Goosehead Insurance (NASDAQ:GSHD) held its second-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.
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Summary
Goosehead Insurance reported strong Q2 2026 results with total written premiums growing 14% year-over-year to $1.36 billion and policies in force increasing by 15%.
Total revenues grew 21% to $113 million, and adjusted EBITDA reached $38 million, representing a 34% margin.
CEO Mark Miller announced his retirement at the end of the year, with Mark Jones Jr. set to take over as CEO, emphasizing a focus on speed of execution and simplification.
The company's franchise network is performing well with the average payment to franchises increasing by over 35% year-over-year.
The Digital Agent platform has been launched in Texas, with plans to optimize and expand to other states, enhancing both digital and agent-assisted sales.
Enterprise Sales continues to grow rapidly, contributing $3 million in new business commissions, indicating strong future potential.
The company increased its full-year 2026 revenue growth guidance, expecting total revenues to grow organically between 12% and 19%.
Improved client retention rates and a healthier product market environment are driving operational efficiency and financial performance.
Management and key shareholders have been active in share repurchases, reflecting confidence in the company's long-term value despite recent stock price fluctuations.
Full Transcript
OPERATOR
Good day, and thank you for standing by. Welcome to the Goosehead Insurance second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you'll need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To start your question, please press star 11 again.
Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, Maddie Milton, Senior Director of Investor Relations. Please go ahead.
Maddie Milton, 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 in 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 you all to our recent SEC filings for a more detailed discussion of risks and uncertainties that could impact future operating results and financial condition of Goosehead Insurance. 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 in 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.
Mark Miller, President and CEO
Thanks, Mattie, and good afternoon, everyone. Thank you for joining us today for our second quarter 2026 earnings call. Before I walk through the quarter, I want to start with a little perspective. Four years ago when I joined the management team, we were navigating a business that had significant untapped potential but also had some real challenges. Since that time we have fundamentally transformed this organization. We restructured our corporate and franchise agent forces, raising the bar on quality and productivity across both networks.
We grew our corporate footprint to more than a dozen offices across the country. We launched and expanded ASP, our internal staffing support program for our franchise owners. We launched our enterprise sales and partnership businesses from scratch and they are now unlocking access to millions of new potential clients. We built a world-class technology team that delivered the United States' first true end-to-end choice shopping platform for personal lines insurance.
We increased total written premiums from approximately $2 billion in 2022 to well over $4 billion today. We right-sized our cost structure while preserving our capacity to grow. We grew adjusted EBITDA from under $40 million in 2022 to over $130 million in our last four quarters and expanded our margin meaningfully through the hardest product market in 50 years. We did all this while returning significant capital to our shareholders and maintaining a conservative balance sheet.
The business we have today is stronger, more diversified, and more capable. With the company and the industry in such a strong position, I'd like to share something personal. After a 40-year professional career, I've decided that the time is right for me to retire. At the end of this year, I will hand over the CEO position to Mark Jones Jr. and remain a member of the Board of Directors and help in any way I can. My decision was made easier knowing we have an exceptional leader in Mark Jones Jr. He has been a member of the management team for nearly 10 years and closely tied to the business since its founding. He knows this business like no one else. He has the trust of our agents, our carriers, and our shareholders. And he has the hunger, the skill set, and the vision to take Goosehead Insurance to heights that will continue to set the standard for what excellence looks like in our industry. I'm very confident in him and in this team. I love this company and I believe deeply in what we're building and I'll remain fully engaged and focused on execution through the end of the year.
I'll do everything in my power to set this organization up for its next chapter. Now let me turn to our current operational performance. We delivered strong second quarter results that reflect continued execution against our strategic plan and broad-based momentum across the business. Total written premiums grew 14%, accelerating off the first quarter to 1.36 billion. Policies in force grew 15% year over year and client retention, our most impactful driver of top and bottom line performance, improved to 86%, representing its highest level since the hard market began.
We're encouraged by this continued sequential improvement in client retention rate and see no structural limitation to meeting or exceeding our prior high of 89% in the future. Total revenues grew 21% to 113 million, with core revenues up 10% to 95 million over the prior year period. As a reminder, in the second quarter of 2025 we recovered $4 million of previously unpaid renewal commissions and royalty fees. When adjusting for that year-over-year variance, core revenues grew 16% and total revenues grew 26% in the second quarter.
Adjusted EBITDA was $38 million, representing a 34% margin for the quarter. We've spent a considerable amount of time recently discussing our technology enhancements and new developments related to Our Digital Agent 2.0, the country's first choice shopping platform. We remain as enthusiastic as ever around the progress we're making and the significant future opportunity ahead of us, but I want to focus the discussion today on the strategy, consistency, and compounding nature of our core business.
The largest portion of our business, our franchise network, is now healthier than ever. Our franchise strategy remains focused on placing the right agency owners in the right geographies and arming them with the support they need to maximize their productivity and profitability. A core pillar of that strategy is generating franchises with more producers. Our agency staffing program, which we stood up in 2023, has done exactly that. Since that program's inception, we have helped our agency owners place hundreds of producers into their operations, and now that strategy is bearing real fruit.
Franchise producers are at the highest level in history at nearly 2,200 with an average of 2.4 producers per franchise, which is resulting in our franchises generating more income per location than ever. The average payment that we send to a franchise on a monthly basis has increased more than 35% year over year and is now over $28,000. This powerful and durable income stream allows them to reinvest back into their businesses to further reinforce the growth flywheel.
At the beginning of the year, we discussed the expanding footprint of our corporate offices. These new locations were selected strategically to align with attractive product markets, high rates of home ownership, and strong recruiting pipelines from local universities. Our five recent office launches across the country are scaling rapidly, averaging nearly 20 agents each and delivering strong new business production over the quarter. Several of these new offices were among the top overall offices in our corporate network.
