Certified Information Systems Security Professional (CISSP) with a Master's in Cybersecurity and Information Assurance (MS-CIA) from WGU, with additional certifications in cybersecurity, networking, and other IT-related topics, and over 16 years of experience in cybersecurity.
Our Director, IT Security & Compliance has over 25 years of experience in IT systems architecture, application development, and cybersecurity, and is certified in software development, systems, AI and machine learning, database, and networking.
Added
In 2025, we did not identify any cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats or incidents, or provide assurances that we have not experienced an undetected cybersecurity incident.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Our headquarters is located in leased offices in Westlake, Texas. The lease consists of approximately 230,000 square feet and expires in June 2033. As of December 31, 2024, our company-owned insurance brokerage business leases approximately 481,000 square feet of office space in Texas, Nevada, Colorado, Illinois, North Carolina, Florida, Arizona and Ohio under 14 leases.
Biggest changeItem 2. Properties Our headquarters is located in leased offices in Westlake, Texas. The Westlake lease consists of approximately 230,000 square feet and expires in June 2033.
These offices are typically located in small office parks, generally with lease terms of five to ten years. We believe that all of our properties and facilities are well maintained.
These offices are typically located in small office parks, generally with lease terms of five to ten years. We believe that all of our properties and facilities are adequate to support our current needs. In the future, we may need to purchase, construct, or lease additional facilities as our operations continue to expand.
Added
As of December 31, 2025, our company-owned insurance brokerage business leases approximately 512,000 square feet of office space in Texas, Arizona, Colorado, Florida, Illinois, Indiana, Minnesota, North Carolina, Ohio, Tennessee, Virginia, and Washington under 18 leases, 4 of which were not yet operational as of December 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine safety disclosures Not applicable. 46 PART II
Biggest changeMine safety disclosures Not applicable. 49 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSubject to the terms of the Amended and Restated Limited Liability Company Agreement of Goosehead Financial, LLC, dated as of May 1, 2018, each LLC Unit is redeemable (along with the cancellation of the corresponding share of Class B common stock) for one share of Class A common stock Stock Performance Graph The following graph and table illustrate the total return from May 1, 2018 through December 31, 2024 for (i) our Class A common stock, (ii) the Standard and Poor's 500 Index, and (iii) the Russell 2000 Index, assuming an investment of $100 on May 1, 2018 including the reinvestment of dividends. 5/1/2018 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 GSHD $ 100 $ 178 $ 291 $ 865 $ 914 $ 241 $ 533 $ 753 S&P 500 100 96 126 149 192 157 199 249 Russell 2000 100 88 111 133 153 121 142 158 48 Securities Authorized for Issuance Under Equity Incentive Plans The following table provides information about our compensation plans under which our Class A Common Stock is authorized for issuance, as of December 31, 2024: Number of securities to be issued upon exercise of outstanding options (in thousands) 3,263 Weighted-average exercise price of outstanding options 68.50 Number of securities remaining available for future issuances under equity compensation plans (in thousands) 4,242 Number of securities issued in connection with the Employee Stock Purchase Plan 60 Number of securities remaining available for future issuance in connection with the Employee Stock Purchase Plan 22 Issuer Purchases of Equity Securities Share repurchase activity during the three months ended December 31, 2024 was as follows (in thousands, except for average price paid per share): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 — $— — $36,837 November 1, 2024 - November 30, 2024 — $— — $36,837 December 1, 2024 - December 31, 2024 — $— — $36,837 Total — — (1) On April 24, 2024, our board of directors approved a share repurchase program with authorization to purchase up to $100 million of our Class A common stock through March 31, 2025 .
Biggest changeStock Performance Graph The following graph and table illustrate the total return from December 31, 2020 through December 31, 2025 for (i) our Class A common stock, (ii) the Standard and Poor's 500 Index, and (iii) the Russell 2000 Index, assuming an investment of $100 on December 31, 2020, including the reinvestment of dividends. 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 GSHD $ 100 $ 106 $ 28 $ 62 $ 87 $ 63 S&P 500 100 129 105 133 166 196 Russell 2000 100 115 91 107 119 134 Securities Authorized for Issuance Under Equity Incentive Plans The following table provides information about our compensation plans under which our Class A Common Stock is authorized for issuance, as of December 31, 2025: Number of securities to be issued upon exercise of outstanding options (in thousands) 3,436 Weighted-average exercise price of outstanding options 76.11 Number of securities remaining available for future issuances under equity compensation plans (in thousands) 5,260 Number of securities issued in connection with the Employee Stock Purchase Plan (in thousands) 65 Number of securities remaining available for future issuance in connection with the Employee Stock Purchase Plan (in thousands) 26 51 Issuer Purchases of Equity Securities Share repurchase activity during the three months ended December 31, 2025 was as follows (in thousands, except for average price paid per share): Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2025 - October 31, 2025 190 $70.92 190 $27,366 November 1, 2025 - November 30, 2025 133 $68.19 133 $18,300 December 1, 2025 - December 31, 2025 — $— — $18,300 Total 323 323 (1) On April 23, 2025, our board of directors approved a share repurchase program with authorization to purchase up to $100 million of our Class A common stock through May 1, 2026.
In addition, on January 31, 2025, a one-time special cash dividend of $5.91 per share of Class A common stock was paid to holders of record of our Class A 47 common stock as of the close of business on January 21, 2025. $1.22 of the special dividend was funded by cash received by us from prior tax distributions from Goosehead Financial, LLC that were in excess of the corporate income taxes payable by us.
In addition, on January 31, 2025, a one-time special cash dividend of $5.91 per share of Class A common stock was paid to holders of record of our Class A 50 common stock as of the close of business on January 21, 2025. $1.22 of the special dividend was funded by cash received by us from prior tax distributions from Goosehead Financial, LLC that were in excess of the corporate income taxes payable by us.
Holders of Record As of January 31, 2025, there were 6 shareholders of record of our Class A common stock. The number of record holders does not include persons who held shares of our Class A common stock in nominee or "street name" accounts through brokers.
Holders of Record As of January 31, 2026, there were 6 shareholders of record of our Class A common stock. The number of record holders does not include persons who held shares of our Class A common stock in nominee or "street name" accounts through brokers.
Use of Proceeds Not applicable. Item 6. Reserved 49
Use of Proceeds Not applicable. Item 6. Reserved 52
As of January 31, 2025, there were 38 shareholders of record of our Class B common stock.
As of January 31, 2026, there were 41 shareholders of record of our Class B common stock.
Added
Subject to the terms of the Amended and Restated Limited Liability Company Agreement of Goosehead Financial, LLC, dated as of May 1, 2018, each LLC Unit is redeemable (along with the cancellation of the corresponding share of Class B common stock) for one share of Class A common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAdjusted EPS increased by $0.66 to $1.99 for the year ended December 31, 2024, from $1.33 for the year ended December 31, 2023, driven by a significant increase in income from operations driven by strong growth in Core Revenue and Contingent Commissions with slower growth in operating expenses and the repurchase of 1,045 thousand Class A shares as part of our share repurchase program. 57 GAAP to Non-GAAP Reconciliations The following table shows a reconciliation of total revenues to other non-GAAP measures of revenue for the years ended December 31, 2024, 2023, and 2022 (in thousands) : Year ended December 31, 2024 2023 2022 Total Revenues $ 314,505 $ 261,276 $ 209,390 Core Revenue: Renewal Commissions (1) $ 74,938 $ 70,730 $ 57,543 Renewal Royalty Fees (2) 138,942 107,524 77,346 New Business Commissions (1) 24,608 23,411 24,126 New Business Royalty Fees (2) 27,122 23,168 18,244 Agency Fees (1) 8,127 8,174 10,912 Total Core Revenue 273,737 233,007 188,171 Cost Recovery Revenue: Initial Franchise Fees (2) 6,620 11,238 10,853 Interest Income 932 1,443 1,403 Total Cost Recovery Revenue 7,552 12,681 12,256 Ancillary Revenue: Contingent Commissions (1) 31,385 13,746 7,684 Other Income (2) 1,831 1,843 1,279 Total Ancillary Revenue 33,216 15,588 8,963 Total Revenues $ 314,505 $ 261,276 $ 209,390 (1) Renewal Commissions, New Business Commissions, Agency Fees, and Contingent Commissions are included in "Commissions and agency fees" as shown on the Consolidated statements of operations.
