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 expectations, estimates, and projections of management. As of today, forward-looking statements in our discussion are subject to various assumptions, risks, and uncertainties that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed on them.
We refer all of you to our recent SEC filings for more detailed discussion of risks and uncertainties that could impact future operating results and financial condition of Goosehead Insurance. We disclaim any intention or obligation to update or revise any forward-looking statements except to the extent required by applicable law. I would also like to point out that during this call we will discuss certain financial measures that are not prepared in accordance with GAAP. Management uses these non-GAAP financial measures when planning, monitoring, evaluating our performance. We consider these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons period to period by including potential differences caused by variations in capital structure, tax position, depreciation 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 An archived version will be available shortly after the call ends on the investor relations portion of the company's website at goosehead.com.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 President and CEO, Mark Miller.
Thanks, Dan. Good afternoon and thank you for joining our Q2 earnings call. Before we begin, I want to take a moment to acknowledge the devastating floods that struck Texas earlier this month. As a company rooted in Texas, this is not only where we do business, but these are the communities where we serve. We are working hard to support our employees, clients, and agency owners during this devastating time where, tragically, lives were lost. Catastrophic events such as these are unfortunately a constant reminder of why we exist. Our hearts go out to the families affected by this devastation and our Goosehead team is here to support you. Here at Goosehead, we continue to pursue our goal to become the largest distributor of personal lines insurance in the U.S. in our founder's lifetime.
We've steadily ramped our vast distribution network, which has grown to over 2,500 licensed agents and 200+ carriers. Our growth plan centers around a few key strategic initiatives supporting the accelerated expansion of our existing agencies, a strategy we've continued to optimize over the last several years. Placing the right new franchise owners in the right geographies, expanding our corporate team to further support top decile agency growth, ramping new go to market motions through our enterprise sales and partnerships teams, developing new and maturing technologies to help us win the AI arms race and accelerate our path to industry leadership. I'm going to expand on each of these topics. Mark Jones Jr., our CFO, will provide more information about the quarter's results. First, our Agency Staffing Program, which we call ASP, has been a highly strategic asset for Goosehead.
Simply put, this program helps existing agency owners find talented agents to grow their franchises. Twenty years of industry experience has allowed our recruiting function to gain unique insight into identifying the highest potential sales agent recruits. We have leveraged our knowledge to create an internal recruiting firm that is dedicated to sourcing top talent to put in front of our most successful agency owners. Since the inception of this program in Q4 of 2022, our agencies have hired over 500 producers sourced through this internal recruiting firm, with 132 starting in 2025 and roughly 150 more slated to start before the end of the year. When an agency owner adds an incremental producer, the productivity of all agents in that franchise improves. They add accountability, share best practices, and lead flow. The feedback we've received from our franchise community has been incredibly positive on this program.
It allows our agency owners to focus on what they do best, capture lead flow, and drive sales teams, allowing them to outsource a very time-consuming recruitment process to our trusted ASP team who presents them with highly qualified talent. One example of this in practice is Troy Cropp, an agency owner in Tucson, Arizona, who served as an Army Ranger and as a previous State Farm agent. In July of 2021, Troy opened his Goosehead franchise and has since grown his agency to nine producers, seven of which were recruited through the Agency Staffing Program. Today, Troy Cropp is not just an agency owner, he's a sophisticated business owner with a $10 million + premium book and over 6,500 policies in force.
He has been part of our most advanced agency training programs, most of which focus on business growth, and he has put those trainings in practice by acquiring two other agency books as well as opening a second office location with two more office locations in the pipeline. We're incredibly proud of the business Troy has grown thus far and look forward to seeing him continue to grow in our ecosystem. To find the next group of agencies that look like Troy Cropp, our franchise development team has built pipelines into new talent sources that we believe have the grit, intelligence, and leadership capability to be successful in our ecosystem. First, we've developed a program to attract franchises from the veteran community. We believe former service members possess many of the intangibles that we know separate our top agencies from those in the middle of the pack.
