Q2 2024 Goosehead Insurance Inc Earnings Call

Good day, and thank you for standing by, and welcome to Goosehead Insurance.

Operator: Conference call. At this time, I'll participants on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. So, will draw your question, please press star 1-1 again.

Operator: Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Daniel Farrell, Vice President of Capital Markets. Please go ahead.

Speaker Change: second quarter 2024 earnings conference call.

Speaker Change: At this time, all participants are in a listen-only mode.

Speaker Change: After the speaker's presentation there will be a question and answer session. To ask a question during the session you'll need to press star 1 1 on your telephone.

Speaker Change: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Daniel Farrell, Vice President of Capital Markets. Please go ahead.

Operator: Please be advised that today's conference is being recorded.

Daniel Farrell: I would now like to hand the conference over to your speaker today, Daniel Farrell, Vice President of Capital Markets. Please go ahead.

Daniel Farrell: Thank you and good afternoon. 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 the management as of today. Forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties, and other factors that are difficult to predict, in which could cause actual results to differ materially from those expressed or implied in the forward-looking statements.

Daniel D. Farrell: Thank you and good afternoon. 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 the management as of today. 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 actual results to differ materially from those expressed or implied in the forward-looking statement.

Daniel D. Farrell: Thank you and good afternoon. 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 the management as of today.

Speaker Change: 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 actual results to differ materially from those expressed or implied in the forward-looking statements.

Daniel Farrell: These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer you all to our recent SEC filings for a more detailed discussion of risks and uncertainties that could impact future operating results in the financial condition of Goosehead. We display any intention or obligation to update and revise any forward-looking statements, except to the extent required by applicable law.

Daniel D. Farrell: These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer you all to our recent SEC filings for a more detailed discussion of risks and uncertainties that could impact future operating results and financial condition of Goosehead. We disclaim any intention or obligation to update and revise any forward-looking statements, except to the extent required by applicable law.

These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them.

We refer you all to our recent SEC filings for a more detailed discussion of risks and uncertainties that could impact future operating results and financial condition of Goosehead. We disclaim any intention or obligation to update and revise any forward-looking statements except to the extent required by applicable law.

Daniel Farrell: I would also like to point out that during the call, we will discuss certain financial measures that are not prepared in accordance with GAAP. Management uses these non-GAAP financial measures when planning, monitoring, and evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons, period to period, by including potential differences caused by variations in capital structure, tax position, depreciation, amortization, and certain other items that we believe are not represented in our core business. For more information regarding the use of non-GAAP financial measures, including reconciliation of these measures to the most recent comparable GAAP financial measures, we refer you to today's earnings release.

Daniel D. Farrell: I would also like to point out that during the call, we will discuss certain financial measures that are not prepared in accordance with GAAP. Management uses these non-GAAP financial measures when planning, monitoring, and evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period by including potential differences caused by variations in capital structure, tax position, depreciation, amortization, and certain other items that we believe are not representative of our core business.

Speaker Change: I would also like to point out that during the call we will discuss certain financial measures that are not prepared in accordance with GAAP.

Speaker Change: Management uses these non-GAAP financial measures when planning, monitoring, and evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons period-to-period.

Speaker Change: by including potential differences caused by variations in capital structure, tax position, depreciation, amortization, and certain other items that we believe are not representative of our core business.

Daniel D. Farrell: For more information regarding the use of non-GAAP financial measures, including reconciliation of these measures to the most recent comparable GAAP financial measures, we refer you to today's earnings release. In addition, this call is being webcast in an archived version, which will be available shortly after the call ends on the investor relations portion of the company's website at goosehead.com. Now, I'd like to turn the call over to our president and CEO, Mark Miller.

Speaker Change: For more information regarding the use of non-GAAP financial measures, including reconciliation of these measures to the most recent comparable GAAP financial measures,

Daniel Farrell: In addition, this call is being broadcast in our current version. We'll be available shortly after the call ends on the Investor Relations portion of the company's website at goosehead.com.

Speaker Change: We refer you to today's earnings release. In addition, this call is being webcast in archived version, will be available shortly after the call ends on the investor relations portion of the company's website at goosehead.com. Now, I'd like to turn the call over to our President and CEO , Mark Miller.

Mark Miller: Now, I'd like to turn the call over to our President and CEO, Mark Miller.

Mark K. Miller: Thanks, Dan, and welcome, everyone, to our second quarter earnings call. I'm honored to be joining for the first time as Goosehead's president and CEO. Mark and Robin Jones founded this company over 20 years ago, and they built something unique that transformed the insurance industry by providing unprecedented product choice and building an extremely talented team that puts clients at the center of our universe. I couldn't be more excited to carry on that amazing legacy and help Goosehead reach new heights.

Mark Miller: Thanks, Dan, and welcome everyone to our second quarter earnings call.

Mark Miller: I'm honored to be joining for the first time as Goosehead's President and CEO. Mark and Robin Jones founded this company over 20 years ago, and they built something unique that transformed the insurance industry by providing unprecedented product choice and building an extremely talented team that puts clients at the center of our universe. I couldn't be more excited to carry on that amazing legacy and help Goosehead reach new heights. I'd like to personally thank Mark Jones for his leadership, friendship, and continued support and counsel. The transition could not have gone more smoothly, and the company feels well positioned for the next phase of our journey.

Mark K. Miller: Thanks Dan and welcome everyone to our second quarter earnings call.

Mark K. Miller: I'm honored to be joining for the first time as Goosehead's President and CEO .

Speaker Change: Mark and Robin Jones founded this company over 20 years ago, and they built something unique that transformed the insurance industry by providing unprecedented product choice and building an extremely talented team that puts clients at the center of our universe.

Mark K. Miller: I'd like to personally thank Mark Jones for his leadership, friendship, and continued support and counsel. The transition could not have gone more smoothly, and the company feels well positioned for the next phase of our journey. Over my career, I've been part of many great leadership teams, and I've seen many good business models. However, I've never been part of anything with this much potential, and I believe we have a rare opportunity to change an industry and improve the lives of millions of people along the way. So that's why I'm here and why we're buying back our own stock and why I bought right alongside the company. Let me expand on what I mean.

Speaker Change: I couldn't be more excited to carry on that amazing legacy and help Goosehead reach new heights.

Speaker Change: I'd like to personally thank Mark Jones for his leadership, friendship, and continued support and counsel.

Speaker Change: The transition could not have gone more smoothly, and the company feels well-positioned for the next phase of our journey.

Mark Miller: Over my career, I've been part of many great leadership teams, and I've seen many good business models. However, I've never been part of anything with this much potential, and I believe we have a rare opportunity to change an industry and improve the lives of millions of people along the way. So that's why I'm here, when why we're buying back our own stock and why I bought right alongside the company. Let me explain on what I mean.

Speaker Change: Over my career I've been part of many great leadership teams and I've seen many good business models.

Speaker Change: However, I've never been part of anything with this much potential, and I believe we have a rare opportunity to change an industry and improve the lives of millions of people along the way.

Speaker Change: So that's why I'm here and why we're buying back our own stock.

Mark K. Miller: First, the opportunity for growth in personalized insurance is enormous. The total personalized insurance industry is over 450 billion dollars. We currently have over $3.3 billion in total written premiums, but we account for less than 1% of the total market and just 4.5% of mortgage transactions in the U.S. As a reminder, the majority of our referral partner leads are tied to mortgage transactions. With a market that large, there is obviously plenty of white space for us to grow organically for many years to come.

Mark Miller: First, the opportunity for growth and personal insurance is enormous. The total transactions in the US, as a reminder, the majority of our referral partner leads are tied to mortgage transactions. With a market that large, there is obviously plenty of white space for us to grow organically for many years to come. Second, we're perfectly positioned to capture a larger and larger portion of that market because we simply have the best people in the industry and the best business model. It is our job to execute on that opportunity. Third, Goosehead has created a wide and deep mode that we believe is extremely difficult to replicate.

Speaker Change: and why I bought right alongside the company.

Speaker Change: Let me expand on what I mean. First, the opportunity for growth in personalized insurance is enormous.

Speaker Change: The total personalized industry is over 450 billion dollars.

Speaker Change: We currently have over $3.3 billion in total written premiums, but we account for less than 1% of the total market and just 4.5% of mortgage transactions in the U.S.

Speaker Change: As a reminder, the majority of our referral partner leads are tied to mortgage transactions.

Speaker Change: With a market that large, there is obviously plenty of white space for us to grow organically for many years to come.

Mark K. Miller: Second, we are perfectly positioned to capture a larger and larger portion of that market because we simply have the best people in the industry and the best business model. It is our job to execute on that opportunity. Third, Goosehead has created a wide and deep moat that we believe is extremely difficult to replicate.

Speaker Change: Second, we're perfectly positioned to capture a larger and larger portion of that market because we simply have the best people in the industry and the best business model. It is our job to execute on that opportunity.

Speaker Change: Third, Goosehead has created a wide and deep moat that we believe is extremely difficult to replicate.

Mark Miller: We have over 950,000 clients, nearly 1.6 million policies in force, over 200 carrier partners, industry-leading technology, a national footprint, and more than 2,300 highly skilled and motivated agents. My team and I are relentlessly focused on being the largest personalized insurance distributor in the country in our founder's lifetime. And that's the same mission we have had since day one.

Mark K. Miller: We have over 950,000 clients, nearly 1.6 million policies in force, over 200 carrier partners, industry-leading technology, a national footprint, and more than 2,300 highly skilled and motivated agents. My team and I are relentlessly focused on being the largest personalized insurance distributor in the country during our founder's lifetime. And that's the same mission we've had since day one.

Speaker Change: We have over 950,000 clients.

Speaker Change: nearly 1.6 million policies in force, over 200 carrier partners, industry leading technology, a national footprint, and more than 2,300 highly skilled and motivated agents.

Speaker Change: My team and I are relentlessly focused on being the largest personalized insurance distributor in the country in our founder's lifetime, and that's the same mission we've had since day one.

Mark Miller: To accomplish this goal, it's critical that we re-accelerate growth, and that's exactly what we did in the second quarter. In Q2, we continue to see many of the same macro and industry challenges we have faced for the past two years. From 1980 to 2023, the average annual number of billion-dollar insurance claimed disasters in the US was 8.5. 2023 marked the fourth consecutive year of 18 and more of these size events, CPI adjusted, and this trend has continued in the first half of 2024. Many carriers have taken 20% plus price increases on home insurance over the past 12 months, but those increases have not been sufficient for them to reach their target profitability levels, given inflation and bad weather frequency and severity.

Mark K. Miller: To accomplish this goal, it's critical that we re-accelerate growth and that's exactly what we did in the second quarter. In Q2, we continue to see many of the same macro and industry challenges we have faced for the past two years. From 1980 to 2023, the average annual number of billion-dollar insurance claim disasters in the U.S. was 8.5.

Speaker Change: To accomplish this goal, it's critical that we re-accelerate growth and that's exactly what we did in the second quarter.

Speaker Change: In Q2, we continue to see many of the same macro and industry challenges we have faced for the past two years.

Speaker Change: From 1980 to 2023, the average annual number of billion-dollar insurance claim disasters in the U.S. was 8.5.

Mark K. Miller: 2023 marked the fourth consecutive year of 18 or more of these size events, CPI adjusted, and this trend has continued in the first half of 2024. Many carriers have taken 20% plus price increases on home insurance over the past 12 months. But those increases have not been sufficient for them to reach their target profitability levels given inflation and bad weather frequency and severity. Until carriers feel confident they can write property insurance profitably, they will continue putting significant limitations on appointing new agents and selling new policies.

Speaker Change: 2023 marked the fourth consecutive year of 18 or more of these size events, CPI adjusted, and this trend has continued in the first half of 2024.

Speaker Change: Many carriers have taken 20% plus price increases on home insurance over the past 12 months, but those increases have not been sufficient for them to reach their target profitability levels given inflation and bad weather frequency and severity.

Mark Miller: Until carriers will confident they can write property insurance properly, they will continue putting significant limitations on appointing new agents and selling new policies. We're starting to see some early signs of relief on auto insurance, but it's too early to say carrier profitability has fully turned the corner. Despite these facts, I'm pleased to report there are a team of highly skilled agents and service professionals navigated the hard market extremely well, and we posted strong results that demonstrate momentum is building across the organization and growth is beginning to re-accelerate.

Speaker Change: Until carriers feel confident they can write property insurance profitably, they will continue putting significant limitations on appointing new agents and selling new policies.

Mark K. Miller: We're starting to see some early signs of relief in the auto insurance market, but it's too early to say carrier profitability has fully turned the corner. Despite these facts, I'm pleased to report that our team of highly skilled agents and service professionals navigated the hard market extremely well, and we posted strong results that demonstrate momentum is building across the organization and growth is beginning to reaccelerate. For example, in Q2, we grew total producers for the first time in seven quarters. Total rent and premium increased 30% year over year in the quarter compared to 28% in Q1.

Speaker Change: We're starting to see some early signs of relief on auto insurance, but it's too early to say carrier profitability has fully turned the corner.

Speaker Change: Despite these facts, I'm pleased to report that our team of highly skilled agents and service professionals navigated the hard market extremely well, and we posted strong results that demonstrate momentum is building across the organization, and growth is beginning to reaccelerate.

