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Goosehead Insurance, Inc. Announces Third Quarter 2022 Results

Goosehead Insurance, Inc.
Goosehead Insurance, Inc.

– Total and Core Revenue Each Increased 38% and 39% over the Prior Year, Respectively 
 Total Written Premium Increased 42% to $616 million 
 Net Income of $3.0 million, decreased $2.3 million from a Year Ago 
 Adjusted EBITDA of $11.0 million was up 67% over the Prior-Year Period –
 Adjusted EBITDA Margin Increased over 320 Basis Points to 19% in the Third Quarter –
 Operating Franchises Increased 23% and Corporate Agent headcount decreased 18%

WESTLAKE, Texas, Oct. 26, 2022 (GLOBE NEWSWIRE) -- Goosehead Insurance, Inc. (“Goosehead” or the “Company”) (NASDAQ: GSHD), a rapidly growing independent personal lines insurance agency, today announced results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

  • Total Revenues grew organically 38% over the prior-year period to $57.7 million in the third quarter of 2022

  • Third quarter Core Revenues* of $51.9 million increased 39% over the prior-year period

  • Third quarter net income of $3.0 million decreased 43%, EPS of $0.09 per share decreased 55% and adjusted EPS* of $0.24 per share declined 8%, over the prior-year period

  • Adjusted EBITDA* grew 67% over the prior-year period to $11.0 million

  • Adjusted EBITDA Margin* increased 3 points over the prior-year period to 19%.

  • Total written premiums placed for the third quarter increased 42% over the prior-year period to $616 million

  • Policies in force grew 31% from the prior-year period to approximately 1,238,000

  • Corporate sales headcount of 411 was down 18% year-over-year

  • Total franchises increased 17% compared to the prior-year period to 2,287; operating franchises grew 23% compared to the prior-year period to 1,403

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*Core Revenue, Adjusted EPS, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP measures. Reconciliations of Core Revenue to total revenues, Adjusted EBITDA to net income and Adjusted EPS to basic earnings per share, the most directly comparable financial measures presented in accordance with GAAP, are set forth in the reconciliation table accompanying this release.

“We delivered excellent growth in revenue and earnings for the third quarter, further validating the strength and consistency of our platform in an increasingly challenging macro-economic environment,” stated Mark E. Jones, Chairman and CEO. “In the third quarter premiums grew 42% with some increasing benefit from auto and home rates that could continue through this year and into 2023 given industry loss trends. Total revenues increased 38%, core revenues grew 39% and Adjusted EBITDA increased 67% with EBITDA margin up over 320 basis points. We are already beginning to see the emerging benefits from optimizing our resources to emphasize growth of our Franchise distribution and drive improvement in productivity of Corporate distribution. Franchise launches were up 57% in the quarter while the quality of our Franchises and pipeline continues to improve. We are ramping up our efforts to help an increasing number of franchises scale operations through producer additions and we are creating more opportunity for our highest quality corporate agents to become franchisees. We expect these efforts to result in continued strong growth of our approximately 2,500 total sales agents across both Corporate and Franchise distribution as we continue our march towards industry leadership in US Personal Lines.”

Third Quarter 2022 Results
For the third quarter of 2022, revenues were $57.7 million, an increase of 38% compared to the corresponding period in 2021. Core Revenues, a non-GAAP measure which excludes contingent commissions, initial franchise fees, interest income, and other income, were $51.9 million, a 39% increase from $37.2 million in the prior-year period. Core Revenues are the most reliable revenue stream for the Company, consisting of New Business Commissions, Agency Fees, New Business Royalty Fees, Renewal Commissions, and Renewal Royalty Fees. Core Revenue growth was driven by growth in operating franchises, rising premium rates, and strong client retention of 88%. The Company grew total written premiums, which we consider to be the leading indicator of future revenue growth, by 42% in the third quarter.

Total operating expenses, excluding equity-based compensation, depreciation and amortization, for the third quarter of 2022 were $46.7 million, up 33% from $35.1 million in the prior-year period. The increase from the prior period was due to larger employee compensation and benefits expenses related to investments in franchise recruiters, service agents, and information systems. Equity-based compensation increased to $5.4 million for the period, compared to $1.9 million a year ago. The change in this non-cash item relates to the Black-Scholes valuation of newly issued options, which takes into account stock price on the grant date and historical volatility, among other inputs. Bad debt expense of $2.3 million increased from $0.7 million a year ago due to increased terminations of signed franchises that have yet to launch. General and Administrative expenses are also higher versus a year ago due to increased real estate costs related to 2021 office openings, software expenses, and increased travel, meals, and entertainment costs.