Biggest changeGAAP to Non-GAAP Reconciliations The following table shows a reconciliation of total revenues to other non-GAAP measures of revenue for the years ended December 31, 2025, 2024, and 2023 (in thousands) : Year ended December 31, 2025 2024 2023 Total Revenues $ 365,304 $ 314,505 $ 261,276 Core Revenue: Renewal Commissions (1) $ 78,621 $ 74,938 $ 70,730 Renewal Royalty Fees (2) 170,767 138,942 107,524 New Business Commissions (1) 27,985 24,608 23,411 New Business Royalty Fees (2) 30,153 27,122 23,168 Agency Fees (1) 10,404 8,127 8,174 Total Core Revenue 317,930 273,737 233,007 Cost Recovery Revenue: Initial Franchise Fees (2) 5,594 6,620 11,238 Interest Income 670 932 1,443 Total Cost Recovery Revenue 6,264 7,552 12,681 Ancillary Revenue: Contingent Commissions (1) 38,376 31,385 13,746 Other Income (2) 2,734 1,831 1,843 Total Ancillary Revenue 41,110 33,216 15,588 Total Revenues $ 365,304 $ 314,505 $ 261,276 (1) Renewal Commissions, New Business Commissions, Agency Fees, and Contingent Commissions are included in "Commissions and agency fees" as shown on the Consolidated statements of operations.
Our primary cash flow activities involve: (1) generating cash flow from Commissions and Fees, which largely includes New Business Commissions, Renewal Commissions and Agency Fees; (2) generating cash flow from Franchise Revenue operations, which largely includes Royalty Fees and Initial Franchise Fees; (3) borrowings, interest payments and repayments under our credit agreement; (4) issuing shares of Class A common stock.
Our primary cash flow activities involve: (1) generating cash flow from Commissions and Fees, which largely includes New Business Commissions, Renewal Commissions and Agency Fees; (2) generating cash flow from Franchise Revenue operations, which largely includes Royalty Fees and Initial Franchise Fees; (3) borrowings, interest payments and repayments under our credit agreement; and (4) issuing shares of Class A common stock.
Our primary liquidity needs comprise cash to (1) provide capital to facilitate the organic growth of our business, (2) pay operating expenses, including cash compensation to our employees, (3) make payments under the tax receivable agreement, (4) pay interest and principal due on borrowings under our Credit Agreement (5) pay income taxes, (6) repurchase shares under our Share Repurchase Program, and (7) when deemed advisable by our board of directors, pay dividends.
Our primary liquidity needs comprise cash to (1) provide capital to facilitate the organic growth of our business, (2) pay operating expenses, including cash compensation to our employees, (3) make payments under the tax receivable agreement, (4) pay interest and principal due on borrowings under our Credit Agreement (5) pay income taxes, (6) repurchase shares under our Share Repurchase Program, and (7) pay dividends when deemed advisable by our board of directors.
This revenue stream has predictably converted into higher-margin Renewal Commissions historically, and we expect this to continue moving forward. • New Business Royalty Fees - predictable based on franchise count and consistent ramp-up of franchises, but lower margin than Renewal Royalty Fees because the Company only receives a royalty fee of 20% on the commissions paid by the Carrier in the first term of every policy and higher back-office costs associated with policies in their first term.
This revenue stream has predictably converted into higher-margin Renewal Commissions historically, and we expect this to continue moving forward. • New Business Royalty Fees - predictable based on franchise agent count and consistent ramp-up of franchises, but lower margin than Renewal Royalty Fees because the Company only receives a royalty fee of 20% on the commissions paid by the Carrier in the first term of every policy and higher back-office costs associated with policies in their first term.
We historically accounted, and anticipate that 63 we will continue to account for the effects of these increases in tax basis and associated payments under the tax receivable agreement arising from redemptions or exchanges as follows: • we will record an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the redemption or exchange; • to the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis that will consider, among other things, our expectation of future earnings, we will reduce the deferred tax asset with a valuation allowance; and • we will record 85% of the estimated realizable tax benefit (which is the recorded deferred tax asset less any recorded valuation allowance) as an increase to the liability due under the tax receivable agreement and the remaining 15% of the estimated realizable tax benefit as an increase to additional paid-in capital.
We historically accounted, and anticipate that we will continue to account for the effects of these increases in tax basis and associated payments under the tax receivable agreement arising from redemptions or exchanges as follows: • we will record an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the redemption or exchange; • to the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis that will consider, among other things, our expectation of future earnings, we will reduce the deferred tax asset with a valuation allowance; and 67 • we will record 85% of the estimated realizable tax benefit (which is the recorded deferred tax asset less any recorded valuation allowance) as an increase to the liability due under the tax receivable agreement and the remaining 15% of the estimated realizable tax benefit as an increase to additional paid-in capital.
These fees are fully 52 earned and non-refundable when a franchise attends our initial training and are recognized in revenue over the life of the franchise agreement. • Interest Income - like Initial Franchise Fees, interest income is a Cost Recovery Revenue stream that reimburses the Company for those franchises on a payment plan.
These fees are fully earned and non-refundable when a franchise attends our initial training and are recognized in revenue over the life of the franchise agreement. • Interest Income - like Initial Franchise Fees, interest income is a Cost Recovery Revenue stream that reimburses the Company for those franchises on a payment plan.
Contingent commissions revenue is recognized over time as the Company completes its performance obligations as the underlying policies are placed and other contractual obligations are met. Certain costs to obtain or fulfill a contract are capitalized. The Company capitalizes the incremental costs to obtain franchise contracts.
Contingent commissions revenue is 68 recognized over time as the Company completes its performance obligations as the underlying policies are placed and other contractual obligations are met. Certain costs to obtain or fulfill a contract are capitalized. The Company capitalizes the incremental costs to obtain franchise contracts.
Our board of directors may change our dividend policy at any time. See “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Dividend policy".
Our board of directors may change our dividend policy at any 66 time. See “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Dividend policy".
Employee compensation and benefits is our largest expense and consists of (a) base compensation comprising salary, bonuses and benefits paid and payable to employees, and (b) stock option awards for our senior employees.
Employee compensation and benefits is our largest expense and consists of (a) base compensation comprising salary, bonuses, commissions, and benefits paid and payable to employees, and (b) stock option awards for our senior employees.
We also incur expenses as a public company, including public reporting obligations, proxy statements, stockholder meetings, stock exchange fees and transfer agent fees. 51 Effects of the reorganization on our corporate structure Goosehead Insurance, Inc. was formed for the purpose of the Offering and has engaged to date only in activities related to Goosehead Financial, LLC.
We also incur expenses as a public company, including public reporting obligations, proxy statements, stockholder meetings, stock exchange fees and transfer agent fees. 54 Effects of the reorganization on our corporate structure Goosehead Insurance, Inc. was formed for the purpose of the Offering and to date has only engaged in activities related to Goosehead Financial, LLC.
GAAP, and these provide a measure against which our businesses may be assessed in the future. Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited. These financial measures should be viewed in addition to, not in lieu of, the consolidated financial statements for the year ended December 31, 2024.
GAAP, and these provide a measure against which our businesses may be assessed in the future. Our methods of calculating these measures may differ from those used by other companies and therefore comparability may be limited. These financial measures should be viewed in addition to, not in lieu of, the consolidated financial statements for the year ended December 31, 2025.
