v3.26.1
Revenues
 6 Months Ended
Jun. 30, 2026
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
Commissions and agency fees
The Company earns commissions, which are paid as a percentage of the policy premiums placed by the Company, by performing its obligation to identify, place, and make effective insurance coverage on behalf of its customer, the insured. The Company defines the term of the policy as the contractual period the policy provides insurance coverage to the insured, which is typically one year or less. Commissions earned for the placement of the initial policy term for a given insurance product are recorded as New Business Commissions. New Business Commissions are earned at a point in time on the effective date of the policy, which is when the customer’s unilateral right to cancel the policy without consideration expires, as the Company has no further performance obligations for the initial term once the policy is placed and made effective.

After the initial policy term for a given insurance product, the Company earns Renewal Commissions by assisting the customer to make effective a renewal policy that satisfies the customer’s current insurance coverage needs. The Company performs this obligation by monitoring the customer’s policy to ensure a renewal is offered by the carrier and that the client promptly pays the premium. Alternatively, based on the needs of the customer, the Company may assist the customer to adjust coverage terms to satisfy its current insurance coverage needs or the Company may assist the customer to re-shop the insurance coverage to identify, place, and make effective a policy that better meets those needs. Renewal Commissions are earned at a point in time upon the effective date of the renewal policy term or upon the effective date of the replacement policy identified, placed, and made effective for the customer, which is when the customer’s unilateral right to non-renew the policy expires, as the Company has no further performance obligations for that renewal policy term.

The transaction price for commissions revenue is set as an estimate of the variable consideration to be received for the current policy term. This estimate includes the fixed consideration due based on the contractual terms of the
current policy and adjustments for estimates of modifications of the contractual terms of the current policy and/or termination of the policy before the end of the current term. This variable consideration is constrained to the extent that it is probable there will not be a significant reversal of revenue.

For Agency Fees, the Company enters into a contract with the insured, in which the Company's performance obligation is to place an insurance policy. The transaction price of the agency fee is set at the time the sale is agreed upon, and is included in the contract. Agency Fee revenue is recognized at a point in time, which is the effective date of the policy.

Contingent commission revenue is generated from contracts between the Company and insurance carriers, for which the Company is compensated for certain growth, profitability, or other performance-based metrics. The performance obligations for contingent commissions will vary by contract, but generally include the Company increasing profitable written premium with the insurance carrier. The transaction price for contingent commissions is estimated based on all available information and is recognized over time as the Company completes its performance obligations, as the underlying policies are placed, net of a constraint.

The Company must estimate the amount of consideration that will be received such that a significant reversal of revenue is not probable. Contingent commissions represent a form of variable consideration associated with the placement and profitability of coverage, for which we earn commissions. In connection with Topic 606, contingent commissions are estimated, with a constraint applied, and accrued relative to the recognition of the corresponding commissions for the period over which the contract applies. As contingent commissions are earned in relation to policies placed by the Company with the insurance carrier, the timing of recognizing contingent commissions follows a similar pattern as our commissions and fees with any adjustments recognized when payments are received or as additional information that affects the estimate becomes available.
Franchise revenues
Franchise revenues include initial franchise fees and ongoing new and renewal royalty fees from franchisees.
Revenue from Initial Franchise Fees is generated from a contract between the Company and a franchisee. The Company's performance obligation is to provide initial training, onboarding, ongoing support and use of the Company's business operations over the period of the franchise agreement. The transaction price is set by the franchise agreement and revenue is recognized over time as the Company completes its performance obligations.
Initial franchise fees are recognized as revenue over the 10-year life of the franchise contract, beginning on the start date of the contract.
Revenue from New and Renewal Royalty Fees is recorded by applying the sales- and usage-based royalties exception. Under the sales- and usage-based exception, the Company recognizes revenue over time as a franchise places and makes effective a policy for an insured. The transaction price for the royalty fee for each policy made effective is set as the contractual royalty rate multiplied by an estimate of the commissions to be received by the franchise for the current term of the policy. This estimate includes the fixed consideration due based on the contractual terms of the current policy and adjustments for estimates of modifications of the contractual terms of the current policy and/or termination of the policy before the end of the current term. This variable consideration is constrained to the extent that it is probable there will not be a significant reversal of revenue.
Contract costs
The Company has evaluated ASC Topic 340—Other Assets and Deferred Cost (“ASC 340”) which requires companies to defer certain incremental costs to obtain customer contracts, and certain costs to fulfill customer contracts.
Incremental costs to obtain - The Company defers certain costs to obtain customer contracts primarily as they relate to commission-based compensation plans for selling new franchise agreements. These incremental costs are deferred and amortized over a 10-year period, which is consistent with the term of the contract. The balance of costs to obtain is included with other assets on the condensed consolidated balance sheets.
Costs to fulfill - The Company has evaluated the need to capitalize costs to fulfill customer contracts and has determined that there are no costs that meet the definition for capitalization under ASC 340.
Performance obligations satisfied in previous periods
Changes in the estimated transaction price for variable consideration under contingent commissions arrangements are recognized in commissions and agency fees in the period of change. During the three and six months ended June 30, 2026, the Company recognized $0.7 million and $8.2 million, respectively, in commissions and agency fees from performance obligations satisfied in the previous annual period ended December 31, 2025. During the three and six months ended June 30, 2025, the Company recognized $(0.02) million and $2.3 million, respectively, from performance obligations satisfied in the previous annual period ended December 31, 2024.
Separately, for certain policies placed, the Company constrains amounts when uncertainty exists related to variable consideration included in the transaction price and recognizes revenue as that uncertainty is resolved. During the three and six months ended June 30, 2025, the Company recognized $3.0 million in commissions and agency fees and $1.0 million in franchise revenues from performance obligations satisfied as of the previous annual period ended December 31, 2024. No comparable amounts were recognized during the three and six months ended June 30, 2026.

