Ladies and gentlemen, thank you for standing by. Welcome to Goosehead Insurance Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to your first speaker today, Dan Farrell, VP Capital Markets. Please go ahead. 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 the expectations, estimates, and projections of the management as of today. Forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties, and other factors 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, under-reliance should not be placed upon them. We refer you to all of our recent SEC filings for more detailed discussions of risks and uncertainties that could impact future operating results and financial condition of Goosehead. We disclaim any intention or obligation to update and revise any forward-looking statements except to the extent required by applicable law. I would also like to point out that during the call, we will discuss certain financial measures that are not prepared in accordance with GAAP. Management uses these non-GAAP financial measures when 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 from period to period by including potential differences caused by variations in capital structure, tax position, depreciation, and 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. An archived version will be 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 Chairman and CEO, Mark Jones. Thanks, Dan, and welcome everyone on the call. By now, you should all have had a chance to read the two press releases that went out prior to this call. I will address our management transition plans at the conclusion of our prepared remarks. Before getting into our 2023 results, I'd like to share some background context on the master plan that we've been executing against for the last 18 months. The basics of that plan were to refocus our efforts and resources around profitable growth, remove any barriers to profitable growth, and protect and strengthen our competitive moat. We are pleased with both the pace of execution of the master plan and the results we're seeing and are right on schedule. Much of our time, effort, and resources were focused on revamping our sales networks, yielding dramatic gains in agent productivity. During Q4, we reorganized our sales management functions into one consolidated team that works across both corporate and franchise under the leadership of Brian Pattillo. This has enabled us to better leverage our intellectual capital and is delivering great productivity growth. As a reminder, Brian took over the corporate sales function in late 2022. Corporate productivity was up 27% in 2023 relative to the prior year. Even more exciting, we saw first-year corporate agent productivity grow 46%. Productivity per franchise was up 30% in Q4 following our management realignments, even in the context of some pretty heavy industry headwinds. During the year, we also right-sized our cost structure in a way that continued to support high levels of growth, but at the same time allowed us to deliver much better margins. We invested and continue to invest aggressively in our Quote-to-Issue technology, which has profoundly expanded our competitive moat, unlocking productivity of our sales agents, simplifying service delivery, and over time, potentially opening the aperture for other distribution channels. Tools like this create a virtuous cycle where agent success enhances our recruiting value proposition, drives better agent retention, and ultimately facilitates more rapid and profitable growth. Our human capital is the secret sauce that makes us an extraordinary company, and we continue to focus on building it. We leveled up our recruiting practices by returning to our roots with uncompromising quality standards. These efforts are bearing fruit, with first-year corporate agent productivity up 46% from 2022, as I mentioned earlier. We're also investing in our highest potential franchises through additional leadership support, providing dedicated recruiting resources, and implementing new training programs at important inflection points. Now that our sales teams are much more productive and we have the right cost structure and organization supporting the business, we're beginning to reignite growth in sales capacity in each of our distribution networks. We're growing corporate sales headcount up to our absorptive capacity. We're expanding our partnership networks to drive growth in our new enterprise sales unit. We're dialing up sales capacity in the franchise business through a combination of helping our agency partners recruit producers and adding high-quality franchisees. We launched what we call our middle-market agency business development team in Q4, focused on helping mortgage lenders and Realtors bolt their own Goosehead agencies onto their core businesses. Interest is high, and the pipeline of active opportunities is very rich and exciting. While we're in the early stages of this capacity growth, we're seeing tangible results with corporate sales headcount up 20% from its low of around 250 and producers per franchise up 7% from last year. Now, turning briefly to our 2023 results, Total Written Premiums grew 34% for the year. Total revenues were up 25% for the year. Adjusted EBITDA grew 90% in 2023, and Adjusted EBITDA margin expanded about 900 basis points to 27% on the year. We plan to continue to grow our corporate team in 2024 and for the foreseeable future, which will support the conversion of more corporate agents into franchisees. As a reminder, when we launch a corporate agent into their own franchise, we're not only creating a top-decile agency, but we're also retaining and expanding the productive capacity of converting agents as they scale their agencies. During 2023, we launched 30 corporate agents into franchises and have already seen several of them adding new producers in just their first year. As a reminder, these 30 corporate conversions yield production equivalent to about 200 franchises that we hunt in the wild. This remains an incredibly long lever for us and a massive competitive moat. No other insurance agency has an asset like our scale team of highly skilled, hardworking, and disciplined corporate agents. We further invested in our highest potential franchises during 2023, rolling out a producer recruiting program that has seen immediate success. 