What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-03-03 · 85 added, 67 removed, 474 unchanged (24% of the section changed)

18 unchanged sentences

• Total Written Premiums Placed increased 17% from 2024 to $4.4 billion

• Net income increased by $25.4 million from 2023 to $49.1 million, or 16% of total revenues

• Net income decreased by $4.7 million from 2024 to $44.5 million, or 12% of total revenues

• Adjusted EBITDA*, a non-GAAP measure, increased by 14% from 2024 to $113.6 million, or 31% of total revenues

• Basic earnings per share was $1.11 and Adjusted EPS*, a non-GAAP measure, was $1.86 for the year ended December 31, 2025.

• Policies in Force increased 13% from December 31, 2023 to 1,674,000 at December 31, 2024.

• Policies in Force increased 14% from December 31, 2024 to 1.9 million at December 31, 2025.

• Corporate sales headcount increased 17% from December 31, 2024 to 489 at December 31, 2025.

2 unchanged sentences

◦ As of December 31, 2025, 87 operating franchises had less than one year of tenure and 922 operating franchisees had greater than one year of tenure.

◦ Total franchise agents increased 1% from December 31, 2024 to 2,113 at December 31, 2025.

*Core Revenue, Adjusted EBITDA and Adjusted EPS are non-GAAP measures.

10 unchanged sentences

We will continue to market actively for new franchises in our established markets, which represent over 97% of the U.S.

We are now licensed with the necessary state departments of commerce and insurance and registered as a franchisor in all 50 states in the U.S.

We are licensed with the necessary state departments of commerce and insurance and registered as a franchisor in all 50 states in the U.S.

• Continued retention of existing Book of Business.

25 unchanged sentences

Goosehead Insurance, Inc.

was formed for the purpose of the Offering and has engaged to date only in activities related to Goosehead Financial, LLC.

was formed for the purpose of the Offering and to date has only engaged in activities related to Goosehead Financial, LLC.

Goosehead Insurance, Inc.

26 unchanged sentences

This revenue stream has predictably converted into higher-margin Renewal Commissions historically, and we expect this to continue moving forward.

• New Business Royalty Fees - predictable based on franchise count and consistent ramp-up of franchises, but lower margin than Renewal Royalty Fees because the Company only receives a royalty fee of 20% on the commissions paid by the Carrier in the first term of every policy and higher back-office costs associated with policies in their first term.

• New Business Royalty Fees - predictable based on franchise agent count and consistent ramp-up of franchises, but lower margin than Renewal Royalty Fees because the Company only receives a royalty fee of 20% on the commissions paid by the Carrier in the first term of every policy and higher back-office costs associated with policies in their first term.

This revenue stream has predictably converted into higher-margin Renewal Royalty Fees historically, and we expect this to continue moving forward.

1 unchanged sentence

Cost Recovery Revenue:

• Initial Franchise Fees - Cost Recovery Revenue stream charged one time per franchise unit that covers the Company's costs to recruit, train, onboard, and support the franchise for the first year.

These fees are fully

earned and non-refundable when a franchise attends our initial training and are recognized in revenue over the life of the franchise agreement.

• Initial Franchise Fees - Cost Recovery Revenue stream charged one time per franchise unit that covers the Company's costs to recruit, train, and onboard the franchisee, and to provide ongoing support over the life

of the franchise agreement.

These fees are fully earned and non-refundable when a franchise attends our initial training and are recognized in revenue over the life of the franchise agreement.

• Interest Income - like Initial Franchise Fees, interest income is a Cost Recovery Revenue stream that reimburses the Company for those franchises on a payment plan.

37 unchanged sentences

For policies placed through franchise sales, we receive 20% of the commissions and fees received as New Business Royalties during the first term of the policy.

All clients are serviced by our world-class service centers, allowing for predictable retention of our Book of Business, which has historically been 84%.

All clients are serviced by our world-class service centers, allowing for predictable retention of our Book of Business.

Client retention was 85% as of December 31, 2025.

All commissions received in corporate sales after the first term of the policy are recognized as Renewal Commissions, which are higher margin due to lower commissions and servicing costs.

3 unchanged sentences

Cost Recovery Revenue:

The Company charges every franchise an Initial Franchise Fee, which, on a cash flow basis, covers our costs to recruit, train, onboard, and support the franchise for the first year.

The Initial Franchise Fee is determined by the state of the Franchise location and the payment terms.

