gshd-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ______

Commission file number: 001-38466

GOOSEHEAD INSURANCE, INC.

(Exact name of registrant as specified in its charter)


Delaware			82-3886022
(State or other jurisdiction of incorporation or organization)			(IRS Employer Identification No.)
1500 Solana Blvd, Building 4, Suite 4500
Westlake
Texas			76262
(Address of principal executive offices)			(Zip Code)

(469) 480-3669

(Registrant's telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class A Common Stock, par value $.01 per share	GSHD	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

þ Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☑ No

As of April 20, 2026, there were 23,670,665 shares of Class A common stock outstanding and 11,935,389 shares of Class B common stock outstanding.

Table of contents



		Page
Part I
Item 1.	Condensed Consolidated Financial Statements (Unaudited)	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40

Part II
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	42

SIGNATURES		42

Commonly used defined terms

As used in this Quarterly Report on Form 10-Q ("Form 10-Q"), unless the context indicates or otherwise requires, the following terms have the following meanings:

•Ancillary Revenue: Revenue that is supplemental to our Core Revenue and Cost Recovery Revenue, Ancillary Revenue is unpredictable and often outside of the Company's control. Included in Ancillary Revenue are Contingent Commissions and other income.

•Agency Fees: Fees separate from commissions charged directly to clients for efforts performed in the issuance of new insurance policies.

•Annual Report on Form 10-K: The Company's annual report on Form 10-K for the fiscal year ended December 31, 2025.

•Carrier: An insurance company.

•Carrier Appointment: A contractual relationship with a Carrier.

•Client Retention: Calculated by comparing the number of all clients that had at least one policy in force twelve months prior to the date of measurement and still have at least one policy in force at the date of measurement.

•Contingent Commission: Revenue in the form of contractual payments from Carriers contingent upon several factors, including growth and profitability of the business placed with the Carrier.

•Core Revenue: The most predictable revenue stream for the Company, these revenues consist of New Business Revenue and Renewal Revenue. New Business Revenue is lower-margin, but fairly predictable. Renewal Revenue is higher-margin and very predictable.

•Corporate Agent Productivity: The New Business Revenue collected related to corporate sales, divided by the average number of full-time corporate sales agents for the same period. This calculation excludes interns, part-time sales agents and partial full-time equivalent sales managers.

•Cost Recovery Revenue: Revenue received by the Company associated with cost recovery efforts associated with selling and financing franchises. Included in Cost Recovery Revenue are Initial Franchise Fees and Interest Income.

•Franchise Agreement: Agreements governing our relationships with Franchisees.

•Franchise Productivity: The gross commissions paid by Carriers and Agency Fees received from clients related to policies in their first term sold by franchise sales agents, divided by the average number of franchises for the same period, prior to paying Royalty Fees to the Company.

•Franchisee: An individual or entity who has entered into a Franchise Agreement with us.

•GF: Goosehead Financial, LLC.

•Initial Franchise Fee: Contracted fees paid by Franchisees to compensate Goosehead for the training, onboarding and ongoing support of new franchise locations.

•LLC Unit: a limited liability company unit of Goosehead Financial, LLC.

•New Business Commission: Commissions received from Carriers relating to policies in their first term.

•New Business Revenue: New Business Commissions, Agency Fees, and New Business Royalty Fees.

•New Business Royalty Fees: Royalty Fees received from Franchisees relating to policies in their first term

•NPS: Net Promoter Score is calculated based on a single question: “How likely are you to refer Goosehead Insurance to a friend, family member or colleague?” Clients that respond with a score of 6 or below are Detractors, a score of 7 or 8 are called Passives, and a score of 9 or 10 are Promoters. NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters.

•Policies in Force: As of any reported date, the total count of current (non-cancelled) policies placed by us with our Carriers.

•Policy Term: The contractual period the policy provides insurance coverage to the insured.

•Pre-IPO LLC Members: owners of LLC Units of GF prior to the Offering.

•Renewal Commission: Commissions received from Carriers relating to a policy in a renewal term.

•Renewal Revenue: Renewal Commissions and Renewal Royalty Fees.

•Renewal Royalty Fees: Royalty Fees received from Franchisees relating to a policy in a renewal term.

•Royalty Fees: Fees paid by Franchisees to the Company that are tied to the gross commissions paid by the Carriers related to policies sold or renewed by a franchisee.

