Andrew Andersen — Analyst, Jefferies
Hey, good afternoon. Just in terms of the guidance for next year, how are you thinking with regards to home closing transactions, and how are you thinking about the insurance pricing environment?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Hey, Andrew. Yeah, this is Mark Jones. In terms of home closings, I think you saw some interesting data come in in December. A strong December, followed by what looked like a relatively weak January. As we've talked about for the last couple of years, you know, housing construction, while, you know, certainly not a tailwind for us, hasn't necessarily been a big headwind. Our agents have done a really good job continuing to go get lead flow, and, you know, through our strategic partnerships, we just continue to decouple our business from the ebbs and flows of the housing market. We're not counting on any improvements in housing in terms of our guidance throughout 2026. I think that would be potentially upside.
And then pricing, you know, you could probably assume the bottom end of the guidance range includes pricing that's generally down, and the top end of the guidance range, you'd have, you know, moderate increases in homeowners pricing. I think that's pretty consistent with what we're seeing in the market right now.
Andrew Andersen — Analyst, Jefferies
Thanks. And then, as some states consider measures like profitability caps or just tighter constraints on insurance pricing, how would those types of regulatory changes impact your business model? I guess, specifically, carrier appetite, maybe commission economics and your ability to maintain growth in these geographies.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, I mean, it'll be interesting to see how that plays out. I'm not sure that that is likely actually to happen. I know I've, I've seen, you know, a couple articles about that across a few different states. I don't necessarily believe that is a good thing for the whole market, but what you'll probably see is the excess and surplus lines market, that can be a little bit more nimble, probably be more durable in those areas. But we'll just have to see how that plays out.
Andrew Andersen — Analyst, Jefferies
Thank you.
Brian Meredith — Analyst, UBS
Yeah, thanks. A couple big picture questions. First, thanks for all the color on kind of how you're using AI, but maybe you can talk a little bit about, you know, why you don't think agents will be disintermediated through the use of AI. Clearly, that was a big topic last week.
Mark Miller — President and CEO, Goosehead Insurance
Yeah, Brian, this is Mark Miller. I'll take that one. So, you know, clearly none of us have a crystal ball, but I'll give you my perspectives on it. Auto, generally becomes more commoditized, I think, over time. It's a more standard commodity type of product. Home remains complex and often, you know, is the largest asset for our clients. I think they're going to be particular about how they buy that product.
And selling home, in general, is just a much trickier, sale. Requires a lot more detail, a lot more knowledge. So I think, it's going to be difficult to disintermediate the clients. You know, and carriers, when you think about them, what they want is they don't want to sell as much product as possible. What they want to sell is the highest quality product to the highest quality clients. And that's what we're doing with our agents.
And the majority of our clients still want some human guidance, interaction in the process. And we lead with the home and cross-sell with the auto. So I think it makes it even harder for us to get disintermediated in this process. I see a world where it can be a combination of fully automated, maybe in a sale of an auto product, a hybrid sort of a product, or a fully, you know, human distribution. But digital, in my opinion, just over time, increases the productivity of our agents rather than disintermediates them. And one last point is just, you know, it's really, really challenging to disintermediate when the service function is such a big component of it. What makes Goosehead so unique is the size and capability of our service function compared to anybody else.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, Brian, I would just add, I think people really underestimate the complexity of being able to distribute in a choice model directly to consumers. A, there's not really a ton of underwriting demand for that, especially on the home side. But B, it's, it's 50 different state regulators. There is a ton of different product out there, and the product market ebbs and flows. And then I, I would just call out, there's only, from what we know of, one business that can actually today, bind policies end-to-end without human intervention, and that's us. Everybody else out there is lead aggregation.
