Goosehead Insurance, Inc.

Good day and thank you for standing by. Welcome to the Goosehead Insurance First Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation, there will be a question and answer session. To ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. I would now like to hand the conference over to your speaker today. Maddie Middleton, Senior Director of Investor Relations.

Thank you, and good afternoon. Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements, which are based on expectations, estimates, and projections of management as of today. Forward-looking statements and our discussions are subject to various assumptions, risks, and uncertainties that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed on them. We refer all of you to our recent SEC filings for a more detailed discussion of risks and uncertainties that could impact future operating results and financial condition . We disclaim any intention or obligation to update or revise any forward-looking statements except to the extent required by applicable law. I would also like to point out that during this call, we will discuss certain financial measures that are not prepared in accordance with GAAP. Management uses these non-GAAP financial measures when planning, monitoring, and evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons period to period, by including potential differences caused by variations in capital structure, tax position, depreciation, amortization, and certain other items that we believe are not representative of our core business. For more information regarding the use of non-GAAP financial measures, including reconciliations of these measures to the most recent comparable GAAP financial measures, we refer you to today's earnings release. In addition, this call is being webcast, and an archived version will be made available shortly after the call ends on the investor relations portion of the company's website at Goosehead.com. Now, I'd like to turn the call over to our CEO, Mark Miller.

Thanks, Maddie, and good afternoon, everyone. Thank you for joining us today for our first quarter 2026 earnings call. I'd like to begin by welcoming John Martin as our new Chief Financial Officer. succeeding Mark Jones, Jr., who has been promoted to president and COO. John brings a strong combination of financial expertise, operational discipline, and a background rooted in technology and e-commerce, which aligns well with our focus on execution and our high-performance culture. The team is excited to welcome John, and I know he looks forward to engaging with our investors and analysts in the quarters ahead. We are equally thrilled to see Mark expanded leadership responsibilities. John will report to Mark, and I will work closely with both of them, continuing my role as CEO. These leadership announcements are evidence of our commitment to a comprehensive succession plan and our focus on ensuring GUSED is the right leaders for today and well into the future. Let me start by reinforcing something we've said consistently. GUSED is a compounding business. designed to drive long-term growth in policies and force, revenue, earnings, and ultimately cash flow. We achieved that by operating a highly scalable distribution platform supported by world-class service. For the first quarter, we delivered strong and consistent financial results, with revenue growing 23% to 93 million, core revenue growing 15% to 79 million, and delivering adjusted EBITDA of 24.4 million. Last quarter, we spent a significant amount of time discussing investments we're making in our digital agent platform and AI initiatives. We've been very intentional in prioritizing long-term value creation while managing to strong and sustainable margins in order to maximize shareholder returns. Today, I want to focus on the strong start to the year and how the investments we have been making are beginning to translate into tangible business results. Goosehead has always been a technology-forward distribution platform, but over the past several years, technology has become even more deeply embedded in every part of how we operate. What's in front of us today is what I believe is the single largest opportunity our business and the broader personal line industry have ever seen. In nearly every industry, customers have the ability to choose how they want to interact and transact. That has not existed in independent, personalized insurance space until now. Choice has always been part of Goosehead's DNA. Historically, that choice has been centered around access to a broad set of carrier partners. We've proven that we are a market leader in providing clients coast to coast with access to over 200 underwriting partners. But today, we're expanding that definition of choice. We're now giving clients a choice in how they prefer to actually transact. For the first time in the United States, clients can shop, quote, and bind insurance through a true choice model, whether that is fully digital, partially digital, or entirely human-driven. During our last earnings call, we announced we went live with this capability with multiple auto carriers in Texas, including partners like Progressive, Liberty Mutual, Mercury, and Root. Today, we're excited to announce that clients can now digitally bind multiple homeowners' products in Texas with carriers such as SageSure and Mercury. This is an important milestone in building a large-scale digital marketplace, which is now that much more achievable because of the real demand that now exists with our carrier partners. Carriers want this capability, and they want it specifically with Goosehead. Because of the trusted relationships we've built over decades, our access to large amounts of integrated data that drive better underwriting outcomes and our differentiated go-to-market strategy executed through highly curated client acquisition channels. At the same time, the broader insurance shopping experience, particularly online, remains fragmented and often broken. You may see advertising across social media for AI insurance agencies that claim they can bind and service autonomously, or headlines that declare instant best rates. Most false claims end up generating terrible experiences for the end user. Customers are frequently routed through lead aggregators and data resellers, creating the illusion of choice, but ultimately leading to confusion, lack of transparency, and in many cases, poor coverage decisions. Who says digital agent platform is solving these pain points? We're delivering real choice, not just in product offering, but now in purchasing experience. And by implementing this platform with a targeted audience through our partnerships, we remain the trusted advisor our clients and carrier partners rely on. In the area of AI, we are now seeing tangible benefits as we roll out multiple use cases across our service organization. Lilly, our AI-powered virtual phone assistant, is now fully resolving approximately 19% of all inbound calls without requiring transfer to a live agent. This improves speed to resolution for our clients and allows our service teams to focus on more complex and consultative interactions. In addition, we have deployed tools behind the scenes in areas such as intelligent case routing, which has allowed us to reinvest roughly 40 full-time service team members towards more complex and value-added interactions. These tools are driving real-time efficiency gains while also adding scalability to what has historically been the most complex and labor intensive part of our business. All of this progress is occurring alongside a rapidly improving product market. Our carrier partners are increasingly leaning into growth across both home and auto products nationwide. As pricing stabilizes and product availability expands, we are seeing consistent improvement in many of our key operating metrics. For example, our client retention continues to climb at a steady pace, and we expect to achieve 86% client retention during the year. Find rates and packet rates are increasing, supporting higher agent productivity. Given these strong market conditions, we believe the time is right to more aggressively expand our offensive capability with more agents and more geographies. When we spoke to you in February, I commented, that we had fundamentally reset the corporate agent footprint. At that time, we expanded the new geographies like Tempe, Arizona, and Nashville, Tennessee. We're continuing to make excellent progress on this initiative. During the quarter, we opened three additional corporate offices in Seattle, the Washington DC area, and Minneapolis. And we had the fourth opening in April in Indianapolis. As of the end of the first quarter, we now have more than half of our corporate agents outside of Texas. These three offices are outperforming our expectations. But even more importantly, these offices serve a strategic purpose that far exceeds the short-term production they generate. They are quickly diversifying our agent base, making Goose Hunt an even more attractive partner for our major national carriers. And these offices are talent incubators for future franchise ownership. Since the beginning of the year, we have launched 12 new franchises out of our corporate offices, all of which are outperforming the average franchises we have launched from outside of our ecosystem. In just their second month live, these 12 launches contributed new business production that were nearly 2.5 times the average franchise. Our existing franchise base also continues to lean into growth, with 133 franchises hiring at least one producer during the quarter. generating nearly 50% increase in gross producer ads year over year. As agencies continue to focus on hiring and driving productivity, they're reaching new highs with 208 franchises hitting monthly production records during the quarter. On top of that momentum, our enterprise sales and partnership teams are rapidly gaining scale. What was a startup inside the organization just two years ago is now meaningfully contributing total revenue. When we step back, we're building more than an insurance agency. We're building a technology-enabled distribution platform that delivers real choice, professional experience, and better outcomes for clients and carrier partners. I want to thank and recognize our teammates. This quarter's performance is a direct result of their discipline, execution, and commitment to delivering a world-class client experience. With that, I'll turn it over to Mark Jones, Jr., our president and COO.