Net income in the third quarter of 2022 was $3.0 million, with the decrease due to higher non-cash stock compensation expense and lower income tax benefit. Net income attributable to Goosehead Insurance, Inc. for the third quarter of 2022 was $2.0 million, or $0.09 per basic and diluted share. Adjusted EPS for the third quarter of 2022, which excludes equity-based compensation, was $0.24 per share. Total Adjusted EBITDA was $11.0 million for the third quarter of 2022 compared to $6.6 million in the prior-year period. Adjusted EBITDA Margin of 19% was up 3 points in the quarter.

Liquidity and Capital Resources
As of September 30, 2022, the Company had cash and cash equivalents of $46.1 million. We had an unused line of credit of $24.8 million as of September 30, 2022. Total outstanding term note payable balance was $95.6 million as of September 30, 2022.

2022 Outlook
The Company’s outlook for full year 2022 is as follows:

  • Total written premiums placed for 2022 are expected to be between $2.176 billion and $2.215 billion, representing organic growth of 40% on the low end of the range to 42% on the high end of the range.

  • Total revenues for 2022 are expected to be between $194 million and $205 million, representing organic growth of 28% on the low end of the range to 35% on the high end of the range, driven by high levels of Core Revenue growth partly offset by lower than historical average contingent commissions of $7-10 million for the full year 2022 as our carriers continue to struggle with their underwriting profitability.

  • After a year of historical investments in people, technology, and real estate, Adjusted EBITDA Margin is expected to expand for the full year 2022.

Conference Call Information
Goosehead will host a conference call and webcast today at 4:30 PM ET to discuss these results.

The dial-in number for the conference call is (855) 327-6837 (toll-free) or (631) 891-4304 (international). Please dial the number 10 minutes prior to the scheduled start time.

In addition, a live webcast of the conference call will also be available on Goosehead’s investor relations website at http://ir.gooseheadinsurance.com.

A webcast replay of the call will be available at http://ir.gooseheadinsurance.com for one year following the call.

About Goosehead
Goosehead (NASDAQ: GSHD) is a rapidly growing and innovative independent personal lines insurance agency that distributes its products and services throughout the United States.   Goosehead was founded on the premise that the consumer should be at the center of our universe and that everything we do should be directed at providing extraordinary value by offering broad product choice and a world-class service experience. Goosehead represents over 150 insurance companies that underwrite personal lines and small commercial lines risks, and its operations include a network of 12 corporate sales offices and 2,287 operating and contracted franchise locations. For more information, please visit gooseheadinsurance.com.

Forward-Looking Statements
This press release may contain various “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, which represent Goosehead’s expectations or beliefs concerning future events. Forward-looking statements are statements other than historical facts and may include statements that address future operating, financial or business performance or Goosehead’s strategies or expectations. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “projects”, “potential”, “outlook” or “continue”, or the negative of these terms or other comparable terminology. Forward-looking statements are based on management’s current expectations and beliefs and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements.

Factors that could cause actual results or performance to differ from the expectations expressed or implied in such forward-looking statements include, but are not limited to, conditions impacting insurance carriers or other parties with which Goosehead does business, the economic effects of the COVID-19 pandemic, the loss of one or more key executives or an inability to attract and retain qualified personnel and the failure to attract and retain highly qualified franchisees. These risks and uncertainties also include, but are not limited to, those described under the captions “1A. Risk Factors” in Goosehead’s Annual Report on Form 10-K for the year ended December 31, 2021 and in Goosehead’s other filings with the SEC, which are available free of charge on the Securities Exchange Commission's website at: www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All forward-looking statements and all subsequent written and oral forward-looking statements attributable to Goosehead or to persons acting on behalf of Goosehead are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date they are made, and Goosehead does not undertake any obligation to update them in light of new information, future developments or otherwise, except as may be required under applicable law.