The Company charges every franchise an Initial Franchise Fee, which, on a cash flow basis, helps to cover our costs to recruit, train, onboard, and to provide ongoing support over the life of the franchise agreement.

The Company recognizes revenue over the 10-year life of the contract.

If the franchise elects the payment plan, the difference between the pay-in-full and the payment plan amounts is recognized as Interest Income using the interest rate method over the 5-year term of the payment plan.

For franchises that have elected the payment plan, the difference between the pay-in-full and the payment plan amounts is recognized as Interest Income using the interest rate method over the 5-year term of the payment plan.

Ancillary Revenue:

With certain Carriers, the Company has the opportunity to earn additional revenue in the form of Contingent Commissions, typically based on the volume, growth, and loss ratio of the business placed with the select Carriers.

With certain Carriers, the Company has the opportunity to earn additional revenue in the form of Contingent Commissions, typically based on the volume, growth, and loss ratios of the business placed with the select Carriers.

The Contingent Commissions are extremely difficult to predict in any given period and can vary greatly from year to year.

9 unchanged sentences

Contingent Commissions can vary significantly from year-to-year and should be viewed over several years.

Since 2022, revenue from Contingent Commissions have historically represented approximately 0.54% of Total Written Premium at year-end.

Since 2023, revenue from Contingent Commissions has represented approximately 0.71% of Total Written Premium at year-end.

Most of our Contingent Commissions are earned in the year prior to when they are received.

For the year ended December 31, 2023, $13.7 million of Contingent Commissions were earned (below our historical average as a percentage of premium), of which $6.9 million was still receivable at December 31, 2023.

For the year ended December 31, 2024, $31.4 million of Contingent Commissions were earned (above our historical average as a percentage of premium), of which $25.5 million was still receivable at December 31, 2024.

For the year ended December 31, 2025, $38.4 million of Contingent Commissions were earned (above our historical average as a percentage of premium), of which $29.1 million was still receivable at December 31, 2025.

Premium by line of business

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Due to our organic-focused growth strategy, virtually all of our investments in future growth are in people and technology.

The majority of our investments are not capitalizable and are recognized immediately on our statement of operations, while investments in software are capitalized as intangible assets and recognized as expense over the useful life of the software.

The majority of our investments in people, such as in sales and service functions, are not capitalizable and are recognized immediately on our statement of operations, while investments in software are capitalized as intangible assets and recognized as expense over the useful life of the software.

Employee compensation and benefits.

Employee compensation and benefits is our largest expense and consists of (a) base compensation comprising salary, bonuses and benefits paid and payable to employees, and (b) stock option awards for our senior employees.

Employee compensation and benefits is our largest expense and consists of (a) base compensation comprising salary, bonuses, commissions, and benefits paid and payable to employees, and (b) stock option awards for our senior employees.

We expect to continue to experience a general rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain competitive compensation levels as we expand geographically and create new products and services.

General and administrative expenses.

General and administrative expenses include technology, travel, accounting, legal and other professional fees, placement fees, office expenses, depreciation and other costs associated with our operations.

General and administrative expenses include technology, travel, professional services, marketing and advertising, occupancy, depreciation and other costs associated with our operations.

Our occupancy-related costs and professional services expenses, in particular, generally increase or decrease in relative proportion to the number of our employees and the overall size and scale of our business operations.

19 unchanged sentences

NPS is a useful gauge of the loyalty of client relationships and can be compared across companies and industries.

NPS has decreased modestly to 89 as of December 31, 2024 from 92 at December 31, 2023, primarily driven by rapid premium increases offset by our service team's consistent delivery.

NPS is calculated on a trailing twelve-month basis.

NPS has decreased to 77 as of December 31, 2025 from 89 at December 31, 2024.

Client Retention

1 unchanged sentence

We believe Client Retention is useful as a measure of how well Goosehead retains clients year-over-year and minimizes defections.

Client Retention decreased modestly to 84% at December 31, 2024 when compared to 86% at December 31, 2023, impacted modestly by premium rate increases yet supported by the service team’s continued focus on delivering highly differentiated service levels.

Client Retention increased to 85% at December 31, 2025 when compared to 84% at December 31, 2024, reflecting continued execution by our service teams in delivering highly differentiated service levels and moderating premium rate increases.

Our retention rate is even stronger on a premium basis, driven from increases in premium taken by our Carriers and additional coverages sold by our sales agents.

