What changed in this filing

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Item 1. Business

2025-03-03 compared with 2024-02-22 · 58 added, 67 removed, 404 unchanged (24% of the section changed)

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We are a rapidly growing independent insurance agency, reinventing the traditional approach to distributing personal lines policies throughout the United States.

Our differentiated business model and innovative technology platform have enabled us to deliver insurance customers a superior experience, as evidenced by our 92 Net Promoter Score, which is 2.6x the 2022 P&C Industry Average according to Statista.

Our differentiated business model and innovative technology platform have enabled us to deliver insurance customers a superior experience, as evidenced by our 89 Net Promoter Score, which is 4.0x the 2024 Industry Average according to Qualtrics XM Institute.

To fully appreciate the value of our model, there are three lenses with which you can view us – from the perspective of 1) the insurance buyer;

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We are able to solve that by partnering with over 200 carriers and using technology to shop for our clients and quickly identify the Carrier who is targeting their segment of the market.

This allows us to provide value by finding the right coverage at the lowest price, and to do so in one phone-call so that the client does not have to spend hours shopping for themselves.

This allows us to provide value by finding the right coverage at the lowest price so that the client does not have to spend hours shopping for themselves.

Knowledgeable sales and service agents

Our clients benefit from the value of having a knowledgeable agent explain and evaluate coverages to help the client make smart insurance buying decisions.

Clients will have vastly different insurance needs throughout their lifetime, and our model allows us to serve them at every stage of life.

While there are other independent agents who also provide choice, we believe that they lack the scale, talent, and technology of Goosehead, leading to a poorer client experience.

Clients will have different insurance needs throughout their lifetime, and our model allows us to serve them at every stage of life.

While there are other independent agents who also provide choice, we believe that they lack the scale, depth of talent, and technology of Goosehead, leading to a poorer client experience.

Additionally, in contrast to the traditional insurance agency model, we separate the sales function from the service function, thus enabling agents to focus on selling, and service personnel to focus on delivering superior client service.

This model has helped drive best-in-class net promoter scores for client service, nearly 2.6x the 2022 P&C industry average according to Statista.

This model has helped drive best-in-class net promoter scores for client service, 4.0x the 2024 P&C industry average according to Qualtrics XM Institute.

Proprietary technology

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After signing their documents electronically, clients can engage with Goosehead’s industry-leading service team via phone, text, online chat, or email.

Our choice model, superior sales and service agents, and proprietary technology have led to 86% client retention during 2023, which we believe is among the best in our industry.

Goosehead's Digital Agent, a proprietary online quoting platform, allows clients to shop their home and auto insurance rates with top carriers.

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Goosehead does not sell or share the client's data without the client's permission.

Our choice model, superior sales and service agents, and proprietary technology have led to 84% client retention during 2024, which we believe is among the best in our industry.

Agent perspective

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All policy fulfillment and servicing is handled by our centralized service team, which retains our clients at 84%, unlocking the agent’s time to focus on new sales.

Our 14 corporate-owned offices and 300 corporate sales agents serve as the blueprint for what is possible in the Goosehead model, and our corporate agents provide critical training and support to help the franchise agents reach their full potential.

Our 12 corporate-owned sales offices and 417 corporate sales agents serve as the blueprint for what is possible in the Goosehead model, and our corporate agents provide critical training and support to help the franchise agents reach their full potential.

We have proven that this system delivers superior results as demonstrated by agents, who with a few years tenure, are 2.8x more productive than industry best practice according to Reagan Consulting's 2024 Best Practices Study .

In addition to recruiting current insurance agents with a superior value proposition, we are also bringing in sales and marketing savvy professionals who are attracted to the recession-resistant and residual economics offered by a career in insurance.

The value and opportunity we provide to agents has led to our rapid growth to 1,226 operating franchise locations.

The value and opportunity we provide to agents has led to our growth to 1,103 operating franchise locations.

