What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-19 compared with 2025-03-03 · 147 added, 194 removed, 755 unchanged (31% of the section changed)

22 unchanged sentences

Litigation 100

Related Party Transactions 100

Report of Independent Registered Public Accounting Firm

2 unchanged sentences

We have audited the accompanying consolidated balance sheets of Goosehead Insurance, Inc.

and subsidiaries (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, shareholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

19 unchanged sentences

This estimate includes fixed consideration due based on the contractual terms of the current policy, adjustments for estimates of modifications of the contractual terms of the current policy and/or termination of the policy before the end of the current term, and constraint of the variable consideration to the extent that it is probable there will not be a significant reversal of revenue.

For the year ended December 31, 2024, commissions and agency fees was $139.1 million, of which $74.9 million relates to renewal commissions and $24.6 million relates to new business commissions.

For the year ended December 31, 2024, franchise revenue was $174.5 million, of which $138.9 million relates to renewal royalty fees and $27.1 million relates to new business royalty fees.

We identified renewal and new business commissions and renewal and new business royalty fees revenue as a critical audit matter because of the judgments and assumptions necessary for management to estimate the variable consideration to be received for the current policy term.

This required a high degree of auditor judgment when

performing audit procedures to evaluate the reasonableness of management’s estimates of variable consideration and required extensive audit effort when performing those audit procedures due to the volume of commissions contracts.

We identified commissions revenue, consisting of renewal and new business commissions, and royalty fees revenue, consisting of renewal and new business royalty fees, as a critical audit matter because of the judgments and assumptions necessary for management to estimate the variable consideration to be received for the current policy term.

This required a high degree of auditor judgment when performing audit procedures to evaluate the reasonableness of management’s estimates of variable consideration and required extensive audit effort when performing those audit procedures due to the volume of commissions contracts.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates of the variable consideration in recognizing revenue for renewal and new business commissions and renewal and new business royalty fees revenue included the following, among others:

• We tested the operating effectiveness of controls over commissions and royalty fees revenue, including management’s controls over its estimates of the variable consideration.

• For a sample of commissions and royalty fees revenue transactions, we tested the recording of cash receipts by agreeing the amounts recognized to source documents.

65 unchanged sentences

Note payable 2,993 10,063

Liabilities under tax receivable agreement 6,237 —

Total current liabilities 58,313 46,457

9 unchanged sentences

Accumulated deficit ( 133,356 ) ( 15,401 )

Total stockholders' equity and members' deficit 43,889 27,966

Total stockholders' equity ( 95,504 ) 43,889

Noncontrolling interests ( 67,284 ) ( 4,813 )

7 unchanged sentences

Balance January 1, 2023 23,034 14,470 $ 228 $ 146 $ 51,038 $ ( 59,967 ) $ ( 8,555 ) $ ( 25,069 ) $ ( 33,624 )

Distributions — — — — — — ( 10,939 ) ( 10,939 )

Net income — — — — — 14,140 14,140 9,556 23,696

8 unchanged sentences

Distributions — — — — — — — ( 4,829 ) ( 4,829 )

Share repurchases ( 1,045 ) — ( 10 ) — ( 41,551 ) — ( 41,561 ) ( 22,044 ) ( 63,605 )

Net income — — — — — 30,426 30,426 18,687 49,113

8 unchanged sentences

Distributions — — — — — — — ( 66,931 ) ( 66,931 )

Dividends declared ($ 5.91 per share)

— — — — — ( 145,786 ) ( 145,786 ) — ( 145,786 )

Share repurchases ( 1,014 ) — ( 10 ) — ( 53,302 ) — ( 53,312 ) ( 28,408 ) ( 81,720 )

16 unchanged sentences

Depreciation and amortization 11,270 10,535 9,244

Loss on disposal of fixed assets 74 — —

Amortization of debt discounts and issuance costs 1,142 420 225

(Gain) loss on disposal of fixed assets ( 189 ) 74 —

Loss on debt extinguishment 804 — —

Impairment expense 4,694 347 3,628

1 unchanged sentence

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

Impact of tax receivable agreement 8,672 23,640 24,703

Adjustments to tax receivable agreement liability 516 8,672 23,640

Deferred income taxes 5,888 ( 3,745 ) ( 22,123 )

12 unchanged sentences

Proceeds from notes receivable to franchisees 303 94 —

Purchase of software ( 11,209 ) ( 7,705 ) ( 2,484 )

Capitalized software development costs ( 13,096 ) ( 11,209 ) ( 7,705 )

Cash consideration paid for asset acquisitions ( 4,922 ) — ( 6,895 )

Cash paid for asset disposals ( 32 ) — —

Purchase of property and equipment ( 5,671 ) ( 979 ) ( 4,452 )

3 unchanged sentences

Debt issuance cost ( 7,944 ) ( 621 ) —

Repayment of revolving credit facility — — ( 50,000 )

Repayment of term note payable ( 9,422 ) ( 16,875 ) ( 4,375 )

Proceeds from revolving credit facility — — 25,000

Proceeds from term note payable 25,000 — —

Repayment of notes payable ( 101,700 ) ( 9,422 ) ( 16,875 )

Proceeds from notes payable 306,374 25,000 —

Proceeds from the issuance of Class A common stock 13,967 12,235 9,898

2 unchanged sentences

Payments pursuant to tax receivable agreement ( 6,736 ) ( 5,372 ) —

Dividends to stockholders ( 145,786 ) — —

Net cash used for financing activities ( 88,250 ) ( 45,199 ) ( 17,991 )

7 unchanged sentences

Cash paid for income taxes 929 631 701

Cash paid pursuant to tax receivable agreement 7,371 5,372 421

See Notes to the Consolidated Financial Statements

31 unchanged sentences

Following completion of the Reorganization Transactions and the Offering, GSHD owned 37.3 % of GF and the Pre-IPO LLC Members owned the remaining 62.7 %.

