For our last session of the day, I have Goosehead Insurance. Thank you everybody for being here. Maybe just to kick it off, could you all give a brief background of Goosehead? Some of the things you're doing that are allowing the growth that's well in excess of what we've seen in some of the other brokers. Sure. Thanks, Alex. Thanks for having us today. Let me start by just addressing really two of the problems in the industry that Goosehead is solving for. First off, as you probably know, buying home and auto insurance is a terrible experience for most clients. Consumers are, quite frankly, asked questions they don't know how to answer about their home and about vehicle. They're presented with options that they don't understand and that aren't explained to them. They're bombarded with sales pitches in phone calls and emails and text messages and the like. It's a very fragmented market, so they're going to have to repeat this process over and over in order to have any type of shopping experience. If they go to a kind of comparative rating site, they're going to find out that their data's going to get sold over and over, and just lead to an even worse claim experience. Most of the time, to avoid the pain, they're going to just go with one of the first couple options they see online, which is going to mean they're going to be overpaying for their insurance or underinsured, or probably both. Goosehead makes this easier. We have a network of deeply knowledgeable sales agents with local area expertise that can shop them around 140 different insurance companies, and leverage technology to do so in a very efficient way. We've also recently rolled out our Digital Agent, which, with as little as three data points, your name, address, and date of birth, clients can go online and shop themselves. I think we've recently rolled out the additional feature where, with one carrier right now, they can go all the way through the quotation process and kind of think of it like a checkout button if they like what they see. By the end of the year, we'll have several different carriers online that make up a very meaningful portion of the new business that we're writing. We're extremely excited about that. Once the client decides to buy, either through an insurance agent or directly themselves online, they're handed off to our service team, which is world-class, with a 92 Net Promoter Score, 89% client retention. Our goal is to keep every single one of our clients for life. The other problem we help address is that selling home and auto insurance is a terrible experience for agents, right? Most of the industry is made up of single carrier platforms or single product platforms where they don't have the product to be competitive most of the time. It really limits their ability to grow. They also have outdated technology to work with, and they have to build out their own service team, which is a really hard thing to efficiently scale. Agents that come into our system can immediately plug and play, have access to a very competitive product portfolio. They have very good technology to help make them very efficient at their jobs. Again, they have the best service team in the world that once they sell a policy, it's handed off to the service team for all the renewals, billing questions and the like. They can 100% focus on growing their business through new insurance sales. What this has led to is a five-year CAGR for premium of 45%, which has accelerated over the 10-year CAGR, I think it was 26%. We have a long way to go, right? By the end of the year, I think we'll have a little more than 50 basis points of a $360 billion industry. Again, if we keep doing what we're doing, then we're hoping this new Digital Agent with some of these quote-to-issue capabilities will help accelerate that path. Look, I would just add, I think that was it. Kurt hit everything, but just, I don't think there's anyone in the marketplace that brings to bear what we do to the personal lines marketplace. That choice product platform with over 140 carriers, knowledgeable sales and service agents to help clients through the process, and industry-leading proprietary technology that we've developed to address issues in the personal lines space. We've focused on personal lines for nearly two decades, and there's a real benefit to that built experience curve that you have and the years of stuff that you've learned from dealing with clients, agents, and carriers focusing on addressing really all three of their needs. Yeah. I wanted to expand on it a bit, especially as it relates to the operating franchises, and the total franchise growth that you guys have seen. What are some of the things you're doing to drive in new partners there? I mean, what is attracting people to the business that is allowing for this growth? As of the first quarter, we reported a 41% increase in total franchises and a 28% increase in operating franchises. The difference being just franchises that have signed a contract but haven't yet come to training. We get two-thirds of our franchisees from the captives, State Farm, Farmers, and Allstate. These folks have very specific pain points in their business. Again, they have 1 product to sell, so if they can have a 10%-20% close rate, they're doing really, really well. The next thing is they have really bad agent-facing technology, the third being, again, they have to grow their own service team. You can imagine being a State Farm agent, and you might have two or three service folks in this labor market went home, quits, and you're now having to stop selling to go recruit a new service agent and having to train them up and all that. It just really, really limits their ability to grow. Again, immediately they come into our system, they can plug and play with unlimited growth potential for their