Mark Miller: For example, in Q2, we grew total producers for the first time in seven quarters. Total written premium increased 30% year of year in the quarter compared to 28% in Q1. Core revenue increased 20% year of year compared to 13% growth in Q1, and we reached the highest level of franchise agent productivity and company history with same-store sales of 29% year of year. I'm incredibly proud of the way our entire team has performed in this environment, and I'm also extremely grateful for the strong partnership we have with many of our largest carriers. We understand what our partners need in this environment where growth for them is easy, but profitability is hard. To have a great partnership, both parties must be honest and be very clear about their expectations and commitments, and both sides must commit to joint goals.

Speaker Change: For example, in Q2, we grew total producers for the first time in seven quarters.

Speaker Change: Total rent and premium increased 30% year-over-year in the quarter compared to 28% in Q1.

Mark K. Miller: Core revenue increased 20% year over year compared to 13% growth in Q1. And we reached the highest level of franchise agent productivity in company history, with same store sales of 29% year over year. I'm incredibly proud of the way our entire team has performed in this environment.

Speaker Change: Core revenue increased 20% year-over-year compared to 13% growth in Q1.

Speaker Change: And we reached the highest level of franchise agent productivity in company history with same store sales of 29% year-over-year.

Mark K. Miller: And I'm also extremely grateful for the strong partnership we have with many of our largest carriers. We understand what our partners need in this environment, where growth for them is easy, but profitability is hard. To have a great partnership, both parties must be honest and be very clear about their expectations and commitments. And both sides must commit to joint goals. We call this the backing our partners play.

Speaker Change: I'm incredibly proud of the way our entire team has performed in this environment.

Speaker Change: And I'm also extremely grateful for the strong partnership we have with many of our largest carriers.

Speaker Change: We understand what our partners need in this environment, where growth for them is easy, but profitability is hard.

Speaker Change: To have a great partnership, both parties must be honest and be very clear about their expectations and commitments, and both sides must commit to joint goals. We call this backing our partners play.

Mark Miller: We call this backing our partners, and our partners play. On our side, we deliver the highest quality clients wherever and whenever our carrier partners need them. We're uniquely positioned to deliver this value to our partners because of our comprehensive geographic footprint, highly skilled agents, targeted marketing approach, and superior technology capability. And in return, these great partners allocate to us scarce product that keep our agents fully utilized and our clients happy. Obviously, we can control macro factors or the pace of product market recovery, but we can't focus on being a great partner that delivers attractive clients, which tend to purchase multiple policies and have better loss experience and retention within respective geographic locations.

Mark K. Miller: On our side, we deliver the highest quality clients wherever and whenever our caring partners need them. We're uniquely positioned to deliver this value to our partners because of our comprehensive geographic footprint. And in return, these great partners allocate to us scarce products that keep our agents fully utilized and our clients happy. Obviously, we can't control macro factors or the pace of product market recovery, but we can focus on being a great partner that delivers attractive clients, which tend to purchase multiple policies and have better loss experience and retention within respective geographic locations.

Speaker Change: On our side, we deliver the highest quality clients wherever and whenever our carrier partners need them.

Speaker Change: We're uniquely positioned to deliver this value to our partners because of our comprehensive geographic footprint, highly skilled agents, targeted marketing approach, and superior technology capability.

Speaker Change: And in return, these great partners allocate to us scarce product that keep our agents fully utilized and our clients happy.

Speaker Change: Obviously, we can't control macro factors or the pace of product market recovery, but we can focus on being a great partner that delivers attractive clients, which tend to purchase multiple policies and have better loss experience and retention within respective geographic locations.

Mark Miller: You should expect us to continue down the strategic path we have discussed on previous calls, but we will begin to push even harder on the growth levers in the business. Let me give you a few examples of how. We have a three-pronged approach to add agents to our network quickly. First, hire more quality corporate agents with a larger, high-powered university recruiting program. Second, optimize our in-house agent staffing program, helping our existing agency owners accelerate growth by supporting their recruitment of exceptional agents. And third, increase the size and capability of our franchise development team. As of the end of Q2, we had 313 corporate agents, up from 292 at the end of Q1.

Mark K. Miller: You should expect us to continue down the strategic path we have discussed on previous calls, but we will begin to push even harder on the growth levers in the business. Let me give you a few examples of how.

Speaker Change: You should expect us to continue down the strategic path we have discussed on previous calls.

Speaker Change: but we will begin to push even harder on the growth levers in the business.

Mark K. Miller: We have a three-pronged approach to add agents to our network quickly. First, we hire more quality corporate agents with a larger, high-powered university recruiting program. Second, optimize our in-house agent staffing program, helping our existing agency owners accelerate growth by supporting their recruitment of exceptional agents. And third, increase the size and capability of our franchise development. As of the end of Q2, we had 313 corporate agents, up from 292 at the end of Q1. And we expect to end the year with over 400 corporate agents.

Speaker Change: Let me give you a few examples of how.

Speaker Change: We have a three-pronged approach to add agents to our network quickly.

Speaker Change: First, hire more quality corporate agents with a larger, high-powered university recruiting program.

Speaker Change: Second, optimize our in-house agent staffing program, helping our existing agency owners accelerate growth by supporting their recruitment of exceptional agents.

Speaker Change: And third, increase the size and capability of our franchise development team.

Speaker Change: As of the end of Q2, we had 313 corporate agents, up from 292 at the end of Q1.

Mark Miller: And we expect to end the year with over 400 corporate agents. This summer, we're quickly adding many new high-quality agents to our corporate network. The class of 2024 represents some of the best agents we have ever hired. The early results from the class of 2024 indicate that we are ramping even faster than the class of 2023, notwithstanding the very challenging macro conditions. We're possible. We want to build around our best existing agency partners and help them develop even larger businesses. As a result, our agents per franchise continued to increase. Since the beginning of the year, we have helped source more than 150 agents that have been hired by our existing franchises.

Mark K. Miller: This summer, we're quickly adding many new high-quality agents to our corporate network. The class of 2024 represents some of the best agents we have ever hired. The early results from the class of 2024 indicate that we are ramping even faster than the class of 2023, notwithstanding the very challenging macro conditions.

Speaker Change: And we expect to end the year with over 400 corporate agents.

Speaker Change: This summer, we're quickly adding many new high-quality agents to our corporate network.

Speaker Change: The class of 2024 represents some of the best agents we have ever hired.

Speaker Change: The early results from the class of 2024 indicate that we are ramping even faster than the class of 2023.

Mark K. Miller: Where possible, we want to build around our best existing agency partners and help them develop even larger businesses. As a result, our number of agents per franchise continued to increase. Since the beginning of the year, we have helped source more than 150 agents that have been hired by our existing franchises. In addition, our agency owners have hired over 200 agents on their own this year. I believe the support we're providing our agency owners is building confidence within the community that they can each have the capability to grow into larger businesses with multiple agencies. We now average 1.8 agents per franchise. Last year, that number was 1.5 agents per franchise.

Speaker Change: notwithstanding the very challenging macro conditions.

Speaker Change: Where possible, we want to build around our best existing agency partners and help them develop even larger businesses. As a result, our agents per franchise continue to increase.

Speaker Change: Since the beginning of the year, we have helped source more than 150 agents that have been hired by our existing franchises.

Mark Miller: In addition, our agency owners have hired over 200 agents on their own this year. I believe the support we're providing our agency owners is building confidence within the community that they can each have the capability to grow into larger businesses with multiple agents. We now average 1.8 agents per franchise. Last year, that number was 1.5 agents per franchise.

Speaker Change: In addition, our agency owners have hired over 200 agents on their own this year.

Speaker Change: I believe the support we're providing our agency owners is building confidence within the community that they can each have the capability to grow into larger businesses with multiple agents.

Speaker Change: We now average 1.8 agents per franchise.

Mark Miller: We will also be adding new franchises and key markets around the country to grow our overall footprint. To help accelerate the number of new franchises launched, we recruited Brian Slime, a senior sales executive from AT&T, to lead our franchise development team. Brian is quickly adding key resources and preparing us for more rapid expansion in the future.

Mark K. Miller: We will also be adding new franchises and key markets around the country to grow our overall footprint. To help accelerate the number of new franchises launched, we recruited Brian Sly, a senior sales executive from AT&T, to lead our franchise development team. Brian is quickly adding key resources and preparing us for more rapid expansion in the future. In addition to adding more high-quality agents to the network, we're hyper-focused on optimizing agent productivity.

Speaker Change: Last year that number was 1.5 agents per franchise.

Speaker Change: We will also be adding new franchises and key markets around the country to grow our overall footprint.

Speaker Change: To help accelerate the number of new franchises launched, we recruited Brian Sly, a senior sales executive from AT&T, to lead our franchise development team.

Mark Miller: In addition to adding more high-quality agents to the network, we're hyper-focused on optimizing agent productivity. One of the best ways to drive agent productivity is through technology. As a company, we're making outsized investments in our technology platform to drive current agent productivity and to enable the company to scale more efficiently in the future. Over the past two years, we have built an information technology team that we believe far exceeds the capability of anyone in the industry and rivals most pure technology companies. This technological superiority has created a unique competitive advantage and is beginning to show in the numbers.

Brian Pattillo: Brian is quickly adding key resources and preparing us for more rapid expansion in the future.

Brian Pattillo: In addition to adding more high-quality agents to the network, we're hyper-focused on optimizing agent productivity.

Mark K. Miller: One of the best ways to drive agent productivity is through technology. As a company, we're making outsized investments in our technology platform to drive current agent productivity and to enable the company to scale more efficiently in the future. Over the past two years, we have built an information technology team that we believe far exceeds the capability of anyone in the industry and rivals most pure technology companies. This technological superiority has created a unique competitive advantage and is beginning to show in the numbers. For example, we've talked about the quote to issue for some time now.

Brian Pattillo: One of the best ways to drive agent productivity is through technology.

Brian Pattillo: As a company, we're making outsized investments in our technology platform to drive current agent productivity and to enable the company to scale more efficiently in the future.

Brian Pattillo: Over the past two years we have built an information technology team that we believe far exceeds the capability of anyone in the industry and rivals most pure technology companies.

Brian Pattillo: This technological superiority has created a unique competitive advantage and is beginning to show in the numbers.

Mark Miller: For example, we've talked about quote to issue for some time now. The utilization of that technology investment has really started to take off. Our core platform has historically allowed agents to easily shop the market for the best insurance at the best price. But when it came to binding the policy, our agents needed to go into the native carrier system and re-enter data. This reentry process was time-consuming and suboptimal, but our QTI technology now eliminates much of this redundancy on carriers where we have built connections. Each quarter, an increasing percentage of our policies are bound using our QTI infrastructure, and the number of binds is growing exponentially as our agents become more familiar with this new technology.

Mark K. Miller: The utilization of that technology investment has really started to take off. Our core platform has historically allowed agents to easily shop the market for the best insurance at the best price. But when it came to finding the policy, our agents needed to go into the native carrier system and reenter data.

Brian Pattillo: For example, we have talked about quote-to-issue for some time now.

Brian Pattillo: The utilization of that technology investment has really started to take off. Our core platform has historically allowed agents to easily shop the market for the best insurance at the best price.

Speaker Change: But when it came to finding the policy, our agents needed to go into the native carrier system and re-enter data.

Mark K. Miller: This reentry process was time-consuming and suboptimal, but our QTI technology now eliminates much of this redundancy on carriers where we have built connections. Each quarter, an increasing percentage of our policies are bound using our QTI infrastructure, and the number of binds is growing exponentially as our agents become more familiar with this new technology. We still have a lot of opportunity in this area to drive efficiency, but I'm so proud of what this team has accomplished.

Brian Pattillo: This reentry process was time-consuming and suboptimal, but our QTI technology now eliminates much of this redundancy on carriers where we have built connections.

Speaker Change: Each quarter increasing percentage of our policies are bound using our QTI infrastructure and the number of binds is growing exponentially as our agents become more familiar with this new technology.

Mark Miller: We still have a lot of opportunity in this area to drive efficiency, but I'm so proud of what this team has accomplished.

Brian Pattillo: We still have a lot of opportunity in this area to drive efficiency, but I'm so proud of what this team has accomplished.

Mark Miller: To my knowledge, no one in the industry is doing what we are doing at this scale. These types of ongoing technology investments will rapidly help our agents become even more efficient and deliver a superior client experience. Another adjacent benefit of our technology comes in the relationship we establish with our carriers. In this profitability challenge environment, carriers are looking for partners that can drive economic benefit for them. Our technology platform delivers our partners great clients that have been accurately underwritten to their unique specifications and subjected to rigorous quality control processes. Historically, most of our technology investments have been directed towards enabling sales productivity, but we believe there is tremendous opportunity to use the same technology to drive scale and quality in our service department.

Mark K. Miller: To my knowledge, no one in the industry is doing what we are doing at this scale. These types of ongoing technology investments will rapidly help our agents become even more efficient and deliver a superior client experience. Another adjacent benefit of our technology comes in the relationship we establish with our carriers. In this profitability-challenged environment, carriers are looking for partners that can drive economic benefits for them. Our technology platform delivers great clients that have been accurately underwritten to their unique specifications and subjected to a rigorous quality control process.

Brian Pattillo: To my knowledge, no one in the industry is doing what we are doing at this scale.

Brian Pattillo: These types of ongoing technology investments will rapidly help our agents become even more efficient and deliver a superior client experience.

