The following is a summary of the Goosehead Insurance, Inc. (GSHD) Q1 2024 Earnings Call Transcript:
Financial Performance:
Goosehead Insurance reported a total Q1 revenue of $64.5 million, an 11% growth from the previous year.
Total written premiums grew by 28% to $819 million.
Contingent commissions increased from $1.9 million to $2.7 million.
Cost recovery revenue declined to $2.5 million from $3.5 million year-over-year.
Adjusted EBITDA grew from $10.2 million to $11.7 million, maintaining an 18% margin.
The firm expects an adjusted EBITDA margin expansion for the full year.
The company ended Q1 with $51 million in cash and cash equivalents, and $9.1 million as free cash flow.
Estimated total written premiums for 2024 are expected to be between $3.62 billion and $3.82 billion.
Business Progress:
The company increased the number of franchise producers to 1,963 in Q1.
Both franchise new business premium and corporate new business saw growth of 19% and 11% respectively.
The company planned a large stock buyback and is focusing on aiding franchises to add more producers.
An expectation to end the year with at least 375 corporate agents, supported by a flourishing college recruitment program.
Guideposts for the year have been revised due to market uncertainty and potential temporary drops in retention rates.
Structural and foundational improvements have been implemented for future performance.
A $100 million share repurchase authorization was approved, along with an upsizing of the existing credit facility.
Despite legislative changes reducing real estate commissions, no negative impacts are anticipated.
Plans to add hundreds more franchise producers this year, prioritizing quality over quantity.
Despite retention issues due to increasing home premiums, especially in Texas, improvements are expected by the end of the year or by 2025.
More details: Goosehead Insurance IR
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