GSHD is the sole managing member of GF and, although GSHD holds a minority economic interest in GF, GSHD has the sole voting power and control of management of GF.

GSHD is the sole managing member of GF and holds the sole voting power and management control.

Accordingly, GSHD consolidates the financial results of GF and reports noncontrolling interest in GSHD's consolidated financial statements.

5 unchanged sentences

Certain amounts previously reported in the prior period financial statements have been reclassified for comparative purposes to conform to the current period's presentation.

The Company elected to change its presentation of cash flows associated with "Premiums payable" from operating activities to present them as financing activities, net, within the Consolidated Statement of Cash Flows within the caption "Customer premiums, net".

This reclassification had no impact on the Consolidated Statements of Operations, Consolidated Balance Sheets, or Consolidated Statements of Stockholders' Equity.

Significant accounting policies

7 unchanged sentences

The Company earns interest on its cash balance that is held in interest-bearing checking accounts.

During the year ended December 31, 2024, the Company recognized $ 1.6 million in interest income within Other income (expense) in the Consolidated Statements of Operations.

No interest was earned during the years ended December 31, 2023 and 2022.

During the years ended December 31, 2025 and 2024, the Company recognized $ 2.9 million and $ 1.6 million, respectively, in interest income within Other income (expense) in the Consolidated Statements of Operations.

No interest was earned during the year ended December 31, 2023.

As of December 31, 2025, 2024 and 2023, the Company did not have any cash equivalents.

2 unchanged sentences

Premiums received but not yet remitted included in restricted cash were $ 3.5 million and $ 3.7 million as of December 31, 2025 and 2024, respectively.

The following is a reconciliation of our cash and restricted cash balances as presented in the consolidated statement of cash flows for the years ended December 31, 2024, 2023, and 2022 ( in thousands ):

The following is a reconciliation of our cash and cash equivalents and restricted cash balances as presented in the consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023 ( in thousands ):

2025 2024 2023

4 unchanged sentences

Upon issuance of a new policy, the Company typically collects the first premium payment from the insured and then remits the full premium amount to the insurance carrier.

The insurance carrier collects the remaining premiums

directly from the insured and remits the applicable commissions to the Company.

The insurance carrier collects the remaining premiums directly from the insured and remits the applicable commissions to the Company.

Accordingly, as reported in the accompanying consolidated balance sheets, commissions are receivables from the insurance carriers.

These direct-bill arrangements consist of a high volume of transactions with small premium amounts, with the billing controlled by the insurance carriers.

The income statement and balance sheet effects of the commissions are recorded at the contract effective date and generally are based on a percentage of premiums for insurance coverage.

The income statement and balance sheet effects of the commissions are recorded at the

contract effective date and generally are based on a percentage of premiums for insurance coverage.

During 2025, the Company wrote with over 200 insurance carriers, of which 76 provided national coverage.

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

In 2025, two carriers represented more than 10% of total revenue at 19 % and 13 %.

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

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

6 unchanged sentences

Receivable from franchisees

Receivable from franchisees consists of franchise fees receivable net of an allowance for uncollectible franchise fees and unamortized discount on franchise fees;

royalty fees receivable;

and notes receivable from franchisees.

Receivable from franchisees consists of franchise fees receivable net of an allowance for uncollectible franchise fees and unamortized discount on franchise fees, royalty fees receivable, and notes receivable from franchisees.

Franchise fees receivable

1 unchanged sentence

The contract liability will be amortized to franchise fees within Franchise revenues over the 10-year life of the franchise contract.

Franchis ees have the option to pay the full amount of franchise fees up front or to pay a deposit up front and the remaining balance by payment plan over time.

The franchisees that elect to pay the initial franchise fee over time pay in total an amount that exceeds the amount due had they paid the full amount up front.

Franchis ees have historically had the option to pay the full amount of franchise fees up front or to pay a deposit up front and the remaining balance by payment plan over time.

The franchisees that elected to pay the initial franchise fee over time pay in total an amount that exceeds the amount due had they paid the full amount up front.

As such, the payment plan option is treated as a zero-interest rate note, which creates an imputation of interest.

5 unchanged sentences

The Company calculates the allowance based on our history of write offs for all franchise accounts.

Franchise fees receivable and the related allowance is written off if the franchisee owing the balance terminates.

Franchise fees receivable and the related allowance are written off if the franchisee owing the balance terminates.

Royalty fees receivable

11 unchanged sentences

The Company capitalizes the commission payments paid to obtain new franchise contracts.

These deferred costs are amortized over the expected life of the underlying franchise fee, and are included in Other assets in the Company's consolidated balance sheet as of December 31, 2024.

These deferred costs are amortized over the expected life of the underlying franchise fee, and are included in Other assets in the Company's consolidated balance sheets.

See Note 3 Revenues for further explanation of the Company's revenue recognition policy.

9 unchanged sentences

In May 2023, the Company entered into an agreement to purchase Vivint Smart Home's insurance Book of Business, for which the Company paid $ 5.8 million in cash consideration.

Total purchases of books of business during the year ended December 31, 2023 was $ 6.9 million.

We made no purchases of books of business during the year ended December 31, 2024.

Total purchases of books of business during the year ended December 31, 2025 were $ 4.9 million.

Asset Impairment

1 unchanged sentence

In reviewing identifiable assets, if the undiscounted future cash flows were less than the carrying amount of the respective assets, an indicator of impairment would exist, and further analysis would be required to determine whether or not a loss would need to be charged against current period earnings as a component of general and administrative expenses.