Brian Pattillo: Another adjacent benefit of our technology comes in the relationship we establish with our carriers.

Brian Pattillo: In this profitability-challenged environment, carriers are looking for partners that can drive economic benefit for them.

Brian Pattillo: Our technology platform delivers our partners great clients that have been accurately underwritten to their unique specifications and subjected to rigorous quality control processes.

Mark K. Miller: Historically, most of our technology investments have been directed towards enabling sales productivity, but we believe there is a tremendous opportunity to use the same technology to drive scale and quality in our service department. Service is by far our largest cost center, and many of the tasks they perform can be automated, freeing our agents to deliver an even better client experience.

Brian Pattillo: Historically, most of our technology investments have been directed towards enabling sales productivity.

Brian Pattillo: But we believe there is tremendous opportunity to use the same technology to drive scale and quality in our service department.

Mark Miller: Services by far our largest cost center, and many of the tasks they perform can be automated, freeing our agents to deliver an even better client experience. Improving quality and reducing costs with automation will help us significantly widen our competitive mode and expand margins.

Brian Pattillo: Services by far our largest cost center and many of the tasks they perform can be automated, freeing our agents to deliver an even better client experience.

Mark K. Miller: Improving quality and reducing costs with automation will help us significantly widen our competitive mode and expand margins. With this operating playbook focused on re-accelerating growth by adding more agents across the country and strategically investing in technology and service, I believe we are well positioned to deliver strong revenue and earnings growth in the back half of 2024 and accelerate growth in 2025. There is still much to be accomplished, but the next phase of our evolution is well mapped out.

Brian Pattillo: Improving quality and reducing costs with automation will help us significantly widen our competitive moat and expand margins.

Mark Miller: With this operating playbook focused on re-accelerating growth by adding more agents across the country and strategically investing in technology and service, I believe we are well positioned to deliver strong revenue and earnings growth in the back half of 2024 and accelerating growth in 2025. There is still much to be accomplished, but the next phase of our evolution is well mapped, and we will continue to thoughtfully focus our investments on people and technology that better serve our clients and carrier partners.

Brian Pattillo: With this operating playbook focused on re-accelerating growth by adding more agents across the country and strategically investing in technology and service, I believe we are well positioned to deliver strong revenue and earnings growth in the back half of 2024 and accelerating growth in 2025.

Mark K. Miller: And we will continue to thoughtfully focus our investments on people and technology that better serve our clients and carrier partners. In my prior experience, we would often refer to a Rule of 40 company as an excellent benchmark for measuring success. That is to say, the combination of revenue growth and EBITDA margin added up to 40%. Earlier this year, I said I believed our company could reach a rule of 60 level over time.

Brian Pattillo: There is still much to be accomplished, but the next phase of our evolution is well mapped.

Brian Pattillo: And we will continue to thoughtfully focus our investments on people and technology that better serve our clients and carrier partners.

Mark Miller: In my prior experience, we would often refer to a Rule of 40 companies as an excellent benchmark for measuring success. That is to say, the combination of revenue growth and EBITDA margin added up to 40%. Earlier this year, I said I believe our company can reach a rule of 60 level over time. We're not there yet, but I still believe that statement to be true if we follow our strategic plan and focus on what we can control. I want to take our clients, employees, carriers, sales partners, and shareholders for the tremendous support on our continued journey.

Brian Pattillo: In my prior experience, we would often refer to a Rule of Forty company as an excellent benchmark for measuring success.

Brian Pattillo: That is to say, the combination of revenue growth and EBITDA margin added up to 40%.

Mark K. Miller: We're not there yet, but I still believe that statement to be true if we follow our strategic plan and focus on what we can control. I want to thank our clients, employees, carriers, sales partners, and shareholders for their tremendous support on our continued journey. With that, I want to turn the call over to Mark Jones, Jr., our CFO.

Speaker Change: Earlier this year, I said I believe our company can reach a rule of 60 level over time.

Speaker Change: We're not there yet, but I still believe that statement to be true if we follow our strategic plan and focus on what we can control.

Speaker Change: I want to thank our clients, employees, carriers, sales partners, and shareholders for their tremendous support on our continued journey.

Mark Jones Jr.: With that, let me turn the call over to Mark Jones Jr. or CFO.

Mark E. Jones: Thanks, Mark, and good afternoon to everyone on the call. In the second quarter of 2024, we continue to accelerate on our first quarter momentum with total revenue, core revenue, franchise producer count, and corporate agent count all accelerating from the first quarter of 2024. While the carrier product market remains very tight, we've stayed maniacally focused on what we do best, delivering value for our clients, our agents, our referral partners, and our carrier partners. At quarter end, total franchise producers were 1,995, up from 1,963 as of the end of the first quarter of 2024.

Mark Jones Jr.: Thanks, Mark, and good afternoon to everyone on the call. In the second quarter of 2024, we continue to accelerate on our first quarter momentum, with total revenue, core revenue, franchise producer count, and corporate agent count all accelerating from the first quarter of 2024. While the carrier product market remains very tight, we've stayed maniacally focused on what we do best: delivering value for our clients, our agents, our referral partners, and our carrier partners. At quarter end, total franchise producers were 1,995, up from 1,963 as of the end of the first quarter of 2024. Our agency force is healthier than ever as our franchise has continued to scale, grow in our producers per franchise for the sixth consecutive quarter to 1.8.

Speaker Change: With that, let me turn the call over to Mark Jones, Jr., our CFO .

Speaker Change: Thanks, Mark, and good afternoon to everyone on the call. In the second quarter of 2024, we continue to accelerate on our first quarter momentum with total revenue, core revenue, franchise producer count, and corporate agent count all accelerating from the first quarter of 2024.

Speaker Change: While the carrier product market remains very tight, we've stayed maniacally focused on what we do best, delivering value for our clients, our agents, our referral partners, and our carrier partners.

Speaker Change: At quarter end, total franchise producers were 1,995, up from 1,963 as of the end of the first quarter of 2024.

Mark E. Jones: Our agency force is healthier than ever as our franchises continue to scale, growing in number of producers per franchise for the sixth consecutive quarter to 1.8. As we have discussed in the past, each time a franchise onboards a producer, it improves the productivity of everyone in that agency, creating exponential growth opportunities. Productivity per franchise is up 54% year-over-year, and same-store sales are up 29% year-over-year, as the additional technology enhancements and management resources that focus on our largest distribution arm continue to take hold.

Speaker Change: Our agency force is healthier than ever as our franchises continue to scale, grow in our producers per franchise for the sixth consecutive quarter to 1.8.

Mark Jones Jr.: As we have discussed in the past, e.g. I'm a franchise on board the producer and improve the productivity of everyone in that agency, creating exponential growth opportunities. Productivity per franchise is up 54% year over year, and same store sales is up 29% year over year as the additional technology enhancements and management resources that focus on our largest distribution arm continue to take hold. Considering the backdrop of the personal lines carrier market, coupled with the continued cool in the housing market, these productivity improvements are all the more impressive. In the second quarter, the average gross pay to our franchises increased by 62% over the previous year, further demonstrating the resiliency of the model and the health of our agencies.

Speaker Change: As we have discussed in the past, each time a franchise onboards a producer, it improves the productivity of everyone in that agency, creating exponential growth opportunities.

Speaker Change: Productivity per franchise is up 54% year-over-year and same-store sales is up 29% year-over-year as the additional technology enhancements and management resources that focus on our largest distribution arm continue to take hold.

Mark E. Jones: Considering the backdrop of the personal lines carrier market, coupled with the continued cooling in the housing market, these productivity improvements are all the more impressive. In the second quarter, the average gross pay to our franchises increased by 62% over the previous year, further demonstrating the resiliency of the model and the health of our agency. Corporate producers at quarter end were 313, up from 292 at the end of the first quarter and 280 at the end of the second quarter of 2023.

Speaker Change: Considering the backdrop of the personal lines carrier market coupled with the continued cooling in the housing market, these productivity improvements are all the more impressive.

Speaker Change: In the second quarter, the average gross pay to our franchises increased by 62 percent over the previous year, further demonstrating the resiliency of the model and the health of our agencies.

Mark Jones Jr.: Corporate producers at quarter end were 313, up from 2.92 at the end of the first quarter and 2.80 as of the end of the second quarter of 2023. The career path were able to lay out on college campuses that includes multiple exciting options for young and hungry graduates, including the ability to progress into management to further expand our corporate team, opening their own franchise and blazing a path to a seven figure income or leveraging the experience that gained on the front lines into other value add positions like carrier management training or partnership positions. This value proposition is allowing us to attract top talent, which we can immediately see in the production of our June class.

Speaker Change: Corporate producers at quarter end were 313, up from 292 at the end of the first quarter, and 280 as of the end of the second quarter of 2023.

Mark E. Jones: The career path we're able to lay out on college campuses that includes multiple exciting options for young and hungry graduates, including the ability to progress into management to further expand our corporate team, open their own franchise, andblaze a path to a seven-figure income. We leverage the experience they gain on the front lines into other value-add positions like carrier management, training, or partnership positions. This value proposition is allowing us to attract top talent, which we can immediately see in the production of our June class.

Speaker Change: The career path we're able to lay out on college campuses that includes multiple exciting options for young and hungry graduates, including the ability to progress into management to further expand our corporate team, opening their own franchise and blazing a path to a seven-figure income.

Speaker Change: or leveraging the experience they gain on the front lines into other value-add positions like carrier management, training, or partnership positions.

Mark Jones Jr.: This should help drive future growth by lowering the attrition with an improved success rate and expanding the potential pool of future managers. We are excited to continue to grow the corporate team and now expect the headcounts to be in excess of 400 by year end. While the personal lines industry remains in the hardest cycle on our company's history, we're not waiting for the market to turn before we act. We will continue onboarding producers strategically so that when our carrier partners reach rate adequacy, we are ready to deliver rapid growth with a larger and more productive agent.

Mark E. Jones: This should help drive future growth by lowering attrition with an improved success rate and expanding the potential pool of future managers. We're excited to continue to grow the corporate team and now expect the headcount to be in excess of 400 by year end. While the personal lines industry remains in the hardest cycle in our company's history, we're not waiting for the market to turn before we act. We will continue onboarding producers strategically so that when our carrier partners reach rate adequacy, we are ready to deliver rapid growth with a larger and more productive agency. An interesting phenomenon is happening in our business right now. Our first-year agents have no historical context for what a soft personal lines market looks like.

Speaker Change: This value proposition is allowing us to attract top talent, which we can immediately see in the production of our June class.

Speaker Change: This should help drive future growth by lowering the attrition with an improved success rate and expanding the potential pool of future managers.

Speaker Change: We are excited to continue to grow the corporate team and now expect the headcount to be in excess of 400 by year end.

Speaker Change: While the personal lines industry remains in the hardest cycle in our company's history, we're not waiting for the market to turn before we act. We will continue onboarding producers strategically so that when our carrier partners reach rate adequacy, we are ready to deliver rapid growth with a larger and more productive agent force.

Mark Jones Jr.: Enforce. An interesting phenomenon is happening in our business right now. Our first year agents have no historical context of what a soft personal lines market looks like. All they know is that they have great tools at their disposal to help them win business in any market. One example is our proprietary referral partner search tool, which allows agents to be precise in their marketing efforts, targeting only those loan officers and realtors who are doing the most volume. As our agents double down on their marketing efforts, we've seen a 29 percent increase in lead flow per agent when compared to the prior year period.

Speaker Change: An interesting phenomenon is happening in our business right now. Our first-year agents have no historical context of what a soft personal lines market looks like. All they know is that they have great tools at their disposal to help them win business in any market.

Mark E. Jones: All they know is that they have great tools at their disposal to help them win business in any market. One example is our proprietary referral partner search, which allows agents to be precise in their marketing efforts, targeting only those loan officers and realtors who are doing the most volume. As our agents double down on their marketing efforts, we've seen a 29% increase in lead flow per agent when compared to the prior year.

Speaker Change: One example is our proprietary referral partner search tool which allows agents to be precise in their marketing efforts targeting only those loan officers and realtors who are doing the most volume.

Speaker Change: As our agents double down on their marketing efforts, we've seen a 29% increase in lead flow per agent when compared to the prior year period.

Mark Jones Jr.: This coupled with our improved recruiting standards has led to first year agents in both the corporate and franchise networks delivering some all-time highs in productivity. What this means is, as the market softens, it will be uniquely positioned to expand their productive capacity even further. Turning to our results, total written premiums, the leading indicator for future revenues, grew at 30 percent over the prior year period to $999 million. This includes franchise premium growth of 35 percent to $793 million and corporate premium growth of 15 percent to $206 million. We continued our trend of accelerating new business premium for the third consecutive quarter, with franchise new business premiums up 29 percent.

Mark E. Jones: This, coupled with our improved recruiting standards, has led to first-year agents in both the corporate and franchise networks delivering some all-time highs in productivity. What this means is that as the market softens, they will be uniquely positioned to expand their productive capacity even further. Turning to our results.

Speaker Change: This, coupled with our improved recruiting standards, has led to first-year agents in both the corporate and franchise networks delivering some all-time highs in productivity.

Speaker Change: What this means is that as the market softens, it will be uniquely positioned to expand in productive capacity even further.

