Q2 2026 Goosehead Insurance Inc Earnings Call

July 22, 2026

Operator: Good day, and thank you for standing by. Welcome to the Goosehead Insurance Q2 2026 Earnings Conference Call. At this time, all participants are in 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to turn the conference over for your speaker for today, Maddie Middleton, Senior Director of Investor Relations. Please go ahead.

Speaker #1: 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 *11 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker #1: To ensure your question is registered, please press *11 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Maddie Milton, Senior Director of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: 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 expectations, estimates, and projections of management as of today.

Maddie Middleton: 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 expectations, estimates, and projections of management as of today. Forward-looking statements in our discussions are subject to various assumptions, risks, and uncertainties that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed on 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 or revise any forward-looking statements except to the extent required by applicable law.

Maddie Middleton: 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 expectations, estimates, and projections of management as of today. Forward-looking statements in our discussions are subject to various assumptions, risks, and uncertainties that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed on 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 or revise any forward-looking statements except to the extent required by applicable law.

Speaker #2: Forward-looking statements in our discussions are subject to various assumptions, risks, and uncertainties that are difficult to predict, and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements.

Speaker #2: These statements are not guarantees of future performance and, therefore, undue reliance should not be placed on 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, if you have any questions.

Speaker #2: We disclaim any intention or obligation to update or revise any forward-looking statements, except to the extent required by applicable law. I would also like to point out that during this call, we will discuss certain financial measures that are not prepared in accordance with GAAP.

Maddie Middleton: I would also like to point out that during this call, we will discuss certain financial measures that are not prepared in accordance with GAAP. Management uses these non-GAAP financial measures in 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 representative of our core business. For more information regarding the use of non-GAAP financial measures, including reconciliations 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 and an archived version will be made available shortly after the call ends on the investor relations portion of the company's website at goosehead.com.

Speaker #2: Management uses these non-GAAP financial measures in 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 representative of our core business.

Speaker #2: For more information regarding the use of non-GAAP financial measures, including reconciliations of these measures to the most recent comparable GAAP financial measures, we refer you to today's earnings release.

Speaker #2: In addition, this call is being webcast, and an archived version will be made available shortly after the call ends on the Investor Relations portion of the company's website at goosehead.com.

Speaker #2: Now, I'd like to turn the call over to our CEO, Mark Miller.

Maddie Middleton: I'd like to turn the call over to our CEO, Mark Miller.

Maddie Middleton: I'd like to turn the call over to our Chief Executive Officer, Mark Miller.

Speaker #3: Thanks, Maddie, and good afternoon, everyone. Thank you for joining us today for our Q2 2026 earnings call. Before I walk through the quarter, I want to start with a little perspective.

Mark Miller: Thanks, Maddie, good afternoon, everyone. Thank you for joining us today for our Q2 2026 earnings call. Before I walk through the quarter, I want to start with a little perspective. Four years ago, when I joined the management team, we were navigating a business that had significant untapped potential, but also had some real challenges. Since that time, we have fundamentally transformed this organization. We restructured our corporate and franchise agent forces, raising the bar on quality and productivity across both networks. We grew our corporate footprint to more than a dozen offices across the country. We launched an expanded ASP, our internal staffing support program for our franchise owners. We launched our enterprise sales and partnership businesses from scratch, and they are now unlocking access to millions of new potential clients.

Mark Miller: Thanks, Maddie, good afternoon, everyone? Thank you for joining us today for our Q2 2026 Earnings Call. Before I walk through the quarter, I want to start with a little perspective. Four years ago, when I joined the management team, we were navigating a business that had significant untapped potential, but also had some real challenges. Since that time, we have fundamentally transformed this organization. We restructured our corporate and franchise agent forces, raising the bar on quality and productivity across both networks. We grew our corporate footprint to more than a dozen offices across the country. We launched an expanded ASP, our internal staffing support program for our franchise owners. We launched our enterprise sales and partnership businesses from scratch, and they are now unlocking access to millions of new potential clients.

Speaker #3: Four years ago, when I joined the management team, we were navigating a business that had significant untapped potential, but also had some real challenges.

Speaker #3: Since that time, we have fundamentally transformed this organization. We restructured our corporate and franchise agent forces, raising the bar on quality and productivity across both networks.

Speaker #3: We grew our corporate footprint to more than a dozen offices across the country. We launched and expanded ASP, our internal staffing support program, for our franchise owners.

Speaker #3: We launched our enterprise sales and partnership businesses from scratch, and they are now unlocking access to millions of new potential clients. We built a world-class technology team that delivered the United States' first true end-to-end choice shopping platform for personalized insurance.

Mark Miller: We built a world-class technology team that delivered the United States' first true end-to-end choice shopping platform for personal lines insurance. We increased total written premiums from approximately $2 billion in 2022 to well over $4 billion today. We right-sized our cost structure while preserving our capacity to grow. We grew adjusted EBITDA from under $40 million in 2022 to over $130 million in our last four quarters and expanded our margin meaningfully through the hardest product market in 50 years. We did all this while returning significant capital to our shareholders and maintaining a conservative balance sheet. The business we have today is stronger, more diversified, and more capable. With the company and the industry in such a strong position, I'd like to share something personal. After a 40-year professional career, I've decided that the time is right for me to retire.

Speaker #3: We increased total written premiums from approximately $2 billion in 2022 to well over $4 billion today, right-sized our cost structure, while preserving our capacity to grow.

Speaker #3: We grew adjusted EBITDA from under $40 million in 2022 to over $130 million in our last four quarters, and expanded our margin meaningfully through the hardest product market in 50 years.

Speaker #3: We did all this while returning significant capital to our shareholders and maintaining a conservative balance sheet. The business we have today is stronger, more diversified, and more capable.

Speaker #3: With the company and the industry in such a strong position, I'd like to share something personal. After a 40-year professional career, I've decided that the time is right for me to retire.

Speaker #3: At the end of this year, I will hand over the CEO position to Mark Jones, Jr., and remain a member of the board of directors to help in any way I can.

Mark Miller: At the end of this year, I will hand over the CEO position to Mark Jones Jr., and remain a member of the board of directors and help in any way I can. My decision was made easier knowing we have an exceptional leader in Mark Jones Jr. He has been a member of the management team for nearly 10 years and closely tied to the business since its founding. He knows this business like no one else. He has the trust of our agents, our carriers, and our shareholders, he has the hunger, the skillset, and the vision to take Goosehead to heights that will continue to set the standard for what excellence looks like in our industry. I'm very confident in him and in this team.

Mark Miller: At the end of this year, I will hand over the Chief Executive Officer position to Mark Jones Jr., and remain a member of the board of directors and help in any way I can. My decision was made easier knowing we have an exceptional leader in Mark Jones Jr. He has been a member of the management team for nearly 10 years and closely tied to the business since its founding. He knows this business like no one else. He has the trust of our agents, our carriers, and our shareholders, he has the hunger, the skillset, and the vision to take Goosehead to heights that will continue to set the standard for what excellence looks like in our industry. I'm very confident in him and in this team.

Speaker #3: My decision was made easier knowing we have an exceptional leader in Mark Jones, Jr. He has been a member of the management team for nearly 10 years, and closely tied to the business since its founding.

Speaker #3: He knows this business like no one else. He is the trusted partner of our agents, our carriers, and our shareholders. And he has the hunger, the skill set, and the vision to take Goosehead to heights that will continue to set the standard for what excellence looks like in our industry.

Speaker #3: I'm very confident in him and in this team. I love this company, and I believe deeply in what we're building. I'll remain fully engaged and focused on execution through the end of the year.

Mark Miller: I love this company, I believe deeply in what we're building, and I'll remain fully engaged and focused on execution through the end of the year. I'll do everything in my power to set this organization up for its next chapter. Now let me turn to our current operational performance. We delivered strong Q2 results that reflect continued execution against our strategic plan and broad-based momentum across the business. Total written premiums grew 14%, accelerating off the Q1 to $1.36 billion. Policies in force grew 15% year over year, and client retention, our most impactful driver of top and bottom line performance, improved to 86%, representing its highest level since the hard market began. We're encouraged by this continued sequential improvement in client retention rate and see no structural limitation to meeting or exceeding our prior high of 89% in the future.

Speaker #3: I'll do everything in my power to set this organization up for its next chapter. Now, let me turn to our current operational performance. We delivered strong Q2 results that reflect continued execution against our strategic plan and broad-based momentum across the business.

Speaker #3: Total written premiums grew 14%, accelerating off the first quarter to $1.36 billion. Policies in force grew 15% year over year, and client retention, our most impactful driver of top- and bottom-line performance, improved to 86%, representing its highest level since the hard market began.

Speaker #3: We're encouraged by this continued sequential improvement in client retention rate and see no structural limitation to meeting or exceeding our prior high of 89% in the future.

Speaker #3: Total revenues grew 21% to $113 million, with core revenues up 10% to $95 million over the prior year period. As a reminder, in Q2 of 2025, we recovered $4 million of previously unpaid renewal commissions and royalty fees.

Mark Miller: Total revenues grew 21% to $113 million, with core revenues up 10% to $95 million over the prior year period. As a reminder, in the Q2 of 2025, we recovered $4 million of previously unpaid renewal commissions and royalty fees. When adjusting for that year-over-year variance, core revenues grew 16% and total revenues grew 26% in the Q2. Adjusted EBITDA was $38 million, representing a 34% margin for the quarter. We've spent a considerable amount of time recently discussing our technology enhancements and new developments related to our Digital Agent 2.0, the country's first choice shopping platform. We remain as enthusiastic as ever around the progress we're making and the significant future opportunity ahead of us, I want to focus the discussion today on the strategy, consistency, and compounding nature of our core business.

Speaker #3: When adjusting for that year-over-year variance, core revenues grew 16%, and total revenues grew 26% in Q2. Adjusted EBITDA was $38 million, representing a 34% margin for the quarter.

Speaker #3: We've spent a considerable amount of time recently discussing our technology enhancements and new developments related to our Digital Agent 2.0, the country's first-choice shopping platform.

Speaker #3: We remain as enthusiastic as ever about the progress we're making and the significant future opportunity ahead of us. But I want to focus the discussion today on the strategy, consistency, and compounding nature of our core business.

Speaker #3: The largest portion of our business, our franchise network, is now healthier than ever. Our franchise strategy remains focused on placing the right agency owners in the right geographies, and arming them with the support they need to maximize their productivity and profitability.

Mark Miller: The largest portion of our business, our franchise network, is now healthier than ever. Our franchise strategy remains focused on placing the right agency owners in the right geographies and arming them with the support they need to maximize their productivity and profitability. A core pillar of that strategy is generating franchises with more producers. Our agency staffing program, which we stood up in 2023, has done exactly that. Since that program's inception, we have helped our agency owners place hundreds of producers into their operations, now that strategy is bearing real fruit. Franchise producers are at the highest level in history at nearly 2,200, with an average of 2.4 producers per franchise, which is resulting in our franchises generating more income per location than ever.

Speaker #3: A core pillar of that strategy is generating franchises with more producers. Our agency staffing program, which we stood up in 2023, has done exactly that.

Speaker #3: Since that program's inception, we have helped our agency owners place hundreds of producers into their operations, and now that strategy is bearing real fruit.

Speaker #3: Franchise producers are at the highest level in history, at nearly 2,200, with an average of 2.4 producers per franchise, which has resulted in our franchises generating more income per location than ever before.

Speaker #3: The average payment that we send to a franchise on a monthly basis has increased more than 35% year over year, and is now over $28,000.

Mark Miller: The average payment that we send to a franchise on a monthly basis has increased more than 35% year-over-year and is now over $28,000. This powerful and durable income stream allows them to reinvest back into their businesses to further reinforce the growth flywheel. At the beginning of the year, we discussed the expanding footprint of our corporate offices. These new locations were selected strategically to align with attractive product markets, high rates of home ownership, and strong recruiting pipelines from local universities. Our five recent office launches across the country are scaling rapidly, averaging nearly 20 agents each and delivering strong new business production. Over the quarter, several of these new offices were among the top overall offices in our corporate network.