Carrier perspective

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This value enables Goosehead to have a very competitive carrier portfolio, ensuring that clients find the best solution and increasing agents’ close rates.

By delivering a better client experience, offering a more compelling business opportunity to agents, and driving more value to carrier partners, we have seen growth as reflected in our financial performance.

Total Written Premium, which we believe is the best leading indicator of future revenue growth because it drives our future Core Revenue and gives us potential opportunities to earn Ancillary Revenue in the form of Contingent Commissions, grew 34% to $3.0 billion from $2.2 billion in 2022.

By delivering a better client experience, offering a more compelling business opportunity to agents, and driving more value to carrier partners, we have seen growth and profitability as reflected in our financial performance.

This growth has been driven by several factors including (1) our team’s ability to recruit talented agents to our platform;

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and (3) our service centers’ ability to retain renewal business.

Furthermore, we are profitable.

Our Go-to-Market Strategy

Our business model allows both our corporate and franchise sales agents to concentrate on sales and marketing activities related to acquiring new clients and issuing new policies, thus growing New Business Revenue and

Renewal Revenue more rapidly than in other systems.

Their primary marketing efforts are focused on establishing referral relationships with other financial services providers in their communities using our proprietary marketing strategy.

We do not compensate Referral Partners for leads, but rather rely on our servicing capabilities to generate repeat business.

Goosehead’s Digital Agent provides a best-in-class way to shop for and buy personal insurance — allowing consumers to find the right coverage at the best price.

We do not compensate Referral Partners for leads, but rather they rely on our servicing capabilities to generate repeat business.

Goosehead’s Digital Agent provides a best-in-class way to shop for personal insurance — allowing clients to find the right coverage at the best price.

The platform provides a simple, transparent, and efficient way to get insurance quotes.

With as little as three data points – name, address, and date of birth – the proprietary tool arms consumers with accurate home and auto quotes from a variety of A-rated insurance companies in less than two minutes and connects them with a knowledgeable agent to complete the purchase process.

With as little as three data points—name, address, and date of birth—the proprietary tool arms clients with actionable home and auto quotes from a variety of A-rated insurance companies in less than two minutes and connects them with a knowledgeable agent to complete the purchase process.

The Digital Agent, available across the U.S., is powered by key data integrations and a proprietary database.

It automatically populates information about consumers’ homes and vehicles during the quoting process and combines that information with millions of data points from two decades worth of Goosehead's expert agents’ quoting decisions and accumulated experiences.

It automatically populates information about client's homes and vehicles during the quoting process and combines that information with millions of data points from two decades worth of Goosehead's expert agents’ quoting decisions and accumulated experiences.

Our model, which allows agents to focus on New Business Revenue, is highly differentiated from the traditional insurance agency model.

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Our agents are freed from the burden of ongoing service, and as a result, both corporate sales and franchise agents are substantially more productive than top performers in our industry as it relates to new sales.

Compared to the 2023 Best Practices Study, which uses 2022 industry data, in 2023 and 2022, corporate sales agents with more than three years of tenure averaged 2.8x and 2.9x as much New Business Production per Agent, respectively, as the industry best practice.

Compared to the 2024 Best Practices Study, which uses 2023 industry data, our corporate sales agents with more than three years of tenure averaged 2.8x as much New Business Production per Agent in both 2024 and 2023 as the industry best practice.

Franchise sales agents with more than three years of tenure averaged 1.9x in 2024 and 1.8x in 2023 as much New Business Production per Agent (Franchise) as the industry best practice.

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most industry agents have tenures significantly longer than 2 to 3 years.

We believe our agent productivity compares even more favorably to the industry than the Best Practices Study would imply because the Best Practices Study excludes Unvalidated Producers.

If the Best Practices Study included Unvalidated Producers, our New Business Production per Agent outperformance would be even larger.

In 2024, New Business Production per Agent in corporate sales was $66 thousand for agents with less than 1 year of tenure and $115 thousand for agents with more than one year of tenure.

