This included Franchise premium growth of 47% to $191 million and Corporate segment premium growth of 29% to $83 million. This growth is being driven by continued high retention rates, strong new business generation and increasing agent productivity in the Franchise Channel. Over the last year, we have more than doubled our information systems development team, which is enabling significant progress on our technology innovation roadmap. Our service team transitioned seamlessly to a virtual environment and are continuing to provide unrivaled service to our clients.
“We want to provide an opportunity for a broader set of people in the organization to participate in ownership. We want them to participate in ownership and have that alignment,” Colby said. On the franchise side, Goosehead has 292 franchises in 21 states; an additional 119 franchises are set to open this year. Goosehead grew by 36 percent between 2016 and 2017, generating revenue of $31.5 million in 2016 and $42.7 million in 2017, according to documents filed with the Securities and Exchange Commission. For the year ended Dec. 31, 2017, net income was $8.7 million.
§80C.14 (subd. 5) currently requires that consent to the transfer of the franchise may not be unreasonably withheld. Minnesota law provides franchisees with certain non-renewal rights. § 80C.14 (subd. 4) currently requires, except in certain specified cases, that a franchisee be given 180 days’ notice of non-renewal of the Franchise Agreement.
I mean, I’ll remind you that, 93% — 94% of home insurance is still purchased through an agent. As far as margins go there, yes, it will be challenging to grow EBITDA this year, just given the tough comparison to last year with contingent commissions and the much lower expense level than we thought was going to happen last year. So overall, we’re continuing that whole true in our message of driving high levels of premium and revenue growth, but it will be a little more challenging year for earnings, specifically EBITDA. To move forward with the quotes, a client simply contacts the agent or requests a call where they will review available options, make important recommendations and ultimately issue the home and auto policies. This is an important milestone on our road map to deliver a complete purchase experience, quote-to-issuance informed by expert agent intelligence.
- Core Revenue growth was driven by growth in corporate agents and operating franchises , productivity improvements in the Franchise Channel, and continued high levels of retention.
- Thanks, Dan, and welcome to our second quarter 2020 earnings call.
- I am extremely excited about the long-term prospects for our business.
- Pretty campus too; you might get a chance to see it when you leave for home at 9pm.
- During these unprecedented times, we remained laser-focused on best practices, which drive our high level of client service, improve the overall productivity of both our sales agents and back office functions and allow us to achieve full share of wallet with our clients.
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This is a fast-paced environment, all right – so fast-paced, you’ll understand why the customer satisfaction scores are sinking so horribly. Your job is to take calls consistently, and you’re SOL if you need to actually help with any sort of answers for customers because your time for cases, both past and present, will require you to use your lunch hour to work through them all plus your 30-minute designated case time. Their claims of upward mobility are idealist at best, and they’re losing service agents regularly due to the burnout after being stuck on phones for months, some for years. You’re lucky to have a consistent manager during your time there, much less a competent one that does anything but be on phones themselves because they don’t have enough agents to deal with the call volume. Be prepared to take an additional half hour to an hour after your shift ends to help with the call volume but for no extra pay for overtime.
We also incurred $917 thousand of additional non-cash employee stock compensation expense for options granted in April 2020. The insurance agency has done a great job of growing the top and bottom lines over the years. In the first nine months of 2020, revenue grew 29% compared to the same period last year, to $82 million, with diluted earnings per share up 33%, to $0.36 per share. Since 2017, it has seen great growth in both channels, with the corporate channel’s premiums growing at a 30% compounded annual growth rate and its franchise channel’s premiums growing 58% compounded annually. Goosehead Insurance, Inc. operates as a holding company for Goosehead Financial, LLC that provides personal lines insurance agency services in the United States. The company operates in two segments, Corporate Channel and Franchise Channel.
I look forward to updating you all on continued progress on future calls. The increase in compensation and benefits is being partly offset by slower growth in general and administrative expenses, which were up 14% compared to the year ago quarter. G&A expense growth is benefiting from our increased scale and reduced travel and entertainment given the COVID environment.
Think of us as your roadmap to better protection and better rates. Goosehead puts the power of information in your hands—no hiding behind celebrity spokespeople or high-dollar productions. We show you policies and prices from only the best companies so you can compare insurance quotes. Names you’ll recognize and others you’ll wish you’d heard of long ago.
All spelled out so you have the confidence you’re getting the right coverage at the best price. The Standard Insurance group of companies is a vertically integrated group of five insurance affiliates that together underwrite, finance and market standard and non-standard automobile insurance and homeowner policies. Discount and savings amounts and eligibility will vary.
Goosehead Insurance Employee Reviews For Account Executive
What you see especially with our go-to-market strategy is leading with the home and specifically during a mortgage origination, whether that’s a new purchase or refinance. And to the extent that we can make it easier and remove obstacles, it dramatically increases our likelihood of capturing those other lines of business. If it’s a super cumbersome process, the agent — neither the agent nor the client are going to want to deal with it. So when we can streamline that, it dramatically improves the likelihood of us capturing that full share of wallet.