Mark E. Jones: Total written premiums, the leading indicator for future revenues, grew 30% over the prior year period to $999 million. This included franchise premium growth of 35% to $793 million, and corporate premium growth of 15% to $206 million. We continued our trend of accelerating new business premiums for the third consecutive quarter with franchise new business premiums up 29%. Additionally, we are continuing to experience a temporary moderation in our client retention driven by carrier pricing actions, resulting in more shopping behavior from our existing clients. We expect that this will abate as year-over-year pricing increases inevitably slow.

Speaker Change: Turning to our results, total written premiums, the leading indicator for future revenues, grew 30% over the prior year period to $999 million.

Speaker Change: This includes franchise premium growth of 35% to $793 million, and corporate premium growth of 15% to $206 million.

Speaker Change: We continued our trend of accelerating new business premium for the third consecutive quarter with franchise new business premiums up 29%.

Mark Jones Jr.: While we are continuing to experience a temporary moderation in our client retention driven by carrier pricing actions resulting in more shopping behavior from our existing clients, we expect that this will evade as year-over-year pricing increases inevitably slow. Improving client retention coupled with accelerating new business generation gives us confidence in our intermediate-term goal of a 30 percent compound annual growth rate and total premium through 2027. Total revenues for the quarter grew to $78.1 million, representing 13 percent growth over the prior year period, with core revenues of $73.4 million, representing 20 percent growth over the prior year period, both accelerating sequentially for the second consecutive quarter.

Speaker Change: While we are continuing to experience a temporary moderation in our client retention driven by carrier pricing actions resulting in more shopping behavior from our existing clients, we expect that this will abate as year-over- year pricing increases inevitably slow.

Mark E. Jones: Improving client retention, coupled with accelerating new business generation, gives us confidence in our intermediate-term goal of a 30% compound annual growth rate and total written premium through 2027. Total revenues for the quarter grew to $78.1 million, representing 13% growth over the prior year period, with core revenues of $73.4 million, representing 20% growth over the prior year period, both accelerating sequentially for the second consecutive quarter. The strategic decisions we've made over the last two years are beginning to bear fruit in our core revenue growth.

Speaker Change: Improving client retention, coupled with accelerating new business generation, give us confidence in our intermediate term goal of a 30% compound annual growth rate in total written premium through 2027.

Speaker Change: Total revenues for the quarter grew to $78.1 million, representing 13% growth over the prior year period, with core revenues of $73.4 million, representing 20% growth over the prior year period, both accelerating sequentially for the second consecutive quarter.

Mark Jones Jr.: The strategic decisions we've made over the last two years are beginning to bear fruit in our core revenue growth. Costs of measures we have taken to improve agent productivity, recruiting, and investments in technology impact our earnings in real time but take much longer to flow through revenue growth as improving new business converts to renewal. We are confident, however, that these investments will drive strong growth and profitability over time. Significantly lower franchise turnover resulted in cost recovery revenue for the quarter declining by 49 percent compared to the prior year period to $1.9 million, driven by a reduction in accelerated franchise fee revenue in connection with turnover.

Mark E. Jones: Costs of measures we have taken to improve agent productivity, recruiting, and investments in technology impact our earnings in real time, but take much longer to flow through revenue growth as improved new business converts to renewables. We are confident, however, that these investments will drive strong growth and profitability over time. Significantly lower franchise turnover resulted in cost recovery revenue for the quarter declining by 49% compared to the prior year period to $1.9 million, driven by a reduction in accelerated franchise fee revenue in connection with turnover. During the quarter, we terminated or transferred 52 operating franchises compared to 115 operating franchises in the prior year period.

Speaker Change: The strategic decisions we've made over the last two years are beginning to bear fruit in our core revenue growth.

Speaker Change: Costs of measures we have taken to improve agent productivity, recruiting, and investments in technology impact our earnings in real time, but take much longer to flow through revenue growth, as improving new business converts to renewal.

Speaker Change: We are confident, however, that these investments will drive strong growth and profitability over time.

Speaker Change: Significantly lower franchise turnover resulted in cost recovery revenue for the quarter declining by 49% compared to the prior year period to 1.9 million dollars driven by a reduction in accelerated franchise fee revenue in connection with turnover.

Mark Jones Jr.: During the quarter, we terminated or transferred 52 operating franchises compared to 115 operating franchises in the prior year period. As we consistently improve the health of our franchise network, we expect the total turnover to continue to decline. Looking forward to 2025, we expect to grow our operating franchise count, which would result in a more normalized cost recovery revenue growth rate. Continued commissions in the quarter were $2.2 million, representing a 44 percent decline over the prior year period, driven by challenging carrier profitability. While we outperform our expectations for contingent commissions in the second quarter, our outlook for the full year remains unchanged.

Speaker Change: During the quarter we terminated or transferred 52 operating franchises compared to 115 operating franchises in the prior year period.

Mark E. Jones: As we consistently improve the health of our franchise network, we expect the total turnover to continue to decline. Looking forward to 2025, we expect to grow our operating franchise count, which should result in more normalized cost-recovery revenue growth. Contingent commissions in the quarter were $2.2 million, representing a 44% decline over the prior year period, driven by challenging carrier profitability.

Speaker Change: As we consistently improve the health of our franchise network, we expect the total turnover to continue to decline. Looking forward to 2025, we expect to grow our operating franchise count, which should result in a more normalized cost-recovery revenue growth rate.

Speaker Change: Contingent commissions in the quarter were 2.2 million dollars representing a 44% decline over the prior year period driven by challenging carrier profitability.

Mark E. Jones: While we outperformed our expectations for contingent commissions in the second quarter, our outlook for the full year remains unchanged. We continue to expect approximately 35 basis points of total written premiums to be earned as contingent commissions, as we believe there remains uncertainty on end-of-year outcomes given the recent high frequency of weather events in Texas. We do believe that continued rate increases and underwriting actions taken by our carrier partners will ultimately bring the industry to improving levels of profitability, which should drive improvement in contingent commissions over time.

Mark Jones Jr.: We continue to expect approximately 35 basis points of total written premiums to be earned as contingent commissions, as we believe there remains uncertainty on end-of-year outcomes given the recent high frequency of weather events.

Speaker Change: While we outperformed our expectations for contingent commissions in the second quarter, our outlook for the full year remains unchanged.

Speaker Change: We continue to expect approximately 35 basis points of total written premiums to be earned as contingent commissions as we believe there remains uncertainty on end-of-year outcomes given the recent high frequency of weather events in Texas.

Mark Jones Jr.: in Texas. We do believe that continued rate increases and underwriting actions taken by our carrier partners will ultimately bring the industry to improving levels of profitability, which should drive improvement in contingent commissions over time. Policies in force grew 11% versus the prior year quarter. We now believe that policies in force growth rate has bottomed and will reflect to accelerating growth in the third quarter. Client retention for the quarter was 84% compared to 85% as at the end of the first quarter. We also believe that client retention will begin to improve as homeowners' premium rate increases begin to inevitably slow.

Speaker Change: We do believe that continued rate increases and underwriting actions taken by our carrier partners will ultimately bring the industry to improving levels of profitability which should drive improvement in contingent commissions over time.

Mark E. Jones: Policies Enforced grew 11% versus the prior year quarter. We now believe the Policies Enforced growth rate has bottomed and will accelerate to accelerating growth in the third quarter. Client retention for the quarter was 84% compared to 85% as of the end of the first. We also believe that client retention will begin to improve as homeowners premium rate increases begin to inevitably slow.

Speaker Change: Policies in force grew 11% versus the prior year quarter. We now believe the policies in force growth rate has bottomed and will inflect to accelerating growth in the third quarter.

Speaker Change: Client retention for the quarter was 84% compared to 85% as of the end of the first quarter.

Speaker Change: We also believe that client retention will begin to improve as homeowners premium rate increases begin to inevitably slow.

Mark Jones Jr.: Adjusted EBITDA for the quarter grew to $24.7 million compared to $23.1 million in the year-to-go period. This included employee compensation and benefits expense growth of 14% driven by increased head count across the organization and GNA expense growth of 23% due largely to investments in technology. We expect GNA expense growth in the remainder of the year to be lower relative to the second quarter level. We remain very focused on cost controls and expected to deliver adjusted EBITDA margin expansion for the full year, with the majority of that taking place in the fourth quarter. We continue to demonstrate the cash flow power of our organization during the quarter, generating 18.9 million dollars in cash flow from operations, up 14% from a year ago.

Mark E. Jones: Adjusted EBITDA for the quarter grew to $24.7 million compared to $23.1 million in the year-ago period. This included employee compensation and benefits expense growth of 14%, driven by increased headcount across the organization, and G&A expense growth of 23%, due largely to investments in technology. We expect G&A expense growth in the remainder of the year to be lower relative to the second quarter level.

Speaker Change: Adjusted EBITDA for the quarter grew to $24.7 million compared to $23.1 million in the year-ago period.

Speaker Change: This included employee compensation and benefits expense growth of 14%, driven by increased headcount across the organization, and G&A expense growth of 23%, due largely to investments in technology.

Mark E. Jones: We remain very focused on cost controls and expect to deliver adjusted EBITDA margin expansion for the full year, with the majority of that taking place in the fall. We continue to demonstrate the cash flow power of our organization during the quarter, generating $18.9 million in cash flow from operations, up 14% from a year ago. Because we have managed our company conservatively, our strong balance sheet gives us multiple options to enhance shareholder value.

Speaker Change: We expect G&A expense growth in the remainder of the year to be lower relative to the second quarter level.

Speaker Change: We remain very focused on cost controls and expect to deliver adjusted EBITDA margin expansion for the full year, with the majority of that taking place in the fourth quarter.

Speaker Change: We continue to demonstrate the cash flow power of our organization during the quarter, generating 18.9 million dollars in cash flow from operations, up 14% from a year ago.

Mark Jones Jr.: Because we have managed our company conservatively, our strong balance she gives us multiple options to enhance shareholder value. During the quarter, we utilized $63.2 million of our share repurchase authorization to invest in our own stock, retiring over 1 million shares from our public flow. We remain incredibly confident in our long-term growth and earnings potential and will continue to be opportunistic with share repurchases and other actions to further enhance shareholder value. At the end of the second quarter, we had $23.6 million of cash and cash equivalence. Our unused line of credit was $74.8 million, and total outstanding notes payable balance was $98.1 million.

Speaker Change: Because we have managed our company conservatively, our strong balance sheet gives us multiple options to enhance shareholder value.

Mark E. Jones: During the quarter, we utilized $63.2 million of our share repurchase authorization to invest in our own stock, retiring over 1 million shares from our public flow. We remain incredibly confident in our long-term growth and earnings potential and will continue to be opportunistic with share repurchases and other actions to further enhance shareholder value. At the end of the second quarter, we had $23.6 million of cash and cash equivalents. Our unused line of credit was $74.8 million, and our total outstanding notes payable balance was $98.1 million.

Speaker Change: During the quarter, we utilized $63.2 million of our share repurchase authorization to invest in our own stock, retiring over 1 million shares from our public flow.

Speaker Change: We remain incredibly confident in our long-term growth and earnings potential and will continue to be opportunistic with share repurchases and other actions to further enhance shareholder value.

Speaker Change: At the end of the second quarter, we had $23.6 million of cash and cash equivalents. Our unused line of credit was $74.8 million, and total outstanding notes payable balance was $98.1 million.

Mark Jones Jr.: Our net debt to EBITDA on a 12-month basis is just over one time, providing us with significant flexibility for future capital return as we see appropriate to drive shareholder value.

Mark E. Jones: Our net debt to EBITDA on a trailing 12-month basis is just over one times, providing us with significant flexibility for future capital return as we see appropriate to drive shareholder value. We are reiterating our guidance for the full year 2024 as follows. Total written premiums placed are expected to be between $3.62 billion and $3.82 billion, representing 22% growth on the low end of the range and 29% growth on the high end of the range.

Speaker Change: Our net debt to EBITDA on a trailing 12-month basis is just over one times, providing us with significant flexibility for future capital return as we see appropriate to drive shareholder value.

Mark Jones Jr.: We are reiterating our guidance for the full year 2024 as follows. Total written premiums placed are expected to be between $3.62 billion and $3.82 billion. Representing 22% growth on the low end of the range and 29% growth on the high end of the range. Total revenues are expected to be between $290 million and $310 million. Representing 11% organic growth at the low end of the range and 19% organic growth at the high end of the range. Adjusted EBITDA margin is expected to expand for the full year 2024. Thank you to our team for delivering a fantastic second quarter and continuing to make strides on our path to industry leadership.

Speaker Change: We are reiterating our guidance for the full year 2024 as follows.

Speaker Change: Total written premiums placed are expected to be between $3.62 billion and $3.82 billion, representing 22% growth on the low end of the range and 29% growth on the high end of the range.

Mark E. Jones: Total revenues are expected to be between $290 million and $310 million, representing 11% organic growth at the low end of the range and 19% organic growth at the high end of the range. Adjusted EBITDA margin is expected to expand for the full year 2024. Thank you to our team for delivering a fantastic second quarter and continuing to make strides on our path to industry leadership. With that, let's open up the line for questions. Operator? and Thank you.

Speaker Change: Total revenues are expected to be between $290 million and $310 million, representing 11% organic growth at the low end of the range and 19% organic growth at the high end of the range.

Speaker Change: Adjusted EBITDA margin is expected to expand for the full year 2024.

