0001726978-23-000042 | 10-Q | XBRL Viewer

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Cover Page - shares	3 Months Ended
Cover Page - shares	Mar. 31, 2023	Apr. 24, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-38466
Entity Registrant Name	GOOSEHEAD INSURANCE, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-3886022
Entity Address, Address Line One	1500 Solana Blvd, Building 4, Suite 4500
Entity Address, City or Town	Westlake
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	76262
City Area Code	469
Local Phone Number	480-3669
Title of 12(b) Security	Class A Common Stock, par value $.01 per share
Trading Symbol	GSHD
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Central Index Key	0001726978
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Common Class A
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		23,480,674
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		14,047,138

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues:
Revenues	$ 57,955	$ 41,278
Operating Expenses:
Employee compensation and benefits	36,882	31,484
General and administrative expenses	15,856	13,524
Bad debts	1,655	796
Depreciation and amortization	2,093	1,576
Total operating expenses	56,486	47,380
Income (loss) from operations	1,469	(6,102)
Other Income (Expense):
Interest expense	(1,731)	(883)
Loss before taxes	(262)	(6,985)
Tax benefit	(81)	(1,602)
Net loss	(181)	(5,383)
Less: net loss attributable to non-controlling interests	(100)	(3,126)
Net loss attributable to Goosehead Insurance, Inc.	$ (81)	$ (2,257)
Earnings per share:
Basic (in dollars per share)	$ 0	$ (0.11)
Diluted (in dollars per share)	$ 0	$ (0.11)
Weighted average shares of Class A common stock outstanding
Basic (in shares)	23,206	20,240
Diluted (in shares)	23,206	20,240
Commissions and agency fees
Revenues:
Revenues	$ 25,484	$ 20,009
Franchise revenues
Revenues:
Revenues	32,074	20,950
Interest income
Revenues:
Revenues	$ 397	$ 319

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 24,588	$ 28,743
Restricted cash	1,590	1,644
Commissions and agency fees receivable, net	7,108	14,440
Receivable from franchisees, net	8,928	4,932
Prepaid expenses	13,279	4,334
Total current assets	55,493	54,093
Receivable from franchisees, net of current portion	17,543	23,835
Property and equipment, net of accumulated depreciation	36,564	35,347
Right-of-use asset	42,725	44,080
Intangible assets, net of accumulated amortization	5,172	4,487
Deferred income taxes, net	159,468	155,318
Other assets	4,617	4,193
Total assets	321,582	321,353
Current Liabilities:
Accounts payable and accrued expenses	14,237	15,958
Premiums payable	1,590	1,644
Lease liability	8,218	6,627
Contract liabilities	5,394	6,031
Note payable	7,500	6,875
Total current liabilities	36,939	37,135
Lease liability, net of current portion	62,246	64,947
Note payable, net of current portion	84,893	86,711
Contract liabilities, net of current portion	34,715	40,522
Liabilities under tax receivable agreement	128,773	125,662
Total liabilities	347,566	354,977
Additional paid in capital	77,569	70,866
Accumulated deficit	(60,754)	(60,570)
Total stockholders' equity	17,189	10,670
Non-controlling interests	(43,173)	(44,294)
Total equity	(25,984)	(33,624)
Total liabilities and equity	321,582	321,353
Common Class A
Current Liabilities:
Common stock	231	228
Class B Common Stock
Current Liabilities:
Common stock	$ 143	$ 146

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2023	Dec. 31, 2022
Common Class A
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock shares authorized (in shares)	300,000	300,000
Common stock shares issued (in shares)	23,379	23,034
Common stock shares outstanding (in shares)	23,379	23,034
Class B Common Stock
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock shares authorized (in shares)	50,000	50,000
Common stock shares issued (in shares)	14,147	14,471
Common stock shares outstanding (in shares)	14,147	14,471