A franchisee may bring a lawsuit in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise. The Franchise Agreement contains a covenant not to compete which extends beyond the termination of the franchise. This provision may not be enforceable under California law. Landlord and Franchisee agree that the premises will be used solely for the operation of a “Goosehead Insurance” business.
Management uses these non-GAAP financial measures when planning, monitoring and evaluating our performance. For more information regarding our use of non-GAAP financial measures, including reconciliations of these measures to the most comparable GAAP financial measures, we refer you to today’s earnings release. In addition, this call is being webcast and archives version will be available shortly after the call ends on the Investor Relations portion of the company’s website at
You’ll work side-by-side with experienced agents on real-world scenarios in fast-paced, immersive sessions and have access to ongoing immediate support. And selling insurance should be just as beneficial to the agent as it is for the buyer. Like having the reassurance that goes along with belonging to something recession-proof, not to mention evergreen. Goosehead is the fastest-growing insurance agency in the United States.
The largest region is the South with 357 franchise locations. Completing the CAPTCHA proves you are a human and gives you temporary access to the web property. Device Information – We may collect information concerning your computer and other devices used to access the Services.
Ancillary revenue, which includes contingent commissions grew 63% to $7.5 million for the quarter, and more than tripled to $16.9 million for the full year. We had a tremendous year for contingent commissions, driven by COVID-related lower loss ratios with our carriers. And now we’ll discuss our outlook for 2021 contingent commissions shortly. Total premiums placed for the year, the key leading indicator of future core revenue growth, were $1.074 billion, an increase of 45% over 2019, driven by strongly business growth and continued high levels of retention.
A release or waiver of rights executed by a franchisee shall not include rights under the Washington Franchise Investment Protection Act except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, rights or remedies under the Act such as a right to a jury trial may not be enforceable. There are circumstances in which an offering made by us would not fall within the scope of the New York General Business Law, Article 33, such as when the offer and acceptance occurred outside the state of New York.
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Thanks for visiting, and the next time you need to research GSHD past earnings or those of another stock, we hope you’ll think of our site, as your go-to past earnings research resource of choice. On this page we presented the GSHD past earnings date information for Goosehead Insurance. Reviewing thatGoosehead Insurance Past Earnings for the company, we see that the highest past earnings result in our data set was in Q4 2020, when GSHD posted adjusted EPS of 0.190/share. Meanwhile the lowest GSHD past earnings result was in Q1 2020, when GSHD posted adjusted EPS of 0.000/share.
The Goosehead Insurance Agency LLC in Westlake, Texas provides the following products. To learn more about each insurance product, click on the links below. Find answers to your insurance questions, insights into current trends, and tools for navigating life in our resource center.
“Core Revenue” is a supplemental measure of our performance and includes Renewal Commissions, Renewal Royalty Fees, New Business Commissions, New Business Royalty Fees, and Agency Fees. We believe that Core Revenue is an appropriate measure of operating performance because it summarizes all of our revenues from sales of individual insurance policies. For the nine months ended September 30, 2020, revenues were $82.4 million, compared to $63.7 million in the corresponding period in 2019. If recognized under ASC 605, revenues would have been $82.5 million for the nine months ended September 30, 2020. Core Revenues were $69.3 million, a 39% increase from $49.8 million in the prior year period. If reported under ASC 605, Core Revenues increased 42%.
Net income attributable to Goosehead Insurance, Inc. for the second quarter of 2020 was $3.4 million, or $0.21 per basic and $0.19 per diluted share. Adjusted EPS for the second quarter of 2020, which excludes equity-based compensation, was $0.25 per share. Total Adjusted EBITDA was $9.8 million for the second quarter of 2020, or $7.3 million if reported under ASC 605, an increase of 56%. “Ancillary Revenue” is a supplemental measure of our performance and includes Contingent Commissions and Other Income. We believe that Ancillary Revenue is an appropriate measure of operating performance because it summarizes revenues that are ancillary to our core business.
Employing both artificial intelligence and deep, integrated technology, Goosehead’s new Digital Agent Platform can now offer consumers a new way to shop and buy personal insurance. Nationwide offers small business resources to help you strengthen your business, such as financial calculators and information and articles on marketing and cash flow management. There are also important decisions to discuss that go beyond TX business requirements and your company’s international health insurance individual risk profile. As the owner, you’ll want to make sure, for example, that your policy structure meets your month-to-month budget crunch and end-of-year fiscal goals. To this point, Nationwide offers flexible billing options that can be matched with different revenue and expenditure schedules. And if the day ever comes when the life and health of your business depends on making a claim, you’ll be dealing with Nationwide’s On Your Side® Claims Service.
The insurance distribution technology market can be segmented on the basis of function and application. You’re presented with a different set of challenges when you’re recruiting from outside the industry. But candidly, I think teaching the insurance components the fundamentals, that’s the easy part. So what I see is the opportunity in a lot of these kind of outside of the industry recruits is that these folks come in and they don’t have bad habits that they need to unwind.
