0001726978-20-000355 | 10-Q | XBRL Viewer

$ 32,015

$ 21,169

$ 82,364

$ 63,688

17,901

11,412

47,308

30,981

5,872

5,169

17,108

13,800

376

399

1,004

1,282

900

516

2,152

1,391

25,049

17,496

67,572

47,454

Income from operations

6,966

3,673

14,792

16,234

Other Income (Expense):

(582)

(609)

(1,665)

(1,861)

Income before taxes

6,394

3,064

13,203

14,373

(331)

301

(612)

1,475

Less: net income attributable to non-controlling interests

6,725

2,763

13,815

12,898

3,458

1,765

7,325

8,525

Net income attributable to Goosehead Insurance, Inc.

$ 3,267

$ 998

$ 6,490

$ 4,373

Earnings per share:

$ 0.19

$ 0.07

$ 0.39

$ 0.30

Weighted average shares of Class A common stock outstanding

$ 0.17

$ 0.06

$ 0.36

$ 0.27

Basic (in shares)

17,376

15,140

16,466

14,746

Diluted (in shares)

18,915

16,451

17,926

15,936

Dividends declared per share (in dollars per share)

$ 1.15

$ 0

$ 1.15

$ 0.41

Commissions and agency fees

Revenues:

$ 19,385

$ 11,739

$ 49,444

$ 38,672

Franchise revenues

Revenues:

12,418

9,261

32,347

24,564

Interest income

Revenues:

Beginning balance at Dec. 31, 2018

$ 212

$ 169

$ 573

$ 452

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current Assets:
Cash and cash equivalents	$ 19,957	$ 14,337
Restricted cash	1,378	923
Commissions and agency fees receivable, net	11,793	6,884
Receivable from franchisees, net	2,414	2,602
Prepaid expenses	3,903	1,987
Total current assets	39,445	26,733
Receivable from franchisees, net of current portion	15,023	11,014
Property and equipment, net of accumulated depreciation	12,365	9,542
Intangible assets, net of accumulated amortization	554	445
Deferred income taxes, net	48,777	15,537
Other assets	3,790	1,357
Total assets	119,954	64,628
Current Liabilities:
Accounts payable and accrued expenses	5,210	5,033
Premiums payable	1,378	923
Deferred rent	881	683
Contract liabilities	3,729	2,771
Note payable	3,000	4,000
Total current liabilities	14,198	13,410
Deferred rent, net of current portion	7,507	6,681
Note payable, net of current portion	80,332	42,161
Contract liabilities, net of current portion	25,855	20,024
Liabilities under tax receivable agreement, net of current portion	41,494	13,359
Total liabilities	169,386	95,635
Commitments and contingencies (see note 8)
Additional paid in capital	24,601	14,442
Accumulated deficit	(37,102)	(23,811)
Total stockholders' equity	(12,135)	(9,007)
Non-controlling interests	(37,297)	(22,000)
Total equity	(49,432)	(31,007)
Total liabilities and equity	119,954	64,628
Class A Common Stock
Current Liabilities:
Common stock	175	152
Class B Common Stock
Current Liabilities:
Common stock	$ 191	$ 210

Condensed Consolidated Balance Sheets (Unaudited) - Parenthetical - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Class A Common Stock
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock shares authorized (in shares)	300,000,000	300,000,000
Common stock shares issued (in shares)	17,499,000	15,238,000
Common stock shares outstanding (in shares)	17,499,000	15,238,000
Class B Common Stock
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock shares authorized (in shares)	50,000,000	50,000,000
Common stock shares issued (in shares)	19,158,000	21,055,000
Common stock shares outstanding (in shares)	19,158,000	21,055,000

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
shares in Thousands, $ in Thousands

Total

Class A Common Stock

Class B Common Stock

Common stock

Class A Common Stock

Common stock

Class B Common Stock

Additional paid in capital

Accumulated deficit

Total stockholders' equity

Non-controlling interest

$ (25,203)

$ 138

$ 224

$ 11,899

$ (20,761)

$ (8,500)

$ (16,703)

Beginning balance (in shares) at Dec. 31, 2018

13,799

22,486

Increase (Decrease) in Stockholders' Equity [Roll Forward]

(245)

(15,000)

(5,962)

(9,038)

7,318

2,472

4,846

368

$ 7

$ (7)

(679)

679

Deferred tax adjustments related to Tax Receivable Agreement

723

(723)

911

Ending balance at Mar. 31, 2019

(31,851)

$ 145

$ 217

12,499

(24,251)

(11,390)

(20,461)

Ending balance (in shares) at Mar. 31, 2019

14,522

21,763

Beginning balance at Dec. 31, 2018

(25,203)

$ 138

$ 224

11,899

(20,761)

(8,500)

(16,703)

Beginning balance (in shares) at Dec. 31, 2018

13,799

22,486

Increase (Decrease) in Stockholders' Equity [Roll Forward]

^[1]

12,898

142

Ending balance at Sep. 30, 2019

(1,301)

(27,850)

$ 152

$ 210

13,792

(22,350)

(8,196)

(19,654)

Ending balance (in shares) at Sep. 30, 2019

15,173

21,115

Beginning balance at Mar. 31, 2019

(31,851)

$ 145

$ 217

12,499

(24,251)

(11,390)

(20,461)

Beginning balance (in shares) at Mar. 31, 2019

14,522

21,763

Increase (Decrease) in Stockholders' Equity [Roll Forward]

(2,708)

2,817

903

1,914

368

Activity under employee stock purchase plan (in shares)

142

$ 5

$ (5)

(477)

477

Deferred tax adjustments related to Tax Receivable Agreement

488

(488)

684

Ending balance at Jun. 30, 2019

(30,548)

$ 150

$ 212

13,216

(23,348)

(9,770)

(20,778)

Ending balance (in shares) at Jun. 30, 2019

15,013

21,275

Increase (Decrease) in Stockholders' Equity [Roll Forward]

(786)

2,763

^[1]

998

1,765

396

$ 2

$ (2)

(145)

145

Deferred tax adjustments related to Tax Receivable Agreement

160

(160)

325

Ending balance at Sep. 30, 2019

(27,850)

$ 152

$ 210

13,792

(22,350)

(8,196)

(19,654)

Ending balance (in shares) at Sep. 30, 2019

15,173

21,115

Beginning balance at Dec. 31, 2019

(31,007)

$ 152

$ 210

14,442

(23,811)

(9,007)

(22,000)

Beginning balance (in shares) at Dec. 31, 2019

15,238

21,055

Increase (Decrease) in Stockholders' Equity [Roll Forward]

(1,003)

(296)

(156)

(140)

498

Activity under employee stock purchase plan (in shares)

116

$ 8

$ (8)

(869)

869

Deferred tax adjustments related to Tax Receivable Agreement

791

(791)

1,704

Ending balance at Mar. 31, 2020

(29,988)

$ 160

$ 202

15,891

(23,967)

(7,714)

(22,274)

Ending balance (in shares) at Mar. 31, 2020

16,032

20,264

Beginning balance at Dec. 31, 2019

(31,007)

$ 152

$ 210

14,442

(23,811)

(9,007)

(22,000)

Beginning balance (in shares) at Dec. 31, 2019

15,238

21,055

Increase (Decrease) in Stockholders' Equity [Roll Forward]

^[2]

13,815

396

(2,208)

Ending balance at Sep. 30, 2020

1,897

(49,432)

$ 175

$ 191

24,601

(37,102)

(12,135)

(37,297)

Ending balance (in shares) at Sep. 30, 2020

17,499

19,158

Beginning balance at Mar. 31, 2020

(29,988)

$ 160

$ 202

15,891

(23,967)

(7,714)

(22,274)

Beginning balance (in shares) at Mar. 31, 2020

16,032

20,264

Increase (Decrease) in Stockholders' Equity [Roll Forward]

(859)

Exercise of stock options

7,386

3,379

4,007

2,407

$ 3

2,404

2,407

Exercise of stock options (in shares)

241

1,416

Activity under employee stock purchase plan (in shares)

138

$ 8

$ (8)

(762)

762

Deferred tax adjustments related to Tax Receivable Agreement

809

(809)

2,314

2,261

Reallocation of Non-controlling interest

(63)

Ending balance at Jun. 30, 2020

(17,186)

$ 171

$ 194

21,348

(20,525)

1,188

(18,374)

Ending balance (in shares) at Jun. 30, 2020

17,084

19,455

Increase (Decrease) in Stockholders' Equity [Roll Forward]

(835)

(42,000)

(19,895)

(22,105)

Exercise of stock options

6,725

^[2]

3,267

3,458

1,161

$ 1

1,160

1,161

Exercise of stock options (in shares)

116

1,416

Activity under employee stock purchase plan (in shares)

142

$ 3

$ (3)

(577)

577

Deferred tax adjustments related to Tax Receivable Agreement

297

(297)

1,145

1,112

Reallocation of Non-controlling interest

(51)

Ending balance at Sep. 30, 2020

$ (49,432)

$ 175

$ 191

$ 24,601

$ (37,102)

$ (12,135)

$ (37,297)

Ending balance (in shares) at Sep. 30, 2020

17,499

19,158

[1]	The three and nine months ended September 30, 2019 are reported under ASC 605
[2]	The three and nine months ended September 30, 2020 are reported under ASC 606

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Cash flows from operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

$ 13,815

^[1]

$ 12,898

^[2]

2,499

1,551

1,004

^[1]

1,282

^[2]

Impacts of Tax Receivable Agreement

3,330

1,132

28,815

10,967

Deferred income taxes

(28,077)

(10,625)

Changes in operating assets and liabilities:

(4,029)

(1,698)

(5,731)

(961)

Prepaid expenses

(1,916)

(720)

(2,432)

(97)

(495)

244

Deferred rent

1,023

2,368

6,789

Premiums payable

455

352

Payments pursuant to the tax receivable agreement

(200)

(9)

Net cash provided by operating activities

15,041

16,493

Cash flows from investing activities:

Proceeds from notes receivable

Purchase of software

(318)

(340)

Purchase of property and equipment

(4,765)

(3,285)

Net cash used for investing activities

(5,057)

(3,609)

Cash flows from financing activities:

Debt issuance costs

(677)

Repayment of note payable

(27,321)

(1,750)

Proceeds from notes payable

64,821

Proceeds from the issuance of Class A common stock

3,965

142

Member distributions and dividends

(44,697)

(18,739)

Net cash provided by (used for) financing activities

(3,909)

(20,347)

Net increase (decrease) in cash and restricted cash

6,075

(7,463)

Cash and cash equivalents, and restricted cash, beginning of period

15,260

19,011

Cash and cash equivalents, and restricted cash, end of period

21,335

11,548

Supplemental disclosures of cash flow data:

Cash paid during the year for interest

1,318

1,861

Cash paid for income taxes

$ 270

$ 1,175

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

Organization	9 Months Ended
Organization	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization On May 1, 2018 Goosehead Insurance, Inc. ("GSHD") completed an initial public offering (the “Offering”) of 9,810 thousand shares of Class A common stock at a price of $10.00 per share, which included 1,280 thousand shares issued pursuant to the underwriter's over-allotment option. Following completion of the Offering, GSHD owned 37.3% of Goosehead Financial, LLC (“GF”) and the Pre-IPO LLC Members owned the remaining 62.7%. GSHD is the sole managing member of GF and, although GSHD holds a minority economic interest in GF, GSHD has the sole voting power and control of management of GF. Accordingly, GSHD consolidates the financial results of GF and reports non-controlling interest in GSHD's condensed consolidated financial statements. GF was organized on January 1, 2016 as a Delaware Limited Liability Company and is headquartered in Westlake, TX. GSHD (collectively with its consolidated subsidiaries, the “Company”) provides personal and commercial property and casualty insurance brokerage services for its clients through a network of corporate-owned agencies and franchise units across the nation. The Company had nine and seven corporate-owned locations in operation at September 30, 2020 and 2019, respectively. Franchisees are provided access to insurance Carrier Appointments, product training, technology infrastructure, client service centers and back office services. During the three months ended September 30, 2020 and 2019, the Company onboarded 110 and 72 franchise locations, respectively, and had 823 and 583 operating franchise locations as of September 30, 2020 and 2019, respectively. No franchises were purchased by the Company during the three and nine months ended September 30, 2020 or 2019. All intercompany accounts and transactions have been eliminated in consolidation. As of December 31, 2020, the Company will be deemed a large accelerated filer, because the market value of our common stock that is held by non-affiliates exceeded $700 million as of the last business day of our most recently completed second fiscal quarter (June 30, 2020). Furthermore, the Company will no longer be considered an emerging growth company.

