Goosehead Insurance delivered strong, broad-based second-quarter 2026 results and raised its full-year revenue guidance: total revenues grew 21% to $113.4 million, total written premiums rose 14% (accelerating from Q1) to $1.36 billion, adjusted EBITDA grew 30% to $37.9 million (33-34% margin), and net income nearly doubled to $17.0 million with GAAP diluted EPS of $0.42 (up 106%) and adjusted EPS of $0.64. Client retention improved sequentially to 86% (a post-hard-market high with room toward the prior 89% peak), new business commissions grew 27% and royalties 20% (fastest in six quarters), and franchise economics strengthened with average monthly franchise payments up 35% to over $28,000 and same-store sales up 22% (top-50 up 40%). Contingent commissions surged 180% to $16.3 million on better loss ratios, carrier mix and contracts - the main driver of the guidance raise (contingents now 70-100 bps of premium versus 60-85 bps) - while core revenue expectations were unchanged with a second-half acceleration expected off 12% first-half growth. The company also announced a leadership transition, with CEO Mark Miller retiring at year-end and President/COO Mark Jones, Jr. taking over (strategy unchanged, emphasizing execution speed and simplification), alongside new CFO John Martin. Softer points included producer growth of just 5% (despite hires up 30%), guided moderate ex-contingent margin compression as comp and G&A grow high-teens to low-20% on growth investments, slowed buybacks, and modestly declining pricing (auto down mid-single-digits, home roughly flat). Strategically, enterprise sales grew ~70% to 21% of new business commissions with embedded franchises (Planet Home) ramping fast, Digital Agent 2.0 (the first U.S. end-to-end personal-lines choice platform) is optimizing its Texas funnel ahead of a multi-state rollout, and AI agent Lily handles ~20% of service calls, with management reaffirming a long-term, conservatively financed, shareholder-value focus and no interest in going private.
Thank you. 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. 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. I'd like to turn the call over to our CEO, Mark Miller.
Thanks, Maddie, 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 an 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 U.S.'s 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 skillset, and the vision to take Goosehead 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. 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.
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 30th, 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+ 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've built capabilities that broaden how consumers interact with Goosehead.
Thank you, Mark. Good afternoon, everyone. It's a pleasure to speak with you today for the first time as Goosehead CFO. I've enjoyed meeting many of you in the second quarter. 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.
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'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'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 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 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'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. 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. 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 continues 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 healthy product environment, they are reaching impressive new levels of success. Client retention increased sequentially as expected from 85%-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.