2023 was the hardest product market we've seen in our 20 years of operations as underwriters struggled to take premium rates fast enough to offset the increasing costs of claims. To combat this, we developed more resources. We deployed more resources to our carrier management function to work with our most important carrier partners to maximize product access for our agents. We're very encouraged to see signs of the product market beginning to thaw and hope to see broader product access around mid-year this year. On top of historic product restrictions for many carriers, we face substantial headwinds in the housing market as existing home sales fell to a 28-year low. It would have been easy for our agents to panic, wring their hands, and say it's out of our control, but that's not part of our DNA. We continue to deliver through these headwinds by doing what we do best: execute our value proposition with referral partners to maximize our inbound lead flow, which was at an all-time high in 2023, and deliver an exceptional client experience. Since our last earnings call, we've launched five new carriers on our Quote-to-Issue platform, including Progressive Auto. Our QTI platform improves the client experience, increases agent productivity, and improves our ability to deliver carriers to business that matches their underwriting risk appetite. I normally conclude our internal financial review meetings with a single comment: "This is a damn good business." Let me explain why this is a damn good business. We operate in a highly fragmented, approximately $450 billion premium industry where we account for less than 1% of market share. If you live somewhere or drive something, you need the product that we sell. We've remained disciplined and focused on the link in the value chain where we can and do win in distribution. We don't get distracted by shiny objects, and we have a firm belief that ideas need to compete in a marketplace. When we arrive at the office for work, we check our egos at the door. Our entire business model is based on placing the client at the center of our universe, which has allowed us to deliver world-class NPS scores and maintain client retention at levels that allow us to aggressively attack new business growth while maintaining strong profitability. The competitive set in personal lines distribution cannot fully meet the needs of today's clients. Single carrier platforms do not offer the power of choice, and other independent agents lack the industry-leading technology we've spent decades building on the back of our millions of proprietary quotes. The industry has historically not attracted the very best talent. Goosehead, on the other hand has. We find ourselves possessing massive competitive advantage in an industry that, for all intents and purposes, is of infinite size with very attractive recurring economics, deeply aware of what we are and what we are not. I am grateful every day we face the competitive set that we do. We believe the only thing that could stop us from reaching our full potential, becoming the largest distributor of personal lines i nsurance in the United States during my lifetime, is our own execution, and we do not plan to let that happen. I'm very excited for our future, and I want to thank our team for a tremendous 2023. With that, I'll turn the call over to Mark Miller to go more in-depth about our operations for the quarter and the year. Thanks, Mark, and good afternoon, everyone. As Mark mentioned, 18 months ago, we thoughtfully architected a master plan that included a list of initiatives designed to improve quality and execution across the organization. Our goal was to transform Goosehead into an even better company, one that could grow faster and more profitably at scale and expand our already wide competitive moat. We knew that by executing our plan, we would slow the revenue growth in the short term, but we believed these actions would build a stronger foundation to deliver sustained, high levels of both revenue and earnings growth in the future. In some areas, we were able to move quickly and start realizing benefits in the P&L within a few quarters. In other areas, we needed to invest in people and processes and develop new business capabilities. Even when executed with precision, these types of growth initiatives can take multiple quarters to bear fruit. I'm pleased to report that in 2023, we executed exceptionally well against these initiatives. We restructured our corporate and franchise agent force to drive higher levels of productivity. We doubled down on our recruiting function and raised our hiring standards to bring in significantly more high-quality talent. We drove cost discipline across the organization. We built a new enterprise capability that winds our distribution aperture toward more effectively with inbound lead flow from our online Digital Agent and partnerships. We built a world-class technology team that has successfully developed what we believe is the best agent shopping platform in the industry. We have proven we can directly integrate that technology with the largest carriers in the industry to bind and manage policies. With strong execution in 2023, we are now ready to start pulling the levers to accelerate PIF growth in 2024. We plan to add distribution capacity across both corporate and franchise networks. Our corporate recruiters have already locked in a significant portion of our new agent needs for 2024, and our agency staffing program is on pace to help our agency partners recruit several hundred high-caliber agents this year. As we've mentioned previously, these agents that we help place in thriving franchises are nearly 1.5x more productive than the average new franchise. We plan to continue increasing corporate and franchise agent productivity by leveraging improved sales processes and technology. With our new management structure, we believe we can continue to reduce the gap between franchise and corporate agent productivity. Our expanding QTI capabilities should improve overall efficiency of our entire agent force. In addition, our new enterprise sales and partnership network efforts are starting to add meaningful volume. We believe we can further improve our already strong service function to effectively support our growing renewal base, enhance the client experience, and ultimately drive client retention. Let me take a moment to go a bit deeper on some of the achievements in 2023 and how we believe this sets us up for profitable growth in 2024 and beyond. We saw dramatic improvement in our new corporate and franchise agent productivity in 2023, and we believe the runway for further improvement is substantial, particularly as the challenging macro environment ultimately abates. For the year, our corporate new business revenue productivity on a cash basis, which will be disclosed in the 10-K, increased 27%. Our agents with less than one year of experience increased new business productivity by 46%, a remarkable accomplishment in the current environment and a testament to the value of returning to our roots with our recruiting strategy. We saw substantial franchise productivity improvement in the back half of 2023, particularly in the fourth quarter compared to the first half of the year. We have now seen four consecutive quarters of franchise productivity improvement. Specifically, we saw a 30% increase in Q4 versus the prior year. To put this in perspective, franchise productivity in the fourth quarter was the highest on record. We believe there is substantial runway for continued improvement in franchise productivity as we reduce the gap between corporate and franchise agents with better