Goosehead Insurance, Inc Announces Third Quarter 2020 Results
Franchisee and Landlord acknowledge and agree that Franchisor will have no liability or obligation whatsoever under the Lease unless and until Franchisor assumes the Lease in writing pursuant to Section 2 or Section 3, above. If we do not approve a proposed site by giving you written notice within the 30-day period, then we will be deemed to have disapproved the site. Member covenants and agrees that during the Post-Term Period, Member will not, either directly or indirectly, solicit, divert, or attempt to solicit or divert any actual or potential business or customer of the Franchised Business to any Competitive Business. You acknowledge and agree that our advice is just that; that our advice is not a guarantee of success; and that you are the party that must reach and implement your own decisions about how to operate your Franchised Business on a day-to-day basis under the System. You acknowledge and agree that you have read and understood the FDD, this Agreement, and the exhibits to this Agreement. Subject to Section 27.3 below, the parties agree that any action that you bring against us, in any court, whether federal or state, must be brought only within the state and judicial district in which we maintain our principal place of business.
Lastly, Goosehead’s deep carrier integrations allow the company to run accurate, real-time quotes – providing a better range of product than other tools on the market. Once quotes are generated, users are then connected to a Goosehead agent who can provide further details on the options available, discuss special considerations based on their unique needs, and provide continuous support throughout the insurance buying process and throughout the client’s lifetime. In addition to choosing coverage based on what you can afford, you need to think about how you or your loved ones may need to use your policy proceeds. Maybe you’ll need to replace lost income or pay for long-term care expenses and your kids’ college education.
We believe in the role of the agent and we believe this is a powerful tool to augment our agent’s efforts. One if you’re an existing client, you come to our site, our system is smart enough to route you to your existing agents. So if you’re new to Goosehead, you’re exploring Goosehead options, we’ll start with your local area and then we will be distributing leads through a round-robin distribution for agents who qualify based on certain qualitative metrics. So, we want to distribute the leads to agents are going to capture the most value and deliver the highest level of lifetime customer value. The client is immediately introduced to one of our more than 2000 knowledgeable agents.
When you need us, our service team is always ready to help. Whether you’re on the phone with one of our agents or using our digital agent tool, you’ll be matched with the right protection and great rates.
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And typically, even in a softening rate environment, we’re — because we’re working with auto insurance companies across the country, we can find a competitive rate as part of that homeowner insurance procurement. And I’ll mention it to you the standard comparative rating applications that are available in the market are typically just for the primary homeowners and the auto. So what we’re doing is unique, bringing those other lines of business into that comparative rating platform.
And not to mention, the data that we’re bringing into the system is also alerting us where the opportunity is before it would be up to the agent to really inquire. But now we’re pulling in data, and we can see they own a motorcycle. We can see if they’re in a flood zone that makes sensitive to purchase a flood policy. So we’re excited because removing those obstacles, streamlining the quoting process and presenting it front and center for the agent will increase the likelihood of us capturing those lines of business, which will drive retention. That is statistically true in our business and every business.
$GSHD in Downtrend: its price may drop because broke its higher Bollinger Band on September 22, 2021. View odds for this and other indicators: https://t.co/ta25rklxdR #GooseheadInsurance #stockmarket #stock #technicalanalysis #money #trading #investing #daytrading #news #today pic.twitter.com/HNguCG3ZRo
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In 2020, our corporate agents with more than one year of experience were able to maintain their already exceptionally high levels of new business productivity. In 2020, we nearly tripled our information services development team, information systems development team, which is enabling significant progress on our technology innovation roadmap. Our omni-channel approach combined with our world class service team is having a meaningful positive impact on the overall insurance buying and service experience as evidenced by our net promoter score of 92 from 89 at the end of 2019. As a reminder, our net promoter scores are higher than any company we’ve been able to identify, while our cost to deliver this extraordinary level of service are roughly one quarter of industry best practice. We ended the year with 1,468 total franchises, an increase of 55% from the prior year, while operating franchises increased 45% to 891.
The policy or policies must value property on a new replacement cost basis without deduction for depreciation and the amount of insurance must not be less than 90% of the full replacement value of the Franchised Business, its furniture, fixtures, equipment, and stock . Any deductibles contained in such policy will be subject to our review and approval. 7.1.8 If you want to buy any products, services or any item from an unapproved supplier, then you must first submit a written request to us asking for our prior written approval. You agree not to buy from any such supplier unless and until we have given you our prior written consent to do so. We have the right to require that our representatives be permitted to inspect the supplier’s facilities, and that samples from the supplier be delivered to us. You may be required to pay a charge, not to exceed the reasonable cost of the inspection, as well as the actual cost of the test.
While Goosehead is, definitely, a customer focused agency, they do not provide the needed support to grow a business. It is my belief that they have focused on growth to greatly, and are not poised to be able to sustain their position in the marketplace without major changes to their protocols. Goosehead earned $18.8 million last year on revenue of $117 million. Revenue has nearly quadrupled since 2016, the earliest data available, according to Refinitiv. In the second quarter, it missed analysts’ estimates due to higher expenses from expanding offices and investing in the platform. For Goosehead stock, growth is an important factor to consider.