Based on a review of tangible assets during the year ended December 31, 2024, the Company identified one office lease that would be subleased and completed a recoverability assessment for assets at that location.

Based on a review of tangible assets during the year ended December 31, 2025, the Company identified three office leases that would be exited or subleased and completed a recoverability assessment for assets at each location.

Based on the results of the recoverability assessment, the Company determined that the undiscounted cash flows of the assets were below their carrying values.

1 unchanged sentence

The Company determined the fair values by estimating sublease cash flows based on market rates for similar properties and discounted them using the Company's internal borrowing rate.

Based on the results of the recoverability assessment, the Company determined that the undiscounted cash flows of the assets were below their carrying values.

As a result, the Company compared the fair values of the assets to their carrying values and recorded an impairment expense of $ 0.1 million of property and equipment and $ 0.2 million of right-of-use asset for the amount the carrying values exceeded the fair values.

The Company determined the fair values by estimating sublease cash flows based on market rates for similar properties and discounted them using the Company's internal borrowing rate.

Based on a review of tangible assets during the year ended December 31, 2023, the Company identified two office leases that will be subleased and completed a recoverability assessment for assets at those locations.

4 unchanged sentences

As a result, the Company determined the assets had no fair value and recorded an impairment expense of $ 1.1 million related to the asset group.

No additional impairment was identified during the year ended December 31, 2024, 2023, and 2022.

No additional impairment was identified during the years ended December 31, 2025, 2024, and 2023.

Premiums payable

12 unchanged sentences

See Note 15 for further information.

Prior to the Offering, GF was treated as a partnership for U.S.

federal and applicable state and local income tax purposes.

As a partnership, GF's taxable income or loss was included in the taxable income of its members.

Accordingly, no income tax expense was recorded for federal and state and local jurisdictions for periods prior to the Offering.

In connection with the Offering completed on May 1, 2018, the Company became a taxable entity.

The Company accounts for income taxes pursuant to the asset and liability method, which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse.

1 unchanged sentence

The Company expenses advertising costs as they are incurred.

Advertising expense for the years ended December 31, 2024, 2023, and 2022 was $ 1.0 million, $ 0.9 million, and $ 1.0 million.

Advertising expense for the years ended December 31, 2025, 2024, and 2023 was $ 1.3 million, $ 1.0 million, and $ 0.9 million, respectively, and is included within general and administrative expenses in the consolidated statements of operations.

Recently adopted accounting pronouncements

In March 2020, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No.

2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting , which provides optional expedients and exceptions for applying U.S.

GAAP if certain criteria are met to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued.

ASU 2020-04 was initially effective as of March 12, 2020 through December 31, 2022.

In December 2022, ASU 2022-06 extended the effective period through December 31, 2024.

The adoption of ASU 2020-04 did not have a material impact on our consolidated financial statements.

The standard will ease, if warranted, the administrative requirements for accounting for the future effects of the rate reform.

A substantial portion of our indebtedness bore interest at variable interest rates, primarily based on USD-LIBOR, and contained a provision to move to the Secured Overnight Financing Rate ("SOFR") if or when LIBOR is phased out.

On April 26, 2023, the Company entered into an Amendment No.1 to the Second Amended and Restated Credit Agreement executing the provision to move to SOFR from LIBOR.

Under the allowable expedients, a modification of a debt contract that is only a replacement of the reference rate is accounted for as a non-substantial modification.

In November 2023, the FASB issued ASU No.

5 unchanged sentences

Segment information" for more information.

Accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU No.

5 unchanged sentences

The standard is to be applied on a prospective basis, although optional retrospective application is permitted.

The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.

The Company adopted this ASU for the annual period ended December 31, 2025.

Refer to our income tax disclosure in "Note 10.

Income taxes" for more information.

Accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU No.

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Suptopic 220-40):

2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The amendment requires additional disclosures of certain costs and expenses with the notes to the financial statements.

The amendment requires additional disclosures of certain costs and expenses within the notes to the consolidated financial statements.

Additionally, in January 2025, the FASB issued ASU No.

2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Suptopic 220-40):

2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date , which clarified that the updates are effective for annual reporting periods beginning after December 15, 2026, and interim periods thereafter.

The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.

The Company is currently evaluating the impact this guidance will have on its consolidated financial statement disclosures.

In July 2025, the FASB issued ASU No.

2025-05, Financial Instruments—Credit Losses—(Topic 326)—Measurement of Credit Losses for Account Receivable and Contract Assets.

The amendments provide for a practical expedient that an entity may assume that conditions as of the balance sheet date remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers.

The guidance is effective for annual reporting periods beginning after December 15, 2025, and should be applied prospectively.

The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles —Goodwill and Other—Internal-Use Software (Subtopic 350-40)—Targeted Improvements to the Accounting for Internal-Use Software.

The amendments improve the accounting for costs related to internal-use software.

The new guidance eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended.

When evaluating if a project is probable to be completed, significant development uncertainty must be assessed.

Additionally, disclosures for property, plant and equipment will be required for all capitalized software costs.

The guidance is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted as of the beginning of an annual reporting period.

Upon adoption, the guidance may be applied prospectively, retrospectively or using a modified transition approach.

The Company is currently evaluating the impact this guidance will have on its consolidated financial statements.

Commissions and agency fees

11 unchanged sentences

For Agency Fees, the Company enters into a contract with the insured, in which the Company's performance obligation is to place an insurance policy.

The transaction price of the agency fee is set at the time the sale is agreed upon, and is included in the contract.

The transaction price of the agency fee is set at the time the sale is

agreed upon, and is included in the contract.