technology, training, and recruiting. Under Brian Pattillo's leadership, we are managing corporate agents and guiding franchise agents as one cohesive team. We believe the changes that Brian has implemented already helped to drive fourth-quarter gains. Our recruiting function was significantly upgraded in 2023, and we now have the foundation and process to bring on larger numbers of high-quality producers. In corporate, we ended the year at 300 agents, up from the low of around 250 in the middle of the second quarter. We're now confident in our ability to significantly grow corporate producer count while maintaining quality in 2024. On the franchise side, we intentionally reduced the number of franchises recruited and focused on dramatically improving the quality and launch speed. Our franchises are now launching around 20% faster than they were in the prior year and are 29% more productive than they were this time last year. We have been franchising for over a decade now, and we are continuously improving our model on who and where we want to launch franchises. We are currently focusing our franchise recruiting efforts on underrepresented geographies and on owners that want to run large, multi-agent growth businesses. It is important to reiterate that our franchise growth is no longer about simply growing the number of franchises. It is about growing productive capacity and overall producer headcount. One of the most efficient ways to accomplish this objective is by helping our best agency partners grow more quickly. Let me highlight one example to illustrate how this new muscle works at one of our top franchises. The Sacchieri Agency is one of the most successful franchises in the country. The owners, Ryan and Scott Sacchieri brothers, are masters at onboarding and ramping up agents. At Goosehead, we're exceptional at sourcing high-caliber sales talent. Last year, we created the agency sourcing program to help franchises like Sacchieri's find talent more quickly. In May of 2023, Goosehead helped the Sacchieri Agency recruit Dimitri Kent. In his first eight months, Dimitri averaged a little over $13,000 in monthly new business revenue, earning him Rookie of the Year award. In November, he finished with $30,000 in new business revenue in just his seventh month. This is just one small example of how we work with our existing franchises to maximize growth. Ultimately, removing underproducing franchises has muted our overall producer growth numbers in recent quarters. But I'm confident we will see strong overall franchise growth production in 2024, driven by adding high-quality new franchises, scaling existing franchises, driving productivity gains, and converting high-performing corporate agents to franchises. In addition to sales productivity gains, our dramatic profitability improvement in 2023 was driven by very disciplined P&L management. Since taking on the CFO role, Mark Jones Jr., has personally taken on responsibility of the expense structure and helped drive cost discipline across the company. Thanks to Mark's contributions, we're starting to realize unit cost improvements in some of our largest expense categories, such as service. We believe we have the best service function in the industry, but we also know we can get even better and more efficient over time. Towards that objective, we recently announced the hire of David Lakamp as Chief Service Officer. David brings substantial experience operating a large service function at USAA. David is uniquely qualified to help take the service function to the next level, bringing benefits to clients and driving further scale efficiencies, which will be key to building a service department that can support an organization and client base that we believe will be multiple times its current size. In 2023, we made substantial progress in laying a solid technology foundation for the future. One great example of this progress is the rollout of our Quote-to-Issue capability. We launched five carriers on QTI since our last call, and we have ambitious targets for ramping this technology in 2024. We expect a substantial portion of our carrier volume to be QTI-enabled by the end of the year. We believe this technology will drive significant efficiency for the sales agents and service agents over the next several years. This technology will greatly strengthen our ability around enterprise sales and partnership opportunities. For much of my career, when a company's year-over-year revenue growth and EBITDA margin added up to 40, we would say the company was performing well at a Rule of 40. This implied the company was balancing growth and profitability effectively. Over the long term, I believe Goosehead can perform at a Rule of 60 level with a healthy balance of revenue growth rate and EBITDA margin. Very few companies can sustain these levels of financial performance over a long period of time. But we believe our unique business model, huge addressable market, and wide competitive moat make it completely possible. I want to thank the entire Goosehead team that worked tirelessly to make dramatic improvements to the organization. I couldn't be more pleased with the progress we've made over the past year and our strong positioning for 2024 and beyond to drive accelerating high-quality and sustainable growth. With that, let me turn the call over to our CFO, Mark Jones Jr. Thanks, Mark. Mark Sr. and Mark Miller have both referred to our master plan. Let me take a minute to provide more details of that plan, what we've accomplished to date, and what to expect in 2024. First and foremost in our plan was to refocus on profitable growth and remove any barriers to future profitable growth. When we kicked off this plan, corporate sales headcount was just over 500, but we were not delivering the productivity that could drive the level of margin we know this business should produce. We evaluated our management resources, our recruiting practices, and our incentive structure and ultimately decided that the best step we could take would be to reset the size of the team, with total productivity being the guidepost for the appropriate team composition, essentially a shrink-to-grow strategy. We reached our productivity targets, a 56% increase at a headcount of around 250, and have been adding back productive capacity, with the only limiting factor being our absorptive capacity. We took a similar approach in the franchise network. The business was carrying too many underproductive agencies that were blocking other successful agencies from onboarding new referral partners, hurting our brand in the market, and clogging up management resources. We shifted our focus from the number of operating agencies to what we view as the true measure of productive capacity, the number of producers, and began healing that network by investing in additional management resources, fostering engagement, and incentivizing monthly goals where possible. We began aggressively pulling underperforming agencies early in 2022 and