3 unchanged sentences

For the year ended December 31, 2025, New Business Revenue grew 15% to $68.5 million, from $59.9 million for the year ended December 31, 2024.

Growth in New Business Revenue is primarily attributable to increases in the number of sales agents, increased New Business Production per Agency, and rising premium rates.

Any diminished capacity of Carriers to place new business (including as a result of the recent wildfires in Southern California and hurricanes in Florida) could slow the growth of our New Business Revenue in the future.

Growth in New Business Revenue is primarily attributable to increases in the number of sales agents, growth in Franchise productivity, and rising premium rates.

Any diminished capacity of Carriers to place new business (including as a result of 2025 wildfires in Southern California, severe floods in Central Texas, or other natural disasters) could slow the growth of our New Business Revenue in the future.

Renewal Revenue

1 unchanged sentence

For the year ended December 31, 2025, Renewal Revenue grew 17% to $249.4 million, from $213.9 million for the year ended December 31, 2024.

Growth in Renewal Revenue was driven primarily by Client Retention of 84% at December 31, 2024, and premium rate increases over the prior year.

As our agent force matures, the policies they wrote in prior years begin to convert from New Business Revenue to more profitable Renewal Revenue.

Continued declines in client retention caused by increases in premium rates could slow the growth of our Renewal Revenue in the future.

Growth in Renewal Revenue was driven primarily by an increase in the number of policies in a renewal term assisted by Client Retention of 85% at December 31, 2025, and premium rate increases over the prior year.

The increase during the year ended December 31, 2025 also reflects the release of the constraint on certain variable consideration related to policies placed and made effective in previous periods.

Increases in premium rates may continue to exert pressure on client retention and could slow the growth of our Renewal Revenue in the future.

Non-GAAP Financial Measures

6 unchanged sentences

Core Revenue increased by $44.2 million, or 16%, to $317.9 million for the year ended December 31, 2025 from $273.7 million for the year ended December 31, 2024.

The primary drivers of the increase from December 31, 2023 to December 31, 2024 are more new policies written driven by increases in the number of sales agents and

increased New Business Production per Agency, an increase in policies in the renewal term assisted by client retention of 84%, and rising premium rates.

The primary drivers of the increase from December 31, 2024 to December 31, 2025 are an increase in policies in their renewal term, assisted by Client Retention of 85% at December 31, 2025;

the release of the constraint on certain variable consideration related to policies placed and made effective in previous periods;

more new policies written driven by increases in the number of sales agents and growth in Franchise productivity;

and rising premium rates.

Cost Recovery Revenue

2 unchanged sentences

Cost Recovery Revenue decreased by $1.3 million, or 17%, to $6.3 million for the year ended December 31, 2025 from $7.6 million for the year ended December 31, 2024.

The primary driver of the decrease was a decrease in terminations of franchises, which resulted in less accelerated recognition of initial franchise fee revenue.

The primary drivers of the decrease were a decrease in total franchises and fewer franchise terminations during the period, resulting in less acceleration of initial franchise fee revenue.

Ancillary Revenue

2 unchanged sentences

Ancillary Revenue increased by $7.9 million, or 24%, to $41.1 million for the year ended December 31, 2025 from $33.2 million for the year ended December 31, 2024.

The primary drivers of the increase from December 31, 2023 to December 31, 2024 were improved loss ratios as well as growth in Total Written Premiums leading to attaining higher Contingent Commissions.

The primary drivers of the increase from December 31, 2024 to December 31, 2025 were an increase in Total Written Premium and receiving and qualifying for additional Contingent Commissions, assisted by improved loss ratios.

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.

3 unchanged sentences

Adjusted EBITDA is defined as net income (the most directly comparable GAAP measure) before interest, income taxes, depreciation and amortization, adjusted to exclude equity-based compensation, impairment expense, and other non-operating items, including, among other things, certain non-cash charges and certain non-recurring or non-operating gains or losses.

Adjusted EBITDA increased by $30.1 million, or 43%, to $99.9 million for the year ended December 31, 2024, from $69.8 million for the year ended December 31, 2023, driven by a 17% increase in Core Revenue with slower growth of 13% in employee compensation and benefits excluding equity-based compensation and of 14% in general and administrative expenses excluding impairment as well as a $17.6 million increase in high-margin Contingent Commissions.