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Class A	Class B Common Stock	Total stockholders' equity	Common stock Common Class A	Common stock Class B Common Stock	Additional paid in capital	Accumulated deficit	Non-controlling interest
Beginning balance (in shares) at Dec. 31, 2021					20,198,000	16,909,000
Beginning balance at Dec. 31, 2021	$ (69,188)			$ (14,020)	$ 200	$ 170	$ 46,281	$ (60,671)	$ (55,168)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(5,383)			(2,257)				(2,257)	(3,126)
Exercise of stock options (in shares)					19,000
Exercise of stock options	256			256			256
Equity-based compensation	5,788			5,788			5,788
Activity under employee stock purchase plan (in shares)					3,000
Activity under employee stock purchase plan	214			214			214
Redemption of LLC Units (in shares)					101,000	101,000
Redemption of LLC Units	0			(344)	$ 1	$ (1)	(344)		344
Deferred tax adjustments related to Tax Receivable Agreement	416			394			394		22
Reallocation of Non-controlling interest	0			(478)				(478)	478
Ending balance (in shares) at Mar. 31, 2022					20,321,000	16,808,000
Ending balance at Mar. 31, 2022	(67,897)			(10,447)	$ 201	$ 169	52,589	(63,406)	(57,450)
Beginning balance (in shares) at Dec. 31, 2022		23,034,000	14,471,000		23,034,000	14,471,000
Beginning balance at Dec. 31, 2022	(33,624)			10,670	$ 228	$ 146	70,866	(60,570)	(44,294)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(181)			(81)				(81)	(100)
Exercise of stock options (in shares)					17,000
Exercise of stock options	173			173			173
Equity-based compensation	6,620			6,620			6,620
Activity under employee stock purchase plan (in shares)					4,000
Activity under employee stock purchase plan	201			201			201
Redemption of LLC Units (in shares)		323,000	323,000		323,000	323,000
Redemption of LLC Units	0			(990)	$ 3	$ (3)	(990)		990
Deferred tax adjustments related to Tax Receivable Agreement	828			699			699		129
Reallocation of Non-controlling interest	0			(103)				(103)	103
Ending balance (in shares) at Mar. 31, 2023		23,379,000	14,147,000		23,379,000	14,147,000
Ending balance at Mar. 31, 2023	$ (25,984)			$ 17,189	$ 231	$ 143	$ 77,569	$ (60,754)	$ (43,173)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss	$ (181)	$ (5,383)
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	2,150	1,632
Bad debt expense	1,655	796
Equity-based compensation	6,620	5,788
Impacts of Tax Receivable Agreement	3,574	2,235
Deferred income taxes	(3,322)	(2,885)
Noncash lease activity	245	1,004
Changes in operating assets and liabilities:
Receivable from franchisees	1,332	(2,397)
Commissions and agency fees receivable	6,930	2,727
Prepaid expenses	(8,945)	(5,673)
Other assets	(424)	(1,743)
Accounts payable and accrued expenses	(3,477)	(3,762)
Contract liabilities	(6,444)	2,968
Premiums payable	(352)	(461)
Net cash used for operating activities	(639)	(5,154)
Cash flows from investing activities:
Proceeds from notes receivable	8	10
Purchase of software	(784)	(773)
Cash consideration paid for asset acquisitions	(161)	0
Purchase of property and equipment	(1,756)	(1,728)
Net cash used for investing activities	(2,693)	(2,491)
Cash flows from financing activities:
Repayment of note payable	(1,250)	(625)
Proceeds from the issuance of Class A common stock	373	470
Net cash used for financing activities	(877)	(155)
Net decrease in cash and restricted cash	(4,209)	(7,800)
Cash and cash equivalents, and restricted cash, beginning of period	30,387	30,479
Cash and cash equivalents, and restricted cash, end of period	26,178	22,679
Supplemental disclosures of cash flow data:
Cash paid during the period for interest	1,675	1,086
Cash paid for income taxes	$ 2	$ 9

Organization	3 Months Ended
Organization	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization	Organization Goosehead Insurance, Inc. (“GSHD”) is the sole managing member of Goosehead Financial, LLC (“GF”) and 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 12 and 15 corporate-owned locations in operation at March 31, 2023 and 2022, 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 March 31, 2023 and 2022, the Company onboarded 83 and 113 franchise locations, respectively, and had 1,387 and 1,268 operating franchise locations as of March 31, 2023 and 2022, respectively. No franchises were purchased during the three months ended March 31, 2023 and 2022. All intercompany accounts and transactions have been eliminated in consolidation.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

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 March 31, 2023 and December 31, 2022, the condensed consolidated results of operations, stockholders' equity and statements of cash flows for the three months ended March 31, 2023 and 2022. 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 for the fiscal year ended December 31, 2022.

The results of operations for the three months ended March 31, 2023 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.

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. 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 $1.6 million and $1.5 million as of March 31, 2023 and 2022, 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 three months ended March 31, 2023 and 2022 (in thousands):


	March 31,
	2023		2022
Cash and cash equivalents	$	24,588	$	21,187
Restricted cash	1,590		1,492
Cash and cash equivalents, and restricted cash	$	26,178	$	22,679

Recently adopted accounting pronouncements

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 is effective from March 12, 2020 through December 31, 2022. In December 2022, ASU 2022-06 extended the effective period through December 31, 2024. A substantial portion of our indebtedness bears interest at variable interest rates, primarily based on USD-LIBOR. The adoption of ASU 2020-04 did not have a material impact on our condensed consolidated financial statements. The standard will ease, if warranted, the administrative requirements for accounting for the future effects of the rate reform. Our debt agreement contains a provision to move to the Secured Overnight Financing Rate ("SOFR") if or when LIBOR is phased out.