business. Maybe more broadly on the environment right now, obviously inflation's doing what it's doing. There's a lot of repricing going on. I would think that probably translates to maybe a bit more shopping than is normal. What are some of the challenges and opportunities associated with this kind of environment? Yeah. Inflation obviously has its kind of ups and downs for any business. I think we're seeing the same cost increases that every company in the world is seeing on certain fronts. We're pretty unique in that insurance is a very hard market right now, where insurance companies are having to raise their rates. Because we're paid a percentage of the total written premium, that's essentially a pay raise for us and for our agents. Honestly, we tend not to focus too much on that when you're growing premium at 40-plus%. These kind of few points here and there don't tend to really matter. There are a lot of companies out there in the brokerage world that their entire growth strategy depends on rate. We're fortunate enough, if you think about the pillars of our growth being onboarding large amounts of franchise and corporate agents, ramping up their production to industry-leading levels, and most importantly, retaining that business, that's what we're focused on day-to-day. We tend not to focus too much on rate, the hard market again tends to be a net positive for the business. Yeah. I think the true value of what we bring in the business is highlighted in an environment like this. The choice product platform, a shopping experience, the ability to get customers appropriate insurance at the best possible cost. I think we can deliver more in a challenging environment. Thanks. Since this is an InsurTech conference, I did want to focus more in on the Digital Agent aspect of what you're doing. Could you tell us a bit more about that? Why did you decide to build this platform? What is that opportunity? How big could that be for you? Sure. Yeah. Well, it's something we're very excited about, we rolled out really the beta version last August with only home and auto insurance. We've since added condos, renters insurance, life insurance, flood insurance, and a couple other lines. We've also added the kind of quote-to-issue capability for one insurance company currently. I think at the end of the year we'll have several more. They make up a sizable portion of our new business. I think it's just probably important to just take a step back and really talk about what's currently available for clients online, right? There's really 2 different types of options clients are going to see when they go online. They're either going to go to a direct company like the GEICO of the world or the Progressive, it has really good technology, ultimately you're only seeing one product option. If you're going to those sites, the chances of either overpaying for insurance or being undervalued or underinsured is pretty high. The other option that clients are going to see are some of these rating platforms or claim to be rating platforms, really, they're just gathering your data, they're selling it to other data sellers and to other insurance companies. If you want to play a good joke on a friend, go in there, put in their phone number in there, theirs can get blown up for two weeks and then 12 months after that. It's a pretty bad experience, it's either they're not getting quotes or if they are, they're very unrealistic quotes, right? I can think of one in particular that the fine print said that they're going to quote you as a 65-year-old male with perfect credit who drives an 85 Oldsmobile and only drives 5,000 miles a year. That's for auto insurance. There's same scenarios for home insurance. What they're trying to do is just drive down the listed price as much as possible, and then when you finish the process, you're going to end up paying multiples of that. It's just a very unsatisfying sales process to say the least. Again, we're the only company bringing the choice product offering. We'll give you accurate quotes because remember, this is driven by 30 million-plus historical quotes that our agents have run, and it really drives this agent-driven machine learning that will provide very accurate quotes that fit your particular situation. Again, we're shopping you across our entire carrier platform, so we're going to give you the best choice possible. Finally, we're excited about growing. I don't think that many clients are comfortable buying home insurance online. I think there's more so that are comfortable buying auto insurance, but that could just be because the experience has been so terrible so far. It's kind of too early to tell how many of our clients that go through this will buy online versus ejecting and talking to an agent. Really our goal is to try and reach the client however they want to be reached, whether they want to go through the process themselves or whether they want to start the process and eject at the agent or whether they just want to pick up the phone and call the agent for the first time and have a 30-minute call and be educated and all those things. We'll be there for the clients. Well, yeah, I think the early indications of this are pretty profound. I think the Net Promoter Score for the clients that go through this process is about a 95, which is higher than our current process. The ones that go quote-to-issue online have a very high cross-sell rate. They're buying both home and auto, which is pretty remarkable. It's telling me that clients want both. They just have to present it to them. Again, we're really excited about it. I think it opens up the door for a lot of opportunities with some of our strategic partnerships and really integrating with any company that has your name, address, and date of birth that wants to provide home insurance and auto