Ancillary Revenue: With certain Carriers, the Company has the opportunity to earn additional revenue in the form of Contingent Commissions, typically based on the volume, growth, and loss ratio of the business placed with the select Carriers. The Contingent Commissions are extremely difficult to predict in any given period and can vary greatly from year to year.
Ancillary Revenue: With certain Carriers, the Company has the opportunity to earn additional revenue in the form of Contingent Commissions, typically based on the volume, growth, and loss ratios of the business placed with the select Carriers. The Contingent Commissions are extremely difficult to predict in any given period and can vary greatly from year to year.
We will continue to market actively for new franchises in our established markets, which represent over 98% of the U.S. population. We are now licensed with the necessary state departments of commerce and insurance and registered as a franchisor in all 50 states in the U.S. • Continued retention of existing Book of Business.
We will continue to market actively for new franchises in our established markets, which represent over 97% of the U.S. population. We are licensed with the necessary state departments of commerce and insurance and registered as a franchisor in all 50 states in the U.S. • Continued retention of existing Book of Business.
The following discussion contains references to the years ended December 31, 2024, December 31, 2023, and December 31, 2022. See Goosehead’s Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of the changes from year ended December 31, 2022 to the year ended December 31, 2023.
The following discussion contains references to the years ended December 31, 2025, December 31, 2024, and December 31, 2023. See Goosehead’s Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of the changes from year ended December 31, 2023 to the year ended December 31, 2024.
These deferred costs are amortized over the expected life of the underlying franchise fee and are included in Other assets in the Company's consolidated balance sheet as of December 31, 2024.
These deferred costs are amortized over the expected life of the underlying franchise fee and are included in Other assets in the Company's consolidated balance sheet as of December 31, 2025.
Contractual obligations, commitments and contingencies The following table represents our contractual obligations as of December 31, 2024, aggregated by type.
Contractual obligations, commitments and contingencies The following table represents our contractual obligations as of December 31, 2025, aggregated by type.
In addition to monthly lease payments, the lease agreements require the Company to reimburse the lessors for its portion of operating costs each year. Rent expense was $7.5 million, $7.8 million, and $7.0 million for years ending December 31, 2024, 2023, and 2022.
In addition to monthly lease payments, the lease agreements require the Company to reimburse the lessors for its portion of operating costs each year. Rent expense was $6.8 million, $7.5 million, and $7.8 million for years ending December 31, 2025, 2024, and 2023.
The following table shows Total Written Premium by channel for the years ended 2024 and 2023 (in thousands) .
The following table shows Total Written Premium by channel for the years ended 2025 and 2024 (in thousands) .
Our retention rate is even stronger on a premium basis, driven from increases in premium taken by our Carriers and additional coverages sold by our sales agents. In 2024, we retained 98% of the premiums we distributed in 2023, a decrease from premium retention in 2023 of 101%.
Our retention rate is even stronger on a premium basis, driven from increases in premium taken by our Carriers and additional coverages sold by our sales agents. In 2025, we retained 90% of the premiums we distributed in 2024, a decrease from premium retention in 2024 of 98%.
We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of items that do not relate to underlying business performance.
Adjusted EBITDA Adjusted EBITDA is a supplemental measure of our performance. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of items that do not relate to underlying business performance.
The increase in revenue from Renewal Royalty Fees was primarily attributable to an increase in the number of policies in the renewal term from December 31, 2023 to December 31, 2024, assisted by client retention of 84%, and premium rate increases.
The increase in revenue from Renewal Royalty Fees was primarily attributable to an increase in the number of policies in the renewal term from December 31, 2024 to December 31, 2025, assisted by client retention of 85% and premium rate increases.
We believe that Total Written Premium is an appropriate measure of operating performance because it reflects growth of our business relative to other insurance agencies. For the year ended December 31, 2024, we had $3.8 billion in Total Written Premium, representing a 29% increase, compared to $3.0 billion for the year ended December 31, 2023.
We believe that Total Written Premium is an appropriate measure of operating performance because it reflects growth of our business relative to other insurance agencies. For the year ended December 31, 2025, we had $4.4 billion in Total Written Premium, representing a 17% increase, compared to $3.8 billion for the year ended December 31, 2024.
Furthermore, payments under the tax receivable agreement give rise to additional tax benefits and therefore additional payments under the tax receivable agreement itself. See "Item 13. Certain relationships and related transactions, and director independence". Certain income statement line items Revenues In 2024, revenue increased by 20% to $314.5 million from $261.3 million in 2023.
Furthermore, payments under the tax receivable agreement give rise to additional tax benefits and therefore additional payments under the tax receivable agreement itself. See "Item 13. Certain relationships and related transactions, and director independence". Certain income statement line items Revenues In 2025, revenue increased by 16% to $365.3 million from $314.5 million in 2024.
NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. For example, if 50% of respondents were Promoters and 10% were Detractors, NPS is a 40. NPS is a useful gauge of the loyalty of client relationships and can be compared across companies and industries.
NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters. For example, if 50% of respondents were Promoters and 10% were Detractors, NPS is a 40. NPS is a useful gauge of the loyalty of client relationships and can be compared across companies and industries. NPS is calculated on a trailing twelve-month basis.
(5) See "Item 7. Management's discussion and analysis of financial condition and results of operation - Tax receivable agreement." Critical accounting policies and estimates We prepare our consolidated financial statements in accordance with GAAP.
Management's discussion and analysis of financial condition and results of operation - Tax receivable agreement." Critical accounting policies and estimates We prepare our consolidated financial statements in accordance with GAAP.
Total Written Premium growth, which is the best indicator of future revenue growth, increased 29% to $3.8 billion in 2024 from $3.0 billion in 2023. Total Written Premiums Placed drive our current and future Core Revenue and give us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions.
Total Written Premium growth, which is the best indicator of future revenue growth, increased 17% to $4.4 billion in 2025 from $3.8 billion in 2024. Total Written Premiums Placed drive our current and future Core Revenue and give us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions.
We believe that Policies in Force is an appropriate measure of operating performance because it reflects growth of our business relative to other insurance agencies. As of December 31, 2024, we had 1,674,000 Policies in Force compared to 1,486,000 as of December 31, 2023, representing a 13% increase.
We believe that Policies in Force is an appropriate measure of operating performance because it reflects growth of our business relative to other insurance agencies. As of December 31, 2025, we had 1,900,000 Policies in Force compared to 1,674,000 as of December 31, 2024, representing a 14% increase.
The majority of our investments are not capitalizable and are recognized immediately on our statement of operations, while investments in software are capitalized as intangible assets and recognized as expense over the useful life of the software. Employee compensation and benefits.
The majority of our investments in people, such as in sales and service functions, are not capitalizable and are recognized immediately on our statement of operations, while investments in software are capitalized as intangible assets and recognized as expense over the useful life of the software. Employee compensation and benefits.
General and administrative expenses include technology, travel, accounting, legal and other professional fees, placement fees, office expenses, depreciation and other costs associated with our operations. Our occupancy-related costs and professional services expenses, in particular, generally increase or decrease in relative proportion to the number of our employees and the overall size and scale of our business operations.
General and administrative expenses include technology, travel, professional services, marketing and advertising, occupancy, depreciation and other costs associated with our operations. Our occupancy-related costs and professional services expenses, in particular, generally increase or decrease in relative proportion to the number of our employees and the overall size and scale of our business operations.
New Business Revenue New Business Revenue is commissions received from the Carrier, Agency Fees received from clients, and Royalty Fees relating to policies in their first term. For the year ended December 31, 2024, New Business Revenue grew 9% to $59.9 million, from $54.8 million for the year ended December 31, 2023.
New Business Revenue New Business Revenue is commissions received from the Carrier, Agency Fees received from clients, and Royalty Fees relating to policies in their first term. For the year ended December 31, 2025, New Business Revenue grew 15% to $68.5 million, from $59.9 million for the year ended December 31, 2024.
No impairment was recorded for the year ended December 31, 2022. Consolidated results of operations The following is a discussion of our consolidated results of operations for each of the years ended December 31, 2024, 2023, and 2022. This information is derived from our accompanying consolidated financial statements prepared in accordance with GAAP.
