Goosehead Insurance, Inc (NASDAQ:GSHD) Q2 2018 Earnings Conference Call - Final Transcript

Aug 07, 2018 • 05:00 pm ET

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Goosehead Insurance, Inc (NASDAQ:GSHD) Q2 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day ladies and gentlemen, and welcome to the Goosehead Insurance Second Quarter 2018 Earnings Conference Call. At this time, all phone participants are in a listen-only mode.

(Operator Instructions)

Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder today's conference maybe recorded.

I'd now like to introduce your host for today's conference, Mr. Garrett Edson, SVP, ICR. Sir, please go ahead.

Executive
Garrett Edson

Thank you and good afternoon. With us today are your host, Mark Jones, Chairman and CEO of Goosehead, and Mark Colby, CFO. And in addition, Michael Colby, President and COO, will be available during Q&A. By now, everyone should have access to our earnings announcement, which was released prior to this call, which may also be found on our website at ir.gooseheadinsurance.com.

(Forward-Looking Cautionary Statements)

With that, I'd now like to turn the call over to CEO, Mark Jones. Please go ahead.

Executive
Mark Jones

Thanks Garrett and welcome to our second quarter 2018 earnings call. Thank you to everyone for participating on our call and for your continued interest in Goosehead. Today, I will provide an overview on the quarter and our long-term strategy. Our CFO, Mark Colby will then follow and provide some details about our second quarter results. Overall, our second quarter saw us follow through and continue to build upon our strong start to the year. We continue to generate strong organic growth across both our corporate and franchise channels and excluding the one-time, non-cash equity compensation charge in the quarter related to our IPO, we recorded another quarter of strong profitability.

For the quarter, we recorded $14.8 million in revenues and adjusted EBITDA, which is a metric on which we focus closely, a $4.0 million. We continue to win new business at strong levels with total written premiums growing over 50% and policies in force up nearly 50% from the prior year, while maintaining industry-leading retention and net promoter scores.

All-in-all, it was another quarter of robust, high quality growth. That said on our last call, I noted that we are building Goosehead to become an industry-leader over the long term. While we want to make sure that we're executing in the near-term, our strategic focus is trained on execution over the entire year and more importantly, ensuring that we're investing wisely in our human capital and technology. While we're certainly pleased with our second quarter results, most important aspect of our second quarter from a long-term perspective, with the acceleration of corporate channel hiring and the addition of 44 net new operating franchises to our platform by the end of the quarter. A critical aspect of our business is ensuring, we are staffing the right people in each of our departments.

In our corporate channel, that typically means young, hungry, well-educated agents who are typically recent college graduates. This quarter, given the pipeline of talent we were seeing, we made the decision to accelerate our hiring in this channel. Once on-boarded, we walk our new recruits through our