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company have been prepared in accordance with the instructions to Form 10-Q. Therefore, they do not include all of the annual disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). However, in the opinion of management, these statements include all adjustments, consisting of normal recurring adjustments, which are necessary for a fair presentation of the condensed consolidated financial positions at September 30, 2020, the condensed consolidated results of operations, stockholders' equity and statements of cash flows for the three and nine months ended September 30, 2020 and 2019. The interim period condensed consolidated financial statements should be read in conjunction with the Consolidated Financial Statements that are included in the Annual Report on Form 10-K.

The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results that can be expected for the entire year. The Company experiences seasonal fluctuations of its revenue due to the timing of contingent commission revenue recognition and trends in housing market activity.

Impact of the coronavirus (“COVID-19”) pandemic

The extent to which the COVID-19 pandemic and the related economic impact may affect our financial condition or results of operations is uncertain. The extent of the impact on our operational and financial performance will depend on various factors, including the duration and spread of the outbreak and its impact on home sales and consumer spending. To date, the pandemic has not increased our costs of or access to capital under our term note and revolving credit facility and we do not believe it is reasonably likely to in the future. In addition, we do not believe that the pandemic will affect our ongoing ability to meet the covenants in our debt instruments, including under our term note and revolving credit facility. To date, the pandemic has not impacted the collectability of receivables or

adversely affected our ability to generate new business, add new franchises, or retain existing franchises or policies. Due to the nature of our business, the effect of the COVID-19 pandemic may not be fully reflected in our results of operations until future periods. Changes in consumer behavior linked to the COVID-19 pandemic may have contributed to reduced loss ratios through the nine months ended September 30, 2020, increasing the amount of revenue from Contingent Commissions the Company expects to receive.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period.

We are not presently aware of any events or circumstances arising from the COVID-19 pandemic, outside of those described above, that would require us to update our estimates, judgments or revise the carrying value of our assets or liabilities. Our estimates may change, however, as new events occur and additional information is obtained, any such changes will be recognized in the condensed consolidated financial statements. Accordingly, actual results could differ from those estimates as more information becomes known.

Income Taxes

The Company accounts for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment.

Restricted Cash

The Company holds premiums received from the insured, but not yet remitted to the insurance Carrier in a fiduciary capacity. Premiums received but not yet remitted included in restricted cash were $1.4 million and $0.7 million as of September 30, 2020 and 2019, respectively.

The following is a reconciliation of our cash and restricted cash balances as presented in the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019 (in thousands):


	September 30,
	2020		2019
Cash and cash equivalents	$	19,957	$	10,820
Restricted cash	1,378		728
Cash and cash equivalents, and restricted cash	$	21,335	$	11,548

Recently Issued Accounting Pronouncements

Leases (ASU 2016-02): In February 2016, the FASB issued ASU 2016-02 to increase transparency and comparability of information regarding an entity’s leasing activities by providing additional information to users of financial statements. ASU 2016-02 requires lessees to recognize most leases on their balance sheet by recording a liability for its lease obligation and an asset for its right to use the underlying asset as of the lease commencement date and recognizing expenses on the income statement in a similar manner to the current guidance in ASC Topic 840, Leases (“ASC 840”). Lessor accounting will remain largely unchanged, other than certain targeted improvements intended to align lessor accounting with the lessee accounting model and with the updated revenue recognition guidance.

Upon adoption of ASU 2016-02, as amended, leases will be classified as either finance or operating, with classification affecting the geography of expense recognition in the income statement. Additionally, enhanced quantitative and qualitative disclosures regarding leases are required.

As permitted by the amended guidance, we intend to elect to retain the original lease classification and historical accounting for existing or expired contracts, so that we will not be required to reassess whether such contracts

contain leases, the lease classification, or the initial direct costs. Additionally, we intend to elect an accounting policy by class of underlying asset to combine lease and non-lease components.

The standard became effective for the Company January 1, 2020, but the Company is not required to present the impacts of the standard until it files its Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

We have implemented leasing software solutions to account for the leases where we are the lessee and are continuing to identify changes to our business processes, systems and controls to support adoption of the new standard. We expect the adoption of ASU 2016-02 will have a material effect on our balance sheets as a result of recognizing a lease obligation and right-of-use asset for our operating leases, primarily those related to leases of real estate and other assets of approximately $18 million. We do not expect the adoption of ASU 2016-02 to have a material effect on our Income Statements or Cash Flows.

Credit Losses (ASU 2016-13): Under the new guidance an entity is required to measure all credit losses on certain financial instruments, including trade receivables and various off-balance sheet credit exposures, using an expected credit loss model. This model incorporates past experience, current conditions and reasonable and supportable forecasts affecting collectability of these instruments. This standard became effective for the Company beginning January 1, 2020, but the Company is not required to present the impacts of the standard until it files its Annual Report on Form 10-K for the fiscal year ended December 31, 2020, at which point the company will become a large accelerated filer. The Company does not expect the adoption of this amendment will have a material impact on the Company's consolidated financial statements.

Reference Rate Reform (ASU 2020-04): In March 2020, the Financial Accounting Standards Board issued ASU 2020-04. Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying U.S. GAAP if certain criteria are met to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued. ASU 2020-04 became effective on March 12, 2020 and may be applied prospectively through December 31, 2022. A substantial portion of our indebtedness bears interest at variable interest rates, primarily based on USD-LIBOR. The adoption of ASU 2020-04 is not expected to have a material impact on our consolidated financial statements as the standard will ease, if warranted, the administrative requirements for accounting for the future effects of the rate reform. We continue to monitor the impact the discontinuance of LIBOR or another reference rate will have on our contracts and other transactions.

Recently adopted accounting pronouncements

Revenue from Contracts with Customers (ASU 2014-09) (“Topic 606”): This standard supersedes the existing revenue recognition guidance and provides a new framework for recognizing revenue. The core principle of the standard is that an entity should recognize revenue for the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Additionally, the guidance requires improved disclosure to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized. Guidance subsequent to ASU 2014-09 has been issued to clarify various provisions in the standard, including principal versus agent considerations, identifying performance obligations, licensing transactions, as well as various technical corrections and improvements. According to the superseding standard ASU 2015-14 that deferred the effective dates of the preceding, and because the Company is filing as an emerging growth company, the standard became effective for the Company on January 1, 2019, but the Company was not required to present the impacts of the standard until the Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

The Company adopted this standard by recognizing the cumulative effect as an adjustment to opening accumulated deficit and non-controlling interests at January 1, 2019, under the modified retrospective method for contracts not completed as of the day of adoption. Under the modified retrospective method, the Company was not required to restate comparative financial information prior to the adoption of these standards and, therefore, such information presented prior to the filing of the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 will continue to be reported under the Company’s previous accounting policies.

Impact on Financial Statements

The following tables summarize the impacts of adopting the revenue recognition standard on the Company’s condensed consolidated statement of income:


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Income
Three Months Ended September 30, 2020
Revenues:
Commissions and agency fees	15,430	3,955	19,385
Franchise revenues	14,408	(1,990)	12,418

Expenses:
Employee compensation and benefits	18,055	(154)	17,901
Bad debts	681	(305)	376
Tax expense (benefit)	(689)	358	(331)

Net income	4,659	2,066	6,725

Earnings per share:
Basic	0.15	0.04	0.19
Diluted	0.14	0.03	0.17


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Income
Nine Months Ended September 30, 2020
Revenues:
Commissions and agency fees	45,183	4,261	49,444
Franchise revenues	36,744	(4,397)	32,347

Expenses:
Employee compensation and benefits	47,612	(304)	47,308
Bad Debts	1,606	(602)	1,004
Tax expense (benefit)	(784)	172	(612)

Net income	13,217	598	13,815

Earnings per share:
Basic	0.38	0.01	0.39
Diluted	0.36	—	0.36


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Balance Sheet
September 30, 2020
Assets:
Commissions and agency fees receivable, net(1)	3,005	8,788	11,793
Receivable from franchisees, net(1)	3,898	13,539	17,437
Deferred income taxes, net	48,457	320	48,777
Other assets	2,133	1,657	3,790

Liabilities:
Accounts payable and accrued expenses	4,977	233	5,210

Contract liabilities(1)	—	29,584	29,584
Liabilities under tax receivable agreement	41,471	23	41,494

Stockholders' Equity:
Accumulated Deficit	(34,051)	(3,051)	(37,102)
Non-controlling interests	(34,251)	(3,046)	(37,297)
Total equity	(43,335)	(6,097)	(49,432)

(1) - Includes both the current and long term portion of this balance.


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2020
Operating Cash Flows:
Net Income	13,217	598	13,815
Bad debt expense	1,606	(602)	1,004


Receivable from franchisees	(472)	(3,557)	(4,029)
Commissions and agency fees receivables	(1,827)	(3,904)	(5,731)
Other assets	(3,465)	1,033	(2,432)
Accounts payable and accrued expenses	(150)	(345)	(495)
Contract liabilities	—	6,789	6,789
Unearned revenue	(490)	490	—
Net cash provided by operating activities	15,041	—	15,041

Revenue

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue

Commissions and fees

The Company earns new and renewal commissions paid by insurance Carriers and fees paid by its clients for the binding of insurance coverage. The transactions price is set as the estimated commissions to be received over the term of the policy based on an estimate of premiums placed, policy changes and cancellations, net of a constraint.

These commissions and fees are earned at a point in time upon the effective date of bound insurance coverage, as no performance obligation exists after coverage is bound.

For Agency Fees, the Company enters into a contract with the insured, in which the Company's performance obligation is to place an insurance policy. The transaction price of the agency fee is set at the time the sale is agreed upon, and is included in the contract. Agency Fee revenue is recognized at a point in time, which is the effective date of the policy.

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

Franchise revenues

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

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

Revenue from New and Renewal Royalty Fees is recorded by applying the sales- and usage-based royalties exception. Under the sales- and usage-based exception, the Company estimates the anticipated amount of the royalties to be received over the term of the policy based on an estimate of premiums placed by the franchisee, policy changes, and cancellations, net of a constraint. Revenue from Royalty Fees is recognized over time as the placement of the underlying policies occur.

Contract Costs

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

Incremental cost to obtain - The adoption of ASC 340 resulted in the Company deferring certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans in the Franchise Channel, in which the Company pays an incremental amount of compensation on new Franchise Agreements. These incremental costs are deferred and amortized over a 10-year period, which is consistent with the term of the contract.

Costs to fulfill - The Company has evaluated the need to capitalize costs to fulfill customer contracts and has determined that there are no costs that meet the definition for capitalization under ASC 340.

Disaggregation of Revenue

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


Three Months Ended September 30, 2020:	Franchise Channel		Corporate Channel		Total
Type of revenue stream:
Commissions and agency fees
Renewal Commissions	$	—	$	7,931	$	7,931
New Business Commissions	—		4,790		4,790
Agency Fees	—		2,491		2,491
Contingent Commissions	2,662		1,511		4,173
Franchise revenues
Renewal Royalty Fees	8,117		—		8,117
New Business Royalty Fees	3,090		—		3,090
Initial Franchise Fees	1,152		—		1,152
Other Franchise Revenues	59		—		59
Interest Income	212		—		212
Total Revenues	$	15,292	$	16,723	$	32,015

Timing of revenue recognition:
Transferred at a point in time	$	—	$	15,212	$	15,212
Transferred over time	15,292		1,511		16,803
Total Revenues	$	15,292	$	16,723	$	32,015


Nine Months Ended September 30, 2020:	Franchise Channel		Corporate Channel		Total
Type of revenue stream:
Commissions and agency fees
Renewal Commissions	$	—	$	21,382	$	21,382
New Business Commissions	—		12,452		12,452
Agency Fees	—		6,362		6,362
Contingent Commissions	6,130		3,118		9,248
Franchise revenues
Renewal Royalty Fees	21,406		—		21,406
New Business Royalty Fees	7,737		—		7,737
Initial Franchise Fees	3,031		—		3,031
Other Franchise Revenues	173		—		173
Interest Income	573		—		573
Total Revenues	$	39,050	$	43,314	$	82,364

Timing of revenue recognition:
Transferred at a point in time	$	—	$	40,196	$	40,196
Transferred over time	39,050		3,118		42,168
Total Revenues	$	39,050	$	43,314	$	82,364

Contract Balances

The following table provides information about receivables, cost to obtain, and contract liabilities from contracts with customers (in thousands):


	September 30, 2020	December 31, 2019		Increase/(decrease)
Cost to obtain franchise contracts(1)	1,309	$	1,004	$	305
Commissions and agency fees receivable, net(2)	11,793	6,884		4,909
Receivable from franchisees(2)	17,437	13,616		3,821
Contract liability(3)	29,584	22,795		6,789

(1) Cost to obtain franchise contracts is included in Other assets on the condensed consolidated balance sheets.