You agree to take such action as may be necessary to do so, including, without limitation, exhibiting a notice of that fact in a conspicuous place at the Approved Location, the content of which we reserve the right to specify. You agree to promptly pay when due all taxes levied or assessed, including, without limitation, unemployment and sales taxes, and all accounts and other indebtedness of every kind that you incur in the conduct of the business franchised under this Agreement. You agree to pay us an amount equal to any sales tax, gross receipts tax, or similar tax imposed on us with respect to any payments that you make to us as required under this Agreement, unless the tax is credited against income tax that we otherwise pay to a state or federal authority. You agree not to hire third party or outside vendors to perform any services or obligations in connection with the Computer System, Required Software, and/or any other of your obligations, without our prior written approval.
You will also be responsible for all of the other costs of attendance, including travel, room and board, and your employees’ wages, benefits and other expenses. 5.3.2 You agree to take all steps necessary to determine for yourself whether a particular location and the terms of any lease, sublease, or purchase agreement for the site are beneficial and acceptable to you. 4.3.2 You agree to establish an arrangement for electronic funds transfer to us, or electronic deposit to us of any payments required under this Agreement. If we elect to use ACH withdrawal to sweep payment of fees, then you will not be required to submit a separate payment to us unless you do not maintain sufficient funds to pay the full amount due.
We can also work with you to assess whether additional drivers or a family member should be added to your insurance protection in order that everyone benefits from an airtight plan. Once you have your plan in place, we hope you’ll sit down with us to discuss any major changes that have taken place in your life, such as moving, driving more or less, adding new features to your insured vehicle, or changing jobs. All of these factors can have an impact on your protection, and we always want to make sure that protection is up-to-date.
An archived version will be available shortly after the call ends on the Investor Relations portion of the company’s website at Goosehead also announced today that Goosehead Financial, LLC declared a special cash dividend of $42.0 million payable in cash on August 24, 2020 to holders of LLC Units of record, including Goosehead Insurance, Inc., as of the close of business on August 10, 2020. In addition, Goosehead Insurance, Inc. announced today that its Board of Directors declared a special cash dividend of an estimated $1.15 per share on the Company’s Class A common stock. The dividend will be payable in cash on August 24, 2020 to holders of the Class A common stock of record as of the close of business on August 10, 2020. Net income for the six months ended June 30, 2020 was $7.1 million.
The idea is that more recent information is, generally speaking, more accurate and can be a better predictor of the future, which can give investors an advantage in earnings season. So we’ve talked in the past from a quarterly perspective of how we think about Contingent Commissions. And if you would have asked me three months ago, I wouldn’t have expected to book a lot of Contingent Commissions this quarter. However, the data we’ve been getting from the carriers on the Contingent Commissions that are loss ratio driven has been so positive that we felt very comfortable booking something in Q2 and still being very conservative on those Contingent Commissions. Yeah, primarily around incentives to keep people engaged, Mark. That working virtually, it’s very important that we’re doing things to keep people engaged throughout the weeks, the months of the quarter, and that’s where we really repurposed that spend.
Well, I think it starts with recruiting, and we’re getting better and better at identifying candidates that can come into the system and produce at very high levels very soon. Definitely, I want to give a lot of credit to our training team who has — continues to iterate the training program and make it better and better every single month. And especially in a virtual environment, I mean, they’ve continued to be able to bring people on and get them ramped up very quickly.
16.4.3 If you are a partnership or limited liability partnership, then the partners of that partnership will not, without our prior written consent, admit additional general partners, remove a general partner, or otherwise materially alter the powers of any general partner. Each general partner in such a partnership will automatically be deemed to be a Principal. medica insurance In the event of cancellation, material change, ornon-renewal of any policy, sixty days’ advance written notice must be provided to us in the manner provided in Section 24 below. You agree to use the telephone service for the Franchised Business that we may require, which may be one or more centralized vendors that we designate for that purpose.
Our Digital Agent has analyzed every home carrier combined with every auto carrier to find the option that delivers the best combination of coverage and price. To get a fair comparison, each company is quoting with similar coverage levels and we are including critical coverages many clients are missing, such as replacement cost and internal water damage. We aren’t presenting low-ball quotes to drive calls, rather we are showing accurate quotes that an expert Goosehead agent would recommend to drive a great client experience. On the next screen, we point any vehicles registered to the client, so they can quickly select the vehicles they want to insure. All these data integrations provide a more convenient user experience and increase the accuracy of the quotes they are about to see.
At this point, we honestly don’t know what 2021 is going to look like. And so we’ve tried to be as realistic as we can be in estimating gainsco auto insurance what contingents are going to be. But it’s a — that’s a big question mark, which is one of the reasons why we really encourage people.
While this can sometimes stay high for a while, a ratio that’s too high can be a warning sign — unless you believe the company can grow into its multiple. And again, we can’t develop this technology without the information and the behavior and observing the behavior of our expert agents. And we can’t continue to deliver for our clients the experience that they deserve and that they expect from us, without our agents. So — and we have a track record of being very transparent and very solid partners to our agents.