Operator: With that, let's open up the line for questions.

Speaker Change: Thank you to our team for delivering a fantastic second quarter and continuing to make strides on our path to industry leadership. With that, let's open up the line for questions. Operator?

Operator: Operator? And thank you.

Operator: As a reminder to ask a question, please press star 111 on your telephone and wait for your name to be announced. So, with all your questions, please press star 111 again. Please stand by where we compile the Q&A roster in one moment by our first question.

Operator: As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster and one moment for our first question. And our first question comes from Mark Carletti. From Citizens JMP, your line is now open.

Speaker Change: And thank you.

Speaker Change: As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. And one moment for our first question.

Matthew Carletti: And our first question comes from Mark Carletti, from Citizen JMP. Your line is now open.

Speaker Change: And our first question comes from Mark Carletti.

Matthew John Carletti: Thanks. Good afternoon. Hey, Matt.

Matthew Carletti: Hey, thanks. Good afternoon.

Mark Miller: Hey, Matt. Mark, in your opening comments, you commented a little bit about product availability. I think, if I heard it right, maybe starting to see things improve a little bit on the auto side, but maybe not quite yet on the property, homeowner side. What's the house view there? Do you expect that improvement to come in shorter-term order? Now that we're hopefully past kind of cute-to-cat activity that a lot of carriers are exposed to and maybe more exposed to given recent re-entrance changes, or any color you can give in generalities on kind of the conversations you've had with some of your bigger partners and what their appetite going forward might look like.

Speaker Change: From Citizens JMP, your line is now open.

Mark K. Miller: Mark, in your opening comments, you commented a little bit about product availability. I think, if I heard it right, we may be starting to see things improve a little bit on the auto side, but maybe not quite yet on the property owner side. What's the house view there? Do you expect that improvement to come, and in a shorter term order now that we're hopefully past the kind of Q2 cat activity that a lot of carriers are exposed to and maybe more exposed to given recent reinsurance changes? Or any color you can give in generalities on kind of the conversations you've had with some of your bigger partners and what their appetite going forward might look like.

Mark Carletti: Hey, thanks. Good afternoon.

Speaker Change: Hey Matt.

Speaker Change: Mark, in your opening comments you commented a little bit about product availability. I think

Speaker Change: If I heard it right, maybe starting to see things improve a little bit on the auto side, but maybe not quite yet on the property homeowner side. What's the house view there? Do you expect that improvement to come?

Speaker Change: in shorter term order now that we're hopefully past kind of Q2CAT activity that a lot of carriers are exposed to and maybe more exposed to given recent reinsurance changes or just any color you can give in generalities on kind of the conversations you've had with some of your bigger partners and what their appetite going forward might look like.

Mark Miller: Yeah, Matt, thanks for the question.

Mark K. Miller: Yeah, Matt, thanks for the question. I've also got Brian Pattillo here with me.

Mark Miller: I've also got Brian Pattillo here with me. He's been to a lot of the meetings with the carriers with me. And I would say, honestly, on the home side, it's anybody's guess. You know, it seems to be improving. They're opening up certain markets, but it's state-by-state, market-by-market, product-by-product. And on the auto side, we are seeing availability open up, but it's slow, kind of on a state-by-state basis as well. But I think we have to see what happens with the carrier profitability over more than just one quarter, and the weather continues to hang in there like it has been. You know, it could open up.

Brian Pattillo: He's been to a lot of meetings with the carriers with me, and I would say honestly, on the home side, it's it's anybody's guess. You know, it seems to be improving. They're opening up certain markets, but it's state by state, market by market, product by product. And on the auto side, we are seeing availability open up, but it's slow, kind of on a state by state basis as well.

Speaker Change: Yeah, Matt, thanks for the question. I've also got Brian Pattillo here with me. He's been to a lot of the meetings with the carriers with me. And I would say, honestly, on the home side, it's anybody's guess.

Speaker Change: It seems to be improving. They're opening up certain markets, but it's...

Brian Pattillo: state-by-state, market-by-market, product-by-product.

Brian Pattillo: And on the auto side, we are seeing availability open up, but it's slow, kind of on a state-by-state basis as well.

Brian Pattillo: But I think we have to see what happens with carrier profitability over more than just one quarter. And if the weather continues to hang in there like it has been, it could open up. But I don't have any better predictions than that.

Speaker Change: But I think we have to see, you know, what happens with the carrier profitability over more than just one quarter and, you know, if the weather continues to hang in there like it has been, you know, it could open up. But I don't have any better predictions than that.

Mark Miller: But I don't have any better predictions than that.

Mark K. Miller: I mean, it's I guess just more drill down more specifically kind of said state by state are you. I mean, obviously, Texas, which you've talked about in the past, that's a big state for you guys and obviously cat-impacted. Have you seen anything changing there in any way, or just kind of more of the same?

Matthew Carletti: Great.

Matthew Carletti: I mean, I guess just more drilled down more specifically, kind of said state-by-state. I mean, obviously, Texas, you've talked about in the past, that's a big state for you guys, and obviously, cat-impacted. Have you seen anything changing there in any way, or just kind of more of the same? I mean, honestly, I think Texas is one of the more difficult markets right now. So, price is catching up to where it needs to be. It's just uncertainty about the weather. But it's a, you know, it is a big market for us, and we still continue to sell insurance in Texas.

Speaker Change: I mean, I guess just drill down more specifically, kind of state by state, are you, I mean, obviously Texas, you've talked about in the past, that's a big state for you guys, and obviously CAP impacted. Have you seen anything changing there in any way, or just kind of more of the same?

Mark K. Miller: I mean, honestly, I think Texas is one of the more difficult markets right now. So price is catching up to where it needs to be. There's just uncertainty about the weather. But it's, you know, it is a big market for us. And we still continue to sell insurance in Texas. Yeah.

Speaker Change: I mean honestly I think Texas is one of the more difficult markets right now so price is catching up to where it needs to be there's just uncertainty about the weather

Mark E. Jones: Yeah, I would say Matt, this is Mark Jr. It's not the whole state, really. I mean, looking at Houston, there's much more reinsurance capacity for the type of catastrophic risk that happens there compared to DFW with the hailstorms. It doesn't have the same type of reinsurance. So it's not all one blanket thing for Texas, but our two biggest metros kind of have two different dynamics. That makes sense.

Mark Jones Jr.: Yeah, and I would say, Matt, this is Mark Jr.; it's not the whole state, really. I mean, looking at Houston, there's much more reinsurance capacity for the type of catastrophic risk that happens there compared to DFW with the hailstorms. It doesn't have the same type of reinsurance. So it's not all one blanket thing for Texas, but our two biggest metros kind of have two different dynamics going on.

Speaker Change: But it is a big market for us and we still continue to sell insurance in Texas.

Mark E. Jones: Yeah, I would say, Matt, this is Mark Jr., it's not the whole state, really. I mean, looking at Houston, there's much more reinsurance capacity for the type of catastrophic risk that happens there.

Mark E. Jones: compared to DFW with the hailstorms. It doesn't have the same type of reinsurance, so it's not all one blanket thing for Texas, but our two biggest metros kind of have two different dynamics going on.

Mark Jones Jr.: That makes sense.

Matthew John Carletti: That makes sense. I appreciate the call.

Matthew Carletti: Appreciate the color. Thank you.

Operator: And thank you. And one moment for our next question.

Operator: and thank you. And one moment for our next question. And our next question comes from Tommy Mcjoynt from KBW. Your line is now open.

Matt: That makes sense. Appreciate the color. Thank you.

Matt: Thanks, Matt. Yeah.

Thomas McJoynt: And our next question comes from Tommy McJoint from KBW. Your line is now open.

Speaker Change: And thank you. And one moment for our next question.

Speaker Change: And our next question comes from Tommy Mcjoynt from KBW. Your line is now open.

Mark Jones Jr.: Hey guys, thanks for taking my questions. Regarding the reiterated guidance for the margin to expand, can you remind us if there are any notables or one-timers in the second half of 23 that we should keep in mind for comparative purposes, and perhaps this can feed into what the reason is for most of your anticipated margin expansion to come in the fourth quarter rather than the third quarter. Yeah, there's not really any one-timers in the second half of 2023 from a comparison perspective.

Thomas Patrick Mcjoynt: Hey guys, thanks for taking my questions. Regarding the reiterated guidance for the margin to expand, can you remind us if there are any notables or one-timers in the second half of 2013 that we should keep in mind for comparative purposes? And perhaps this can feed into what the reason is for most of your anticipated margin expansion to come in the fourth quarter rather than the third quarter? Yeah, there are.

Thomas Patrick Mcjoynt: Hey guys, thanks for taking my questions.

Thomas Patrick Mcjoynt: Regarding the reiterated guidance for the margin to expand, can you remind us if there are any notables or one-timers in the second half of...

Speaker Change: 23 that we should keep in mind for

Speaker Change: Comparative purposes and perhaps this can feed into what the reason is for most of your anticipated margin expansion to come in the fourth quarter rather than the third quarter.

Mark E. Jones: Yeah, there's not really any one-timers in the second half of 2023 from a comparison perspective. The Q4 guide is really just that when we would expect if there are going to be material contingencies for it to happen at that point, and obviously, those are 100% earnings.

Speaker Change: Yeah, there's not really any one-timers in the second half of 2023 from a comparison perspective.

Mark Jones Jr.: The Q4 guide is really just that's when we would expect if there's going to be material contingencies for it to happen at that point, and obviously those are 100% earnings. At the same time, Brad, we've got a big summer class starting in June. Some of them started in June, and other big class starts in July, and then again in August and September. So that can cause a very short-term drag, but they've been ramping up so well. Like we mentioned in our prepared remarks, they're coming on the learning curve, even faster than what they have in previous years.

Speaker Change: The Q4 guide is really just that's when we would expect if there's going to be material contingencies for it to happen at that point and obviously those are 100% earnings.

Mark E. Jones: At the same time, we've got a big summer class starting in June. Some of them have already started in June. Another big class starts in July and then again in August and September. So that can cause a very short-term drag, but they've been ramping up so well. Like we mentioned in our prepared remarks, they're coming down the learning curve even faster than they have in previous years, so that gives us confidence that they can get margin accretive really quickly.

Speaker Change: At the same time, we've got a big summer class starting in June . Some of them started in June , another big class starts in July , and then again in August and September .

Speaker Change: So that can cause a very short-term drag, but they've been ramping up so well. Like we mentioned in our prepared remarks, they're coming down the learning curve even faster than what they have in previous years. So that gives us confidence that they can get margin accretive really quickly.

Thomas McJoynt: So that gives us confidence that they can get margin accretives, really. quickly. Okay, got it.

Thomas Patrick Mcjoynt: Okay, got it. And then switching topics, last quarter, I think you spoke about a modest impact on commission rates from a couple carriers in terms of what they compensated agents. Did you see any of that same dynamic play out again? And along the same lines, how about sizing up the impact of policies that are those head-to-state backed plans that generally pay lower commissions? Yeah.

Mark Jones Jr.: And then switching topics, a last quarter, I think you spoke about a modest impact on the commission rates from a couple carriers in terms of what they compensated the agents. Did you see any of that same dynamic play out again? And along the same lines, how about sizing up the impact of policies that had to state back plans that generally pay lower commissions? Yeah, so we haven't seen other carriers changing commission rates. Now, on average, the commission rate has a slight decline. That's a function of writing in geographies that pay lower commission rates, if not necessarily a change, and more business going to, like you mentioned, state-run plans that typically would pay a lower commission rate.

Speaker Change: Okay, got it. And then, switching topics, last quarter, I think you spoke about a modest impact on the commission rates from a couple carriers in terms of what they compensated the agents. Did you see any of that same dynamic play out again? And along the same lines, how about sizing up the impact of

Mark E. Jones: Yeah, so we haven't seen other carriers changing commission rates. Now, on average, the commission rate has seen a slight decline. That's a function of writing in geographies that pay lower commission rates, so not necessarily a change, and more business going to, like you mentioned, state-run plans that typically would pay a lower commission rate. So the average commission rate, sure, because it's not going to the traditional carriers that are more like that 15% rate. It's more towards the state-run plans. You can see a decline there.

Speaker Change: Policies that head to state-backed plans that generally pay lower commissions.

Speaker Change: Yeah, so we haven't seen other carriers changing commission rates now on average the commission rate has a slight decline that's a function of writing in geographies that pay lower commission rates are not necessarily a change and More business going to like you mentioned state-run plans that typically would pay a lower commission rate

Mark Jones Jr.: So the average commission rate, sure, because it's not going to the traditional carriers that are more like that 15% rate, it's more towards the state-run plans; you can see a decline there. We would expect, though, that as those carriers come back into the market and get ready to grow, you could see improvements in that number. Got it.

Speaker Change: Thank you.

Thomas Patrick Mcjoynt: Got it. Thanks for unpacking that.

Thomas McJoynt: Thanks for backing up. Yep, no problem.

Operator: And thank you. And one moment for our next question.

Operator: and thank you. And one moment for our next question. And our next question comes from Brian Meredith from UBS. Your line is now open.

Speaker Change: Got it. Thanks for unpacking that.

Speaker Change: Yep, no problem.

Brian Meredith: And our next question comes from Brian Meredith from UBS. Your line is now open.

Speaker Change: And thank you. And one moment for our next question.