Consolidated results of operations The following is a discussion of our consolidated results of operations for each of the years ended December 31, 2025, 2024, and 2023. This information is derived from our accompanying consolidated financial statements prepared in accordance with GAAP.
Because of the lower royalty fees on New Business Commissions as compared to Renewal Commissions, and because we are placing an increasing percentage of Total Written Premium in franchise sales, Core Revenue growth will lag that of Total Written Premium. 53 Cost Recovery Revenue: The Company charges every franchise an Initial Franchise Fee, which, on a cash flow basis, covers our costs to recruit, train, onboard, and support the franchise for the first year.
Because of the lower royalty fees on New Business Commissions as compared to Renewal Commissions, and because we are placing an increasing percentage of Total Written Premium in franchise sales, Core Revenue growth will lag that of Total Written Premium. 56 Cost Recovery Revenue: The Company charges every franchise an Initial Franchise Fee, which, on a cash flow basis, helps to cover our costs to recruit, train, onboard, and to provide ongoing support over the life of the franchise agreement.
All clients are serviced by our world-class service centers, allowing for predictable retention of our Book of Business, which has historically been 84%. All commissions received in corporate sales after the first term of the policy are recognized as Renewal Commissions, which are higher margin due to lower commissions and servicing costs.
All clients are serviced by our world-class service centers, allowing for predictable retention of our Book of Business. Client retention was 85% as of December 31, 2025. All commissions received in corporate sales after the first term of the policy are recognized as Renewal Commissions, which are higher margin due to lower commissions and servicing costs.
Note that totals may not sum due to rounding: Year ended December 31, 2024 2023 2022 Earnings per share - basic (GAAP) $ 1.23 $ 0.59 $ 0.03 Add: equity-based compensation (1) 0.75 0.64 0.52 Add: impairment expense (2) 0.01 0.10 — Adjusted EPS (non-GAAP) $ 1.99 $ 1.33 $ 0.55 (1) Calculated as equity-based compensation divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock outstanding during the period 2024 - [$28.0 million / ( 24.7 million + 12.7 million )] 2023 - [ $24.0 million / ( 23.9 million + 13.8 million )] 2022 - [ $19.6 million / ( 21.0 million + 16.2 million )] (2) Calculated as impairment expense divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock [ $0.3 million / ( 24.7 million + 12.7 million )] for the year ended December 31, 2024 and [ $3.6 million / ( 23.9 million + 13.8 million )].
Note that totals may not sum due to rounding: Year ended December 31, 2025 2024 2023 Earnings per share - basic (GAAP) $ 1.11 $ 1.23 $ 0.59 Add: equity-based compensation (1) 0.63 0.75 0.64 Add: impairment and other gains and losses (2) 0.12 0.01 0.10 Adjusted EPS (non-GAAP) $ 1.86 $ 1.99 $ 1.33 (1) Calculated as equity-based compensation divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock outstanding during the period 2025 - [$23.4 million / ( 25.0 million + 12.2 million )] 2024 - [ $28.0 million / ( 24.7 million + 12.7 million )] 2023 - [ $24.0 million / ( 23.9 million + 13.8 million )] (2) Calculated as impairment and other gains and losses divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock [ $4.5 million / ( 25.0 million + 12.2 million )] for the year ended December 31, 2025, [ $0.3 million / ( 24.7 million + 12.7 million )] for the year ended December 31, 2024, and [ $3.6 million / ( 23.9 million + 13.8 million )] for the year ended December 31, 2023.
This increase in New Business Commissions was primarily attributable to an increase in total sales agent head count to 417 at December 31, 2024, from 300 at December 31, 2023, a 39% increase.
This increase in New Business Commissions was primarily attributable to an increase in total sales agent head count to 489 at December 31, 2025, from 417 at December 31, 2024, a 17% increase.
For the year ended December 31, 2023, $13.7 million of Contingent Commissions were earned (below our historical average as a percentage of premium), of which $6.9 million was still receivable at December 31, 2023.
Most of our Contingent Commissions are earned in the year prior to when they are received. For the year ended December 31, 2023, $13.7 million of Contingent Commissions were earned (below our historical average as a percentage of premium), of which $6.9 million was still receivable at December 31, 2023.
This decrease was primarily attributable to lower franchise turnover and an increase in average cash collections relative to revenue recognized for terminated franchises on the payment plan. Depreciation and amortization Depreciation and amortization increased by $1.2 million, or 13%, to $10.5 million for 2024 from $9.2 million for 2023.
This decrease was primarily attributable to lower franchise turnover and an increase in average cash collections relative to revenue recognized for terminated franchises on the payment plan. Depreciation and amortization Depreciation and amortization increased by $0.8 million, or 8%, to $11.3 million for 2025 from $10.5 million for 2024.
(2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue excluding other non-operating items ($99,911 / $314,505) for the year ended December 31, 2024, ($69,817 / $261,276) for the year ended December 31, 2023, and ($36,654 /$209,390) for the year ended December 31, 2022. 58 The following tables show a reconciliation from basic earnings per share to Adjusted EPS for the years ended December 31, 2024, 2023, and 2022.
(2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue excluding other non-operating items ($113,599 / $365,304), ($99,911 / $314,505), and ($69,817 /$261,276) for the years ended December 31, 2025, 2024, and 2023, respectively. 61 The following tables show a reconciliation from basic earnings per share to Adjusted EPS for the years ended December 31, 2025, 2024, and 2023.
Growth in New Business Revenue is primarily attributable to increases in the number of sales agents, increased New Business Production per Agency, and rising premium rates.
Growth in New Business Revenue is primarily attributable to increases in the number of sales agents, growth in Franchise productivity, and rising premium rates.
For the year ended December 31, 2022, $7.7 million of Contingent Commissions were earned (below our historical average as a percentage of premium), of which $7.4 million was still receivable at December 31, 2022.
For the year ended December 31, 2025, $38.4 million of Contingent Commissions were earned (above our historical average as a percentage of premium), of which $29.1 million was still receivable at December 31, 2025.
We believe that Core Revenue is an appropriate measure of operating performance because it summarizes all of our revenues from sales of individual insurance policies. Core Revenue increased by $40.7 million, or 17%, to $273.7 million for the year ended December 31, 2024 from $233.0 million for the year ended December 31, 2023.
We believe that Core Revenue is an appropriate measure of operating performance because it summarizes all of our revenues from sales of individual insurance policies. 59 Core Revenue increased by $44.2 million, or 16%, to $317.9 million for the year ended December 31, 2025 from $273.7 million for the year ended December 31, 2024.
As of December 31, 2024, as a result of the prior redemptions of LLC Units, we recognized liabilities totaling $160.1 million relating to our obligations under the tax receivable agreement. 65
As of December 31, 2025, as a result of the prior redemptions of LLC Units, we recognized liabilities totaling $171.9 million relating to our obligations under the tax receivable agreement. 69
The following table sets forth our Total Written Premium placed by line of business by amount and as a percentage of our Total Written Premium for the periods indicated ( in thousands ): Year Ended December 31, 2024 2023 2022 Line of business Homeowner $ 2,338,616 61 % $ 1,729,138 58 % $ 1,268,217 57 % Automotive 1,367,578 36 % 1,149,737 39 % 874,505 40 % Commercial 72,804 2 % 57,207 2 % 49,582 2 % Other 32,994 1 % 27,903 1 % 24,719 1 % Total Written Premium $ 3,811,992 100 % $ 2,963,985 100 % $ 2,217,023 100 % 54 Expenses Due to our organic-focused growth strategy, virtually all of our investments in future growth are in people and technology.