Including all producers in franchise sales

in 2023, New Business Production per Agency was $38 thousand for franchises with less than 1 year of tenure and $88 thousand for franchises with more than one year of tenure.

Including all producers in franchise sales in 2024, New Business Production per Agency was $80 thousand for franchises with less than 1 year of tenure and $115 thousand for franchises with more than one year of tenure.

Corporate sales

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We also generate Ancillary Revenue in the form of Contingent Commissions from Carriers related to the overall growth and loss performance of the Book of Business we have placed with them.

Corporate sales is comprised of employed sales agents located in 11 sales offices across Texas, Illinois, Colorado, Ohio, Nevada, Florida, and North Carolina.

Corporate sales is comprised of employed sales agents located in 12 sales offices across Texas, Illinois, Colorado, Ohio, Florida, North Carolina, and Arizona.

As of December 31, 2024, we had corporate sales offices operating in the following locations:

Westlake, Texas;

Irving, Texas;

Coppell, Texas;

Fort Worth, Texas;

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Orlando, Florida;

Tempe, Arizona;

and Columbus, Ohio.

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Captive Agents typically can only sell products from one Carrier.

• Franchise owners and their sales agents can leverage our service centers to handle service requests and process renewals.

• Franchise owners and their sales agents leverage our service centers to handle service requests and process renewals.

Most traditional agencies require their agents to handle client service and renewals, which diminishes the time they can devote to winning additional new business and growing their agencies.

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Franchise sales agents are trained side-by-side with corporate sales agents to leverage our training program, to acquire product and Carrier knowledge, and to utilize our technology and back office support.

Our corporate sales function continues its investment in the success of our franchise sales well past initial training in

the form of ongoing sales coaching and mentoring.

Our corporate sales function continues its investment in the success of our franchise sales well past initial training in the form of ongoing sales coaching and mentoring.

The corporate sales function also serves as fertile recruiting ground for future regional territory managers within our franchise support team.

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• Franchise owners own an economic interest in their Books of Business.

The recruiting team seeks applicants who have demonstrated a strong capacity to win new business and a desire to own their own business.

The Franchise Development team seeks applicants who have demonstrated a strong capacity to win new business and a desire to own their own business.

Our recruiting efforts have helped us create a franchise pool which is significantly more productive than most personal lines agents.

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Cost Recovery Revenue consists of non-refundable Initial Franchise Fees, which compensate us for the training and onboarding efforts to launch a new franchise location, and Interest Income related to Franchisees that elect the payment plan option for their Initial Franchise Fee.

Ancillary Revenue consists of Contingent Commissions and Other Income.

We started franchising in 2012 and have since expanded rapidly.

Premiums in franchise sales grew 33% during 2024.

As of December 31, 2023, we have 1,415 total franchises, including 1,226 franchises operating and 189 in implementation, a 33% decrease in total franchises and a 13% decrease in operating agencies in 2023 compared to 2022.

We have franchise locations either operating or signed in the following states, which cover over 99% of the US population:

As of December 31, 2024, we have 1,103 franchises operating which represents a 10% decrease in 2024 compared to 2023.

We have franchise locations operating in the following states, which cover over 98% of the US population:

Geographic footprint Operating agencies

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North Carolina 36

New Jersey 30

Profitability of Corporate and Franchise Sales

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The Company earns 100% of New Business Commissions and Agency Fees generated by corporate sales and incurs fixed and variable compensation and benefits for corporate sales agents as well as other fulfillment and administrative costs.

Company also earns and records New Business Royalty Fees revenue equal to 20% of the New Business Commissions and Agency Fees generated by franchise sales and incurs fixed and variable fulfillment and administrative costs.

The Company also earns and records New Business Royalty Fees revenue equal to 20% of the New Business Commissions and Agency Fees generated by franchise sales and incurs fixed and variable fulfillment and administrative costs.

