Gross written premiums: $1 billion, up 28% year over year.
Franchise premium growth: 33% to $825 million.
Commercial insurance premium growth: 12% to $204 million.
Total revenue: $78 million, representing a 10% year-over-year increase.
Core revenue: $73.5 million, up 16% in the quarter.
Adjusted EBITDA: $26.1 million, an increase of 17% from $22.4 million in the prior year period.
Adjusted EBITDA margin: increased by 193 basis points to 34%.
Operating Cash Flow: Increased from $37.4 million to $59 million, an increase of 58%.
Number of policies in force: 1.6 million, up 12% compared to 11% last quarter.
Customer retention rate: Stable at 84% from Q2 to Q3.
Franchise producers: 2,093 companies, up from 1,995 companies in Q2 2024.
Corporate producers: 458 companies, up 45% from the previous year’s level of 316 companies.
Same-store sales growth rate: 26% year over year.
Average gross salary per franchise: grew 56% year-over-year this quarter.
Cash and cash equivalents: $50.1 million at end of third quarter.
Debt EBITDA to last quarter: 1.2x.
Net debt to final quarter EBITDA: 0.6x.
Full-year 2024 total premium written guidance: expected to be $3.7 billion to $3.82 billion.
Full-year 2024 total revenue guidance: expected to be between $295 million and $310 million.
Q: Could you elaborate on market stabilization and product availability, particularly in key regions such as Texas and California? A: President and CEO Mark Miller explained that auto products are starting to come back and carriers are also changing their products for home use, which is good for markets like Texas. did. Although product availability has declined, there is optimism that it will improve soon.
Q: Are your products competitive in places like Texas and California compared to captives? A: Mark Miller says the market isn’t as competitive as it used to be, but as captives start raising prices. I pointed out that there is. Goosehead carriers keep prices stable while maintaining adequate lead flow and product availability.
Q: Has customer retention bottomed out at 84% or is it likely to decline further? A: CFO Mark Jones says customer retention is heavily influenced by pricing actions. I did. Due to low price increases, retention rates are expected to remain stable and potentially improve through 2025.
Q: How are new referral partner activations and corporate classes performing amid challenging home sales volumes? A: Mark Miller emphasized that the primary strategy remains focused on residential closing transactions. Despite the challenges, this new class of companies is performing well, with early signs of high quality and productivity.
Q: Have the recent hurricanes affected your revenue and what kind of impact do you expect in the fourth quarter? A: Mark Jones said hurricanes typically slow down production due to airline production shutdowns. I explained that this can cause temporary stagnation. The impact is typically short-term, with production restarting after the event and some business potentially moving into the next quarter.
Q: Why is there a range of revenue outlooks despite the end of the year? A: Mark Jones highlighted a volatile environment where product availability and contingent revenue are key variables . The franchise is doing well and has a bigger impact on premiums than immediate revenue.
Q: What is driving the improvement in the ratio of premium income in your fourth quarter guidance? A: This improvement is primarily due to franchise performance, which has accelerated new business production and driven near-term revenue growth. It affects insurance premium growth more than growth.
Q: What impact will the new class of corporate hires have on profits compared to the previous class? A: Mark Jones believes that increased productivity should lead to higher profit margins. I pointed it out. We’re focused on retaining our agents for the first year so they can take full advantage of Goosehead’s system.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