Revenue

3 Months Ended

Mar. 31, 2023

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 transaction 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, or 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

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 for the franchise sales team, 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 source (in thousands):


	Three Months Ended March 31,
		2023		2022
Type of revenue stream:
Commissions and agency fees
Renewal Commissions		$	15,818	$	10,207
New Business Commissions		5,517		5,367
Agency Fees		2,230		2,637
Contingent Commissions		1,920		1,798
Franchise revenues
Renewal Royalty Fees		22,752		14,002
New Business Royalty Fees		5,671		4,292
Initial Franchise Fees		3,063		2,296
Other Franchise Revenues		587		360
Interest Income		397		319
Total Revenues		$	57,955	$	41,278

Timing of revenue recognition:
Transferred at a point in time		$	23,565	$	18,211
Transferred over time		34,390		23,067
Total Revenues		$	57,955	$	41,278

Contract Balances

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


	March 31, 2023		December 31, 2022		Increase/(decrease)
Cost to obtain franchise contracts(1)	$	3,187	$	3,255	$	(68)
Commissions and agency fees receivable, net(2)	7,108		14,440		(7,332)
Receivable from franchisees(2)	26,471		28,767		(2,296)
Contract liabilities(2)(3)	40,109		46,553		(6,444)

(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.

The Company records Franchise Fees as contract liabilities on the Condensed Consolidated Balance Sheets when the agreement is executed. Contract liabilities are reduced as fees are recognized in revenue over the expected life of the franchise license. As the term of the franchise license is typically ten years, substantially all of the franchise fee revenue recognized in the period ended March 31, 2023 was included in the contract liabilities balance as of December 31, 2022.

The weighted average remaining amortization period for contract liabilities related to open franchises is 7.8 years.

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



Contract liabilities at December 31, 2022	$	46,553
Revenue recognized during the period	(3,063)
New deferrals(1)	2,210
Write offs(2)	(5,591)
Contract liabilities at March 31, 2023	$	40,109

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

(2) Franchise Fees, net of recognized revenue, no longer deferred due to the termination of the Franchise Agreement.

- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI https://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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&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 https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Franchise Fees Receivable

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Franchise Fees Receivable

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


	March 31, 2023		December 31, 2022
Franchise fees receivable(1)	$	27,518	$	35,606
Less: Unamortized discount(1)	(8,252)		(9,896)
Less: Allowance for uncollectible franchise fees(1)	(347)		(487)
Net franchise fees receivable(1)	$	18,919	$	25,223

(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, 2022	$	487
Charges to bad debts	762
Write offs	(902)
Balance at March 31, 2023	$	347

Balance at December 31, 2021	$	303
Charges to bad debts	271
Write offs	(186)
Balance at March 31, 2022	$	388

Allowance for Uncollectible Agency Fees

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Allowance for Uncollectible Agency Fees

Allowance for Uncollectible Agency FeesActivity in the allowance for uncollectible agency fees was as follows (in thousands):


Balance at December 31, 2022	$	450
Charges to bad debts	318
Write offs	(286)
Balance at March 31, 2023	$	482

Balance at December 31, 2021	$	489
Charges to bad debts	525
Write offs	(499)
Balance at March 31, 2022	$	515

Property and equipment

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Property and equipment

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


	March 31, 2023		December 31, 2022
Furniture & fixtures	$	11,264	$	9,772
Computer equipment	4,061		4,041
Network equipment	423		423
Phone system	326		326
Leasehold improvements	37,545		36,009
Total	53,619		50,571
Less accumulated depreciation	(17,055)		(15,224)
Property and equipment, net	$	36,564	$	35,347

Depreciation expense was $1.8 million and $1.4 million for three months ended March 31, 2023 and 2022, respectively.

Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

On July 21, 2021, the Company refinanced its $25.0 million revolving credit facility and $80.0 million term note payable to a $50.0 million revolving credit facility and $100.0 million term note payable to finance general corporate purposes and the special dividend. 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 by an additional $25.0 million.

The $50.0 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 March 31, 2023 the Company was accruing interest at LIBOR plus 225 basis points. At March 31, 2023, the Company had nothing drawn against the revolving credit facility and had a letter of credit of $0.2 million applied against the maximum borrowing availability, payable on July 21, 2026. Thus, amounts available to draw totaled $49.8 million. The revolving credit facility is collateralized by substantially all the Company’s assets, which includes rights to future commissions and royalties.

The term note is payable in quarterly installments of $0.6 million the first twelve months, $1.3 million the next twelve months, $1.9 million the next twelve months, and $2.5 million the last twenty-four months, with a balloon payment of $65.6 million on July 21, 2026. The note is collateralized by substantially all of the Company’s assets, which includes rights to future commissions and royalties. Interest is calculated initially at LIBOR plus 2.25%, then at an interest rate based on the Company's leverage ratio for the preceding period. At March 31, 2023 the Company was accruing interest at LIBOR plus 225 basis points.

The interest rate for each leverage ratio tier is 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 five years are as follows (in thousands):


	Amount
2023	$	5,625
2024	9,375
2025	10,000
2026	68,125
2027	—
Total	$	93,125

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. As of March 31, 2023, the Company's maximum allowable trailing twelve months debt-to-EBITDA ratio, as defined by the credit agreement, was 4x. 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 March 31, 2023, the Company was in compliance with these covenants.