Adjusted EBITDA increased by $13.7 million, or 14%, to $113.6 million for the year ended December 31, 2025, from $99.9 million for the year ended December 31, 2024, driven by a 16% increase in Core Revenue, a $7.0 million increase in high-margin Contingent Commissions, partially offset by growth of 19% in employee compensation and benefits excluding equity-based compensation and 15% in general and administrative expenses excluding impairment.

Additionally, the increase for the year ended December 31, 2025 included $4.0 million of Renewal Revenues recognized due to the release of a constraint on certain variable consideration related to policies placed and made effective in previous periods.

Adjusted EBITDA Margin

2 unchanged sentences

For the year ended December 31, 2025, Adjusted EBITDA Margin was 31% compared to 32% for the year ended December 31, 2024.

The Adjusted EBITDA margin increase came from a 17% increase in Core Revenue with slower growth of 13% in employee compensation and benefits excluding equity-based compensation and of 14% in general and administrative expenses excluding impairment as well as a $17.6 million increase in high-margin Contingent Commissions.

The Adjusted EBITDA margin decrease came as a result of employee compensation and benefits, excluding equity-based compensation, growing faster than total revenue.

Adjusted EPS is a supplemental measure of our performance, defined as earnings per share (the most directly comparable GAAP measure) before non-recurring or non-operating income and expenses, adjusted to assume a single class of stock (Class A) and assuming noncontrolling interest does not exist.

Adjusted EPS is a useful measure to management because it eliminates the impact of items that do not relate to business performance and helps compare companies that may not have a dual-share class structure.

Adjusted EPS increased by $0.66 to $1.99 for the year ended December 31, 2024, from $1.33 for the year ended December 31, 2023, driven by a significant increase in income from operations driven by strong growth in Core Revenue and Contingent Commissions with slower growth in operating expenses and the repurchase of 1,045 thousand Class A shares as part of our share repurchase program.

Adjusted EPS decreased by $0.13 to $1.86 for the year ended December 31, 2025, from $1.99 for the year ended December 31, 2024, driven by a decrease in basic EPS and equity-based compensation, partially offset by an increase in impairment and other gains and losses.

GAAP to Non-GAAP Reconciliations

37 unchanged sentences

Equity-based compensation 23,375 27,971 23,989

Impairment expense 347 3,628 —

Impairment and other gains and losses

4,505 347 3,628

Other (income) expense (192) 7,101 —

1 unchanged sentence

Net Income Margin (1)

12 % 16 % 9 %

Adjusted EBITDA Margin (2)

31 % 32 % 27 %

(1) Net Income Margin is calculated as Net Income divided by Total Revenue ($49,113 / $314,505), ($23,696 / $261,276), and ($2,630 / $209,390) for the years ended December 31, 2024, 2023, and 2022.

(2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue excluding other non-operating items ($99,911 / $314,505) for the year ended December 31, 2024, ($69,817 / $261,276) for the year ended December 31, 2023, and ($36,654 /$209,390) for the year ended December 31, 2022.

(1) Net Income Margin is calculated as Net Income divided by Total Revenue ($44,451 / $365,304), ($49,113 / $314,505), and ($23,696 / $261,276) for the years ended December 31, 2025, 2024, and 2023, respectively.

(2) Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Total Revenue excluding other non-operating items ($113,599 / $365,304), ($99,911 / $314,505), and ($69,817 /$261,276) for the years ended December 31, 2025, 2024, and 2023, respectively.

The following tables show a reconciliation from basic earnings per share to Adjusted EPS for the years ended December 31, 2025, 2024, and 2023.

5 unchanged sentences

0.63 0.75 0.64

impairment expense (2)

impairment and other gains and losses (2)

0.12 0.01 0.10

Adjusted EPS (non-GAAP) $ 1.86 $ 1.99 $ 1.33

(1) Calculated as equity-based compensation divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock outstanding during the period 2025 - [$23.4 million / ( 25.0 million + 12.2 million )] 2024 - [ $28.0 million / ( 24.7 million + 12.7 million )] 2023 - [ $24.0 million / ( 23.9 million + 13.8 million )]

(2) Calculated as impairment expense divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock [ $0.3 million / ( 24.7 million + 12.7 million )] for the year ended December 31, 2024 and [ $3.6 million / ( 23.9 million + 13.8 million )].

No impairment was recorded for the year ended December 31, 2022.