have made great progress to date. Through the combination of franchise calling and new producer onboarding, we transitioned from a peak of just over 2,100 producers to a much healthier 1,957 at year-end while seeing fourth-quarter productivity gains of 30%. Because we were aggressive in executing to our plan in 2023, we are already seeing the strategic initiatives bear fruit. Total new business production on the year was up 12%, while the average producer count company-wide was down 5%. As planned, we have reaccelerated growth in new business production, as total new business production in the fourth quarter was up 14% over the prior year. Reestablishing these high levels of productivity in corporate and driving significant improvement, particularly in the fourth quarter in the franchise network, allows us to shift our focus back to rapid and responsible growth. Looking forward to 2024, we are excited to be transitioning into the next phase of our overall plan, faster and more profitable revenue growth. We will achieve that through a few specific strategic actions: meaningful growth in corporate agent headcount, particularly in the second and third quarters of the year, further investment in our franchise agent staffing program, for which we have significant demand, and through productivity enhancements from a combination of strategically timed training programs and increased leverage of our proprietary QTI technology across all of our sales and service functions, which will drive new business productivity and client retention. On top of that, we expect to onboard additional strategic partnerships that further decouple our results from the housing market and allow us to reach new clients outside of our traditional go-to-market strategy. All of those items, on the backdrop of what we believe will be an improving macro environment as opposed to a deteriorating one, give us tremendous confidence in our ability to drive a reacceleration in growth while expanding our margins. Moving on to some specifics for our fourth quarter and full-year results. For the quarter, Total Written Premiums, the key leading indicator for future revenues, were $756 million, an increase of 29% from the year-ago period. This includes $584 million of franchise premiums, up 33%, and $172 million of corporate premiums, up 18% for the quarter. For the full year, 2023, our premiums grew 34% to just under $3 billion. While we have been experiencing tailwinds from carrier pricing actions, it is important to call out the secondary effect of that is less product availability in many of our key markets, such as Texas, California, Florida, and New York. The impact to new business productivity from carrier restrictions has more than offset the tailwinds from increasing average premium per policy. We believe this makes our significant productivity improvements, particularly in the franchise side of the business, representing 87% of our total productive capacity, all the more exciting. During the fourth quarter, our existing agency saw 23% same-store sales growth, driven by both improvements in the productivity of the existing agents and by increasing the average number of producers per franchise from 1.49 a year ago to 1.6 at year-end 2023. Policies in Force grew 16% versus the year-ago quarter, again, as we expected. We anticipate growth in policies in force to accelerate in the second half of 2024, with further acceleration in 2025 as we continue through our master plan to onboard new producers, improve our service function to maximize retention, launch additional strategic partnerships, and continue to add carriers to our QTI platform. This very short-term slowdown in top-line growth but not bottom-line profitability is just how we mapped out our plan 18 months ago. Total revenue for the quarter grew 10% to $63 million, and for the full year, total revenue was up 25% to $261 million. Core revenue for the quarter also grew 10% and was up 24% for the full year. As planned, we intentionally slowed overall premium growth and had a larger portion of our growth driven by the franchise network while reducing our average corporate agent headcount as we reestablished our profitable base. Because we recognize only our royalty fee as revenue in the franchise distribution, this creates a lag from new business production growth to core revenue growth. As production continues to accelerate in 2024, we should see more meaningful revenue acceleration in 2025. Contingent commissions for the quarter were $3 million versus $2 million a year ago. For the full year, contingent commissions were $13.7 million compared to $7.7 million and represented 46 basis points of total written premium. For 2024, we are assuming contingent commissions to be roughly 35 basis points of total written premium. Longer term, we see no impediments to contingent commissions getting back to the historical average of 80 basis points of total written premium. However, we are remaining cautious and prudent in our near-term forecasting as the timing and pace of the recovery of profitability for carriers has uncertainty and is not entirely within our control. Cost recovery revenue for the quarter was $2.8 million compared to $3.3 million in the year-ago quarter. For the full year, cost recovery revenue was $12.7 million compared to $12.3 million in 2022. For 2024, we are expecting cost recovery revenue to decline moderately from the 2023 levels as we have dramatically improved the health of our franchise network, resulting in fewer franchise terminations and less accelerated recognition of initial franchise fees for GAAP purposes. It is important to remember that this changes nothing from a cash basis as we collect franchise fees at the time of training, and they are non-refundable at that point, but we are required to recognize the revenue over a 10-year period or the life of the franchise. As year-over-year franchise turnover normalizes, we would expect this line item to grow at a level consistent with franchise launches. Franchise producer count ended the year at 1,957, down 7% from the year-ago period. High levels of terminations are masking what we believe to be strong growth in overall productive capacity for the franchise distribution. For the full year, we launched 209 franchises and terminated 396 franchises. With increasing resources we have put into our agent staffing program, we expect total agents placed into existing scaling franchises to increase in 2024, driving an increase in the average number of producers per franchise. An important stat for our scaling agencies: each time they add a producer, it improves the average productivity of everyone in their agency. This is an incredibly powerful tool for parabolic growth for both our franchises and us. Adjusted EBITDA in the quarter was $14.1 million compared to $11.9 million in the year-ago quarter. For the full year, adjusted EBITDA increased 90% to $69.8 million. Our adjusted EBITDA margin for the full year increased about 900 basis points