Because of both instruments’ variable interest rate, the note payable balance at March 31, 2023 and December 31, 2022, 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.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

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+ Details

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes GSHD is 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) GSHD is 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. Provision benefit from income taxes for the three months ended March 31, 2023 was $0.1 million compared to $1.6 million for the three months ended March 31, 2022. The effective tax rate was 31% for the three months ended March 31, 2023 and 23% for the three months ended March 31, 2022. The increase in the effective tax rate for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 was primarily due to an increase in pre-tax income between periods. Deferred taxes Deferred tax assets at March 31, 2023 were $159.5 million compared to $155.3 million at December 31, 2022. 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 months ended March 31, 2023. 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 months ended March 31, 2023, an aggregate of 323,485 LLC Units were redeemed by the Pre-IPO LLC Members for newly issued shares of Class A common stock. In connection with these redemptions, GSHD received 323,485 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 March 31, 2023, the total amount of TRA Payments due to the Pre-IPO LLC Members under the tax receivable agreement was $129.2 million, of which $0.5 million was current and included in Accounts payables and accrued expenses on the Condensed 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 March 31, 2023.

- Definition

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.

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+ Details

Stockholders' Equity

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Stockholders' Equity

Class A Common Stock

GSHD has a total of 23,379 thousand shares of its Class A common stock outstanding at March 31, 2023. 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 14,147 thousand shares of its Class B common stock outstanding at March 31, 2023. 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 months ended March 31, 2023 and 2022, divided by the basic weighted average number of Class A common stock as of March 31, 2023 and 2022 (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. 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 March 31,
		2023		2022
Numerator:
Loss before taxes		$	(262)	$	(6,985)
Less: loss before taxes attributable to non-controlling interests		(100)		(3,126)
Loss before taxes attributable to GSHD		(162)		(3,859)
Less: income tax benefit attributable to GSHD		(81)		(1,602)
Net loss attributable to GSHD		$	(81)	$	(2,257)
Denominator:
Weighted average shares of Class A common stock outstanding - basic		23,206		20,240
Effect of dilutive securities:
Stock options(1)		—		—
Weighted average shares of Class A common stock outstanding - diluted		23,206		20,240

Earnings per share of Class A common stock - basic		$	—	$	(0.11)
Earnings per share of Class A common stock - diluted		$	—	$	(0.11)

(1) 3,235 stock options were excluded from the computation of diluted earnings per share of Class A common stock for the three months ended March 31, 2023 because the effect would have been anti-dilutive. 2,300 stock options were excluded from the computation of diluted earnings per share of Class A common stock for the three months ended March 31, 2022 because the effect would have been anti-dilutive.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Non-controlling interest

3 Months Ended

Mar. 31, 2023

Noncontrolling Interest [Abstract]

Non-controlling interest

GSHD is 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.

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 months ended March 31, 2023, an aggregate of 323 thousand LLC Units were redeemed by the non-controlling interest holders. Pursuant to the GF LLC Agreement, GSHD issued 323 thousand shares of Class A common stock in connection with these redemptions and received 323 thousand LLC Interests, increasing GSHD's ownership interest in GF. Simultaneously, and in connection with these redemptions, and 323 thousand shares of Class B common stock were surrendered and cancelled.

The following table summarizes the ownership interest in GF as of March 31, 2023 (in thousands):


	March 31, 2023
	LLC Units	Ownership %
Number of LLC Units held by GSHD	23,379	62.3%
Number of LLC Units held by non-controlling interest holders	14,147	37.7%
Number of LLC Units outstanding	37,526	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 months ended March 31, 2023 was 38.1%.

The following table summarizes the effects of changes in ownership in GF on the equity of GSHD for the three months ended March 31, 2023 and 2022 as follows (in thousands):


	Three Months Ended March 31,
		2023		2022
Net loss attributable to Goosehead Insurance Inc.		$	(81)	$	(2,257)
Transfers (to) from non-controlling interests:
Decrease in additional paid-in capital as a result of the redemption of LLC interests		(990)		(344)
Increase in additional paid-in capital as a result of activity under employee stock purchase plan		201		214
Total effect of changes in ownership interest on equity attributable to Goosehead Insurance Inc.		$	(870)	$	(2,387)

Equity-Based Compensation	3 Months Ended
Equity-Based Compensation	Mar. 31, 2023
Share-Based Payment Arrangement [Abstract]
Equity-Based Compensation	Equity-Based CompensationStock option expense was $6.6 million for the three months ended March 31, 2023. Stock option expense was $5.8 million for the three months ended March 31, 2022.

Litigation	3 Months Ended
Litigation	Mar. 31, 2023
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)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2023
Accounting Policies [Abstract]
Basis of Combination	All intercompany accounts and transactions have been eliminated in consolidation.
Basis of Presentation	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 March 31, 2023 and December 31, 2022, the condensed consolidated results of operations, stockholders' equity and statements of cash flows for the three months ended March 31, 2023 and 2022. 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 for the fiscal year ended December 31, 2022. The results of operations for the three months ended March 31, 2023 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.
Use of Estimates	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. Accordingly, actual results could differ from those estimates as more information becomes known.
Income Taxes	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	Restricted CashThe Company holds premiums received from the insured, but not yet remitted to the insurance Carrier, in a fiduciary capacity.
Recently Adopted Accounting Pronouncements	Recently adopted accounting pronouncements 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 is effective from March 12, 2020 through December 31, 2022. In December 2022, ASU 2022-06 extended the effective period through December 31, 2024. A substantial portion of our indebtedness bears interest at variable interest rates, primarily based on USD-LIBOR. The adoption of ASU 2020-04 did not have a material impact on our condensed consolidated financial statements. The standard will ease, if warranted, the administrative requirements for accounting for the future effects of the rate reform. Our debt agreement contains a provision to move to the Secured Overnight Financing Rate ("SOFR") if or when LIBOR is phased out.
Framework for Measuring Fair Value	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.

