On July 24, 2024, Goosehead Insurance Inc (GSHD, Financial) released its 8-K filing for the second quarter of 2024, showcasing a robust financial performance that surpassed analyst expectations. Goosehead Insurance Inc operates as an insurance agency offering a variety of insurance products including homeowner's, auto, flood, wind, earthquake, excess liability, specialty lines, commercial lines, and life insurance across multiple regions in the United States.
Q2 2024 Financial Highlights
Goosehead Insurance Inc reported total revenues of $78.1 million for Q2 2024, marking a 13% increase from the same period last year. This figure exceeded the analyst estimate of $74.24 million. Core Revenues, which exclude contingent commissions, initial franchise fees, interest income, and other income, grew by 20% to $73.4 million.
The company also reported a net income of $10.9 million, up from $7.2 million in the prior-year period. Earnings per share (EPS) came in at $0.25, surpassing the analyst estimate of $0.23. Adjusted EPS, which excludes equity-based compensation and impairment expenses, was $0.43, reflecting a 72% increase over the prior-year period.
Key Metrics and Financial Achievements
Goosehead Insurance Inc's total written premiums for the second quarter increased by 30% to $998.9 million, indicating strong future revenue potential. The company also saw an 11% increase in policies in force, reaching approximately 1,588,000.
| Metric | Q2 2024 | Q2 2023 | Change |
|---|---|---|---|
| Total Revenue | $78.1 million | $69.3 million | +13% |
| Core Revenue | $73.4 million | $61.0 million | +20% |
| Net Income | $10.9 million | $7.2 million | +51% |
| EPS | $0.25 | $0.15 | +67% |
| Adjusted EBITDA | $24.7 million | $23.1 million | +7% |
Operational and Financial Analysis
Goosehead Insurance Inc's operational expenses, excluding equity-based compensation, depreciation, and amortization, rose by 16% to $53.4 million. This increase was primarily due to higher employee compensation and benefits expenses, driven by investments in corporate producers, partnerships, technology, and service functions.
Equity-based compensation increased to $6.6 million from $5.9 million a year ago, while bad debt expenses decreased to $0.7 million from $0.9 million. The company's general and administrative expenses, excluding impairment, rose due to investments in technology and systems aimed at enhancing growth and improving client experience.
Liquidity and Capital Resources
As of June 30, 2024, Goosehead Insurance Inc had cash and cash equivalents of $23.6 million and an unused line of credit of $74.8 million. The total outstanding term note payable balance was $98.1 million. During the quarter, the company repurchased 1.045 million shares at an average price of $60.46 per share, leaving $36.8 million available under the share repurchase authorization.
Commentary and Future Outlook
"Our excellent second quarter 2024 results reinforce our return to an accelerating profitable growth phase as total revenue was up 13%, core revenue grew 20%, premiums increased 30% and a significant number of new high-quality producers were added to both corporate and franchise networks during the quarter," stated Mark Miller, President and CEO.
Goosehead Insurance Inc's strong performance in Q2 2024 highlights its ability to navigate market challenges and capitalize on growth opportunities. The company's focus on enhancing productivity, client retention, and premium rates has positioned it well for sustained growth in the competitive insurance industry.
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Explore the complete 8-K earnings release (here) from Goosehead Insurance Inc for further details.