(2) Includes both the current and long term portion of this balance.

(3) Initial Franchise Fees to be recognized over the life of the contract

Significant changes in contract liabilities are as follows (in thousands):



Contract liability at December 31, 2019	$	22,795
Revenue recognized during the period	(3,031)
New deferrals(1)	9,820
Contract liability at September 30, 2020	29,584

(1) Initial Franchise Fees where the consideration is received from the customer for services which are to be transferred to the Franchisee over the term of the Franchise Agreement

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130554-203045

Franchise Fees Receivable

9 Months Ended

Sep. 30, 2020

Franchise Fees Receivable

The balance of Franchise fees receivable included in Receivable from franchisees consisted of the following (in thousands):


	September 30, 2020		December 31, 2019
Franchise fees receivable(1)	$	21,236	$	15,314
Less: Unamortized discount(1)	(5,519)		(3,771)
Less: Allowance for uncollectible franchise fees(1)	(107)		(52)
Net franchise fees receivable(1)	$	15,610	$	11,491

(1) Includes both the current and long term portion of this balance

Activity in the allowance for uncollectible franchise fees was as follows (in thousands):


Balance at December 31, 2019	$	52
Charges to bad debts	182
Write offs	(127)
Balance at September 30, 2020	$	107

Balance at December 31, 2018	$	455
Charges to bad debts	486
Write offs	(376)
Balance at September 30, 2019	$	565

Allowance for Uncollectible Agency Fees

9 Months Ended

Sep. 30, 2020

Allowance for Uncollectible Agency Fees

Activity in the allowance for uncollectible Agency Fees was as follows (in thousands):


Balance at December 31, 2019	$	178
Charges to bad debts	822
Write offs	(541)
Balance at September 30, 2020	$	459

Balance at December 31, 2018	$	242
Charges to bad debts	796
Write offs	(730)
Balance at September 30, 2019	$	308

Property and equipment

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Property and equipment

Property and equipment consisted of the following (in thousands):


	September 30, 2020		December 31, 2019
Furniture & fixtures	$	4,256	$	3,012
Computer equipment	2,429		1,480
Network equipment	350		268
Phone system	937		885
Leasehold improvements	11,509		9,073
Total	19,481		14,718
Less accumulated depreciation	(7,116)		(5,176)
Property and equipment, net	$	12,365	$	9,542

Debt

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Debt

On March 6, 2020, the Company refinanced its $13.0 million revolving credit facility and $40.0 million term note payable to a $25.0 million revolving credit facility and $80.0 million term note payable to finance general corporate purposes. The Company also has the right, subject to approval by the administrative agent and each issuing bank, to increase the commitments under the credit facilities an additional $50.0 million. As part of the refinancing, $0.2 million of debt issuance costs from previous debt were immediately recognized as interest expense.

The $25.0 million revolving credit facility accrues interest on amounts drawn at an initial interest rate of LIBOR plus 2.50%, then at an interest rate determined by the Company's leverage ratio for the preceding period. At September 30, 2020 the Company was accruing interest at LIBOR plus 200 basis points. At September 30, 2020, the Company had $5.0 million drawn against the revolver and had a letter of credit of $0.3 million applied against the maximum borrowing availability, payable on March 6, 2023. Thus, amounts available to draw totaled $19.7 million. The revolving credit facility is collateralized by substantially all the Company’s assets, which includes rights to future commissions.

The term note is payable in quarterly installments of $0.5 million the first twelve months, $1.0 million the next twelve months and $2.0 million the last twelve months, with a balloon payment on March 6, 2023. The note is collateralized by substantially all of the Company’s assets, which includes rights to future commissions. Interest is calculated initially at LIBOR plus 2.50%, then at an interest rate based on the Company's leverage ratio for the preceding period. At September 30, 2020 the Company was accruing interest at LIBOR plus 200 basis points. On June 24, 2020 the Company drew down the remaining $37.9 million of the term loan. As of September 30, 2020, the Company had $79.0 million of the term note drawn.

The interest rate for each leverage ratio tier are as follows:


Leverage Ratio			Interest Rate
< 1.50x			LIBOR + 175 bps
> 1.50x			LIBOR + 200 bps
> 2.50x			LIBOR + 225 bps
> 3.50x			LIBOR + 250 bps

Maturities of the term note payable for the next four years are as follows (in thousands):


	Amount
2020	$	500
2021	3,500
2022	7,000
2023	68,000
Total	$	79,000

The Company’s note payable agreement contains certain restrictions and covenants. Under these restrictions, the Company is limited in the amount of debt incurred and distributions payable. In addition, the credit agreement contains certain change of control provisions that, if broken, would trigger a default. Finally, the Company must maintain certain financial ratios. As of September 30, 2020, the Company was in compliance with these covenants.

Because of both instruments’ variable interest rate, the note payable balance at September 30, 2020 and December 31, 2019, approximates fair value using Level 2 inputs, described below.

The framework for measuring fair value provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows:

•Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets.

•Level 2—Significant other observable inputs other than Level 1 prices such as quoted prices in markets that are not active, quoted prices for similar assets or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset.

•Level 3—Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and ContingenciesThe Company leases its facilities under non-cancelable operating leases, expiring in various years through 2029. In addition to monthly lease payments, the lease agreements require the Company to reimburse the lessors for its portion of operating costs each year. Rent expense was $0.7 million and $1.9 million for the three and nine months ended September 30, 2020 and $0.5 million and $1.4 million for three and nine months ended September 30, 2019.

The following is a schedule of future minimum lease payments as of September 30, 2020 (in thousands):


	Amount
2020	$	707
2021	2,793
2022	2,762
2023	2,578
2024	2,394
Thereafter	9,231
Total	$	20,465

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2020
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes As a result of the Reorganization Transactions and the Offering, GSHD became the sole managing member of GF, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, GF is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by GF is passed through to and included in the taxable income or loss of its members, including GSHD, on a pro rata basis. GSHD is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to GSHD's allocable share of income of GF. Income tax expense (benefit) Provision for/(benefit from) income taxes for the three and nine months ended September 30, 2020 was $(331) thousand and $(612) thousand compared to $301 thousand and $1.5 million for the three and nine months ended September 30, 2019. The effective tax rate was (5)% and (5)% for the three and nine months ended September 30, 2020 and 10% and 10% for the three and nine months ended September 30, 2019. The decrease in the effective tax rate for the period ended September 30, 2020 compared to the period ended September 30, 2019 was primarily due to exercises of employee stock options resulting in excess tax deductible expenses. Deferred taxes Deferred tax assets at September 30, 2020 were $48.8 million compared to $15.5 million at December 31, 2019. The primary contributing factor to the increase in deferred tax assets is additional redemptions of LLC Units of GF for shares of Class A common stock of GSHD during the three and nine months ended September 30, 2020. Tax Receivable Agreement GF intends to make an election under Section 754 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”) effective for each taxable year in which a redemption or exchange of LLC Units and corresponding Class B common stock for shares of Class A common stock occurs. Future taxable redemptions or exchanges are expected to result in tax basis adjustments to the assets of GF that will be allocated to the Company and thus produce favorable tax attributes. These tax attributes would not be available to GSHD in the absence of those transactions. The anticipated tax basis adjustments are expected to reduce the amount of tax that GSHD would otherwise be required to pay in the future. GSHD entered into a tax receivable agreement with the Pre-IPO LLC Members on May 1, 2018 that provides for the payment by GSHD to the Pre-IPO LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that GSHD actually realizes as a result of (i) any increase in tax basis in GSHD's assets and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreement. During the three and nine months ended September 30, 2020, an aggregate of 0.3 million and 1.9 million LLC Units, respectively, were redeemed by the Pre-IPO LLC Members for newly issued shares of Class A common stock. In connection with these redemptions, GSHD received 0.3 million and 1.9 million LLC Units, which resulted in an increase in the tax basis of its investment in GF subject to the provisions of the tax receivable agreement. The Company recognized a liability for the TRA Payments due to the Pre-IPO LLC Members, representing 85% of the aggregate tax benefits the Company expects to realize from the tax basis increases related to the redemptions of LLC Units, after concluding it was probable that such TRA Payments would be paid based on its estimates of future taxable income. As of September 30, 2020, the total amount of TRA Payments due to the Pre-IPO LLC Members under the tax receivable agreement was $42.2 million, of which $0.7 million was current and included in Accounts payables and accrued expenses on the Consolidated Balance Sheet. Future exchanges of LLC Units for Class A common stock will result in additional TRA payments. Uncertain tax positions GSHD has determined there are no material uncertain tax positions as of September 30, 2020.

Share-based Payment Arrangement [Abstract]

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Stockholders' Equity

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Stockholders' Equity

Class A Common Stock

GSHD has a total of 17,499 thousand shares of its Class A common stock outstanding at September 30, 2020. Each share of Class A common stock holds economic rights and entitles its holder to one vote per share on all matters submitted to a vote of the stockholders of GSHD.

Class B Common Stock

GSHD has a total of 19,158 thousand shares of its Class B common stock outstanding at September 30, 2020. Each share of Class B common stock has no economic rights but entitles its holder to one vote per share on all matters submitted to a vote of the stockholders of GSHD.

Holders of Class A common stock and Class B common stock vote together as a single class on all matters presented to GSHD's shareholders for their vote or approval, except as otherwise required by applicable law, by agreement, or by GSHD's certificate of incorporation.

Earnings Per Share

The following table sets forth the calculation of basic earnings per share ("EPS") based on net income attributable to GSHD for the three and nine months ended September 30, 2020 and 2019, divided by the basic weighted average number of Class A common stock as of September 30, 2020 and September 30, 2019 (in thousands, except per share amounts). Diluted earnings per share of Class A common stock is computed by dividing net income attributable to GSHD by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities (in thousands, except per share amounts). The Company has not included the effects of conversion of Class B shares to Class A shares in the diluted EPS calculation using the "if-converted" method, because doing so has no impact on diluted EPS.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Income before taxes	$	6,394	$	3,064	$	13,203	$	14,373
Less: income before taxes attributable to non-controlling interests	3,458		1,801		7,325		8,662
Income before taxes attributable to GSHD	2,936		1,263		5,878		5,711
Less: income tax expense (benefit) attributable to GSHD	(331)		265		(612)		1,338
Net income attributable to GSHD	$	3,267	$	998	$	6,490	$	4,373
Denominator:
Weighted average shares of Class A common stock outstanding - basic	17,376		15,140		16,466		14,746
Effect of dilutive securities:
Stock options	1,539		1,311		1,460		1,190
Weighted average shares of Class A common stock outstanding - diluted	18,915		16,451		17,926		15,936

Earnings per share of Class A common stock - basic	$	0.19	$	0.07	$	0.39	$	0.30
Earnings per share of Class A common stock - diluted	$	0.17	$	0.06	$	0.36	$	0.27

Non-controlling interest

9 Months Ended

Sep. 30, 2020

Noncontrolling Interest [Abstract]

Non-controlling interest

Following the Offering, GSHD became the sole managing member of GF and, as a result, it consolidates the financial results of GF. GSHD reports a non-controlling interest representing the economic interest in GF held by the other members of GF.