insurance and other lines of business to their clients. That's another area if you want to get into it now, we can. Just something that we feel is a nice additional growth vector for the business. Yeah. That's interesting. Maybe we could talk about just how the launch is going so far. I think you talked on your last earnings call about an initial group of carriers that you were going to go live on. How is that process going? Where were you starting in terms of products and where will that go from here? Yeah. We rolled out our first, it's an InsurTech company who, again, was the first to go quote-to-issue. I think since then, the dominoes have really started to fall. In fact, we were at our annual Ascend meeting. We had 100 representatives from our carrier partners. We were announcing, we called special attention to this insurance carrier and said, "Thank you. We're going to be the first company that goes quote-to-issue." We were literally getting emails live in that meeting from some of our largest insurance companies saying, "Can I be next?" I think it's really shown that carriers want to integrate with us. They trust us to provide our clients with a great experience, also the right good business, which is important in this space as a lot of companies in the past, I can think of Google specifically, have tried to do something like this, ultimately failed because the carriers couldn't get comfortable with the product they were writing. We'll have a large number of our carriers that are writing new business on the platform quote-to-issue by the end of the year. We're excited about it. We have yet to determine how many of our clients are going to go quote-to-issue, I think it provides a nice opportunity. Yeah, it's a grouping that includes traditional, national, regional or InsurTechs. That's all of the above that have an interest and excitement to join the platform. Maybe next we could talk about, for the Digital Agent, what will the distribution look like through partnerships? Tim, you talked some about that as well. It sounds pretty interesting. Just from the value proposition of having a choice of a number of carriers is an option to be able to go to bigger partners with that kind of value proposition sounds pretty interesting. Where do you see that going? Where does that stand in terms of what stage it's in and bringing some of that to fruition? For sure. I think it's important to just say first and foremost, that we recognize that our core growth strategy remains within the franchise operation and with our corporate agents and continuing to grow that. However, I think this possibility creates a nice potential kind of growth sector for us. Really, again, any company, whether it's a mortgage company or a community bank or a credit union or a financial service company, a home builder, whatever it is, anyone that has your name, address, and date of birth and wants to provide home and auto and other lines of business to their clients, they can do so. I think that it really opens up the door and the possibilities are endless. I think this is the perfect timing for us to start the strategy because it wasn't until really last August and even more so at the end of this year when we get some additional quote-to-issue capabilities that we can provide the technology that these partners would be interested in. The ability for their agents to go through the process on their own or reach out to talk to an agent. We also haven't been, until recently, at a scale with thousands of insurance agents across the entire country to be able to handle these leads volume, right? I think a lot of folks underestimate the local area expertise that's needed to provide a good shopping experience for clients, right? Someone that lives in Houston, Texas, is a lot different than someone who lives in Nebraska or some other place that might not have as much unique risk. Like the state of California has very unique risks. Florida, really anywhere in the country. I think we're at a really good point in our company where we can feel comfortable aggressively pursuing some of these opportunities, knowing that we can provide a good experience for those partners' clients. We can also have the bandwidth to absorb these leads without putting stress on the system. I think Mark really touched on a good point of the difficulty there is in providing this experience, this high quality, appropriate experience for clients. There's a lot that goes into building that. I think there's examples of companies from other industries that have tried to tap into various parts of the insurance value chain and have ended up having challenges doing that. We think our digital agent offering is a nice way for a lot of companies to consider gaining that way, and at the same time gaining that expertise without necessarily having to build it because it takes time. With ourselves, our own management team that built this business, if you gave them several billion dollars today to start from scratch, it could take five, seven, eight years, a decade to build it again. There really is a value and a barrier and a moat in the time that's been put into that. Got it. I guess high level, where are you with being able to take this and really integrate it in, like white label it as part of a partnership? Are you pretty close to being able to have all those capabilities ready to go? Is that something that you're continuing to build out in addition to bringing the carriers on, having the products available? Yeah. Again, we're working on all those things at once, and actually going through our first implementation with a couple of smaller strategic partners. Again, nothing that you'll notice from a financial statement impact, but I think they're good examples of just cutting our teeth, building out the blueprints for implementation, so