Agency Fee revenue is recognized at a point in time, which is the effective date of the policy.

23 unchanged sentences

Costs to fulfill - The Company has evaluated the need to capitalize costs to fulfill customer contracts and has determined that there are no costs that meet the definition for capitalization under ASC 340.

Performance obligations satisfied in previous periods

During the year ended December 31, 2025, the Company recognized $ 3.0 million in Commissions and agency fees and $ 1.0 million in Franchise revenues due to the release of the constraint on certain variable consideration related to policies placed and made effective in previous periods.

The Company did not recognize any revenue related to performance obligations satisfied in previous periods for the years ended December 31, 2024, or 2023.

Disaggregation of Revenue

21 unchanged sentences

The following table provides information about receivables, cost to obtain, and contract liabilities from contracts with customers (in thousands) :

December 31, 2024 December 31, 2023 Increase/(decrease)

2025 2024 Increase/(decrease)

Cost to obtain franchise contracts (1)

10 unchanged sentences

Significant changes in contract liabilities are as follows (in thousands) :

December 31, 2024 December 31, 2023

Contract liability at beginning of period $ 18,466 $ 27,099

57 unchanged sentences

The Company has adopted a qualified deferred compensation plan under section 401(k) of the Internal Revenue Code.

Full-time employees over the age of 21 with six months of service are eligible to participate.

Full-time employees over the age of 21 with one month of service are eligible to participate.

Under the plan, the Company’s contribution is based on a discretionary matching of 100 % of salary deferral elected by each eligible employee up to a maximum of 3 % of compensation.

2 unchanged sentences

Company contributions totaled $ 1.7 million, $ 1.5 million, and $ 1.5 million for the years ended December 31, 2025, 2024, and 2023.

On July 21, 2021, the Company refinanced its $ 25.0 million revolving credit facility and $ 80.0 million term note payable to a $ 50.0 million revolving credit facility and $ 100.0 million term note payable in order to obtain a more favorable interest rate on the outstanding debt.

The revolving credit facility and term note are collateralized by substantially all the Company's assets, which includes right to future commissions and royalties.

On July 21, 2021, the Company entered into the Second Amended and Restated Credit Agreement (the "Second Amended and Restated Credit Agreement") to refinance its $ 25.0 million revolving credit facility and $ 80.0 million term note payable to a $ 50.0 million revolving credit facility and $ 100.0 million term note payable in order to obtain a more favorable interest rate on the outstanding debt.

The revolving credit facility and term note were collateralized by substantially all the Company's assets, which included right to future commissions and royalties.

On April 26, 2023, the Company entered into Amendment No.1 of the Second Amended and Restated Credit Agreement, which provided that LIBOR should be replaced with Term SOFR.

1 unchanged sentence

2 of the Second Amended and Restated Credit Agreement, increasing the term note payable by $ 25 million and increasing the capacity of the revolving credit facility by $ 25 million to a total capacity of $ 75 million.

At December 31, 2024, the Company had nothing drawn against the revolving credit facility and had a letter of credit of $ 0.2 million applied against the maximum borrowing availability.

Thus, amounts available to draw totaled $ 74.8 million.

The revolving credit facility is due in full on July 21, 2026.

The aggregate principal amount of the term note as of December 31, 2024 is $ 93.1 million, payable in quarterly installments of $ 2.5 million, with a balloon payment of $ 80.5 million on July 21, 2026.

Amounts outstanding under both the term note and the revolving credit facility bear interest at Term SOFR plus a margin based on our current leverage ratio.

The interest rates applicable for each leverage ratio tier are as follows:

On January 8, 2025, the Company entered into a credit agreement (the "2025 Credit Agreement") providing for an aggregate $ 300 million term notes payable (the "2025 Initial Term Loan") and $ 75 million revolving credit facility (the "2025 Revolving Credit Facility").

The 2025 Initial Term Loan matures on January 8, 2032 and the 2025 Revolving Credit Facility matures on January 8, 2030.

The 2025 Credit Agreement replaced the Second Amended and Restated Credit Agreement, which was repaid with the proceeds of the 2025 Initial Term Loan and terminated.

The Company recorded $ 6.8 million of debt issuance costs and original issue discount related to the 2025 Initial Term Loan within Notes Payable and $ 1.8 million of debt issuance costs related to the 2025 Revolving Credit Facility within Other Assets in the consolidated balance sheets.

On July 9, 2025, the Company entered into Amendment No.

1 to the 2025 Credit Agreement in order to refinance the outstanding balance of the 2025 Initial Term Loan with a new term loan facility (the "Term B-1 Facility").

The amendment reduced the applicable interest rate on our term loan borrowings under the facility by 0.50 % to a rate of Term SOFR plus 3.00 %.

The Term B-1 Loan is payable in quarterly installments of $ 0.7 million, with a balloon payment of $ 280.5 million on January 8, 2032.

The 2025 Credit Agreement is secured by all property owned, leased or operated by the Company except for certain excluded assets.

As of December 31, 2025, the Company had nothing drawn against the revolving credit facility and had $ 75.0 million available to draw.

Our long term debt consists of the following (in thousands) :

December 31, 2025

Term Loan B-1 298,502

Unamortized discount and issuance costs ( 6,048 )

Current portion of note payable ( 2,993 )

Note payable, net of current portion $ 289,461

The Term B-1 Loan bears interest at a rate of Term SOFR plus 3.00 %.

The 2025 Revolving Credit Facility bears interest at Term SOFR plus a spread based on leverage ratio tiers as follows:

Leverage Ratio Interest Rate

3 unchanged sentences

SOFR + 250 bps

At December 31, 2024, the interest rate applicable for the credit facilities was Term SOFR plus 175 basis points.

