Goosehead Insurance (NASDAQ:GSHD) reported stronger second-quarter 2026 revenue and profitability, raised the lower end of its full-year revenue outlook and announced a planned CEO transition, according to management comments on the company’s earnings call.
Chief Executive Officer Mark Miller said he will retire at the end of 2026 and hand the CEO role to President and Chief Operating Officer Mark Jones Jr. Miller said he will remain on Goosehead’s board of directors and stay engaged through the end of the year to support the transition.
Jones Jr. said the company’s strategy is not changing. “We remain laser-focused on our objective to become the largest distributor of personal lines insurance in our founder’s lifetime,” he said, adding that his focus will be on “speed of execution, simplification, and rapid decision-making.”
Second-quarter results show growth across key metrics
Goosehead reported total written premiums of $1.36 billion, up 14% year over year and accelerating from 13% growth in the first quarter. Policies in force increased 15% year over year to 2.1 million, while client retention improved sequentially to 86%, its highest level since the beginning of the hard market, according to Miller.
Total revenue rose 21% year over year to $113.4 million. Core revenue increased 10% to $95.6 million. Management noted that second-quarter 2025 results included a $4 million recovery of previously unpaid renewal commissions and royalty fees from a carrier partner. Adjusted for that prior-year item, total revenue grew 26% and core revenue grew 16%.
Adjusted EBITDA rose 30% year over year to $37.9 million, representing a 33% adjusted EBITDA margin. Miller cited “continued execution against our strategic plan and broad-based momentum across the business.”
Chief Financial Officer John Martin said several factors contributed to the quarter’s top-line performance, including strong new business generation, improving client retention and higher contingent commissions.
- New business commissions increased 27% year over year to $9.6 million.
- New business royalties rose 20% to $9.4 million, the fastest pace of growth in six quarters.
- Ancillary revenue, largely contingent commissions, increased 180% year over year to $16.3 million.
- Franchise producers grew 5% year over year and 2% sequentially to 2,190.
Franchise and enterprise channels gain momentum
Miller said Goosehead’s franchise network is “healthier than ever,” pointing to the company’s agency staffing program, which was launched in 2023 and has helped franchise owners add hundreds of producers. Franchise producers reached nearly 2,200, with an average of 2.4 producers per franchise, he said.
The average monthly payment Goosehead sends to a franchise increased more than 35% year over year to more than $28,000, according to Miller. Jones Jr. said the company had about 70% more franchises produce over $100,000 of gross new business commissions and agency fees in a month during the quarter compared with the prior year.
Jones Jr. also highlighted the role of Goosehead’s corporate sales team in developing future franchise owners. He said more than 60 agencies have launched from the corporate channel, representing more than 170 producers inside those franchises.
Enterprise sales is becoming a more material part of the business, management said. The channel generated approximately $3 million in new business commissions and agency fees during the second quarter and represented 21% of total new business commissions and agency fees, according to Martin. Jones Jr. said enterprise sales is “approaching a third the size” of Goosehead’s corporate sales team after three years.
Technology investments remain a key theme
Jones Jr. said Goosehead’s digital agent platform is now allowing consumers in Texas to complete the shopping and binding process digitally across multiple home and auto carriers. He said the company delivered the first version of the platform ahead of schedule and is focused in the second half of the year on optimizing the Texas conversion funnel before expanding to additional states.
Jones Jr. emphasized that the platform is designed to enhance agent productivity rather than replace agents. He said many customers still choose to speak with an agent before completing a purchase, but by that point they have already completed the data collection process, creating more qualified opportunities for producers.
The company also discussed Lily, its AI voice assistant. Jones Jr. said Lily now handles about 20% of inbound service calls from start to finish, with performance exceeding 30% during certain periods. He said automation is being applied selectively where it improves the client experience, producer productivity or retention.
Guidance raised on contingent commission outlook
Goosehead raised its full-year 2026 revenue outlook. Martin said the company now expects total revenue to grow organically in a range of 12% to 19% year over year. The increase to the bottom end of the range reflects a more favorable view of contingent commissions, which are tracking ahead of prior expectations.
The company continues to expect total written premiums to grow organically in a range of 12% to 20% year over year. Martin said Goosehead still expects second-half acceleration in core revenue growth compared with the first half, supported by improving client retention and strong new business generation.
In response to analyst questions, Martin said there was no change to the company’s underlying expense outlook. He said Goosehead continues to expect compensation and general and administrative expenses to grow in the high teens to low 20% range for the year, likely above core revenue growth because of the current investment cycle.
Capital returns and market conditions
Goosehead generated $15.9 million in operating cash flow during the quarter and repurchased 95,000 Class A shares for $3.9 million. Year to date, the company generated $38.8 million in operating cash flow and repurchased more than 1 million Class A shares for $53.7 million. Martin said Goosehead had $144.6 million remaining under its existing share repurchase authorization at quarter-end.
The company ended the quarter with $23.7 million in cash and cash equivalents and $323 million of total debt outstanding.
Management described the personal lines product market as significantly improved after several years of difficult conditions. Jones Jr. said auto pricing is generally declining in the mid-single-digit range, while homeowners pricing is broadly flat and still up low single digits in some geographies. He said the more stable product market improves efficiency across the business.
Asked about shareholder value creation, Jones Jr. said Goosehead is focused on maximizing long-term profit dollars and is not concerned with short-term swings in equity valuation. Co-founder and Executive Chairman Mark Jones added that the company is focused on “building long-term shareholder value” and is not distracted by short-term market fluctuations.
About Goosehead Insurance (NASDAQ:GSHD)
Goosehead Insurance (NASDAQ: GSHD) is a technology-driven insurance agency that connects consumers with a broad range of personal and commercial insurance products through an extensive network of independent insurance advisors. The company specializes in homeowners, auto, flood, dwelling fire, umbrella, life, and commercial lines coverage, working with multiple national and regional carriers to offer tailored policies. By combining advanced quoting tools with local market expertise, Goosehead streamlines the insurance shopping process and helps clients find competitive coverage options.
Founded in 2003 and headquartered in Westlake, Texas, Goosehead has grown its footprint across more than 40 states in the U.S.