These offices allow us to tap into previously underserved markets, build a more diversified client base and, most importantly, they will produce the next generation of future franchise owners. We will continue to drive outsized market share gains with this powerful capacity that is both unique to Goosehead Insurance and extremely difficult to replicate. Our enterprise sales business continues to grow at a rapid pace and our pipeline of new potential partners to fuel continued growth is expanding.
As we implement our embedded insurance offering with our current and future partners, this third leg of our distribution stool will continue to grow at an accelerated pace. The backdrop for all of our agents across the sales network is now a dramatically improved product environment which is resulting in improving bind and package rates. As we highlighted over the past several quarters, everything in our business operates more efficiently in a stable product environment.
This is where we thrive. We've navigated a historically hard market over the last several years and we're now poised to take advantage of a much healthier personal lines product market. Client retention continues to improve, the burden on our service function continues to abate, and we remain aligned with our carrier partners in our mutual pursuit of profitable growth. We have built a firm foundation for the next phase of growth and I'm incredibly proud of the work we have done.
When Mark Jones asked me to take this position four years ago, I knew it was a special opportunity. I'd been with Goosehead Insurance on its board for four years and I had been a client for 15 before that. I knew the business, I knew the culture, and most importantly, I knew Mark's vision. I didn't fully appreciate until I was inside was just how truly extraordinary the people at every level are in the organization. The agents who wake up every day and go find new referral partners.
The franchise owners who are building businesses which are generating life-changing income. The service team members who help our clients navigate some of the most stressful moments in their lives. The technology team who built something that the industry said could not be built, and the rest of our teammates who strive for excellence every day. I'm grateful to all of them and I'm proud of what we have accomplished. Together we came through a once-in-a-generation hard market stronger than we entered.
We built new capabilities that will define the next decade of this business. We consistently expanded our market share and more than tripled adjusted EBITDA. We returned hundreds of millions of dollars to shareholders and we did it without compromising who we are: a company that puts the client at the center of its universe. The company is in exceptional position today and it gives me great confidence that now is the right time for the transition.
Our leadership team is deep and experienced and Mark Jones Jr. is one of the best operators I've encountered in my career. I plan to spend the rest of the year making sure that every initiative is properly sourced and set up for success. And then I will hand the baton with tremendous pride, full confidence, and continued support wherever needed from my position on the board. Thank you to this team, thank you to our agents and franchise partners, thank you to our carrier partners, and thank you to our shareholders for the trust you have placed in us.
It has been the biggest privilege of my professional career. With that, let me turn the call over to our President and COO, Mark Jones Jr.
UNKNOWN, Chief Executive Officer
Thanks, Mark, and good afternoon to everyone on the call. First and foremost, I feel incredibly honored to have been able to work directly with Mark Miller for the last number of years. Mark brings deep care and commitment not only to the work that we do, but to our teammates, franchisees, carrier partners, and shareholders. He's been an incredible example for everyone here at Goosehead and positioned the company to create value well beyond his tenure as CEO.
On behalf of everyone at Goosehead, thank you for your leadership, your partnership, and your unwavering commitment to this organization. I'm grateful to have worked alongside you and look forward to continuing that partnership as you remain on the board. I'm deeply grateful to our board of directors, our shareholders, and our executive team for their support and the confidence they've placed in me to lead this organization into the next chapter.
Our strategy is not changing. We remain laser focused on our objective to become the largest distributor of personal lines insurance in our founder's lifetime. Our pathway to achieving that is fundamentally rooted in our highly differentiated human capital advantage. Our best-in-class sales agents, our white glove service team, our technology organization rivaling the best in Silicon Valley, and our professionals across all of our operating teams.
Because of the work that Mark Miller has done to build such a strong foundation and leadership team, my focus in this next chapter will be on speed of execution, simplification, and rapid decision making. I look forward to continuing my relationship with the investing community and keeping you all up to date on the exciting things we're doing at Goosehead as we continue to disrupt the industry and raise the bar in the years ahead. As Mark Miller mentioned, this quarter's results speak to the consistency and durability of our business.
Our model, focused solely on personal lines and organic growth, is highly differentiated in insurance distribution and our results compete with some of the most successful businesses in any sector. Since our IPO in 2018, we've grown our total revenue at a 29% compound annual growth rate and adjusted EBITDA at a 34% compound annual growth rate when comparing full year 2018 results to the trailing four quarters ended June 30, 2026. All of this while returning hundreds of millions to shareholders through dividends and share repurchases.
I am so proud of our team for building such an amazing business and one that looks like no other organization out there. As Mark Miller mentioned, our corporate and franchise teams are healthier than ever before, delivering strong growth and profitability. As the product market has improved, franchisees have increasingly leaned into growth. We now have multiple agencies with more than 40 producers and one agency over 50 producers. As we've talked about in the past, the productivity impact of that is not linear.
Each time a franchise adds an additional producer, it raises the average productivity per producer, meaning that growth accelerates in excess of the producer count. To give you some context, the number of highly productive agencies during the second quarter we had approximately 70% more franchises produce over $100,000 of gross new business commissions and agency fees in a month when compared to the prior year. More and more agencies are hitting all-time production highs and the bar continues to get raised.
Our corporate sales team is a key enabler for future franchise growth as we produce the highest-powered agency owners inside of our corporate team first before launching them into their own franchise. In total, we have over 60 agencies who launch from corporate representing more than 170 producers inside those franchises. A new development with our highly differentiated corporate sales talent is seeding these producers into an embedded franchise.
Like our partnership with Planet Home, we're able to provide embedded agencies that have natural lead flow access to plug-and-play talent from our corporate sales force. A majority of Planet Home's team consists of former corporate sales agents and their ramp up has been faster than any franchise in system history. Pairing high-quality lead flow with embedded seasoned talent has allowed them to produce at a strong level, immediately placing them near the top 5% of franchises after just six months of production.