Speaker #3: This powerful and durable income stream allows them to reinvest back into their businesses to further reinforce the growth flywheel. At the beginning of the year, we discussed the expanding footprint of our corporate offices.

Speaker #3: These new locations were selected strategically to align with attractive product markets, high rates of homeownership, and strong recruiting pipelines from local universities. Our five recent office launches across the country are scaling rapidly.

Speaker #3: Averaging nearly 20 agents each and delivering strong new business production. Over the quarter, several of these new offices were among the top overall offices in our corporate network.

Speaker #3: These offices allow us to tap into previously underserved markets, build a more diversified client base, and, most importantly, they will produce the next generation of future franchise owners.

Mark Miller: These offices allow us to tap into previously underserved markets, build a more diversified client base, and most importantly, they will produce the next generation of future franchise owners. We will continue to drive outsized market share gains with this powerful capacity that is both unique to Goosehead and extremely difficult to replicate. Our enterprise sales business continues to grow at a rapid pace. Our pipeline of new potential partners to fuel continued growth is expanding. As we implement our embedded insurance offering with our current and future partners, this third leg of our distribution stool will continue to grow at an accelerated pace. The backdrop for all of our agents across the sales network is now a dramatically improved product environment, which is resulting in improving bind and package rates.

Speaker #3: We will continue to drive outsized market share gains with this powerful capacity that is both unique to Goosehead and extremely difficult to replicate. Our enterprise sales business continues to grow at a rapid pace, and our pipeline of new potential partners to fuel continued growth is expanding.

Speaker #3: As we implement our embedded insurance offering with our current and future partners, this third leg of our distribution stool will continue to grow at an accelerated pace.

Speaker #3: The backdrop for all of our agents across the sales network is now a dramatically improved product environment, which has resulted in improving bind and package rates.

Speaker #3: As we have highlighted over the past several quarters, everything in our business operates more efficiently in a stable product environment. This is where we thrive.

Mark Miller: As we highlighted over the past several quarters, everything in our business operates more efficiently in a stable product environment. This is where we thrive. We've navigated a historically hard market over the last several years. We're now poised to take advantage of a much healthier personal lines product market. Client retention continues to improve. The burden on our service function continues to abate. We remain aligned with our carrier partners in our mutual pursuit of profitable growth. We have built a firm foundation for the next phase of growth. I'm incredibly proud of the work we have done. When Mark Jones asked me to take this position four years ago, I knew it was a special opportunity. I'd been with Goosehead on its board for four years, and I had been a client for 15 before that.

Speaker #3: We've navigated a historically hard market over the last several years, and we're now poised to take advantage of a much healthier personalized product market.

Speaker #3: Client retention continues to improve, the burden on our service function continues to abate, and we remain aligned with our carrier partners in our mutual pursuit of profitable growth.

Speaker #3: We have built a firm foundation for the next phase of growth, and I'm incredibly proud of the work we have done. When Mark Jones asked me to take this position four years ago, I knew it was a special opportunity.

Speaker #3: I'd been with Goosehead on its board for four years, and I had been a client for fifteen before that. I knew the business. I knew the culture.

Mark Miller: I knew the business, I knew the culture. Most importantly, I knew Mark's vision. What I didn't fully appreciate until I was inside was just how truly extraordinary the people at every level are in the organization. The agents who wake up every day and go find new referral partners, the franchise owners who are building businesses which are generating life-changing income, the service team members who help our clients navigate some of the most stressful moments in their lives, the technology team who built something that the industry said could not be built. The rest of our teammates who strive for excellence every day. I'm grateful to all of them. I'm proud of what we have accomplished together. We came through a once-in-a-generation hard market stronger than we entered. We built new capabilities that will define the next decade of this business.

Speaker #3: And, most importantly, I knew Mark's vision. What I didn't fully appreciate until I was inside was just how truly extraordinary the people at every level are in the organization.

Speaker #3: The agents who wake up every day and go find new referral partners; the franchise owners who are building businesses that are generating life-changing income; the service team members who help our clients navigate some of the most stressful moments in their lives; the technology team who built something that the industry said could not be built; and the rest of our teammates who strive for excellence every day.

Speaker #3: I'm grateful to all of them, and I'm proud of what we have accomplished together. We came through a once-in-a-generation hard market stronger than we entered.

Speaker #3: We built new capabilities that will define the next decade of this business. We consistently expanded our market share, and more than tripled adjusted EBITDA.

Mark Miller: We consistently expanded our market share and more than tripled adjusted EBITDA. We returned hundreds of millions of dollars to shareholders. We did it without compromising who we are, a company that puts the client at the center of its universe. The company is in an exceptional position today. It gives me great confidence that now is the right time for the transition. Our leadership team is deep and experienced. Mark Jones Jr. is one of the best operators I've encountered in my career. I plan to spend the rest of the year making sure that every initiative is properly sourced and set up for success. Then I will hand the baton with tremendous pride, full confidence, and continued support wherever needed from my position on the board. Thank you to this team. Thank you to our agents and franchise partners.

Speaker #3: We returned hundreds of millions of dollars to shareholders, and we did it without compromising who we are—a company that puts the client at the center of its universe.

Speaker #3: The company is in an exceptional position today, and it gives me great confidence that now is the right time for the transition. Our leadership team is deep and experienced, and Mark Jones Jr.

Speaker #3: is one of the best operators I've encountered in my career. I plan to spend the rest of the year making sure that every initiative is properly sourced and set up for success, and then I will hand the baton with tremendous pride, full confidence, and continued support wherever needed for my position on the board.

Speaker #3: Thank you to this team. Thank you to our agents and franchise partners, thank you to our carrier partners, and thank you to our shareholders for the trust you have placed in us.

Mark Miller: Thank you to our carrier partners. Thank you to our shareholders for the trust you have placed in us. It has been the biggest privilege of my professional career. With that, let me turn the call over to our President and COO, Mark Jones Jr.

Speaker #3: It has been the biggest privilege of my professional career. With that, let me turn the call over to our President and COO, Mark Jones Jr.

Speaker #2: Thanks, Mark. And good afternoon to everyone on the call. First and foremost, I feel incredibly honored to have been able to work directly with Mark Miller for the last number of years.

Mark Jones Jr.: Thanks, Mark. Good afternoon to everyone on the call. First and foremost, I feel incredibly honored to have been able to work directly with Mark Miller for the last number of years. Mark brings deep care and commitment, not only to the work that we do, but to our teammates, franchisees, carrier partners, and shareholders. He's been an incredible example for everyone here at Goosehead and positioned the company to create value well beyond his tenure as CEO. On behalf of everyone at Goosehead, thank you for your leadership, your partnership, and your unwavering commitment to this organization. I'm grateful to have worked alongside you. Look forward to continuing that partnership as you remain on the board.

Speaker #2: Mark brings deep care and commitment not only to the work that we do, but also to our teammates, franchisees, carrier partners, and shareholders. He has been an incredible example for everyone here at Goosehead and has positioned the company to create value well beyond his tenure as CEO.

Speaker #2: On behalf of everyone at Goosehead, thank you for your leadership, your partnership, and your unwavering commitment to this organization. I'm grateful to have worked alongside you and look forward to continuing that partnership as you remain on the Board.

Speaker #2: I'm deeply grateful to our board of directors, our shareholders, and our executive team for their support and the confidence they've placed in me to lead this organization into the next chapter.

Mark Jones Jr.: I'm deeply grateful to our board of directors, our shareholders, and our executive team for their support and the confidence they've placed in me to lead this organization into the next chapter. Our strategy is not changing. We remain laser-focused on our objective to become the largest distributor of personal lines insurance in our founder's lifetime. Our pathway to achieving that is fundamentally rooted in our highly differentiated human capital advantage. Our best-in-class sales agents, our white glove service team, our technology organization rivaling the best in Silicon Valley. Our professionals across all of our operating teams. Because of the work that Mark Miller has done to build such a strong foundation and leadership team, my focus in this next chapter will be on speed of execution, simplification, and rapid decision-making.

Speaker #2: Our strategy is not changing. We remain laser-focused on our objective: to become the largest distributor of personalized insurance in our founder's lifetime. Our pathway to achieving that is fundamentally rooted in our highly differentiated human capital advantage.

Speaker #2: Our best-in-class sales agents, our white-glove service team, our technology organization—rivaling the best in Silicon Valley—and our professionals across all of our operating teams.

Speaker #2: Because of the work that Mark Miller has done to build such a strong foundation and leadership team, my focus in this next chapter will be on speed of execution, simplification, and rapid decision-making.

Speaker #2: I look forward to continuing my relationship with the investing community and keeping you all up to date on the exciting things we're doing at Goosehead, as we continue to disrupt the industry and raise the bar in the years ahead.

Mark Jones Jr.: I look forward to continuing my relationship with the investing community and keeping you all up to date on the exciting things we are doing at Goosehead as we continue to disrupt the industry and raise the bar in the years ahead. As Mark Miller mentioned, this quarter's results speak to the consistency and durability of our business. Our model, focused solely on personal lines and organic growth, is highly differentiated in insurance distribution, and our results compete with some of the most successful businesses in any sector. Since our IPO in 2018, we have grown our total revenue at a 29% compound annual growth rate and adjusted EBITDA at a 34% compound annual growth rate, while when comparing full year 2018 results to the trailing four quarters ended 30 June 2026. All of this while returning $hundreds of millions to shareholders through dividends and share repurchases.

Speaker #2: As Mark Miller mentioned, this quarter's results speak to the consistency and durability of our business. Our model, focused solely on personalized and organic growth, is highly differentiated in insurance distribution, and our results compete with some of the most successful businesses in any sector.

Speaker #2: Since our IPO in 2018, we've grown our total revenue at a 29% compound annual growth rate, and adjusted EBITDA at a 34% compound annual growth rate, when comparing full-year 2018 results to the trailing four quarters ended June 30, 2026.

Speaker #2: All of this while returning hundreds of millions to shareholders through dividends and share repurchases. I am so proud of our team for building such an amazing business—one that looks like no other organization out there.

Mark Jones Jr.: I am so proud of our team for building such an amazing business and one that looks like no other organization out there. As Mark Miller mentioned, our corporate and franchise teams are healthier than ever before, delivering strong growth and profitability. As the product market has improved, franchisees have increasingly leaned into growth. We now have multiple agencies with more than 40 producers and one agency over 50 producers. As we have talked about in the past, the productivity impact of that is not linear. Each time a franchise adds an additional producer, it raises the average productivity per producer, meaning that growth accelerates in excess of the producer count.

Speaker #2: As Mark Miller mentioned, our corporate and franchise teams are healthier than ever before, delivering strong growth and profitability. As the product market has improved, franchisees have increasingly leaned into growth.

Speaker #2: We now have multiple agencies with more than 40 producers, and one agency with over 50 producers. As we've talked about in the past, the productivity impact of that is not linear.

Speaker #2: Each time a franchise adds an additional producer, it raises the average productivity per producer, meaning that growth accelerates in excess of the producer count.

Speaker #2: To give you some context, the number of highly productive agencies during the second quarter—we had approximately 70% more franchises produce over $100,000 of gross new business commissions and agency fees in a month when compared to the prior year.

Mark Jones Jr.: To give you some context, the number of highly productive agencies, during Q2, we had approximately 70% more franchises produce over $100,000 of gross new business commissions and agency fees in a month when compared to the prior year. More and more agencies are hitting all-time production highs, and the bar continues to get raised. Our corporate sales team is a key enabler for future franchise growth, as we produce the highest-powered agency owners inside of our corporate team first before launching them into their own franchise. In total, we have over 60 agencies who launch from corporate, representing more than 170 producers inside those franchises. A new development with our highly differentiated corporate sales talent is seeding these producers into an embedded franchise, like our partnership with Planet Home.

Speaker #2: More and more agencies are hitting all-time production highs, and the bar continues to get raised. Our corporate sales team is a key enabler for future franchise growth.

Speaker #2: We produce the highest-powered agency owners inside our corporate team first, before launching them into their own franchises. In total, we have over 60 agencies that have launched from corporate, representing more than 170 producers inside those franchises.