- Definition

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.

+ References + Details

Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Schedule of Restrictions on Cash and Cash Equivalents


	March 31,
	2023		2022
Cash and cash equivalents	$	24,588	$	21,187
Restricted cash	1,590		1,492
Cash and cash equivalents, and restricted cash	$	26,178	$	22,679

Schedule of Reconciliation of Cash and Restricted Cash


	March 31,
	2023		2022
Cash and cash equivalents	$	24,588	$	21,187
Restricted cash	1,590		1,492
Cash and cash equivalents, and restricted cash	$	26,178	$	22,679

Revenue (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

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


	Three Months Ended March 31,
		2023		2022
Type of revenue stream:
Commissions and agency fees
Renewal Commissions		$	15,818	$	10,207
New Business Commissions		5,517		5,367
Agency Fees		2,230		2,637
Contingent Commissions		1,920		1,798
Franchise revenues
Renewal Royalty Fees		22,752		14,002
New Business Royalty Fees		5,671		4,292
Initial Franchise Fees		3,063		2,296
Other Franchise Revenues		587		360
Interest Income		397		319
Total Revenues		$	57,955	$	41,278

Timing of revenue recognition:
Transferred at a point in time		$	23,565	$	18,211
Transferred over time		34,390		23,067
Total Revenues		$	57,955	$	41,278

Schedule of Contract Balances

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


	March 31, 2023		December 31, 2022		Increase/(decrease)
Cost to obtain franchise contracts(1)	$	3,187	$	3,255	$	(68)
Commissions and agency fees receivable, net(2)	7,108		14,440		(7,332)
Receivable from franchisees(2)	26,471		28,767		(2,296)
Contract liabilities(2)(3)	40,109		46,553		(6,444)

(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 liabilities at December 31, 2022	$	46,553
Revenue recognized during the period	(3,063)
New deferrals(1)	2,210
Write offs(2)	(5,591)
Contract liabilities at March 31, 2023	$	40,109

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

(2) Franchise Fees, net of recognized revenue, no longer deferred due to the termination of the Franchise Agreement.

Franchise Fees Receivable (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Schedule of Franchise Fees Receivable

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


	March 31, 2023		December 31, 2022
Franchise fees receivable(1)	$	27,518	$	35,606
Less: Unamortized discount(1)	(8,252)		(9,896)
Less: Allowance for uncollectible franchise fees(1)	(347)		(487)
Net franchise fees receivable(1)	$	18,919	$	25,223

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

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


Balance at December 31, 2022	$	450
Charges to bad debts	318
Write offs	(286)
Balance at March 31, 2023	$	482

Balance at December 31, 2021	$	489
Charges to bad debts	525
Write offs	(499)
Balance at March 31, 2022	$	515

Schedule of Allowance for Uncollectible Franchise Fees

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


Balance at December 31, 2022	$	487
Charges to bad debts	762
Write offs	(902)
Balance at March 31, 2023	$	347

Balance at December 31, 2021	$	303
Charges to bad debts	271
Write offs	(186)
Balance at March 31, 2022	$	388

Allowance for Uncollectible Agency Fees (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Schedule of Allowance for Uncollectible Agency Fees

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


	March 31, 2023		December 31, 2022
Franchise fees receivable(1)	$	27,518	$	35,606
Less: Unamortized discount(1)	(8,252)		(9,896)
Less: Allowance for uncollectible franchise fees(1)	(347)		(487)
Net franchise fees receivable(1)	$	18,919	$	25,223

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

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


Balance at December 31, 2022	$	450
Charges to bad debts	318
Write offs	(286)
Balance at March 31, 2023	$	482

Balance at December 31, 2021	$	489
Charges to bad debts	525
Write offs	(499)
Balance at March 31, 2022	$	515

Property and equipment (Tables)

3 Months Ended

Mar. 31, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

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


	March 31, 2023		December 31, 2022
Furniture & fixtures	$	11,264	$	9,772
Computer equipment	4,061		4,041
Network equipment	423		423
Phone system	326		326
Leasehold improvements	37,545		36,009
Total	53,619		50,571
Less accumulated depreciation	(17,055)		(15,224)
Property and equipment, net	$	36,564	$	35,347

Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Interest Rate Dependent of Leverage Ratio

The interest rate for each leverage ratio tier is 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 five years are as follows (in thousands):


	Amount
2023	$	5,625
2024	9,375
2025	10,000
2026	68,125
2027	—
Total	$	93,125

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Schedule of Earnings Per Share, Basic and Diluted