Contacts
Investor Contact:
Dan Farrell
Goosehead Insurance - VP Capital Markets
Phone: (214) 838-5290
Email: dan.farrell@goosehead.com;   IR@goosehead.com;

PR Contact:
Mission North for Goosehead Insurance
Email: goosehead@missionnorth.com; PR@goosehead.com


Goosehead Insurance, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

Commissions and agency fees

 

$

27,402

 

 

$

22,420

 

 

$

73,676

 

 

$

61,007

 

Franchise revenues

 

 

29,922

 

 

 

18,960

 

 

 

77,299

 

 

 

49,234

 

Interest income

 

 

363

 

 

 

301

 

 

 

1,012

 

 

 

841

 

Total revenues

 

 

57,687

 

 

 

41,681

 

 

 

151,987

 

 

 

111,082

 

Operating Expenses:

 

 

 

 

 

 

 

 

Employee compensation and benefits

 

 

36,328

 

 

 

26,078

 

 

 

99,471

 

 

 

69,862

 

General and administrative expenses

 

 

13,456

 

 

 

10,141

 

 

 

39,358

 

 

 

29,549

 

Bad debts

 

 

2,306

 

 

 

732

 

 

 

4,762

 

 

 

1,825

 

Depreciation and amortization

 

 

1,809

 

 

 

1,188

 

 

 

5,043

 

 

 

3,320

 

Total operating expenses

 

 

53,899

 

 

 

38,139

 

 

 

148,634

 

 

 

104,556

 

Income from operations

 

 

3,788

 

 

 

3,542

 

 

 

3,353

 

 

 

6,526

 

Other Income (Expense):

 

 

 

 

 

 

 

 

Other income

 

 

 

 

 

7

 

 

 

 

 

 

146

 

Interest expense

 

 

(1,414

)

 

 

(756

)

 

 

(3,411

)

 

 

(1,903

)

Income (loss) before taxes

 

 

2,374

 

 

 

2,793

 

 

 

(58

)

 

 

4,769

 

Tax expense (benefit)

 

 

(666

)

 

 

(2,575

)

 

 

(104

)

 

 

(2,646

)

Net income

 

 

3,040

 

 

 

5,368

 

 

 

46

 

 

 

7,415

 

Less: net income attributable to non-controlling interests

 

 

1,061

 

 

 

1,332

 

 

 

(18

)

 

 

2,288

 

Net income attributable to Goosehead Insurance, Inc.

 

$

1,979

 

 

$

4,036

 

 

$

64

 

 

$

5,127

 

Earnings per share:

 

 

 

 

 

 

 

 

Basic

 

$

0.09

 

 

$

0.21

 

 

$

 

 

$

0.27

 

Diluted

 

$

0.09

 

 

$

0.19

 

 

$

 

 

$

0.25

 

Weighted average shares of Class A common stock outstanding

 

 

 

 

 

 

 

 

Basic

 

 

20,892

 

 

 

19,559

 

 

 

20,531

 

 

 

18,903

 

Diluted

 

 

21,569

 

 

 

21,206

 

 

 

21,430

 

 

 

20,570

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goosehead Insurance, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

 

 

Three months ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

 

Core Revenue:

 

 

 

 

 

 

 

 

Renewal Commissions(1)

 

16,485

 

 

10,969

 

 

41,233

 

 

29,036

 

Renewal Royalty Fees(2)

 

21,574

 

 

13,206

 

 

54,446

 

 

33,622

 

New Business Commissions(1)

 

6,215

 

 

6,013

 

 

18,312

 

 

16,573

 

New Business Royalty Fees(2)

 

4,866

 

 

4,003

 

 

13,979

 

 

10,840

 

Agency Fees(1)

 

2,740

 

 

3,050

 

 

8,491

 

 

8,579

 

Total Core Revenue

 

51,880

 

 

37,241

 

 

136,461

 

 

98,650

 

Cost Recovery Revenue:

 

 

 

 

 

 

 

 

Initial Franchise Fees(2)

 

3,056

 

 

1,680

 

 

7,943

 

 

4,570

 

Interest Income

 

363

 

 

301

 

 

1,012

 

 

841

 

Total Cost Recovery Revenue

 

3,419

 

 

1,981

 

 

8,955

 

 

5,411

 

Ancillary Revenue:

 

 

 

 

 

 

 

 

Contingent Commissions(1)

 

1,962

 

 

2,388

 

 

5,640

 

 

6,819

 

Other Franchise Revenues(2)

 

426

 

 

71

 

 

931

 

 

202

 

Total Ancillary Revenue

 

2,388

 

 

2,459

 

 

6,571

 

 

7,021

 

Total Revenues

 

57,687

 

 

41,681

 

 

151,987

 

 

111,082

 

Operating Expenses:

 

 

 

 

 

 

 

 

Employee compensation and benefits, excluding equity-based compensatoin

 