Brian Robert Meredith: Yeah, thanks. A couple questions here for you. The first one, I just want to make sure you understand, thanks for the guidance. So, it looks like we should expect revenue growth to kind of start accelerating pretty nicely in the third and fourth quarter. Is that an appropriate statement?

Brian Meredith: Yeah, thanks.

Brian Meredith: A couple of questions here for you. The first one, I just want to make sure you get. Thanks for the guidance. So it looks like we should expect revenue growth to kind of start accelerating pretty nicely, third and fourth quarters. Is that appropriate segment statement? Yeah, we would expect that, especially on a core basis. I mean, the timing of the aggregate growth could move depending on contingencies, but core we're expecting to see that good acceleration. Gotcha.

Speaker Change: And our next question comes from Brian Meredith from UBS. Your line is now open.

Speaker Change: Yeah, thanks. A couple questions here for you. The first one, I just want to make sure you get, thanks for the guidance. So, it looks like we should expect revenue growth to kind of start accelerating pretty nicely third, fourth quarter. Is that, is that an appropriate segment, statement?

Mark E. Jones: Yeah, yeah, we would expect that, especially on a core basis. I mean, the timing of the aggregate growth could move depending on contingencies, but we're expecting to see that good acceleration.

Speaker Change: Yeah, yeah, we would expect that especially on a core basis. I mean the timing of the aggregate growth could move depending on contingencies, but core we're expecting to see that good acceleration.

Brian Robert Meredith: Gotcha. And then, I guess, on the capacity situation, are you seeing any other carriers, any issues as far as carriers kind of coming, removing themselves from your markets, or just getting out of markets?

Mark Jones Jr.: And then back, I guess, on the capacity situation, are you seeing any other carriers, any issues as far as carriers, kind of becoming removing themselves from your markets or just getting out of markets? I would say the market abs and flows as carriers work their pricing on their in underwriting models that that's kind of a daily update thing, but we've got a really good sophisticated team that manages all of that and then integrates it with the tech. That's kind of what allows us to scale across the entire country.

Speaker Change: Gotcha. And then back, I guess, on the capacity situation, are you seeing any other carriers, any issues as far as carriers kind of coming, removing themselves from your markets or just getting out of markets?

Mark E. Jones: I would say the market ebbs and flows as carriers work out their pricing and underwriting models, so that's kind of a daily update thing, but we've got a really good, sophisticated team that manages all of that and then integrates it with the tech. That's kind of what allows us to scale across the entire country.

Speaker Change: Yeah, I would say the market ebbs and flows as carriers work their pricing and underwriting models. That's kind of a daily update thing. But we've got a really good, sophisticated team that manages all of that and then integrates it with the tech. That's kind of what allows us to scale across the entire country.

Mark E. Jones: Gotcha, but nothing like what happened in the first place.

Mark Jones Jr.: Gotcha, but nothing like what happened in the first quarter. No, I mean, the stores in Texas certainly didn't help, but at the same time, it would be hard for it to get much worse than what it was in the first quarter. Gotcha.

Brian Robert Meredith: No, I mean the storms in Texas certainly didn't help, but at the same time, it would be hard for it to get much worse than it was in the past. Gotcha. And then last, I'm just curious, I think I may have asked this before, but maybe remind me, what are your wholesale capabilities? And is that something that, you know, you think you're going to see more and more homeowners businesses just stay in the wholesale market given this elevated cat exposure and just regulatory constraints? I mean, we certainly write with some wholesalers, but obviously, we tend to lean towards the admitted paper.

Speaker Change: Gotcha, but nothing like what happened in the first quarter.

Speaker Change: No, I mean the storms in Texas certainly didn't help, but at the same time it would be hard for it to get much worse than what it was in the first quarter.

Mark Jones Jr.: My last, I'm just curious; I think I may have asked this before, but maybe remind me, what are your wholesale capabilities? And is that something that, you know, you think you're going to see more and more homeowners' business just stay in the wholesale market given this elevated cat exposure and just regulatory constraints? I mean, we certainly write with some wholesalers. Obviously, we tend to lean towards the admitted paper. It's just a smoother transaction for everybody. It scales a lot easier on the service side. It tends to be a better client experience. But when there's gaps in coverage in the admitted market, we will go that route as needed.

Speaker Change: Gotcha. And then, last, I'm just curious, I think I may have asked this before, but maybe remind me, what are your wholesale capabilities and is that something that, you know, you think you're going to see more and more homeowners business just stay in the wholesale market given this elevated cat exposure and just regulatory constraints?

Mark E. Jones: It's just a smoother transaction for everybody. It scales a lot easier on the service side. It tends to be a better client experience. But when there's gaps in coverage in the admitted market, we will go that route as needed. I would expect, over time, it goes back towards more in the admitted market. Certainly, along the coast, you're seeing a lot more E&S and wholesale.

Speaker Change: I mean, we certainly write with some wholesalers. Obviously, we tend to lean towards the admitted paper.

Speaker Change: [inaudible]

Mark Jones Jr.: I would expect over time that goes back towards more in the admitted market, certainly along the coast, you're seeing a lot more in as a wholesale product.

Brian Robert Meredith: Would wholesale capabilities be something you consider doing? Let us talk to you in a little bit. Yeah, we probably won't turn our own.

Mark Jones Jr.: But would wholesale capabilities be something you consider doing? Let us start you on wholesale. Yeah, we probably not start our own wholesaler now, but we distribute through other wholesalers.

Mark E. Jones: Yeah, we probably won't start our own wholesaler now, but we distribute through other wholesalers.

Speaker Change: Would wholesale capabilities be something you'd consider doing?

Saylor: Let us talk to you in a moment, Saylor.

Saylor: Yeah, we probably not start our own wholesaler, but we distribute through other wholesalers.

Brian Meredith: Thank you.

Operator: Thank you, and one moment for our next question. And our next question comes from Mark Hughes from Truist Securities. Your line is now open. Yeah, thank you.

Mark Hughes: And one moment for our next question. And our next question comes from Mark Hughes from Trua Securities.

Saylor: Thank you.

Speaker Change: Thank you, and one moment for our next question.

Mark Hughes: Your line is now open. Yeah, thank you.

Mark Douglas Hughes: Yeah, thank you. Good afternoon.

Speaker Change: And our next question comes from Mark Hughes from Truist Securities. Your line is now open.

Mark Hughes: Good afternoon.

Mark Douglas Hughes: I think you suggested 400 corporate agents were the target. Was that by year end? Did I hear that correctly? Yes, that's correct.

Mark Hughes: I think you would suggested 400 corporate agents was a target within a year, and did I hear that properly? Yes, that's correct.

Mark Douglas Hughes: Yeah, thank you. Good afternoon.

Mark Douglas Hughes: Mark, I think you had suggested 400 corporate agents was the target. Was that by year end? Did I hear that properly?

Mark Jones Jr.: And then the corporate commission retention, I know you give your commission or your renewal or premium renewal numbers; looks like it really improved this quarter. And I hear what you're saying about maybe some early signs of relief in auto, but you look like you did a much better job of kind of holding on to corporate commissions.

Mark E. Jones: And then the corporate commission retention, I know you give your commission, are your renewal or premium renewal numbers, looks like it really improved this quarter. And I hear what you're saying about maybe some early signs of relief in auto, but you look like you did a much better job of kind of holding on to corporate commissions. If you look at, you know, kind of this quarter last year and how it flowed into this quarter, anything you would point to that maybe kind of artificially depressed the first quarter and you had kind of normalized in the second quarter, just anything else you might be able to throw into the mix, thinking about retention and particularly on the corporate side of the business. Yeah, I mean, we're

Speaker Change: Yep, that's correct.

Mark Douglas Hughes: And then the Corporate Commission Retention, I know you give your commission...

Mark Douglas Hughes: or your renewal or premium renewal numbers. It looks like it really improved this quarter, and I hear what you're saying about maybe some early signs of relief in auto, but you look like you did a much better job of kind of holding on to corporate commissions if you look at, you know, kind of this quarter last year and how it flowed into

Mark Jones Jr.: If you look at, you know, kind of this quarter last year and I would float into this quarter, anything you would point to that maybe artificially depressed the first quarter and you had kind of normalized in the second quarter, just anything else you might be able to throw into the mix thinking about that retention and particularly on the corporate side of the business. Yeah, I mean, we're starting to see the rate of decline in retention slow down. I mean, we mentioned at the end of the first call or the first quarter call that you could expect some more decline in the client retention number as the market begins to normalize.

Mark Douglas Hughes: This quarter...

Speaker Change: Anything you would point to that maybe kind of artificially depressed the first quarter and you had kind of normalized in the second quarter, just anything else you might be able to throw into the mix, thinking about that.

Mark E. Jones: Yeah, I mean, we're starting to see the rate of decline in retention slow down. I mean, we mentioned at the end of the first call or the first quarter call that you could expect some more decline in the client retention number as the market begins to normalize, but we're starting to see the rate of decline slow down, which really helps that revenue retention metric, and we had really strong pricing in the second quarter. I think premiums ran higher in the second quarter than they did in the first quarter.

Speaker Change: retention and particularly on the the corporate side of the business.

Speaker Change: Yeah, I mean, we're starting to see the rate of decline in retention slow down. I mean, we mentioned at the end of the first call or the first quarter call that you could expect

Mark Jones Jr.: But we're starting to see the rate of decline slowdown, which really helps that revenue retention metric, and we had really strong pricing in the second quarter; premiums ran faster in the second quarter than they did in the first quarter.

Speaker Change: Some more decline in the client retention number as the market begins to normalize. But we're starting to see the rate of decline slow down, which really helps.

Speaker Change: that revenue retention metric. And we had really strong pricing in the second quarter. I think premiums ran faster in the second quarter than they did in the first quarter.

Mark Hughes: Thank you very much.

Operator: And thank you. And one moment for our next question.

Mark Douglas Hughes: And thank you. And one moment for our next question, and our next question comes from Katie Sakys from Autonomous Research. Your line is now open.

Speaker Change: Thank you very much.

Speaker Change: And thank you. And one moment for our next question.

Katie Sakys: And our next question comes from Katie Sakes from Autonomous Research. Your line is now open.

Speaker Change: And our next question comes from Katie Sakys from Autonomous Research. Your line is now open.

Katie Sakys: Hi, thank you, and good evening. My first question is, you know, on your guys' perspective of margin expansion for the full year. 24. I'm kind of curious, you know, given that full year revenue and premium guidance has been reiterated, but not changed, while productivity has certainly, you know, continued to improve. Has management's view of the magnitude of margin expansion possible by year end shifted?

Katie Sakys: Hi, thank you. Good evening. My first question is, you know, on you guys' perspective of marketing expansion for the full year 24. I'm kind of curious, you know, given that a full year revenue and premium guidance has been reiterated but not changed while productivity has certainly continued to improve.

Katie Sakys: Hi, thank you, good evening. My first question is, you know, on you guys' perspective of margin expansion for the full year 24. I'm kind of curious, you know, given that a full year revenue and premium guidance has

Speaker Change: It's been reiterated but not changed, while productivity has certainly, you know, continued to improve. Has management's view of the magnitude of margin expansion capable by year-end shifted?

Mark Jones Jr.: Has management view of the magnitude of margin expansion capable by year and shifted? Yeah, I mean, we're not going to get into the specifics on margin from a guidance perspective. You know, that's why we set it a kind of a broad and open-ended point like that.

Mark E. Jones: Yeah, I mean, we're not going to get into the specifics on margin from a guidance perspective. You know, that's why we set it at a kind of broad and open-ended point like that. We want to have the flexibility to make any investments that we need to make but, at the same time, have the cost discipline to continue to drive expansion. Obviously, productivity helps. We feel really good about the way that our service team is growing.

Speaker Change: Yeah, I mean, we're not going to get into the specifics on margin from a guidance perspective. You know, that's why we set it at a kind of a broad and open-ended.

Mark Jones Jr.: We want to have flexibility to make any investments that we need to make, but at the same time have the cost discipline to continue to drive expansion. Obviously, productivity helps. We feel really good about the way that our service team is scaling. We've made a lot of investments in technology that can help drive efficiencies. But, like we mentioned, you should expect more of that margin expansion in the fourth quarter, just as contingencies flow through. But that's probably as specific as we're going to get.

Speaker Change: point like that. We want to have flexibility to make any investments that we need to make, but at the same time have the cost discipline to continue to drive expansion. Obviously, productivity helps.

Mark E. Jones: We've made a lot of investments in technology that can help drive efficiencies. Like we mentioned, you should expect more of that margin expansion in the fourth quarter as contingencies flow through. But that's probably as specific as we're going to get right now.

Speaker Change: We feel really good about the way that our service team is scaling, we've made a lot of investments in technology that can help drive efficiencies, but like we mentioned you should expect more of that margin expansion in the fourth quarter as contingencies flow through, but that's probably as specific as we're going to get right now.

Katie Sakys: right now. Fair enough.

Katie Sakys: Fair enough. And then just going back to some remarks made in the prepared remarks, you mentioned targeting some key geographies for the expansion of new franchises. Is there any more color you guys can give us on what states those may be or how those targeted geographies align with carrier capacity and propensity for new business right now?

Mark Jones Jr.: And then just going back to some remarks made on the prepared remarks, you mentioned you know, targeting some key geographies for expansion of news franchises. Is there any more color you guys can give us on, you know, what states those may be or how, you know, those targeted geography to line with carrier capacity and propensity for new business right now? I mean, Katie, generally speaking, it's where product is good.