Each subsequent term that a policy renews, both corporate sales and franchise sales generate Renewal Commissions by assisting the customer to make effective a renewal policy that satisfies the customer’s current insurance coverage needs.

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Our service agents are also focused on selling additional insurance coverages to clients, which result in additional New Business Revenue.

Our four separate service centers provide us with the ability to cover the U.S.

Our centralized service team spread across five service centers provides us with the ability to cover the U.S.

time zones more broadly, and the ability to better manage business continuity risks.

We manage our service centers with the goal to maximize NPS, which we believe maximizes retention.

This differentiated level of service has enabled us to earn an NPS of 92 in 2023, a modest increase from 90 in 2022, greater than highly regarded brands like Ritz Carlton and Nordstrom and 2.6x the 2022 industry average, according to Statista.

This differentiated level of service has enabled us to earn an NPS of 89 in 2024, a modest decrease from 92 in 2023 and 4.0x the 2024 industry average, according to Qualtrics XM Institute and Bain & Company, Inc.

Our high degree of client satisfaction drove our 84% Client Retention rate during 2024, which we believe to be among the highest in the industry.

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The combination of expanding total producer count, leveraging technology, and maintaining our commitment to service led to revenue growth of 20% and Total Written Premium growth of 29% in 2024.

As of December 31, 2023, our 10-year Total Written Premium CAGR was 44% and our 5-year premium CAGR was 42%.

As of December 31, 2024, our 10-year Total Written Premium CAGR was 42% and our 5-year Total Written Premium CAGR was 39%.

Carrier provided information

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The agents in corporate sales are fundamentally different than the typical agents in the personal lines industry.

Substantially all of our agents are recent college graduates, whereas 61% of personal lines agents in the industry are over 50 years old, according to the 2022 Future One Agency Universe Case Study.

Substantially all of our agents are recent college graduates, whereas 66% of personal lines agents in the industry are over 40 years old, according to Zippia.

This gives us a significant advantage both in the short- and long-term.

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This has enabled our agents to generate approximately 2.8x as much new business as top performing personal lines agents after three years, according to the 2024 Best Practices Study.

Over the long-term, we believe these factors will enable us to avoid the shrinking workforce challenges that many of our competitors face and win an even larger market share from other agencies.

Over the long-term, we believe these factors will enable us to avoid

the shrinking workforce challenges that many of our competitors face and win an even larger market share from other agencies.

According to Independent Insurance Agents & Brokers of America, Inc., 33% of independent agencies anticipate a change of control within the next five years.

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Additionally, our technology provides agents with data and analytics which allow them to make smarter business decisions.

Importantly, our integrated solution allows us to pivot quickly and upgrade our technology offering without a large financial investment.

Importantly, our integrated solution allows us to pivot quickly and upgrade our technology offering as market dynamics change.

We believe our single, sales-oriented technology platform is differentiated relative to most insurance agency IT environments that utilize disparate accounting-driven agency management vendors and legacy mainframe systems across their operations.

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We continue to make the necessary technology, staffing and real estate investments in our service centers to support our planned agent hiring, which we believe will allow us to readily scale and increase market share.

Each of our service agents can service, on average, a Book of Business that it would take a productive sales agent years to generate.

Each of our service agents can service, on average, a Book of Business that would take a productive sales agent years to generate.

• Proven and experienced senior management team .

◦ Our Chairman and Chief Executive Officer, Mark E.

◦ Our Executive Chairman, Mark E.

Jones, co-founded Goosehead in 2003.

Prior to his appointment as Executive Chairman in July 2024, Mr.

Jones served as Goosehead's Chief Executive Officer and Chairman since the Company's inception.

Prior to co-founding Goosehead, Mr.

Jones was a Senior Partner and Director at Bain & Company, a global management consulting firm, where he also served for many years as Global Head of Recruiting.