Brian Meredith — Analyst, UBS
Makes sense. And then I guess my second question, back to the Digital Agent. You know, maybe you can dive in a little bit more on kind of what exactly that's doing, 'cause I guess the concern I have on it is it gonna actually cause customer retentions to actually start to decline here if it's easier and easier for customers to switch, something like what's going on in the U.K.?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
So, Brian, what we've seen so far, and granted, it's not like we've sold tens of thousands of policies so far. We've sold some, and largely what it has been so far is existing clients who were monoline home, bought an auto policy directly from Goosehead.com. That actually improves client retention, because it rounds out their total account, helps us capture a full share of wallet better. And I think if you interact with one specific platform, like we're trying to, you know, drive the industry to be Goosehead is the really the place you need to purchase your insurance through, you don't have to leave Goosehead in order to get that full, complete shopping experience.
Mark Miller — President and CEO, Goosehead Insurance
And Brian, I think how we're gonna use it is pretty unique. Right now, you could go to goosehead.com for the state of Texas, and you can see auto carriers live that you could bind on. But when we think about how we use it over the medium term to long term, we're using it through our partner network that we've talked about, that we've been adding. So we'll go straight at, like, mortgage service clients, if you will, cross-sell them auto, help them with their auto- their home products, in the initial loan origination process, loan closing process, and as their service books come up for renewal, renewing their mortgages, or renewing their mortgage insurance.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, and ultimately, the service function is what really locks in client retention over the longer term. And the service function that we've built today does what we believe is the best job in the industry of, you know, fully licensed U.S.-based service agents who can handle the complexity of hundreds of different carriers in 50 different states.
Brian Meredith — Analyst, UBS
Makes sense. Thank you.
Tommy McJoynt — Analyst, KBW
Hey, good evening, guys. The first question, along the same topic here, how did the majority of consumers that are serviced by Digital Agent 2.0, you know, find their way to Goosehead? Is it through top-of-funnel search engines, through corporate partners? And to go further, do you think Goosehead needs to go integrate with the LLM, such as ChatGPT, if that's where consumer eyeballs are going?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah. So, Tommy, we'll certainly look at that, but, you know, we're not necessarily trying to drive a whole bunch of monoline auto business. It may be a way to generate a bunch of short-term premium, but it doesn't actually generate long-term enterprise value because that's not the most retentive business. It's not the highest quality business, and when there's a market downturn, it's typically the channel that gets shut off first. Now, our distribution point with the digital agent, largely going through the partnership base, gets us access to a preferred set of clients, one where we can solve pain points for the partners and give the carriers the type of clients that they want at scale and at speed.
You know, we're not gonna go into a giant advertising campaign to try and drive eyeballs to Goosehead.com, but just the economics don't work in that world, and the advertising space and personal lines is so competitive. I mean, you can't watch TV for 10 minutes without seeing four different insurance ads. So that's not an area where that's gonna be a good use of capital.
Mark Miller — President and CEO, Goosehead Insurance
As we've gone around and talked to the big home carriers, that's not what they're looking for. They just don't want massive volume of low-quality leads. They want very select customer bases, and that's what we're gonna deliver to them.
Tommy McJoynt — Analyst, KBW
Got it. That all makes sense. And then switching over to buybacks, saw the announcement of the sort of increased authorization here. Can you talk about your appetite and capacity for buybacks as we go through the year, given where the stock is now? What's the cadence of your guys' cash flow generation, typically, throughout the year that should unlock perhaps some more front-loaded buybacks through this year?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah. So I would point you to, you know, 2025, we used 80% of the full authorization, and we were pretty aggressive because we thought the stock was undervalued. Looking at the valuation of where it is today, I think it's probably safe to say we think we're undervalued, hence the repurchase authorization. We generate a really strong amount of cash. First quarter typically has the contingent commission bonuses that actually get paid.
So, it may not be the biggest EBITDA quarter, but it's a big cash flow quarter. And then we've got strong flexibility in our balance sheet because we've been conservative over the long term and, you know, being diligent and not over-levering. We have a revolving credit facility of $75 million that's got same-day liquidity. So we have a lot of options, but we wanna be aggressive and deploy capital in the way that's gonna drive long-term shareholder value. Thank you.