Speaker Change: Fair enough. And then just going back to some remarks made in the prepared remarks.

Speaker Change: You mentioned, you know, targeting some key geographies for expansion of new franchises. Is there any more color you guys can give us on, you know, what states those may be or how, you know, those targeted geographies align with carrier capacity and propensity for new business right now?

Mark K. Miller: I mean, Katie, generally speaking, it's where the product is good. I don't want to get into specifics state by state, but certain states have better product availability right now, and so that's what we're focused on.

Mark K. Miller: I mean...

Mark Jones Jr.: You know, I don't want to, I don't want to get into specifics on state by state, but certain states have better product availability right now, and so that's what we're focused on. Anna, thank you.

Speaker Change: I mean, Katie, generally speaking, it's where product is good. I don't want to get into specifics on state by state, but certain states have better product availability right now, and so that's what we're focused on.

Operator: And thank you. And one moment for our next question.

Operator: and thank you. And one moment for our next question. And our next question comes from Scott Heleniak from RBC Capital Markets. Your line is now open.

Speaker Change: Fair enough. Thank you.

Speaker Change: And, thank you.

Scott Heleniak: And our next question comes from Scott Hellenic from RBC Capital Markets; your line is not open. Yes, just a couple quick questions.

Speaker Change: And our next question comes from Scott Heleniak from RBC Capital Markets. Your line is now open.

Scott Gregory Heleniak: Yes, just a couple of quick questions. The corporate headcount, you're talking about getting that over 400 this year. I think last quarter you said 375, so it's a little bit of an uptick compared to what you had said before. And you're obviously doing this in a tougher market. Can you talk about the decision to increase that and what's kind of driving that? I think Mark, you had mentioned some increased productivity of some of the newer classes. What's kind of driving that decision to ramp up the hiring or just find better talent than you had thought? Anything you can talk about there?

Scott Heleniak: The corporate head count, you're talking about getting that over 400 this year. I think last quarter, you said 375. So it's a little bit of an uptick, kind of what, compared to what you had said before. And you're obviously doing this in a tougher market.

Scott Gregory Heleniak: Yes, just a couple quick questions. The corporate headcount, you were talking about getting that over 400 this year. I think last quarter you said 375, so it's a little bit of an uptick compared to what you had said before.

Mark Miller: Can you talk about the decision to increase that in what's kind of driving that? I think Mark, you had mentioned some increased productivity of some of the newer classes that what's kind of driving that decision to ramp up the hiring or just finding better talent than you thought. Anything you can talk about there.

Scott Gregory Heleniak: and you're obviously doing this in a tougher market. Can you talk about the decision to increase that and what's kind of driving that? I think, Mark, you had mentioned some increased productivity of some of the

Mark: Some of the newer classes that what's kind of driving that decision to ramp up the hiring or just finding better talent than you thought Anything you can can talk about there

Mark K. Miller: This is Mark Miller. I'll start.

Mark Miller: Yes, Mark Miller. I'll start. I would say university recruiting is number one for us. And that's gone tremendously well this year. And the limiting factor is really what quality can we find in the campuses. And that was really available this year. And, second of all, our ability to absorb that capacity, which speaks to how productive the corporate agents are we have today. And can we take on new agents and not deteriorate productivity? And we're at a point where we feel like we've taken on a lot of the challenges we've had over the last couple of years, and it's forming really, really nicely.

Mark K. Miller: I would say university recruiting is number one for us, and that's gone tremendously well this year. The limiting factor is really what quality can we find on the campuses, and that was really available this year. Second of all, our ability to absorb that capacity, which speaks to how productive the corporate agents we have today and whether we can take on new agents and not deteriorate productivity. We're at a point where we feel like we've taken on a lot of the challenges we've had over the last couple of years. For more information, please visit www.goosehead.com.

Mark: This is Mark Miller. I'll start. I would say university recruiting is number one for us, and that's gone tremendously well this year, and the limiting factor is really what quality can we find on the campuses, and that was really available this year, and second of all, our ability to absorb that capacity, which speaks to how productive the corporate agents are we have today, and can we take on new agents and not

Mark: [inaudible]

Mark Miller: And we can take on more agents. So the 400 agents, you know, we've been, we've been to the college campuses. We've extended offers. We know the candidates are coming. So we decided to increase the number. Yeah, and they're doing a great job coming down the learning curve, which just gives you a little bit more confidence to add some more into the talent pool. Like we mentioned, they're ramping up out of this year than they were last year, and last year's class was very, very good. So it's interesting that they don't have any other historical context of what a really soft market looks like.

Mark: performing really, really nicely, and we can take on more agents. So, the 400 agents, you know, we've been to the college campuses, we've extended offers, we know the candidates are coming.

Mark E. Jones: Yeah, and they're doing a great job coming down the learning curve, which just gives you a little bit more confidence to add some more to the talent pool. Like we mentioned, they're ramping up better this year than they were last year. And last year's class was very, very good.

Speaker Change: So we decided to increase the number. Yeah, and they're doing a great job coming down the learning curve, which just gives you a little bit more confidence to add some more into the talent pool.

Scott Gregory Heleniak: So it's interesting that they don't have any other historical context of what a really soft market looks like. So they just go out there and find a way. They're doing a great job.

Speaker Change: Like we mentioned, they're ramping up better this year than they were last year, and last year's class was very, very good. It's interesting that they don't have any other historical context of what a really soft market looks like, so they just go out there and find a way. They're doing a great job.

Scott Heleniak: So they just go out there and find a way. They're doing a great job. Yeah, okay.

Mark E. Jones: Okay, that makes sense. And I wanted to ask you about the share buyback. It was pretty significant. Your stocks recovered quite a bit here. You mentioned the word opportunistic. Do you expect to be active in the second half of the year? Is there any comment? Are you just going to kind of see what the market does and make a decision then?

Scott Heleniak: That makes sense.

Mark Jones Jr.: And I wanted to ask too about the share of buyback was was pretty significant. Your stocks recovered quite a bit here. Do you you mentioned the word opportunistic? Do you expect to be active in the second half of the year? Is there any any comment? Are you just going to kind of see how to see what the market does and make it decision then? Yeah, and we'll be opportunistic if there's a market dislocation. Yeah, so. Okay.

Speaker Change: Yeah, okay, that makes sense.

Speaker Change: And I wanted to ask too about the share buyback was pretty significant, your stocks recovered quite a bit here. You mentioned the word opportunistic, do you expect to be active in the second half of the year? Is there any comment or are you just going to kind of see what the market does and make a decision then?

Scott Gregory Heleniak: Yeah, I mean, we'll be opportunistic if there's a market dislocation, so...

Speaker Change: yeah I mean we'll be opportunistic if there's a market dislocation

Mark E. Jones: Okay, yeah, just finally, the last question was just on the quote issue platform; you made you had some commentary there. Can you just give us a sense of how much priming is being bound on there and how that's ramped up, and where you see the heading?

Mark Jones Jr.: Yeah, just finally the last question was just on the quote to issue platform. You've had some commentary there. Can you just give us a sense of how much premium is being bound on there and how that's how that's ramped up and how you where you see the heading? Yeah, at this point, I don't want to give exact figures, but it has been exponential growth, and I'm super pleased with the way we've implemented it across multiple carriers now and the uptake from our agents and utilization of the platforms very good.

Speaker Change: So...

Speaker Change: okay yeah just just finally the last question was just on the the coach issue platform you had some commentary there can you just give us a sense of how much preeming is being bound on there and how that's how that's ramped up and how you where you see the heading

Scott Gregory Heleniak: Yeah, at this point, I don't want to give exact figures, but it has been exponential growth, and I'm super pleased with the way we've implemented it across multiple carriers now, and the uptake from our agents and utilization of the platform is very good. Yeah, I mean, at this point, the maturity of our...

Speaker Change: Yeah at this point I don't want to give exact figures but it has been exponential growth and I'm super pleased with the way we've implemented it across multiple carriers now and the uptake from our agents and utilization of the platform is very good. Yeah I mean at this point the majority of our agents have have found a policy through our QTI platform and the feedback has been really great.

Mark E. Jones: Yeah, I mean, at this point, the majority of our agents have found a policy through our QTI platform, and the feedback has been really great.

Mark Jones Jr.: Yeah, I mean at this point, the maturity of our agents have found a policy through our QTI platform, and the feedback has been really great.

Mark Jones Jr.: That's awful.

Scott Heleniak: Thanks. And thank you.

Operator: And thank you. And one moment for our next question. And our next question comes from Michael Zaremski from BMO. Your line is now open.

Michael Zaremski: And one more moment by our next question. And our next question comes from Michael Zaremski from BMO.

Speaker Change: That's helpful. Thanks.

Speaker Change: And thank you. And one moment for our next question.

Michael Zaremski: Your line is now open. Hey, great good afternoon.

Speaker Change: And our next question comes from Michael Zaremski from BMO. Your line is now open.

Michael David Zaremski: Hey Craig, good afternoon.

Michael Zaremski: I have a question on kind of on your revenue growth rate versus the premium growth rate. And I know there's a lot; there's a lot of moving parts, but I guess just. At the highest level, you know, we're only trying to forecast revenues, and it's been actually pretty amazing watching your EBITDA margins grow. Despite your revenues divided by your premium, you know, great compressing and just curious. So, you know, if I think out longer term, other than the contingent commission element, which is a small piece of total of revenues. It, you know, to get out to your kind of, you know, the 40% kind of long term goal for margins, or you can correct me if it's a little different than 40.

Michael David Zaremski: I have a question on kind of on your revenue growth rate versus the premium growth rate. And I know there's, you've unpacked a lot, there's a lot of moving parts, but I guess just at the highest level, you know, we're only trying to forecast revenues. And it's been actually pretty amazing watching your EBITDA margins grow, despite your revenues divided by your premium rate compressing. I'm just curious, so if I think out longer term, other than the contingent commission element, which is a small piece of total of revenues, to get out to your kind of.., you know, the 40% kind of long-term goal for margins, or you can correct me if it's a little different than 40, does that revenue-to-premium ratio need to move up materially, or can you keep doing the positive things you're doing and still get to that long-term margin goal?

Michael David Zaremski: Hey, Craig. Good afternoon.

Michael David Zaremski: I have a question on kind of on your revenue growth rate versus the premium growth rate and I know there's

Michael David Zaremski: We've unpacked a lot. There's a lot of moving parts, but I guess just At the highest level, you know, we're only trying to forecast revenues And it's it's been actually pretty amazing watching your EBITDA margins grow

Speaker Change: Despite your revenues divided by your premium, you know, rate compressing, I'm just curious, so you know, if I think out longer term, other than the contingent commission element, which is a small piece of total of revenues,

Speaker Change: to get out to your kind of...

Mark Jones Jr.: Does that revenue to premium ratio need to need to move up materially, or can you can you keep doing the positive things you're doing and still get to that. That long-term margin goal.

Michael David Zaremski: You know, the 40% kind of long-term goal for margins, or you can correct me if it's a little different than 40. Does that revenue-to-premium ratio need to move up materially, or can you...

Speaker Change: Can you keep doing the positive things you're doing and still get to that long-term margin goal?

Mark E. Jones: Yeah, Mike, so we would expect that you get the growth rates of premiums and revenue kind of pointed in the same direction as you look at next year. Kind of as we went through this transformation over the last couple of years with new business going up and down and up and down, that's caused that gap between premium growth rates and revenue growth rates. That will not be an issue on a go-forward basis and in the longer term.

Mark Jones Jr.: Yeah, Mike. So we would expect that you get the growth rates of premiums and revenue kind of pointed in the same direction as you look at next year. Kind of as we went through this transformation over the last couple of years with new business going up and down and up and down, that's caused that gap between premium growth rates and revenue growth rates. That will not be an issue on the go forward basis and in the longer term. So to hit our top line growth numbers, you're going to need to get really strong premium growth, which will convert to revenue growth and to drive margin expansion. Together, keep an eye on every part of the business and make sure you don't have cost creep and you're continuing to drive scale.

Speaker Change: Yeah, Mike, so we would expect that you get the growth rates of premiums and revenue kind of pointed in the same direction as you look at next year, kind of as we went through this transformation over the last

Speaker Change: couple of years with new business going up and down and up and down that's Caused that gap between premium growth rates and revenue growth rates

Michael David Zaremski: So to hit our top-line growth numbers, you're going to need really strong premium growth, which will convert to revenue growth. And to drive margin expansion, you've got to keep an eye on every part of the business and make sure you don't have cost creep and you're continuing to drive scale. So we want to do both. We want to grow really fast, and we want to get a good scale and deliver high levels of profit.

Speaker Change: That will not be an issue on a go-forward basis and in the longer term.

Speaker Change: So to hit our top-line growth numbers you're going to need to get really strong...

Speaker Change: premium growth, which will convert to revenue growth. And to drive margin expansion, you've got to keep an eye on every part of the business and make sure you don't have cost creep and you're continuing to drive scale. So we want to do both. We want to grow really fast, and we want to get good scale and deliver high levels of profitability.

Mark Jones Jr.: So we want to do both. We want to grow really fast, and we want to get good scale and deliver high levels of profitability.

