10-Q: Goosehead Insurance Q1 2026 Revenue Surges 23%

Goosehead Insurance reports a 23% year-over-year increase in total revenue for Q1 2026, reaching $93.1 million, driven by strong growth in commissions and franchise revenues.

Summary

• Total revenue for the first quarter of 2026 increased by 23% to $93.1 million, up from $75.6 million in the same period of 2025.
• Total Written Premiums grew 13% to $1.1 billion, indicating future revenue potential.
• Net income rose to $8.0 million ($0.20 basic EPS, $0.19 diluted EPS), a significant increase from $2.6 million ($0.09 basic and diluted EPS) in Q1 2025.
• Adjusted EBITDA increased by 57% to $24.4 million, with an improved margin of 26% compared to 21% in the prior year.
• Policies in Force grew by 14% to 1,973,000, and total franchise agents increased by 3% to 2,150.
• However, total operating franchises decreased by 13% to 956.
• Employee compensation and benefits increased by 5% to $50.5 million, while general and administrative expenses saw a substantial 37% rise to $24.0 million, largely due to investments in technology and AI.
• The company has $26.0 million drawn against its $75 million revolving credit facility, with $49.0 million available.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, with strong revenue and net income growth, alongside improved operational efficiency metrics like Adjusted EBITDA margin. However, the decline in NPS and increase in G&A expenses are noted as areas for future observation.

Positives

• Total revenue increased by 23% to $93.1 million in Q1 2026.
• Total Written Premiums increased by 13% to $1.1 billion.
• Net income more than tripled to $8.0 million.
• Basic and diluted EPS increased to $0.20 and $0.19, respectively.
• Adjusted EBITDA increased by 57% to $24.4 million, with a margin improvement to 26%.
• Policies in Force increased by 14% to 1,973,000.
• Client Retention remained strong at 85%.
• Renewal Revenue grew by 14% to $61.8 million.
• New Business Revenue grew by 19% to $17.7 million.
• The company's credit facility has $49.0 million available.

Negatives

• Total operating franchises decreased by 13% to 956.
• General and administrative expenses increased by 37% to $24.0 million.
• Net Promoter Score (NPS) decreased to 72 from 87 in the prior year.
• Cash and cash equivalents, and restricted cash decreased by $8.9 million to $29.1 million.

Risks

• Any diminished capacity of Carriers to place new business, including as a result of 2025 wildfires in Southern California, severe floods in Central Texas, and other natural disasters, could slow the growth of New Business Revenue.
• Declines in client retention caused by increases in premium rates could slow the growth of Renewal Revenue.
• Contingent Commissions are inherently volatile as they are based on carrier underwriting profitability and may be impacted by catastrophic losses resulting from natural or man-made disasters.

Future Outlook

The company expects its current sources of liquidity, including cash on hand, net working capital, cash flows from operations, and its revolving credit facility, to be sufficient to fund working capital requirements and meet commitments for the next 12 months. Primary uses of liquidity will include facilitating organic growth, paying operating expenses, making payments under the tax receivable agreement, debt service, share repurchases, and potential dividends.

Management Comments

• We are a rapidly growing personal lines independent insurance agency, reinventing the traditional approach to distributing personal lines products and services throughout the United States.
• We were founded with one vision in mind: to provide clients with superior insurance coverage at the best available price and in a timely manner.
• By leveraging our differentiated business model and innovative technology platform, we are able to deliver a superior insurance experience to our clients.

Industry Context

StockSavvy.ai notes that Goosehead Insurance's Q1 2026 results reflect continued growth in the insurance brokerage sector, with a notable increase in revenue and net income. The company's strategy of leveraging technology and a franchise model appears to be driving expansion, though the increase in G&A expenses due to technology investments, including AI, warrants monitoring.

Comparison to Industry Standards

• Goosehead's revenue growth of 23% in Q1 2026 outpaces the average growth rate for many established insurance carriers, which typically see single-digit to low-double-digit growth.
• The increase in Policies in Force by 14% suggests strong customer acquisition and retention, a positive indicator compared to industry benchmarks where customer churn can be a significant challenge.
• The Adjusted EBITDA margin of 26% is robust and competitive within the insurance distribution and brokerage industry, indicating efficient operations.
• The decrease in NPS from 87 to 72 is a point of concern, as customer loyalty is a key differentiator in the insurance market. Industry leaders often maintain NPS scores above 50, but a decline from a high 80s score requires attention.

Legal Proceedings

• A stockholder class action complaint (Dollens Action) alleging invalid corporate governance documents was filed. A proposed settlement includes non-monetary benefits and payment of attorneys' fees and litigation expenses, which the company does not consider material.

Related Party Transactions

• The company has a tax receivable agreement (TRA) with Pre-IPO LLC Members, providing for payments of 85% of realized cash tax savings resulting from increased tax basis in assets and tax benefits related to imputed interest. As of March 31, 2026, the total amount due under the TRA was $171.9 million, with $6.2 million current.

Stakeholder Impact

• Shareholders: Positive impact from increased revenue, net income, and EPS. The share repurchase program also supports shareholder value.
• Employees: Increased compensation and benefits expenses suggest investment in personnel, potentially indicating growth and opportunities.
• Franchisees: Continued growth in franchise revenues and royalty fees, though a decrease in operating franchises was noted.
• Carriers: Increased Total Written Premiums indicate more business placed with carriers, potentially benefiting them through increased premiums.

Next Steps

• Continue to monitor the impact of investments in technology, including AI, on general and administrative expenses.
• Observe trends in Net Promoter Score (NPS) and client retention to ensure customer loyalty is maintained.
• Evaluate the impact of franchise turnover on Initial Franchise Fee recognition.
• Monitor the availability and utilization of the revolving credit facility.

Key Dates

Recommendation

The company demonstrates strong revenue and profit growth, exceeding prior year performance and showing improved operational efficiency. However, the decline in NPS, significant increase in G&A expenses, and a decrease in operating franchises warrant a cautious approach. While the financial performance is positive, these factors suggest a 'hold' recommendation until trends in customer satisfaction and operational costs stabilize and become clearer.

Keywords

Goosehead Insurance, GSHD, 10-Q, Quarterly Report, Insurance, Insurance Brokerage, Revenue, Net Income, Franchise, Commissions, Financials