In Texas, during 2020, new business production per franchise with more than one year of tenure was up 27% and we continue to see opportunity for additional productivity improvements, as we further leverage our corporate agents in training and mentoring efforts. At the end of the fourth quarter, we had 1,468 total franchises, up 55% from the prior year, and 891 operating franchises, up 45% from a year ago. For the six months ended June 30, 2020, revenues were $50.3 million, compared to $42.5 million in the corresponding period in 2019. If recognized under ASC 605, revenues would have been $52.4 million for the six months ended June 30, 2020. Core Revenues, a non-GAAP measure which excludes contingent commissions and initial franchise fees, were $42.9 million, a 37% increase from $31.4 million in the prior year period. If reported under ASC 605, Core Revenues increased 41%.
We reserve the right to apply any monies received from you to any of your obligations as we determine and to withhold payment of any monies if this Agreement has been terminated for any reason. You acknowledge and agree that we have the right to set-off as part of Net Revenues any amounts you owe to us. 4.3.3 You acknowledge and agree that your obligations to make full and timely payment of Royalty Fees and Marketing Contributions are absolute, unconditional, fully-earned , and due when you are open and in operation. 4.2.6 the term “Net Revenues” means Gross Revenues net of all amounts due to us under this Agreement, including, without limitation, Royalty Fees, Marketing Contributions , Technology Fees, and payments due to us under the Promissory Note . We have the right to provide our standards and specifications for the layout and design of a Goosehead Business, including specifications for the exterior and interior design and layout, fixtures, furnishings, equipment, and signs.
The even lighter blue range in the background of the two lines represents the low price target and the high price target for each stock. And I think as you digest those numbers in the 10-K, I think it’s important to remember kind of our strategic approach to leveraging our corporate assets to drive success, sales and growth and the franchise channel. And we’ve certainly kind of seen the productivity results of that investment manifest with franchise productivity over the last several years. Efforts and investments in the corporate channel are integral to our overall success as an organization and form a crucial part of our competitive moat. Our recruiting team currently stands at 98 compared to 61 individuals at the end of 2019.
As a reminder, because of college recruiting for the corporate channel, the summer months are historically our largest for corporate sales onboarding, with the fourth quarter and the first quarter of the year, having limited new agent additions. We continue to invest in the success of our franchise channel agents via our corporate agents, through our virtual sales coach program. Thanks, Mike and good afternoon to everyone on the call. For the fourth quarter of 2020, total written premiums, the key leading indicator of our future core and ancillary revenue growth increased 45% to $285 million. This included franchise premium growth of 52% to $202 million in corporate segment premium growth of 31% to $83 million. At the end of the second quarter, we had 1,132 total franchises, up 48% from the prior year and 730 operating franchises, up 36% from a year ago.
We’re very proud to be a stable employer to our team, partner to our agents and referral sources and service provider to our clients during this time of crisis. We look forward to bringing our team back together in our offices when it’s safe to do so, and will continue to follow CDC recommendations and government requirements. Over the first half of 2020, we’ve continued to see our strategy surrounding technology investment create substantial competitive advantage for our business. One, our seamless transition to a virtual operating environment in response to the COVID-19 pandemic. Two, the continued progress on our technology development roadmap. And three, new talent acquisition within our development team.
The business offers a custom Agency Management System, proven marketing approaches, classroom training, and vast ongoing assistance for their franchisees. However, the main benefits of the chain are really affordable initial cost & fees, and professional service team who manages the book of franchisee`s business. Mike Littau is an Agency Owner with Goosehead Insurance located in Redding, CA. Mike joined Goosehead because of his unwavering commitment to take care of his clients. Using cutting edge technology to shop with dozens of “A” rated insurance companies in just a few short minutes, he is able to find the right coverage at a competitive price. He takes the time to review all of the options and customizes a policy based on the unique risks and desires of each client. After finalizing an option, Mike is backed by a service team that has the highest client loyalty rating in the industry.
However, in 2019, contingencies were 73 basis points of total written premium for the year. As such, we encourage investors to look at trends over the long-term. Also, while it is still too early to know the impact of the recent winter storm in Texas, the event could have an impact on contingencies in 2021. Adjusted EBITDA for the quarter was $7.9 million compared to $7.5 million in the prior year, primarily due to the difference in timing of contingent commissions from 2019 to 2020.
From day 1 we set out to provide our clients an intuitive and robust experience in our client portal. Each of these new product additions in the third quarter will continue to provide further improvement to sales and retention going forward. In addition to improvements in the capabilities of the agent-facing application, we have made strong progress on the client interface. We expect to have the first version of our client-facing comparative rating application available to clients in 2021, providing a uniquely powerful tool for clients and referral partners to engage with us. The competitive advantage of our accumulated experience in servicing personal lines clients over many years cannot be overstated. We are also continuing to streamline and expand the effectiveness of our comparative rating application with the addition of the ability to quote from interest insurance and motorcycle insurance on the platform.
Goosehead agents work hard to protect you against the unexpected. We always recommend our clients carry $1M in additional liability protection through an umbrella policy. Whether it’s for your house, condo, townhome, or your belongings as a renter, Goosehead will find the right policy for you at a great price. ‘s insurance policies are designed to keep you safe by helping you when you’re at your lowest.
In regards to the Service Agent position at Goosehead Insurance, there is little respect received from other departments, and Service is often under staffed and overworked. As much as they stress that Service is the most valuable department, the actions of management does not reflect this belief. Retention in the Service team is low, as most people quit or transfer departments regularly.