	Three Months Ended March 31,
		2023		2022
Numerator:
Loss before taxes		$	(262)	$	(6,985)
Less: loss before taxes attributable to non-controlling interests		(100)		(3,126)
Loss before taxes attributable to GSHD		(162)		(3,859)
Less: income tax benefit attributable to GSHD		(81)		(1,602)
Net loss attributable to GSHD		$	(81)	$	(2,257)
Denominator:
Weighted average shares of Class A common stock outstanding - basic		23,206		20,240
Effect of dilutive securities:
Stock options(1)		—		—
Weighted average shares of Class A common stock outstanding - diluted		23,206		20,240

Earnings per share of Class A common stock - basic		$	—	$	(0.11)
Earnings per share of Class A common stock - diluted		$	—	$	(0.11)

Non-controlling interest (Tables)

3 Months Ended

Mar. 31, 2023

Noncontrolling Interest [Abstract]

Schedule of Ownership Interests

The following table summarizes the ownership interest in GF as of March 31, 2023 (in thousands):


	March 31, 2023
	LLC Units	Ownership %
Number of LLC Units held by GSHD	23,379	62.3%
Number of LLC Units held by non-controlling interest holders	14,147	37.7%
Number of LLC Units outstanding	37,526	100.0%

Schedule of 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 months ended March 31, 2023 and 2022 as follows (in thousands):


	Three Months Ended March 31,
		2023		2022
Net loss attributable to Goosehead Insurance Inc.		$	(81)	$	(2,257)
Transfers (to) from non-controlling interests:
Decrease in additional paid-in capital as a result of the redemption of LLC interests		(990)		(344)
Increase in additional paid-in capital as a result of activity under employee stock purchase plan		201		214
Total effect of changes in ownership interest on equity attributable to Goosehead Insurance Inc.		$	(870)	$	(2,387)

Organization - Narrative (Details)	3 Months Ended
Organization - Narrative (Details)	Mar. 31, 2023 location franchise	Mar. 31, 2022 location franchise
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Corporate-owned locations (in locations) \| location	12	15
Franchise locations sold (in franchises)	83	113
Operating franchise locations (in franchises)	1,387	1,268
Franchises purchased (in franchises)	0	0

Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Mar. 31, 2022
Accounting Policies [Abstract]
Restricted cash	$ 1,590	$ 1,492

Summary of Significant Accounting Policies - Schedule of Restricted Cash (Details) - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 24,588	$ 28,743	$ 21,187
Restricted cash	1,590		1,492
Cash and cash equivalents, and restricted cash	$ 26,178	$ 30,387	$ 22,679	$ 30,479

Revenue - Narrative (Details)	3 Months Ended
Revenue - Narrative (Details)	Mar. 31, 2023
Revenue from Contract with Customer [Abstract]
Amortization period	10 years
Franchise license revenue period	10 years
Weighted average remaining amortization period for contract liabilities	7 years 9 months 18 days

Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Revenues	$ 57,955	$ 41,278
Renewal Commissions
Disaggregation of Revenue [Line Items]
Revenues	15,818	10,207
New Business Commissions
Disaggregation of Revenue [Line Items]
Revenues	5,517	5,367
Agency Fees
Disaggregation of Revenue [Line Items]
Revenues	2,230	2,637
Contingent Commissions
Disaggregation of Revenue [Line Items]
Revenues	1,920	1,798
Renewal Royalty Fees
Disaggregation of Revenue [Line Items]
Revenues	22,752	14,002
New Business Royalty Fees
Disaggregation of Revenue [Line Items]
Revenues	5,671	4,292
Initial Franchise Fees
Disaggregation of Revenue [Line Items]
Revenues	3,063	2,296
Other Franchise Revenues
Disaggregation of Revenue [Line Items]
Revenues	587	360
Interest income
Disaggregation of Revenue [Line Items]
Revenues	397	319
Transferred at a point in time
Disaggregation of Revenue [Line Items]
Revenues	23,565	18,211
Transferred over time
Disaggregation of Revenue [Line Items]
Revenues	$ 34,390	$ 23,067

Revenue - Schedule of Contract Balances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Cost to obtain franchise contracts	$ 3,187		$ 3,255
Increase (decrease) in cost to obtain franchise contracts	(68)
Commissions and agency fees receivable, net	7,108		14,440
Increase (decrease) in commissions and agency fees receivable, net	(7,332)
Receivables from franchisees	26,471		28,767
Increase (decrease) in receivables from franchisees	(2,296)
Contract liabilities	40,109		$ 46,553
Increase (decrease) in contract liability	(6,444)	$ 2,968
Contract Liability [Roll Forward]
Contract liabilities at December 31, 2022	46,553
Revenue recognized during the period	(3,063)
New deferrals	2,210
Write offs	5,591
Contract liabilities at March 31, 2023	$ 40,109