Fueled by our strategic partnerships, Enterprise Sales is quickly becoming a more material portion of our business. During the second quarter, this team generated approximately $3 million in new business commissions and agency fees. In just three years since its inception, Enterprise Sales is approaching a third the size of our corporate sales team, which we've been operating in an industry-leading fashion for 20 plus years. That growth reflects increasing demand for businesses across the homeownership ecosystem that are looking to improve the client experience while adding recurring high-quality revenue streams.
Goosehead is uniquely positioned to support those partners. We combine national scale with local expertise, access to more than 200 carrier relationships, sophisticated technology, and a service platform built to support clients as their insurance needs evolve over time. We know of no one else that has that combination of capabilities and execution at scale. As our partners continue to grow, we expect enterprise to become an increasingly more meaningful contributor to both revenue growth and profitability.
Technology is an important part of enabling that opportunity. Over the last several years, we built capabilities that broaden how consumers interact with Goosehead. Our digital agent platform allows consumers to shop across multiple carriers through a seamless digital experience while preserving access to a licensed Goosehead agent whenever advice or expertise add value. Today, consumers in Texas can complete the entire shopping and binding process digitally across multiple home and auto carriers.
We believe that's an important step forward not because technology replaces our agents, but because it allows our agents to spend more time where they create the greatest value. Our early results reinforce that view. While we're now generating business entirely through digital interactions, many clients still choose to engage with an agent before completing a purchase. By the time that interaction occurs, the client has already completed the data collection process, creating highly qualified opportunities for our producers and driving productivity.
Enhancing agent productivity while also driving fully digital interactions will allow us to break the human capital bottleneck that exists in traditional agent models and accelerate growth over time. We believe one of the best ways to measure the success of the digital agent will be growth in new business production per active producer rather than digital adoption alone. That is ultimately the economic outcome we're trying to achieve. We're applying the same philosophy across our broader technology investments.
Lily, our AI voice assistant, now handles approximately 20% of our inbound service calls from start to finish, with performance exceeding 30% during certain periods. Those interactions reduce routine administrative work while allowing our service professionals to focus on situations where experience, judgment, and empathy have the greatest impact on client experience and retention. Technology should improve the overall offering and economics, not simply automate activity.
Where automation enhances the client experience, increases producer productivity, or improves retention, we will continue to invest aggressively. When it doesn't, we won't. That discipline will remain central to how we allocate capital. We've made amazing progress over the last several years across every area of our business, and I look forward to keeping you updated on our progress as we continue the march towards industry leadership. Again, I am grateful, honored, and humbled to have the opportunity to lead this organization to the next phase in our journey.
I would like to extend a heartfelt thank you to our teammates, franchisees, carrier partners, board members, and our shareholders for their support. I'll turn it over to John Martin, our Chief Financial Officer, to discuss the quarter's results and outlook for the rest of the year.
John Martin, Chief Financial Officer
Thank you, Mark, and good afternoon everyone. It's a pleasure to speak with you Today for the first time as Goosehead Insurance CFO. I've enjoyed meeting many of you in the second quarter and I look forward to engaging with more of you in the months ahead. Before we dive into the numbers, I'd like to take a step back and briefly share my perspective from these first few months on the executive team. I've had the opportunity to dig in and pressure test what really makes our company different, and what's especially clear to me is the business is stronger and the opportunity is larger than I initially appreciated from the outside.
At the core of Goosehead Insurance's success are a number of foundational competitive advantages, beginning with talent. The belief that people represent our greatest asset has been central to our ethos from the beginning. This is clearly reflected in the quality of our team, who show up eager to win in the market every single day across sales, service, technology, and more. Our differentiated human capital foundation has no peer. Goosehead Insurance's integrated technology, proprietary data, carrier relationships, product breadth, and nationwide distribution enable a flywheel at scale that is incredibly difficult to replicate, with the client at the center of every decision. Goosehead Insurance leverages this scale to reinvest in what matters most: improving the client experience, reducing complexity, and providing greater choice across products and transactional modalities. Goosehead Insurance has always led with the home, not in spite of its difficulty, but because of it. This uncompromising focus has allowed our business to become the authority for clients and an essential partner for carriers within a massive, essential, and fragmented market.
We have a proven history of capturing significantly outsized share. Our competitive positioning, long-term approach, and consistent execution have together created a rule of 50 financial profile that grows stronger year after year. Goosehead Insurance's unique value proposition and recurring revenue model deliver sustainable growth, attractive margins, and natural operating leverage with scale. This is the hallmark of a true compounder. Companies of this quality are extraordinarily uncommon, and the results speak for themselves.
Since the 2018 IPO, revenue and EBITDA have increased more than sevenfold organically. And while these figures are helpful in setting context, what's most important is the number: our entire organization is focused on 99%. With less than 1% market share today, more than 99% of our addressable market remains in front of us. This is what we wake up every day thinking about, and it couldn't be a more exciting time to be here. And with that, let's turn to our financial results for the second quarter.
Total written premiums grew 14% year over year to $1.3 billion, accelerating from 13% growth in the first quarter. Policies in force grew 15% year over year to 2.1 million, accelerating from 14% growth in the first quarter. Total revenues grew 21% year over year to $113.4 million, and core revenues grew 10% year over year to $95.6 million. Strong new business generation, improving client retention, and meaningful contingent commissions all contributed to our robust top-line performance.
As a reminder, in the second quarter of 2025 we recovered $4 million related to previously unpaid renewal commissions and royalty fees from a carrier partner. Adjusting for this amount in 2025, total revenues grew 26% year over year and core revenues grew 16% year over year. New business commissions grew 27% year over year to $9.6 million. We have now delivered consecutive quarters of over 20% growth in new business commissions for the first time since 2021.
Improvements to agent management infrastructure, a healthier product market, geographic expansion, and enterprise sales and partnership efforts together drove the strength in new business commissions. Enterprise sales continue to scale rapidly and represented 21% of total new business commissions and agency fees in the quarter. New business royalties grew 20% year over year to $9.4 million. This was the fastest pace of growth in the last six quarters, supported by increases in both producers and producer productivity.