Speaker #2: A new development with our highly differentiated corporate sales talent is seeding these producers into an embedded franchise, like our partnership with Planet Home. We're able to provide embedded agencies that have natural lead flow and access to plug-and-play talent from our corporate sales force. A majority of Planet Home's team consists of former corporate sales agents, and their ramp-up has been faster than any franchise in system history.

Mark Jones Jr.: We are able to provide embedded agencies that have natural lead flow access to plug-and-play talent from our corporate sales force. A majority of Planet Home's team consists of former corporate sales agents, and their ramp-up has been faster than any franchise in system history. Pairing high-quality lead flow with embedded seasoned talent has allowed them to produce at a strong level immediately, placing them near the top 5% of franchises after just six months of production. Fueled by our strategic partnerships, enterprise sales is quickly becoming a more material portion of our business. During Q2, this team generated approximately $3 million in new business commissions and agency fees. In just three years since its inception, enterprise sales is approaching a third the size of our corporate sales team, which we have been operating in an industry-leading fashion for 20-plus years.

Speaker #2: Pairing high-quality lead flow with embedded seasoned talent has allowed them to produce at a strong level immediately, placing them near the top 5% of franchises after just six months of production.

Speaker #2: Fueled by our strategic partnerships, enterprise sales has quickly become a more material portion of our business. During the second quarter, this team generated approximately $3 million in new business commissions and agency fees.

Speaker #2: In just three years since its inception, enterprise sales is approaching a third the size of our corporate sales team, which we've been operating in an industry-leading fashion for over 20 years.

Speaker #2: That growth reflects increasing demand from businesses across the homeownership ecosystem that are looking to improve the client experience while adding recurring, high-quality revenue streams.

Mark Jones Jr.: That growth reflects increasing demand from businesses across the homeownership ecosystem that are looking to improve the client experience while adding recurring, high-quality revenue streams. Goosehead is uniquely positioned to support those partners. We combine national scale with local expertise, access to more than 200 carrier relationships, sophisticated technology, and a service platform built to support clients as their insurance needs evolve over time. We know of no one else that has that combination of capabilities and execution at scale. As our partners continue to grow, we expect enterprise to become an increasingly more meaningful contributor to both revenue growth and profitability. Technology is an important part of enabling that opportunity. Over the last several years, we've built capabilities that broaden how consumers interact with Goosehead.

Speaker #2: Goosehead is uniquely positioned to support those partners. We combine national scale with local expertise, access to more than 200 carrier relationships, sophisticated technology, and a service platform built to support clients as their insurance needs evolve over time.

Speaker #2: We know of no one else that has that combination of capabilities and execution at scale. As our partners continue to grow, we expect enterprise to become an increasingly meaningful contributor to both revenue growth and profitability.

Speaker #2: Technology is an important part of enabling that opportunity. Over the last several years, we've built capabilities that broaden how consumers interact with Goosehead. Our Digital Agent platform allows consumers to shop across multiple carriers through a seamless digital experience, while preserving access to a licensed Goosehead agent whenever advice or expertise adds value.

Mark Jones Jr.: Our digital agent platform allows consumers to shop across multiple carriers through a seamless digital experience while preserving access to a licensed Goosehead agent whenever advice or expertise add value. Today, consumers in Texas can complete the entire shopping and binding process digitally across multiple home and auto carriers. We believe that's an important step forward, not because technology replaces our agents, but because it allows our agents to spend more time where they create the greatest value. Our early results reinforce that view. While we're now generating business entirely through digital interactions, many clients still choose to engage with an agent before completing a purchase. By the time that interaction occurs, the client has already completed the data collection process, creating highly qualified opportunities for our producers and driving productivity.

Speaker #2: Today, consumers in Texas can complete the entire shopping and binding process digitally across multiple home and auto carriers. We believe that's an important step forward—not because technology replaces our agents, but because it allows our agents to spend more time where they create the greatest value.

Speaker #2: Our early results reinforce that view. While we're now generating business entirely through digital interactions, many clients still choose to engage with an agent before completing a purchase.

Speaker #2: By the time that interaction occurs, the client has already completed the data collection process, creating highly qualified opportunities for our producers and driving productivity.

Speaker #2: Enhancing agent productivity, while also driving fully digital interactions, will allow us to break the human capital bottleneck that exists in traditional agent models and accelerate growth.

Mark Jones Jr.: Enhancing agent productivity while also driving fully digital interactions will allow us to break the human capital bottleneck that exists in traditional agent models and accelerate growth. Over time, we believe one of the best ways to measure the success of the digital agent will be growth in new business production per active producer rather than digital adoption alone. That is ultimately the economic outcome we're trying to achieve. We're applying the same philosophy across our broader technology investments. Lilly, our AI voice assistant, now handles approximately 20% of our inbound service calls from start to finish, with performance exceeding 30% during certain periods. Those interactions reduce routine administrative work while allowing our service professionals to focus on situations where experience, judgment, and empathy have the greatest impact on client experience and retention. Technology should improve the overall offering and economics, not simply automate activity.

Speaker #2: Over time, we believe one of the best ways to measure the success of the digital agent will be growth in new business production per active producer, rather than digital adoption alone.

Speaker #2: That is ultimately the economic outcome we're trying to achieve. We're applying the same philosophy across our broader technology investments. Lilly, our AI voice assistant, now handles approximately 20% of our inbound service calls from start to finish, with performance exceeding 30% during certain periods.

Speaker #2: Those interactions reduce routine administrative work, while allowing our service professionals to focus on situations where experience, judgment, and empathy have the greatest impact on client experience and retention.

Speaker #2: Technology should improve the overall offering and economics, not simply automate activity. Where automation enhances the client experience, increases producer productivity, or improves retention, we will continue to invest aggressively.

Mark Jones Jr.: Where automation enhances the client experience, increases producer productivity, or improves retention, we will continue to invest aggressively. When it doesn't, we won't. That discipline will remain central to how we allocate capital. We've made amazing progress over the last several years across every area of our business. I look forward to keeping you updated on our progress as we continue to march towards industry leadership. Again, I am grateful, honored, and humbled to have the opportunity to lead this organization to the next phase in our journey. I would like to extend a heartfelt thank you to our teammates, franchisees, carrier partners, board members, and our shareholders for their support. I'll turn it over to John Martin, our Chief Financial Officer, to discuss the quarter's results and outlook for the rest of the year.

Speaker #2: When it doesn't, we won't. That discipline will remain central to how we allocate capital. We've made amazing progress over the last several years across every area of our business, and I look forward to keeping you updated on our progress as we continue to march towards industry leadership.

Speaker #2: Again, I am grateful, honored, and humbled to have the opportunity to lead this organization into the next phase of our journey. I would like to extend a heartfelt thank you to our teammates, franchisees, carrier partners, board members, and our shareholders for their support.

Speaker #2: I'll turn it over to John Martin, our Chief Financial Officer, to discuss the quarter's results and outlook for the rest of the year.

Speaker #3: Thank you, Mark. Good afternoon, everyone. It's a pleasure to speak with you today for the first time as Goosehead's CFO. I've enjoyed meeting many of you in the second quarter, and I look forward to engaging with more of you in the months ahead.

John Martin: Thank you, Mark. Good afternoon, everyone. It's a pleasure to speak with you today for the first time as Goosehead's CFO. I've enjoyed meeting many of you in Q2, and I look forward to engaging with more of you in the months ahead. Before we dive into the numbers, I'd like to take a step back and briefly share my perspective from these first few months on the executive team. I've had the opportunity to dig in and pressure test what really makes our company different, and what's especially clear to me is the business is stronger and the opportunity is larger than I initially appreciated from the outside. At the core of Goosehead's success are a number of foundational competitive advantages, beginning with talent. The belief that people represent our greatest asset has been central to our ethos from the beginning.

Speaker #3: Before we dive into the numbers, I'd like to take a step back and briefly share my perspective from these first few months on the executive team.

Speaker #3: I've had the opportunity to dig in and pressure-test what really makes our company different, and what's especially clear to me is that the business is stronger and the opportunity is larger than I initially appreciated from the outside.

Speaker #3: At the core of Goosehead's success are a number of foundational competitive advantages, beginning with talent. The belief that people represent our greatest asset has been central to our ethos from the beginning.

Speaker #3: This is clearly reflected in the quality of our team, who show up eager to win in the market every single day. Across sales, service, technology, and more, our differentiated human capital foundation has no peer.

John Martin: This is clearly reflected in the quality of our team, who show up eager to win in the market every single day. Across sales, service, technology, and more, our differentiated human capital foundation has no peer. Goosehead's integrated technology, proprietary data, carrier relationships, product breadth, and nationwide distribution enable a flywheel at scale that is incredibly difficult to replicate. With the client at the center of every decision, Goosehead leverages this scale to reinvest in what matters most, improving the client experience, reducing complexity, and providing greater choice across products and transactional modalities. Goosehead has always led with the home, not in spite of its difficulty, but because of it. This uncompromising focus has allowed our business to become the authority for clients and an essential partner for carriers. Within a massive, essential, and fragmented market, we have a proven history of capturing significantly outsized share.

Speaker #3: Goosehead's integrated technology, proprietary data, carrier relationships, product breadth, and nationwide distribution enable a flywheel at scale that is incredibly difficult to replicate. With the client at the center of every decision, Goosehead leverages this scale to reinvest in what matters most: improving the client experience, reducing complexity, and providing greater choice across products and transactional modalities.

Speaker #3: Goosehead has always led with the home—not in spite of its difficulty, but because of it. This uncompromising focus has allowed our business to become the authority for clients and an essential partner for carriers.

Speaker #3: Within a massive, essential, and fragmented market, we have a proven history of capturing significantly outsized share. Our competitive positioning, long-term approach, and consistent execution have together created a Rule of 50 financial profile that grows stronger year after year.

John Martin: Our competitive positioning, long-term approach, and consistent execution have together created a rule of 50 financial profile that grows stronger year after year. Goosehead's unique value proposition and recurring revenue model deliver sustainable growth, attractive margins, and natural operating leverage with scale. This is the hallmark of a true compounder. Companies of this quality are extraordinarily uncommon, and the results speak for themselves. Since the 2018 IPO, revenue and EBITDA have increased more than sevenfold organically. While these figures are helpful in setting context, what's most important is the number our entire organization is focused on, 99%. With less than 1% market share today, more than 99% of our addressable market remains in front of us. This is what we wake up every day thinking about, and it couldn't be a more exciting time to be here.

Speaker #3: Goosehead's unique value proposition and recurring revenue model deliver sustainable growth, attractive margins, and natural operating leverage with scale. This is the hallmark of a true compounder.

Speaker #3: Companies of this quality are extraordinarily uncommon, and the results speak for themselves. Since the 2018 IPO, revenue and EBITDA have increased more than sevenfold organically.

Speaker #3: And while these figures are helpful in setting context, what's most important is the number our entire organization is focused on—99%. With less than 1% market share today, more than 99% of our addressable market remains in front of us.

Speaker #3: This is what we wake up every day thinking about, and it couldn't be a more exciting time to be here. And with that, let's turn to our financial results for the second quarter.

John Martin: With that, let's turn to our financial results for Q2. Total written premiums grew 14% year over year to $1.3 billion, accelerating from 13% growth in Q1. Policies in force grew 15% year over year to 2.1 million, accelerating from 14% growth in Q1. Total revenues grew 21% year over year to $113.4 million, and core revenues grew 10% year over year to $95.6 million. Strong new business generation, improving client retention, and meaningful contingent commissions all contributed to our robust top-line performance. As a reminder, in Q2 2025, we recovered $4 million related to previously unpaid renewal commissions and loyalty fees from a carrier partner. Adjusting for this amount in 2025, total revenues grew 26% year over year, and core revenues grew 16% year over year. New business commissions grew 27% year over year to $9.6 million.

Speaker #3: Total written premiums grew 14% year over year to $1.3 billion, accelerating from 13% growth in the first quarter. Policies in force grew 15% year over year to 2.1 million.