Mark Hughes — Analyst, Truist Securities
Yeah, thank you. Good afternoon. What is the latest number, and I apologize if you gave this earlier in the call, but the investment spending, kind of elevated investment spending in 2026?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, the 2026 number is still the same that we talked about in the third quarter call. That's $25 million-$35 million of total cash, 8-11 of that, that hits the P&L. And just for your context, fourth quarter 2025, there was $2.9 million that hit the P&L in the Q4 related to the digital agent.
Mark Hughes — Analyst, Truist Securities
Yeah. You had mentioned the, I think, 2.3 million potential mortgages available to you with the enterprise sales, other partners, but you're still ramping up. How many of that, or how much of that potential is active, as we sit here today? What's the cadence for bringing the rest of that online?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah. A pretty small percentage of that is actually live so far today through either enterprise sales, lead flow type arrangements, or through embedded franchises. The embedded franchises that we have live so far today are performing really well. I think the story that having inbound lead flow already built inside your business is going to result in productivity is certainly holding true. But I get really bullish on that channel when I just look at what the potential pipeline looks like and how much we already have under contract and how the implementations are going.
So I would not say the majority of that $2.3 million is already kind of fully sending lead flow through. And then there's always going to be tweaks that we make as we learn on how to best engage with one specific audience. Is there different marketing collateral that needs to be sent? Do we need to adjust, how we interact with them to drive conversion?
Mark Hughes — Analyst, Truist Securities
Understood. Then on the new business royalty fees, up 6%, I think, this quarter. You talked about consolidation of the franchises that maybe impacts productivity in the short term. You think that'll be good for the long term. Anything else? That category has just been a little volatile. It was up 9% in the second quarter, then up 18%, and then up 6%. And maybe some of that's just underlying mortgage activity, but anything else that you would highlight around the productivity in the franchise channel?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, I mean, we feel actually really good about the health of the agency community. I mean, same-store sales was up 19% in the fourth quarter. As Mark Miller mentioned in his prepared remarks, gross payments to agencies was up 29%. So the franchise community is healthier than what it has been in a long time. We feel really good about that. I, I think a really good leading indicator is our agency staffing program.
The demand for that is really, really high, almost higher than what we can actually, you know, fulfill. So we've got to put some more resources against that. But our, our top agencies, kind of that top 200 bucket, is growing really, really nicely, and they're kind of more like 25%-35% same-store sales growth. So I feel really good about the direction of the franchise community. Obviously, there can be, you know, quarter-to-quarter fluctuations in the overall growth rate of new business royalties, but we're expecting that to accelerate throughout 2026. You can see it in the hiring plans from our franchises.
Mark Hughes — Analyst, Truist Securities
If I could, one more, the corporate sales headcount, how do you think that'll trend in 2026?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, I would, I would expect it to trend up. I mean, enterprise sales should grow pretty strong. Just as we've got to onboard these partners, we want to make sure we have butts and seats to fulfill the lead flow. The traditional corporate sales team, we've seen nice improvements in the agent retention. We've made some changes to the recruiting profile that not get off of college campuses, but add additional talent pools of experienced sellers that we traditionally have not necessarily gone after.
And then as we've expanded geographically, and we got three new offices here in February, we've got one more coming in in the second quarter, I feel good about the direction of the corporate sales team and expect the headcount to grow. And I don't expect it to double in 2026, but expect it to grow.
Mark Miller — President and CEO, Goosehead Insurance
But I think the opening of the new offices speaks to how we feel about the product market and our ability to grow the corporate staff.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, and the corporate sales team is super strategic to the long-term vision of the organization. I mean, we talked about the franchises that we've launched in the last year. Many of them are already in the... Not even just the top five percent, some of them are in the top five of the agency community already. So we, we really are able to grow what I believe is the best insurance professionals in the industry in-house.
Mark Hughes — Analyst, Truist Securities
Appreciate that. Thank you.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Thank you.