Franchise producers grew 5% year over year and 2% sequentially to 2,190 producers. We're encouraged to see continued momentum here, with producer hires increasing 30% year over year. As our franchisees continue to scale their producer forces, lean into best practices, and benefit from a healthy product environment, they are reaching impressive new levels of success. Client retention increased sequentially as expected from 85% to 86%, driven by strategic client experience initiatives and a more stable year-over-year pricing environment.
Ancillary revenues, largely comprised of contingent commissions, grew 180% year over year to $16.3 million. Improved underwriting loss ratios, favorable carrier mix dynamics, and initiatives to optimize carrier relationships all contributed to the increase in contingent commission revenues in the quarter. Adjusted EBITDA grew 30% year over year to $37.9 million, representing a 33% adjusted EBITDA margin. During the second quarter, we generated $15.9 million in operating cash flow and repurchased 95,000 Class A shares for a total of $3.9 million.
On a year-to-date basis, we generated $38.8 million in operating cash flow and repurchased over 1 million Class A shares for a total of $53.7 million. We now have fewer Class A shares outstanding than we did at the time of our IPO, and we will continue to be opportunistic with the $144.6 million remaining on our existing share repurchase authorization. We continue to believe the price of our stock is meaningfully dislocated from the value of our business.
Recent filings reflect that conviction, showing that Mark Jones Jr., Mark Miller, our general counsel, Martin Thornthwaite, and I all purchased shares in the open market during the quarter. We ended the quarter with $23.7 million of cash and cash equivalents and $323 million of total debt outstanding. Turning now to the balance of the year, we are increasing our revenue outlook for the full year 2026. We now expect total revenues to grow organically in a range of 12% to 19% year over year.
This increase to the bottom end of our revenue range reflects a more favorable outlook around contingent commissions, which are currently tracking to outperform our prior expectations. We are encouraged by the 12% year-over-year growth in core revenue we delivered in the first half, and we continue to expect a second-half acceleration from these levels given the upward trajectory of client retention and strong new business generation. Finally, we continue to expect total written premiums to grow organically in a range of 12% to 20% year over year.
I'd like to close by emphasizing how thrilled I am to be part of such an exceptional team and such an extraordinary business. Our unique positioning provides a strong foundation for continued share gains and compounding growth far into the future. Though Goosehead Insurance has come a long way, it truly feels like we're just getting started, and it's such an exciting time to be here. Thank you to our teammates, partners, and franchisees for the hard work you do to make all of this possible.
And thank you to everyone joining us today for your continued support of Goosehead Insurance. With that, we'll conclude our prepared remarks. For today's Q&A session, our co-founder and chairman Mark Jones will be joining us. Let's go ahead and open the line for questions. Operator.
OPERATOR
Thank you. As a reminder, if you would like to ask a question, please press star 11 on your telephone. You'll hear the automated message, "Your hand is raised." We also ask that you please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question of the day will be coming from the line of Tommy McJoint of KBW. Your line is open.
Tommy McJoint, Analyst at KBW
Hey, good evening. Thanks for taking my questions, and congrats, Mark and Mark as well. My first question is actually just around the trajectory of margins. Obviously a very strong margin report in the second quarter, and part of that was benefiting from the high contingents number. So can you go through your expectations, maybe on a full-year basis, for how you think about margins on an ex-contingent basis, how you see those trending? Thanks.
John Martin, Chief Financial Officer
Sure thing. Hey, it's John here. You know, so there's no change on an underlying basis with respect to how we're thinking about expenses for the year. Ultimately, from a planning perspective, we look at our expenses largely on a revenue ex-contingent basis. And, you know, previously we mentioned that we expect moderate compression this year driven by the growth investments that we're making. Our guidance around expenses thus remains unchanged. You know, we've also commented that we expect comp and G&A to grow in the high teens to low 20% for the year, which will likely be in excess of core revenue growth just given the current investment cycle.
Tommy McJoint, Analyst at KBW
Got it. Thanks for that. And then switching over, there have been some well publicized changes regarding the comp and benefits at the largest captive insurer in the space, one of your competitors. Have you seen any notable uptick in interest from captive agents in Goosehead Insurance opportunity just over the last few weeks or months? And then does seeing those changes in the market from a competitor impact at all your go-to-market strategy around recruiting, compensation, or anything?
Mark Jones, President and COO
Hey Tommy, this is Mark Jones Jr. Yeah, it's a pretty interesting development. I mean, what we're seeing is a lot of our franchisees and producers have contacts across the entire insurance landscape. So I think what you're going to end up seeing is a lot of free agents on the field who don't necessarily feel like they're being treated the right way. So ultimately I think that could potentially be a tailwind for our producer recruiting. It's not changing the way we think about our go-to-market strategy.
We're going to continue to invest in things like the digital agent to drive digital conversions, but that's also a tool that's going to help arm our existing agent force with productivity enhancements, help them get through their entire funnel more quickly. Ultimately, we believe we have a model that's going to win in the marketplace over the long term.
OPERATOR
Thank you. One moment for the next question, please. And our next question is coming from the line of Andrew Anderson, Jefferies. Please go ahead.
UNKNOWN, Analyst
Hey, good afternoon and congrats to you both. Productivity improved pretty significantly for both the newer and tenured franchise operators. Could you maybe just elaborate a bit on what's driving that step up and how durable you think that is? There was a good chunk of it related to the agency staffing program and the agency side, but agency size. But hopefully you could just expand a bit more on that productivity gain.
Mark Jones, President and COO
Yeah, we're seeing really positive things with our franchisees. Continue to lean into the growth message and hire new producers as well as adopt best practices. And we're also getting a tailwind from the product market being considerably more open than it was in the previous couple of years. But ultimately what we've been trying to do for the last multiple years is continue to grow really high quality franchises inside our corporate sales team first and then launch them into that community.