•The Offering: The initial public offering completed by Goosehead Insurance, Inc. on May 1, 2018.

•Total Written Premium: For any reported period, the total amount of current (non-cancelled) gross premium that is placed by Goosehead with its portfolio of Carriers.

Special note regarding forward-looking statements

We have made statements in this Form 10-Q that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the caption entitled “Item 1A. Risk factors” herein and in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

The forward-looking statements included in this Form 10-Q are made only as of the date hereof. Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this Form 10-Q to conform our prior statements to actual results or revised expectations.

PART I

Item 1. Condensed Consolidated Financial Statements (Unaudited)


		Page
Condensed Consolidated Statements of Operations		6
Condensed Consolidated Balance Sheets		7
Condensed Consolidated Statements of Stockholders' Equity		8
Condensed Consolidated Statements of Cash Flows		9
Notes to the Condensed Consolidated Financial Statements		11
Note 1	Organization	11
Note 2	Summary of significant accounting policies	11
Note 3	Revenues	13
Note 4	Franchise fees receivable	16
Note 5	Allowance for uncollectible agency fees	16
Note 6	Property and equipment	17
Note 7	Intangible assets	17
Note 8	Debt	17
Note 9	Income taxes	19
Note 10	Stockholders' equity	20
Note 11	Noncontrolling interest	22
Note 12	Equity-based compensation	23
Note 13	Dividends	23
Note 14	Segment information	23
Note 15	Litigation	24

Goosehead Insurance, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(In thousands, except per share amounts)


	Three Months Ended March 31,
	2026		2025
Revenues:
Commissions and agency fees	$	38,685	$	29,423
Franchise revenues	54,274		45,971
Interest income	117		189
Total revenues	93,076		75,583
Operating Expenses:
Employee compensation and benefits	50,527		48,334
General and administrative expenses	23,969		17,559
Bad debts	373		406
Depreciation and amortization	3,212		2,670
Total operating expenses	78,081		68,969
Income from operations	14,995		6,614
Other Income:

Interest expense	(5,472)		(5,823)
Other income	267		168
Income before taxes	9,790		959
Tax expense (benefit)	1,745		(1,687)
Net income	8,045		2,646
Less: net income attributable to noncontrolling interests	3,156		304
Net income attributable to Goosehead Insurance, Inc.	$	4,889	$	2,342
Earnings per share:
Basic	$	0.20	$	0.09
Diluted	$	0.19	$	0.09
Weighted average shares of Class A common stock outstanding
Basic	24,269		24,791
Diluted	36,640		25,943

See Notes to the Condensed Consolidated Financial Statements

Goosehead Insurance, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per share amounts)


	March 31,		December 31,
	2026		2025
Assets
Current Assets:
Cash and cash equivalents	$	25,652	$	34,390
Restricted cash	3,436		3,547

Commissions and agency fees receivable, net	15,785		36,613
Receivable from franchisees, net	14,554		11,141
Prepaid expenses	13,863		7,552

Total current assets	73,290		93,243
Receivable from franchisees, net of current portion	1,822		2,936
Property and equipment, net of accumulated depreciation	22,493		21,549
Right-of-use asset	32,689		34,087
Intangible assets, net of accumulated amortization	44,061		39,700
Deferred income taxes, net	211,442		216,371
Other assets	7,016		6,978
Total assets	$	392,813	$	414,864
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable and accrued expenses	$	31,002	$	33,629
Premiums payable	3,436		3,547

Lease liability	9,039		8,666

Contract liabilities	2,931		3,241
Notes payable	2,993		2,993
Liabilities under tax receivable agreement	6,237		6,237
Total current liabilities	55,638		58,313
Lease liability, net of current portion	48,784		51,168

Note payable, net of current portion	314,917		289,461
Contract liabilities, net of current portion	11,974		13,025
Liabilities under tax receivable agreement, net of current portion	165,685		165,685
Total liabilities	596,998		577,652

Class A common stock, $0.01 par value per share - 300,000 shares authorized, 23,671 shares issued and outstanding as of March 31, 2026, 24,653 shares issued and outstanding as of December 31, 2025	237		247
Class B common stock, $0.01 par value per share - 50,000 shares authorized, 11,935 issued and outstanding as of March 31, 2026, 11,935 shares issued and outstanding as of December 31, 2025	119		119
Additional paid-in capital	6,839		37,486
Accumulated deficit	(128,467)		(133,356)
Total stockholders' equity	(121,272)		(95,504)
Noncontrolling interests	(82,913)		(67,284)
Total equity	(204,185)		(162,788)
Total liabilities and equity	$	392,813	$	414,864

See Notes to the Condensed Consolidated Financial Statements

Goosehead Insurance, Inc.