The following table sets forth our Total Written Premium placed by line of business by amount and as a percentage of our Total Written Premium for the periods indicated ( in thousands ): Year Ended December 31, 2025 2024 2023 Line of business Homeowner $ 2,816,235 63 % $ 2,338,616 61 % $ 1,729,138 58 % Automotive 1,509,451 34 % 1,367,578 36 % 1,149,737 39 % Commercial 84,916 2 % 72,804 2 % 57,207 2 % Other 37,493 1 % 32,994 1 % 27,903 1 % Total Written Premium $ 4,448,095 100 % $ 3,811,992 100 % $ 2,963,985 100 % 57 Expenses Due to our organic-focused growth strategy, virtually all of our investments in future growth are in people and technology.
Revenue from Contingent Commissions increased by $17.6 million, or 128%, to $31.4 million for the year ended December 31, 2024, from $13.7 million for the year ended December 31, 2023. The increase is primarily attributable to growth in total written premiums as well as receiving and qualifying for additional Contingent Commissions.
Revenue from Contingent Commissions increased by $7.0 million, or 22%, to $38.4 million for the year ended December 31, 2025, from $31.4 million for the year ended December 31, 2024. The increase is primarily attributable to growth in Total Written Premium as well as receiving and qualifying for additional Contingent Commissions.
This increase was primarily attributable to the increase in investments in software development during 2024. Interest expense Interest expenses increased by $0.8 million, or 12%, to $7.3 million for 2024 from $6.6 million for 2023. This increase is attributable to an increase in total borrowings outstanding.
This increase was primarily attributable to the increase in investments in software development during 2025. Interest expense Interest expense increased by $16.5 million, or 224%, to $23.8 million for 2025 from $7.3 million for 2024. This increase is attributable to an increase in total borrowings outstanding.
The following table shows a reconciliation from net income to Adjusted EBITDA for the years ended December 31, 2024, 2023, and 2022 (in thousands) : Year ended December 31, 2024 2023 2022 Net income $ 49,113 $ 23,696 $ 2,630 Interest expense 7,339 6,568 4,999 Depreciation and amortization 10,453 9,244 6,884 Tax expense (benefit) (2,413) 2,692 2,499 Equity-based compensation 27,971 23,989 19,642 Impairment expense 347 3,628 — Other (income) expense 7,101 — — Adjusted EBITDA $ 99,911 $ 69,817 $ 36,654 Net Income Margin (1) 16 % 9 % 1 % Adjusted EBITDA Margin (2) 32 % 27 % 18 % (1) Net Income Margin is calculated as Net Income divided by Total Revenue ($49,113 / $314,505), ($23,696 / $261,276), and ($2,630 / $209,390) for the years ended December 31, 2024, 2023, and 2022.
The following table shows a reconciliation from net income to Adjusted EBITDA for the years ended December 31, 2025, 2024, and 2023 (in thousands) : Year ended December 31, 2025 2024 2023 Net income $ 44,451 $ 49,113 $ 23,696 Interest expense 23,793 7,339 6,568 Depreciation and amortization 11,270 10,453 9,244 Tax expense (benefit) 6,397 (2,413) 2,692 Equity-based compensation 23,375 27,971 23,989 Impairment and other gains and losses 4,505 347 3,628 Other (income) expense (192) 7,101 — Adjusted EBITDA $ 113,599 $ 99,911 $ 69,817 Net Income Margin (1) 12 % 16 % 9 % Adjusted EBITDA Margin (2) 31 % 32 % 27 % (1) Net Income Margin is calculated as Net Income divided by Total Revenue ($44,451 / $365,304), ($49,113 / $314,505), and ($23,696 / $261,276) for the years ended December 31, 2025, 2024, and 2023, respectively.
The following table sets forth our commissions and agency fees by amount and as a percentage of our revenues for the periods indicated ( in thousands ): Year Ended December 31, 2024 2023 2022 Core Revenue: Renewal Commissions $ 74,938 54 % $ 70,730 61 % $ 57,543 57 % New Business Commissions 24,608 18 % 23,411 20 % 24,126 24 % Agency Fees 8,127 6 % 8,174 7 % 10,912 11 % Total 107,673 77 % 102,315 88 % 92,581 92 % Ancillary Revenue: Contingent Commissions 31,385 23 % 13,746 12 % 7,684 8 % Commissions and agency fees $ 139,059 100 % $ 116,061 100 % $ 100,265 100 % Renewal Commissions increased by $4.2 million, or 6%, to $74.9 million for the year ended December 31, 2024 from $70.7 million for the year ended December 31, 2023.
The following table sets forth our commissions and agency fees by amount and as a percentage of our revenues for the periods indicated ( in thousands ): Year Ended December 31, 2025 2024 2023 Core Revenue: Renewal Commissions $ 78,621 50 % $ 74,938 54 % $ 70,730 61 % New Business Commissions 27,985 18 % 24,608 18 % 23,411 20 % Agency Fees 10,404 7 % 8,127 6 % 8,174 7 % Total 117,010 75 % 107,673 77 % 102,315 88 % Ancillary Revenue: Contingent Commissions 38,376 25 % 31,385 23 % 13,746 12 % Commissions and agency fees $ 155,386 100 % $ 139,059 100 % $ 116,061 100 % Renewal Commissions increased by $3.7 million, or 5%, to $78.6 million for the year ended December 31, 2025 from $74.9 million for the year ended December 31, 2024.
Financing activities Net cash used for financing activities was $45.2 million for 2024 as compared to net cash used for financing activities of $18.0 million for 2023.
Financing activities Net cash used for financing activities was $88.3 million for 2025 as compared to net cash used for financing activities of $45.2 million for 2024.
The following table sets forth our franchise revenues by amount and as a percentage of our revenues for the periods indicated ( in thousands ): Year Ended December 31, 2024 2023 2022 Core Revenues: Renewal Royalty Fees $ 138,942 80 % $ 107,524 75 % $ 77,346 72 % New Business Royalty Fees 27,122 16 % 23,168 16 % 18,244 17 % Total 166,064 96 % 130,692 91 % 95,590 89 % Cost Recovery Revenues: Initial Franchise Fees 6,620 4 % 11,238 8 % 10,853 10 % Ancillary Revenues: Other Franchise Revenues 1,831 1 % 1,843 1 % 1,279 1 % Franchise revenues $ 174,514 100 % $ 143,772 100 % $ 107,722 100 % 60 Revenue from Renewal Royalty Fees increased by $31.4 million, or 29%, to $138.9 million, for the year ended December 31, 2024 from $107.5 million for the year ended December 31, 2023.
The following table sets forth our franchise revenues by amount and as a percentage of our revenues for the periods indicated ( in thousands ): Year Ended December 31, 2025 2024 2023 Core Revenues: Renewal Royalty Fees $ 170,767 82 % $ 138,942 80 % $ 107,524 75 % New Business Royalty Fees 30,153 14 % 27,122 16 % 23,168 16 % Total 200,920 96 % 166,064 96 % 130,692 91 % Cost Recovery Revenues: Initial Franchise Fees 5,594 3 % 6,620 4 % 11,238 8 % Ancillary Revenues: Other Franchise Revenues 2,734 1 % 1,831 1 % 1,843 1 % Franchise revenues $ 209,248 100 % $ 174,514 100 % $ 143,772 100 % Revenue from Renewal Royalty Fees increased by $31.8 million, or 23%, to $170.8 million, for the year ended December 31, 2025 from $138.9 million for the year ended December 31, 2024.
Interest Income Interest Income decreased to $0.9 million for 2024 compared to $1.4 million for 2023, driven by fewer franchises on a payment plan in the current period. Expenses Employee compensation and benefits Employee compensation and benefits expenses increased by $20.3 million, or 13%, to $172.9 million for 2024 from $152.6 million for 2023.
Interest Income Interest Income decreased to $0.7 million for 2025 compared to $0.9 million for 2024, driven by fewer franchises on a payment plan in the current period. 64 Expenses Employee compensation and benefits Employee compensation and benefits expenses increased by $23.4 million, or 14%, to $196.4 million for 2025 from $172.9 million for 2024.