Speaker #3: Accelerating from 14% growth in the first quarter, total revenues grew 21% year over year to $113.4 million, and core revenues grew 10% year over year to $95.6 million.

Speaker #3: Strong new business generation, improved client retention, and meaningful contingent commissions all contributed to our robust top-line performance. As a reminder, in the second quarter of 2025, we recovered $4 million related to previously unpaid renewal commissions and royalty fees from a carrier partner.

Speaker #3: Adjusting for this amount in 2025, total revenues grew 26% year over year and core revenues grew 16% year over year. New business commissions grew 27% year over year to $9.6 million.

Speaker #3: We have now delivered consecutive quarters of over 20% growth in new business commissions for the first time since 2021. Improvements to agent management infrastructure, a healthier product market, geographic expansion, and enterprise sales and partnership efforts together drove this strength in new business commissions.

John Martin: We have now delivered consecutive quarters of over 20% growth in new business commissions for the first time since 2021. Improvements to agent management infrastructure, a healthier product market, geographic expansion, and enterprise sales and partnership efforts together drove the strength in new business commissions. Enterprise sales continues to scale rapidly and represented 21% of total new business commissions and agency fees in Q2. New business royalties grew 20% year-over-year to $9.4 million. This was the fastest pace of growth in the last six quarters, supported by increases in both producers and producer productivity. Franchise producers grew 5% year-over-year and 2% sequentially to 2,190 producers. We're encouraged to see continued momentum here with producer hires increasing 30% year-over-year.

Speaker #3: Enterprise sales continue to scale rapidly and represented 21% of total new business commissions and agency fees in the quarter. New business royalties grew 20% year over year to $9.4 million.

Speaker #3: This was the fastest pace of growth in the last six quarters, supported by increases in both producers and producer productivity. Franchise producers grew 5% year over year and 2% sequentially to 2,190 producers.

Speaker #3: We're encouraged to see continued momentum here, with producer hires increasing 30% year-over-year. As our franchisees continue to scale their producer forces, lean into best practices, and benefit from a healthy product environment, they are reaching impressive new levels of success.

John Martin: As our franchisees continue to scale their producer forces, lean into best practices, and benefit from a healthy product environment, they are reaching impressive new levels of success. Client retention increased sequentially, as expected, from 85% to 86%, driven by strategic client experience initiatives and a more stable year-over-year pricing environment. Ancillary revenues, largely comprised of contingent commissions, grew 180% year-over-year to $16.3 million. Improved underwriting loss ratios, favorable carrier mix dynamics, and initiatives to optimize carrier relationships all contributed to the increase in contingent commission revenues in Q2. Adjusted EBITDA grew 30% year-over-year to $37.9 million, representing a 33% adjusted EBITDA margin. During Q2, we generated $15.9 million in operating cash flow and repurchased 95,000 Class A shares for a total of $3.9 million.

Speaker #3: Client retention increased sequentially, as expected, from 85% to 86%, driven by strategic client experience initiatives and a more stable year-over-year pricing environment. Ancillary revenues, largely comprised of contingent commissions, grew 180% year-over-year to $16.3 million.

Speaker #3: Improved underwriting loss ratios, favorable carrier mix dynamics, and initiatives to optimize carrier relationships all contributed to the increase in contingent commission revenues in the quarter.

Speaker #3: Adjusted EBITDA grew 30% year over year to $37.9 million, representing a 33% adjusted EBITDA margin. During the second quarter, we generated $15.9 million in operating cash flow and repurchased 95,000 Class A shares for a total of $3.9 million.

Speaker #3: On a year-to-date basis, we generated $38.8 million in operating cash flow and repurchased over 1 million Class A shares for a total of $53.7 million.

John Martin: On a year-to-date basis, we generated $38.8 million in operating cash flow and repurchased over one million Class A shares for a total of $53.7 million. We now have fewer Class A shares outstanding than we did at the time of our IPO, and we will continue to be opportunistic with the $144.6 million remaining on our existing share repurchase authorization. We continue to believe the price of our stock is meaningfully dislocated from the value of our business. Recent filings reflect that conviction, showing that Mark Jones, Jr., Mark Miller, our General Counsel, Martin Thornthwaite, and I all purchased shares in the open market during Q2. We ended Q2 with $23.7 million of cash and cash equivalents and $323 million of total debt outstanding. Turning now to the balance of the year. We are increasing our revenue outlook for the full year 2026.

Speaker #3: We now have fewer Class A shares outstanding than we did at the time of our IPO, and we will continue to be opportunistic with the $144.6 million remaining on our existing share repurchase authorization.

Speaker #3: We continue to believe the price of our stock is meaningfully dislocated from the value of our business. Recent filings reflect that conviction, showing that Mark Jones, Jr., Mark Miller, our general counsel Martin Thornthwaite, and I all purchased shares in the open market during the quarter.

Speaker #3: We ended the quarter with $23.7 million of cash and cash equivalents and $323 million of total debt outstanding. Turning now to the balance of the year.

Speaker #3: We are increasing our revenue outlook for the full year 2026. We now expect total revenues to grow organically in a range of 12% to 19% year over year.

John Martin: We now expect total revenues to grow organically in a range of 12% to 19% year-over-year. This increase to the bottom end of our revenue range reflects a more favorable outlook around contingent commissions, which are currently tracking to outperform our prior expectations. We're encouraged by the 12% year-over-year growth in core revenue we delivered in H1, and we continue to expect a H2 acceleration from these levels, given the upward trajectory of client retention and strong new business generation. Finally, we continue to expect total written premiums to grow organically in the range of 12% to 20% year-over-year. I'd like to close by emphasizing how thrilled I am to be part of such an exceptional team and such an extraordinary business. Our unique positioning provides a strong foundation for continued share gains and compounding growth far into the future.

Speaker #3: This increase to the bottom end of our revenue range reflects a more favorable outlook around contingent commissions, which are currently tracking to outperform our prior expectations.

Speaker #3: We are encouraged by the 12% year-over-year growth in core revenue we delivered in the first half, and we continue to expect a second-half acceleration from these levels given the upward trajectory of client retention and strong new business generation.

Speaker #3: Finally, we continue to expect total written premiums to grow organically in a range of 12% to 20% year over year. I'd like to close by emphasizing how thrilled I am to be part of such an exceptional team and such an extraordinary business.

Speaker #3: Our unique positioning provides a strong foundation for continued share gains and compounding growth far into the future. Though Goosehead has come a long way, it truly feels like we're just getting started, and it's such an exciting time to be here.

John Martin: Though Goosehead has come a long way, it truly feels like we're just getting started, and it's such an exciting time to be here. Thank you to our teammates, partners, and franchisees for the hard work you do to make all of this possible. Thank you to everyone joining us today for your continued support of Goosehead. With that, we'll conclude our prepared remarks. For today's Q&A session, our Co-Founder and Chairman, Mark Jones, will be joining us. Let's go ahead and open the line for questions. Operator?

Speaker #3: Thank you to our teammates, partners, and franchisees for the hard work you do to make all of this possible. And thank you to everyone joining us today for your continued support of Goosehead.

Speaker #3: With that, we'll conclude our prepared remarks. For today's Q&A session, our co-founder and chairman, Mark Jones, will be joining us. Let's go ahead and open the line for questions.

Speaker #3: Operator?

Speaker #1: Thank you. As a reminder, if you would like to ask a question, please press *11 on your telephone. You'll hear the automated message advising your hand is raised.

Operator: Thank you. As a reminder, if you would like to ask a question, please press * one one on your telephone. You'll hear the automated message advising your hand is raised. We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question of the day will be coming from the line of Tommy McJoynt of KBW. Your line is open.

Speaker #1: We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster.

Speaker #1: Our first question of the day will be coming from the line of Tommy McDroint of KBW. Your line is open.

Speaker #4: Hey, good evening. Thanks for taking my questions, and congrats, Mark and Mark, as well. My first question is actually just around the trajectory of margins.

Tommy McJoynt: Hey, good evening. Thanks for taking my questions. Congrats, Mark and Mark as well. My first question is actually just around the trajectory of margins. Obviously, a very strong margin report in the Q2, and part of that was benefiting from the high contingents number. Can you go through your expectations, maybe on a full year basis for how you think about margins on ex contingent basis, how you see those trending? Thanks.

Speaker #4: Obviously, a very strong margin report in the second quarter, and part of that was benefiting from the high contingent number. So, can you go through your expectations, maybe on a full-year basis, for how you think about margins on a contingent basis?

Speaker #4: How do you see those trending? Thanks.

Speaker #5: Sure thing. Hey, it's John here. So there's no change on an underlying basis. With respect to how we're thinking about expenses for the year, ultimately, from a planning perspective, we look at our expenses largely on a revenue ex-contingent basis, and previously we've mentioned that we expect moderate compression this year, driven by the growth investments that we're making. Our guidance around expenses thus remains unchanged.

John Martin: Sure thing. Hey, it's John here. There's no change on an underlying basis with respect to how we're thinking about expenses for the year. Ultimately, from a planning perspective, we look at our expenses largely on a revenue ex contingent basis. Previously, we've mentioned that we expect moderate compression this year driven by the growth investments that we're making. Our guidance around expenses thus remains unchanged. We've also commented that we expect comp and G&A to grow in the high teens to low 20% for the year, which will likely be in excess of core revenue growth, just given the current investment cycle.

Speaker #5: We've also commented that we expect comp and G&A to grow in the high teens to low 20% range for the year, which will likely be in excess of core revenue growth, just given the current investment.

Speaker #4: Got it. Thanks for that. And then, switching over, there have been some well-publicized changes regarding the comp and benefits at the largest captive insurer in the space, one of your competitors.

Tommy McJoynt: Got it. Thanks for that. Switching over, there have been some well-publicized changes regarding the comp and benefits at the largest captive insurer in the space, one of your competitors. Have you seen any notable uptick in interest from captive agents in Goosehead opportunity just over the last few weeks or months? Does seeing those changes in the market from a competitor impact at all your go-to-market strategy around recruiting, compensation, or anything?

Speaker #4: Have you seen any notable uptick in interest from captive agents in the Goosehead opportunity, just over the last few weeks or months? And then, does seeing those changes in the market from a competitor impact at all your go-to-market strategy around recruiting, compensation, or anything?

Mark Jones Jr.: Hey, Tommy. This is Mark Jones, Jr. Yeah, it's a pretty interesting development. What we're seeing is a lot of our franchisees and producers have contacts across the entire insurance landscape. I think what you're going to end up seeing is a lot of free agents on the field who don't necessarily feel like they're being treated the right way. Ultimately, I think that could potentially be a tailwind for our producer recruiting. It's not changing the way we think about our go-to-market strategy. We're going to continue to invest in things like the Digital Agent to drive digital conversions, but that's also a tool that's going to help arm our existing agent force with productivity enhancements, help them get through their entire funnel more quickly. Ultimately, we believe we have a model that's going to win in the marketplace over the long term.

Speaker #5: Hey, Tommy. This is Mark Jones, Jr. Yeah, it's a pretty interesting development. I mean, what we're seeing is a lot of our franchisees and producers have contacts across the entire insurance landscape.

Speaker #5: And so I think what you're going to end up seeing is a lot of free agents on the field who don't necessarily feel like they're being treated the right way.

Speaker #5: So ultimately, I think that could potentially be a tailwind for our producer recruiting. It's not changing the way we think about our go-to-market strategy.

Speaker #5: We're going to continue to invest in things like the digital agent to drive digital conversions, but that's also a tool that's going to help arm our existing agent force with productivity enhancements—help them get through their entire funnel more quickly.

Speaker #5: Ultimately, we believe we have a model that's going to win in the marketplace over the long term.

Speaker #4: Thanks.

Tommy McJoynt: Thanks.

Speaker #1: Thank you. One moment for the next question, please. Our next question is coming from the line of Andrew Anderson of Jefferies. Please go ahead.

Operator: Thank you. One moment for the next question, please. Our next question is coming from the line of Andrew Andersen of Jefferies. Please go ahead.

Speaker #6: Hey, good afternoon, and congrats to both. Productivity improved pretty significantly for both the newer and tenured franchise operators. Could you maybe just elaborate a bit on what's driving that step up, and how durable you think that is?

