Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes GSHD is the sole managing member of GF, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, GF is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by GF is passed through to and included in the taxable income or loss of its members, including GSHD, on a pro rata basis. GSHD is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to GSHD's allocable share of income of GF. Income Tax Expense Tax expense from income taxes was $4.1 million for the three months ended June 30, 2026 compared to tax expense of $1.9 million for the three months ended June 30, 2025. The effective tax rate was 20% for the three months ended June 30, 2026 compared to 19% for the three months ended June 30, 2025. Tax expense was $5.9 million for the six months ended June 30, 2026 compared to tax expense of $0.2 million for the six months ended June 30, 2025. The effective tax rate was 19% for the six months ended June 30, 2026 and 2% for the six months ended June 30, 2025. The change in the effective tax rate was primarily due to a decrease in the excess tax benefit recognized on stock option exercises during the six months ended June 30, 2025. Deferred Taxes Deferred tax assets at June 30, 2026 were $209.8 million compared to $216.4 million at December 31, 2025. The primary driver of the decrease was a change in the outside basis difference of GSHD's investment in GF, attributable to the amortization of previously recognized 743(b) basis adjustments and to share repurchase activity during the six months ended June 30, 2026. Tax Receivable Agreement GF intends to make an election under Section 754 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder (the “Code”) effective for each taxable year in which a redemption or exchange of LLC Units and corresponding Class B common stock for shares of Class A common stock occurs. Future taxable redemptions or exchanges are expected to result in tax basis adjustments to the assets of GF that will be allocated to the Company and thus produce favorable tax attributes. These tax attributes would not be available to GSHD in the absence of those transactions. The anticipated tax basis adjustments are expected to reduce the amount of tax that GSHD would otherwise be required to pay in the future. GSHD entered into a tax receivable agreement ("TRA") with the Pre-IPO LLC Members on May 1, 2018 that provides for the payment by GSHD to the Pre-IPO LLC Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that GSHD actually realizes as a result of (i) any increase in tax basis in GSHD's assets and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the tax receivable agreement. During the three and six months ended June 30, 2026, 222 thousand LLC Units were redeemed by the Pre-IPO LLC Members for newly issued shares of Class A common stock. In connection with prior redemptions, GSHD received an increase in the tax basis of its investment in GF subject to the provisions of the tax receivable agreement. The Company recognized a liability for the TRA Payments due to the Pre-IPO LLC Members, representing 85% of the aggregate tax benefits the Company expects to realize from the tax basis increases related to the prior redemptions of LLC Units, after concluding it was probable that such TRA Payments would be paid based on its estimates of future taxable income. As of June 30, 2026, the total amount of TRA Payments due to the Pre-IPO LLC Members under the tax receivable agreement was $174.5 million, of which $6.2 million was current and included in liabilities under tax receivable agreement within current liabilities on the condensed consolidated balance sheets. Future exchanges of LLC Units for Class A common stock will result in additional TRA payments. Uncertain tax positions GSHD has determined there are no material uncertain tax positions as of June 30, 2026.
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