On a quarterly basis, GF makes distributions to the LLC Unit holders on a pro rata basis to facilitate the LLC Unit holder's quarterly tax payments. For the three and nine months ended September 30, 2020, GF made distributions of $1.6 million and $4.8 million, of which $0.8 million and $2.7 million where made to Pre-IPO LLC Members. The remaining $0.7 million and $2.2 million were made to GSHD and were eliminated in consolidation. For the three and nine months ended September 30, 2019, GF made distributions of $1.4 million and $6.3 million, of which $0.8 million and $3.7 million were made to Pre-IPO LLC Members. The remaining $0.6 million and $2.6 million were made to GSHD and were eliminated in consolidation.

Under the amended and restated Goosehead Financial, LLC Agreement, the Pre-IPO LLC Members have the right, from and after the completion of the Offering (subject to the terms of the amended and restated Goosehead Financial, LLC Agreement), to require GSHD to redeem all or a portion of their LLC Units for, at GSHD's election, newly-issued shares of Class A common stock on a one-for-one basis or a cash payment equal to the volume weighted average market price of one share of GSHD's Class A common stock for each LLC Unit redeemed (subject to customary adjustments, including for stock splits, stock dividends and reclassifications) in accordance with the terms of the amended and restated Goosehead Financial, LLC Agreement. Additionally, in the event of a redemption request by a Pre-IPO LLC Member, GSHD may, at its option, effect a direct exchange of cash or Class A common stock for LLC Units in lieu of such a redemption. Shares of Class B common stock will be cancelled on a one-for-one basis if GSHD, at the election of a Pre-IPO LLC Member, redeems or exchanges LLC Units of such Pre-IPO LLC Member pursuant to the terms of the amended and restated Goosehead Financial, LLC Agreement. Except for transfers to GSHD pursuant to the amended and restated Goosehead Financial, LLC Agreement or to certain permitted transferees, the Pre-IPO LLC Members are not permitted to sell, transfer or otherwise dispose of any LLC Units or shares of Class B common stock.

During the three and nine months ended September 30, 2020, an aggregate of 297 thousand and 1,897 thousand LLC Units were redeemed by the non-controlling interest holders. Pursuant to the GF LLC Agreement, GSHD issued $297 thousand and $1,897 thousand shares of Class A common stock in connection with these redemptions and received $297 thousand and $1,897 thousand LLC Interests, increasing GSHD's ownership interest in GF. Simultaneously, and in connection with these redemptions, 297 thousand and 1,897 thousand shares of Class B common stock were surrendered and cancelled.

The following table summarizes the ownership interest in GF as of September 30, 2020 (in thousands):


	September 30, 2020
	LLC Units	Ownership %
Number of LLC Units held by GSHD	17,499	47.7%
Number of LLC Units held by non-controlling interest holders	19,158	52.3%
Number of LLC Units outstanding	36,657	100.0%

The weighted average ownership percentages for the applicable reporting periods are used to attribute net income to GSHD and the non-controlling interest holders. The non-controlling interest holders' weighted average ownership percentage for the three and nine months ended September 30, 2020 was 52.5% and 55.1%, respectively.

The following table summarizes the effects of changes in ownership in GF on the equity of GSHD for the three and nine months ended September 30, 2020 and 2019 as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net Income attributable to Goosehead Insurance Inc.	$	3,267	$	998	$	6,490	$	4,373
Transfers (to) from non-controlling interests:
Decrease in additional paid-in capital as a result of the redemption of LLC interests	(577)		(145)		(2,208)		(1,301)
Increase in additional paid-in capital as a result of activity under employee stock purchase plan	142		—		396		142
Total effect of changes in ownership interest on equity attributable to Goosehead Insurance Inc.	$	2,832	$	853	$	4,678	$	3,214

Equity-Based Compensation

9 Months Ended

Sep. 30, 2020

Equity-Based Compensation

Stock option expense was $1.4 million and $3.3 million for the three and nine months ended September 30, 2020, respectively. Stock option expense was $0.4 million and $1.1 million for the three and nine months ended September 30, 2019, respectively.

On April 1, 2020, the Company granted an additional 900,000 stock options to its Managing Directors at an exercise price equal to $40.88 per share. The grant date fair value of $16.31 per option was determined using the Black-Scholes valuation model using the following assumptions:


Expected volatility	40	%
Expected dividend yield	—	%
Expected term (in years)	6.5
Risk-free interest rate	0.47	%

Dividends

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Dividends

On March 7, 2019, GF approved a $15.0 million extraordinary dividend to all holders of LLC Units, including GSHD. The board of directors of the Company then declared an extraordinary dividend of $0.41 (rounded) to all holders of Class A common stock of GSHD with a record date of March 18, 2019, which was paid on April 1, 2019. A summary of the total amounts declared by GF is as follows (in thousands):


	LLC Units held as of March 18, 2019	Dividends declared
Class A common stockholders	14,421	$	5,962
Class B common stockholders via LLC Units held	21,864	9,038
Total	36,285	$	15,000

On July 30, 2020, GF approved an extraordinary dividend in the aggregate amount of $42.0 million payable to holders of LLC Units, including GSHD. The board of directors of the Company subsequently declared an extraordinary dividend of $1.15 (rounded) to all holders of Class A common stock of GSHD with a record date of August 10, 2020, which was paid on August 24, 2020. A summary of the total amounts declared by GF is as follows (in thousands):


	LLC Units held as of August 10, 2020	Dividends declared
Class A common stockholders	17,308	$	19,895
Class B common stockholders via LLC Units held	19,230	22,105
Total	36,538	$	42,000

Any future extraordinary dividends will be declared at the sole discretion of GF's managing members with respect to GF and the Company's board of directors with respect to GSHD. In determining whether a future extraordinary dividend will be declared by the Company, the board of directors may, at its sole discretion, consider the following: the Company's financial condition and operating results, the Company's available cash and current and anticipated cash needs, the Company's capital requirements, any contractual, legal, tax and regulatory restrictions, general economic and business conditions, and such other factors or conditions as the board of directors deems relevant.

Segment Information

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Information

Segment InformationThe Company has two reportable Segments: Corporate Channel and Franchise Channel. The Corporate Channel consists of company-owned and financed operations with employees who are hired, trained, and managed by Goosehead. The Franchise Channel network consists of Franchisee operations that are owned and managed by individual business owners. These business owners have a contractual relationship with Goosehead to use the Company's processes, systems, and back-office support team to sell insurance and manage their business. In exchange, Goosehead is entitled to an Initial Franchise Fee and ongoing royalty fees. Allocations of contingent commissions and certain operating expenses are based on reasonable assumptions and estimates primarily using revenue, headcount and other information. The Company’s chief operating decision maker uses net income before interest, income taxes, depreciation and amortization, adjusted to exclude equity-based compensation and other non-operating items, including, among other things, certain non-cash charges and certain non-recurring or non-operating gains or losses (“Adjusted EBITDA”) as a performance measure to manage resources and make decisions about the business. Summarized financial information concerning the Company’s reportable Segments is shown in the following tables (in thousands). There are no intersegment sales, only interest income and interest expense related to an intersegment line of credit, all of which eliminate in consolidation. The “Other” column includes any income and expenses not allocated to reportable Segments and corporate-related items, including equity-based compensation, certain legal expenses and interest related to the note payable.


	Franchise Channel		Corporate Channel		Other		Total
Three months ended September 30, 2020
Revenues:
Commissions and agency fees
Renewal Commissions	$	—	$	7,931	$	—	$	7,931
Agency Fees	—		2,491		—		2,491
New Business Commissions	—		4,790		—		4,790
Contingent Commissions	2,662		1,511		—		4,173
Total Commissions and Agency Fees	2,662		16,723		—		19,385
Franchise revenue
Renewal Royalty Fees	8,117		—		—		8,117
New Business Royalty Fees	3,090		—		—		3,090
Initial Franchise Fees	1,152		—		—		1,152
Other Income	59		—		—		59
Total Franchise Revenues	12,418		—		—		12,418
Interest income
Interest Income	212		—		—		212
Total Interest Income	212		—		—		212
Total Revenues	15,292		16,723		—		32,015
Operating expenses:
Employee compensation and benefits, excluding equity based compensation	6,552		9,933		—		16,485
General and administrative expenses	2,329		2,781		762		5,872
Bad debts	45		331		—		376
Total Operating Expenses	8,926		13,045		762		22,733
Adjusted EBITDA	6,366		3,678		(762)		9,282
Other income (expense)	10		—		—		10
Equity based compensation	—		—		(1,416)		(1,416)
Interest expense	—		—		(582)		(582)
Depreciation and amortization	(473)		(427)		—		(900)
Income tax benefit	—		—		331		331
Net income	$	5,903	$	3,251	$	(2,429)	$	6,725
September 30, 2020:
Total Assets	$	40,578	$	24,977	$	54,399	$	119,954


	Franchise Channel		Corporate Channel		Other		Total
Three months ended September 30, 2019:
Revenues:
Commissions and agency fees
Renewal Commissions	$	—	$	6,056	$	—	$	6,056
Agency Fees	—		1,782		—		1,782
New Business Commissions	—		3,294		—		3,294
Contingent Commissions	413		194		—		607
Total Commissions and Agency Fees	413		11,326		—		11,739
Franchise revenue
Renewal Royalty Fees	5,295		—		—		5,295
New Business Royalty Fees	1,994		—		—		1,994
Initial Franchise Fees	1,935		—		—		1,935
Other Income	37		—		—		37
Total Franchise Revenues	9,261		—		—		9,261
Interest income
Interest Income	169		—		—		169
Total Interest Income	169		—		—		169
Total Revenues	9,843		11,326		—		21,169
Operating expenses:
Employee compensation and benefits, excluding equity based compensation	4,531		6,485		—		11,016
General and administrative expenses	2,325		2,281		563		5,169
Bad debts	119		280		—		399
Total Operating Expenses	6,975		9,046		563		16,584
Adjusted EBITDA	2,868		2,280		(563)		4,585

Equity based compensation	—		—		(396)		(396)
Interest expense	—		—		(609)		(609)
Depreciation and amortization	(266)		(250)		—		(516)
Taxes	—		—		(301)		(301)
Net income	$	2,602	$	2,030	$	(1,869)	$	2,763
September 30, 2019:
Total Assets	$	14,103	$	7,150	$	23,168	$	44,421


	Franchise Channel		Corporate Channel		Other		Total
Nine months ended September 30, 2020
Revenues:
Commissions and agency fees
Renewal Commissions	$	—	$	21,382	$	—	$	21,382
Agency Fees	—		6,362		—		6,362
New Business Commissions	—		12,452		—		12,452
Contingent Commissions	6,130		3,118		—		9,248
Total Commissions and Agency Fees	6,130		43,314		—		49,444
Franchise revenue
Renewal Royalty Fees	21,406		—		—		21,406
New Business Royalty Fees	7,737		—		—		7,737
Initial Franchise Fees	3,031		—		—		3,031
Other Income	173		—		—		173
Total Franchise Revenues	32,347		—		—		32,347
Interest income
Interest Income	573		—		—		573
Total Interest Income	573		—		—		573
Total Revenues	39,050		43,314		—		82,364
Operating expenses:
Employee compensation and benefits, excluding equity based compensation	18,413		25,565		—		43,978
General and administrative expenses	6,488		8,111		2,509		17,108
Bad debts	182		822		—		1,004
Total Operating Expenses	25,083		34,498		2,509		62,090
Adjusted EBITDA	13,967		8,816		(2,509)		20,274
Other income (expense)	76		—		—		76
Equity based compensation	—		—		(3,330)		(3,330)
Interest expense	—		—		(1,665)		(1,665)
Depreciation and amortization	(1,182)		(970)		—		(2,152)
Income tax benefit	—		—		612		612
Net income	$	12,861	$	7,846	$	(6,892)	$	13,815
September 30, 2020:
Total Assets	$	40,578	$	24,977	$	54,399	$	119,954


	Franchise Channel		Corporate Channel		Other		Total
Nine months ended September 30, 2019:
Revenues:
Commissions and agency fees
Renewal Commissions	$	—	$	16,744	$	—	$	16,744
Agency Fees	—		4,959		—		4,959
New Business Commissions	—		8,766		—		8,766
Contingent Commissions	4,719		3,484		—		8,203
Total Commissions and Agency Fees	4,719		33,953		—		38,672
Franchise revenue
Renewal Royalty Fees	14,120		—		—		14,120
New Business Royalty Fees	5,213		—		—		5,213
Initial Franchise Fees	5,160		—		—		5,160
Other Income	71		—		—		71
Total Franchise Revenues	24,564		—		—		24,564
Interest income
Interest Income	452		—		—		452
Total Interest Income	452		—		—		452
Total Revenues	29,735		33,953		—		63,688
Operating expenses:
Employee compensation and benefits, excluding equity based compensation	12,326		17,524		—		29,850
General and administrative expenses	5,487		6,261		2,052		13,800
Bad debts	486		796		—		1,282
Total Operating Expenses	18,299		24,581		2,052		44,932
Adjusted EBITDA	11,436		9,372		(2,052)		18,756

Equity based compensation	—		—		(1,131)		(1,131)
Interest expense	—		—		(1,861)		(1,861)
Depreciation and amortization	(668)		(723)		—		(1,391)
Income tax benefit	—		—		(1,475)		(1,475)
Net income	$	10,768	$	8,649	$	(6,519)	$	12,898
September 30, 2019:
Total Assets	$	14,103	$	7,150	$	23,168	$	44,421

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

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Recent Accounting Pronouncements

Litigation	9 Months Ended
Litigation	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Litigation	LitigationFrom time to time, GSHD may be involved in various legal proceedings, lawsuits and claims incidental to the conduct of the Company's business. The amount of any loss from the ultimate outcomes is not probable or reasonably estimable. It is the opinion of management that the resolution of outstanding claims will not have a material adverse effect on the financial position or results of operations of the Company.