You can see the impact of that in that less than one year franchise count. There's approximately 30ish franchises that we've launched out of corporate that are included in that. You see that's driving a 70% productivity improvement in that tenure band. And our more tenured agencies are continuing to hire. The same store sales stats for this quarter are pretty awesome. So in aggregate, same store sales is up 22% for this quarter. And the top end of the franchise community, the top 50 same store sales was over 40%.
So they're really leaning into the message. They're onboarding new producers and we think we can continue to grow the franchise unit productivity for the foreseeable future.
UNKNOWN, Analyst
Thanks. And you had mentioned kind of your next chapter focused on speed of execution and simplification. What parts of the business do you think you can move materially faster here? Is that on product development, technology, more partnerships, kind of all the above?
Mark Jones, President and COO
Yeah, it's really all of the above. We've done a lot of foundational work in the last few years and massive credit to Mark Miller for the amount of work that he's done in getting this business in a really stable position with a strong foundation. And now we need to look for opportunities to reduce complexity wherever we can. As the product market had constricted over several years, we had to onboard a tremendous amount of new underwriters. And I don't necessarily think having 300 underwriters on the platform is ideally the right amount.
So we've reduced some complexity there. We're going to continue to do that. On the service side that has had massive complexity increase over the last several years, just with the changes in the product environment and underwriter capacity that's beginning to alleviate. That's an area where we can use technology to automate everything that should be automated, not necessarily everything that could be automated. We still really believe in the role of the human service agent.
We're going to continue to expand that and then some of the nitty gritty stuff in the back office that I don't think the industry fully comprehends. Things like how do you get an agent licensed and onboarded nationally for something like our enterprise sales team in a really scalable fashion? It's actually a pretty complex challenge to cover because you've got 50 different state regulators, you get a whole bunch of different licensing exams, and every carrier has different requirements for licensing or appointing in their state.
So we're making a ton of progress on that front and we're going to continue to look for opportunities to speed up everywhere in the business.
UNKNOWN, Analyst
Thank you.
OPERATOR
Thank you. One moment for the next question. Our next question is coming from the line of Paul Newsom of Piper Sandler. Please go ahead.
Paul Newsom, Analyst at Piper Sandler
Good morning. Congratulations, Mark, on the changes. Was hoping you could talk a little bit about additional color on the contingent commissions and the sustainability thereof. Seems to be the least in my model, the biggest happy surprise. And anything in there that would be deemed kind of unusual or anything that we should think of from that perspective.
John Martin, Chief Financial Officer
Hey, so just on our... Nothing's changed structurally with respect to how we're approaching recognition or anything like that. You know, as I mentioned in the prepared remarks, there's really three main drivers of favorability this year. So one, growth in the new business we're driving. Two, profitability of the business and three, more favorably negotiated contracts. But all three of these have us tracking a bit higher than we initially anticipated.
And you know, as you know, contingents can have a relatively wide range of outcomes depending on where business flows and losses shake out throughout the year. But our updated guidance reflects confidence in where we're going to land this year.
Paul Newsom, Analyst at Piper Sandler
Is there anything today that would change the cadence of new production relative to new agents that we've seen in the past? Or should we genuinely think that the new agent forces should have about the same impact prospectively over the next 12 months that we would have, you know, a year ago or something like that?
Mark Jones, President and COO
Yeah, I think agent ramp up is going to look similar to how it has looked in the past. You know, we've invested a ton in training tools and management infrastructure, so we should get incrementally better in ramping up new agents. And we've also on the corporate side, I think we talked about this in previous calls as we expanded that pipeline of new agents that we're onboarding from more so like 90% college hires to now more of an even split between experienced hires and college hires.
That's been pretty impactful for agent ramp up. Just get somebody that's got a little bit more experience underneath them has been incrementally positive. We've got a good onboarding class coming during the summer. We feel great about the position of our sales channels.
Mark Miller, President and CEO
They're more spread out than they typically have. So then you have more market opportunity, Paul. So I think that's one of the biggest things is just the aperture of opportunity has opened up for us as well.
Paul Newsom, Analyst at Piper Sandler
Great. Thanks folks. Appreciate the help.
OPERATOR
Thank you. One moment please. And our next question will be coming from the line of Brian Meredith of UBS. Please go ahead.
Brian Meredith, Analyst at UBS
Yeah, thanks. Just a couple of quick questions here for you. First, just on comp and benefits, I guess it looks like there's going to be a pretty big ramp up second half of the year. Is that all just coming from the new hires you have coming in and should that ultimately kind of lead to additional sales?
Mark Miller, President and CEO
Yeah, it's a couple of things, Brian. It's new sales talent coming in the door. It's continued investment in our technology teams, which is really differentiated talent I think in the industry as well as continued investments in our service function to keep driving client satisfaction and move client retention up as fast as possible. So you're going to see some of that end up reflected in new business production. But not all of that compensation increase is going to go directly towards current day new business. It's more platform stability and scalability.
Brian Meredith, Analyst at UBS
All right, so that's helpful. Thanks. And then I saw you a little bit of a tick up in customer retention rates. Do you expect that to continue here?
Mark Miller, President and CEO
Yeah, I mean, we're pretty pleased with the trajectory of client retention. You know, we were pretty confident it was going to tick up to 86% during the year. We saw that it's continuing to improve. Obviously we're not going to promise any specific timeline for when you're going to see the next click up. But we've put some of our sharpest human capital against client retention just to make sure we continue to see that forward progress. Obviously the improved product market is super helpful, but we're not just sitting on our heels waiting for the market to heal itself.
We're being pretty aggressive with investments in this area.
Brian Meredith, Analyst at UBS
Gotcha. That's helpful. And then I guess, last question, just curious, commission rates based commission rates. Seeing any tick up there yet?