Andrew Andersen: Hey, good afternoon, and congrats to you two both. Productivity improved pretty significantly for both the newer and tenured franchise operators. Could you maybe just elaborate a bit on what's driving that step up and how durable you think that is? I imagine there was a good chunk of it related to the agency staffing program and the agency side, agency size, but hopefully you could just expand a bit more on that productivity gain.

Speaker #6: I imagine there was a good chunk of it related to the agency staffing program and the agency side, but with agency size. But hopefully, you could just expand a bit more on that productivity gain.

Speaker #5: Yeah, we're seeing really positive things with our franchisees. They continue to lean into the growth message and hire new producers, as well as adopt best practices.

Mark Jones Jr.: Yeah, we're seeing really positive things with our franchisees continue to lean into the growth message and hire new producers as well as adopt best practices. We're also getting a tailwind from the product market being considerably more open than it was in the previous couple of years. Ultimately, what we've been trying to do for the last multiple years is continue to grow really high quality franchises inside our corporate sales teams first, then launch them into that community. You can see the impact of that in that less than 1 year franchise count. There's approximately 30-ish franchises that we've launched out of corporate that are included in that. You can see that's driving a 70% productivity improvement in that tenure band. Our more tenured agencies are continuing to hire. The same store sales stats for this quarter are pretty awesome.

Speaker #5: And we're also getting a tailwind from the product market being considerably more open than it was in the previous couple of years. But ultimately, what we've been trying to do for the last multiple years is continue to grow really high-quality franchises inside our corporate sales team first, and then launch them into that community.

Speaker #5: You can see the impact of that in that less-than-one-year franchise count. There are approximately 30-ish franchises that we've launched out of corporate that are included in that.

Speaker #5: If you look at what's driving a 70% productivity improvement in that ten-year band, and that our more tenured agencies are continuing to hire, the same-store sales stats for this quarter are pretty awesome.

Speaker #5: So, in aggregate, same store sales are up 22% for this quarter. And at the top end of the franchise community—the top 50—same store sales was over 40%.

Mark Jones Jr.: In aggregate, same store sales is up 22% for this quarter. The top end of the franchise community, the top 50, same store sales was over 40%. They're really leaning into the message. They're onboarding new producers, we think we can continue to grow the franchise unit productivity for the foreseeable future.

Speaker #5: So they're really leaning into the message. They're onboarding new producers and we think we can continue to grow the franchise unit productivity. For the foreseeable future.

Speaker #6: Thanks. You had mentioned that your next chapter is focused on speed of execution and simplification. Which parts of the business do you think you can move materially faster here?

Andrew Andersen: Thanks. You had mentioned your next chapter focused on speed of execution and simplification. What parts of the business do you think you can move materially faster here? Is that on product development, technology, more partnerships, kind of all of the above?

Speaker #6: Is that on product development, technology, more partnerships—kind of all of the above?

Speaker #5: Yeah, I mean, it's really all of the above. We've done a lot of foundational work in the last few years, and massive credit to Mark Miller for the amount of work that he's done in getting this business in a really stable position with a strong foundation.

Mark Jones Jr.: Yeah. It's really all of the above. We've done a lot of foundational work in the last few years, massive credit to Mark Miller for the amount of work that he's done in getting this business in a really stable position with a strong foundation. Now we need to look for opportunities to reduce complexity wherever we can. As the product market had constricted over several years, we had to onboard a tremendous amount of new underwriters, I don't necessarily think having 300 underwriters on the platform is ideally the right amount. We've reduced some complexity there. We're going to continue to do that. On the service side, that has had massive complexity increase over the last several years, just with the changes in the product environment and underwriter capacity. That's beginning to alleviate.

Speaker #5: And now we need to look for opportunities to reduce complexity wherever we can. As the product market has constricted over several years, we had to onboard a tremendous amount of new underwriters, and I don't necessarily think having 300 underwriters on the platform is ideally the right amount.

Speaker #5: So, we've reduced some complexity there. We're going to continue to do that. On the service side, there has been a massive increase in complexity over the last several years, just with the changes in the product environment and underwriter capacity.

Speaker #5: That's beginning to alleviate. That's an area where we can use technology to automate everything that should be automated, not necessarily everything that could be automated.

Mark Jones Jr.: That's an area where we can use technology to automate everything that should be automated, not necessarily everything that could be automated. We still really believe in the role of the human service agent. We're going to continue to expand that. Some of the nitty-gritty stuff in the back office that I don't think the industry fully comprehends. Things like how do you get an agent licensed and onboarded nationally for something like our enterprise sales team in a really scalable fashion? It's actually a pretty complex challenge to cover because you've got 50 different state regulators, you get a whole bunch of different licensing exams, and every carrier has different requirements for licensing or appointing in their state. We're making a ton of progress on that front, and we're going to continue to look for opportunities to speed up everywhere in the business.

Speaker #5: We still really believe in the role of the human service agent. We're going to continue to expand that. And then some of the nitty-gritty stuff in the back office that I don't think the industry fully comprehends—things like how do you get an agent licensed and onboarded nationally for something like our enterprise sales team in a really scalable fashion.

Speaker #5: It's actually a pretty complex challenge to cover, because you've got 50 different state regulators, you get a whole bunch of different licensing exams, and every carrier has different requirements for licensing and their appointing in their state.

Speaker #5: So we're making a ton of progress on that front, and we're going to continue to look for opportunities to speed up everywhere in the business.

Speaker #6: Thank you.

Andrew Andersen: Thank you.

Speaker #1: Thank you. One moment for the next question. Our next question is coming from the line of Paul Newsom of Piper Sandler. Please go ahead.

Operator: Thank you. One moment for the next question. Our next question is coming from the line of Paul Newsome of Piper Sandler. Please go ahead.

Speaker #7: Good morning. Congratulations, Mark, on the changes. I was hoping you could talk a little bit and provide additional color on the contingent commissions and the sustainability thereof.

Paul Newsome: Good morning. Congratulations, Mark, on the changes. Was hoping you could talk a little bit about additional color on the contingent commissions, and the sustainability thereof. Seems to be the, at least in my mind, the biggest happy surprise. Anything in there that would be deemed kind of unusual or anything that we should think of from that perspective?

Speaker #7: It seems to be that the solution in my model, the biggest happy surprise. And anything in there that would be deemed kind of unusual or anything that we should think of from that perspective?

Speaker #5: Hey, so just on contingent commissions, our nothing's changed structurally. With respect to how we're approaching recognition or anything like that, as I mentioned, in the prepared remarks, there's really three main drivers of favorability this year.

John Martin: Hey, just on contingent commissions, nothing's changed structurally with respect to how we're approaching recognition or anything like that. As I mentioned in the prepared remarks, there's really three main drivers of favorability this year. One, growth in the new business we're driving. Two, profitability of the business. Three, more favorably negotiated contracts. All three of these have us tracking a bit higher than we initially anticipated. As you know, contingents can have a relatively wide range of outcomes depending on where the business flows and models shake out throughout the year. Our updated guidance reflects confidence in where we're going to land this year.

Speaker #5: So one, growth in the new business we're driving. Two, profitability of the business. And three, more favorably negotiated contracts. But all three of these have us tracking a bit higher than we initially anticipated.

Speaker #5: And as you know, contingents can have a relatively wide range of outcomes depending on where business closes, business flows, and losses shake out throughout the year.

Speaker #5: But our updated guidance reflects confidence in where we're going to land this year.

Speaker #7: Is there anything today that would change the cadence of new production relative to new agents that we've seen in the past, or should we generally think that the new agent force should have about the same impact prospectively over the next twelve months that we would have expected a year ago, or something like that?

Paul Newsome: Is there anything today that would change the cadence of new production relative to new agents that we've seen in the past? Or should we genuinely think that the new agent forces should have about the same impact prospectively over the next 12 months that we would've a year ago or something like that?

Speaker #5: Yeah, I think agent ramp-up is going to look similar to how it has looked in the past. We've invested a ton in training tools and management infrastructure.

Mark Jones Jr.: Yeah, I think agent ramp-up is going to look similar to how it has looked in the past. We've invested a ton in training tools and management infrastructure, we should get incrementally better in ramping up new agents. We've also, on the corporate side, I think we talked about this in previous calls, as we've expanded that pipeline of new agents that we're onboarding from more so like 90% college hires to now more of an even split between experienced hires and college hires. That's been pretty impactful for agent ramp-up. Just get somebody that's got a little bit more experience underneath them has been incrementally positive. We've got a good onboarding class coming during the summer. We feel great about the position of our sales channels.

Speaker #5: So we should get incrementally better at wrapping up new agents. And we've also, on the corporate side—I think we talked about this in previous calls—as we've expanded that pipeline of new agents that we're onboarding from more like 90% college hires to now more of an even split between experienced hires and college hires.

Speaker #5: That's been pretty impactful for agent ramp-up. Just getting somebody that's got a little bit more experience underneath them has been incrementally positive. We've got a good onboarding class coming during the summer.

Speaker #5: We feel great about the position of our sales channels.

Speaker #7: And we're more spread out than they typically have. So then you have more market opportunity also. I think that's one of the biggest things, just that the aperture of opportunity has opened up for us as well.

John Martin: They're more spread out than they typically have, then you have more market opportunity, Paul. I think that's one of the biggest things is just the aperture of opportunity has opened up for us as well.

Speaker #7: Great. Thanks, folks. Appreciate the help.

Paul Newsome: Great. Thanks, folks. Appreciate the help.

Speaker #1: Thank you. One moment, please. Our next question will be coming from the line of Brian Meredith of UBS. Please go ahead.

Operator: Thank you. One moment, please. Our next question will be coming from the line of Brian Meredith of UBS. Please go ahead.

Speaker #3: Yeah, thanks. Just a couple of quick questions here for you. First, just on comp and benefits—I guess it looks like there's going to be a pretty big ramp-up in the second half of the year.

Brian Meredith: Yeah, thanks. Just a couple of quick questions here for you. First, just on comp and benefits. I guess, looks like there's going to be a pretty big ramp-up H2. Is that all just coming from the new hires you have coming in? Should that ultimately kind of lead to additional sales?

Speaker #3: Is that all just coming from the new hires you have coming in? And should that ultimately kind of lead to additional sales?

Speaker #5: Yeah, it's a couple of things, Brian. It's new sales talent coming in the door. It's continued investment in our technology teams, which is really differentiated talent.

Mark Jones Jr.: Yeah. It's a couple of things, Brian. It's new sales talent coming in the door. It's continued investment in our technology teams, which is really differentiated talent, I think, in the industry. As well as continued investments in our service function to keep driving client satisfaction and move client retention up as fast as possible. You're going to see some of that end up reflected in new business production, but not all of that compensation increase is going to go directly towards current day new business. It's more platform stability and scalability.

Speaker #5: I think in the industry, as well as continued investments in our service function, we aim to keep driving client satisfaction and move client retention up as fast as possible.

Speaker #5: So, you're going to see some of that end up reflected in new business production, but not all of that compensation increase is going to go directly towards current-day new business.

Speaker #5: It's about more platform stability and scalability.

Speaker #3: All right, so that's helpful, thanks. And then I saw a little bit of a tick up in customer retention rates. Do you expect that to continue here?

Brian Meredith: That's helpful. Thanks. I saw you had a little bit of a tick-up in customer retention rates. Do you expect that to continue here?

Speaker #5: Yeah, I mean, we're pretty pleased with the trajectory. Client retention—we were pretty confident it was going to tick up to 86% during the year.

Mark Jones Jr.: Yeah. We are pretty pleased with the trajectory of client retention. We were pretty confident it was going to tick up to 86% during the year. We saw that it is continuing to improve. Obviously, we are not going to promise any specific timeline for when you are going to see the next clip up. We have put some of our sharpest human capital against client retention just to make sure we continue to see that forward progress. Obviously, the improved product market is super helpful, we are not just sitting on our heels waiting for the market to heal itself. We are being pretty aggressive with investments in this area.