Comparative cash flows The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated: Year Ended December 31 2024 2023 2022 Net cash provided by operating activities $ 71,544 $ 50,833 $ 36,033 Net cash used for investing activities (12,419) (19,182) (12,571) Net cash used for financing activities (45,199) (17,991) (23,554) Net increase (decrease) in cash and cash equivalents 13,926 13,660 (92) Cash and cash equivalents, and restricted cash, beginning of period 44,047 30,387 30,479 Cash and cash equivalents, and restricted cash, end of period $ 57,973 $ 44,047 $ 30,387 Operating activities Net cash provided by operating activities was $71.5 million for 2024 as compared to net cash provided by operating activities of $50.8 million for 2023.
Debt" in the consolidated financial statements included herein for a discussion of the Company's credit facilities. 65 Comparative cash flows The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated: Year Ended December 31 2025 2024 2023 Net cash provided by operating activities $ 91,757 $ 71,544 $ 50,833 Net cash used for investing activities (23,543) (12,419) (19,182) Net cash used for financing activities (88,250) (45,199) (17,991) Net increase (decrease) in cash and cash equivalents (20,036) 13,926 13,660 Cash and cash equivalents, and restricted cash, beginning of period 57,973 44,047 30,387 Cash and cash equivalents, and restricted cash, end of period $ 37,937 $ 57,973 $ 44,047 Operating activities Net cash provided by operating activities was $91.8 million for 2025 as compared to net cash provided by operating activities of $71.5 million for 2024.
Adjusted EBITDA increased by $30.1 million, or 43%, to $99.9 million for the year ended December 31, 2024, from $69.8 million for the year ended December 31, 2023, driven by a 17% increase in Core Revenue with slower growth of 13% in employee compensation and benefits excluding equity-based compensation and of 14% in general and administrative expenses excluding impairment as well as a $17.6 million increase in high-margin Contingent Commissions.
Adjusted EBITDA increased by $13.7 million, or 14%, to $113.6 million for the year ended December 31, 2025, from $99.9 million for the year ended December 31, 2024, driven by a 16% increase in Core Revenue, a $7.0 million increase in high-margin Contingent Commissions, partially offset by growth of 19% in employee compensation and benefits excluding equity-based compensation and 15% in general and administrative expenses excluding impairment.
Cost Recovery Revenue: • Initial Franchise Fees - Cost Recovery Revenue stream charged one time per franchise unit that covers the Company's costs to recruit, train, onboard, and support the franchise for the first year.
Cost Recovery Revenue: • Initial Franchise Fees - Cost Recovery Revenue stream charged one time per franchise unit that covers the Company's costs to recruit, train, and onboard the franchisee, and to provide ongoing support over the life 55 of the franchise agreement.
NPS has decreased modestly to 89 as of December 31, 2024 from 92 at December 31, 2023, primarily driven by rapid premium increases offset by our service team's consistent delivery. 55 Client Retention Client Retention is calculated by comparing the number of all clients that had at least one policy in force twelve months prior to the date of measurement and still have at least one policy in force at the date of measurement.
NPS has decreased to 77 as of December 31, 2025 from 89 at December 31, 2024. 58 Client Retention Client Retention is calculated by comparing the number of all clients that had at least one policy in force twelve months prior to the date of measurement and still have at least one policy in force at the date of measurement.
We discuss below the breakdown of our revenue by stream: Years ended December 31, 2024 (in thousands) 2024 2023 2022 % Growth Core Revenue: Renewal Commissions (1) $ 74,938 24 % $ 70,730 27 % $ 57,543 27 % 6 % Renewal Royalty Fees (2) 138,942 44 % 107,524 41 % 77,346 37 % 29 % New Business Commissions (1) 24,608 8 % 23,411 9 % 24,126 12 % 5 % New Business Royalty Fees (2) 27,122 9 % 23,168 9 % 18,244 9 % 17 % Agency Fees (1) 8,127 3 % 8,174 3 % 10,912 4 % (1) % Total Core Revenue 273,737 87 % 233,007 89 % 188,171 89 % 17 % Cost Recovery Revenue: Initial Franchise Fees (2) 6,620 2 % 11,238 4 % 10,853 5 % (41) % Interest Income 932 — % 1,443 1 % 1,403 1 % (35) % Total Cost Recovery Revenue 7,552 2 % 12,681 5 % 12,256 6 % (40) % Ancillary Revenue: Contingent Commissions (1) 31,385 10 % 13,746 5 % 7,684 4 % 128 % Other Income (2) 1,831 1 % 1,843 1 % 1,279 1 % (1) % Total Ancillary Revenue 33,216 11 % 15,588 6 % 8,963 5 % 113 % Total Revenues $ 314,505 100 % $ 261,276 100 % $ 209,390 100 % 20 % (1) Renewal Commissions, New Business Commissions, Agency Fees, and Contingent Commissions are included in "Commissions and agency fees" as shown on the Consolidated statements of operations.
We discuss below the breakdown of our revenue by stream: Years ended December 31, 2025 (in thousands) 2025 2024 2023 % Growth Core Revenue: Renewal Commissions (1) $ 78,621 22 % $ 74,938 24 % $ 70,730 27 % 5 % Renewal Royalty Fees (2) 170,767 46 % 138,942 44 % 107,524 41 % 23 % New Business Commissions (1) 27,985 8 % 24,608 8 % 23,411 9 % 14 % New Business Royalty Fees (2) 30,153 8 % 27,122 9 % 23,168 9 % 11 % Agency Fees (1) 10,404 3 % 8,127 3 % 8,174 3 % 28 % Total Core Revenue 317,930 87 % 273,737 87 % 233,007 89 % 16 % Cost Recovery Revenue: Initial Franchise Fees (2) 5,594 2 % 6,620 2 % 11,238 4 % (15) % Interest Income 670 — % 932 — % 1,443 1 % (28) % Total Cost Recovery Revenue 6,264 2 % 7,552 2 % 12,681 5 % (17) % Ancillary Revenue: Contingent Commissions (1) 38,376 10 % 31,385 10 % 13,746 5 % 22 % Other Income (2) 2,734 1 % 1,831 1 % 1,843 1 % 49 % Total Ancillary Revenue 41,110 11 % 33,216 11 % 15,588 6 % 24 % Total Revenues $ 365,304 100 % $ 314,505 100 % $ 261,276 100 % 16 % (1) Renewal Commissions, New Business Commissions, Agency Fees, and Contingent Commissions are included in "Commissions and agency fees" as shown on the Consolidated statements of operations.
Revenue from Agency Fees decreased by $0.1 million, or 1%, to $8.1 million for the year ended December 31, 2024 from $8.2 million for the year ended December 31, 2023.
Revenue from Agency Fees increased by $2.3 million, or 28%, to $10.4 million for the year ended December 31, 2025 from $8.1 million for the year ended December 31, 2024.
The following table summarizes our results of operations for the years ended December 31, 2024, 2023, and 2022 (in thousands) : Year Ended December 31, 2024 2023 2022 Revenues: Commissions and agency fees $ 139,059 44 % $ 116,061 44 % $ 100,265 48 % Franchise revenues 174,514 56 % 143,772 55 % 107,722 51 % Interest income 932 — % 1,443 1 % 1,403 1 % Total revenues 314,505 100 % 261,276 100 % 209,390 100 % Operating Expenses: Employee compensation and benefits 172,942 68 % 152,604 67 % 133,293 67 % General and administrative expenses 67,069 27 % 62,111 27 % 52,887 27 % Bad debts 2,901 1 % 4,361 2 % 6,198 3 % Depreciation and amortization 10,453 4 % 9,244 4 % 6,884 3 % Total operating expenses 253,365 100 % 228,320 100 % 199,262 100 % Income from operations 61,140 32,956 10,128 Other Income: Interest expense (7,339) (6,568) (4,999) Other (expense) income, net (7,101) — — Income before taxes 46,700 26,388 5,129 Tax expense (benefit) (2,413) 2,692 2,499 Net Income 49,113 23,696 2,630 Less: net income attributable to noncontrolling interests 18,687 9,556 2,065 Net Income attributable to Goosehead Insurance, Inc. $ 30,426 $ 14,140 $ 565 59 Revenues In 2024, revenue increased by 20% to $314.5 million from $261.3 million in 2023.
Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 62 The following table summarizes our results of operations for the years ended December 31, 2025, 2024, and 2023 (in thousands) : Year Ended December 31, 2025 2024 2023 Revenues: Commissions and agency fees $ 155,386 43 % $ 139,059 44 % $ 116,061 44 % Franchise revenues 209,248 57 % 174,514 56 % 143,772 55 % Interest income 670 — % 932 — % 1,443 1 % Total revenues 365,304 100 % 314,505 100 % 261,276 100 % Operating Expenses: Employee compensation and benefits 196,364 67 % 172,942 68 % 152,604 67 % General and administrative expenses 81,379 28 % 67,069 27 % 62,111 27 % Bad debts 1,842 1 % 2,901 1 % 4,361 2 % Depreciation and amortization 11,270 4 % 10,453 4 % 9,244 4 % Total operating expenses 290,855 100 % 253,365 100 % 228,320 100 % Income from operations 74,449 61,140 32,956 Other Income: Interest expense (23,793) (7,339) (6,568) Other income (expense) 192 (7,101) — Income before taxes 50,848 46,700 26,388 Tax expense (benefit) 6,397 (2,413) 2,692 Net Income 44,451 49,113 23,696 Less: net income attributable to noncontrolling interests 16,620 18,687 9,556 Net Income attributable to Goosehead Insurance, Inc. $ 27,831 $ 30,426 $ 14,140 Revenues In 2025, revenue increased by 16% to $365.3 million from $314.5 million in 2024.
We believe Client Retention is useful as a measure of how well Goosehead retains clients year-over-year and minimizes defections. Client Retention decreased modestly to 84% at December 31, 2024 when compared to 86% at December 31, 2023, impacted modestly by premium rate increases yet supported by the service team’s continued focus on delivering highly differentiated service levels.
We believe Client Retention is useful as a measure of how well Goosehead retains clients year-over-year and minimizes defections. Client Retention increased to 85% at December 31, 2025 when compared to 84% at December 31, 2024, reflecting continued execution by our service teams in delivering highly differentiated service levels and moderating premium rate increases.
New Business Commissions increased by $1.2 million, or 5%, to $24.6 million for the year ended December 31, 2024 from $23.4 million for the year ended December 31, 2023.
New Business Commissions increased by $3.4 million, or 14%, to $28.0 million for the year ended December 31, 2025 from $24.6 million for the year ended December 31, 2024.
Revenue recognition Goosehead provides personal and commercial property and casualty insurance brokerage services for its clients through a network of corporate-owned offices and franchise units.
Revenue recognition Goosehead provides personal and commercial property and casualty insurance brokerage services for its clients through a network of corporate-owned offices and franchise units. Goosehead is compensated for the insurance brokerage services that it provides for clients in the form of commission revenue, agency fees, royalty fees, and contingent commissions.
This decrease in net cash used in business investment activities was primarily attributable to a $6.9 million decrease in purchases of books of business and a $3.5 million decrease in cash purchases of property and equipment offset by a $3.5 million increase in cash paid for software development.
This increase in net cash used in business investment activities was primarily attributable to a $4.9 million increase in purchases of books of business and a $4.7 million increase in cash purchases of property and equipment.
Year Ended December 31 % Change 2024 2023 Corporate Sales Total Written Premium $ 765,485 $ 681,025 12 % Franchise Sales Total Written Premium 3,046,507 2,282,959 33 % Total Written Premium $ 3,811,992 $ 2,963,984 29 % Policies in Force Policies in Force means the total count of current (non-cancelled) policies placed with Goosehead’s portfolio of Carriers as of a reported date.
Year Ended December 31 % Change 2025 2024 Corporate Sales Total Written Premium $ 793,735 $ 765,485 4 % Franchise Sales Total Written Premium 3,654,360 3,046,507 20 % Total Written Premium $ 4,448,095 $ 3,811,992 17 % Policies in Force Policies in Force means the total count of current (non-cancelled) policies placed with Goosehead’s portfolio of Carriers as of a reported date.
Total Written Premium Contingent Commission Revenue % of Premium 2022 $ 2,217,023 $ 7,684 0.35 % 2023 2,963,984 13,746 0.46 % 2024 3,811,992 31,385 0.82 % 3-year average 0.54 % Contingent Commissions can vary significantly from year-to-year and should be viewed over several years.
Total Written Premium Contingent Commission Revenue % of Premium 2023 $ 2,963,984 $ 13,746 0.46 % 2024 3,811,992 31,385 0.82 % 2025 4,448,095 38,376 0.86 % 3-year average 0.71 % Contingent Commissions can vary significantly from year-to-year and should be viewed over several years. Since 2023, revenue from Contingent Commissions has represented approximately 0.71% of Total Written Premium at year-end.
If the franchise elects the payment plan, the difference between the pay-in-full and the payment plan amounts is recognized as Interest Income using the interest rate method over the 5-year term of the payment plan.
The Company recognizes revenue over the 10-year life of the contract. For franchises that have elected the payment plan, the difference between the pay-in-full and the payment plan amounts is recognized as Interest Income using the interest rate method over the 5-year term of the payment plan.
Financial Highlights for 2024: • Total revenue increased 20% from 2023 to $314.5 million; Core Revenues*, a non-GAAP measure, of $273.7 million increased 17% over 2023 • Total Written Premiums Placed increased 29% from 2023 to $3.8 billion • Net income increased by $25.4 million from 2023 to $49.1 million, or 16% of total revenues • Adjusted EBITDA*, a non-GAAP measure, increased by 43% from 2023 to $99.9 million, or 32% of total revenues • Basic earnings per share was $1.23 and Adjusted EPS*, a non-GAAP measure, was $1.99 for the year ended December 31, 2024. • Policies in Force increased 13% from December 31, 2023 to 1,674,000 at December 31, 2024. • Corporate sales headcount increased 39% from December 31, 2023 to 417 at December 31, 2024. ◦ As of December 31, 2024, 253 of these corporate sales agents had less than one year of tenure and 164 had greater than one year of tenure. • Operating franchises decreased 10% from December 31, 2023 to 1,103 at December 31, 2024. ◦ As of December 31, 2024, 90 operating franchises had less than one year of tenure and 1,013 operating franchisees had greater than one year of tenure. 50 *Core Revenue, Adjusted EBITDA and Adjusted EPS are non-GAAP measures.
Financial Highlights for 2025: • Total revenue increased 16% from 2024 to $365.3 million; Core Revenues*, a non-GAAP measure, of $317.9 million increased 16% over 2024 • Total Written Premiums Placed increased 17% from 2024 to $4.4 billion • Net income decreased by $4.7 million from 2024 to $44.5 million, or 12% of total revenues • Adjusted EBITDA*, a non-GAAP measure, increased by 14% from 2024 to $113.6 million, or 31% of total revenues • Basic earnings per share was $1.11 and Adjusted EPS*, a non-GAAP measure, was $1.86 for the year ended December 31, 2025. • Policies in Force increased 14% from December 31, 2024 to 1.9 million at December 31, 2025. • Corporate sales headcount increased 17% from December 31, 2024 to 489 at December 31, 2025. ◦ As of December 31, 2025, 261 of these corporate sales agents had less than one year of tenure and 228 had greater than one year of tenure. • Operating franchises decreased 9% from December 31, 2024 to 1,009 at December 31, 2025. ◦ As of December 31, 2025, 87 operating franchises had less than one year of tenure and 922 operating franchisees had greater than one year of tenure. ◦ Total franchise agents increased 1% from December 31, 2024 to 2,113 at December 31, 2025. 53 *Core Revenue, Adjusted EBITDA and Adjusted EPS are non-GAAP measures.