Mark Miller, President and CEO
Yeah, aggregate commission rate has improved. So it improved in Q1 over the fourth quarter. It improved again in Q2 over the first quarter, which is a combination of multiple factors. One first being just business mix. So less of it going to your statement plans, less of it going to ensuring and more of it going towards the traditional admitted markets. But also as carriers have gotten into a really healthy position now they're looking for ways to incentivize growth. And I think we've talked about in the past, we look at those negotiations holistically, right? Like how do we drive the most efficient service interactions, how do we get the most efficient technology interactions, and also how do we make sure we've got appropriate market compensation for the business we're delivering?
Brian Meredith, Analyst at UBS
Makes sense. Thank you.
OPERATOR
Thank you. One moment please, for the next question. And the next question is coming from the line of Charlie Lederder of BMO Capital Markets. Please go ahead.
Charlie Lederder, Analyst at BMO Capital Markets
Hey, thanks. Maybe just on the digital agent, you know you had previously said you anticipate that being a contributor in 2H26. Do you still expect that to be the case? Do you have plans this year to expand that outside of Texas? And then you also mentioned that new business proactive producer KPI. Do you have any stats around how that's run? Yeah, I'll leave it there, thanks.
Mark Miller, President and CEO
Hey Charlie, thanks for the question. Yeah, so we were really pleased to be able to deliver this version 1 of the platform slightly ahead of our anticipated schedule. So our tech team has done a really amazing job putting something in market that has never really existed before. The ability for a client to interact in a fully digital world in a choice model has not existed in the US. So super excited to have delivered that in the first half of this year.
In the second half of this year, the focus is on optimizing the Texas conversion funnel. So like we talked about in prepared remarks, we've got fully digital transactions going through. We've also got plenty of people that are getting even all the way down to the buy screen and then kicking out because they want to talk to an agent. Our agent network is a massive competitive moat for us, one that I don't believe exists elsewhere in the market. But we'll keep investing in Texas, optimizing the conversion funnel and then rolling it out to additional states subsequent to that, as well as increasing functionality, adding and improving the user interface, making it more chat like so it feels more like you're talking to a normal human agent. But we just want to make sure we're providing a couple of things. Our agents with leading technology, our carrier partners with highly profitable business that matches what the risk appetite is, and our clients with a tremendous experience.
Charlie Lederder, Analyst at BMO Capital Markets
That's helpful. Thanks. And maybe just on the pricing environment and your geographic mix, can you update us on how you're thinking about premium per policy trends? From here it looked like it decelerated a little bit in the quarter. Thanks.
Mark Miller, President and CEO
Yeah, it's in line with our expectations. We plan to see the stability in the pricing market that we're seeing right now. I mean, we anticipated moderate pricing declines in most geographies. You're seeing that in the PIF growth rates versus premium growth rates. Historically those have been considerably different given the pricing environment, and now they look a lot more similar. But that's not driving any kind of negative impact in our business.
We expected that to happen. It's contemplated in our guidance. We prefer a product market that's considerably more stable. It just makes everything else work more efficiently in our business.
Charlie Lederder, Analyst at BMO Capital Markets
Thank you.
OPERATOR
Thank you. One moment for the next question. And our next question will be coming from the line of Andrew Kilburn of TD Cowen. Please go ahead.
Andrew Kilburn, Analyst
Hey, good evening and congratulations to both Marks. I want to follow up just quickly on Charlie's question just now. Could you clarify or kind of define what you meant by moderate in terms of pricing decline and then maybe separately home versus auto, those two pieces?
Mark Jones, President and COO
Yeah, sure, Andrew. So in auto what you're seeing is more like mid-single-digits pricing decline. And obviously that's geography dependent. There's places where that's not necessarily going to be the norm. But if you look kind of nationwide, you should expect something like mid-single-digits pricing decline. Home has been much more durable. It's looking more flat and in some geographies still up low single digits. The new business trends I think have been interesting.
The pricing on new business has not been as impactful as it has been on the renewal book. So the pricing decline on renewal has been larger than the pricing impact on new business. We're actually still continuing to see higher pricing on new policies that we're writing. But, you know, auto market, mid-single down; home market, generally flat. Super helpful.
Andrew Kilburn, Analyst
And then just a little clarity on production, both corporate and franchise. So, I mean, really solid number, better than solid—22% up headcount in corporate agents. And I think you mentioned a little earlier, you know, the mix was kind of even college versus more experienced. I'm kind of curious, what was the mix or, you know, the new agent count mix of embedded versus non-embedded?
Mark Jones, President and COO
Not sure I'm quite following the question, Andrew. I mean, so when we're talking about
Andrew Kilburn, Analyst
Like, in other words, like, if agents are, you know, immediately put into one of the embedded channels versus, you know, going into a typical corporate setting, as has always been the case.
Mark Jones, President and COO
Yeah. So, like, the agency staffing program has added a large amount of producers into existing franchises from our existing corporate agent team. We've taken more than 10 producers in the last several months out of the corporate agent team and placed them into something like Planet's embedded franchise, where they've got natural lead flow. And the exciting thing for me is it's actually improving the productivity of those agents. So they're already solid producers inside our corporate agent force, and then we put them in a situation where they've got the same type of lead flow but effectively at an unlimited amount, and they're doing a great job.
Planet has had a tremendous circular agency.
Andrew Kilburn, Analyst
I see, I see. And then just lastly, in terms of franchise producers up 5%, so you're now starting to see the producer count grow as well as the franchise count, which is great—I mean, the franchises are growing too, rather. And then you mentioned 30% increase in producer hires. So do you see kind of the producer count kind of accelerating up from 5% over time? I mean, where could that go a couple of years from now? I mean, are we going to start to see the double digits pretty soon?
Mark Jones, President and COO
So there's a lot of possibilities, Andrew. Obviously we don't control exactly what our franchisees do. Right. We explain to them best practices. We help walk through the model and help them understand the level of value that they're able to create by onboarding more producers and holding them accountable to the standards that we think that they should be able to go produce. And you're seeing the top end of the franchise community just continue to grow at a really exciting pace.
