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United States securities and exchange commission logo
September 18, 2023
Mark Jones, Jr.
Chief Financial Officer
Goosehead Insurance, Inc.
1500 Solana Blvd.
Building 4, Suite 4500
Westlake, TX 76262
Re: Goosehead
Insurance, Inc.
Form 10-K for
Fiscal Year Ended December 31, 2022
Filed February 27,
2023
File No. 001-38466
Dear Mark Jones:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K filed February 27, 2023
Company Overview, page 5
1. We note your disclosure
that you receive 20% of commissions and agency fees during the
first term of the
policy and 50% of commissions every year the policy is renewed for
franchise sales. Please
tell us and revise future filings to compare and contrast the
profitability of
franchise sales as compared to corporate sales in year one and subsequent
years. Additionally, we
note you discuss the margin expansion opportunities after the first
renewal. Please tell us
and revise to provide additional quantitative detail, to the extent
available, regarding
the magnitude of increased margin or profitability of franchise sales
after the first renewal
to allow an investor to better revenue trends.
3. Revenues - Commissions and agency fees, page 79
2. We note your disclosure
that The transaction price is set as the estimated commissions to
Mark Jones, Jr.
Goosehead Insurance, Inc.
September 18, 2023
Page 2
be received over the term of the policy based on an estimate of
premiums placed, policy
changes and cancellations, net of a constraint. Please tell us how
you define the term of
the policy (e.g., one year or lifetime including expected renewals,
etc.), how you consider
if the transaction price includes variable consideration related to
renewal commissions and
how you consider whether the variable consideration is constrained.
Please detail any
accounting guidance you considered in your determinations. Please
revise your disclosure
in future filings, as needed, to clarify these aspects of your
accounting policies.
11. Stockholder's equity , page 86
3. We note your disclosure on page 86 that 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.
Please tell us and
revise future filings to explain how you determined including the
effects of the conversion
would have no impact on diluted EPS calculation. Specifically, clarify
if upon the
conversion of Class B shares, the related LLC Units must also be
redeemed or exchanged
for Class A shares. If so, please tell us how you determined that
redeeming the LLC Unit
non-controlling interest for a Class A share of the Goosehead
Insurance, Inc. would not
have an impact on diluted EPS. Please detail any accounting guidance
you considered in
your determinations.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact William Schroeder at 202-551-3294 or Michael Volley at
202-551-
3437 with any questions.
FirstName LastNameMark Jones, Jr. Sincerely,
Comapany NameGoosehead Insurance, Inc.
Division of
Corporation Finance
September 18, 2023 Page 2 Office of Finance
FirstName LastName