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Basis of Combination

All intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

Impact of the coronavirus (“COVID-19”) pandemic

Use of Estimates

Income Taxes

Restricted Cash

Restricted CashThe Company holds premiums received from the insured, but not yet remitted to the insurance Carrier in a fiduciary capacity.

Recently Issued Accounting Pronouncements

contain leases, the lease classification, or the initial direct costs. Additionally, we intend to elect an accounting policy by class of underlying asset to combine lease and non-lease components.

Recently adopted accounting pronouncements

Impact on Financial Statements

The following tables summarize the impacts of adopting the revenue recognition standard on the Company’s condensed consolidated statement of income:


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Income
Three Months Ended September 30, 2020
Revenues:
Commissions and agency fees	15,430	3,955	19,385
Franchise revenues	14,408	(1,990)	12,418

Expenses:
Employee compensation and benefits	18,055	(154)	17,901
Bad debts	681	(305)	376
Tax expense (benefit)	(689)	358	(331)

Net income	4,659	2,066	6,725

Earnings per share:
Basic	0.15	0.04	0.19
Diluted	0.14	0.03	0.17


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Income
Nine Months Ended September 30, 2020
Revenues:
Commissions and agency fees	45,183	4,261	49,444
Franchise revenues	36,744	(4,397)	32,347

Expenses:
Employee compensation and benefits	47,612	(304)	47,308
Bad Debts	1,606	(602)	1,004
Tax expense (benefit)	(784)	172	(612)

Net income	13,217	598	13,815

Earnings per share:
Basic	0.38	0.01	0.39
Diluted	0.36	—	0.36


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Balance Sheet
September 30, 2020
Assets:
Commissions and agency fees receivable, net(1)	3,005	8,788	11,793
Receivable from franchisees, net(1)	3,898	13,539	17,437
Deferred income taxes, net	48,457	320	48,777
Other assets	2,133	1,657	3,790

Liabilities:
Accounts payable and accrued expenses	4,977	233	5,210

Contract liabilities(1)	—	29,584	29,584
Liabilities under tax receivable agreement	41,471	23	41,494

Stockholders' Equity:
Accumulated Deficit	(34,051)	(3,051)	(37,102)
Non-controlling interests	(34,251)	(3,046)	(37,297)
Total equity	(43,335)	(6,097)	(49,432)

(1) - Includes both the current and long term portion of this balance.


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2020
Operating Cash Flows:
Net Income	13,217	598	13,815
Bad debt expense	1,606	(602)	1,004


Receivable from franchisees	(472)	(3,557)	(4,029)
Commissions and agency fees receivables	(1,827)	(3,904)	(5,731)
Other assets	(3,465)	1,033	(2,432)
Accounts payable and accrued expenses	(150)	(345)	(495)
Contract liabilities	—	6,789	6,789
Unearned revenue	(490)	490	—
Net cash provided by operating activities	15,041	—	15,041

Framework for Measuring Fair Value

•Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets.

•Level 3—Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Restrictions on Cash and Cash Equivalents

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]


	September 30,
	2020		2019
Cash and cash equivalents	$	19,957	$	10,820
Restricted cash	1,378		728
Cash and cash equivalents, and restricted cash	$	21,335	$	11,548

Schedule of Reconciliation of Cash and Restricted Cash


	September 30,
	2020		2019
Cash and cash equivalents	$	19,957	$	10,820
Restricted cash	1,378		728
Cash and cash equivalents, and restricted cash	$	21,335	$	11,548

Impact of Adopting the Revenue Recognition Standard

The following tables summarize the impacts of adopting the revenue recognition standard on the Company’s condensed consolidated statement of income:


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Income
Three Months Ended September 30, 2020
Revenues:
Commissions and agency fees	15,430	3,955	19,385
Franchise revenues	14,408	(1,990)	12,418

Expenses:
Employee compensation and benefits	18,055	(154)	17,901
Bad debts	681	(305)	376
Tax expense (benefit)	(689)	358	(331)

Net income	4,659	2,066	6,725

Earnings per share:
Basic	0.15	0.04	0.19
Diluted	0.14	0.03	0.17


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Income
Nine Months Ended September 30, 2020
Revenues:
Commissions and agency fees	45,183	4,261	49,444
Franchise revenues	36,744	(4,397)	32,347

Expenses:
Employee compensation and benefits	47,612	(304)	47,308
Bad Debts	1,606	(602)	1,004
Tax expense (benefit)	(784)	172	(612)

Net income	13,217	598	13,815

Earnings per share:
Basic	0.38	0.01	0.39
Diluted	0.36	—	0.36


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Balance Sheet
September 30, 2020
Assets:
Commissions and agency fees receivable, net(1)	3,005	8,788	11,793
Receivable from franchisees, net(1)	3,898	13,539	17,437
Deferred income taxes, net	48,457	320	48,777
Other assets	2,133	1,657	3,790

Liabilities:
Accounts payable and accrued expenses	4,977	233	5,210

Contract liabilities(1)	—	29,584	29,584
Liabilities under tax receivable agreement	41,471	23	41,494

Stockholders' Equity:
Accumulated Deficit	(34,051)	(3,051)	(37,102)
Non-controlling interests	(34,251)	(3,046)	(37,297)
Total equity	(43,335)	(6,097)	(49,432)

(1) - Includes both the current and long term portion of this balance.


(in thousands)	Legacy GAAP	Adjustments due to Topic 606	As Reported
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 2020
Operating Cash Flows:
Net Income	13,217	598	13,815
Bad debt expense	1,606	(602)	1,004


Receivable from franchisees	(472)	(3,557)	(4,029)
Commissions and agency fees receivables	(1,827)	(3,904)	(5,731)
Other assets	(3,465)	1,033	(2,432)
Accounts payable and accrued expenses	(150)	(345)	(495)
Contract liabilities	—	6,789	6,789
Unearned revenue	(490)	490	—
Net cash provided by operating activities	15,041	—	15,041

Revenue (Tables)

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

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


Three Months Ended September 30, 2020:	Franchise Channel		Corporate Channel		Total
Type of revenue stream:
Commissions and agency fees
Renewal Commissions	$	—	$	7,931	$	7,931
New Business Commissions	—		4,790		4,790
Agency Fees	—		2,491		2,491
Contingent Commissions	2,662		1,511		4,173
Franchise revenues
Renewal Royalty Fees	8,117		—		8,117
New Business Royalty Fees	3,090		—		3,090
Initial Franchise Fees	1,152		—		1,152
Other Franchise Revenues	59		—		59
Interest Income	212		—		212
Total Revenues	$	15,292	$	16,723	$	32,015

Timing of revenue recognition:
Transferred at a point in time	$	—	$	15,212	$	15,212
Transferred over time	15,292		1,511		16,803
Total Revenues	$	15,292	$	16,723	$	32,015


Nine Months Ended September 30, 2020:	Franchise Channel		Corporate Channel		Total
Type of revenue stream:
Commissions and agency fees
Renewal Commissions	$	—	$	21,382	$	21,382
New Business Commissions	—		12,452		12,452
Agency Fees	—		6,362		6,362
Contingent Commissions	6,130		3,118		9,248
Franchise revenues
Renewal Royalty Fees	21,406		—		21,406
New Business Royalty Fees	7,737		—		7,737
Initial Franchise Fees	3,031		—		3,031
Other Franchise Revenues	173		—		173
Interest Income	573		—		573
Total Revenues	$	39,050	$	43,314	$	82,364

Timing of revenue recognition:
Transferred at a point in time	$	—	$	40,196	$	40,196
Transferred over time	39,050		3,118		42,168
Total Revenues	$	39,050	$	43,314	$	82,364

Contract Balances

The following table provides information about receivables, cost to obtain, and contract liabilities from contracts with customers (in thousands):


	September 30, 2020	December 31, 2019		Increase/(decrease)
Cost to obtain franchise contracts(1)	1,309	$	1,004	$	305
Commissions and agency fees receivable, net(2)	11,793	6,884		4,909
Receivable from franchisees(2)	17,437	13,616		3,821
Contract liability(3)	29,584	22,795		6,789

(1) Cost to obtain franchise contracts is included in Other assets on the condensed consolidated balance sheets.

(2) Includes both the current and long term portion of this balance.

(3) Initial Franchise Fees to be recognized over the life of the contract

Significant changes in contract liabilities are as follows (in thousands):



Contract liability at December 31, 2019	$	22,795
Revenue recognized during the period	(3,031)
New deferrals(1)	9,820
Contract liability at September 30, 2020	29,584

(1) Initial Franchise Fees where the consideration is received from the customer for services which are to be transferred to the Franchisee over the term of the Franchise Agreement

Franchise Fees Receivable (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Franchise Fees Receivable

The balance of Franchise fees receivable included in Receivable from franchisees consisted of the following (in thousands):


	September 30, 2020		December 31, 2019
Franchise fees receivable(1)	$	21,236	$	15,314
Less: Unamortized discount(1)	(5,519)		(3,771)
Less: Allowance for uncollectible franchise fees(1)	(107)		(52)
Net franchise fees receivable(1)	$	15,610	$	11,491

(1) Includes both the current and long term portion of this balance

Schedule of Allowance For Uncollectible Franchise Fees

Activity in the allowance for uncollectible franchise fees was as follows (in thousands):


Balance at December 31, 2019	$	52
Charges to bad debts	182
Write offs	(127)
Balance at September 30, 2020	$	107

Balance at December 31, 2018	$	455
Charges to bad debts	486
Write offs	(376)
Balance at September 30, 2019	$	565

Allowance for Uncollectible Agency Fees (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Allowance for Uncollectible Agency Fees

Activity in the allowance for uncollectible Agency Fees was as follows (in thousands):


Balance at December 31, 2019	$	178
Charges to bad debts	822
Write offs	(541)
Balance at September 30, 2020	$	459

Balance at December 31, 2018	$	242
Charges to bad debts	796
Write offs	(730)
Balance at September 30, 2019	$	308

Property and equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following (in thousands):


	September 30, 2020		December 31, 2019
Furniture & fixtures	$	4,256	$	3,012
Computer equipment	2,429		1,480
Network equipment	350		268
Phone system	937		885
Leasehold improvements	11,509		9,073
Total	19,481		14,718
Less accumulated depreciation	(7,116)		(5,176)
Property and equipment, net	$	12,365	$	9,542

Debt (Tables)

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Schedule of Interest Rate Dependent of Leverage Ratio

The interest rate for each leverage ratio tier are as follows:


Leverage Ratio			Interest Rate
< 1.50x			LIBOR + 175 bps
> 1.50x			LIBOR + 200 bps
> 2.50x			LIBOR + 225 bps
> 3.50x			LIBOR + 250 bps

Schedule of Maturities of Note Payable

Maturities of the term note payable for the next four years are as follows (in thousands):