Jones has received a wide variety of accolades for his leadership accomplishments, including being recognized as one of the Top Rated CEOs from among more than 7,000 companies with less than 1,000 employees on Glassdoor’s “Employee’s Choice Award” in 2017.

◦ Mark Miller serves as the President and Chief Operating Officer for Goosehead.

Jones has received a wide variety of accolades for his leadership accomplishments, including being recognized as one of the Top Rated CEOs from among

more than 7,000 companies with less than 1,000 employees on Glassdoor’s “Employee’s Choice Award” in 2017.

◦ Mark Miller serves as the President and Chief Executive Officer for Goosehead.

In addition, Mr.

Miller has served on the board since March 2018.

Miller has served on the board since March 2018 and previously served as Goosehead's President and Chief Operating Officer since May 2022.

For the past 15 years, Mr.

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In order to grow both corporate sales and franchise sales, we must expand our agent count in corporate sales.

We have a highly developed process for recruiting new agents which we have continually refined over the last decade and has resulted in higher success rates for our corporate sales agents.

We have a highly-developed process for recruiting new agents that we have continually refined over the last decade and that has resulted in higher success rates for our corporate sales agents.

We plan to continue to expand our recruiting to additional college campuses and engage in highly targeted internet recruiting campaigns as we grow.

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• National penetration of the Franchisees .

As of December 31, 2023, we have signed Franchise Agreements in 46 states covering over 99% of the total US population.

As of December 31, 2024, we have operating franchises in 44 states covering over 98% of the total US population.

We expect to continue growing our market share within these states as we sign and launch new franchises, and as those franchises ramp up their new business production over the course of 2-3 years.

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Given the anticipated New Business productivity uplift that comes with more years of experience, and the elevated Royalty Fees on renewal business, we believe our franchise sales category is positioned for strong growth and margin expansion.

This growth will be further enhanced by the approximately 180,000 potential franchise candidates in our current pipeline.

The number of potential franchise candidates is updated daily to reflect new franchise candidates on our customized recruiting platform.

Of our total current pipeline, we estimate approximately 10% of the candidates would qualify over time as Franchisees under our exacting standards.

Although the candidates that meet our franchise standards are not guaranteed to enter into Franchise Agreements, we believe our pipeline will allow us to execute a robust national build-out of our model.

This growth will be further enhanced by our continued national expansion of franchisees.

The pace of our national build-out will be aided by the regulatory approvals, product offering approvals and Carrier relationships we have already established across the continental United States.

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Our Client Retention effort is led by our service centers, which had a 2024 NPS score of 89, leading to an 84% Client Retention rate and 98% premium retention rate in 2024.

Key to maintaining these NPS scores and Client Retention rates is the consistency of personnel in our service centers.

The key to maintaining these NPS scores and Client Retention rates is the consistency of personnel in our service centers.

Our consistency in service personnel is due to a combination of the opportunities for professional advancement within the Company and the competitive wages we offer;

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The Company represents over 200 Carriers, of which 54 provide national coverage.

During 2023, two carriers represented more than 10% of total revenue at 16% and 12%.

During 2024, three carriers represented more than 10% of total revenue at 19%, 15%, and 10%.

Franchise agreements

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Franchisees are also required to pay a monthly Royalty Fee, which entitles the Franchisee to continue to operate.

The Royalty Fee is derived from a percentage of gross commissions on insurance policies in their initial (20%) and renewal terms (50%).

The Royalty Fee is derived from a percentage of gross commissions on insurance policies in their initial term (20%) and renewal terms (50%).

Franchise owners are not entitled to an exclusive territory and may solicit sales from any location within the state in which they operate, subject to certain internal restrictions.

Franchisees who sign a Franchise Agreement after January 1, 2018, are required to pay a minimum monthly Royalty Fee if the Royalty Fee derived from the gross commissions on insurance policies does not exceed a specific amount.

Total Franchises decreased by 33% to 1,415 in 2023 from 2,125 in 2022.