For further discussion regarding our consolidated results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022, refer to "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations," in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
For further discussion regarding our consolidated results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, refer to "Part II, Item 7.
Goosehead is compensated for the insurance brokerage services that it provides for clients in the form of commission revenue, agency fees, royalty fees, and contingent commissions. 64 The transaction price for commissions revenue and royalty fees is set as an estimate of the variable consideration to be received for the current policy term.
The transaction price for commissions revenue and royalty fees is set as an estimate of the variable consideration to be received for the current policy term.
Other income (expense) Other income (expense) consists of remeasurements of our tax receivable agreement liability and interest income.
Other income (expense) Other income (expense) consists of interest earned on cash deposits, loss on debt extinguishment, debt modification expense, and operating remeasurements of our tax receivable agreement liability.
As of December 31, 2024, our unrestricted cash and cash equivalents, and restricted cash was $58.0 million. We have used cash flow from operations primarily to pay compensation and related expenses; general, administrative and other expenses; and debt service. Credit agreement See "Note 9. Debt" in the consolidated financial statements included herein for a discussion of the Company's credit facilities.
As of December 31, 2025, our unrestricted cash and cash equivalents, and restricted cash was $37.9 million. We have used cash flow from operations primarily to pay compensation and related expenses; general, administrative and other expenses; investments in strategic technologies; debt service; special dividends, share repurchases, and distributions to our owners. Credit agreement See "Note 9.
Cost Recovery Revenue decreased by $5.1 million, or 40%, to $7.6 million for the year ended December 31, 2024 from $12.7 million for the year ended December 31, 2023. The primary driver of the decrease was a decrease in terminations of franchises, which resulted in less accelerated recognition of initial franchise fee revenue.
Cost Recovery Revenue decreased by $1.3 million, or 17%, to $6.3 million for the year ended December 31, 2025 from $7.6 million for the year ended December 31, 2024. The primary drivers of the decrease were a decrease in total franchises and fewer franchise terminations during the period, resulting in less acceleration of initial franchise fee revenue.
This decrease is primarily attributable to the deferred tax impact of changes in state apportionment and related state filing requirements. 61 Liquidity and capital resources Historical liquidity and capital resources We have managed our historical liquidity and capital requirements primarily through the receipt of revenues from our corporate and franchise sales.
Liquidity and capital resources Historical liquidity and capital resources We have managed our historical liquidity and capital requirements primarily through the receipt of revenues from our corporate and franchise sales.
Revenue from New Business Royalty Fees increased by $4.0 million, or 17%, to $27.1 million for the year ended December 31, 2024 from $23.2 million for the year ended December 31, 2023. The increase in revenue from New Business Royalty Fees was driven primarily by an increase in New Business Production per Agency and rising premium rates.
The increase in revenue from New Business Royalty Fees was driven primarily by an increase in the number of franchise agents, an increase in Franchise productivity, and rising premium rates. Initial Franchise Fee revenue decreased by $1.0 million, or 15%, to $5.6 million for the year ended December 31, 2025 from $6.6 million for the year ended December 31, 2024.
This decrease in Agency Fees was primarily attributable to slight decreases in both the percentage of policies written where an agency fee was charged and the average amount of an agency fee charge.
This increase in Agency Fees was primarily attributable to increases in the average fee charged as well as an increase in the number of policies written where an agency fee was charged.
Adjusted EBITDA Margin Adjusted EBITDA Margin is Adjusted EBITDA as defined above, divided by total revenue excluding other non-operating items. Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level. For the year ended December 31, 2024, Adjusted EBITDA Margin was 32% compared to 27% for the year ended December 31, 2023.
Adjusted EBITDA Margin is helpful in measuring profitability of operations on a consolidated level. For the year ended December 31, 2025, Adjusted EBITDA Margin was 31% compared to 32% for the year ended December 31, 2024. The Adjusted EBITDA margin decrease came as a result of employee compensation and benefits, excluding equity-based compensation, growing faster than total revenue.
The primary drivers of the increase from December 31, 2023 to December 31, 2024 are more new policies written driven by increases in the number of sales agents and 56 increased New Business Production per Agency, an increase in policies in the renewal term assisted by client retention of 84%, and rising premium rates.
The primary drivers of the increase from December 31, 2024 to December 31, 2025 are an increase in policies in their renewal term, assisted by Client Retention of 85% at December 31, 2025; the release of the constraint on certain variable consideration related to policies placed and made effective in previous periods; more new policies written driven by increases in the number of sales agents and growth in Franchise productivity; and rising premium rates.
Tax expense (benefit) Tax expense (benefit) decreased by $5.1 million, or 190%, to $(2.4) million for 2024 from $2.7 million for 2023.
Tax expense (benefit) Tax expense (benefit) increased by $8.8 million, or 365%, to $6.4 million expense for 2025 from $2.4 million benefit for 2024.
This increase is primarily attributable to an increase in the number of policies in the renewal term from December 31, 2023 to December 31, 2024, assisted by client retention of 84%, and premium rate increases.
This increase is primarily attributable to the recognition of 63 $3.0 million due to the release of the constraint on certain variable consideration related to policies placed and made effective in previous periods as well as an increase in the number of policies in the renewal term from December 31, 2024 to December 31, 2025, assisted by client retention of 85% and premium rate increases.
This increase was primarily attributable to increased spending on software offset by a decrease in asset impairment charges. Bad debts Bad debts decreased by $1.5 million, or 33%, to $2.9 million for 2024 from $4.4 million for 2023.
This increase was primarily attributable to increases in spend on technology and professional services as well as an increase of $4.3 million in asset impairment charges. Bad debts Bad debts decreased by $1.1 million, or 36%, to $1.8 million for 2025 from $2.9 million for 2024.
Adjusted EPS is a useful measure to management because it eliminates the impact of items that do not relate to business performance and helps compare companies that may not have a dual-share class structure.
Adjusted EPS is a useful measure to management because it eliminates the impact of items that do not relate to business performance and helps compare companies that may not have a dual-share class structure. 60 Adjusted EPS decreased by $0.13 to $1.86 for the year ended December 31, 2025, from $1.99 for the year ended December 31, 2024, driven by a decrease in basic EPS and equity-based compensation, partially offset by an increase in impairment and other gains and losses.
For the year ended December 31, 2024, Renewal Revenue grew 20% to $213.9 million, from $178.3 million for the year ended December 31, 2023. Growth in Renewal Revenue was driven primarily by Client Retention of 84% at December 31, 2024, and premium rate increases over the prior year.
Growth in Renewal Revenue was driven primarily by an increase in the number of policies in a renewal term assisted by Client Retention of 85% at December 31, 2025, and premium rate increases over the prior year.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeA hard market is an insurance market characterized by a period of rising premium rates, which, absent other changes, can positively affect commissions earned by insurance agents. The Company represents over 200 insurance carriers, of which 54 provide national coverage. During 2024, three carriers represented more than 10% of total revenue at 19%, 15%, and 10%.
Biggest changeA hard market is an insurance market characterized by a period of rising premium rates, which, absent other changes, can positively affect commissions earned by insurance agents. The Company represents over 200 insurance carriers, of which 76 provide national coverage. During 2025, two carriers represented more than 10% of total revenue at 19% and 13%.
As of December 31, 2024, we had $93.1 million of borrowings outstanding under our Credit Agreement, which bears interest on a floating basis tied to SOFR and therefore is subject to changes in the associated interest expense. The effect of an immediate hypothetical 10% change in interest rates would not have a material effect on our consolidated financial statements. 66
As of December 31, 2025, we had $298.5 million of borrowings outstanding under our Credit Agreement, which bears interest on a floating basis tied to SOFR and therefore is subject to changes in the associated interest expense. The effect of an immediate hypothetical 10% change in interest rates would not have a material effect on our consolidated financial statements. 70

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