to 27%. At the beginning of 2023, we indicated an intermediate-term adjusted EBITDA margin goal of 30%+ over the next three to five years. With strong execution in 2023, we now expect to achieve that goal closer to the shorter end of that time frame. We plan to manage the business to consistently grow margin on an annual basis and continue to believe that longer term, we can operate the business around a 40% margin. As of December 31, 2023, we had cash and cash equivalents of $42 million. Our unused line of credit was $49.8 million, and total outstanding term notes payable balance was $77.5 million. Given our low leverage levels, we have significant flexibility with which we plan to utilize to optimize our balance sheet in 2024. Our guidance for the full year 2024 is as follows: total written premiums placed are expected to be between $3.7 billion-$3.85 billion, representing 25% organic growth on the low end of the range and 30% organic growth on the high end of the range. Total revenues are expected to be between $310 million-$320 million, representing 19% organic growth on the low end of the range and 22% organic growth on the high end of the range. Adjusted EBITDA margin is expected to expand for the full year. As a reminder, our philosophy on guidance has always been to be as transparent and accurate as possible. We guide to what we actually believe we will achieve during the year. I can't thank our team enough for their hard work and discipline delivering just what we set out to do in 2023, and I'm looking forward to doing that again in 2024. At this point, I'd like to turn the call back over to our Chairman and CEO, Mark Jones. As Goosehead marks 2024 as our 21st year in business, I'd like to take a moment to reflect on a few of our important milestones to date. After I spent 14 years at Bain & Company, my wife, Robyn, and I founded Goosehead in October 2003. My view of the personal lines insurance industry was that it was irredeemably broken. It was old, slow-moving, not client-centric, and honestly, quite boring. So we started with a fresh approach. Conceptually, it wasn't complicated: just put the client at the center of our universe and build the business around them. We didn't start with someone else's business model and try and improve it. We started from scratch, a blank sheet of paper. My experience at Bain taught me that smart people will figure out great solutions to the most complex problems if we apply ourselves. So I set out to build a team of really smart, albeit inexperienced people, all committed to doing something really special to create one of the truly great American business success stories. After launching the business in 2003, we opened our first satellite office in Houston in 2009. In 2012, we sold our first franchise to JC and Patty Harter. In 2018, we took Goosehead public in one of the most successful IPOs of that year. Since then, our stock is up approximately 800% versus returns for the S&P 500 of a little more than 100%. In 2020, we generated over $1 billion in premium for the first time and expect to be well north of $3 billion this year. As the company grew, we invested in our management team with an eye to the future needs of the company, trying to have the right team in place to manage the business when it was two or three times its current size. The most important change has been Mark Miller joining us nearly two years ago as President and COO. He had previously served on our board since 2018 and continues to do so. Mark has brought a deep reservoir of business experience and a maturity and discipline to our company that has resulted in stronger operating effectiveness and productivity and enabled much higher levels of profitability. Mark and I have worked very hard together to assemble what we view as the right senior leadership team at Goosehead, and that team is working very effectively together. I have great confidence in their ability to deliver for our clients, business partners, and shareholders for many years to come. Given our progress to date and the current state of the company, I feel like now is the right time for me to transition my role out of the day-to-day operations of the company so I can focus more of my time on other priorities in my life, such as family and philanthropy. Effective July 1, 2024, I will transition to an Executive Chairman role. Mark Miller will become President and Chief Executive Officer at that time. I continue to be, by far, the largest owner of Goosehead's stock. Our family owns about one-third of the outstanding shares, and a large portion of our family's wealth continues to be invested in this company. I am fully committed to its success. I'm not retiring, and I'm not going away. As I've said before, when I go away, it will be in a box. But going forward, my time will be focused on supporting our strategy development work, mentoring our executives and our most important franchise partners, serving as a resource and sounding board as needed for our leadership team, and continuing to lead the work of our board of directors. Our mission remains the same as it was when we started the company: to become the number one distributor of first lines insurance in the United States during my lifetime. I'm very excited about our tremendous foundation for highly profitable growth and the amazing runway in front of us. I am fully committed and look forward to continuing to be engaged and contributing to making Goosehead one of the truly great American business success stories. With that, I'll turn the call back to the operator to open the line up for questions. Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. The first question comes from Paul Newsome with Piper Sandler. Your line is open. Good morning. Congratulations on the transitions to both of you. I wanted to ask, maybe, and I know you guys touched on this through the prepared remarks, but a little bit more on the disconnect between written premium growth and revenue growth in your expectations. I would expect some of that has to do with the contingents, obviously. But it looks like there's maybe something else in there as well to get you substantially slower revenue growth than written premium growth. Maybe you could just talk about that a little bit. Yeah. Paul, thanks for the question. This is Mark Jr. So looking at 2024, as a reminder, when we write new business on the franchise side of the business, we only recognize our royalty as the revenue, which is $0.20 on the dollar compared to the corporate side. And a lot of our investments are going into placing producers and launching new, highly successful franchises and driving productivity on that side of the business. That shows up in premium before it shows up in revenue growth. So then you look forward to 2025 to see that spring-loading function as that 20% new business converts into 50% renewal. Then relatedly, I'm surprised that the amount of Contingent Commissions as a percent of premium is expected to fall. I kind of think of personal lines and results being as bad as they could get in the last two years. And we've seen some companies make the transition to profitability in the fourth quarter. So is that essentially a lag effect from what's happened with the personal lines profitability, or is there something else in there that is reducing Contingent Commissions that isn't related necessarily to the profitability of the personal lines providers? Is there a mixture of commissions reduction? Yeah. Paul, so looking at where carriers are having more success now, you're starting to see the auto side of the business start to unthaw a little bit as loss ratios improve. 