Total Franchises operating decreased by 13% to 1,226 in 2023 from 1,413 in 2022.

Total operating franchises decreased by 10% to 1,103 in 2024 from 1,226 in 2023, an improvement in franchise turnover compared to the 13% decrease in 2023 from 1,413 in 2022.

Growing total operating franchises is an important growth lever for the business.

The insurance brokerage business is highly competitive, and numerous firms actively compete with us for customers and insurance markets.

Competition in the insurance business is largely based upon innovation, knowledge, terms and condition of coverage, quality of service and price.

Competition in the insurance business is largely based upon innovation, knowledge, terms and conditions of coverage, quality of service, and price.

A number of firms and banks with substantially greater resources and market presence compete with us.

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Major slowdowns in the various housing markets Goosehead serves could impact our ability to generate new business.

Additionally, an increase in interest rates may decrease the number of home closing transactions, which could

negatively impact our ability to generate new business.

Additionally, an increase in interest rates may decrease the number of home closing transactions, which could negatively impact our ability to generate new business.

We experience seasonality and revenue related to the sale of insurance policies throughout the course of a calendar year that is tied to the seasonality of new home sales.

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Goosehead employees are also eligible to be awarded incentive stock options under our Omnibus Incentive Plan, which is designed to motivate and reward key employees to perform at the highest level and contribute significantly to our long term success, thereby aligning our employee incentives with the best interests of our shareholders.

Goosehead offers its employees a competitive health benefits package, including medical, dental, and vision insurance, as well as flex and health savings accounts, life insurance, short-term disability insurance, long-term disability insurance, accident insurance, critical illness insurance, and the opportunity to participate in our 401(k) retirement savings plan.

Under the 401(k), we match participants' contributions, which become vested over four years.

Goosehead offers its employees a competitive health benefits package, including medical, dental, and vision insurance, as well as flex and health savings accounts, life insurance, short-term disability insurance, long-term disability insurance, accident insurance, critical illness insurance, a 401(k) retirement savings plan, and an employee stock purchase plan.

Under the 401(k), we match participants' contributions, which vest over four years.

Workforce Diversity and Engagement

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Goosehead maintains strong Equal Opportunity and Anti-Harassment policies, and we are committed to the principles of openness, empathy, and respect in our workplace.

We contracted with a third-party solutions team to

encourage and facilitate independent and timely reporting and investigation of alleged policy violations.

Goosehead does not tolerate any form of discipline, reprisal, threats, intimidation, or other retaliatory conduct against an employee for making a good faith complaint of a perceived incident of discrimination or harassment or for cooperating in an investigation by the company or any federal, state, or local agency of such a complaint.

Our co-founder, Robyn Jones, established a Women's Professional Development Program ("WPDP") in 2015 to provide a place of connection and support for the women leaders of Goosehead to grow personally and professionally.

Goosehead's WPDP is open to all female employees and franchise agents and hosts small group and plenary sessions designed to promote engagement with salient topics unique to women professionals.

It also offers Goosehead women an opportunity to interact with Goosehead's rising and longer-tenured female leaders and organically establish and enhance our mentorship culture.

We contracted with a third-party solutions team to encourage and facilitate independent and timely reporting and investigation of alleged policy violations.

Goosehead does not tolerate any form of discipline, reprisal, threats, intimidation, or other retaliatory conduct against an

employee for making a good faith complaint of a perceived incident of discrimination or harassment or for cooperating in an investigation by the company or any federal, state, or local agency of such a complaint.

Operating principles

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Such reports and other information filed by us with the SEC are available free of charge on our website at ir.gooseheadinsurance.com when such reports are made available on the SEC’s website.

The SEC maintains an Internet site that contains reports, proxy and information statements and other information

regarding issuers that file electronically with the SEC at www.sec.gov.

The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov.

The contents of these websites are not incorporated into this filing.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business