(2) Calculated as impairment and other gains and losses divided by the sum of the weighted average number of shares of Class A common stock and Class B common stock [ $4.5 million / ( 25.0 million + 12.2 million )] for the year ended December 31, 2025, [ $0.3 million / ( 24.7 million + 12.7 million )] for the year ended December 31, 2024, and [ $3.6 million / ( 23.9 million + 13.8 million )] for the year ended December 31, 2023.

Consolidated results of operations

19 unchanged sentences

Interest expense (23,793) (7,339) (6,568)

Other (expense) income, net (7,101) — —

Other income (expense) 192 (7,101) —

Income before taxes 50,848 46,700 26,388

19 unchanged sentences

Renewal Commissions increased by $3.7 million, or 5%, to $78.6 million for the year ended December 31, 2025 from $74.9 million for the year ended December 31, 2024.

This increase is primarily attributable to an increase in the number of policies in the renewal term from December 31, 2023 to December 31, 2024, assisted by client retention of 84%, and premium rate increases.

This increase is primarily attributable to the recognition of

$3.0 million due to the release of the constraint on certain variable consideration related to policies placed and made effective in previous periods as well as an increase in the number of policies in the renewal term from December 31, 2024 to December 31, 2025, assisted by client retention of 85% and premium rate increases.

New Business Commissions increased by $3.4 million, or 14%, to $28.0 million for the year ended December 31, 2025 from $24.6 million for the year ended December 31, 2024.

This increase in New Business Commissions was primarily attributable to an increase in total sales agent head count to 489 at December 31, 2025, from 417 at December 31, 2024, a 17% increase.

Revenue from Agency Fees decreased by $0.1 million, or 1%, to $8.1 million for the year ended December 31, 2024 from $8.2 million for the year ended December 31, 2023.

This decrease in Agency Fees was primarily attributable to slight decreases in both the percentage of policies written where an agency fee was charged and the average amount of an agency fee charge.

Revenue from Agency Fees increased by $2.3 million, or 28%, to $10.4 million for the year ended December 31, 2025 from $8.1 million for the year ended December 31, 2024.

This increase in Agency Fees was primarily attributable to increases in the average fee charged as well as an increase in the number of policies written where an agency fee was charged.

Revenue from Contingent Commissions increased by $7.0 million, or 22%, to $38.4 million for the year ended December 31, 2025, from $31.4 million for the year ended December 31, 2024.

The increase is primarily attributable to growth in total written premiums as well as receiving and qualifying for additional Contingent Commissions.

The increase is primarily attributable to growth in Total Written Premium as well as receiving and qualifying for additional Contingent Commissions.

Franchise Revenues

14 unchanged sentences

The increase in revenue from Renewal Royalty Fees was primarily attributable to an increase in the number of policies in the renewal term from December 31, 2024 to December 31, 2025, assisted by client retention of 85% and premium rate increases.

The increase was also impacted by the recognition of $1.0 million due to the release of the constraint on certain variable consideration related to policies placed and made effective in previous periods.

Revenue from New Business Royalty Fees increased by $3.0 million, or 11%, to $30.2 million for the year ended December 31, 2025 from $27.1 million for the year ended December 31, 2024.

The increase in revenue from New Business Royalty Fees was driven primarily by an increase in New Business Production per Agency and rising premium rates.

Initial Franchise Fee revenue decreased approximately $4.6 million, or 41%, to $6.6 million for the year ended December 31, 2024 from $11.2 million for the year ended December 31, 2023.

The primary driver of the decrease in Initial Franchise Fees was a decrease in terminations of franchises, which reduced the accelerated recognition of initial franchise fee revenue.

The increase in revenue from New Business Royalty Fees was driven primarily by an increase in the number of franchise agents, an increase in Franchise productivity, and rising premium rates.

Initial Franchise Fee revenue decreased by $1.0 million, or 15%, to $5.6 million for the year ended December 31, 2025 from $6.6 million for the year ended December 31, 2024.

The primary drivers of the decrease in Initial Franchise Fees were a decrease in total franchises and lower turnover of franchises during the period, which avoids accelerated recognition of Initial Franchise Fees for terminated franchises.

Interest Income

2 unchanged sentences

Employee compensation and benefits expenses increased by $23.4 million, or 14%, to $196.4 million for 2025 from $172.9 million for 2024.

This was primarily related to investments in corporate producers and technology functions, and increases in equity-based compensation of 17% related to additional stock options granted during 2024.

The increase was primarily related to investments in corporate producers and our service and technology functions, partially offset by a decrease in equity-based compensation.