Interest payments on the revolving credit facility totaled $ 0.2 million, $ 0.1 million, and $ 0.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Loan origination fees of $ 0.8 million at December 31, 2024 are reflected as a reduction to the note balance and are amortized through interest expense.

Interest payments on the revolving credit facility totaled $ 0.2 million, $ 0.2 million, $ 0.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The effective interest rate for the term note as of December 31, 2025 was 7.17 %.

Maturities of the term note payable for the next five calendar years as of December 31, 2025 are as follows (in thousands) :

2025 $ 10,063

Thereafter 283,537

Total $ 298,502

The Company’s note payable agreement contains certain restrictions and covenants.

Under these restrictions, the Company is limited in the amount of debt incurred and distributions payable.

In addition, the credit agreement contains certain change of control provisions that, if broken, would trigger a default.

Finally, the Company must maintain certain financial ratios.

The 2025 Credit Agreement contains certain affirmative and negative covenants.

Under these covenants, the Company is limited in the amount of additional debt incurred and distributions payable.

The Company's maximum allowable trailing twelve months debt-to-EBITDA ratio, as defined by the 2025 Credit Agreement, is 5.00 to 1.00.

Additionally, the 2025 Credit Agreement contains certain change of control provisions that, if breached, would trigger a default.

As of December 31, 2025, the Company was in compliance with these covenants.

8 unchanged sentences

The valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Subsequent event

The 2025 Initial Term Loan matures on January 8, 2032 and the 2025 Revolving Credit Facility matures on January 8, 2030.

This credit agreement replaces the existing Second Amended and Restated Credit Agreement, dated July 21, 2021, which was repaid with the proceeds of the 2025 Initial Term Loan and terminated.

Loans under the 2025 Credit Agreement will bear interest at a rate of Term SOFR plus 3.50 %.

The 2025 Credit Agreement is secured by all property owned, leased or operated by the Company except for certain excluded assets.

As a result of the Reorganization Transactions and the Offering, GSHD became the sole managing member of GF, which is treated as a partnership for U.S.

17 unchanged sentences

Total deferred income taxes 5,888 ( 3,745 ) 1,937

Income tax expense (benefit) $ ( 2,413 ) $ 2,692 $ 2,499

Income tax $ 6,397 $ ( 2,413 ) $ 2,692

A reconciliation of income tax expense computed at the U.S.

5 unchanged sentences

federal statutory rate 10,678 21.0 % 9,807 21.0 % 5,541 21.0 %

Tax on income not subject to entity level federal income tax ( 3,929 ) ( 2,034 ) ( 483 )

Permanent Differences:

Non-deductible stock compensation costs ( 3,060 ) ( 1,760 ) ( 1,478 )

Non-deductible excess compensation — 70 15

Meals & entertainment 178 152 101

Permanent Provision to Return 9 ( 53 ) 43

Tax effect of income not subject to entity level federal income tax

( 3,547 ) ( 7.0 ) ( 3,929 ) ( 8.5 ) ( 2,034 ) ( 7.8 )

Nontaxable or nondeductible items:

Excess tax (benefit) or deficiency on equity-based compensation ( 2,146 ) ( 4.2 ) ( 3,060 ) ( 6.6 ) ( 1,760 ) ( 6.7 )

Nondeductible equity-based compensation 721 1.4 731 1.6 127 0.5

Nondeductible excess compensation 691 1.4 313 0.7 1,028 3.9

Meals and entertainment

229 0.5 178 0.4 152 0.6

State income tax expense (benefit), net of federal benefit (1)

Other reconciling items:

Section 162(m) DTA Write-off 1,044 1,085 935

( 100 ) ( 0.2 ) ( 6,530 ) ( 14.0 ) ( 329 ) ( 1.2 )

Other ( 129 ) ( 0.3 ) 77 0.2 ( 33 ) ( 0.1 )

Income tax expense (benefit) $ 6,397 12.6 % $ ( 2,413 ) ( 5.2 ) % $ 2,692 10.2 %

(1) State taxes in Texas made up the majority (greater than 50%) of the tax effect in this category for 2025..

Deferred tax assets and liabilities

8 unchanged sentences

GSHD also has income tax net operating loss carryforwards for federal and state purposes of $ 103.0 million and $ 19.4 million (post apportionment pre-tax), respectively.

The federal net operating loss carryforwards are carried forward indefinitely and are limited to 80% of taxable income in a given year.

The federal net operating loss carryforwards are carried

forward indefinitely and are limited to 80% of taxable income in a given year.

The state net operating loss carryforwards begin to expire in 2033.

1 unchanged sentence

GSHD has determined there are no material uncertain tax positions as of December 31, 2025.

Cash paid for income taxes

The components of cash paid for income taxes are as follows (in thousands) :

Year Ended December 31, 2025

State and local

Other state and local

Total state and local

Tax receivable agreement

4 unchanged sentences

GSHD entered into a tax receivable agreement with the Pre-IPO LLC Members on May 1, 2018 that provides for the payment by GSHD to the Pre-IPO LLC Members of 85 % of the amount of cash savings, if any, in U.S.

federal, state and local income tax or franchise tax that GSHD actually realizes as a result of (i) any increase in tax basis in

GSHD's assets and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreement.

federal, state and local income tax or franchise tax that GSHD actually realizes as a result of (i) any increase in tax basis in GSHD's assets and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreement.

During the years ended December 31, 2025, 2024 and 2023, an aggregate of 0.7 million, 0.3 million and 1.5 million LLC Units, respectively, were redeemed by the Pre-IPO LLC Members for newly-issued shares of Class A common stock.