	Amount
2020	$	500
2021	3,500
2022	7,000
2023	68,000
Total	$	79,000

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments

The following is a schedule of future minimum lease payments as of September 30, 2020 (in thousands):


	Amount
2020	$	707
2021	2,793
2022	2,762
2023	2,578
2024	2,394
Thereafter	9,231
Total	$	20,465

Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2020

Equity [Abstract]

Schedule of Calculation of EPS and Pro Forma EPS


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Numerator:
Income before taxes	$	6,394	$	3,064	$	13,203	$	14,373
Less: income before taxes attributable to non-controlling interests	3,458		1,801		7,325		8,662
Income before taxes attributable to GSHD	2,936		1,263		5,878		5,711
Less: income tax expense (benefit) attributable to GSHD	(331)		265		(612)		1,338
Net income attributable to GSHD	$	3,267	$	998	$	6,490	$	4,373
Denominator:
Weighted average shares of Class A common stock outstanding - basic	17,376		15,140		16,466		14,746
Effect of dilutive securities:
Stock options	1,539		1,311		1,460		1,190
Weighted average shares of Class A common stock outstanding - diluted	18,915		16,451		17,926		15,936

Earnings per share of Class A common stock - basic	$	0.19	$	0.07	$	0.39	$	0.30
Earnings per share of Class A common stock - diluted	$	0.17	$	0.06	$	0.36	$	0.27

Non-controlling interest (Tables)

9 Months Ended

Sep. 30, 2020

Noncontrolling Interest [Abstract]

Schedule of Ownership Interests

The following table summarizes the ownership interest in GF as of September 30, 2020 (in thousands):


	September 30, 2020
	LLC Units	Ownership %
Number of LLC Units held by GSHD	17,499	47.7%
Number of LLC Units held by non-controlling interest holders	19,158	52.3%
Number of LLC Units outstanding	36,657	100.0%

Effects of Changes in Ownership Interests on Equity

The following table summarizes the effects of changes in ownership in GF on the equity of GSHD for the three and nine months ended September 30, 2020 and 2019 as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net Income attributable to Goosehead Insurance Inc.	$	3,267	$	998	$	6,490	$	4,373
Transfers (to) from non-controlling interests:
Decrease in additional paid-in capital as a result of the redemption of LLC interests	(577)		(145)		(2,208)		(1,301)
Increase in additional paid-in capital as a result of activity under employee stock purchase plan	142		—		396		142
Total effect of changes in ownership interest on equity attributable to Goosehead Insurance Inc.	$	2,832	$	853	$	4,678	$	3,214

Equity-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Stock Option Valuation Assumptions

The grant date fair value of $16.31 per option was determined using the Black-Scholes valuation model using the following assumptions:


Expected volatility	40	%
Expected dividend yield	—	%
Expected term (in years)	6.5
Risk-free interest rate	0.47	%

Dividends (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Summary of total estimated dividends to be paid

A summary of the total amounts declared by GF is as follows (in thousands):


	LLC Units held as of March 18, 2019	Dividends declared
Class A common stockholders	14,421	$	5,962
Class B common stockholders via LLC Units held	21,864	9,038
Total	36,285	$	15,000

A summary of the total amounts declared by GF is as follows (in thousands):


	LLC Units held as of August 10, 2020	Dividends declared
Class A common stockholders	17,308	$	19,895
Class B common stockholders via LLC Units held	19,230	22,105
Total	36,538	$	42,000

Segment Information (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Schedule of Segment Information


	Franchise Channel		Corporate Channel		Other		Total
Three months ended September 30, 2020
Revenues:
Commissions and agency fees
Renewal Commissions	$	—	$	7,931	$	—	$	7,931
Agency Fees	—		2,491		—		2,491
New Business Commissions	—		4,790		—		4,790
Contingent Commissions	2,662		1,511		—		4,173
Total Commissions and Agency Fees	2,662		16,723		—		19,385
Franchise revenue
Renewal Royalty Fees	8,117		—		—		8,117
New Business Royalty Fees	3,090		—		—		3,090
Initial Franchise Fees	1,152		—		—		1,152
Other Income	59		—		—		59
Total Franchise Revenues	12,418		—		—		12,418
Interest income
Interest Income	212		—		—		212
Total Interest Income	212		—		—		212
Total Revenues	15,292		16,723		—		32,015
Operating expenses:
Employee compensation and benefits, excluding equity based compensation	6,552		9,933		—		16,485
General and administrative expenses	2,329		2,781		762		5,872
Bad debts	45		331		—		376
Total Operating Expenses	8,926		13,045		762		22,733
Adjusted EBITDA	6,366		3,678		(762)		9,282
Other income (expense)	10		—		—		10
Equity based compensation	—		—		(1,416)		(1,416)
Interest expense	—		—		(582)		(582)
Depreciation and amortization	(473)		(427)		—		(900)
Income tax benefit	—		—		331		331
Net income	$	5,903	$	3,251	$	(2,429)	$	6,725
September 30, 2020:
Total Assets	$	40,578	$	24,977	$	54,399	$	119,954


	Franchise Channel		Corporate Channel		Other		Total
Three months ended September 30, 2019:
Revenues:
Commissions and agency fees
Renewal Commissions	$	—	$	6,056	$	—	$	6,056
Agency Fees	—		1,782		—		1,782
New Business Commissions	—		3,294		—		3,294
Contingent Commissions	413		194		—		607
Total Commissions and Agency Fees	413		11,326		—		11,739
Franchise revenue
Renewal Royalty Fees	5,295		—		—		5,295
New Business Royalty Fees	1,994		—		—		1,994
Initial Franchise Fees	1,935		—		—		1,935
Other Income	37		—		—		37
Total Franchise Revenues	9,261		—		—		9,261
Interest income
Interest Income	169		—		—		169
Total Interest Income	169		—		—		169
Total Revenues	9,843		11,326		—		21,169
Operating expenses:
Employee compensation and benefits, excluding equity based compensation	4,531		6,485		—		11,016
General and administrative expenses	2,325		2,281		563		5,169
Bad debts	119		280		—		399
Total Operating Expenses	6,975		9,046		563		16,584
Adjusted EBITDA	2,868		2,280		(563)		4,585

Equity based compensation	—		—		(396)		(396)
Interest expense	—		—		(609)		(609)
Depreciation and amortization	(266)		(250)		—		(516)
Taxes	—		—		(301)		(301)
Net income	$	2,602	$	2,030	$	(1,869)	$	2,763
September 30, 2019:
Total Assets	$	14,103	$	7,150	$	23,168	$	44,421


	Franchise Channel		Corporate Channel		Other		Total
Nine months ended September 30, 2020
Revenues:
Commissions and agency fees
Renewal Commissions	$	—	$	21,382	$	—	$	21,382
Agency Fees	—		6,362		—		6,362
New Business Commissions	—		12,452		—		12,452
Contingent Commissions	6,130		3,118		—		9,248
Total Commissions and Agency Fees	6,130		43,314		—		49,444
Franchise revenue
Renewal Royalty Fees	21,406		—		—		21,406
New Business Royalty Fees	7,737		—		—		7,737
Initial Franchise Fees	3,031		—		—		3,031
Other Income	173		—		—		173
Total Franchise Revenues	32,347		—		—		32,347
Interest income
Interest Income	573		—		—		573
Total Interest Income	573		—		—		573
Total Revenues	39,050		43,314		—		82,364
Operating expenses:
Employee compensation and benefits, excluding equity based compensation	18,413		25,565		—		43,978
General and administrative expenses	6,488		8,111		2,509		17,108
Bad debts	182		822		—		1,004
Total Operating Expenses	25,083		34,498		2,509		62,090
Adjusted EBITDA	13,967		8,816		(2,509)		20,274
Other income (expense)	76		—		—		76
Equity based compensation	—		—		(3,330)		(3,330)
Interest expense	—		—		(1,665)		(1,665)
Depreciation and amortization	(1,182)		(970)		—		(2,152)
Income tax benefit	—		—		612		612
Net income	$	12,861	$	7,846	$	(6,892)	$	13,815
September 30, 2020:
Total Assets	$	40,578	$	24,977	$	54,399	$	119,954


	Franchise Channel		Corporate Channel		Other		Total
Nine months ended September 30, 2019:
Revenues:
Commissions and agency fees
Renewal Commissions	$	—	$	16,744	$	—	$	16,744
Agency Fees	—		4,959		—		4,959
New Business Commissions	—		8,766		—		8,766
Contingent Commissions	4,719		3,484		—		8,203
Total Commissions and Agency Fees	4,719		33,953		—		38,672
Franchise revenue
Renewal Royalty Fees	14,120		—		—		14,120
New Business Royalty Fees	5,213		—		—		5,213
Initial Franchise Fees	5,160		—		—		5,160
Other Income	71		—		—		71
Total Franchise Revenues	24,564		—		—		24,564
Interest income
Interest Income	452		—		—		452
Total Interest Income	452		—		—		452
Total Revenues	29,735		33,953		—		63,688
Operating expenses:
Employee compensation and benefits, excluding equity based compensation	12,326		17,524		—		29,850
General and administrative expenses	5,487		6,261		2,052		13,800
Bad debts	486		796		—		1,282
Total Operating Expenses	18,299		24,581		2,052		44,932
Adjusted EBITDA	11,436		9,372		(2,052)		18,756

Equity based compensation	—		—		(1,131)		(1,131)
Interest expense	—		—		(1,861)		(1,861)
Depreciation and amortization	(668)		(723)		—		(1,391)
Income tax benefit	—		—		(1,475)		(1,475)
Net income	$	10,768	$	8,649	$	(6,519)	$	12,898
September 30, 2019:
Total Assets	$	14,103	$	7,150	$	23,168	$	44,421

Organization - Narrative (Details) shares in Thousands			3 Months Ended		9 Months Ended
Organization - Narrative (Details) shares in Thousands	May 02, 2018	May 01, 2018 $ / shares shares	Sep. 30, 2020 location franchise	Sep. 30, 2019 location franchise	Sep. 30, 2020 location franchise	Sep. 30, 2019 location franchise
Subsidiary, Sale of Stock [Line Items]
Corporate-owned locations \| location			9	7	9	7
Franchise locations sold			110	72
Operating franchise locations			823	583	823	583
Franchises purchased			0	0	0	0
Goosehead Insurance, Inc. \| Goosehead Financial, LLC
Subsidiary, Sale of Stock [Line Items]
Ownership interest	37.30%
Pre-IPO LLC Members \| Goosehead Financial, LLC
Subsidiary, Sale of Stock [Line Items]
Ownership interest	62.70%
Initial Public Offering \| Class A Common Stock
Subsidiary, Sale of Stock [Line Items]
Shares issued (in shares) \| shares		9,810
Share price (in dollars per share) \| $ / shares		$ 10.00
Over-Allotment Option \| Class A Common Stock
Subsidiary, Sale of Stock [Line Items]
Shares issued (in shares) \| shares		1,280

Summary of Significant Accounting Policies - Narrative (Details) - Forecast - ASU 2016-02 $ in Millions	Dec. 31, 2020 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Lease obligation	$ 18
Right-of-use asset	$ 18

Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Accounting Policies [Abstract]
Cash and cash equivalents	$ 19,957	$ 14,337	$ 10,820
Restricted cash	1,378		728
Cash and cash equivalents, and restricted cash	$ 21,335	$ 15,260	$ 11,548	$ 19,011

Summary of Significant Accounting Policies - Impact of Revenue Recognition Standard (Details) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Jun. 30, 2020

Mar. 31, 2020

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Sep. 30, 2020

Sep. 30, 2019

Dec. 31, 2019

Dec. 31, 2018

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

$ 32,015

^[1]

$ 21,169

^[2]

$ 82,364

^[1]

$ 63,688

^[2]

17,901

^[1]

11,412

^[2]

47,308

^[1]

30,981

^[2]

376

^[1]

399

^[2]

1,004

^[1]

1,282

^[2]

(331)

^[1]

301

^[2]

(612)

^[1]

1,475

^[2]

$ 6,725

^[1]

$ 7,386

$ (296)

$ 2,763

^[2]

$ 2,817

$ 7,318

$ 13,815

^[1]

$ 12,898

^[2]

$ 0.19

^[1]

$ 0.07

^[2]

