Executive Summary

Q1 2025 delivered 17% revenue growth to $75.6M, Adjusted EPS of $0.26, and Adjusted EBITDA of $15.5M with margin expanding 300 bps to 21%; total written premium reached ~$1.00B (+22%), and policies in force grew 13% YoY to ~1.729M .
Versus S&P Global consensus, EPS beat (Actual $0.26 vs $0.219*), while revenue missed (Actual $75.6M vs $78.1M*); management reiterated FY25 guidance for revenues ($350–$385M) and written premium ($4.65–$4.88B) . Values with asterisk retrieved from S&P Global.
Productivity and retention trends improved: client retention at 84% with CFO indicating sensitivity to lower premium increases (<25% increases retained ~25 pts higher), and franchise/enterprise channels gaining momentum; corporate producers up 46% YoY to 426 .
New $100M share repurchase authorization through May 1, 2026 provides capital return optionality; management plans opportunistic buybacks when valuation dislocates .
Strategic catalysts: expanding AI-driven tools (mobile app rollout, routing leads, automation), improving product availability post hail season, and enterprise partnerships (mortgage servicers) targeted to accelerate growth .

What Went Well and What Went Wrong

What Went Well

Strong topline and core: revenues +17% to $75.6M; Core Revenue +17% to $69.1M, driven by improved franchise productivity, 84% client retention, and rising rates; Adjusted EBITDA +32% to $15.5M with margin +300 bps to 21% .
Premium scale milestone and KPIs: total written premium ~$1.00B (+22% YoY), policies in force ~1.729M (+13% YoY), franchise producers up to 2,097; corporate producers 426 (+46% YoY) .
Technology/AI push: “outsized investments” in technology; generative AI removing bottlenecks; mobile app rolling out to enhance service; board addition of Bain tech leader Bill Wade to win the “AI race” .

What Went Wrong

Revenue miss vs consensus and lower cost recovery: revenue below Street (~$75.6M vs $78.1M*), with initial franchise fees declining to $1.3M from $2.2M YoY; cost recovery revenue fell to $1.5M from $2.5M YoY . Values with asterisk retrieved from S&P Global.
Opex growth with human capital investments: employee comp & benefits rose to $48.3M (+$6.2M YoY), and G&A increased to $17.6M; management guided G&A pace likely to tick up as automation investments proceed .
Market still “hard” in key states (TX, CA, FL): home product remains selective; buying rate below historical averages despite strong lead flow; NPS ticked down in the trailing-12 window (still strong at 87) .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$78.035	$93.922	$75.583
GAAP EPS (Basic) ($)	$0.31	$0.60	$0.09
Adjusted EPS ($)	$0.50	$0.79	$0.26
Net Income Margin (%)	16%	25%	4%
Adjusted EBITDA ($USD Millions)	$26.145	$37.378	$15.520
Adjusted EBITDA Margin (%)	34%	40%	21%
Total Written Premium ($USD Millions)	$1,028.736	$965.596	$1,000.231

Consensus vs Actual (S&P Global unless noted):

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue – Consensus* ($USD Millions)	$80.096*	$78.033*	$78.089*
Revenue – Actual ($USD Millions)	$78.035	$93.922	$75.583
Primary EPS – Consensus* ($)	$0.452*	$0.398*	$0.219*
Adjusted EPS – Actual ($)	$0.50	$0.79	$0.26
Primary EPS – # of Estimates*	11*	11*	8*
Revenue – # of Estimates*	6*	6*	3*

Core Revenue composition and ancillary/cost recovery:

Metric ($USD Thousands)	Q1 2024	Q1 2025
Renewal Commissions	$15,961	$16,952
Renewal Royalty Fees	$29,053	$37,244
New Business Commissions	$5,681	$5,755
New Business Royalty Fees	$6,234	$6,929
Agency Fees	$1,911	$2,240
Total Core Revenue	$58,839	$69,120
Initial Franchise Fees (Cost Recovery)	$2,245	$1,342
Interest Income (Cost Recovery)	$250	$189
Contingent Commissions (Ancillary)	$2,668	$4,476
Other Franchise Revenues (Ancillary)	$458	$456
Total Revenues	$64,460	$75,583

KPI snapshot:

KPI	Mar 31, 2024	Dec 31, 2024	Mar 31, 2025
Corporate sales agents <1 yr	138	253	254
Corporate sales agents >1 yr	154	164	172
Operating franchises <1 yr	133	90	100
Operating franchises >1 yr	1,022	1,013	998
Total franchise producers	1,963	2,092	2,097
Policies in force	1,528,000	1,674,000	1,729,000
Client retention	85%	84%	84%
Premium retention	100%	98%	98%
QTD Written Premium ($000s)	$818,785	$965,596	$1,000,231
Net Promoter Score	91	89	87

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total written premiums placed	FY 2025	$4.65B–$4.88B	$4.65B–$4.88B	Maintained
Total revenues	FY 2025	$350M–$385M	$350M–$385M	Maintained
Share repurchase authorization	Through May 1, 2026	Prior authorization expired 3/31/2025	New $100M authorization	Raised/New