2023 on the home side was just about as bad as it has ever been. And so when you think about our go-to-market strategy and how much of our book is made up of home, which is a much more preferred client, but this was a really bad loss year for carriers on the home side. We're not expecting that to get materially better in 2024. So I don't want to overpromise on contingencies. We're going to be conservative on that outwardly. And I would love to see that home side thaw, but we're going to see the auto side come around first. 2024 contingencies are based on 2023 loss ratios. So there is that lag effect. Correct. Great. I'll have some other folks ask questions, but thank you for the help. I really appreciate it. Thanks, Paul. One moment for our next question. The next question comes from Brian Meredith with UBS. Your line is open. Yeah. Thanks. I got a couple of them quickly here for you. First one, just looking at the commissions and agency fees, it really slowed from a growth perspective in the fourth quarter, and it looks like a lot of that is because of what was going on with renewal commissions. Was there anything unusual in that number, any kind of reversals or something that may have happened that caused that to really slow? No. When you're looking at the commissions and fees line, really agency fees, because that's probably the least important line in our revenue as it doesn't renew, and a lot of that gets paid to the agents anyway. And as we diversify our footprint outside of Texas into more states where the department of insurance does not allow you to charge fees, naturally, that slows from a growth rate perspective. But also remember, on the corporate side of the business, we went through a lot of cutting starting in 2022 and through the middle of 2023. And so you saw that new business productivity increase, but the aggregate amount of production remained relatively flat. So that had a really nice positive impact on the earnings. The secondary effect of that is you have less flowing into renewal the next year. So looking at the growth rate in that number, you need to go back and look at the growth rate in new business commissions in 2022 to see what happens to renewals in 2023. Gotcha. That makes sense. Yeah. And we do expect to see that reaccelerate very early in 2024. Okay. Perfect. And then second, just a quick question here. What is your kind of expectations with respect to leads from mortgage originators as you look into 2024? I mean, Mark Miller and Brian Pattillo, who leads the sales organization, is here with me. I think our expectation is that the housing market continues to stay challenging, but we found a way to power through it. And we're literally going out and just making more referral partner relationships out there, which increases our lead flow. So I think we can continue to see our lead flow at least as strong as it is now and continue to work on our sales process. Brian, anything you want to add? Yeah. I would argue obviously, the 2023 housing results were not good, but we were able to power through that and drive productivity. It's really just about managing the activity. We have such a low percent market share of new purchases still. There's lots of business out there. We just have to go hunt, go develop new relationships, and we're able to power through it. Our intention is to continue on with those additional investments going into this year. It's hard to say exactly what housing does this year, but I feel very confident we can power through any challenges or headwinds on housing. That proprietary RP search tool, just refresh everyone on that. Yeah. We have a proprietary kind of referral partner database that allows us to know exactly who is doing the transactions and which ones we're working with and which ones we're not. So every month, we're looking at, okay, which Realtors, which loan officers are doing the volume that are not working with us currently. And our agents proactively go out and build relationships with those. So that technology has been a huge help. And we have stayed extremely proactive and aggressive during this time. Many insurance agents have sat back and dealt with all of the reshops and renewal activity. Our agents have gone out and aggressively built more relationships during this time to counteract the slowdown in housing. I'll just add one thing. I think we're also expecting to see lead flow pick up from some of our new lead sources. We mentioned kind of the mid-market business, and also our partnerships are starting to take hold. I think all of that leads to solid expectations for lead flow next year or this year. Thank you. Please stand by for the next question. The next question comes from Andrew Kligerman with TD Cowen. Your line is open. Hey. Thanks a lot. And congratulations to Mark Miller on the promotion. And I guess there'll still be a Mark as the CEO. So just to kind of. Thanks, Andrew. Yeah. We still got a few around here. Yeah. Sorry. That was really bad. So in any event, just tacking on to Paul's and Brian's questions, just following up on the contingent, then, if I'm taking a very optimistic view about the turn in auto underwriting performance, homeowners underwriting performance, I could see a material move when you're citing contingent commissions in 2025, if I'm taking that optimistic view, right? Yeah. That's exactly how I would look at it, Andrew. I mean, I think in 2025, we would expect to see some kind of regression back towards the mean of historical average of 80 basis points of total written premium. And I would be surprised if we get all the way back there in 2025, but it's a very big premium number by that point. And so any move in that makes a pretty big difference to not only the top line, but the bottom line because that is effectively 100% profit. That makes a lot of sense. And then per what Brian was asking about the new business commissions, I guess it makes sense in the context of the corporate agents being down to 300 versus 310 year-over-year. And then the franchise producers, even though they're more productive, they're down 5%-10%. So I guess the question then would be, you've got 300 corporate agents. Where can that get to at the end of this year? And same thing on the 1,957 franchise agents. How are you thinking about growth in both of those channels in terms of numbers of agents? Yeah. This is