Condensed Consolidated Statements of Stockholders' Equity

(Unaudited)

(In thousands, except per share amounts)


	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
Balance January 1, 2026	24,653	11,935	$	247	$	119	$	37,486	$	(133,356)	$	(95,504)	$	(67,284)	$	(162,788)
Distributions	—	—	—		—		—		—		—		(2,190)		(2,190)

Share repurchases	(985)	—	(10)		—		(31,628)		—		(31,638)		(18,691)		(50,329)
Net income	—	—	—		—		—		4,889		4,889		3,156		8,045

Equity-based compensation	—	—	—		—		4,167		—		4,167		2,050		6,217
Activity under employee stock purchase plan	3	—	—		—		70		—		70		46		116

Deferred tax adjustments net of tax receivable agreement liabilities	—	—	—		—		(3,256)		—		(3,256)		—		(3,256)
Balance March 31, 2026	23,671	11,935	$	237	$	119	$	6,839	$	(128,467)	$	(121,272)	$	(82,913)	$	(204,185)


	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
Balance January 1, 2025	24,668	12,620	$	247	$	126	$	58,917	$	(15,401)	$	43,889	$	(4,813)	$	39,076
Distributions	—	—	—		—		—		—		—		(59,232)		(59,232)
Dividends declared ($5.91 per share)	—	—	—		—		—		(145,786)		(145,786)		—		(145,786)

Net income	—	—	—		—		—		2,342		2,342		304		2,646
Exercise of stock options	241	—	3		—		6,588		—		6,591		3,936		10,527
Equity-based compensation	—	—	—		—		4,136		—		4,136		2,100		6,236
Activity under employee stock purchase plan	1	—	—		—		70		—		70		37		107
Redemption of LLC Units	145	(145)	1		(1)		(697)		—		(697)		697		—
Deferred tax adjustments net of tax receivable agreement liabilities	—	—	—		—		911		—		911		—		911
Balance March 31, 2025	25,055	12,475	$	251	$	125	$	69,925	$	(158,845)	$	(88,544)	$	(56,971)	$	(145,515)

See Notes to the Condensed Consolidated Financial Statements

Goosehead Insurance, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	8,045	$	2,646
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	3,212		2,724
Amortization of debt discounts and issuance costs	294		243

Loss on debt extinguishment	—		771

Bad debt expense	373		406
Equity-based compensation	6,217		6,236

Deferred income taxes	1,673		(1,766)
Noncash lease activity	(872)		(745)
Cloud computing arrangement implementation costs	(340)		(460)
Changes in operating assets and liabilities:
Receivable from franchisees	(2,374)		(1,283)
Commissions and agency fees receivable	20,230		22,945
Prepaid expenses	(6,311)		(14,359)
Other assets	(367)		1,008
Accounts payable and accrued expenses	(5,551)		(2,836)
Contract liabilities	(1,361)		(46)
Net cash provided by operating activities	22,868		15,484
Cash flows from investing activities:
Issuance of notes receivable to franchisees	—		(25)
Proceeds from notes receivable to franchisees	58		62
Capitalized software development costs	(5,694)		(2,771)
Cash consideration paid for asset acquisitions	(115)		—
Proceeds from fixed asset disposals	245		—
Purchase of property and equipment	(1,633)		(579)
Net cash used for investing activities	(7,139)		(3,313)
Cash flows from financing activities:
Customer premiums, net	(113)		(1,431)
Debt issuance cost	—		(7,929)
Repayment of notes payable	(748)		(93,078)
Proceeds from notes payable	—		299,250
Proceeds from revolving credit facility	26,000		—
Proceeds from the issuance of Class A common stock	116		10,634
Repurchases of Class A common stock	(49,833)		—
Member distributions	—		(59,233)

Dividends to stockholders	—		(145,786)
Net cash (used for) provided by financing activities	(24,578)		2,427
Net increase (decrease) in cash and cash equivalents, and restricted cash	(8,849)		14,598
Cash and cash equivalents, and restricted cash, beginning of period	37,937		57,973
Cash and cash equivalents, and restricted cash, end of period	$	29,088	$	72,571


	Three Months Ended March 31,
	2026		2025
Supplemental disclosure of cash flow data:
Cash paid for interest	$	5,169	$	4,155
Cash paid (refunded) for incomes taxes, net	(252)		15

See Notes to the Condensed Consolidated Financial Statements


Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)

1. Organization

Goosehead Insurance, Inc. (“GSHD”) is the sole managing member of Goosehead Financial, LLC (“GF”) and has the sole voting power and control of management of GF. Accordingly, GSHD consolidates the financial results of GF and reports noncontrolling interest in GSHD’s condensed consolidated financial statements.