Speaker #5: We saw that it's continuing to improve. Obviously, we're not going to promise any specific timelines for when you're going to see the next pickup, but we've put some of our sharpest human capital against client retention just to make sure we continue to see that forward progress.

Speaker #5: Obviously, the improved product market is super helpful, but we're not just sitting on our heels waiting for the market to heal itself. We're being pretty aggressive with investments in this area.

Speaker #3: Gotcha. That's helpful. And then, I guess last question—just curious, on commission rates. Are you seeing any tick up there yet?

Brian Meredith: Got you. It is helpful. I guess last question, just curious, commission rates, base commission rates, seeing any tick up there yet?

Speaker #5: Yeah, aggregate commission rate—it has improved. So, it improved in Q1 over the fourth quarter. It improved again in Q2 over the first quarter, which is a combination of multiple factors.

Mark Jones Jr.: Yeah. Aggregate commission rate has improved. It improved in Q1 over Q4. It began in Q2 over Q1, which is a combination of multiple factors. One first being just business mix, less of it going to your state-mandated plans, less of it going to E&S, and more of it going towards the traditional admitted markets. Also, as carriers have gotten into a really healthy position now, they are looking for ways to incentivize growth. I think we have talked about in the past.

Speaker #5: First, it's just business mix—so less of it going to your statement plans, less of it going to E&S, and more of it going towards the traditional admitted markets.

Speaker #5: But also, as carriers have gotten into a really healthy position now, they're looking for ways to incentivize growth. And I think we've talked about, in the past, we look at those negotiations holistically, right?

Brian Meredith: Yeah

Mark Jones Jr.: We look at those negotiations holistically, right? Like, how do we drive the most efficient service interactions? How do we get the most efficient technology interactions? Also, how do we make sure we've got appropriate market compensation for the business we're delivering?

Speaker #5: How do we drive the most efficient service interactions? How do we get the most efficient technology interactions? And also, how do we make sure we've got appropriate market compensation for the business we're delivering?

Speaker #3: Makes sense. Thank you.

Brian Meredith: Makes sense. Thank you.

Speaker #1: Thank you. One moment, please, for the next question. And the next question is coming from the line of Charlie Letter. Please go ahead.

Operator: Thank you. One moment please for the next question. The next question is coming from the line of Charlie Lederer of BMO Capital Markets. Please go ahead.

Speaker #6: Hey, thanks. Maybe just on the digital agent—you had previously said you anticipate that being a contributor in the second half of '26. Do you still expect that to be the case?

Charlie Lederer: Hey, thanks. Maybe just on the Digital Agent. You had previously said you anticipate that being a contributor in H2 2026. Do you still expect that to be the case? Do you have plans this year to expand that outside of Texas? Then you also mentioned that new business proactive producer KPI. Do you have any stats around how that's run? Yeah, I'll leave it there. Thanks.

Speaker #6: Do you have plans this year to expand that outside of Texas? And then you also mentioned that new business proactive producer KPI. Do you have any stats around how that's run? And yeah, I'll leave it there.

Speaker #6: Thanks.

Speaker #5: Hey, Charlie. Thanks for the question. Yeah, so we were really pleased to be able to deliver this version one of the platform slightly ahead of our anticipated schedule.

Mark Jones Jr.: Hey, Charlie. Thanks for the question. Yeah, we were really pleased to be able to deliver this version one of the platform slightly ahead of our anticipated schedule. Our tech team has done a really amazing job putting something in market that has never really existed before. The ability for a client to interact in a fully digital world in a choice model has not existed in the US, super excited to have delivered that in the H1 of this year. In the H2 of this year, the focus is on optimizing the Texas conversion funnel. Like we talked about in prepared remarks, we've got fully digital transactions going through. We've also got plenty of people that are getting even all the way down to the buy screen and then kicking out because they want to talk to an agent.

Speaker #5: So our tech team has done a really amazing job putting something in the market that has never really existed before. The ability for a client to interact in a fully digital world in a choice model has not existed in the U.S.

Speaker #5: So, super excited to have delivered that in the first half of this year. In the second half of this year, the focus is on optimizing the Texas conversion funnel.

Speaker #5: So, like we talked about and prepared in March, we've got fully digital transactions going through. We've also got plenty of people that are getting even all the way down to the buy screen and then kicking out because they want to talk to an agent.

Speaker #5: Our agent network is a massive competitive moat for us, one that I don't believe exists elsewhere in the market. But we'll keep investing in Texas, optimizing the conversion funnel, and then rolling it out to additional states.

Mark Jones Jr.: Our agent network is a massive competitive moat for us, one that I don't believe exists elsewhere in the market. We'll keep investing in Texas, optimizing the conversion funnel, and then rolling it out to additional states subsequent to that. As well as increasing functionality, adding and improving the user interface, making it more chat-like, so it feels more like you're talking to a normal human agent. We just want to make sure we're providing a couple of things: our agents with leading technology, our carrier partners with highly profitable business that matches what their risk appetite is, and our clients with a tremendous experience.

Speaker #5: Subsequent to that, as well as increasing functionality and adding and improving the user interface—making it more chat-like—so it feels more like you're talking to a normal human agent. But we just want to make sure we're providing a couple of things.

Speaker #5: Our agents with leading technology, our carrier partners with highly profitable business that matches what the risk appetite is, and our clients with a tremendous experience.

Speaker #6: That's helpful, thanks. And maybe just on the pricing environment and your geographic mix, can you update us on how you're thinking about premium per policy trends from here?

Charlie Lederer: That's helpful, thanks. Maybe just on the pricing environment and your geographic mix, can you update us on how you're thinking about premium per policy trends from here? It looks like it decelerated a little bit in the quarter. Thanks.

Speaker #6: It looked like it decelerated a little bit in the quarter. Thanks.

Speaker #5: Yeah, it's in line with our expectations. We planned to see the kind of stability in the pricing market that we're seeing right now. I mean, we anticipated moderate pricing declines in most geographies.

Mark Jones Jr.: Yeah, it's in line with our expectations. We plan to see the kind of stability in the pricing market that we're seeing right now. We anticipated moderate pricing declines in most geographies. You're seeing that in the PIF growth rates versus premium growth rates. Historically, those have been considerably different given the pricing environment, and now they look a lot more similar. That's not driving any kind of negative impact on our business. We expected that to happen. It's contemplated in our guidance. We prefer a product market that's considerably more stable. It just makes everything else work more efficiently in our business.

Speaker #5: You're seeing that in the PIF growth rates versus premium growth rates. Historically, those have been considerably different given the pricing environment, and now they look a lot more similar.

Speaker #5: But that's not driving any kind of negative impact in our business. We expected that to happen; it's contemplated in our guidance. We prefer a product market that's considerably more stable—it just makes everything else work more efficiently in our business.

Speaker #6: Thank you.

Charlie Lederer: Thank you.

Speaker #1: Thank you. One moment for the next question. Our next question will be coming from the line of Andrew Copen of TD Collins. Please go ahead.

Operator: Thank you. One moment for the next question. Our next question will be coming from the line of Andrew Kligerman of TD Cowen. Please go ahead.

Andrew Kligerman: Hey, good evening, and congratulations to both Marks. I want to follow up just quickly on Charlie's question just now. Could you clarify or kind of define what you meant by moderate in terms of pricing decline, and then maybe separately home versus auto, those two pieces?

Speaker #7: Hey, good evening, and congratulations to both Mark. I want to follow up just quickly on Charlie's question just now. Could you clarify or kind of define what you meant by 'moderate' in terms of pricing decline?

Speaker #7: And then maybe separately, home versus auto—those two pieces.

Speaker #5: Yeah, sure, Andrew. So in auto, what you're seeing is more like mid-single-digit pricing decline, and obviously that's geography-dependent. There are places where that's not necessarily going to be the norm.

Mark Jones Jr.: Sure, Andrew. In auto, what you're seeing is more like mid-single digits pricing decline, and obviously that's geography dependent. There's places where that's not necessarily going to be the norm. If you look kind of nationwide, you should expect something like mid-single digits pricing decline. Home has been much more durable. It's looking more flat, and in some geographies still up low single digits. The new business trends, I think, have been interesting. The pricing on new business has not been as impactful as it has been on the renewal book, so the pricing decline on renewal has been larger than the pricing impact on new business. We're actually still continuing to see higher pricing on new policies that we're writing. Auto market, mid-single down, home market, generally flat.

Speaker #5: But if you look kind of nationwide, you should expect something like mid-single-digit pricing decline. Home has been much more durable. It's looking more flat.

Speaker #5: And in some geographies, that's still up low single digits. The new business trends, I think, have been interesting too. Pricing on new business has not been as impactful as it has been on the renewal book.

Speaker #5: So the pricing decline on renewal has been larger than the pricing impact on new business. We're actually still continuing to see higher pricing on new policies that we're writing.

Speaker #5: But auto market, mid-single down; home market, generally flat.

Andrew Kligerman: Super helpful. Just a little clarity on production, both corporate and franchise. Really solid number, better than solid, 22% up head count in corporate agents. I think you mentioned a little earlier, the mix was kind of even, college versus more experienced. I'm kind of curious, what was the mix, or the new agent count, a mix of embedded versus non-embedded?

Speaker #7: Super helpful. And then just a little clarity on production, both corporate and franchise. So, I mean, really solid number—better than solid—22% up headcount in corporate agents.

Speaker #7: And I think you mentioned a little earlier, the mix was kind of even—college versus more experienced. I'm kind of curious, what was the mix, or the new agent count mix, of embedded versus non-embedded?

Mark Jones Jr.: Not sure I'm quite following the question, Andrew.

Speaker #5: I'm not sure I'm quite following the question, Andrew. I mean, so when we're talking about—

Speaker #7: In other words, if agents are immediately put into one of the embedded channels, versus going into a typical corporate setting as has always been the case.

Andrew Kligerman: In other words, if agents are immediately put into one of the embedded channels versus going into a typical corporate setting, as has always been the case.

Speaker #5: Yeah. So the agency staffing program has added a large number of producers into existing franchises. From our existing corporate agent team, we've taken more than ten producers in the last several months out of the corporate agent team and placed them into somebody like Planet's embedded franchise, where they've got natural lead flow.

Mark Jones Jr.: Yeah. The agency staffing program has added a large amount of producers into existing franchises. From our existing corporate agent team, we've taken more than 10 producers in the last several months out of the corporate agent team and placed them into somebody like Planet's embedded franchise, where they've got natural lead flow. The exciting thing for me is it's actually improving the productivity of those agents. They're already solid producers inside our corporate agent force, and then we put them in a situation where they've got the same type of lead flow, but effectively at an unlimited amount, and they're doing a great job. Planet has had a tremendous circular agency.

Speaker #5: And the exciting thing for me is it's actually improving the productivity of those agents. So, they're already solid producers inside our corporate agent force.

Speaker #5: And then we put them in a situation where they've got the same type of lead flow, but effectively at an unlimited amount, and they're doing a great job.

Speaker #5: Planet has had a tremendous circular agency.

Speaker #7: I see, I see. And then just lastly, in terms of franchise producers—up 5%—so you're now starting to see the producer count grow as well as the franchise count, which is great.

Andrew Kligerman: I see. Lastly, in terms of franchise producers up 5%. You're now starting to see the producer count grow as well as the franchise count, which is great. The franchises are growing too, rather. You mentioned 30% increase in producer hires. Do you see the producer count accelerating up from 5% over time? Where could that go a couple of years from now? Are we going to start to see the double digits pretty soon?

Speaker #7: I mean, the franchises are growing too, rather. And then you mentioned a 30% increase in producer hires. So do you see the producer count accelerating up from 5% over time?

Speaker #7: I mean, where could that go a couple of years from now? I mean, are we going to start to see the double digits pretty soon?

Speaker #5: So, there are a lot of possibilities, Andrew. Obviously, we don't control exactly what our franchisees do, right? We explain to them best practices, we help walk through the model, and help them understand the level of value that they're able to create by onboarding more producers and holding them accountable to the standards that we think they should be able to go produce.