Franchise Fees Receivable - Schedule of Franchise Fees Receivable (Details) - Franchise Fees Receivable - USD ($) $ in Thousands	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022	Dec. 31, 2021
Accounts, Notes, Loans and Financing Receivable [Line Items]
Franchise fees receivable	$ 27,518	$ 35,606
Less: Unamortized discount	(8,252)	(9,896)
Less: Allowance for uncollectible franchise fees	(347)	(487)	$ (388)	$ (303)
Net franchise fees receivable	$ 18,919	$ 25,223

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

- Definition

Amortized cost, before allowance for credit loss, of financing receivable. Excludes financing receivable covered under loss sharing agreement and net investment in lease.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section 50
-Paragraph 7A
-URI https://asc.fasb.org/extlink&oid=123577603&loc=SL6953401-111524

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 55
-Paragraph 79
-URI https://asc.fasb.org/extlink&oid=124267575&loc=SL82922352-210448

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(3)(b))
-URI https://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 50
-Paragraph 14
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919253-210447

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 45
-Paragraph 1
-URI https://asc.fasb.org/extlink&oid=124255206&loc=SL82895884-210446

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 50
-Paragraph 5
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=124255953&loc=SL82919230-210447

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 326
-SubTopic 20
-Section 55
-Paragraph 80
-URI https://asc.fasb.org/extlink&oid=124267575&loc=SL82922355-210448

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (1)

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1405
-Paragraph (a)
-Subparagraph (2)

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Publisher SEC
-Name Regulation S-K (SK)
-Number 229
-Section 1404
-Paragraph (a)

+ Details

Franchise Fees Receivable - Schedule of Allowance for Uncollectible Franchise Fees (Details) - Franchise Fees Receivable - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 487	$ 303
Charges to bad debts	762	271
Write offs	(902)	(186)
Ending balance	$ 347	$ 388

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

Allowance for Uncollectible Agency Fees - Schedule of Allowance for Uncollectible Agency Fees (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Charges to bad debts	$ 1,655	$ 796
Agency Fees
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	450	489
Charges to bad debts	318	525
Write offs	(286)	(499)
Ending balance	$ 482	$ 515

Property and equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Total	$ 53,619		$ 50,571
Less accumulated depreciation	(17,055)		(15,224)
Property and equipment, net	36,564		35,347
Depreciation	1,800	$ 1,400
Furniture & fixtures
Property, Plant and Equipment [Line Items]
Total	11,264		9,772
Computer equipment
Property, Plant and Equipment [Line Items]
Total	4,061		4,041
Network equipment
Property, Plant and Equipment [Line Items]
Total	423		423
Phone system
Property, Plant and Equipment [Line Items]
Total	326		326
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total	$ 37,545		$ 36,009

Debt - Narrative (Details) $ in Millions	3 Months Ended
Debt - Narrative (Details) $ in Millions	Mar. 31, 2023 USD ($)	Jul. 21, 2021 USD ($)	Jul. 20, 2021 USD ($)
Line of Credit
Debt Instrument [Line Items]
Additional commitments		$ 25.0
Letter of credit	$ 0.2
Remaining borrowing availability	$ 49.8
Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing availability		50.0	$ 25.0
Interest Rate	2.50%
Revolver balance	$ 0.0
Notes Payable to Bank
Debt Instrument [Line Items]
Principal amount of debt			$ 80.0
Secured Debt
Debt Instrument [Line Items]
Principal amount of debt		$ 100.0
EBITDA ratio	4
Secured Debt \| Debt Repayment, First Twelve Months
Debt Instrument [Line Items]
Periodic payment	$ 0.6
Secured Debt \| Debt Repayment, Next 12 Months
Debt Instrument [Line Items]
Periodic payment	1.3
Secured Debt \| Debt Repayment, Following 12 Months
Debt Instrument [Line Items]
Periodic payment	1.9
Secured Debt \| Debt Repayment, Last 24 Months
Debt Instrument [Line Items]
Periodic payment	2.5
Secured Debt \| Debt Repayment, Balloon Payment
Debt Instrument [Line Items]
Periodic payment	$ 65.6
Secured Debt \| LIBOR
Debt Instrument [Line Items]
Interest Rate	2.25%

Debt - Schedule of Interest Rate Dependent of Leverage Ratio (Details)	3 Months Ended
	Mar. 31, 2023
Less than 1.50
Debt Instrument [Line Items]
Leverage Ratio	1.50
Less than 1.50 \| LIBOR
Debt Instrument [Line Items]
Interest Rate	1.75%
Greater than 1.50
Debt Instrument [Line Items]
Leverage Ratio	1.50
Greater than 1.50 \| LIBOR
Debt Instrument [Line Items]
Interest Rate	2.00%
Greater than 2.50
Debt Instrument [Line Items]
Leverage Ratio	2.50
Greater than 2.50 \| LIBOR
Debt Instrument [Line Items]
Interest Rate	2.25%
Greater than 3.50
Debt Instrument [Line Items]
Leverage Ratio	3.50
Greater than 3.50 \| LIBOR
Debt Instrument [Line Items]
Interest Rate	2.50%

Debt - Schedule of Maturities of Note Payable (Details) $ in Thousands	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
2023	$ 5,625
2024	9,375
2025	10,000
2026	68,125
2027	0
Total	$ 93,125