And we talked about, we have multiple agencies over 40 producers now; we've got one over 50. And if you remember, I think it's probably a couple of years ago, but Mark Miller used to refer to, I want 50 franchises that have 50 producers or more. That could be a great kind of moniker for us, right? A 50-by-50 stat. And we're making progress on that goal. And we've talked about getting a producers-per-franchise number up to five. I still think that's a pretty attainable target in the kind of near to medium term.
But even if you just go, okay, we've got ballpark 900 franchises. Could all of those hire one person? That feels reasonably attainable. Could the top 50 of those hire five people? That feels reasonably attainable. So you can get to some math that looks pretty exciting. I mean, obviously we're not going to be providing specific guidance on what producer count goes to, but you can see how this model works really well, especially because they generate such durable income streams inside their business.
Andrew Kilburn, Analyst
Very helpful. Thank you.
OPERATOR
Thank you. One moment please, for the next question. Our next question is coming from the line of Mark Hughes of Truist Securities. Please go ahead.
Mark Hughes, Analyst at Truist Securities
Yeah, thank you. Good afternoon. The enterprise sales team—I think you described the $3 million in new sales this quarter—that's really ramped up. To what extent is that growing faster? And as it's become a bigger part of the mix here, is it going to be a tailwind for new sales in that corporate channel?
Mark Jones, President and COO
Yeah, I think it absolutely is going to be. It's our fastest-growing sales channel right now. We've got tremendous leadership there. We have great partners. We've built really strong technology to effectively route leads to the right agents. We've got a great agent force that can handle the complexity of dealing with leads from across the entire country. Tried to make that as easy as possible. I think that's a business that's going to grow at a really strong rate for a long period of time.
Because if you think about it, our corporate agents and our franchisees are typically going towards the home closing transaction as their main lead source. It's not the only lead source, but it's their main lead source. And right now that's somewhere between four and a half and five million transactions annualized. The enterprise sales team is focused on embedded pools of clients that could be in mortgage servicing, where there's 85 million mortgages existing in the United States today, or in a myriad of other potential adjacencies—financial services, moving companies.
We have our really strong partnership with Vivint. So we just get access to a lot more potential clients in a really efficient way. I think it's going to be a really meaningful portion of the business over time.
Mark Hughes, Analyst at Truist Securities
Yeah. If it was $3 million this quarter,
John Martin, Chief Financial Officer
What was it in this quarter last year? I think we said it was 70% growth this quarter.
Mark Hughes, Analyst at Truist Securities
Okay, all right, very good. And then the retention—if I kind of try to back into my own number, the renewal commissions—it looks like in the corporate channel it's a little less strong than the royalty fees. So the renewal royalty fees, very healthy, or let's just say it seems to be a little bit better than the corporate channel. Is there any reason for that or is that just some normal variability?
John Martin, Chief Financial Officer
Yeah, I would point towards geographic diversity. The franchise side of the business is much more geographically diverse than the corporate side of the business. We've done a great job expanding outside of Texas in corporate over the last couple of years and we've made really strong progress there. But corporate does have larger Texas exposure than the franchise side of the business. With that, diversification can insulate you more on the franchise side.
And then just from an incentives perspective, a franchisee is making 50 cents on every dollar on every policy that we use. So we do everything that we would do for corporate on the franchise side with the service team, but the franchisees also throw in more additional work on their end because that's just how the incentive structure works. And then if you look at the second half of 2026, ultimately we're expecting total second half on renewal commissions to have some improving revenue retention.
Mark Hughes, Analyst at Truist Securities
Yeah. Very good. Thank you.
OPERATOR
Thank you. One moment, please, for the next question. Our next question is coming from the line of Roland Mayer of RBC Capital Markets. Please go ahead.
Roland Mayer, Analyst at RBC Capital Markets
Hi, good evening, and wanted to quickly congratulate Mark, Mark, and then of course John on his first quarterly call. I believe the percentage of calls you cited being handled by Lily is similar to last quarter. Could you maybe walk through what percentage you might be able to reach long term, if there's any significant savings that might come through Lily?
Mark Jones, President and COO
Yeah, so we said 20% this quarter is kind of the every single day—we feel really confident it's going to be 20%. We're reaching periods of 30% now with some level of consistency, although not ready to, if that's the current watermark, to continue to chase after. I don't really have a target in my head of exactly how much should be fully contained by Lily. I think that's going to be dictated by the client satisfaction scores. If we get to a position where people don't like interacting with that system, then we will adjust.
What we have found so far is that for the more administrative-type tasks—things like I need my ID card, I have a billing question, help me understand this certain piece of my policy—that works really well and people get that handled immediately and they're highly satisfied. But I also think there's a considerable portion of the work that our service function does that we probably could automate that we're not going to because that's going to negatively impact the client experience, and that would negatively impact our client retention.
And our goal is to always maintain absolute tremendous client experience and continue to drive client retention, because that's where all the profitability is in this business. So don't necessarily have a target for exactly what we want the number to be. And those cost savings are going to continue to get reinvested into further tools and technology that help our clients and ultimately over time should reduce our cost to serve. But again, we want to maximize client experience.
That all makes sense.
Roland Mayer, Analyst at RBC Capital Markets
Thank you. Could you maybe just quickly walk through the cash utilization strategy? I was a bit surprised to see the buybacks slow despite the price being down on the shares.
John Martin, Chief Financial Officer
Hey, Roland. Sure. So, you know, I think about the 1Q/2Q repurchase levels much less as any sort of signal on our view of the business or the price of the stock and really point at the fact that we've just bought a ton of stock recently. So since 2024, we've repurchased over 3 million shares, and 1 million of which has come from the first half of this year alone. And you can also see that we on the management team have also been very aggressive in the open market with purchases more broadly.