As of this date, our team continues to operate in this virtual environment and we continue to see strong performance results across the entire business. And we are now focusing on back-end integrations with carriers that will allow us to broaden the online self-servicing capabilities of the portal as well as eventually being able to quote and issue new policies in the portal. These major technology initiatives allow us to compete with cutting-edge tools that until now have been unavailable in the choice model.
You have a — Texas has some of the highest property insurance rates, with — along with Florida, and maybe even New York. But on the auto side, I think, rates are pretty consistent across the states that we’re kind of grabbing, sharing and growing and — but we’ve been diversifying across multiple states outside of Texas now for six years, seven years. So I don’t think — I think a lot of that’s already baked in — baked into the numbers. So we have our team focused on expedient service to our customers, prioritizing those that are in need and have claims. We’ve been through many weather events from all over the country. So we feel like we’re very well equipped to respond to these type of events.
Core Revenues are the most reliable revenue stream for the Company, consisting of New Business Commissions, Agency Fees, New Business Royalty Fees, Renewal Commissions and Renewal Royalty Fees. Core Revenues were driven by growth in corporate agents and operating franchises, productivity improvements in the Franchise Channel, and continued high levels of retention. Total written premiums placed, which is a leading indicator of future revenue growth, grew 41% in the second quarter to $274 million, compared to $194 million in the second quarter of 2019.
I’ve worked at several big corporations and I can tell you that the culture here is by far the best. It is a work hard – play hard environment, and we do experience growing pains, but because of that there is a lot of opportunity for growth. You have to be driven to succeed here, there is no doubt about that. If you are truly invested in your own growth and the growth of your organization you will undoubtedly do well at Goosehead. No need to explain policy fees, include all of the fees on the closing invoice.
We also continued to invest heavily in people and technology, which we believe will sustain our momentum many years into the future. The results further validate our unique and time-tested business model. We run the business putting clients at the center of our universe. This has had a profound effect on the lens through which we view investments in our business. Revenues were $34.7 million for the quarter, an increase of 48% from the year ago period, while core revenues increased 46% to $25.7 million.
We are also expanding our Houston and Westlake offices in the third quarter. In addition to providing support to franchisees, these corporate offices help us scale nationally and enhance college recruiting and career advancement opportunities in both the short and long term. The 2021 office openings and expansions should sufficiently absorb our headcount growth through 2022. Also, while our franchise unit count is growing, the unit productive capacity is also growing, as some of our more seasoned franchises begin adding producers, which will be a larger and larger source of growth over time. Importantly, because of our rapid growth rates, 63% of our total franchise base is either in their first year or preparing to on-board. While this cohort provides minimal premium and revenue today, their predictable launch and production ramp, combined with our increasing retention rates should fuel powerful growth over the next decade and beyond.
Before reviewing our results for the second quarter, I would like to share our business philosophy. Adherence to this philosophy has allowed us to deliver exceptional results even during a global pandemic. One, we view and manage the business through the lens of long-term owners. Every member of our senior management team has the vast majority of their net worth tied up in Goosehead stock.
We also kept our foot firmly on the gas pedal investing heavily in people and our disruptive technology platform, which we believe will drive strong growth in 2021 and beyond. “Adjusted EBITDA” is a supplemental measure of the Company’s performance. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of items that do not relate to business performance. Adjusted EBITDA is defined as net income before interest, income taxes, depreciation and amortization, adjusted to exclude equity-based compensation and other non-operating items, including, among other things, certain non-cash charges and certain non-recurring or non-operating gains or losses. MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock.
Over 35% of our clients are now using our online client portal, which was implemented in the fourth quarter of 2019. The combination of the online portal with our world-class service team is having a meaningful positive impact on the overall insurance buying and service experience as clients on the portal show an average Net Promoter Score of 94. As a reminder, our Net Promoter Scores are higher than any company that we’ve been able to identify, while our cost to deliver this extraordinary level of service are roughly one quarter of industry best practice. Total premiums placed were $274 million, an increase of 41% versus the second quarter of 2019, driven by strong new business growth and continued high levels of retention. Approximately 70% of our second quarter premiums were in the franchise channel compared to 67% a year ago. As our mix of business continues to shift more to the Franchise Channel, it is important to keep in mind how premiums convert to revenue.
— Mark Boudreaux #thebowtieinsuranceguy (@LegacyAgency_GH) October 7, 2021
We ended the quarter with 1,261 total franchises, an increase of 52% from the year ago quarter, while operating franchises increased 41% to 823, the third consecutive quarter of accelerating year-over-year operating franchise growth. Our significant number of signed and operating franchises with less than one year of experience bodes well for transparent and powerful growth for many years to come. We delivered phenomenal results in the third quarter, exhibiting continued strong and profitable growth with exceptional service driving high levels of client retention.
In order to protect our reputation and goodwill and to maintain high standards of operation under our Proprietary Marks, you agree to conduct your business in accordance with the written instructions that we provide, including the Manual. We will lend to you one copy of our Manual, only for the term of this Agreement, and only for your use in connection with operating the Franchised Business during the term of this Agreement. We have the right to approve or disapprove of the suppliers who may be permitted to sell products to you.