They're smart, determined, and execution oriented, and most importantly, they know how to follow a proven business model. As a son of a veteran, veterans are near and dear to my heart for the tremendous personal sacrifices they made to our nation, and many have proven to be excellent franchise owners like Troy. We have also recently rolled out a new MBA Franchise development program. As we've discussed in the past, we want our franchise community to evolve from largely consisting of solo agent operations to a tight-knit community consisting of more growth-oriented owners that have multiple agents with multiple locations. By leveraging our existing campus relationships, we can provide an incredibly compelling offer of business ownership for current or recent MBA graduates. This initiative includes an accelerated training program that allows for rapid ramp and sets them up to scale by leveraging their entrepreneurial business education.
While we're very excited about our veteran and MBA initiatives, it is abundantly clear to us that the single best source of new franchise owners is our own corporate sales department. Our corporate sales agents are steeped in the Goosehead corporate culture and highly educated and experienced in the Goosehead business model. As a reminder, when a corporate agent launches a franchise, they're up to 10x more productive than the average new franchise launch and have a very clear path to a seven figure income. To further support the growth of both the corporate footprint and franchise community in the right geographies, we recently expanded into Arizona with the launch of our Tempe office. This has been the most successful new office launch in many years. This location should help us seed new high powered franchises in the western half of the U.S.
that we might otherwise not have been able to reach with our corporate footprint. We're also now announcing plans to launch a Nashville, Tennessee office in the fourth quarter of this year. We've developed a repeatable blueprint for successful office expansion and plan to continue to leverage that in the most strategic geographies over the next several years. Over the past decade, we refined a highly sophisticated go to market strategy that focused on corporate and franchise agents and building strong relationships with individual loan officers and Realtors. This strategy has proven to be extremely scalable and highly profitable. However, for the past two years we have been quickly developing a new sales motion that we believe will be a solid third leg of the stool. We call it our Enterprise Sales and Partnerships team. This new group has grown exponentially over the last year and continues to accelerate.
I'm excited to announce two additional strategic partnerships that we'll be launching from this team. First, Baird & Warner is one of the most prestigious real estate firms in Illinois. Founded 170 years ago, they currently have more than 2,000 Realtors, over 40 loan officers, and a title operation. They're launching a Goosehead franchise inside their existing business that allows them to further reduce friction in the home buying process, provide better outcomes for clients, and capture insurance economics. They generate over 10,000 transactions annually, which should allow them to scale rapidly. In the last month, we have also entered into a partnership with Fay Servicing, a large prominent mortgage servicer founded in 2007. Their partnership with Goosehead allows them to solve industry pain points and address the rising cost of home affordability by providing a robust portfolio of home insurance offerings to their existing clients.
Base Franchise has the embedded lead flow that could rapidly take them from a new franchise launch to one of the largest agencies in our system. While both of these partnerships are Goosehead franchises, we also have a robust pipeline of traditional partners who would like to offer insurance products to their client base but do not necessarily want the complexity of owning and operating the business. Because we can provide multiple ways to engage with our tech-first platform supported by agents nationwide, we believe we're the partner of choice for organizations looking to add value to their clients while capturing very compelling economics. I believe our industry will be profoundly impacted by the rapid development of new technologies, particularly in the AI space. The list of potential use cases for AI in our business is incredibly long.
However, we're thinking strategically and focused on what we believe will generate the maximum return. First, we're already leveraging AI to optimize the client experience for our existing book of business while reducing the cost of service. Second, we will utilize our data and our carrier relationships to create the U.S. first direct-to-consumer marketplace that maximizes outcomes across the value chain. We want to create a frictionless process that stands true to our founding principles, placing the client at the center of our universe. Our data should allow us to be intelligent about matching carrier risk appetite with client demand to optimize outcomes across the value chain. Third, we expect to capture additional market share through pinpoint marketing campaigns to drive client referrals and cross-sells. We know that we provide a differentiated client experience and we should be leveraging that to continue to drive new business and fuel future growth.