I share the same view that management has always had around capital allocation, and that's been sort of first priority has been investment into the operations of the business, after which we think about return of capital to shareholders. What we're aiming to do is we really want to make sure the core business is appropriately funded and retains as much optionality as possible. What we don't want to do is be in a position where we're making operational decisions based on our capital structure.
So to that end, we maintain a conservative balance sheet and have a conservative approach to leverage. And so we'll continue to follow that approach. And then buybacks are going to be an important part of that.
Roland Mayer, Analyst at RBC Capital Markets
Thank you. And then if I could maybe sneak one more in, there's an adjustment for a contract termination cost. Could you maybe highlight what that is?
John Martin, Chief Financial Officer
Yeah. We were making some technology changes in our service function to reduce complexity and improve routing technology, provide more analytics. So we exited one contract and we implemented a new system.
Roland Mayer, Analyst at RBC Capital Markets
Have a great summer. Thank you.
OPERATOR
Thank you. One moment, please. And our next question will be coming from the line of Ryan Tunis of Cantor. Please go ahead.
Ryan Tunis, Analyst at Autonomous Research
Hey, thanks. Good evening and congrats to everyone. I've got a question. I'm going to put Mark Jones Jr. on the spot. But first, just an observation, and again, this is not to take anything away from all the investments. I think the company's made all the right capital allocation decisions. But you do have this reality that the stock price has not necessarily been—it's been a bit uneven in the last few years. So I guess my question to Mark Jones Jr. is, how are you thinking about shareholder value creation? I mean, for me it's margins, growing your earnings power. If it isn't margins, does this make more sense to just be a private company? I'll leave it there.
Mark Jones, President and COO
Yeah. Ryan, I think the way to maximize long-term shareholder value is to drive the maximum long-term profit dollars. And so we're not going to be concerned with short-term swings in equity valuations. We've got a lot of confidence in the direction that our business is going. Obviously you can see the management team voting with our wallets there. We're in the right place in the value chain. I think we have a pretty strong head start on the industry and we're going to continue to drive as much growth as we can while maintaining strong margins.
We've made pretty material progress on our margin profile over the last number of years while still delivering organic growth considerably in excess of the average player you would see in the industry. So I am not concerned with short-term equity dislocations. We are long-term shareholders and we intend to be long-term shareholders.
Mark Jones Sr.
Yeah. And this is Mark Jones Senior. As the largest shareholder by a huge margin, our focus is building long-term shareholder value. We're not going to get distracted by short-term fluctuations. We're not going to get distracted by the temptation to do a take-private. This is about building long-term shareholder value and we're confident that we have the right strategy, we have the right team and ultimately we believe that we will be the winner.
Ryan Tunis, Analyst at Autonomous Research
Thanks, all. And like I said, congrats. I got confidence in you. Thanks.
Mark Miller, President and CEO
Thanks, Ryan.
OPERATOR
Thank you. One moment for the next question. And our next question will be coming from the line of Katie of Autonomous Research. Please go ahead.
Katie, Analyst at Autonomous Research
Hey, thanks. Good evening and congratulations all around. My first question is on the increase to the full year total revenue growth guide. Do you guys think that core revenue growth can hit that new 15.5% midpoint this year?
Mark Jones, President and COO
Yeah. So, you know, I think as we've said previously, we're extremely pleased with what we've delivered in the first half of the year, both in terms of our financial results and also the directionality of our major operational KPIs. You know, we're growing new business at incredibly strong pace. We feel great about the direction of client retention. You know, everything we're looking at now points to a second half acceleration off the 12% that we delivered in the first half.
That includes both gains from client retention and new business generation. I'd say the one thing, Katie, to keep in mind as you're thinking about the year from an intra-year perspective, we saw a pretty meaningful acceleration in new business generation in the second half of 2025 relative to the first as product availability came back into the market and began hitting our stride on a number of initiatives. So we're just pointing to the quartering last year as you're thinking about year-on-year growth in the third and fourth quarters of this year.
But overall we're performing very well against our expectations so far and things are set up well for the back half.
John Martin, Chief Financial Officer
Yeah, I would say our expectations on core revenue have not changed. The increase in the low end of the guidance range was really to adjust for the outperformance on contingencies driven by strong profitability and growth. And sorry, just to follow up, previously I know we've given guidance around the 60 to 85 basis points. And just to round out Mark's comments there, our more updated view, which is reflective in the full year revenue update, is 70 to 100 basis points total written premium for contingent commissions on the year.
Katie, Analyst at Autonomous Research
All right, thank you. That takes care of one of my follow ups, I guess. Just to sneak one more in quickly, it looks like even excluding the contract termination charge, adjusted G&A expense was a little bit higher than I think I was expecting for the quarter. Certainly appreciate that you guys are investing quite a bit in technology and professional services, but I was wondering if perhaps you could unpack the year-over-year increase there and give any color as to whether there was a pull-forward in the timing of certain costs or if perhaps you're net just spending more year-over-year than perhaps initially expected.
John Martin, Chief Financial Officer
Yeah Katie, there was a couple of nitty gritty pull-forwards associated to G&A for some implementation projects. Nothing that's hugely material but, you know, on the margin can moderately increase that year-over-year growth rate. And remember we did just deliver the country's first choice shopping platform end to end and that generates some incremental G&A expense. And we had a conference with our franchisees in this second quarter, our President's Club conference, which incrementally is a million and a half dollars of G&A. But as you're looking at that from Q1 to Q2, that's where that is same period year-over-year as the second quarter of last year.
Katie, Analyst at Autonomous Research
Got it. Thank you.
John Martin, Chief Financial Officer
Thanks, Katie.
OPERATOR
Thank you. There are no more questions in the queue. And I would like to turn the call back over to Mark Miller, CEO, for closing remarks. Please go ahead.
Mark Miller, President and CEO
Yeah. I just want to thank everybody for joining us on today's earnings call. We look forward to talking to you again in October to review our third quarter results.
OPERATOR
This concludes today's program. Thank you for joining. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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