Michael Zaremski — Analyst, Bank of Montreal
Hey, thanks. Back to the producer trend lines. Could you comment on franchise producers? It's been a bit volatile, you know, declined just a bit sequentially. I know it is better than expected last quarter. I think we heard you loud and clear about the franchise consolidation. But how about do you expect producers at the franchise to increase at a more meaningful rate as the market opens up?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah. Our agencies are really looking forward to hiring. You know, in the fourth quarter, you typically have your lowest recruiting of new producers, just seasonally. You don't necessarily start people going into Thanksgiving, going into Christmas. But the demand for new hires is really strong, and I want to continue to push that producers per franchise number. So it was up to 2.1 here in the fourth quarter. I still believe five is a good kind of medium-term guidepost, continue to drive that up. And I think our largest agency is just about at 50 now, and we've got multiple that are over 20, some in the 30s. So the producer count is growing nicely. It's harder for you guys to see it just as the consolidation happens, but I'm feeling really good about the direction of that.
Mark Miller — President and CEO, Goosehead Insurance
But the larger the franchise is, the more easily they can hire and onboard people and ramp them up. And that's what we're seeing: this consolidation is allowing the bigger ones to get bigger and add more staff. But it's just—it's kind of blurred a bit because if you got consolidation of the really small ones. But most of those small ones are just rolling up into big ones that are more powerful.
Michael Zaremski — Analyst, Bank of Montreal
Well, you know, just directionally, will this consolidation dynamic kind of just work itself out of the system in 2026, or it's more of a kind of ongoing pruning, and we'll be probably maybe talking about this in 2027 as well?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, we talked about in the third quarter, probably the next 12-18 months. So, you know, you might see that a little bit into 2027. You know, it, it's hard to say exactly, 'cause some of this is driven by those franchises themselves, whether they, whether they want to, you know, continue to operate as a sole proprietor or whether they'd like to join a bigger force. But, you know, ultimately, I, I expect probably the number to start to slow down, but it's still going to be slightly elevated in 2026.
Michael Zaremski — Analyst, Bank of Montreal
Got it. Lastly, moving to, you know, you mentioned obviously the importance of retention. We can see the, I think, the sequential improvement this quarter. You know, given. You know, maybe you can talk about kind of what's embedded in the guidance range, you gave, in terms of, you assuming retention kind of continues glide pathing up a little bit or a lot, or not at all? Thanks.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, so we're continuing to see client retention improve, you know, basically on a daily basis. We look at it down to two decimal points. It's the first thing I look at every single morning. It's the most important piece of the business. So it, it's nice to see the trend continue up. You could probably assume the top end of the guidance range contemplates continued improvements in client retention, honestly, acceleration in it in the second half of the year.
The bottom end of the guidance range would probably imply less improvements to potentially stalling in the client retention numbers. But, you know, we think the market's going to continue to improve. Pricing is going to likely slow down, which should naturally improve client retention. And then we've put so much effort into our client-facing tools and the service function. We believe we should be able to drive it up.
Michael Zaremski — Analyst, Bank of Montreal
Thank you.
Katie Sakys — Analyst, Autonomous Research
Good evening. I want to circle back to the Net Promoter Score for the quarter, and normally I wouldn't focus on this metric so much, but it's, I think, the lowest that we've seen in quite a while. And I just wanted to, A, ask for a little bit more color on perhaps what impacted that this quarter. And B, you know, circle back to the discussion of the impact of the rollout on the Digital Agent 2.0 platform, and how that has sort of impacted your clients' view of interacting with Goosehead, and really, how you foresee the further rollout of the Digital Agent 2.0 platform, you know, competing with other similar platforms from your competitors.
Mark Miller — President and CEO, Goosehead Insurance
Sure. Let me, let me take this one, Katie, and I'll, I'll just start by saying, just a reminder, the NPS score is a trailing twelve-month metric, so it still reflects a lot of the price increases that you saw early last year, and they started to taper off, like, third quarter of last year. But people were in shopping mode at that point and very dissatisfied with the general broader market of insurance in general, just when you get the type of price increases they saw. So I would say it's a general affordability kind of sentiment sort of measure. We also started working in internally a CSAT score, which instead of measuring how they felt about the would they recommend Goosehead to a friend, you know, that's, that's the NPS score.
