Goosehead Insurance has disclosed that net income in Q2 was $7.2 million, a vast improvement from $2.4 million in the same quarter last year, which the firm said is due to strong revenue growth and expense discipline.
Goosehead’s Total Revenues in Q2 grew 31% from the same period last year to $69.3 million.
Meanwhile, Core Revenues, a non-GAAP measure which excludes contingent commissions, initial franchise fees, interest income, and other income, were $61.0 million, a 27% increase from $48.1 million in the same quarter last year.
The firm also grew total written premiums in Q2 by 36%, which it considers to be the leading indicator of future revenue growth.
Total operating expenses, excluding equity-based compensation, depreciation and amortisation and impairment expenses for the second quarter of 2023 were $46.2 million, up 14% from $40.5 million in the prior-year period.
Goosehead explains that the increase from the prior period was due to larger employee compensation and benefits expenses related to investments in partnership, technology, marketing, and service functions.
Looking to the future, the firm anticipates total written premiums placed for 2023 to be between $2.87 billion and $2.99 billion, representing organic growth of 30% on the low end of the range to 35% on the high end of the range.
Goosehead also expects Total revenues for 2023 to be between $260 million and $267 million, representing organic growth of 24% on the low end of the range to 28% on the high end of the range.
Mark E. Jones, Goosehead Insurance Chairman and CEO, commented, “We delivered outstanding second quarter results that demonstrate the tremendous strength and consistency of our business and the advantages of where we operate in the insurance value chain.
“For the quarter, premiums increased 36%, revenues were up 31%, core revenues grew 27%, and our adjusted EBITDA grew 85% with adjusted EBITDA margin expanding 900 basis points.
“The restructuring of our corporate sales team is now complete and is producing extraordinary results. We are excited to pivot back to growth in this distribution network.
“The heaviest lifting to improve the health of our franchise business is also complete, but we will continue fine-tuning efforts over the next few quarters. We believe our actions should yield meaningful productivity gains over time.
Jones continued, “Our ongoing efforts to enhance quality across our producer force and recruiting process, and our continued investments and progress on industry-leading technology will further expand our competitive moat, which we believe positions us to sustain high levels of revenue and earnings growth for many years.
“I want to thank our employees and franchise agents for their exceptional efforts as we drive our business forward on the path to industry leadership.”