30,933

 

 

24,227

 

 

83,115

 

 

64,218

 

General and administrative expenses

 

13,456

 

 

10,141

 

 

39,358

 

 

29,549

 

Bad debts

 

2,306

 

 

732

 

 

4,762

 

 

1,825

 

Total

 

46,695

 

 

35,100

 

 

127,235

 

 

95,592

 

Adjusted EBITDA

 

10,992

 

 

6,581

 

 

24,752

 

 

15,490

 

Adjusted EBITDA Margin

 

19

%

 

16

%

 

16

%

 

14

%

 

 

 

 

 

 

 

 

 

Interest expense

 

(1,414

)

 

(756

)

 

(3,411

)

 

(1,903

)

Depreciation and amortization

 

(1,809

)

 

(1,188

)

 

(5,043

)

 

(3,320

)

Tax (expense) benefit

 

666

 

 

2,575

 

 

104

 

 

2,646

 

Equity-based compensation

 

(5,395

)

 

(1,851

)

 

(16,356

)

 

(5,644

)

Other Income

 

 

 

7

 

 

 

 

146

 

Net Income

 

3,040

 

 

5,368

 

 

46

 

 

7,415

 

(1) Renewal Commissions, New Business Commissions, Agency Fees, and Contingent Commissions are included in "Commissions and agency fees" as shown on the Condensed Consolidated statements of operations within Goosehead’s Form 10-Q for the three and nine months ended September 30, 2022 and 2021.
(2) Renewal Royalty Fees, New Business Royalty Fees, Initial Franchise Fees, and Other Franchise Revenues are included in "Franchise revenues" as shown on the Condensed Consolidated statements of operations within Goosehead’s Form 10-Q for the three and nine months ended September 30, 2022 and 2021.


Goosehead Insurance, Inc.
Condensed Consolidated Balance Sheets
(Unaudited) 
(In thousands, except per share amounts)

 

 

September 30,

 

December 31,

 

 

 

2022

 

 

 

2021

 

Assets

 

 

 

 

Current Assets:

 

 

 

 

Cash and cash equivalents

 

$

46,107

 

 

$

28,526

 

Restricted cash

 

 

2,263

 

 

 

1,953

 

Commissions and agency fees receivable, net

 

 

11,271

 

 

 

12,056

 

Receivable from franchisees, net

 

 

2,929

 

 

 

2,986

 

Prepaid expenses

 

 

5,573

 

 

 

4,785

 

Total current assets

 

 

68,143

 

 

 

50,306

 

Receivable from franchisees, net of current portion

 

 

28,126

 

 

 

29,180

 

Property and equipment, net of accumulated depreciation

 

 

35,219

 

 

 

24,933

 

Right-of-use asset

 

 

42,528

 

 

 

32,656

 

Intangible assets, net of accumulated amortization

 

 

4,334

 

 

 

2,798

 

Deferred income taxes, net

 

 

140,244

 

 

 

125,676

 

Other assets

 

 

5,394

 

 

 

4,742

 

Total assets

 

$

323,988

 

 

$

270,291

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current Liabilities:

 

 

 

 

Accounts payable and accrued expenses

 

$

13,500

 

 

$

12,995

 

Premiums payable

 

 

2,263

 

 

 

1,953

 

Lease liability

 

 

6,776

 

 

 

4,893

 

Contract liabilities

 

 

6,224

 

 

 

6,054

 

Note payable

 

 

6,250

 

 

 

4,375

 

Total current liabilities

 

 

35,013

 

 

 

30,270

 

Lease liability, net of current portion

 

 

64,181

 

 

 

47,335

 

Note payable, net of current portion

 

 

113,530

 

 

 

118,361

 

Contract liabilities, net of current portion

 

 

44,535

 

 

 

42,554

 

Liabilities under tax receivable agreement

 

 

112,394

 

 

 

100,959

 

Total liabilities

 

 

369,653

 

 

 

339,479

 

Class A common stock, $0.01 par value per share - 300,000 shares authorized, 21,202 shares issued and outstanding as of September 30, 2022, 20,198 shares issued and outstanding as of December 31, 2021

 

 

210

 

 

 

200

 

Class B common stock, $0.01 par value per share - 50,000 shares authorized, 16,201 issued and outstanding as of September 30, 2022, 16,909 shares issued and outstanding as of December 31, 2021

 

 

163

 

 

 

170

 

Additional paid in capital

 

 

67,238

 