we can take that to partners and say, "Here's what we can do." We're excited about that, and I think the larger ones are going to take a lot more time to negotiate, to implement. Again, I think thinking forward a couple of years, it could provide a really nice additional growth vector for us. When we think through over what time period this could evolve and begin to impact the financials in a bigger way, what are the expectations you all have for how quickly that could occur and when we could be sitting here looking at a much bigger growth contribution coming from this part of the business? Yeah. It's to be determined there. I will say, certainly not this year. I think being halfway through the year already, even if we landed some big partners, we probably could get finished implementation by the end of this year. Potentially next year, I think we'll have some additional thoughts on that as the year progresses and as the quarters progress. If there's any important news, we'll certainly share it with you guys. Understood. Maybe shifting gears a little bit. How is inflation impacting the business and from expenses and having to deal with more policies being marketed and just the manpower that goes behind all of that, how is that affecting your business more broadly? Yeah, definitely, the hardening market creates some shopping behaviors. I think we are uniquely positioned to, first, for our own clients to reshop their business effectively and efficiently, using technology through our service team or our sales team to reshop those policies quickly. Or the clients can go on our website and reshop it themselves if they so choose. I think it does provide an opportunity to capture some additional market share as if you're a single carrier platform, you're still having the same struggles with profitability. You're still having to increase your insurance premiums, you have no other choice for your clients other than shaping coverage. It quickly creates much shopping behavior for people that aren't our clients to find Goosehead one way or another. On all the costs, I think we won't be unique in any of our costs that we see. Inflation, rent expense, computer expense, all the good stuff that everyone else is seeing, I think is impacting us. Fortunately, we are a very scalable business. We continue to grow at a very fast clip and grow profitably. I think that's one thing that sometimes gets lost on investors given our high growth and given we're in this growth-y InsurTech name. I think it's assumed that we are a growth at all costs company, which we are most certainly not. We still operate the business and make investments like we're a private company. That includes a necessary ROI that we got to see before we make any investments. I think that's one area we continue to improve on. We talked about some margin expansion that we expect this year, even at very high growth rates. I would say that is one of our greatest differentiators. We have very strong revenue growth and incredible runway in the marketplace, we generate high levels of profit and expect to continue to grow our earnings that are very high levels to go forward as well. Can you talk a bit about your current geographic presence and certainly the Digital Agent will probably maybe contribute to expansion as well, but even just from a franchise perspective, how will you look to expand from a geographical standpoint? Sure. We are currently in 47, I believe, of the lower 48 states. Physical presences there, either corporate offices or franchises or both. Our continued focus will be to further penetrate those markets, especially our key markets. Honestly, like 47 to 48, we got into a lot of those just because we're being opportunistic. We had a really impressive agent come to us and say, "Hey, I want to be your flagship Montana franchise." Montana is a very easy state to turn on. We have the choice product platform, so we can do so easily. I would say our main areas of focused growth are going to be in the Midwest, Illinois, Michigan, Ohio have been really good states for us. Up the Eastern Seaboard, the Carolinas, Georgia. Then again, in our key states of Texas, California. I think those are all really good states with lots of runway for growth. Yeah, we have 15 corporate offices in various places in the U.S. I'd say there last year we added, I think five, a significant amount of growth there. I don't think you'd expect that level of growth going forward in any given year. In fact, we talked about it on the last quarter's call that our corporate side is getting to a level of scale that it's been an important support function for the franchise side, but it's getting to a size where we think we're going to be able to start leveraging some scale in that gradually over time. Not saying that there wouldn't be up for across expansions, but the amount of expansion we had last year was quite a bit, and that's going to scale nicely as we progress through the rest of the year. One of the other questions I wanted to ask you on the growth front was just the, I guess, the increase in contribution from referral partners that you guys had mentioned recently. What's driving that? Is there something different that you all are doing? Is it some dynamic in the market? What's driving the greater referral? Yeah. It's a great question. I think that comment was related to a question that we get quite frequently on the housing market headwinds that we've been seeing recently. Again, we're not immune to these factors, but we're very well insulated. If you look at our total revenue bar. Only about 20% is tied to the housing market in any given year because we have such a big renewable base. What we were talking about was the slowdown in the housing market and what that means for our business. We've said it several times in the