GF was organized on January 1, 2016 as a Delaware Limited Liability Company and is headquartered in Westlake, TX.

GSHD (collectively with its consolidated subsidiaries, the “Company”) provides personal and commercial property and casualty insurance brokerage services for its clients through a network of corporate-owned agencies and franchise units across the nation.

The Company had 17 and 14 corporate-owned locations in operation at March 31, 2026 and 2025, respectively. Franchisees are provided access to Carrier Appointments, product training, technology infrastructure, client service centers and back office services. During the three months ended March 31, 2026 and 2025, the Company onboarded 20 and 36 franchise locations, respectively, and had 956 and 1,098 operating franchise locations as of March 31, 2026 and 2025, respectively. No franchises were purchased during the three months ended March 31, 2026 and 2025.

All intercompany accounts and transactions have been eliminated in consolidation.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all of the annual disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). However, in the opinion of management, these statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated balance sheets at March 31, 2026 and December 31, 2025, and the condensed consolidated statements of operations, stockholders' equity and cash flows for the three months ended March 31, 2026 and 2025. The interim period condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements that are included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of the results that can be expected for the entire year. The Company experiences seasonal fluctuations of its revenue due to the timing of contingent commission revenue recognition and trends in housing market activity.

Reclassification

Certain prior period amounts have been reclassified to conform to the current period's presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates as more information becomes known.

Intangible Assets

Intangible assets are stated at cost less accumulated amortization and reflect amounts paid for the Company’s web domain, computer software costs, and purchased books of business (customer accounts). The web domain is amortized over a useful life of fifteen years, computer software costs are amortized over a useful life of three to ten years, and books of business (customer accounts) are amortized over a useful life of eight years.


Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)

Income Taxes

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. Any effects of changes in income tax rates or laws are included in income tax (benefit) expense in the period of enactment.

Cash and Cash Equivalents, and Restricted Cash

The Company holds premiums received from the insured but not yet remitted to the Carrier in a fiduciary capacity. Premiums received but not yet remitted included in restricted cash were $3.4 million and $2.4 million as of March 31, 2026 and 2025, respectively.

The following is a reconciliation of our cash and cash equivalents and restricted cash balances as presented in the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 (in thousands):


	March 31,
	2026		2025
Cash and cash equivalents	$	25,652	$	70,208
Restricted cash	3,436		2,363
Cash and cash equivalents, and restricted cash	$	29,088	$	72,571

The Company earns interest on its cash balance that is held in interest-bearing checking accounts. During the three months ended March 31, 2026, the Company recognized $0.3 million in interest income. $0.9 million interest income was recognized during the three months ended March 31, 2025. Interest income is recognized within other income in the condensed consolidated statements of operations. As of March 31, 2026, the Company did not have any cash equivalents.

Recently Adopted Accounting Pronouncements

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 amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company has adopted this ASU for the three months ended March 31, 2026, and will apply the practical expedient prospectively.

Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU No. 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 within the notes to the financial statements. Additionally, in January 2025, the FASB issued ASU No. 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.

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


Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)

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.

3. Revenues

Commissions and agency fees

The Company earns commissions, which are paid as a percentage of the policy premiums placed by the Company, by performing its obligation to identify, place, and make effective insurance coverage on behalf of its customer, the insured. The Company defines the term of the policy as the contractual period the policy provides insurance coverage to the insured, which is typically one year or less. Commissions earned for the placement of the initial policy term for a given insurance product are recorded as New Business Commissions. New Business Commissions are earned at a point in time on the effective date of the policy, which is when the customer’s unilateral right to cancel the policy without consideration expires, as the Company has no further performance obligations for the initial term once the policy is placed and made effective.