Mark Jones Jr.: There's a lot of possibilities, Andrew. Obviously, we don't control exactly what our franchisees do. We explain to them best practices. We help walk through the model and help them understand the level of value that they're able to create by onboarding more producers, and holding them accountable to the standards that we think that they should be able to go produce. You're seeing the top end of the franchise community just continue to grow at a really exciting pace. We talked about we have multiple agencies, over 40 producers now. We've got one over 50. If you remember, I think this was probably a couple of years ago, but Mark Miller used to refer to, I want 50 franchises that have 50 producers or more. That could be a great monitor for us. A 50-by-50 stat. We're making progress on that goal.

Speaker #5: And you're seeing the top end of the franchise community just continue to grow at a really exciting pace. I mean, we talked about how we have multiple agencies with over 40 producers now.

Speaker #5: We've got one over 50. And if you remember, I think this is probably a couple of years ago, but Mark Miller used to refer to, "I want 50 franchises that have 50 producers or more." That could be a great kind of moniker for us, right?

Speaker #5: A 50 by 50 stat. And we're making progress on that goal. And we've talked about getting a producers per franchise number up to five.

Mark Jones Jr.: We've talked about getting a producers per franchise number up to five. I still think that's a pretty attainable target in the near to medium term. Even if you just go, okay, we've got ballpark 900 franchises. Could all of those hire one person? That feels reasonably attainable. Could the top 50 of those hire five people? That feels reasonably attainable. You can get to some math that looks pretty exciting. Obviously, we're not going to be providing specific guidance on what producer count goes to, but you can see how this model works really well, especially because they generate such durable income streams inside their business.

Speaker #5: I still think that's a pretty attainable target in the near to medium term. But even if you just go, "Okay, we've got ballpark 900 franchises."

Speaker #5: Could all of those hire one person? That feels reasonably attainable. Could the top 50 of those hire five people? That feels reasonably attainable. So you can get to some math that looks pretty exciting.

Speaker #5: I mean, obviously, we're not going to be providing specific guidance on what producer count goes to, but you can see how this model works really well, especially because they generate such durable income streams inside their business.

Speaker #7: Very helpful. Thank you.

Andrew Kligerman: Very helpful. Thank you.

Speaker #1: Thank you. One moment, please, for the next question. Our next question is coming from the line of Mark Hughes of Choice Securities. Please go ahead.

Operator: Thank you. One moment please for the next question. Our next question is coming from the line of Mark Hughes of Truist Securities. Please go ahead.

Speaker #6: Yeah, thank you. Good afternoon. The enterprise sales team, I think you described the $3 million in new sales this quarter, and that’s really ramped up.

Mark Hughes: Yeah, thank you. Good afternoon. The enterprise sales team, I think you described the $3 million in new sales this quarter, that's really ramped up. As it's become a bigger part of the mix here, is going to be a tailwind for new sales in that corporate channel?

Speaker #6: To what extent is that growing faster? And is it becoming a bigger part of the mix here? Is it going to be a tailwind for new sales in that corporate channel?

Speaker #5: Yeah, I think it absolutely is going to be. It's our fastest-growing sales channel right now. We've got tremendous leadership there. We have great partners.

Mark Jones Jr.: Yeah, I think it absolutely is going to be. It's our fastest-growing sales channel right now. We've got tremendous leadership there. We have great partners. We've built really strong technology to effectively route leads to the right agents. We've got a great agent force that can handle the complexity of dealing with leads from across the entire country. We've tried to make that as easy as possible. I think that's a business that's going to grow at a really strong rate for a long period of time. If you think about it, our corporate agents and our franchisees are typically going towards the home closing transaction as their main lead source. It's not their only lead source, but it's their main lead source. Right now, that's somewhere between 4.5 and 5 million transactions annualized. The enterprise sales team is focused on embedded pools of clients.

Speaker #5: We've built really strong technology to effectively route leads to the right agents. We've got a great agent force that can handle the complexity of dealing with leads from across the entire country.

Speaker #5: We've tried to make that as easy as possible. I think that's a business that's going to grow at a really strong rate for a long period of time, because if you think about it, our corporate agents and our franchisees are typically going towards the home closing transaction as their main lead source.

Speaker #5: It's not their only lead source, but it is their main lead source. And right now, that's somewhere between 4.5 and 5 million transactions annualized.

Speaker #5: The enterprise sales team is focused on kind of embedded pools of clients. So that could be in mortgage servicing, where there are 85 million mortgages existing in the United States today.

Mark Jones Jr.: That could be in mortgage servicing, where there's 85 million mortgages existing in the United States today, or in a myriad of other potential adjacencies, financial services, moving companies. We have our really strong partnership with Vivint. We just get access to a lot more potential clients in a really efficient way. I think it's going to be a really meaningful portion of the business over time.

Speaker #5: Or in a myriad of other potential adjacencies—financial services, moving companies. We have our really strong partnership with Vivint, so we just get access to a lot more potential clients in a really efficient way.

Speaker #5: I think it's going to be a really meaningful portion of the business over time.

Speaker #6: Yeah. If it was $3 million this quarter, what was it in this quarter last year?

Mark Hughes: Yeah. If it was $3 million this quarter, what was it in this quarter last year?

Speaker #5: I think we said it was 70% growth this quarter.

Mark Jones Jr.: I think we said it was 70% growth this quarter.

Speaker #6: Oh, okay. All right. Very good. And then, the retention—if I kind of try to back into my own number—the renewal commissions, it looks like in the corporate channel, it's a little less strong than the royalty fees.

Mark Hughes: Okay. All right. Very good. The retention, if I try to back into my own number, the renewal commissions, it looks like in the corporate channel, it's a little less strong than the royalty fees. The renewal royalty fees, very healthy, or let's just say it seems to be a little bit better than the corporate channel. Is there any reason for that, or is that just some normal variability?

Speaker #6: So, the renewal royalty fees are very healthy, and—or let's just say—it seems to be a little bit better than the corporate channel.

Speaker #6: Is there any reason for that, or is that just some normal variability?

Speaker #5: Yeah, I would point towards geographic diversity. The franchise side of the business is much more geographically diverse than the corporate side of the business.

Mark Jones Jr.: Yeah. I would point towards geographic diversity. The franchise side of the business is much more geographically diverse than the corporate side of the business. We've done a great job expanding outside of Texas in corporate over the last couple of years, we've made really strong progress there. Corporate does have larger Texas exposure than the franchise side of the business. That diversification can insulate you more on the franchise side. Just from a incentives perspective, a franchisee is making $0.50 on every $1 on every policy that renews. We do everything that we would do for corporate on the franchise side with the service team. The franchisees also throw in more additional work on their end, because that's just how the incentive structure works.

Speaker #5: We've done a great job expanding outside of Texas in corporate over the last couple of years, and we've made really strong progress there. But corporate does have larger Texas exposure than the franchise side of the business.

Speaker #5: So that diversification can insulate you more on the franchise side. And then, just from an incentives perspective, a franchisee is making $0.50 on every dollar for every policy that renews.

Speaker #5: So we do everything that we would do for corporate on the franchise side with the service team. But the franchisees also throw in more additional work on their end because that's just how the incentive structure works.

Speaker #5: And then, if you look at the second half of 2026, ultimately, we're expecting total second half renewal commissions to have some improving revenue retention.

Mark Jones Jr.: If you look at H2 2026, ultimately, we're expecting total H2 on renewal commissions to have some improving revenue retention.

Speaker #6: Yeah, very good. Thank you.

Mark Hughes: Yeah, very good. Thank you.

Speaker #5: Thanks.

Mark Jones Jr.: Thanks.

Speaker #1: Thank you. One moment, please, for the next question. Our next question is coming from the line of Roland Mayer. Of RBC Capital Markets, please go ahead.

Operator: Thank you. One moment please, for the next question. Our next question is coming from the line of Roland Mayer of RBC Capital Markets. Please go ahead.

Roland Mayer: Hi, good evening. Wanted to quickly congratulate Mark, and then of course John on his first quarterly call. I believe the % of calls you said are being handled by Lilly is similar to last Q. Could you maybe walk through what % you might be able to reach long term, if there's any significant savings that might come through Lilly?

Rowland Mayor: Hi, good evening. Wanted to quickly congratulate Mark, and then of course John on his first quarterly call. I believe the % of calls you said are being handled by Lilly is similar to last Q. Could you maybe walk through what % you might be able to reach long term, if there's any significant savings that might come through Lilly?

Speaker #4: Hi, good evening. I wanted to quickly congratulate Mark, Mark, and then, of course, John on his first quarterly call. I believe the percentage of calls you cited being handled by Willie is similar to last quarter.

Speaker #4: Could you maybe walk through what percentage you might be able to reach long-term? If there's any significant savings that might come through, Willie.

Speaker #5: Yeah, so we said 20% this quarter is kind of the every single day we feel really confident it's going to be 20%. We're reaching periods of 30% now with some level of consistency, although not really that plant the flag if that's the current watermark to continue to chase after.

Mark Jones Jr.: We said 20% this quarter is the every single day we feel really confident it's going to be 20%. We're reaching periods of 30% now, with some level of consistency, although I am not ready to plant the flag if that's the current watermark to continue to chase after. I do not really have a target in my head of exactly how much should be fully contained by Lilly. I think that's going to be dictated by the client satisfaction scores. If we get to a position where people do not like interacting with that system, we will adjust. What we have found so far is that for the more administrative type tasks, things like, "I need my ID card," "I have a billing question," "Help me understand this certain piece of my policy," that works really well. People get that handled immediately, and they are highly satisfied.

Speaker #5: I don't really have a target in my head of exactly how much should be fully contained by Lily. I think that's going to be dictated by the client satisfaction scores.

Speaker #5: If we get to a position where people don't like interacting with that system, then we will adjust. But what we have found so far is that for the more administrative-type tasks—things like 'I need my ID card,' 'I have a billing question,' or 'Help me understand this certain piece of my policy'—that works really well.

Speaker #5: And people get that handled immediately, and they're highly satisfied. But I also think there's a considerable portion of the work that our service function does that we probably could automate, but we're not going to.

Mark Jones Jr.: I also think there's a considerable portion of the work that our service function does that we probably could automate that we are not going to, because that's going to negatively impact the client experience, and that would negatively impact our client retention. Our goal is to always maintain absolute tremendous client experience and continue to drive client retention, because that's where all the profitability is in this business. Don't necessarily have a target for exactly what we want the number to be, those cost savings are going to continue to get reinvested into further tools and technology that help our clients, ultimately, over time, should reduce our cost to serve. Again, we want to maximize client experience.

Speaker #5: Because that's going to negatively impact the client experience, and that would negatively impact our client retention. Our goal is to always maintain an absolutely tremendous client experience and continue to drive client retention, because that's where all the profitability is in this business.

Speaker #5: So, we don't necessarily have a target for exactly what we want the number to be. Those cost savings are going to continue to be reinvested into further tools and technology that help our clients and, ultimately, over time, should reduce our cost to serve.

Speaker #5: But again, we want to maximize the client experience.

Speaker #4: That all makes sense. Thank you. Could you maybe just quickly walk through the cash utilization strategy? I was a bit surprised to see the buybacks slow despite the price being down on the shares.

Roland Mayer: That all makes sense. Thank you. Could you maybe just quickly walk through the cash utilization strategy? I was a bit surprised to see the buybacks slow despite the price being down on the shares.

Rowland Mayor: That all makes sense. Thank you. Could you maybe just quickly walk through the cash utilization strategy? I was a bit surprised to see the buybacks slow despite the price being down on the shares.

Speaker #3: Hey, Roland. Sure. So, I think about the Q1, Q2 repurchase levels much less as any sort of signal on our view of the business or the price of the stock.

John Martin: Hey, Roland. Sure. I think about the one Q2 repurchase levels, much less as any sort of signal on our view of the business, or the price of the stock, and really pointed to the fact that we have just bought a ton of stock recently. Since 2024, we have repurchased over 3 million shares, 1 million of which has come from the H1 of this year alone. You can also see that we, on the management team, have also been very aggressive in the open market with purchases. More broadly, I share the same view that management has always had around capital allocation. That's been sort of first priority, has been investment into the operations of the business, after which we think about return of capital to shareholders.