The service experience we provide to our clients are second to none, with a net promoter score of 92 in the quarter. I could not be more pleased with the consistent and high quality efforts put forth by our amazing service professionals. Our corporate agent team is up 43% from a year ago and continued investments in this channel are critical as efforts in training, mentoring and beta testing of new technology and processes helps drive our extraordinary growth and improved productivity in the more leveraged franchise channel. These agents represent the gold standard of performance in the industry with new business production levels, nearly 4 times industry best practice, which makes some very powerful supporting critical training, mentoring and R&D functions for the Company. The leading indicator of future revenue growth continues to power ahead. In Q2, premiums increased 46% while policies in force grew 48% compared to the second quarter of last year.
Root stands for fairness in the car insurance industry. This is why we have committed to removing credit score—an unfair and discriminatory factor in traditional insurance— from our pricing by 2025. Our mission to unbreak the car insurance industry rider insurance means identifying the things that are broken, and committing to creating systemic change. Here are just some of the ways that we’re taking action to revolutionize insurance. We understand the unique coverage needs of coastal residents.
The company’s powerful technology coupled with their dedicated Customer Advocate team ensures a quality experience. Backed by one of the world’s biggest reinsurers and built for modern drivers, Clearcover makes it easy to get reliable car insurance in minutes. Clearcover Insurance’s digital auto insurance is now accessible to Goosehead’s large agency footprint in 11 states, with plans for future expansion. Goosehead Insurance, founded in 2003 and headquartered in Westlake, Texas, is an insurance agency that offers insurance products, such as homeowners insurance, condo insurances, renters insurance, and more.
Any action that we bring against you in any court, whether federal or state, may be brought within the state and judicial district in which we maintain our principal place of business. The parties agree that each of the foregoing covenants will be construed as independent of any other covenant or provision of this Agreement. We have the right to reduce in writing the scope of any part of this Section 19 and, if we do so, you agree to comply with the obligations as we have reduced them. 19.5.2 you will not solicit, divert, or attempt to solicit or divert any actual or potential business or customer of the Franchised Business to any Competitive Business.
“Mark and I have made many decisions people didn’t agree with,” she says. Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes.
Unlike their captive and independent counterparts, Goosehead agents’ have a company that is actively investing in driving productivity efficiencies through technology as opposed to cost-cutting or shaving points off the commission every year. Franchising insurance agencies is an attractive/predictable business model. Revenues from policy commissions are fairly recurring (~85-88%) and Goosehead agents have a fairly predictable ability to sell new business leveraging their S&M and relationships on the local/regional level. The punchline is that even though the company looks optically expensive on the screen the company might be a compelling long. Investors may not appreciate the company’s durable growth potential, which is anchored by its “back-office” operations/software, disruptive franchising GTM motion, and recurring revenue profile. The company may be able to grow into its optically high NTM multiple and the same time generate ~$600mm of free cash flow (~12% of current market capitalization).
Note the order of priority, clients first, technology second as an enabler. You will see this on vivid display when we demo our Digital Agent Platform. It is simple and comprehensive and importantly informed by artificial intelligence, leveraging millions of actual quotes by our professional agents.
You will be an underwriter, a sales agent, a billing agent, a claims specialist, and a call center employee for five figures a year, but I guess the break room is nice. Pretty campus too; you might get a chance to see it when you leave for home at 9pm. Take your resume and run, preferably in the opposite direction, from Goosehead Insurance. But again with the absence of the agents, you have a very hard time convincing insurance companies, that this is in their best interest. I mean, I think you go back just not even 10 years and you see kind of the Google insurance shopping experience, which was quickly folded. It was because the carriers were very concerned about the type of business they were looking at.
Core Revenues are the most reliable revenue stream for the Company, consisting of New Business Commissions, Agency Fees, New Business Royalty Fees, Renewal Commissions, and Renewal Royalty Fees. Core Revenue growth was driven by growth in corporate agents and operating franchises , productivity improvements in the Franchise Channel, and continued high levels of retention. Total written premiums placed, which is a leading indicator of future revenue growth, grew 45% in the fourth quarter to $285 million, compared to $196 million in the fourth quarter of 2019.
Team TypTap is out and about meeting with agents. Last week our Southwest Florida rep, Clark Ramos, had the opportunity of hosting a lunch and happy hour with some of his agents from Goosehead and We Insure.#typtap #homeinsurance #teamtyptap #typtapinsurance #iiapbc #networking pic.twitter.com/VevpmuJl7d
— TypTap Insurance (@TypTapInsurance) October 1, 2021
The US insurance distribution technology market is fragmented with many major market players operating in the region. The key players of the insurance distribution technology market are EverQuote, Inc., GoHealth, MediaAlpha, Inc., and Goosehead Insurance, Inc. are also profiled with their financial information and respective business strategies. We definitely saw some kind of more reallocation of where we spend where we didn’t have any travel during the quarter, right, no mileage expenses from our employees going out and visiting shops. No flights from our Franchise sales team going to meeting with potential agents.