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We recognized a liability for the tax receivable agreement payments due to the Pre-IPO LLC Members, representing 85 % of the aggregate tax benefits we expect to realize from the tax basis increases related to the redemptions of LLC Units, after concluding it was probable that such tax receivable agreement payments would be paid based on our estimates of future taxable income.

As of December 31, 2024 and 2023, the total amount of payments due to the Pre-IPO LLC Members under the tax receivable agreement was $ 160.1 million and $ 149.3 million, respectively, of which $ 0.0 million and $ 0.0 million, respectively, was current and included in Accounts payables and accrued expenses on the Consolidated balance sheets.

As of December 31, 2025 and 2024, the total amount of payments due to the Pre-IPO LLC Members under the tax receivable agreement was $ 171.9 million and $ 160.1 million, respectively, of which $ 6.2 million and $ 0.0 million, respectively, was current and included in Liabilities under tax receivable agreement within Current liabilities on the Consolidated balance sheets.

Stockholder's equity

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Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to GSHD's stockholders for their vote or approval, except as otherwise required by applicable law, by agreement, or by GSHD's certificate of incorporation.

Correction of Prior Period Balances

Subsequent to the issuance of the Company’s Annual report on Form 10-K for the year ended December 31, 2023, the Company determined that it did not properly apply the guidance under ASC 810-10-45-23 in determining the allocation of activity related to the exercise of stock options, equity-based compensation, activity under employee stock purchase plan, and redemption of LLC Units.

The Company also identified an error in the recording of deferred tax adjustments related to Tax Receivable Agreement.

The net impact of these misstatements was an overstatement of additional paid-in capital, an understatement of accumulated deficit, and an understatement of noncontrolling interest as presented in the consolidated statements of stockholders’ equity and consolidated balance sheets for all periods presented.

As a result, the Company restated the prior period financial statements to correct the errors.

Additionally, the Company has changed the consolidated statement of stockholders' equity presentation to reflect the reallocation of noncontrolling interest within the specific line items resulting in reallocation instead of as a separate line item.

The Company will also correct previously issued quarterly financial statements for such misstatements in future filings, as applicable.

The Company evaluated the materiality of these misstatements from quantitative and qualitative perspectives and concluded the misstatements are not material to the prior periods.

The amounts previously reported within the Company’s financial statements have been revised to reflect the corrected balances as presented below (in thousands):

Consolidated balance sheet

(in thousands)

As of December 31, 2023

As previously reported Adjustment As corrected

Additional paid-in capital 103,228 ( 29,815 ) 73,413

Accumulated deficit ( 47,056 ) 1,229 ( 45,827 )

Total stockholders's equity 56,552 ( 28,586 ) 27,966

Noncontrolling interest ( 39,766 ) 28,586 ( 11,180 )

Consolidated statements of stockholders' equity

(in thousands)

Issued shares of Class A common stock Issued shares of Class B common stock Class A common stock Class B common stock Additional paid-in capital Accumulated deficit Total stockholders' equity Noncontrolling interest Total equity

As Previously Reported

Balance January 1, 2022 20,198 16,909 $ 200 $ 170 $ 46,281 $ ( 60,671 ) $ ( 14,020 ) $ ( 55,168 ) $ ( 69,188 )

Net income — — — — — 565 565 2,065 2,630

Exercise of stock options 381 — 4 — 5,427 — 5,431 — 5,431

Equity-based compensation — — — — 19,642 — 19,642 — 19,642

Activity under employee stock purchase plan 16 — — — 699 — 699 — 699

Redemption of LLC Units 2,439 ( 2,439 ) 24 ( 24 ) ( 7,598 ) — ( 7,598 ) 7,598 —

Deferred tax adjustments net of Tax Receivable Agreement liabilities — — — — 6,415 — 6,415 747 7,162

Reallocation of Noncontrolling interest — — — — — ( 464 ) ( 464 ) 464 —

Balance December 31, 2022 23,034 14,470 $ 228 $ 146 $ 70,866 $ ( 60,570 ) $ 10,670 $ ( 44,294 ) $ ( 33,624 )

Balance January 1, 2022 — — $ — $ — $ ( 11,545 ) $ 139 $ ( 11,406 ) $ 11,406 $ —

Net income — — — — — — — — —

Exercise of stock options — — — — ( 2,699 ) — ( 2,699 ) 2,699 —

Equity-based compensation — — — — ( 8,643 ) — ( 8,643 ) 8,643 —

Activity under employee stock purchase plan — — — — ( 317 ) — ( 317 ) 317 —

Redemption of LLC Units — — — — 2,630 — 2,630 ( 2,630 ) —

Deferred tax adjustments net of Tax Receivable Agreement liabilities — — — — 747 — 747 ( 747 ) —

Reallocation of Noncontrolling interest — — — — — 464 464 ( 464 ) —

Balance December 31, 2022 — — $ — $ — $ ( 19,828 ) $ 603 $ ( 19,225 ) $ 19,225 $ —

Balance January 1, 2022 20,198 16,909 $ 200 $ 170 $ 34,736 $ ( 60,532 ) $ ( 25,426 ) $ ( 43,762 ) $ ( 69,188 )

Net income — — — — — 565 565 2,065 2,630

Exercise of stock options 381 — 4 — 2,728 — 2,732 2,699 5,431

Equity-based compensation — — — — 10,999 — 10,999 8,643 19,642

Activity under employee stock purchase plan 16 — — — 382 — 382 317 699

Redemption of LLC Units 2,439 ( 2,439 ) 24 ( 24 ) ( 4,969 ) — ( 4,969 ) 4,969 —

Deferred tax adjustments net of Tax Receivable Agreement liabilities — — — — 7,162 — 7,162 — 7,162