Speaker #3: And really pointed to the fact that we've just bought a ton of stock recently. So since 2024, we've repurchased over 3 million shares, and 1 million of those have come from the first half of this year alone.

Speaker #3: And you can also see that we, on the management team, have also been very aggressive in the open market with purchases more broadly. I share the same view that management has always had around capital allocation, and that's been, sort of, first priority has been investment into the operations of the business, after which we think about return of capital to shareholders.

Speaker #3: What we're aiming to do is, we really want to make sure the core business is appropriately funded and retains as much optionality as possible.

John Martin: What we're aiming to do is we really want to make sure the core business is appropriately funded and retains as much optionality as possible. What we don't want to do is be in a position where we're making operational decisions based on our capital structure. To that end, we maintain a conservative balance sheet, and have a conservative approach to leverage. We'll continue to follow that approach, and buybacks are going to be an important part of that.

Speaker #3: What we don't want to do is be in a position where we're making operational decisions based on our capital structure. And so, to that end, we maintain a conservative balance sheet and have a conservative approach to leverage.

Speaker #3: And so we'll continue to follow that approach, and then buybacks are going to be an important part of that.

Speaker #4: Thank you. And then, if I could maybe sneak one more in, there's an adjustment for a contract termination cost. Could you maybe highlight what that is?

Roland Mayer: Thank you. If I could maybe sneak one more in. There's an adjustment for a contract termination cost. Could you maybe highlight what that is?

Rowland Mayor: Thank you. If I could maybe sneak one more in. There's an adjustment for a contract termination cost. Could you maybe highlight what that is?

Speaker #5: Yeah, we were making some technology changes in our service function to reduce complexity, improve routing technology, and provide more analytics. So we exited one contract and implemented a new system.

Mark Jones Jr.: Yeah. We were making some technology changes in our service function to reduce complexity and improve routing technology and provide more analytics. We exited one contract and we implemented a new system.

Speaker #4: Perfect. Have a great summer. Thank you.

Roland Mayer: Perfect. Have a great summer. Thank you.

Rowland Mayor: Perfect. Have a great summer. Thank you.

Speaker #5: Thanks.

Mark Jones Jr.: Thanks.

Speaker #1: Thank you. One moment, please. Our next question will be coming from the line of Ryan Tunis of Canter. Please go ahead.

Operator: Thank you. One moment, please. Our next question will be coming from the line of Ryan Tunis of Cantor. Please go ahead.

Speaker #7: Hey, thanks all. Good evening, and congrats to everyone. So, I've got a question. I'm going to put Mark Jones, Jr. on the spot. But first, just an observation.

Ryan Tunis: Hey, thanks all. Good evening and congrats to everyone. I've got a question. I'm going to put Mark Jones, Jr. on the spot, but first just an observation. Again, this is not to take anything away from all the investments. I think the company's made all the right capital allocation decisions, but you do have this reality that the stock price has not necessarily It's been a bit uneven in the last few years. I guess my question to Mark Jones, Jr. is, how are you thinking about shareholder value creation? For me, it's margins, growing your earnings power. If it isn't margins, does this make more sense to just be a private company? I'll leave it there.

Speaker #7: And again, this is not to take anything away from all the investments. I think the company has made all the right capital allocation decisions.

Speaker #7: But you do have this reality that the stock price has not necessarily been—or it's been a bit uneven in the last few years. And so I guess my question to Mark Jones, Jr.—

Speaker #7: How are you thinking about shareholder value creation? I mean, for me, it's margins—growing your earnings power. If it isn't margins, does it make more sense to just be a private company?

Speaker #7: I'll leave it there.

Speaker #5: Yeah, Ryan, I think the way to maximize long-term shareholder value is to drive the maximum long-term profit dollars. And so we're not going to be concerned with short-term swings in equity valuations.

Mark Jones Jr.: Yeah, Ryan, I think the way to maximize long-term shareholder value is to drive the maximum long-term profit dollars. We're not going to be concerned with short-term swings in equity valuations. We've got a lot of confidence in the direction that our business is going. Obviously, you can see the management team voting with our wallets there. We're in the right place in the value chain. I think we have a pretty strong head start on the industry, and we're going to continue to drive as much growth as we can while maintaining strong margins. We've made pretty material progress on our margin profile over the last number of years, while still delivering organic growth considerably in excess of the average player you would see in the industry. I am not concerned with short-term equity dislocations. We're long-term shareholders, and we intend to be long-term shareholders.

Speaker #5: We've got a lot of confidence in the direction that our business is going. Obviously, you can see the management team voting with our wallets there.

Speaker #5: We're in the right place in the value chain. I think we have a pretty strong head start on the industry, and we're going to continue to drive as much growth as we can while maintaining strong margins.

Speaker #5: We've made pretty material progress on our margin profile over the last number of years, while still delivering organic growth considerably in excess of the average player you would see in the industry.

Speaker #5: So, I am not concerned with short-term equity dislocations. We're a long-term shareholder, and we intend to be long-term shareholders.

Speaker #3: Yeah. And this is Mark Jones Sr., as the largest shareholder by a huge margin. Our focus is building long-term shareholder value, and we're not going to get distracted by short-term fluctuations.

Mark Jones Sr.: Yeah. This is Mark Jones, Sr. As the largest shareholder by a huge margin, our focus is building long-term shareholder value, and we're not going to get distracted by short-term fluctuations. We're not going to get distracted by the temptation to do a take private. This is about building long-term shareholder value, and we're confident that we have the right strategy, we have the right team, and ultimately, we believe that we will be the winner.

Speaker #3: We're not going to get distracted by the temptation to go private. This is about building long-term shareholder value, and we're confident that we have the right strategy.

Speaker #3: We have the right team, and ultimately, we believe that we will be the winner.

Mark Miller: Thanks, all, and like I said, congrats. I got confidence in you. Thanks.

Speaker #7: Thanks, all. And like I said, congrats. I've got confidence in you. Thanks.

Speaker #3: Thanks, Ryan.

Mark Jones Sr.: Thanks, Ryan.

Speaker #1: Thank you. One moment for the next question. Our next question will be coming from the line of Katie Seconds of Autonomous Research. Please go ahead.

Operator: Thank you. One moment for the next question. Our next question will be coming from the line of Katie Sakys of Autonomous Research. Please go ahead.

Speaker #8: Hi, thanks. Good evening. And congratulations all around. My first question is on the increase to the full-year total revenue growth guide. Do you guys think that core revenue growth can hit that new 15 and a half percent midpoint this year?

Katie Sakys: Hey, thanks. Good evening, and congratulations all around. My first question is on the increase to the full-year total revenue growth guide. Do you guys think that core revenue growth can hit that new 15.5% midpoint this year?

Speaker #3: Yeah. So, I think as we've said previously, we're extremely pleased with what we've delivered in the first half of the year, both in terms of our financial results and also the directionality of our major operational KPIs.

John Martin: Yeah. I think as we've said previously, we're extremely pleased with what we've delivered in the H1, both in terms of our financial results and also the directionality of our major operational KPIs. We're growing new business at an incredibly strong pace. We feel great about the direction of client retention. Everything we're looking at now points to a H2 acceleration off the 12% we delivered in the H1. That includes both gains from client retention and new business generation. I'd say the one thing, Katie, to keep in mind as you're thinking about the year, from an intra-year perspective, we saw a pretty meaningful acceleration in new business generation in the H2 of 2025 relative to the H1 as product availability came back into the market and began hitting our stride on a number of initiatives.

Speaker #3: We're growing new business at an incredibly strong pace. We feel great about the direction of client retention. Everything we're looking at now points to a second half acceleration off the 12% that we delivered in the first half. That includes both gains from client retention and new business generation.

Speaker #3: I'd say the one thing, Katie, to keep in mind as you're thinking about the year from an entry-year perspective: we saw a pretty meaningful acceleration in new business generation in the second half of 2025 relative to the first.

Speaker #3: As product availability came back into the market, we began hitting our stride on a number of initiatives. So we're just pointing to the quartering last year as you're thinking about year-over-year growth in the third and fourth quarters of this year.

John Martin: We're just pointing to the quartering last year as you're thinking about year-on-year growth in the Q3 and Q4 of this year. Overall, we're performing very well against our expectations so far, and things are setting up well for the back half.

Speaker #3: But overall, we're performing very well against our expectations so far, and things are setting up well for the back half.

Speaker #5: Yeah, I would say our expectations on core revenue have not changed. The increase in the low end of the guidance range was really to adjust for the outperformance on contingencies driven by strong profitability and growth.

Mark Jones Jr.: Yeah, I would say our expectations on core revenue have not changed. The increase in the low end of the guidance range was really to adjust for the outperformance on contingencies driven by strong profitability and growth.

Speaker #3: And sorry, just to follow up. Previously, I know we've given guidance around the 60 to 85 basis points. And just to round out Mark's comments there, our more updated view, which is reflected in the full-year revenue update, is 70 to 100 basis points total written premium for contingent commissions on the year.

John Martin: Sorry, just to follow up. Previously, I know we've given guidance around the 60 to 85 basis points, just to round out Mark's comments there, our more updated view, which is reflective in the full-year revenue update, is 70 to 100 basis points total written premium for contingent commissions on the year.

Speaker #8: All right. Thank you. That takes care of one of my follow-ups. I guess, just to sneak one more in quickly, it looks like, even excluding the contract termination charge, adjusted G&A expense was a little bit higher than I was expecting for the quarter.

Katie Sakys: All right. Thank you. That takes care of one of my follow-ups. I guess just to sneak one more in quickly. It looks like even excluding the contract termination charge, adjusted G&A expense was a little bit higher than I think I was expecting for the quarter. Certainly appreciate that you guys are investing quite a bit in technology and professional services, I was wondering if perhaps you could unpack the year-over-year increase there and give any color as to whether there was a pull forward in the timing of certain costs or if perhaps you're net just spending more year-over-year than perhaps initially expected.

Speaker #8: I certainly appreciate that you guys are investing quite a bit in technology and professional services. But I was wondering if perhaps you could unpack the year-over-year increase there and give any color as to whether there was a pull-forward in the timing of certain costs, or if perhaps you're net just spending more year-over-year than perhaps initially expected.

Speaker #5: Yeah, Katie, there were a couple of nitty-gritty pull-forwards associated with the DA for some implementation projects. Nothing that's hugely material, but on the margin, it can moderately increase that year-over-year growth rate.

Mark Jones Jr.: Yeah, Katie, there was a couple of nitty-gritty pull forwards associated to the DA for some implementation projects. Nothing that's hugely material, on the margin can moderately increase that year-over-year growth rate. Remember, we did just deliver the country's first choice shopping platform end to end, and that generates some incremental G&A expense. Then we had a conference with our franchisees in Q2, our President's Club conference, which incrementally is a million and a half dollars of G&A. As you're looking at that from Q1 to Q2, that's where that is. Same period year-over-year as the Q2 of last year.

Speaker #5: And remember, we did just deliver the country's first choice shopping platform end-to-end. And that generates some incremental G&A expense. And we had a conference with our franchisees in this second quarter or our president's club conference, which incrementally is a million and a half dollars of G&A.

Speaker #5: But as you're looking at that from Q1 to Q2, that's where that is—the same period year-over-year as the second quarter of last year.

Speaker #8: Got it. Thank you.

Katie Sakys: Got it. Thank you.

Speaker #5: Thanks, Katie.

Mark Jones Sr.: Thanks, Katie.

Speaker #1: Thank you. There are no more questions in the queue, and I would like to turn the call back over to Mark Miller, CEO, for closing remarks.

Operator: Thank you. There are no more questions in the queue. I would like to turn the call back over to Mark Miller, CEO, for closing remarks. Please go ahead.

Speaker #1: Please go ahead.

Speaker #7: Yeah, I just want to thank everybody for joining us on today’s earnings call. We look forward to talking to you again in October to review our third-quarter results.

Mark Miller: I just want to thank everybody for joining us on today's earnings call. We look forward to talking to you again in October to review our Q3 results.

Operator: This concludes today's program. Thank you for joining. You may now disconnect.

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