For the year ended Dec. 31, 2017, net income came in at $8.7 million. Renewal Royalty Fees, New Business Royalty Fees, Initial Franchise Fees, and Other Income are included in “Franchise revenues” as shown on the Consolidated statements of operations within Goosehead’s Form 10-K for the twelve months ended December 31, 2020 and 2019. Zacks Earnings ESP looks to find companies that have recently seen positive earnings estimate revision activity.
Core Revenue growth was driven by growth in corporate agents and operating franchises, productivity improvements in the Franchise Channel, and continued high levels of retention. Total written premiums placed, which is a leading indicator of future revenue growth, grew 49% in the third quarter to $301 million, compared to $202 million in the third quarter of 2019. We believe the consistent outstanding growth in our Franchise Channel this year is a direct result of the investments we’ve made in talent recruitment technological innovation and ongoing support of our franchise agents over the past few years.
In the first quarter the corporate agency plus the 501 franchisees hauled in $147 million of premiums, up 45% from the year before. Since last year’s public offering, Goosehead shares have more than quadrupled, giving the company a valuation of $1.8 billion. Wife, stuck at home raising six kids, is frustrated with husband’s time away from home on his consulting job. Maybe she could start a little business on the side and, if it works out, draw him into it. The company’s investments in integrated quoting technology and agent workflow tools make the agents more efficient than their peers that are still operating through email and phone.
And ultimately, the client experience can be delivered without agents fulfillment and agent execution. So in no way are we trying to create a conflict that would undermine our agents’ experience. This is simply a different way to engage with customers who prefer to engage with us digitally, that’s very important. Lead generators, digital independent agencies or some hybrid of the two, create an even more frustrating experience for the customer, by misleading them to think that they are being shot and will be presented with accurate price close. A similar lengthy information gathering exercise required to start the process, then only a few options are returned with a pricing indication. And other brand options are returned without any indication of potential price.
We also continue to invest in the success of our Franchise agents via our Corporate agents through our virtual sales coach program. As Mark mentioned, our Corporate agents, virtually coaching franchisees helped drive a 32% increase in productivity among Franchise participants. This is a highly leveraged area of investment, not only for productivity gains, but for the retention impacts from both our franchisees being more successful and our Corporate agents having additional coaching opportunities leading to attractive career paths and management. Lastly, we made accelerated investments in our technology development team, having grown the size of the team by 160% over the prior 12 months. The current employment environment has created opportunities for us to play offense and further enhance our development capabilities with the addition of new high quality developer talent.
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You will require all marketing and promotional materials, signs, decorations, merchandise, any and all replacement trade dress products, and other items that we may designate to bear our then-current Proprietary Marks and logos in the form, color, location, and manner that we have then-prescribed. 7.1.5 You may be required to use and/or offer for sale any of the Approved Products and Services that we designate. 7.1.2 For the purpose of this Agreement, the term “supplier” includes, but is not limited to, manufacturers, insurance carriers, distributors, resellers, and other vendors.
Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements which are based on the expectations, estimates and projections of management as of today. The forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict and which could cause the actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. We refer all of you to our recent filings with the SEC for more a detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of Goosehead Insurance. We disclaim any intentions or obligations to update or revise any forward-looking statements except to the extent required by applicable law. Please note that if you request to be contacted by a Progressive agent, the agent may have different privacy practices.
With a variety of coverages, and plenty of ways to save, you can create a policy that keeps your home safe and fits your budget. Yes, we’re an insurance company, but find out what makes us stand out. While you drive, we gather and analyze data from your smartphone’s sensors. After a few weeks, you can get a car insurance quote based primarily on how you drive. The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York.
We continue to manage the Corporate and Franchise Channels as one integrated whole. Efforts and investments in the Corporate Channel are integral to our overall success as an organization. In addition to strong agent recruiting in the quarter, we have added impactful talent across the broader organization. Our recruiting team currently stands at 83 compared to 60 individuals at the end of 2019.
And I think it’s worth noting as well, we’ve talked about in the past, our implementation process and some changes that we’ve made in the implementation process. Total revenues for 2020 under ASC 606 revenue accounting are expected to be between $109 million and $112 million, representing organic growth of 41% on the low end of the range and 45% on the high end of the range. We are very pleased with the momentum in our business and believe we’ll remain well positioned to deliver consistent and sizable growth even during uncertain and challenging environments.
Net income attributable to Goosehead Insurance, Inc. was $3.2 million, or $0.20 per basic and $0.18 per diluted share. Adjusted EPS, which excludes equity-based compensation, was $0.25 per share for the six months ended June 30, 2020. Total Adjusted EBITDA was $11.0 million for the six months ended June 30, 2020, or $12.6 million if reported under ASC 605, a decrease of 11%. Renewal Royalty Fees, New Business Royalty Fees, Initial Franchise Fees, and Other Income are included in “Franchise revenues” as shown on the Condensed Consolidated statements of income within Goosehead’s Form 10-Q for the three and nine months ended September 30, 2019.
If you think you have what it takes to grow with our company, we would love to meet you. Our groundbreaking online digital agent will deliver you qualified leads. So will our comprehensive national referral partner database.