 

 

46,281

 

Accumulated deficit

 

 

(61,282

)

 

 

(60,671

)

Total stockholders' equity (deficit)

 

 

6,329

 

 

 

(14,020

)

Non-controlling interests

 

 

(51,994

)

 

 

(55,168

)

Total equity

 

 

(45,665

)

 

 

(69,188

)

Total liabilities and equity

 

$

323,988

 

 

$

270,291

 

 

 

 

 

 

 

 

 

 


Goosehead Insurance, Inc.
Reconciliation Non-GAAP Measures to GAAP

This release includes Core Revenue, Cost Recovery Revenue, Ancillary Revenue, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS that are not required by, nor presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). The Company refers to these measures as “non-GAAP financial measures.” The Company uses these non-GAAP financial measures when planning, monitoring and evaluating its performance and considers these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures, tax position, depreciation, amortization and certain other items that the Company believes are not representative of its core business. The Company uses Core Revenue, Cost Recovery Revenue, Ancillary Revenue, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EPS for business planning purposes and in measuring its performance relative to that of its competitors.

These non-GAAP financial measures are defined by the Company as follows:

  • "Core Revenue" is a supplemental measure of our performance and includes Renewal Commissions, Renewal Royalty Fees, New Business Commissions, New Business Royalty Fees, and Agency Fees. 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.

  • "Cost Recovery Revenue" is a supplemental measure of our performance and includes Initial Franchise Fees and Interest Income. We believe that Cost Recovery Revenue is an appropriate measure of operating performance because it summarizes revenues that are viewed by management as cost recovery mechanisms.

  • "Ancillary Revenue" is a supplemental measure of our performance and includes Contingent Commissions and Other Income. We believe that Ancillary Revenue is an appropriate measure of operating performance because it summarizes revenues that are ancillary to our core business.

  • "Adjusted EBITDA" is a supplemental measure of the Company's 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 business performance. Adjusted EBITDA is defined as net income (the most directly comparable GAAP measure) before interest, income taxes, depreciation and amortization, adjusted to exclude equity-based compensation and other non-operating items, including, among other things, certain non-cash charges and certain non-recurring or non-operating gains or losses.

  • "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.

  • "Adjusted EPS" is a supplemental measure of our performance, defined as earnings per share (the most directly comparable GAAP measure) before non-recurring or non-operating income and expenses. Adjusted EPS is a useful measure to management because it eliminates the impact of items that do not relate to business performance and helps measure our profitability on a consolidated level.

While the Company believes that these non-GAAP financial measures are useful in evaluating its business, this information should be considered as supplemental in nature and is not meant as a substitute for revenues, net income, or earnings per share, in each case as recognized in accordance with GAAP. In addition, other companies, including companies in the Company’s industry, may calculate such measures differently, which reduces their usefulness as comparative measures.

The following tables show a reconciliation from total revenues to Core Revenue, Cost Recovery Revenue, and Ancillary Revenue (non-GAAP basis) for the three and nine months ended September 30, 2022 and 2021 (in thousands):

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

Total Revenues

$

57,687

 

$

41,681

 

$

151,987

 

$

111,082

 

 

 

 

 

 

 

 

Core Revenue:

 

 

 

 

 

 

 

Renewal Commissions(1)

$

16,485

 

$

10,969

 

$

41,233

 

$

29,036

Renewal Royalty Fees(2)

 

21,574

 

 

13,206

 

 

54,446

 

 

33,622

New Business Commissions(1)

 

6,215

 

 

6,013

 

 

18,312

 

 

16,573

New Business Royalty Fees(2)

 

4,866

 

 

4,003

 

 

13,979

 

 

10,840

Agency Fees(1)

 

2,740

 

 

3,050

 

 

8,491

 

 

8,579

Total Core Revenue

 

51,880

 

 

37,241

 

 

136,461

 

 

98,650

Cost Recovery Revenue:

 

 

 

 

 

 

 

Initial Franchise Fees(2)

 

3,056

 

 

1,680

 

 

7,943

 

 

4,570

Interest Income

 

363

 

 

301

 

 

1,012

 

 

841

Total Cost Recovery Revenue

 

3,419

 

 

1,981

 

 

8,955

 

 

5,411

Ancillary Revenue:

 

 

 

 

 

 

 

Contingent Commissions(1)

 

1,962

 

 

2,388

 

 

5,640

 

 

6,819

Other Franchise Revenues(2)

 

426

 

 

71

 

 

931

 

 

202

Total Ancillary Revenue

 

2,388

 

 

2,459

 

 

6,571

 

 

7,021

Total Revenues

$

57,687

 

$

41,681

 

$

151,987

 

$

111,082

(1) Renewal Commissions, New Business Commissions, Agency Fees, and Contingent Commissions are included in "Commissions and agency fees" as shown on the Condensed Consolidated statements of operations.
(2) Renewal Royalty Fees, New Business Royalty Fees, Initial Franchise Fees, and Other Franchise Revenues are included in "Franchise revenues" as shown on the Condensed Consolidated statements of operations.