General and administrative expenses

General and administrative expenses increased by $14.3 million, or 21%, to $81.4 million for 2025 from $67.1 million for 2024.

This increase was primarily attributable to increased spending on software offset by a decrease in asset impairment charges.

This increase was primarily attributable to increases in spend on technology and professional services as well as an increase of $4.3 million in asset impairment charges.

Bad debts decreased by $1.1 million, or 36%, to $1.8 million for 2025 from $2.9 million for 2024.

4 unchanged sentences

Interest expense

Interest expenses increased by $0.8 million, or 12%, to $7.3 million for 2024 from $6.6 million for 2023.

Interest expense increased by $16.5 million, or 224%, to $23.8 million for 2025 from $7.3 million for 2024.

This increase is attributable to an increase in total borrowings outstanding.

Other income (expense)

Other income (expense) consists of remeasurements of our tax receivable agreement liability and interest income.

Other income (expense) decreased by $7.1 million for 2024 to $(7.1) million, primarily due to remeasurements of our tax receivable agreement liability due to an increase in the effective tax rate resulting from changes in state apportionment and related state filing requirements, offset by interest income generated by cash held in interest-bearing checking accounts.

Other income (expense) consists of interest earned on cash deposits, loss on debt extinguishment, debt modification expense, and operating remeasurements of our tax receivable agreement liability.

Other income (expense) increased by $7.3 million to $0.2 million for 2025, primarily due to remeasurements of our tax receivable agreement liability during 2024 due to increases in our effective tax rate as we identified additional state filing requirements.

Tax expense (benefit)

Tax expense (benefit) decreased by $5.1 million, or 190%, to $(2.4) million for 2024 from $2.7 million for 2023.

This decrease is primarily attributable to the deferred tax impact of changes in state apportionment and related state filing requirements.

Tax expense (benefit) increased by $8.8 million, or 365%, to $6.4 million expense for 2025 from $2.4 million benefit for 2024.

This increase is primarily attributable to the increase in income before taxes during 2025 and the benefit in 2024 attributable to the remeasurement of our deferred tax assets due to increases in our effective tax rate as we identified additional state filing requirements.

Liquidity and capital resources

5 unchanged sentences

(3) borrowings, interest payments and repayments under our credit agreement;

(4) issuing shares of Class A common stock.

and (4) issuing shares of Class A common stock.

As of December 31, 2025, our unrestricted cash and cash equivalents, and restricted cash was $37.9 million.

1 unchanged sentence

general, administrative and other expenses;

and debt service.

investments in strategic technologies;

debt service;

special dividends, share repurchases, and distributions to our owners.

Credit agreement

12 unchanged sentences

Net cash provided by operating activities was $91.8 million for 2025 as compared to net cash provided by operating activities of $71.5 million for 2024.

This increase in net cash provided by operating activities was primarily attributable to a $25.4 million increase in net income, with an $(15.0) million adjustment due to a non-cash loss on the remeasurement of our tax receivable agreement liability, and a $10.8 million lower decrease in our contract liabilities driven by fewer franchise terminations in 2024.

These increases were partially offset by a $19.9 million increase in commissions and agency fees receivable, which is primarily related to an increase in contingent commissions receivable.

The increase in net cash provided by operating activities was primarily attributable to an increase in revenues of $50.8 million, including improved cash collections on commissions and agency fees.

This increase was partially offset by a $37.5 million increase in operating expenses, which included noncash impairment expense of $4.7 million.

Operating activities also reflected a $9.6 million operating increase in our deferred tax assets.

Investing activities

Net cash used for business investment activities was $23.5 million for 2025 as compared to net cash used for business investment activities of $12.4 million for 2024.

This decrease in net cash used in business investment activities was primarily attributable to a $6.9 million decrease in purchases of books of business and a $3.5 million decrease in cash purchases of property and equipment offset by a $3.5 million increase in cash paid for software development.

This increase in net cash used in business investment activities was primarily attributable to a $4.9 million increase in purchases of books of business and a $4.7 million increase in cash purchases of property and equipment.

Financing activities

Net cash used for financing activities was $88.3 million for 2025 as compared to net cash used for financing activities of $45.2 million for 2024.

This increase in net cash used for financing activities was primarily driven by repurchases of our Class A common stock for $63.2 million and a $5.4 million increase in tax receivable agreement payments, offset by new borrowings under our term loan of $25.0 million, a $7.5 million decrease in payments on our term loan due to an additional $10 million principal payment made in 2023 offset by higher quarterly payments in 2024, and a $6.1 million decrease in member distributions.