We started with the CSAT score, which is, how's your interaction with your Goosehead agent that you just had? That score has been, on a 5-point scale, about 4.2 since we started it and holding steady. So I don't think there's been a change there. And the other thing that we look at is just retention, and retention has consistently moved, slightly up every single quarter, which I think is another measure of how people are feeling about our service level. So overall, I feel very good about it. And when you think about the tools that we've put in place with our new, mobile app, is probably the first thing, and our Lily, our AI, automated agent, I think those two things right there have really helped client service overall.
Katie Sakys — Analyst, Autonomous Research
Got it. Okay, thank you. I appreciate that color. And then I guess, you know, thinking about the year ahead and your expectations for productivity growth, can you just kind of delve into more color on those additional pools of talent that you guys are reaching into to further support your recruiting efforts? And, you know, how much, you know, additional tailwinds to productivity those more seasoned producers might be able to provide relative to, like, the typical profile of a traditional Goosehead new hire?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah. So as we go after people who have a little bit more sales experience, what I anticipate is going to happen on that is, A, their retention of those agents should be better because they're not learning whether they want to be in sales or not on our dime. They already understand that that's what the career path that they want is. I don't necessarily think there's a magic bullet between hiring somebody that's off of a college campus versus hiring somebody that's got some experience, as long as you're picking the right person who knows that they want to be in sales. And we've made a lot of investments in the training program and the management infrastructure over the last 6-8 months to help improve agent productivity in the corporate sales force.
You can see that in the less than 1 year corporate agent productivity. And then as you look into 2026, in the third quarter call, we talked about smoothing out the hiring timeframe, which is a little bit different than what we've done in the past. That should also aid both in productivity as well as in retention of those agents, because you're not launching so many of them at one time, where, you know, a manager has the potential to get overloaded.
Katie Sakys — Analyst, Autonomous Research
Thank you.
Andrew Kligerman — Analyst, TD Cowen
Okay, thank you. Just some quick follow-ups on the earlier questions. On the one with regard to the guidance of low double- to high single-digits or 10-19, and you touched on retention being the key variable there. What is kind of your bias thinking? Do you think retention is
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, I think retention goes up.
Andrew Kligerman — Analyst, TD Cowen
Do you think-
Mark Jones Jr. — CFO and COO, Goosehead Insurance
You know, we're seeing that already. You know, I don't have a crystal ball for what happens in the second half of 2026, but my baseline assumption would be retention continues to go up.
Andrew Kligerman — Analyst, TD Cowen
I see.
Mark Miller — President and CEO, Goosehead Insurance
It seems to be highly correlated with pricing, and we're starting to see pricing stabilize. So that would lead that, and we've put a lot of extra efforts into improving retention, just better service.
Andrew Kligerman — Analyst, TD Cowen
Got it. With respect to the AI questions earlier, I completely appreciate your points about the complexity of the product and how you need people to do that. But I think the market's concern is around five years from now and 10 years from now. So does your thesis still hold five and 10 years from now? Where do you see that disruption coming?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah. So Andrew, I think if you're looking out five or 10 years from now, the company that is best positioned to leverage AI, you know, I believe, is us. Because we've got access to proprietary data that we've built over 20 years that is not only just the generic, publicly available data, that you may have from just doing advanced Google searching on, hey, your ZIP code generally has replacement costs of X.
No, we've got almost 2 million policies across all 50 states, across a broad set of carriers that we're, you know, building the infrastructure right now to leverage that, to be able to make the best possible decisions on behalf of clients. So if you're rolling this forward 10 years from now and saying, AI is going to be the main distribution platform, which that may or may not be true, even if it is, that should be through us. I think we're the ones best positioned to capture that, by far.