Michael David Zaremski: Okay, um, maybe, uh, a related question, thinking also kind of longer term, or maybe you can give us perspective on historically. Has Goosehead ever considered changing or has changed its commission structure a bit, you know, as it kind of competitively kind of assesses the environment in terms of kind of the new versus the renewal rates?

Mark Miller: Okay, maybe a related question, thinking also kind of longer term, or maybe you can give us perspective on historically. Has goose had ever considered changing or has changed its commission structure a bit, you know, as it kind of competitively kind of assessing the the environment in terms of kind of that the new versus the renewal rates. Now, I mean, our agents, I think, make significantly more money than the average, we believe, at least the average insurance agent in the market. So I feel really good about the way our compensation is structured. It's truly a partnership with our franchise; these were 50/50 on it. We're all aligned perfectly.

Speaker Change: Okay, maybe...

Speaker Change #101: related question thinking also kind of longer term or maybe you can give us perspective on historically. Has Goosehead ever considered changing it or has changed its commission structure a bit?

Speaker Change #100: You know as it kind of competitively kind of assessing the the environment in terms of kind of the new versus the renewal rates.

Mark E. Jones: No, I mean, our agents, I think, make significantly more money than the average, or so we believe at least, the average insurance agent in the market. So I feel really good about the way our compensation is structured. It's truly a partnership with our franchisees. We're 50-50 on it.

Speaker Change #102: Now, I mean, our agents, I think, make significantly more money than the average, we believe at least, the average insurance agent in the market.

Speaker Change #102: So, I feel really good about the way our compensation is structured. It's truly a partnership with our franchisees, we're 50-50 on it, we're all aligned perfectly. And our corporate agents are making more money now than they ever have in their past. I mean, we've got a kid in his first year in our Denver office who's going to make over $200,000 because he is selling a lot of insurance. So, I don't know that there's anything we need to do to be more competitive, but I think our tools give people the ability to be super successful.

Mark E. Jones: We're all aligned perfectly, and our corporate agents are making more money now than they ever have in their past. I mean, we've got a kid in his first year in our Denver office who's gonna make over $200,000 because he's selling a lot of insurance. So I don't know that there's anything we need to do to be more competitive. I think our tools give people the ability to be super successful.

Mark Miller: And our corporate agents are making more money now than they ever have in their past. I mean, we've got a kid in this first year in our Denver office who is going to make over $200,000 because he is selling a lot of insurance. So I don't know that there's anything we need to do to be more competitive. I think our tools give people the ability to be super. for Successful. And I just part, do happen to have just curious off the top of your head, maybe estimated, like what you said, the average Goosehead agent, you know, you think makes more than the average just a pure U.S.

Michael David Zaremski: And I guess, Mark, you happen to have, just curious, off the top of your head, maybe estimated, like what you said the average Goosehead agent, you know, you think makes more than the average, just pure U.S. average. Do you happen to maybe know any of those stats?

Speaker Change #102: And I guess Mark, you happen to have, just curious off the top of your head, maybe estimated like what you said the average Goosehead agent, you know, you think makes more than the average just pure US average, you happen to maybe know any of those stats?

Mark Miller: average, you happen to maybe know any of those stats? Yeah, I don't have those stats up the top of my head, but I know that our Goosehead agents are two and a half times more productive than industry best practice, and our average commission rate is higher than the average commission rate in the industry. That will lead you to believe pretty easily that our agents are making more money than the industry. Okay, that makes sense.

Mark E. Jones: Yeah, I don't have those stats off the top of my head, but I know that our Goosehead agents are two and a half times more productive than industry best practices, and our average commission rate is higher than the average commission rate in the industry. That will lead you to believe pretty easily that our agents are making more money than

Mark: Yeah, I don't have those stats off the top of my head, but I know that our Goosehead agents are two and a half times more productive than industry best practice, and our average commission rate is higher than the average commission rate in the industry. That will lead you to believe pretty easily that our agents are making more money than the industry.

Michael David Zaremski: Okay, that makes sense. Thank you.

Mark Miller: Thank you. And thank you.

Operator: And thank you. One moment for our next question, and our next question comes from Paul Newsome on Piper Sandler. Your line is now open.

Paul Newsome: And one moment for our next question. And our next question comes from Paul Newsome from Piper Sandler.

Speaker Change #103: Okay, that makes sense. Thank you.

Speaker Change #104: And thank you. And one moment for our next question.

Paul Newsome: Your line is not open. You guys take most of my questions. Just one maybe follow-up or expansion on the competitive environment. I think at one point, it seemed like there were an even amount of competition or lack of competition, particularly home insurance, with some mutuals being rather aggressive, but the stock companies not so much. You know, has that environment changed in the last quarter or so? Or is it still the case that? You know, there's maybe a couple of big carriers out there acting differently than the rest of them.

Speaker Change #105: And our next question comes from Paul Newsome from Piper Sandler. Your line is now open.

Paul Newsome: You guys have hit most of my questions. Just one, maybe a follow-up or expansion on the competitive environment. I think at one point it seemed like there was an uneven amount of competition or a lack of competition, particularly in home insurance, with some mutuals being rather aggressive, but stock companies, not so much. You know, has that environment changed in the last quarter or so? Or is it still the case that, you know, there's maybe a couple of big carriers out there acting differently than the rest? Yeah, I would say we haven't.

Paul Newsome: You guys have hit most of my questions. Just one maybe follow-up or expansion on the competitive environment. I think at one point it seemed like there were

Paul Newsome: on uneven amount of competition or lack of competition, particularly in home insurance.

Speaker Change #107: with some mutuals being rather aggressive, but they're...

Speaker Change #107: stock companies not so much. You know, has that environment changed in the last quarter or so? Or is it still the case that

Speaker Change #108: You know, there's maybe a couple of big carriers out there.

Mark Miller: Yeah, I would say we haven't really seen a shift in the home environment yet from what the environment was in the first quarter. There you go.

Mark E. Jones: Yeah, I would say we haven't really seen a shift in the home environment yet from what it was.

Speaker Change #109: Acting differently than the rest of them.

Speaker Change #110: Yeah, I would say we haven't really seen a shift in the home environment yet from what the environment was in the first quarter.

Operator: Thanks. And thank you.

Operator: And thank you. And one moment for our next question, and our next question comes from Pablo Singzon from J.P. Morgan. Your line is now open.

Pablo Singzon: And one moment for our next question. And our next question comes from Pablo Singsong from JP Morgan.

Speaker Change #111: There you go. Thanks.

Speaker Change #112: And thank you. And one moment for our next question.

Pablo Singzon: Your line is now open. Hi, thank you.

Speaker Change #113: And our next question comes from Pablo Singzon from JP Morgan. Your line is now open.

Pablo Augusto Serrano Singzon: Hi, thank you. First question, I'd be curious to hear what kind of housing or mortgage market conditions you're assuming in your guidance, right? So, I think now there's an expectation of interest rates to decline, and I was curious how that figures into your thinking about where the business is headed.

Pablo Singzon: First question. I'd be curious to hear what kind of housing or mortgage market conditions you're assuming are guidance. Right. So I think now there's an expectation that interest rates to the client.

Pablo Augusto Serrano Singzon: Hi, thank you. First question, I'd be curious to hear what kind of housing or mortgage market conditions you're assuming in your guidance, right? So I think now there's an expectation of interest rates to decline, and I was curious how that figures into your thinking about where the business is headed.

Mark Miller: And I was curious how the figures and the you're thinking about where the business is headed. Yeah, I mean, we're not assuming that the housing environment gets any better in our guidance. Our agents are doing a really good job going on capture more leads. And because we're such a small percentage of total market, there's plenty of share for us to go take. So we don't really need it to improve in order for us to achieve the goals we want to. But that would certainly be really helpful. I think that's definitely upside. Okay.

Mark E. Jones: Yeah, I mean, we're not assuming that the housing environment gets any better in our guidance. Our agents are doing a really good job going out to capture more leads, and because we're such a small percentage of the total market, there's plenty of share for us to go take. So we don't really need it to improve in order for us to achieve the goals we want to, but that would certainly be really helpful. I think that's definitely an upside.

Speaker Change #115: Yeah I mean we're not assuming that the housing environment gets any better in our guidance. Our agents are doing a really good job going out to capture more leads and because we're such a small percentage of the total market

Speaker Change #115: There's plenty of share for us to go take, so we don't really need it to improve in order for us to achieve the goals we want to, but that would certainly be really helpful. I think that's definitely upside.

Mark Miller: And then secondly, as you add more producers to the franchise, these can you provide perspective on how these individual producers get compensated right? So the franchise level, I think the split is 80 50.

Pablo Augusto Serrano Singzon: And then secondly, as you add more producers to the franchisees, can you provide perspective on how these individual producers get compensated, right? So at the franchise level, I think the split is 80-50. But at the agent level, you know, how do these folks get paid?

Speaker Change #115: Okay.

Speaker Change #116: And then secondly, as you add more producers to the franchisees, can you provide perspective on how these individual producers get compensated, right, so at the franchise level, I think this bit is 80-50, but at the agent level, you know, how do these folks get paid?

Mark Miller: But at the agent level, you know, how do these folks get paid? Yeah, so that's ultimately up to the franchise E because they are their own business. You know, we can provide them at least what we do on our side and talk to them about why that makes good sense. So typically, what you end up seeing is a franchise E who pays their employees relatively similar to the way that we would pay our employees, which would be 40% on the gross new business and 15 to 20% on the gross renewal. But ultimately, that is. up to them.

Mark E. Jones: Yeah, so that's ultimately up to the franchisee because they are their own business. We can provide them with at least what we do on our side and talk to them about why that makes good sense. So typically, what you'll end up seeing is a franchisee who pays their employees relatively similarly to the way that we would pay our employees, which would be 40% of the gross new business and 15 to 20% of the gross renewal, but ultimately, that is up to them.

Speaker Change #117: Yeah, so that's ultimately up to the franchisee because they are their own business, you know, we can provide them at least what we do on our side and talk to them about why that makes good sense.

Speaker Change #118: So, typically what you'll end up seeing is a franchisee who pays their employees relatively similar to the way that we would pay our employees, which would be 40% on the gross new business and 15 to 20% on the gross renewal, but ultimately that is up to them.

Pablo Augusto Serrano Singzon: Okay, and then last thing, just a quick numbers question. I think Mark, you mentioned 29% new business growth in the franchise channel. What is the growth number for the corporate channel?

Mark Jones Jr.: Okay, and then last and just a quick numbers question. I think Mark, he had mentioned 29% new business growth in the franchise channel.

Speaker Change #118: Okay, and then last one, just a quick numbers question. I think Mark you had mentioned 29% new business growth in the franchise channel.

Mark Jones Jr.: What is the growth number for the corporate channel? To same, same store sales grill on the franchise side of the business was 29%. Sorry, go ahead. What were you saying? Sorry, yeah, yeah, yeah, maybe I recorded the wrong number. I think you had mentioned first-year premiums, right? Or had you mentioned it at all? Or I think, yeah, yeah, yeah, yeah, yeah, yeah, yeah. Okay, the franchise new premium was up 29% in the quarter. Right. I think the corporate number should be in the 10-Q. In the 10-Q.

Mark E. Jones: The same store sales growth on the franchise side of the business was 29%.

Speaker Change #119: What is the growth number for the corporate channel?

Pablo Augusto Serrano Singzon: Yeah.

Mark: The same store sales growth on the franchise side of the business was 29 percent.

Mark E. Jones: Sorry, go ahead. What were you saying? Sorry, maybe I quoted the wrong number. I think you had mentioned first-year premiums, right? Have you mentioned it at all, or not? I think you did.

Speaker Change #120: Thank you.

Speaker Change #121: Sorry, go ahead, what were you saying? Sorry, maybe I quoted the wrong number. I think you had mentioned first-year premiums, right?

Pablo Augusto Serrano Singzon: Yeah, yeah. He said the franchise new business premium was up 29% in the quarter. Right. I think the corporate numbers should be in the tech section. Okay, we'll just wait for it. Thank you.

Speaker Change #122: Have you mentioned that at all or? I think... Yeah, yeah. Okay. The franchise knew this premium was up 29% in the quarter. Right. I think the corporate numbers should be in the 10-Q.

Pablo Singzon: Okay, I'll just wait for it. Thank you.

Pablo Singzon: Great. And thank you.

Mark K. Miller: And thank you. And I'm showing no further questions. I would now like to turn the call back over to CEO Mark Miller for closing remarks.

Operator: And I'm showing no further questions.

Speaker Change #123: In the tech, okay, we'll just wait for it, thank you.

Mark Miller: I would now like to turn the call back over to the CEO, Mark Miller, for closing remarks. Yeah, I just wanted to thank everybody for joining us for our second quarter call. As always, we appreciate your continued support. And we look forward to speaking to you on our next quarterly call. Thank you very much.

Speaker Change #123: And thank you. And I'm showing no further questions. I would now like to turn the call back over to CEO Mark Miller for closing remarks.

Mark K. Miller: Yeah, I just wanted to thank everybody for joining us on our second quarterly call. As always, we appreciate your continued support, and we look forward to speaking to you on our next quarterly call. Thank you very much.

Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Mark K. Miller: Yeah, I just wanted to thank everybody for joining us for our second quarter call. As always, we appreciate your continued support and we look forward to speaking to you on our next quarterly call. Thank you very much.

Operator: Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker Change #124: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.