Goosehead Insurance, Inc. has recently released its 10-K report, providing a detailed insight into the company's financial performance and operations. The company operates as a holding company for Goosehead Financial, LLC, offering personal lines insurance agency services in the United States. Goosehead provides insurance services for homeowners, automotive, small businesses, life, and other insurance policies, distributing its products and services through corporate and franchise locations. Founded in 2003, the company is headquartered in Westlake, Texas.
In its 10-K report, Goosehead Insurance highlighted its critical accounting policies and estimates, emphasizing the impact of its assumptions, estimates, and judgments on the reported financial statements. The company prepares its consolidated financial statements in accordance with Generally Accepted Accounting Principles (GAAP), basing its estimates and judgments on historical experience and other reasonable assumptions. Goosehead Insurance identified revenue recognition as a critical accounting policy, detailing its compensation for insurance brokerage services in the form of commission revenue, agency fees, royalty fees, and contingent commissions. The company adjusts its estimate of revenue recognized for commissions and royalty fees based on cash collections during the policy term, earning commissions revenue at a point in time on the effective date of the policy and royalty fees over time as the underlying policies are placed.
Additionally, Goosehead Insurance disclosed its liabilities under a tax receivable agreement, which was entered into in connection with the Offering. The agreement provides for the payment by Goosehead to the Pre-IPO LLC Members of 85% of the amount of cash savings in U.S. federal, state, and local income tax or franchise tax actually realized as a result of certain events. As of December 31, 2025, the company recognized liabilities totaling $171.9 million relating to its obligations under the tax receivable agreement, highlighting the potential variability of the increase in tax basis and the amount and timing of any payments under the agreement, subject to various factors including future redemptions, exchanges, and taxable income generation.
Goosehead Insurance's 10-K report offers a comprehensive view of its financial condition and operational intricacies, shedding light on its critical accounting policies, revenue recognition practices, and liabilities under significant agreements. Following these announcements, the company's shares moved -0.73%, and are now trading at a price of $71.57. If you want to know more, read the company's complete 10-K report here.
