Goosehead Insurance Agency, LLC (GSHD) reported second quarter 2022 results, with adjusted Earnings Per Share (EPS) of $0.16. Total revenue rose to $53.0 million which is up 39% compared to 2Q21. This compares to consensus analyst estimates of $0.17 in adjusted EPS and $51.0 million in revenue. Here are five things you should know about this call:
- GSHD’s total revenue in 2Q22 grew organically at 39% year-over-year to $53.0 million. In 1Q22, the company reported 32% organic growth.
- Total written premiums, the leading indicator of future core and ancillary revenue growth, increased in 2Q22 42% over the prior-year period to $566 million, driven by strong referral partner activations and gains in client retention. As part of the total written premiums, franchise premiums increased by 46% to $419 million while corporate premiums increased 31% to $147 million, from improving retention, strong growth in agency count, and new business generation.
- The company continues to be focused on profitable growth (not “growth at any cost”) and believes it can grow premiums at 30-35% and expand margins during current difficult economic times and for many years in the future, given GSHD’s relatively small market share in the U.S. personal lines market and competitive positioning. This assumes a weaker housing market and continued optimization of the firm’s mix of business between corporate and franchise channels.
- GSHD is increasingly focused on the faster growing, more profitable franchise channel. In terms of hiring in the corporate channel for the second half of 2022, GSHD plans to maintain capabilities without “adding bulk that could shrink margins,” a strategy that is projected to help margin expansion.
- In terms of guidance, total revenue for 2022 is projected to be between $194-$205 million, representing organic growth of 28-35%. The company noted this will be “driven by high levels of core revenue growth, but partly offset by lower than historical average contingent commissions of $8-10 million for the full year 2022 as our carriers continue to struggle with their underwriting profitability.”
To learn more visit Goosehead Q2 2022 News
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