$ 0.39

^[1]

$ 0.30

^[2]

Commissions and agency fees receivable, net

$ 0.17

^[1]

$ 0.06

^[2]

$ 0.36

^[1]

$ 0.27

^[2]

$ 11,793

$ 6,884

Receivables from franchisees, net

17,437

13,616

48,777

15,537

3,790

1,357

Liabilities under tax receivable agreement, net of current portion

5,210

5,033

Contract liability

29,584

22,795

41,494

13,359

Accumulated deficit

(37,102)

(23,811)

Non-controlling interests

(37,297)

(22,000)

Total equity

(49,432)

$ (17,186)

$ (29,988)

$ (27,850)

$ (30,548)

$ (31,851)

(49,432)

$ (27,850)

$ (31,007)

$ (25,203)

376

^[1]

399

^[2]

1,004

^[1]

1,282

^[2]

(4,029)

(1,698)

(5,731)

(961)

(2,432)

(97)

(495)

244

6,789

Net cash provided by operating activities

(200)

15,041

16,493

Legacy GAAP

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

18,055

47,612

681

1,606

(689)

(784)

$ 4,659

$ 13,217

$ 0.15

$ 0.38

Commissions and agency fees receivable, net

$ 0.14

$ 0.36

$ 3,005

Receivables from franchisees, net

3,898

48,457

2,133

Liabilities under tax receivable agreement, net of current portion

4,977

Contract liability

41,471

Accumulated deficit

(34,051)

Non-controlling interests

(34,251)

Total equity

(43,335)

681

1,606

(472)

(1,827)

(3,465)

(150)

Adjustments due to Topic 606

(490)

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

(154)

(304)

(305)

(602)

358

172

$ 2,066

$ 598

$ 0.04

$ 0.01

Commissions and agency fees receivable, net

$ 0.03

$ 0

$ 8,788

Receivables from franchisees, net

13,539

320

1,657

Liabilities under tax receivable agreement, net of current portion

233

Contract liability

29,584

Accumulated deficit

(3,051)

Non-controlling interests

(3,046)

Total equity

(6,097)

(305)

(602)

(3,557)

(3,904)

1,033

(345)

6,789

Net cash provided by operating activities

490

Commissions and agency fees

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Commissions and agency fees | Legacy GAAP

19,385

^[1]

11,739

^[2]

49,444

^[1]

38,672

^[2]

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Commissions and agency fees | Adjustments due to Topic 606

15,430

45,183

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

3,955

4,261

Franchise revenues

Franchise revenues | Legacy GAAP

12,418

^[1]

$ 9,261

^[2]

32,347

^[1]

$ 24,564

^[2]

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

Franchise revenues | Adjustments due to Topic 606

14,408

36,744

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

$ (1,990)

$ (4,397)

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

Revenue (Details)	Sep. 30, 2020
Revenue from Contract with Customer [Abstract]
Amortization period	10 years

Revenue - Disaggregation of Revenue (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Sep. 30, 2020

Sep. 30, 2019

$ 32,015

^[1]

$ 21,169

^[2]

$ 82,364

^[1]

$ 63,688

^[2]

Renewal Commissions

7,931

6,056

21,382

16,744

New Business Commissions

4,790

3,294

12,452

8,766

Agency Fees

2,491

1,782

6,362

4,959

Contingent Commissions

4,173

607

9,248

8,203

Renewal Royalty Fees

New Business Royalty Fees

8,117

5,295

21,406

14,120

3,090

1,994

7,737

5,213

Initial Franchise Fees

1,152

1,935

3,031

5,160

Other Franchise Revenues

173

Interest income

Transferred at a point in time

212

^[1]

$ 169

^[2]

573

^[1]

$ 452

^[2]

15,212

40,196

Transferred over time

16,803

42,168

Franchise Channel

Franchise Channel | Renewal Commissions

15,292

39,050

Franchise Channel | New Business Commissions

Franchise Channel | Agency Fees

Franchise Channel | Contingent Commissions

Franchise Channel | Renewal Royalty Fees

2,662

6,130

Franchise Channel | New Business Royalty Fees

8,117

21,406

Franchise Channel | Initial Franchise Fees

3,090

7,737

Franchise Channel | Other Franchise Revenues

1,152

3,031

Franchise Channel | Interest income

173

Franchise Channel | Transferred at a point in time

212

573

Franchise Channel | Transferred over time

15,292

39,050

Corporate Channel

Corporate Channel | Renewal Commissions

16,723

43,314

Corporate Channel | New Business Commissions

7,931

21,382

Corporate Channel | Agency Fees

4,790

12,452

Corporate Channel | Contingent Commissions

2,491

6,362

Corporate Channel | Renewal Royalty Fees

1,511

3,118

Corporate Channel | New Business Royalty Fees

Corporate Channel | Initial Franchise Fees

Corporate Channel | Other Franchise Revenues

Corporate Channel | Interest income

Corporate Channel | Transferred at a point in time

Corporate Channel | Transferred over time

15,212

40,196

Accounts Receivable, Allowance for Credit Loss [Roll Forward]

$ 1,511

$ 3,118

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

Revenue - Contract Balances (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Dec. 31, 2019
Revenue from Contract with Customer [Abstract]
Cost to obtain franchise contracts			$ 1,309	$ 1,004
Increase (decrease) in cost to obtain franchise contracts	$ 305
Commissions and agency fees receivable, net			11,793	6,884
Increase (decrease) in commissions and agency fees receivable, net	4,909
Receivables from franchisees			17,437	13,616
Increase (decrease) in receivables from franchisees	3,821
Contract liability	22,795		$ 29,584	$ 22,795
Increase (decrease) in contract liability	6,789	$ 0
Contract Liability [Roll Forward]
Contract liability at December 31, 2019	22,795
Revenue recognized during the period	(3,031)
New deferrals	9,820
Contract liability at September 30, 2020	$ 29,584

Franchise Fees Receivable - Balance of Franchise Fees Receivable (Details) - Franchise Fees Receivable - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018
Accounts, Notes, Loans and Financing Receivable [Line Items]
Franchise fees receivable	$ 21,236	$ 15,314
Less: Unamortized discount	(5,519)	(3,771)
Less: Allowance for uncollectible franchise fees	(107)	(52)	$ (565)	$ (455)
Net franchise fees receivable	$ 15,610	$ 11,491

Franchise Fees Receivable - Roll-Forward of Allowance (Details) - Franchise Fees Receivable - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 52	$ 455
Charges to bad debts	182	486
Write offs	(127)	(376)
Ending balance	$ 107	$ 565

Allowance for Uncollectible Agency Fees - Roll-Forward of Allowance (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Sep. 30, 2020

Sep. 30, 2019

Accounts Receivable, Allowance for Credit Loss [Roll Forward]

$ 376

^[1]

$ 399

^[2]

$ 1,004

^[1]

$ 1,282

^[2]

Agency Fees

Beginning balance

178

242

822

796

Write offs

(541)

(730)

Ending balance

$ 459

$ 308

$ 459

$ 308

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

Property and equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 19,481	$ 14,718
Less accumulated depreciation	(7,116)	(5,176)
Property and equipment, net	12,365	9,542
Furniture & fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	4,256	3,012
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,429	1,480
Network equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	350	268
Phone system
Property, Plant and Equipment [Line Items]
Property and equipment, gross	937	885
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 11,509	$ 9,073

Debt - Narrative (Details) - USD ($)		9 Months Ended
Debt - Narrative (Details) - USD ($)	Jun. 24, 2020	Sep. 30, 2020	Sep. 30, 2019	Mar. 06, 2020	Mar. 05, 2020
Debt Instrument [Line Items]
Proceeds from notes payable		$ 64,821,000	$ 0
Line of Credit
Debt Instrument [Line Items]
Additional commitments				$ 50,000,000.0
Letter of credit		300,000
Remaining borrowing availability		19,700,000
Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing availability				25,000,000.0	$ 13,000,000.0
Debt issuance costs				200,000
Revolver balance		5,000,000.0
Secured Debt
Debt Instrument [Line Items]
Principal amount of debt				$ 80,000,000.0
Quarterly payments, first twelve months		500,000
Quarterly payments, next twelve months		1,000,000.0
Quarterly payments, last twelve months		2,000,000.0
Proceeds from notes payable	$ 37,900,000
Term note drawn		$ 79,000,000.0
Notes Payable to Bank
Debt Instrument [Line Items]
Principal amount of debt					$ 40,000,000.0
LIBOR \| Secured Debt
Debt Instrument [Line Items]
Basis spread on variable rate		2.50%

Debt - Leverage (Details)	9 Months Ended
Debt - Leverage (Details)	Sep. 30, 2020
Less than 1.50
Debt Instrument [Line Items]
Leverage ratio	1.50
Less than 1.50 \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	1.75%
Greater than 1.50
Debt Instrument [Line Items]
Leverage ratio	1.50
Greater than 1.50 \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	2.00%
Greater than 2.50
Debt Instrument [Line Items]
Leverage ratio	2.50
Greater than 2.50 \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%
Greater than 3.50
Debt Instrument [Line Items]
Leverage ratio	3.50
Greater than 3.50 \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	2.50%

Debt - Schedule of Maturities of Note Payable (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Debt Disclosure [Abstract]
2020	$ 500
2021	3,500
2022	7,000
2023	68,000
Total	$ 79,000

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Rent expense	$ 700	$ 500	$ 1,900	$ 1,400
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2020	707		707
2021	2,793		2,793
2022	2,762		2,762
2023	2,578		2,578
2024	2,394		2,394
Thereafter	9,231		9,231
Total	$ 20,465		$ 20,465

Income Taxes (Details) - USD ($)
shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Sep. 30, 2020

Sep. 30, 2019

Dec. 31, 2019

Effective income tax rate

Taxes

$ (331)

^[1]

$ 301

^[2]

$ (612)

^[1]

$ 1,475

^[2]

(5.00%)

10.00%

(5.00%)

10.00%

$ 48,777

$ 15,537

Uncertain tax positions

$ 0

Tax Receivable Agreement

Percentage due to related parties

85.00%

Tax Receivable Agreement | Pre-IPO LLC Members

Percentage due to related parties

85.00%

Due to related parties

42,200

$ 42,200

Due to related parties, current

$ 700

LLC Units

Less: income before taxes attributable to non-controlling interests

297

1,897

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

Stockholders' Equity - Narrative (Details) shares in Thousands	Sep. 30, 2020 vote shares	Dec. 31, 2019 shares
Class A Common Stock
Class of Stock [Line Items]
Common stock shares outstanding (in shares) \| shares	17,499	15,238
Vote per share \| vote	1
Class B Common Stock
Class of Stock [Line Items]
Common stock shares outstanding (in shares) \| shares	19,158	21,055
Vote per share \| vote	1

Stockholders' Equity - Basic EPS (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Sep. 30, 2019

Sep. 30, 2020

Sep. 30, 2019

Pro forma earnings per share:

Income before taxes

$ 6,394

^[1]

$ 3,064

^[2]

$ 13,203

^[1]

$ 14,373

^[2]

3,458

1,801

7,325

8,662

Income before taxes attributable to GSHD

2,936

1,263

5,878

5,711

Less: income tax expense (benefit) attributable to GSHD

(331)

265

(612)

1,338

Net income attributable to GSHD

$ 3,267

$ 998

$ 6,490

$ 4,373

Weighted average shares of Class A common stock outstanding - basic (in shares)

17,376

^[1]

15,140

^[2]

16,466

^[1]

14,746

^[2]

Effect of dilutive securities, stock options (in shares)

1,539

1,311

1,460

1,190

Weighted average shares of Class A common stock outstanding - diluted (in shares)

18,915

^[1]

16,451

^[2]

17,926

^[1]

15,936

^[2]

Earnings per share of Class A common stock - basic (in dollars per share)

$ 0.19

^[1]

$ 0.07

^[2]

$ 0.39

^[1]

$ 0.30

^[2]

Earnings per share of Class A common stock - diluted (in dollars per share)

0.17

^[1]

0.06

^[2]

0.36

^[1]

0.27

^[2]

Class A Common Stock

Pro forma earnings per share:

Earnings per share of Class A common stock - basic (in dollars per share)

0.19

0.07

0.39

0.30

Earnings per share of Class A common stock - diluted (in dollars per share)