Income Taxes - Narrative (Details) - USD ($)	3 Months Ended
Income Taxes - Narrative (Details) - USD ($)	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Income Tax Contingency [Line Items]
Taxes	$ (81,000)	$ (1,602,000)
Effective income tax rate	31.00%	23.00%
Deferred income taxes, net	$ 159,468,000		$ 155,318,000
Uncertain tax positions	$ 0
LLC Units
Income Tax Contingency [Line Items]
Redemption of LLC Units (in shares)	323,000
Pre-IPO LLC \| LLC Units
Income Tax Contingency [Line Items]
Redemption of LLC Units (in shares)	323,485
Tax Receivable Agreement
Income Tax Contingency [Line Items]
Percentage due to related parties	85.00%
Tax Receivable Agreement \| Pre-IPO LLC
Income Tax Contingency [Line Items]
Percentage due to related parties	85.00%
Due to related parties	$ 129,200,000
Due to related parties, current	$ 500,000

Stockholders' Equity - Narrative (Details) shares in Thousands	Mar. 31, 2023 vote shares	Dec. 31, 2022 shares
Class A Common Stock
Class of Stock [Line Items]
Common stock shares outstanding (in shares) \| shares	23,379	23,034
Vote per share (in votes) \| vote	1
Class B Common Stock
Class of Stock [Line Items]
Common stock shares outstanding (in shares) \| shares	14,147	14,471
Vote per share (in votes) \| vote	1

Stockholders' Equity - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Pro forma earnings per share:
Loss before taxes	$ (262)	$ (6,985)
Less: loss before taxes attributable to non-controlling interests	(100)	(3,126)
Loss before taxes attributable to GSHD	(162)	(3,859)
Less: income tax benefit attributable to GSHD	(81)	(1,602)
Net loss attributable to GSHD	$ (81)	$ (2,257)
Weighted average shares of Class A common stock outstanding - basic (in shares)	23,206	20,240
Effect of dilutive securities, stock options (in shares)	0	0
Weighted average shares of Class A common stock outstanding - diluted (in shares)	23,206	20,240
Earnings per share of Class A common stock - basic (in dollars per share)	$ 0	$ (0.11)
Earnings per share of Class A common stock - diluted (in dollars per share)	$ 0	$ (0.11)
Antidilutive securities excluded from computation of earnings per share (in shares)	3,235	2,300
Common Class A
Pro forma earnings per share:
Earnings per share of Class A common stock - basic (in dollars per share)	$ 0	$ (0.11)
Earnings per share of Class A common stock - diluted (in dollars per share)	$ 0	$ (0.11)

Non-controlling interest - Narrative (Details)	3 Months Ended
Non-controlling interest - Narrative (Details)	Mar. 31, 2023 shares
Noncontrolling interest holders
Noncontrolling Interest [Line Items]
Ownership interest held by non-controlling interest holders	0.381
LLC Units
Noncontrolling Interest [Line Items]
Conversion ratio	1
Redemption of LLC Units (in shares)	323,000
LLC Units \| Noncontrolling interest holders
Noncontrolling Interest [Line Items]
Redemption of LLC Units (in shares)	323,000
Common Class A
Noncontrolling Interest [Line Items]
Redemption of LLC Units (in shares)	323,000
Class B Common Stock
Noncontrolling Interest [Line Items]
Redemption of LLC Units (in shares)	323,000

Non-controlling interest - Schedule of Ownership interests (Details) shares in Thousands	3 Months Ended
	Mar. 31, 2023 shares
Noncontrolling Interest [Line Items]
Number of LLC units outstanding (in shares)	37,526
Noncontrolling interest, ownership percentage	100.00%
Goosehead Financial, LLC
Noncontrolling Interest [Line Items]
Ownership interest held by Goosehead Insurance, Inc.	62.30%
Noncontrolling interest holders
Noncontrolling Interest [Line Items]
Ownership interest held by non-controlling interest holders	37.70%
Parent
Noncontrolling Interest [Line Items]
Number of LLC units outstanding (in shares)	23,379
Non-controlling interest
Noncontrolling Interest [Line Items]
Number of LLC units outstanding (in shares)	14,147

Non-controlling interest - Schedule of Effect of changes in ownership interests on equity (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Noncontrolling Interest [Line Items]
Net loss attributable to Goosehead Insurance Inc.	$ (81)	$ (2,257)
Decrease in additional paid-in capital as a result of the redemption of LLC interests	0	0
Increase in additional paid-in capital as a result of activity under employee stock purchase plan	201	214
Parent
Noncontrolling Interest [Line Items]
Net loss attributable to Goosehead Insurance Inc.	(81)	(2,257)
Decrease in additional paid-in capital as a result of the redemption of LLC interests	(990)	(344)
Increase in additional paid-in capital as a result of activity under employee stock purchase plan	201	214
Total effect of changes in ownership interest on equity attributable to Goosehead Insurance Inc.	$ (870)	$ (2,387)

- Definition

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

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+ Details

Equity-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity-based compensation expense	$ 6.6	$ 5.8