Mark Miller. I'll take that one. On the corporate side, we've had a very successful recruiting season, which kind of for us starts in the fall on college campuses. They're not all signed up yet, but like I mentioned in my comments, we feel really good about the class that we've signed up so far. So there's still more work to go, but we would expect to see a significant increase in the corporate producer headcount this year by the end of the year. But I'm not going to peg an exact number because we're not done with the recruiting cycle yet. On the franchise side, we're more focused on making the agencies that we have stronger and adding producers to those franchises. So I think what you'll see is the number of producers per agency go up over time. We're really focused on closing the gap between the productivity of a corporate agent and a franchise agent. I think we can meaningfully move that up. What I'm trying to say is that the end goal here is productive output across both channels. I think we can meaningfully increase the productive output on both channels in the coming year. Yeah. And Andrew, I would just add one thing to your initial comments. You were talking about new business commissions. As a reminder, we did launch 30 of our absolute best corporate agents into franchises during this year. And so you can take our productivity numbers that are in the 10-K that's going to come out, and you can see what would that have done to new business commissions had we had those 30 all year. I see. And just to kind of add on to that, it looks like you're almost done with the restructuring, right? By the end of the first half of this year, that'll be done. And I get that productivity is key, but you actually could increase the number of agents given that that restructuring is kind of winding down, right? Yeah. I mean, we should see the turnover of franchises begin to slow in 2024. That will happen over time. You shouldn't expect to see that naturally happen just in the first quarter. And we're going to continue to recruit as aggressively as we can on behalf of our agencies because they're telling us, "We want to hire. We need your help." And those are really powerful tools for driving productivity, not just for that individual agent, but for everybody in their franchise. So yeah, it's very possible you could see growth in the producer count number, but we're also not going to reduce our quality standards on our existing force. Yeah. And the way it works in reality is we set a minimum standard of production for the franchises, and we expect them to get over it. As the average productivity of the franchises increases, I think you'll naturally see less of them leave the system. But I do believe we will continue to keep the standard where it is and keep moving franchises up in the productivity range. That's helpful. Thank you. Please stand by for the next question. The next question comes from Meyer Shields with Keefe, Bruyette & Woods. Your line is open. Great. Thanks so much. And congratulations to really everyone on the move forward. A couple of technical questions on the supplemental disclosure, which is really helpful, so thank you. When we look at the franchise productivity, I can't tell whether the denominator of that is the franchises or the producers. It's the franchises. Okay. Perfect. And I was hoping and I'm sure that the shift of corporate agents to the franchise channel is a big part of it. When we look at the productivity for the more experienced corporate agents that went down, is there any way of disentangling how much of that is because the superstars are leaving? Is there any other headwind that we should be thinking about? No. We can quantify that for you pretty easily. So if you were to include those 30 corporate agents that we launched into franchises this year, that greater than one-year bucket of corporate agents would have had a 19% increase in productivity. So that does have a meaningful impact to the team when you take out I think the line we've used before is agents on nuclear steroids and put them into franchises. We did have a handful move into management, I believe, too, right? Yeah. I'm sorry. I missed that. A handful moved into. Into management. As we prepare to add more corporate agents, we need to uplevel the management team, and they don't sell. Right. Okay. Perfect. And then one last question, if I can. I was hoping you gave us a sense of the pricing, specifically on the home side, that are built into the premium and revenue expectations? Yeah. I mean, we're still expecting some pricing tailwinds at least through the first half of the year. We're not going to put a specific number on it, but really, we're focused on driving policy productivity and reigniting policies in force growth, right, which you should see in the second half of the year. Perfect. Thank you very much. Please stand by for the next question. The next question comes from Scott Heleniak with RBC Capital Markets. Your line is open. Yeah. Thanks. And congrats to everybody too there. Just a quick question on the revenue guidance that you're talking about here. And you mentioned basically the revenue trends expected to get better in the second half of 2024 and into 2025. Can you talk more about what's going to be the drivers behind that? Is that new hires? Is that productivity? Is it market conditions, or just kind of a combination of all those, or anything else that's going to, I guess, result in better revenue trends in the second half of the year versus the first half? Yeah. It's kind of all of those things, Scott. So if you think about our corporate team, which they have 100% revenue recognition on their new business compared to the franchise side is 20%. So we're going to onboard a pretty large class this summer of corporate agents that we've got through our recruiting pipeline right now, which you'll start to see that flow through the new business lines in the second and third quarter. And on the franchise side of the business, as we reaccelerated the growth in Q4 of 2023, we've talked a lot about the spring-loading factor of how that will now impact the next year. And so you start to see that new business convert into renewal in the second half of 2024. On top of that, I mentioned in my prepared remarks, we do expect to see an improving macro environment as opposed to a deteriorating one in 2024, both from a product side and hopefully from a housing market side. But even if the housing market doesn't improve, our agents have shown that they can still go out there and generate kind of record number of leads. And so we think there's a lot of things that are going to go right for us, especially in the second half of the year. And so we're feeling very confident. Okay. That's helpful. And then on the EBITDA margin guidance, I know you're not going to talk a whole lot about what it's going to be just up year-over-year, but is there any other expense items that we should kind of keep in mind versus 2023 that might be different, either