We built a tech team with the human capital and the appropriate infrastructure that we believe is highly capable of delivering on each of the critical initiatives. Even with all the progress we've made in AI and tech, the foundation of our business hasn't changed. Great companies are built on great people. Today we've been able to build a great business by attracting talent that doesn't exist elsewhere in the industry, by having high standards for the quality of our work, and by operating with the utmost levels of integrity. While our day to day operations may shift in the coming years, our commitment to our people will not change. We will continue to invest in training, coaching, and leadership development that will take our already phenomenal talent to the next level.
Thanks Mark, and good afternoon to everyone on the call. I'm extremely pleased with the work our management team has been doing and the substantial investments we have made in people, technology, AI, and partnerships that is setting the foundation for our next phase of rapid growth at Goosehead Insurance. For the last several years, we have been delivering strong results through the most constricted product market of the last 50 years. As we look to the back half of 2025 and, importantly, into 2026 and beyond, the landscape for underwriting demand and capacity is becoming increasingly clearer every day. The challenging product market has made us a much stronger company across all facets of our operations. We built a scalable infrastructure, invested in our management and human capital, and developed the technology skill sets to be a company many multiples the size we are today.
Mark Miller touched on the longest levers to continue to drive growth for our business. I'm going to touch on the economics of a couple of those items and provide an update for the quarter's results and outlook for the future. We've made strong progress on our efforts to expand our go-to-market strategy through our Enterprise Sales and Partnerships team, the most rapidly growing division in the company. This team is highly nimble and strategic, as it allows us to further insulate ourselves from cyclicality in the housing market and gain access to pools of clients that our traditional go-to-market strategy doesn't naturally reach, such as home builders and those not currently involved in a home closing transaction. This team is rapidly gaining momentum, producing 88% more new business in the second quarter than in the previous year period and growing 41% sequentially over the first quarter of 2025.
We believe the growth curve of this unit has the potential to be both exponential on earnings and revenue. As Mark mentioned, we recently entered into a couple of new strategic partnerships that take the form of a franchise agreement. The benefits of these new partners will materialize in our P&L initially through new business royalties, through our 20% share, and then into renewal royalties where economics become really interesting at 50% of the commission value. We plan to continue to expand our partnership aperture through new avenues in the coming quarters and ultimately use these relationships as the most logical jumping off point of the direct-to-consumer marketplace for hard at work developing.
In corporate, we have taken steps to align our physical footprint with the most attractive markets, quickly expanding into Arizona with the launch of our Tempe office, doubling down across the country in Denver, Columbus, Charlotte, and Chicago offices, and beginning the expansion efforts of our 13th sales office in the Nashville market. Our former corporate agents continue to be the highest quality possible franchise launches, hiring rapidly and setting new records for new business productivity. This strategy is one that our competitors cannot easily replicate because they lack access to the pools of talent that we have spent decades cultivating, the technology infrastructure that we have spent millions of dollars building, and the deep referral partner relationships our agents develop while part of the corporate team.
Our corporate sales team ended the quarter with 479 total agents, up 53% over the previous year, comprised of 379 traditional corporate sales agents and 100 enterprise sales agents. After multiple years of consistent total output, our corporate new business commissions is now growing at 13% compared to the prior year, the fastest corporate growth in the last three years, and we expect that to accelerate through the rest of the year. Franchise producers at quarter end were 2,085, up 5% from a year ago, and producers per franchise was 1.9, growing 14% over the previous year. As we review our franchise community, it's easy to identify which agencies are fully committed to growth, following the business model and hiring aggressively. Our top 200 franchises have nearly 4x as many producers per franchise as their peers, and as a result, they grow significantly faster.