This increase in net cash used for financing activities was primarily driven by issuance of a $300.0 million term loan, which was used to repay our previous term loan of $93.1 million and fund a special distribution and dividend of $205.0 million.

We also made share repurchases during the year of $81.7 million.

Future sources and uses of liquidity

1 unchanged sentence

Based on our current expectations, we believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments in the foreseeable future.

Our primary liquidity needs comprise cash to (1) provide capital to facilitate the organic growth of our business, (2) pay operating expenses, including cash compensation to our employees, (3) make payments under the tax receivable agreement, (4) pay interest and principal due on borrowings under our Credit Agreement (5) pay income taxes, (6) repurchase shares under our Share Repurchase Program, and (7) when deemed advisable by our board of directors, pay dividends.

Our primary liquidity needs comprise cash to (1) provide capital to facilitate the organic growth of our business, (2) pay operating expenses, including cash compensation to our employees, (3) make payments under the tax receivable agreement, (4) pay interest and principal due on borrowings under our Credit Agreement (5) pay income taxes, (6) repurchase shares under our Share Repurchase Program, and (7) pay dividends when deemed advisable by our board of directors.

Dividend policy

Assuming Goosehead Financial, LLC makes distributions to its members in any given year, the determination to pay dividends, if any, to our Class A common stockholders out of the portion, if any, of such distributions remaining after our payment of taxes and tax receivable agreement payments (any such portion, an “excess distribution”) will be made at the sole discretion of our board of directors.

Our board of directors may change our dividend policy at any time.

Our board of directors may change our dividend policy at any

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Dividend policy".

Share Repurchase Program

On April 24, 2024, our board of directors approved a share repurchase program with authorization to purchase up to $100 million of our Class A common stock, which expired on March 31, 2025.

On April 23, 2025, our board of directors approved a new share repurchase program with authorization to purchase up to $100 million of our Class A common stock through May 1, 2026.

On February 17, 2026, our board of directors extended our share repurchase program, increasing the authorization by $180.0 million and extending the program through May 1, 2027.

See "Note 11.

Stockholders' Equity" in the consolidated financial statements included herein for a discussion of the repurchase programs.

Tax receivable agreement

21 unchanged sentences

Certain relationships and related transactions, and director independence".

We historically accounted, and anticipate that

we will continue to account for the effects of these increases in tax basis and associated payments under the tax receivable agreement arising from redemptions or exchanges as follows:

We historically accounted, and anticipate that we will continue to account for the effects of these increases in tax basis and associated payments under the tax receivable agreement arising from redemptions or exchanges as follows:

• we will record an increase in deferred tax assets for the estimated income tax effects of the increases in tax basis based on enacted federal and state tax rates at the date of the redemption or exchange;

19 unchanged sentences

Rent expense was $6.8 million, $7.5 million, and $7.8 million for years ending December 31, 2025, 2024, and 2023.

(2) The Company further amended its credit facilities on April 24, 2024 increasing term loan borrowings by $25 million and increasing the revolving credit facility by $25 million to $75 million, of which nothing was drawn on the revolving credit facility as of December 31, 2024.

(2) The Company entered into a new credit agreement on January 8, 2025 for a $300 million term loan and a $75 million revolving credit facility, of which nothing was drawn as of December 31, 2025.

Debt" under Part II, Item 8 of this Form 10-K.

(3) Interest payments on our outstanding debt obligations under our Credit Agreement.

1 unchanged sentence

We have calculated future interest obligations based on the interest rate for our debt obligations as of December 31, 2025.

(4) On January 8, 2025, the Company closed on a $300 million term loan and retired our existing $93 million term loan.

Debt" in the consolidated financial statements.

(4) See "Item 7.

18 unchanged sentences

The transaction price for contingent commissions is estimated based on all available information and constrained such that it is probable there will not be a significant reversal of revenue.

Contingent commissions revenue is recognized over time as the Company completes its performance obligations as the underlying policies are placed and other contractual obligations are met.

Contingent commissions revenue is

recognized over time as the Company completes its performance obligations as the underlying policies are placed and other contractual obligations are met.

Certain costs to obtain or fulfill a contract are capitalized.

7 unchanged sentences

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 7. Management’s Discussion and Analysis