After the initial policy term for a given insurance product, the Company earns Renewal Commissions by assisting the customer to make effective a renewal policy that satisfies the customer’s current insurance coverage needs. The Company performs this obligation by monitoring the customer’s policy to ensure a renewal is offered by the carrier and that the client promptly pays the premium. Alternatively, based on the needs of the customer, the Company may assist the customer to adjust coverage terms to satisfy its current insurance coverage needs or the Company may assist the customer to re-shop the insurance coverage to identify, place, and make effective a policy that better meets those needs. Renewal Commissions are earned at a point in time upon the effective date of the renewal policy term or upon the effective date of the replacement policy identified, placed, and made effective for the customer, which is when the customer’s unilateral right to non-renew the policy expires, as the Company has no further performance obligations for that renewal policy term.

The transaction price for commissions revenue is set as an estimate of the variable consideration to be received for the current policy term. This estimate includes the fixed consideration due based on the contractual terms of the current policy and 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. This variable consideration is constrained to the extent that it is probable there will not be a significant reversal of revenue.

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

Contingent commission revenue is generated from contracts between the Company and insurance carriers, for which the Company is compensated for certain growth, profitability, or other performance-based metrics. The performance obligations for contingent commissions will vary by contract, but generally include the Company increasing profitable written premium with the insurance carrier. The transaction price for contingent commissions is estimated based on all available information and is recognized over time as the Company completes its performance obligations, as the underlying policies are placed, net of a constraint.

The Company must estimate the amount of consideration that will be received such that a significant reversal of revenue is not probable. Contingent commissions represent a form of variable consideration associated with the placement and profitability of coverage, for which we earn commissions. In connection with Topic 606, contingent commissions are estimated, with a constraint applied, and accrued relative to the recognition of the corresponding commissions for the period over which the contract applies. As contingent commissions are earned in relation to policies placed by the Company with the insurance carrier, the timing of recognizing contingent commissions follows a similar pattern as our commissions and fees with any adjustments recognized when payments are received or as additional information that affects the estimate becomes available.


Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)

Franchise revenues

Franchise revenues include initial franchise fees and ongoing new and renewal royalty fees from franchisees.

Revenue from Initial Franchise Fees is generated from a contract between the Company and a franchisee. The Company's performance obligation is to provide initial training, onboarding, ongoing support and use of the Company's business operations over the period of the franchise agreement. The transaction price is set by the franchise agreement and revenue is recognized over time as the Company completes its performance obligations.

Initial franchise fees are recognized as revenue over the 10-year life of the franchise contract, beginning on the start date of the contract.

Revenue from New and Renewal Royalty Fees is recorded by applying the sales- and usage-based royalties exception. Under the sales- and usage-based exception, the Company recognizes revenue over time as a franchise places and makes effective a policy for an insured. The transaction price for the royalty fee for each policy made effective is set as the contractual royalty rate multiplied by an estimate of the commissions to be received by the franchise for the current term of the policy. This estimate includes the fixed consideration due based on the contractual terms of the current policy and 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. This variable consideration is constrained to the extent that it is probable there will not be a significant reversal of revenue.

Contract costs

The Company has evaluated ASC Topic 340—Other Assets and Deferred Cost (“ASC 340”) which requires companies to defer certain incremental costs to obtain customer contracts, and certain costs to fulfill customer contracts.

Incremental costs to obtain - The Company defers certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans for selling new franchise agreements. These incremental costs are deferred and amortized over a 10-year period, which is consistent with the term of the contract. The balance of costs to obtain is included with other assets on the condensed consolidated balance sheets.

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 three months ended March 31, 2026, the Company recognized $7.6 million in commissions and agency fees from performance obligations satisfied in the previous annual period ended December 31, 2025. During three months ended March 31, 2025, the Company recognized $2.3 million in commissions and agency fees from performance obligations satisfied in the previous annual period ended December 31, 2024. The amount recognized is attributable to changes in the estimated transaction price for variable consideration under contingent commission arrangements which was previously constrained and recognized as the uncertainty was resolved.


Goosehead Insurance, Inc.
Notes to the Condensed Consolidated Financial Statements (Unaudited)

Disaggregation of Revenue

The following table disaggregates revenue by source (in thousands):


	Three Months Ended March 31,
	2026		2025
Type of revenue stream:
Commissions and agency fees
Renewal Commissions	$	18,162	$	16,952
New Business Commissions	7,452		5,755
Agency Fees	2,385		2,240

SEC Form 10-Q filed by Goosehead Insurance Inc.