This elite group of agencies, just like Troy Cropp, as Mark Miller discussed, look a lot like our corporate offices. They build cultures of excellence, have high standards for production and quality, and they have big goals that they pursue aggressively. Agencies in our top 200 grew their new business by over 30% in the second quarter, and their gross earnings was also up 30%, allowing them to continually reinvest into growth. During the quarter, we launched 16 new franchises across 12 states. Eight existing agencies were terminated, and 30 operating franchises consolidated into another existing agency. The data validates that the continued consolidation in our franchise network is a net positive. Over the last 12 months, the productivity of the purchasing agency increased 21% as they can more effectively capture value from the existing books of business.
As Mark Miller stated, the first place that AI is taking hold in our organization is the area that bears the most costs: our service team. We have built large language models that reduce complexity for our service agents, speed up the time to resolution for our clients, and allow us to forecast service demand with great precision. For the first time in company history, we expect the cost of service delivery to be less in the second half of the year than it was in the first half of the year, all while continuing to improve the client experience. This allows us to further invest in growth opportunities and technology, which increases our ability to scale at a rapid pace. The next place we are aggressively pursuing new technologies is creating a true online choice shopping platform, what we are calling the direct-to-consumer marketplace.
We believe the independent agent will always have a place in personal lines insurance distribution, and we are committed to being a market leader in that space. We also recognize the tremendous opportunity in front of us to radically change how personal lines insurance is distributed in the United States. Through precise client segmentation and detailed risk matching models, we believe we can create a marketplace that not only rapidly fuels our growth, but provides the best possible outcomes for our clients and our carrier partners. Deploying this tool first to our partnership channel allows us to ensure our carrier partners get access to the highest quality client base. This will require significant investment, but the opportunity presents an incredibly asymmetric upside. Case disruption is in our DNA, and we do not plan on stopping now.
Finally, maximizing the economic value of our existing client base to generate referrals, cross sales, and identify gaps in protection in our client's portfolio represents another significant growth opportunity that can be greatly impacted by AI. We now have over 1 million clients and over 1.8 million policies in force, meaning we have a significant and diverse captive audience who have placed their trust in us to present the most logical and valuable options for their personal lines insurance. Deploying technology strategically here can help us better capture full share of wallet with our clients, improve Client retention, and generate client referrals.
Turning to our second quarter results, we delivered another quarter of growth and profitability with total revenue growing 20% over the previous year to $94 million, core revenue growing 18% to $86.8 million, and Adjusted EBITDA growing 18% to $29.2 million, producing an Adjusted EBITDA margin of 31% for the quarter. We remain committed to a balanced approach of organic top line revenue growth with strong profitability. Our deliberate focus on organic growth provides high quality and consistent earnings, builds real competitive advantage, and has no dependency on cooperation from the capital markets to fuel our business. Client retention for the quarter saw continued forward progress and, while still at 84%, we're now seeing consistent basis point rises in retention over time.
We are confident that the strategic actions we have taken combined with greater product availability will result in an increase in Client retention in the second half of the year, providing a tailwind to what has been roughly a two year headwind in growth and profitability. We also expect that our average commission rate will begin to increase throughout the remainder of this year and into 2026 as our mix of new business and renewals naturally shifts back to the admitted product and away from state-run insurers of last resort and more complex non-admitted product. During the quarter, we recovered $4 million of past due renewal commissions and royalty fees from an existing large carrier partner and increased our commission for all existing business.
This increased commission rate should result in the benefit in our existing renewal book with this carrier of approximately $1.5 million for the second half of the year. Total written premiums were $1.2 billion for the quarter, up 18% from a year ago. This included franchise premiums of $959 million, up 21%, and corporate premiums of $217 million, an increase of 6% from a year ago as a result of continued consolidation in our franchise community, which we believe is very positive for the health of the entire network. Franchise new business premiums grew 13%. Contingent commissions for the quarter were $4.5 million compared to $2.2 million in the previous year, an increase of 103%. We continue to maintain our forecast of 40 basis points-65 basis points of Contingent commissions as a percentage of total written premium.