up or down, compared to the 2023 levels as we get into the year, particularly the second half of the year and some of those agents are onboarded? I mean, I would just watch your quarter in. I mean, you should assume that as we onboard a significant number of corporate agents late in the second quarter and early in the third quarter, that will flow through your compensation expense lines. Our G&A shouldn't vary, I would say, materially from the cadence in 2023. Now, to drive margin expansion, which we plan to do again in 2024, you have to get some scale out of both those G&A lines. So as you're looking at your model, that's something I'd point you to. Okay. Thanks. Appreciate it. Please stand by for the next question. The next question comes from Michael Zaremski with BMO. Your line is open. Hey, thanks. I'm going to try sneak in two quick questions from the airport, so hopefully, there's no background noise. But on the contingents first, on the lag in terms of the payment to you all, can you give us any context on six-month versus 12-month policies between home and/or auto so we can kind of better understand that lag? And just secondly, on the lack of carrier appetites in the current underwriting environment and certain ZIP codes or states, can you further unpack what's been going on and how you're viewing the carrier or appetite changes in your kind of guidance in 2024? Thanks. Yeah. So just to briefly touch on the contingency piece. So 12-month versus six months, that doesn't really factor into how the contingent commission contracts work. We've gotten a couple of questions occasionally on how much six-month policies do you write. And so that's just a tool carriers use when they want to rewrite a little bit faster. It typically only happens on the auto side. You don't see six-month home policies. So the home policies are still all 12-month. You do see an increase in the amount of six-month policies you write, but it's still not the majority of the business. We just do see an increase of it during hard markets for auto. I think the second part of the question was about the carrier market and what do we see there. I'll take that one. Just to frame the question up a little bit, slightly over 50% of our business is home. Of that 50%, about 50% of that is in the state of Texas. Texas was hit, as you know, very hard by the weather over the last several years, particularly hail in the spring of last year. A lot of carriers pulled out of the market or put additional restrictions on in selling Texas. It's been, as Mark mentioned in opening remarks, one of the hardest markets that we've seen. We haven't seen all the major carriers come back into the market yet, but we have gotten an indication that carriers are interested in coming back in, especially in auto. So auto looks particularly good right now. And then home, early indications are good. So the Texas home market is very important to us. California got really hard for a while. It's gotten a little bit better. But generally, it comes in a couple of forms. Carriers can pull completely out of a market, or they can restrict new appointments. We're still restricted in some states on appointments for new franchises. So it helps us really narrow our vision on where we want to add new franchises because we want to be in places where they can get full appointments. But we've seen the market softening over the next year. And I think that really, when we look at our forward forecast, it implies that we think the market's going to get better over time. Thanks. As a quick follow-up on. If the trend is towards more six-month policies, does that put any incremental pressure on your agents in terms of them having to do a little more work on renewal? They get the step down in their commission rate upon renewal if they're going from 12 to six, or is that not something we should really be thinking about? Thanks. Yeah. It's not a big issue for agents. If you do the math, the step down in the commission rate versus the rerating faster. It doesn't really cause that big of an impact to the individual agents. Now, it does give a policy more opportunity to rerate faster, so it should help actually drive premium growth. And frankly, on our end, the commission rate does step down. Thank you. Please stand by for the next question. The next question comes from Pablo Singzon with JP Morgan. Your line is open. Hi. Thank you. Productivity gains are encouraging. I guess I'd be interested to hear if you expect the same pace of gains in 2024. Longer term, what kind of trajectory are you assuming for productivity? Well, I guess the question I was having a hard time understanding exactly what you said, but I think you said, "Do we expect the same kind of productivity gains in the coming years?" And that. Oh. Could I clarify? Let me go through it again. Apologies. I think it's on my phone. Yep. So yeah. So 2023, clearly, a good year for productivity gains outsized, right, well into the double digits. The question is, do you expect the same pace in 2024? And longer term, what kind of trajectory are you assuming for productivity? Yes. I would say when we look at corporate, we're very proud of the turnaround and productivity improvement. We still believe that there is more room to grow on the corporate side. That just comes from productivity gains, maturing of the agent basis, their tenure increases. On the franchise side, I think, is where you really see the opportunity with approximately 2,000 agents out there and what their productivity level is versus a corporate agent. There's no mathematical reason why a franchise agent can't get to the same productivity level as a corporate. I think the structural changes that we made to the franchise area towards the end of 2023 really make me optimistic about what the future looks like at the franchise business. I give Brian Pattillo and his team a lot of credit with that. We structurally changed how we interact and engage with franchises rather than just putting them through training and then letting them loose. We're managing their activities more closely now and helping educate them, helping them with their sales processes, helping them with their budgets and goals, incentivizing them. It's really a really long program of things that we've done with the franchises, but it's been incredibly successful. And I think there's a long runway to continue to improve performance on the franchise side of the business. Okay. That makes sense. And then the second question from me, just on the guidance, I just want to confirm that you expect margins to expand next year even with contingents down. Is that correct? Correct. All right. Thank you. I show no further questions at this time. I would now like to turn the call back to Mark Miller for closing remarks. Okay. Well, I want to thank everybody for joining us and appreciate your participation and support of the stock and your questions. With that, we'll close the call. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.