Mark Miller — President and CEO, Goosehead Insurance
Yeah. Andrew, I just say this, carriers, just so the carriers don't give access to binding authority to just anybody, and that trust that we've built up all over this time makes us very, very unique and well positioned, even over the long term.
Andrew Kligerman — Analyst, TD Cowen
Thank you so much.
Paul Newsome — Analyst, Piper Sandler
Good afternoon. Also Paul, a little bit of a follow-up. I apologize if you already hit this, or maybe you could just expand upon it. The guidance, or at least your thinking for the next year or so, does that have any view on product availability changing over the time? I know that was at one point an issue with sales and maybe just some general thoughts on it. Are we at the point where everyone's open and it's just not an issue? Or, is there some sort of expectation that maybe it continues to get even better?
Mark Miller — President and CEO, Goosehead Insurance
Hi, Paul, it's Mark. You know, I would say on the, on the auto side, it's been wide open for, for a bit now. The home, probably 50% open towards the end of the year, pretty wide open right now. There's not a market that we operate in, that we're having a significant product availability issue. Carrier appetite is returning. There might be slight restrictions on some of the carriers where you have to, you know, bundle the product or something like that. But generally speaking, we've got product in every market right now.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah. So as you're thinking about guidance, there's not, it doesn't really contemplate on either end of it, changes in the product environment. I don't necessarily see that coming in 2026.
Paul Newsome — Analyst, Piper Sandler
Great. That's all I had to ask. But, thanks, guys. Appreciate it.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Thanks, Paul.
Ryan Tunis — Analyst, Cantor
Hey, thanks. Good evening. First question, I want to make sure I heard this correctly. It sounded like in your discussion of 2026, objectives, that you're assuming a slightly lower take rate on the contingents. So that's question one. And if that's right, I was wondering if your margin guidance, excluding contingent commissions, allows for any improvement?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah. Hey, Hey, Ryan. Generally, you know, we've had really strong contingent commission years the last two years in a row, 2024 and 2025. That's probably the base case assumption going into 2026, just given how that can impact both revenue and earnings in one year, and given that it is currently February, there's plenty of things that can still happen in the year that can swing that one direction or the other. I don't, I don't think it would be prudent to just assume it's gonna be 85 or more basis points.
So, you know, internally, that's what we're kind of planning towards, is that 60-85. We've talked about forever that the long-term average is 80-85 basis points, and then we've, you know, shown that a couple of years in a row. But, yeah, I wanna make sure we give ourselves enough degrees of freedom in the event that there is some kind of catastrophic events, if there's a bad hurricane season, if there's wildfires, things like that.
Ryan Tunis — Analyst, Cantor
So, any comments on any chance the margins can expand up, like, if we exclude those? And I'm just wondering how much the diesel and contingency is weighing on that margin guide.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, no, the margin guide is really more around the core investments that we're making into the digital agent platform, into the partnership space. And just as you think about the cadence and pacing of that throughout the year, there's a couple of factors I wanna make sure we bring up. One, and we talked about the year-over-year comparison on changes in pricing, impacting the first half of the year more than it does the second half of the year. And so that flowing through the renewal block can impact profitability as well as the revenue growth rates. And remember, we talked about hiring corporate sales agents more evenly throughout the year, which would, you know, mean that gets front-loaded a little bit into the PNL.
But generally, expecting as the renewal block continues to grow and retention improves, at the second half of the year, you get better year-over-year margin. But I think if you look at an ex-contingency, you're probably still expecting margin compression because of these investments that we think are gonna drive long-term growth and shareholder value.
Ryan Tunis — Analyst, Cantor
And-
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, and help us drive towards real industry leadership.
Ryan Tunis — Analyst, Cantor
So but I, I guess, just trying to frame these investments, they've been going on for a little bit of time. Are you guys confident that, you know, looking out into 2027, 2028, this, this morphs into, you know, a real margin expansion story, or is it still kind of wait and see in terms of what you might have to invest in?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, Ryan, we're pretty confident that long term and at scale, this is very accretive to the margin profile. And I wanna be clear, this isn't kind of an infinite money pit that you see a lot of AI investments in. This is very thoughtful about what we're investing in, the specific teams, what we anticipate the return profile to be. So we feel really confident this is an investment that is most likely to pay off, and it is a defined time period. It is not an infinite, you know, kind of black hole of investment. Yeah, so like, at scale, it's going to be able to drive significant growth and significant margin opportunity.