Reallocation of Noncontrolling interest — — — — — — — — —

Balance December 31, 2022 23,034 14,470 $ 228 $ 146 $ 51,038 $ ( 59,967 ) $ ( 8,555 ) $ ( 25,069 ) $ ( 33,624 )

As Previously Reported

Balance January 1, 2023 23,034 14,470 $ 228 $ 146 $ 70,866 $ ( 60,570 ) $ 10,670 $ ( 44,294 ) $ ( 33,624 )

Distributions — — — — — — — ( 10,939 ) ( 10,939 )

Net income — — — — — 14,140 14,140 9,556 23,696

Exercise of stock options 409 — 4 — 9,286 — 9,290 — 9,290

Equity-based compensation — — — — 23,989 — 23,989 — 23,989

Activity under employee stock purchase plan 6 — 1 — 605 — 607 — 607

Redemption of LLC Units 1,517 ( 1,517 ) 15 ( 15 ) ( 4,677 ) — ( 4,677 ) 4,677 —

Deferred tax adjustments net of Tax Receivable Agreement liabilities — — — — 3,159 — 3,159 608 3,767

Reallocation of Noncontrolling interest — — — — — ( 626 ) ( 626 ) 626 —

Balance December 31, 2023 24,966 12,954 $ 250 $ 130 $ 103,228 $ ( 47,056 ) $ 56,552 $ ( 39,766 ) $ 16,786

Balance January 1, 2023 — — $ — $ — $ ( 19,828 ) $ 603 $ ( 19,225 ) $ 19,225 $ —

Distributions — — — — — — — — —

Net income — — — — — — — — —

Exercise of stock options — — — — ( 3,662 ) — ( 3,662 ) 3,662 —

Equity-based compensation — — — — ( 8,788 ) — ( 8,788 ) 8,788 —

Activity under employee stock purchase plan — — — — ( 224 ) — ( 224 ) 224 —

Redemption of LLC Units — — — — 2,078 — 2,078 ( 2,078 ) —

Deferred tax adjustments net of Tax Receivable Agreement liabilities — — — — 608 — 608 ( 608 ) —

Reallocation of Noncontrolling interest — — — — — 626 626 ( 626 ) —

Balance December 31, 2023 — — $ — $ — $ ( 29,815 ) $ 1,229 $ ( 28,586 ) $ 28,586 $ —

Balance January 1, 2023 23,034 14,470 $ 228 $ 146 $ 51,038 $ ( 59,967 ) $ ( 8,555 ) $ ( 25,069 ) $ ( 33,624 )

Distributions — — — — — — — ( 10,939 ) ( 10,939 )

Net income — — — — — 14,140 14,140 9,556 23,696

Exercise of stock options 409 — 4 — 5,624 — 5,628 3,662 9,290

Equity-based compensation — — — — 15,201 — 15,201 8,788 23,989

Activity under employee stock purchase plan 6 — 1 — 381 — 383 224 607

Redemption of LLC Units 1,517 ( 1,517 ) 15 ( 15 ) ( 2,598 ) — ( 2,598 ) 2,598 —

Deferred tax adjustments net of Tax Receivable Agreement liabilities — — — — 3,767 — 3,767 — 3,767

Reallocation of Noncontrolling interest — — — — — — — — —

Balance December 31, 2023 24,966 12,954 $ 250 $ 130 $ 73,413 $ ( 45,827 ) $ 27,966 $ ( 11,180 ) $ 16,786

Earnings Per Share

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Earnings per share of Class A common stock - Diluted $ 1.04 $ 1.16 $ 0.55

(1) For the years ended December 31, 2024 and 2023, the impact of the conversion of Class B common shares to Class A common shares calculated under the if-converted method was dilutive, and as such, (a) 12,749 thousand and 13,769 thousand common shares (assuming the conversion of all outstanding class B common stock) were included in the Weighted average outstanding Class A common shares - Diluted and (b) $ 13.9 million and $ 7.0 million of noncontrolling interest net income (after incremental tax effect from assuming conversion of all outstanding class B common stock), was added back to Net income available to GSHD - Diluted.

For the year 2022, the impact of the conversion of Class B common shares to Class A common shares is excluded from the calculation of Diluted EPS because inclusion of such shares would be anti-dilutive.

(1) For the years ended December 31, 2025, 2024, and 2023, the impact of the conversion of Class B common shares to Class A common shares calculated under the if-converted method was dilutive, and as such, (a) 12,224 thousand, 12,749 thousand, and 13,769 thousand common shares (assuming the conversion of all outstanding class B common stock) were included in the Weighted average outstanding Class A common shares - Diluted and (b) $ 11.8 million, $ 13.9 million, and $ 7.0 million of noncontrolling interest net income (after incremental tax effect from assuming conversion of all outstanding class B common stock), was added back to Net income available to GSHD - Diluted.

(2) The dilutive effect of stock options is computed using the treasury stock method.

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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 through March 31, 2025.

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.

The share repurchase program does not require the Company to acquire any dollar amount or number of shares of common stock and may be modified, suspended, or discontinued at any time.

The timing, manner, price and amount of any repurchases will be determined at the discretion of management in accordance with applicable securities laws and other restrictions.

Class A common

stock acquired under the program will be retired upon repurchase.

Class A common stock acquired under the program will be retired upon repurchase.

Additionally, for every repurchased share of Class A common stock, the Company will direct GF to repurchase, at the price paid to repurchase such share, and cancel an LLC unit of GF held by the Company.

During the year ended December 31, 2025, the Company repurchased and retired 1,014 thousand shares of Class A common stock for an aggregate $ 81.7 million.

During the year ended December 31, 2024, the Company repurchased and retired 1,045 thousand shares of Class A common stock for an aggregate $ 63.2 million.

All repurchases were made in open-market transactions and recorded at their aggregate transaction cost inclusive of commissions and excise taxes.

As of December 31, 2025, the Company had remaining authorization under the share repurchase program to repurchase up to $ 18.3 million of the Company's Class A common stock.

Subsequent Event

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.

With this increase, the Company has a total remaining authorization under the extended repurchase program of up to $ 198.3 million of the Company's Class A common stock .

The share repurchase program does not require the Company to acquire any dollar amount or number of shares of common stock and may be modified, suspended, or discontinued at any time.

The timing, manner, price and amount of any repurchases will be determined at the discretion of management in accordance with applicable securities laws and other restrictions.

Class A common stock acquired under the program will be retired upon repurchase.

Additionally, for every repurchased share of Class A common stock, the Company will direct GF to repurchase and cancel an LLC unit of GF held by the Company, at a price per LLC unit equal to the price paid for the corresponding share of Class A common stock.

Noncontrolling interest

Following the Offering, GSHD became the sole managing member of GF and, as a result, it consolidates the financial results of GF.

GSHD is the sole managing member of GF and, as a result, it consolidates the financial results of GF.

GSHD reports a noncontrolling interest representing the economic interest in GF held by the other members of GF.

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During 2025 and 2024, an aggregate of 0.7 million and 0.3 million LLC Units, respectively, were redeemed by the noncontrolling interest holders.

Pursuant to the GF LLC Agreement, we issued 0.3 million and 1.5 million shares of Class A common stock in connection with these redemptions and received 0.3 million and 1.5 million LLC Interests, increasing our ownership interest in GF.

Pursuant to the GF LLC Agreement, we issued 0.7 million and 0.3 million shares of

Class A common stock in connection with these redemptions and received 0.7 million and 0.3 million LLC Interests, increasing our ownership interest in GF.

Simultaneously, and in connection with these redemptions, 0.7 million and 0.3 million shares of Class B common stock were surrendered and canceled.

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Stock options

The Company granted additional stock options of 831,500 , 904,000 , and 1,482,000 to its Board of Directors and Managing Directors in 2024, 2023, and 2022, respectively.

The Company granted additional stock options of 0.6 million, 0.8 million, and 0.9 million to its Board of Directors and certain key employees in 2025, 2024, and 2023, respectively.

Board of Directors stock option awards have a three-year service period and vest in 12 equal quarterly installments over the service period.

Managing Director stock options awards granted in 2021 have a four-year service period and vest in three equal annual installments, beginning at the end of the second year of service.

Employee stock options awards granted in 2021 have a four-year service period and vest in three equal annual installments, beginning at the end of the second year of service.

Employee awards granted beginning in 2022 have a three-year service period and vest in equal annual installments beginning at the end of the first year of service.

Both Board of Director and Managing Director stock option awards have a maximum contract term of ten years from the grant date.

Both Board of Director and employee stock option awards have a maximum contract term of ten years from the grant date.

Upon exercise of an option, the Company issues a new share of stock.

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Unvested as of December 31, 2024

1,657 $ 30.10

Vested ( 894 ) 31.94

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Unvested as of December 31, 2025

1,344 $ 36.51

As of December 31, 2025, total unrecognized compensation expense related to unvested stock options was $ 29.7 million, which is expected to be recognized over a weighted average period of 1.81 years.

Cash received from stock option exercises during the year ended December 31, 2025 was $ 13.6 million.

The Company did not approve or pay any dividends during the years ended December 31, 2024 and 2023.

The Company did not approve or pay any dividends during the year ended December 31, 2024.

On January 9, 2025, GF declared a special distribution of $ 175 million, which was paid in cash on January 31, 2025 to holders of record of LLC Units, including to GSHD, as of the close of business on January 21, 2025.

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Certain of these leases contain escalation clauses that will increase rent payments based on maintenance, utility and tax increases, which are non-lease components and variable in nature.

The Company elected not to separate lease and non-lease components of a contract for its real

estate and equipment leases.

The Company elected not to separate lease and non-lease components of a contract for its real estate and equipment leases.

As such, real estate and equipment lease payments represent payments on both lease and non-lease components.

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The following table provides information related to the Company’s leases as of December 31, 2025 and 2024 (in thousands) :

December 31, 2024 December 31, 2023

Right-of-use assets

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The following schedule shows the components of lease cost for the years ended December 31, 2025 and 2024 (in thousands):

December 31, 2024 December 31, 2023

Gross operating lease cost

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The following is a schedule of supplemental cash flow information related to leases for the year ended December 31, 2025 and 2024 (in thousands):

December 31, 2024 December 31, 2023

Cash paid for amounts included in the measurement of lease liabilities

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The following is a schedule of future maturity of lease liability as of December 31, 2025 (in thousands):

2026 $ 11,483

Total lease payments 70,861

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While there can be no assurance regarding the ultimate outcome of the petition, the Company believes a potential loss, if any, would not be material.

Related Party Transactions

Mark Jones is the Co-Founder and Executive Chairman of the Company and holds a significant beneficial ownership of the Company’s voting common stock.

Jones also serves as the Co-Founder and Chief Executive Officer of N5B Capital ("N5B"), a family investment office for Mark and Robyn Jones.

In the third quarter of 2025, the Company entered into an agreement to reimburse N5B for expenses associated with Mr.

Jones’ executive assistant.

The estimated annual expense to the Company under this agreement is less than $ 140 thousand and will be recognized as incurred in the consolidated statements of operations.

The Company determined that the agreement is not material to its consolidated financial statements.

Changes in and disagreements with accountants on accounting and financial statement disclosure

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 8. Financial Statements and Supplementary Data