$ 0.17

$ 0.06

$ 0.36

$ 0.27

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

Non-controlling interest (Details) shares in Thousands, $ in Millions		3 Months Ended		9 Months Ended
	May 01, 2018	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)
Noncontrolling Interest [Line Items]
Distributions \| $		$ 1.6	$ 1.4	$ 4.8	$ 6.3
LLC Units
Noncontrolling Interest [Line Items]
Conversion ratio	1
Redemption of LLC Units (in shares)		297		1,897
Class A Common Stock
Noncontrolling Interest [Line Items]
Redemption of LLC Units (in shares)		297		1,897
Class B Common Stock
Noncontrolling Interest [Line Items]
Redemption of LLC Units (in shares)		297		1,897
Pre-IPO LLC Members
Noncontrolling Interest [Line Items]
Distributions \| $		$ 0.8	0.8	$ 2.7	3.7
Goosehead Insurance, Inc.
Noncontrolling Interest [Line Items]
Distributions \| $		$ 0.7	$ 0.6	$ 2.2	$ 2.6
Noncontrolling interest holders
Noncontrolling Interest [Line Items]
Ownership interest held by non-controlling interest holders		0.525		0.551
Noncontrolling interest holders \| LLC Units
Noncontrolling Interest [Line Items]
Redemption of LLC Units (in shares)		297		1,897

Non-controlling interest - Ownership interests (Details) - shares shares in Thousands			9 Months Ended
	Aug. 10, 2020	Mar. 18, 2019	Sep. 30, 2020
Noncontrolling Interest [Line Items]
Number of LLC units outstanding (in shares)	36,538	36,285	36,657
Noncontrolling interest, ownership percentage			100.00%
Goosehead Financial, LLC
Noncontrolling Interest [Line Items]
Ownership interest held by Goosehead Insurance, Inc.			47.70%
Noncontrolling interest holders
Noncontrolling Interest [Line Items]
Ownership interest held by non-controlling interest holders			52.30%
Parent
Noncontrolling Interest [Line Items]
Number of LLC units outstanding (in shares)			17,499
Non-controlling interest
Noncontrolling Interest [Line Items]
Number of LLC units outstanding (in shares)			19,158

Non-controlling interest - Effect of changes in ownership interests on equity (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

Jun. 30, 2020

Mar. 31, 2020

Sep. 30, 2019

Jun. 30, 2019

Mar. 31, 2019

Sep. 30, 2020

Sep. 30, 2019

Noncontrolling Interest [Line Items]

Net Income attributable to Goosehead Insurance Inc.

$ 3,267

^[1]

$ 998

^[2]

$ 6,490

^[1]

$ 4,373

^[2]

Decrease in additional paid-in capital as a result of the redemption of LLC interests

$ 0

Increase in additional paid-in capital as a result of activity under employee stock purchase plan

142

138

116

142

Total effect of changes in ownership interest on equity attributable to Goosehead Insurance Inc.

2,832

853

4,678

3,214

Parent

Noncontrolling Interest [Line Items]

Decrease in additional paid-in capital as a result of the redemption of LLC interests

(577)

(762)

(869)

(145)

(477)

$ (679)

(2,208)

(1,301)

Increase in additional paid-in capital as a result of activity under employee stock purchase plan

$ 142

$ 138

$ 116

$ 0

$ 142

$ 396

$ 142

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Equity-Based Compensation - Schedule of Equity-Based Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
	Apr. 01, 2020	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense		$ 1,416	$ 396	$ 3,330	$ 1,131
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense		$ 1,400	$ 400	$ 3,300	$ 1,100
Stock options granted (in shares)	900,000
Exercise price (in USD per share)	$ 40.88
Grant date fair value (in USD per share)	$ 16.31

Equity-Based Compensation - Stock Option Valuation Assumptions (Details) - Stock Option	Apr. 01, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected volatility	40.00%
Expected dividend yield	0.00%
Expected term (in years)	6 years 6 months
Risk-free interest rate	0.47%

Dividends (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands

3 Months Ended

9 Months Ended

Aug. 10, 2020

Jul. 30, 2020

Mar. 18, 2019

Mar. 07, 2019

Sep. 30, 2020

^[1]

Sep. 30, 2019

^[2]

Sep. 30, 2020

Sep. 30, 2019

^[2]

Dividends declared per share (in dollars per share)

$ 42,000

$ 15,000

$ 1.15

$ 0

$ 1.15

^[1]

$ 0.41

LLC Units held (in shares)

36,538

36,285

36,657

LLC Units

$ 42,000

$ 15,000

Class A Common Stock

Dividends declared per share (in dollars per share)

$ 19,895

$ 5,962

$ 1.15

$ 0.41

LLC Units held (in shares)

17,308

14,421

Class B Common Stock

LLC Units held (in shares)

$ 22,105

$ 9,038

19,230

21,864

[1]	The three and nine months ended September 30, 2020 are reported under ASC 606
[2]	The three and nine months ended September 30, 2019 are reported under ASC 605

Segment Information - Schedule of Segment Information (Details)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2020

USD ($)

Jun. 30, 2020

USD ($)

Mar. 31, 2020

USD ($)

Sep. 30, 2019

USD ($)

Jun. 30, 2019

USD ($)

Mar. 31, 2019

USD ($)

Sep. 30, 2020

USD ($)

segment

Sep. 30, 2019

USD ($)

Dec. 31, 2019

USD ($)

Segment Reporting [Abstract]

Number of reportable segments | segment

Revenues:

$ 32,015

^[1]

$ 21,169

^[2]

$ 82,364

^[1]

$ 63,688

^[2]

Other Income

173

212

169

573

452

Employee compensation and benefits, excluding equity based compensation

16,485

11,016

43,978

29,850

5,872

^[1]

5,169

^[2]

17,108

^[1]

13,800

^[2]

376

^[1]

399

^[2]

1,004

^[1]

1,282

^[2]

22,733

16,584

62,090

44,932

9,282

4,585

20,274

18,756

^[1]

^[2]

^[1]

^[2]

(1,416)

(396)

(3,330)

(1,131)

(582)

^[1]

(609)

^[2]

(1,665)

^[1]

(1,861)

^[2]

(900)

^[1]

(516)

^[2]

(2,152)

^[1]

(1,391)

^[2]

331

^[1]

(301)

^[2]

612

^[1]

(1,475)

^[2]

6,725

^[1]

$ 7,386

$ (296)

2,763

^[2]

$ 2,817

$ 7,318

13,815

^[1]

12,898

^[2]

119,954

44,421

119,954

44,421

$ 64,628

Franchise Channel

Revenues:

15,292

39,050

Corporate Channel

Revenues:

Operating Segments | Franchise Channel

16,723

43,314

Revenues:

15,292

9,843

39,050

29,735

Other Income

173

212

169

573

452

Employee compensation and benefits, excluding equity based compensation

6,552

4,531

18,413

12,326

2,329

2,325

6,488

5,487

119

182

486

8,926

6,975

25,083

18,299

6,366

2,868

13,967

11,436

(473)

(266)

(1,182)

(668)

5,903

2,602

12,861

10,768

Operating Segments | Corporate Channel

40,578

14,103

40,578

14,103

Revenues:

16,723

11,326

43,314

33,953

Other Income

Employee compensation and benefits, excluding equity based compensation

9,933

6,485

25,565

17,524

2,781

2,281

8,111

6,261

331

280

822

796

13,045

9,046

34,498

24,581

3,678

2,280

8,816

9,372

(427)

(250)

(970)

(723)

3,251

2,030

7,846

8,649

24,977

7,150

24,977

7,150

Revenues:

Employee compensation and benefits, excluding equity based compensation

762

563

2,509

2,052

762

563

2,509

2,052

(762)

(563)

(2,509)

(2,052)

(1,416)

(396)

(3,330)

(1,131)

(582)

(609)

(1,665)

(1,861)

331

(301)

612

(1,475)

(2,429)

(1,869)

(6,892)

(6,519)

54,399

23,168

54,399

23,168

Renewal Commissions

Revenues:

Renewal Commissions | Franchise Channel

7,931

6,056

21,382

16,744

Revenues:

Renewal Commissions | Corporate Channel

Revenues:

Renewal Commissions | Operating Segments | Franchise Channel

7,931

21,382

Revenues:

Renewal Commissions | Operating Segments | Corporate Channel

Revenues:

Renewal Commissions | Other

7,931

6,056

21,382

16,744

Revenues:

Agency Fees

Revenues:

Agency Fees | Franchise Channel

2,491

1,782

6,362

4,959

Revenues:

Agency Fees | Corporate Channel

Revenues:

Agency Fees | Operating Segments | Franchise Channel

2,491

6,362

Revenues:

Agency Fees | Operating Segments | Corporate Channel

Revenues:

2,491

1,782

6,362

4,959

Agency Fees | Other

Revenues:

New Business Commissions

Revenues:

New Business Commissions | Franchise Channel

4,790

3,294

12,452

8,766

Revenues:

New Business Commissions | Corporate Channel

Revenues:

New Business Commissions | Operating Segments | Franchise Channel

4,790

12,452

Revenues:

New Business Commissions | Operating Segments | Corporate Channel

Revenues:

New Business Commissions | Other

4,790

3,294

12,452

8,766

Revenues:

Contingent Commissions

Revenues:

Contingent Commissions | Franchise Channel

4,173

607

9,248

8,203

Revenues:

Contingent Commissions | Corporate Channel

2,662

6,130

Revenues:

Contingent Commissions | Operating Segments | Franchise Channel

1,511

3,118

Revenues:

Contingent Commissions | Operating Segments | Corporate Channel

2,662

413

6,130

4,719

Revenues:

Contingent Commissions | Other

1,511

194

3,118

3,484

Revenues:

Commissions and agency fees

Revenues:

Commissions and agency fees | Operating Segments | Franchise Channel

19,385

^[1]

11,739

^[2]

49,444

^[1]

38,672

^[2]

Revenues:

Commissions and agency fees | Operating Segments | Corporate Channel

2,662

413

6,130

4,719

Revenues:

Commissions and agency fees | Other

16,723

11,326

43,314

33,953

Revenues:

Renewal Royalty Fees

Revenues:

Renewal Royalty Fees | Franchise Channel

8,117

5,295

21,406

14,120

Revenues:

Renewal Royalty Fees | Corporate Channel

8,117

21,406

Revenues:

Renewal Royalty Fees | Operating Segments | Franchise Channel

Revenues:

Renewal Royalty Fees | Operating Segments | Corporate Channel

8,117

5,295

21,406

14,120

Revenues:

Renewal Royalty Fees | Other

Revenues:

New Business Royalty Fees

Revenues:

New Business Royalty Fees | Franchise Channel

3,090

1,994

7,737

5,213

Revenues:

New Business Royalty Fees | Corporate Channel

3,090

7,737

Revenues:

New Business Royalty Fees | Operating Segments | Franchise Channel

Revenues:

New Business Royalty Fees | Operating Segments | Corporate Channel

3,090

1,994

7,737

5,213

Revenues:

New Business Royalty Fees | Other

Revenues:

Initial Franchise Fees

Revenues:

Initial Franchise Fees | Franchise Channel

1,152

1,935

3,031

5,160

Revenues:

Initial Franchise Fees | Corporate Channel

1,152

3,031

Revenues:

Initial Franchise Fees | Operating Segments | Franchise Channel

Revenues:

Initial Franchise Fees | Operating Segments | Corporate Channel

1,152

1,935

3,031

5,160

Revenues:

Initial Franchise Fees | Other

Revenues:

Franchise Revenues

Revenues:

Franchise Revenues | Operating Segments | Franchise Channel

12,418

9,261

32,347

24,564

Revenues:

Franchise Revenues | Operating Segments | Corporate Channel

12,418

9,261

32,347

24,564

Revenues:

Franchise Revenues | Other

Revenues:

Interest income

Revenues:

212

^[1]

$ 169

^[2]

573

^[1]

452

^[2]

Interest income | Franchise Channel

212

573

452

Revenues:

Interest income | Corporate Channel

212

573

Revenues:

Interest income | Operating Segments | Franchise Channel

Revenues:

Interest income | Operating Segments | Corporate Channel

212

573

452

Revenues:

Interest income | Other

Revenues: