Executive Summary

Solid topline growth with mixed profitability: revenue rose 20% YoY to $94.0M, Core Revenue +18% to $86.8M, and Adjusted EBITDA +18% to $29.2M, while GAAP EPS fell to $0.20 on higher OpEx and a $4.7M real estate impairment .
Q2 results were broadly in line with S&P Global consensus: revenue modestly beat ($93.7M* cons. vs $94.0M actual) and primary/adjusted EPS was essentially in line ($0.50* cons. vs $0.49 actual). Consensus EBITDA framing is not comparable to management’s Adjusted EBITDA (SPGI “actual” $23.3M* vs company $29.2M) .
Guidance mixed: 2025 revenue guidance maintained at $350–$385M, but total written premium guidance cut to $4.38–$4.65B as rate moderation is outpacing retention recovery near term; management expects commission/take-rate improvement and better retention to offset over time .
Strategic catalysts: AI-enabled service cost reductions (2H cost of service expected below 1H), direct-to-consumer marketplace initiative, and enterprise partnerships (e.g., Baird & Warner) broaden distribution and support medium-term growth; term loan repricing lowers interest by ~$1.5M annually .

What Went Well and What Went Wrong

What Went Well
- Core growth and productivity: Core Revenue +18% YoY; written premiums +18% YoY to $1.18B; franchise productivity and producer count improved; policies in force +13% YoY to ~1.793M .
- Operating leverage in adjusted metrics and AI progress: Adjusted EBITDA +18% to $29.2M and management highlighted AI models that lower service costs and improve client resolution times; 2H service cost expected to be lower than 1H .
- Partnership motion scaling: Enterprise Sales & Partnerships produced strong growth and added notable partners (Baird & Warner) to embed insurance into transactions, with broader DTC marketplace plans .
“We delivered another strong quarter…adding productive capacity… and developing new technologies to engage with clients and partners…be it through agent interaction or digitally direct.” — Mark Miller, CEO
What Went Wrong
- GAAP profitability/margins pressured: Net income fell to $8.3M (from $10.9M), GAAP EPS $0.20, and net margin to 9% due largely to higher OpEx and a $4.7M lease impairment; Adjusted EBITDA margin declined YoY to 31% .
- Premium guide cut: 2025 total written premium guidance reduced to $4.38–$4.65B as premium rate moderation is temporarily outpacing retention recovery, though revenue guide is unchanged on improving commission/take-rate mix .
- Near-term margin cadence: Management flagged intentional hiring and market expansion (e.g., Nashville) that create Q3 margin pressure before improvement in Q4; premium retention slipped to 95% vs 98–99% prior-year comps .

Financial Results

Headline P&L and Cash KPIs (USD)

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($M)	93.9	75.6	94.0
Core Revenues ($M)	68.0	69.1	86.8
Net Income ($M)	23.8	2.6	8.3
EPS (Basic, $)	0.60	0.09	0.20
Adjusted EPS ($)	0.79	0.26	0.49
Adjusted EBITDA ($M)	37.4	15.5	29.2
Net Income Margin (%)	25%	4%	9%
Adjusted EBITDA Margin (%)	40%	21%	31%
Total Written Premium ($M)	965.6	1,000.2	1,175.9
Policies in Force (k)	1,674	1,729	1,793
Client Retention (%)	84%	84%	84%
Premium Retention (%)	98%	98%	95%

Q2 2025 vs S&P Global Consensus

Metric	Consensus*	Actual	Surprise
Revenue ($M)	93.7*	94.0	+0.3 (Beat)
Primary EPS (Adjusted) ($)	0.50*	0.49	-0.01 (Inline)
EBITDA ($M)	29.9*	29.2 (Adj. EBITDA)	-0.7 (Note: non-like-for-like)

Values retrieved from S&P Global.
Note: SPGI “Primary EPS” aligns with company’s Adjusted EPS actuals; SPGI “EBITDA” is not directly comparable to company Adjusted EBITDA (SPGI shows Q2 actual 23.3M* vs company Adjusted EBITDA 29.2M) .

Revenue Composition (Q2)

Revenue Component ($M)	Q2 2024	Q2 2025
Renewal Commissions	20.6	23.1
Renewal Royalty Fees	36.8	45.4
New Business Commissions	6.7	7.6
New Business Royalty Fees	7.2	7.8
Agency Fees	2.1	2.9
Total Core Revenue	73.4	86.8
Initial Franchise Fees	1.6	1.2
Interest Income	0.24	0.18
Total Cost Recovery Revenue	1.88	1.43
Contingent Commissions	2.2	4.5
Other Franchise Revenues	0.60	1.32
Total Ancillary Revenue	2.81	5.82
Total Revenues	78.1	94.0

KPIs and Capacity

KPI	Q4 2024	Q1 2025	Q2 2025
Corporate Agents (<1yr / >1yr)	253 / 164	254 / 172	282 / 197
Total Corporate Agents	417	426	479
Total Franchise Producers	2,092	2,097	2,085
QTD Written Premium ($000s)	965,596	1,000,231	1,175,909
Net Promoter Score (NPS)	89	87	84

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Written Premium	FY 2025	$4.65B–$4.88B	$4.38B–$4.65B	Lowered
Total Revenues	FY 2025	$350M–$385M	$350M–$385M	Maintained

Rationale: Lower premium guide reflects near-term rate moderation outpacing retention recovery; revenue guide unchanged given improving commission/take-rate and mix shift back to admitted markets .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
AI/Tech initiatives	Q1: Mobile app rollout; AI/automation to reduce service costs; building DTC marketplace	LLMs lowering service costs; 2H service cost < 1H; DTC marketplace a core priority	Accelerating
Product availability / macro	Q4: Signs of gradual improvement in product markets -	Admitted carriers re-entering select geos; Auto “wide open”; Home improving geo-dependent	Improving
Commission/take rate	Q1: Take-rate pressure from E&S/state plans; expected improvement with mix normalization	Expect take-rate to increase as mix shifts to admitted; $4M recovery + $1.5M 2H benefit	Positive inflection
Partnerships / enterprise sales	Q1: Rapid growth; mortgage servicer pipeline	88% YoY new biz growth; Baird & Warner franchise; Fay Servicing partnership	Scaling
Franchise consolidation	Q1: Consolidations a net positive; productivity +21% for acquirers	Ongoing consolidation; top 200 agencies new business +30%	Healthy normalization
Margins / investment cadence	Q1: Build human capital; focus on long-term scaling	Q3 margin pressure from hires/expansion; improvement in Q4	Near-term dip, 4Q uplift
Capital / balance sheet	Q1: $100M buyback authorization; $300M term loan in Jan	Loan repriced (SOFR+300 bps); ~$1.5M annual interest savings; small Q2 buyback	Improved funding cost

Management Commentary

“We are…developing new technologies to engage with clients and partners…be it through agent interaction or digitally direct.” — Mark Miller, CEO
“For the first time in company history, we expect the cost of service delivery to be less in the second half…through leveraging AI to better route cases and meet client needs.” — Mark Jones Jr., CFO
“We successfully repriced our term loan…reducing our interest burden by approximately $1.5 million annually.” — Mark Jones Jr., CFO
“Our adjustment to premium guidance reflects a near-term gap where premium increase moderation is outpacing the recovery in client retention…Importantly, our revenue guidance is unchanged to reflect the improving average commission rate.” — Mark Jones Jr., CFO

Q&A Highlights

Commission/take rate recovery: Mix shift from state/E&S back to admitted carriers should lift average commission rate; no quantitative target provided, but management sees clear improvement trajectory .
Margin cadence: Expect Q3 margin pressure due to large hiring waves and new market investments; improvement in Q4; full-year margin ex-contingents could be slightly down given intentional growth investments .
Contingent commissions: No contingents on state-run plans; forecast 40–65 bps of written premium for the year, with wide outcome range based on cat activity .
Retention and premium retention: Client retention at 84% with basis-point improvements expected 2H; premium retention eased to 95% as rate increases moderate, expected to converge as pricing normalizes .
Lead flow and housing: Lead flow per partner is down with weak housing, but broader referral networks and better product availability should support new business; product availability improving supports conversion .

Estimates Context

Q2 revenue slightly beat S&P Global consensus ($93.7M* cons. vs $94.0M reported), while primary/adjusted EPS was essentially in line ($0.50* cons. vs $0.49 actual) .
EBITDA comparisons are not apples-to-apples: management reports Adjusted EBITDA ($29.2M), versus SPGI consensus referencing a different EBITDA basis (SPGI “actual” $23.3M*) .
FY25: Consensus revenue $359.4M* aligns with mid-range of company guide; FY25 primary EPS consensus $1.75* implies modest 2H earnings cadence improvement as retention and take-rate recover. Values retrieved from S&P Global.

Key Takeaways for Investors

Core engine healthy: strong Core Revenue growth, producer capacity, and enterprise channel momentum underpin sustained topline expansion even as rate tailwinds moderate .
Mix/take-rate tailwinds ahead: Shift back to admitted carriers and specific commission resets drive improving revenue yield per premium dollar (including a $1.5M 2H benefit from one carrier) .
Margin path: Near-term (Q3) pressure from hiring/expansion, then improvement in Q4; AI-enabled service efficiencies and scaling enterprise partnerships support medium-term margin leverage .
Guidance quality: Revenue guide maintained despite premium guide cut, signaling confidence in take-rate/contingents/mix; focus on quality growth over volume .
Capital and liquidity: $92.4M cash, $75M undrawn revolver, and term loan repricing reduce interest costs; modest buyback activity with $99.5M remaining authorization supports capital return flexibility .
Catalysts: Additional enterprise/DTC milestones, further admitted carrier re-entry, retention strengthening, and clearer contingent commission outcomes into 4Q could re-rate sentiment .

Additional details and references:

Q2’25 8-K and press release: revenue, Core Revenue, EPS, margins, impairment, liquidity, buyback, and guidance - .
Q2’25 earnings call transcript: strategy (AI, enterprise, DTC), margin cadence, take-rate, retention, contingent commissions, and loan repricing - -.
Baird & Warner partnership press release (7/24): embedded insurance franchise to scale lead flow .
Prior quarters: Q1’25 results and KPIs -; Q4’24 results and KPIs -.

Estimates marked with * are Values retrieved from S&P Global.

Goosehead Insurance, Inc. (GSHD)·Q2 2025 Earnings Summary