Disaggregation of Revenue
The following table disaggregates revenue by source (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Type of revenue stream:
Commissions and agency fees
Renewal Commissions$21,034 $23,119 $39,196 $40,071 
New Business Commissions9,613 7,559 17,065 13,314 
Agency Fees3,083 2,906 5,468 5,146 
Contingent Commissions15,725 4,492 26,411 8,968 
Franchise revenues
Renewal Royalty Fees52,507 45,381 96,101 82,625 
New Business Royalty Fees9,396 7,820 17,282 14,749 
Initial Franchise Fees1,360 1,247 2,969 2,589 
Other Franchise Revenues576 1,324 1,761 1,781 
Interest Income95 179 212 368 
Total Revenues$113,389 $94,027 $206,465 $169,611 
Timing of revenue recognition:
Transferred at a point in time$33,730 $33,584 $61,729 $58,531 
Transferred over time79,659 60,443 144,736 111,080 
Total Revenues$113,389 $94,027 $206,465 $169,611 
Contract Balances
The following table provides information about receivables, cost to obtain, and contract liabilities from contracts with customers (in thousands):
June 30, 2026December 31, 2025Increase/(decrease)
Cost to obtain franchise contracts(1)
$1,470 $1,801 $(331)
Commissions and agency fees receivable, net24,726 36,613 (11,887)
Receivable from franchisees(2)
20,181 14,077 6,104 
Contract liabilities(2)(3)
14,079 16,266 (2,187)
(1) Cost to obtain franchise contracts is included in other assets on the condensed consolidated balance sheets.
(2) Includes both the current and long term portion of this balance.
(3) Initial Franchise Fees to be recognized over the life of the contract.

The Company records Franchise Fees as contract liabilities on the condensed consolidated balance sheets when the agreement is executed. Contract liabilities are reduced as fees are recognized in revenue over the expected life of the franchise license. As the term of the franchise license is typically ten years, substantially all of the franchise fee revenue recognized in the period ended June 30, 2026 was included in the contract liabilities balance as of December 31, 2025.

Significant changes in contract liabilities are as follows (in thousands):
Contract liabilities at December 31, 2025
$16,266 
Revenue recognized during the period(2,969)
New deferrals(1)
1,544 
Write offs(2)
(762)
Contract liabilities at June 30, 2026
$14,079 
(1) Initial Franchise Fees where the consideration is received from the franchisee for services which are to be transferred to the Franchisee over the expected life of the Franchise Agreement.
(2) Franchise Fees, net of recognized revenue, no longer deferred due to the termination of the Franchise Agreement.