The following tables show a reconciliation from net income to Adjusted EBITDA and Adjusted EBITDA Margin (non-GAAP basis) for the three and nine months ended September 30, 2022 and 2021 (in thousands):

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Net income

 

$

3,040

 

 

$

5,368

 

 

$

46

 

 

$

7,415

 

Interest expense

 

 

1,414

 

 

 

756

 

 

 

3,411

 

 

 

1,903

 

Depreciation and amortization

 

 

1,809

 

 

 

1,188

 

 

 

5,043

 

 

 

3,320

 

Tax expense (benefit)

 

 

(666

)

 

 

(2,575

)

 

 

(104

)

 

 

(2,646

)

Equity-based compensation

 

 

5,395

 

 

 

1,851

 

 

 

16,356

 

 

 

5,644

 

Other income

 

 

 

 

 

(7

)

 

 

 

 

 

(146

)

Adjusted EBITDA

 

$

10,992

 

 

$

6,581

 

 

$

24,752

 

 

$

15,490

 

Adjusted EBITDA Margin(1)

 

 

19

%

 

 

16

%

 

 

16

%

 

 

14

%

(1) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue ($10,992/$57,687), and ($6,581/$41,681) for the three months ended September 30, 2022 and 2021, respectively. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue ($24,752/$151,987), and ($15,490/$111,082) for the nine months ended September 30, 2022 and 2021, respectively.

The following tables show a reconciliation from basic earnings per share to Adjusted EPS (non-GAAP basis) for the three and nine months ended September 30, 2022 and 2021. Note that totals may not sum due to rounding:

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Earnings per share - basic (GAAP)

 

$

0.09

 

 

$

0.21

 

 

$

 

 

$

0.27

 

Add: equity-based compensation(1)

 

 

0.14

 

 

 

0.05

 

 

 

0.44

 

 

 

0.15

 

Adjusted EPS (non-GAAP)

 

$

0.24

 

 

$

0.26

 

 

$

0.44

 

 

$

0.42

 

(1) Calculated as equity-based compensation divided by sum of weighted average Class A and Class B shares [$5.4 million/(20.9 million + 16.4 million)] for the three months ended September 30, 2022 and [$1.9 million/ (19.6 million + 17.3 million)] for the three months ended September 30, 2021. Calculated as equity-based compensation divided by sum of weighted average Class A and Class B shares [$16.4 million/(20.5 million + 16.7 million)] for the nine months ended September 30, 2022 and [$5.6 million/ (18.9 million + 17.9 million)] for the nine months ended September 30, 2021.

Goosehead Insurance, Inc.

Key Performance Indicators

 

 

September 30, 2022

 

December 31, 2021

 

September 30, 2021

Corporate sales agents < 1 year tenured

 

 

241

 

 

 

293

 

 

 

301

 

Corporate sales agents > 1 year tenured

 

 

170

 

 

 

213

 

 

 

201

 

Operating franchises < 1 year tenured (TX)

 

 

66

 

 

 

57

 

 

 

56

 

Operating franchises > 1 year tenured (TX)

 

 

237

 

 

 

214

 

 

 

206

 

Operating franchises < 1 year tenured (Non-TX)

 

 

399

 

 

 

333

 

 

 

335

 

Operating franchises > 1 year tenured (Non-TX)

 

 

701

 

 

 

594

 

 

 

542

 

Policies in Force

 

 

1,238,000

 

 

 

1,011,000

 

 

 

948,000

 

Client Retention

 

 

88

%

 

 

89

%

 

 

89

%

Premium Retention

 

 

98

%

 

 

93

%

 

 

92

%

QTD Written Premium (in thousands)

 

$

615,575

 

 

$

407,291

 

 

$

434,752

 

Net Promoter Score ("NPS")

 

 

90

 

 

 

91

 

 

 

92