Goosehead Insurance (NASDAQ:GSHD) reported higher third-quarter revenue and growth in its agent network, while disclosing plans to restate financial statements covering three years and the first half of 2026.
The insurance distributor said total revenue rose 17% year over year to approximately $110 million, representing the midpoint of a range in its earnings release. Core Revenue increased 13% to $95 million. The company maintained its full-year revenue and written premium growth outlook.
Management cautioned that its review of prior-period accounting remains ongoing and that estimated adjustments are preliminary, unaudited and subject to change. Senior Director of Investor Relations Maddie Middleton said previously issued annual and quarterly financial statements for 2023 through 2025, along with quarterly statements for the first half of 2026, should no longer be relied upon.
Restatement Follows SEC Review
Chief Financial Officer John Martin said the company received a comment letter from the Securities and Exchange Commission staff concerning disclosures in its 2025 annual filing, including its accounting for costs of obtaining customer contracts.
Goosehead historically expensed agent compensation costs as they were incurred. Martin said the company determined that a portion of those costs should instead be deferred and recognized over their expected benefit period. The change primarily relates to variable compensation paid to corporate sales agents for generating new business, President and Chief Operating Officer Mark Jones Jr. said.
Goosehead also identified franchise-related fees, largely associated with technology cost recovery, that had been recorded as an offset to general and administrative expenses but should have been classified as revenue. Martin said the reclassification would increase revenue and expenses by the same amount, with no effect on Core Revenue or cash flow.
The company preliminarily expects the fee reclassification to increase both revenue and general and administrative expenses by $11 million to $16 million for 2025 and $8 million to $13 million over the first three quarters of 2026.
For the compensation adjustment, Goosehead expects compensation expense to decrease and operating income to rise by an amount equal to approximately 0.5% to 5.5% of total employee compensation and benefits for each of full-year 2025 and the first half of 2026. Martin said the company expects the restated presentation to increase total revenue, operating income and adjusted EBITDA, without changing the underlying economics of the business.
Goosehead is working to file the restatements and its third-quarter Form 10-Q as soon as practical. Management deferred a fuller discussion of expenses and profitability until the financial statements are finalized.
New Business Grows as Prices Fall
Policies in force increased 14% from a year earlier to 2.1 million, while total written premiums rose 11% to $1.3 billion. New business commissions grew 21% to $9.1 million, and new business royalties increased 13% to $9.4 million. Client retention was 86%, which Martin described as significantly improved.
The company ended the quarter with 2,840 producers across its corporate, enterprise and franchise operations, up 7% year over year. Same-store sales rose 17% across the franchise channel and 29% among its 50 largest franchises, Martin said.
Growth came against a backdrop of falling insurance prices. Jones said auto pricing was down by a mid-single-digit percentage and homeowners pricing by a low-single-digit percentage, with steeper declines in some markets, including Texas and Florida. He said a larger-than-expected pricing decline in Goosehead’s Texas corporate book contributed to slower Core Revenue growth compared with the second quarter.
Jones said lower prices can create a short-term headwind to renewal revenue when agents move clients to more competitive policies, but management expects the practice to support retention over time. He declined to predict when pricing pressure would ease.
Partnerships and Technology
Goosehead’s enterprise sales team, which has more than 150 agents, delivered new business growth of more than 50% for an eighth consecutive quarter, Jones said. Enterprise sales accounted for 23% of total new business commissions and agency fees in the quarter.
Chief Executive Officer Mark Miller said Goosehead has launched 12 embedded franchisees within businesses that have established customer lead flow. New business production at those agencies rose 64% from a year earlier. Jones said the embedded franchise partners remain a relatively small portion of franchise new business production, although their contribution is growing.
On technology, Jones said nearly one-third of service work is completed entirely through digital channels. The company is also building a Model Context Protocol server intended to let personal AI assistants connect with Goosehead’s services, with a launch expected by year-end.
Jones said most customers using the company’s Digital Agent still choose to consult a human agent before completing a purchase. He also noted unresolved questions around regulation, customer consent and security as the company develops connections to AI agents.
Outlook and Leadership Transition
Goosehead reiterated its expectation for organic revenue growth of 12% to 19% and organic written premium growth of 12% to 20% for 2026. Jones raised the company’s full-year expectation for contingent commissions to 80 to 110 basis points of total written premium, from a previous range of 70 to 100 basis points.
Miller said the earnings call was his last as CEO and that he will retire at the end of the year. He expressed confidence in Jones and the company’s leadership team, saying Goosehead’s “best days are still in front of us with Mark at the helm.”
About Goosehead Insurance (NASDAQ:GSHD)
Goosehead Insurance is an independent insurance agency that distributes personal insurance products through a network of company-operated and franchised locations. The company works with multiple insurance carriers, helping customers compare coverage options and obtain policies.
Its offerings include homeowners, automobile, flood, umbrella and other personal insurance products. Goosehead also provides technology and support services to its agents, including tools for quoting, policy management and customer service.
Founded in 2003 by Mark and Robyn Jones, Goosehead is based in Westlake, Texas, and serves customers across the United States.