Management reiterated FY25 guidance and added a new buyback authorization; no margin, OpEx, OI&E, or tax rate ranges were provided in Q1 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
AI/technology initiatives	Margin expansion and disciplined G&A; tech investment to secure growth .	Generative AI to remove bottlenecks; mobile app rolling; routing tech; addition of Bain AI expert to Board .	Accelerating investment and deployment
Product availability & pricing	Auto capacity easing; home still challenged; stabilization emerging; TX changes (deductibles, roofs) .	“Hard” but improving; post-hail season product likely to ‘chunky’ improve; retention up as increases abate .	Gradual improvement expected 2H25
Macro/tariffs/resilience	Business naturally hedged; contingencies could swing revs; cautious on volatility .	Recession/tariffs viewed as limited impact; renewal-driven resilience; no change to guidance .	Stable macro stance
Regional trends (TX/CA/FL)	TX density; CA admitted market constrained; hurricanes shifted timing .	TX remains highest YoY increases; new entrants; CA E&S effective; admitted likely returns over time .	Diversification + selective growth
Enterprise partnerships	Franchise scaling; corporate-to-franchise pipeline; no specific names .	Mortgage servicers TAM (85M mortgages, 1,000 servicers); pipeline strong; target high close-rate flows .	Building pipeline
Margins & G&A discipline	EBITDA margin +190 bps YoY in Q3; cadence weighted to back half .	Aim to grow Core Revenue faster than expenses; G&A pace to tick up with automation benefits .	Committed to expansion ex-contingencies

Management Commentary

“We drove premium growth of 22% with total and core revenue up 17%. Net Income increased 46%… Adjusted EBITDA increased 32%… adjusted EBITDA margin expanded 300 basis points to 21%.” – Mark Miller, CEO .
“Over time, enterprise sales and partnerships will turn our Core business… to a hyper-scale platform using generative AI to remove many… bottlenecks.” – Mark Miller, CEO .
“We are reiterating our guidance… Total revenues $350–$385M… Total written premiums $4.65–$4.88B.” – Mark Jones Jr., CFO .
“We plan to be opportunistic… drive shareholder value by repurchasing our stock…” – Mark Jones Jr., CFO on new $100M buyback .

Q&A Highlights

Enterprise pipeline: Mortgage servicer partnerships under discussion; team sees capacity to capture significant share without naming partners .
Margin trajectory: Focus on growing Core Revenue faster than expenses; cadence not guided quarterly; margin expansion targeted on full-year basis .
G&A outlook: Expect G&A growth pace to tick up given tech/automation investments that reduce headcount costs and improve client experience .
Pricing and retention: Auto rates flattening; home still higher; lower premium increases (<25%) materially lift retention; trend expected to improve through FY25 .
Capital return: $100M buyback authorization; management to remain opportunistic given strong operating cash flow .

Estimates Context

Q1 2025: EPS beat – Actual Adjusted EPS $0.26 vs consensus $0.219*; revenue miss – Actual $75.6M vs consensus $78.1M*. Primary EPS estimates based on S&P Global “Primary EPS Consensus Mean”; revenue based on “Revenue Consensus Mean”. Values retrieved from S&P Global.
Recent pattern: Q4 2024 was a significant beat on both EPS ($0.79 vs $0.398*) and revenue ($93.9M vs $78.0M*); Q3 2024 showed an EPS beat ($0.50 vs $0.452*) and a slight revenue miss ($78.0M vs $80.1M*) .
Potential estimate adjustments: Management reiterated FY25 guidance and cited improving retention/product availability and strong franchise/enterprise momentum; however, cost recovery revenue (initial franchise fees) has normalized lower near term and may temper top-line expectations intra-year .

Key Takeaways for Investors

Mixed headline print: EPS beat but revenue miss; underlying core metrics (Core Revenue +17%, Adjusted EBITDA +32%) and margin expansion remain constructive .
Guidance intact: FY25 revenue and premium ranges reiterated—confidence supported by KPIs (PIF +13%, retention 84%) and improving pricing/product availability; near-term narrative hinges on 2H product normalization post hail season .
Capital return optionality: New $100M buyback authorization suggests willingness to support EPS compounding during valuation dislocations; near-term trading catalyst alongside EPS beat .
Structural growth drivers: Corporate-to-franchise pipeline, enterprise partnerships, and AI-led service/process automation enhance scalability and unit economics over medium term .
Watch cost recovery normalization: Initial franchise fees down YoY; as franchise launches accelerate, cost recovery should grow over time, but consensus revenue modeling should reflect lower near-term fee recognition .
Retention sensitivity to pricing: As premium increases moderate (<25%), retention improves materially, benefiting renewal-driven profitability and contingencies in 2H25 .
Geographic/product mix: TX remains dense with highest YoY increases; selective new entrants and eventual admitted market recovery in CA expected; diversification strategy aims to stabilize growth across cycles .

Values with asterisk retrieved from S&P Global.

Goosehead Insurance, Inc. (GSHD)·Q1 2025 Earnings Summary