past, but I think we finally showed some really good data on our efforts. Anytime there's a pullback in the housing market, really our mission is to gain more share, get more referral partners sending us business. The stats we gave were during the first quarter, we saw a 44% increase in referral partner activation. These are mortgage lenders, realtors, title companies, whoever who sends us a lead for the very first time. We saw a 3x increase in the reactivation, meaning they had sent us business in the past, but hadn't for, I think, 90 days, but started sending us leads again. I just thought it was good data to help put some color to things that we've said over and over again. We've seen these housing market pullbacks several times in our company. We've been able to grow fast through those every single time, including 2008 to 2010, and continue to use those efforts to try and grab market share in the housing market. The other thing I'll mention there is I think something that's commonly misunderstood about Goosehead is that we're kind of closely linked to the refinance activity. Only a very small, low single-digit percentage of our new business is from refinance leads. Again, I don't think there's as big of a headwind as a lot of people think. I still think there's a large number of housing market transactions that are happening in the U.S., and will allow us to continue to grow. Makes sense, okay. Next one was just on the capital markets volatility. When we look at the growth factor rotation and cost of capital's changed a bit, what does that change, if anything, about the strategy that you guys are implementing, the way you capitalize the business? Yeah, I don't think it really changes anything. I think, obviously, we'd like the stock to be where it was at the end of last year or higher, but we're focused on what we can control, and that's growing revenue, growing earnings, grabbing market share, and delivering a good client experience, a great client experience to make that happen. That's what we're focused on. Just from my CFO, it really doesn't change anything on the capital side. We've historically had a very simple capital structure involving some debt and some dividends. We'll continue to evaluate that strategy and see if it makes the most sense, but I don't anticipate any big changes to that. I'd say that the ability to fully self-fund our growth, I think that's a huge advantage for us in any environment, particularly one that gets a little more stressful. Yeah. That's an important point. Back to the point of us being just profitable and generating a lot of cash. We don't need to go to the capital markets. Fortunately, if we see a pullback like we do now, we can weather the storm and just kind of wait for it to go back up. Yep. Maybe pivoting back to the agent and franchise growth, can you talk about how the current labor market is impacting your ability to grow that at all? Has that been a material headwind, or are there enough reasons for State Farm or Allstate brokers to want to switch over that that's not as much of an issue? How do we think about that as a driver for you all? Yeah. It's certainly not as easy as it was in 2020 when seemingly every other company was laying off workers and furloughing them. We were hiring and giving raises and bonuses, and we really accelerated our growth during that period. You hit the nail on the head, I mean, there's over 100,000 agents at State Farm, Farmers, and Allstate alone. They have those pain points regardless of the labor market, right? The pain points aren't necessarily that they're not getting paid enough or whatever it is. It's that they can only sell one product. They're not even employees of State Farm. They have to build their own book of business and build their own individual businesses. It doesn't change in the labor markets. We're not immune to any of those factors, but I think we can continue to grow given that large pool of agents to fish from and given their pain points that have not changed. Maybe just to finish it off here with a pretty broad question about the future. What are the biggest objectives, the biggest things that are top of mind for you, the management team, in thinking about the next few years? What are you most focused on? Yeah, honestly, it's the same answer that I would have given a year ago. It's continuing to focus on growing our agent count with both corporate and franchises, ramping up their production over the first three to four years actually from then on as well. Our franchises, we continue to invest in them and helping them ramp up themselves, but also taking the next step and helping them with their hiring and how to hire, how to fire, how to do the different things to grow their teams effectively. That's really a big focus of ours. Then most importantly, client retention will always be our most important focus because it's so critical to the economics of our business. On new business, we are breakeven at best. All the economics are in the renewables. We have to continue to renew our premium and our revenue at high rates, and that will be a focus of ours. I think the one additional focus that I would add is the strategic partnerships, I think it folds in nicely to all those other things. We'll have the agent force. It's really just more of a shifting a go-to-market strategy compared to it's still going to be agents processing those leads. We're still going to have to retain that business at very high levels. I think it just folds in nicely to our current business strategy. Great. I think we're at the top of the time we had. I really appreciate you guys doing this. It was great to hear about the Digital Agent Platform in particular. Thanks, and thank you everybody in the audience. We'll speak again soon. All right. Thanks, Alex. Thank you very much. Bye.