Ryan Tunis — Analyst, Cantor
Then just the last one. I think the—just looking at the franchise commission rate, that's come off over a point since 2023. I guess, first, like, how focused are you on trying to get those commission rates back up here in 2026? Or-
Mark Jones Jr. — CFO and COO, Goosehead Insurance
That's a big area of focus.
Ryan Tunis — Analyst, Cantor
Is that still gonna be somewhat sticky?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
No, I think it'd be the area of focus for us, and, you know, now is absolutely the right time to be having those conversations. If you look at the last couple of years, and you know, we always wanna be a good partner and partner back our partners' play, and we expect our partners to do the same. So the last few years has been a challenging time to be an underwriter. That's not necessarily the case right now. And so as you look at ways to drive the most profitable growth for a carrier, investing in your distribution channel that's been a good long-term partner for you, is a good way to do that. And if you think about the franchise business specifically, there's a lot in California, there's a lot in Florida.
So over the last couple of years, that's been a lot of business to, A, California FAIR Plan and B, Citizens, both of which have much lower average commission rates in the market because they're not necessarily trying to incentivize you to write business on them. And then we've seen, you know, the uptick in the excess and surplus lines market over the last several years, and I don't necessarily think that's going away. I think the growth rate probably starts to trend down, but, you know, from a positive perspective, in our book, you're seeing E&S markets start to behave a lot more like the admitted market, both from an agent kind of access, from a client understanding, and importantly, from a compensation perspective.
Ryan Tunis — Analyst, Cantor
Thank you.
Pablo Singzon — Analyst, JPMorgan
Hi, good evening. So first question, you've framed the high end and low end of guidance in terms of drivers such as pricing and retention. So should we take your comments about the first half core revenue growth being in low double digits as representative of the midpoint? 'Cause if yes, it seems like a steep trajectory in the second half to get the mid-teens for the full year. So I'm just wondering if you could comment on that, on that point.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, I mean, we're expecting acceleration in the second half of the year through, you know, headcount growth and really all three distribution channels, more partnership efforts coming online, and continued improvements in client retention.
Pablo Singzon — Analyst, JPMorgan
Okay. So but low double digits for the first half, in your view, that's sort of a realistic midpoint, like, level for guidance, right? In other words, you're, you're not being too conservative in setting that expectation for the first half.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, I mean, remember, our philosophy that we've reiterated a lot of times is we try to be as honest as possible in our guidance and guide you to what we actually believe is going to happen.
Pablo Singzon — Analyst, JPMorgan
Okay. And then next question, just on the Digital Agent 2.0. I guess, is the plan to roll it out nationally, ex partnerships? And I'm curious if you're actually able to measure the business you're getting from it, if it's different or incremental from business that your agents would have generated anyway?
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, I mean, the policies we've bound so far are monoline home clients who have, many of them at least, are monoline home clients who have gone and bound an additional auto policy. So an agent was, basically had no incremental effort and now has grown their individual book of business and really received full compensation on that. I want agents engaged and excited about the digital agent, and we will be rolling this out more broadly across additional geographies, as we continue to, you know, go take share in other markets.
Now, it's probably not gonna be something that's at least all 50 states, a blitz, right? We're not gonna try and sprint to South Dakota. It's just obviously in order of prioritization to make sure that we can cover the right geographies where, A, both our carriers want us to be, and there's significant demand in the market, and there's good overlap with our partner client base.
Mark Miller — President and CEO, Goosehead Insurance
Right now, Pablo, as I said earlier, we're focused on getting auto carriers on in Texas, which we've been successful in doing that. We've got a little bit more work to do there. At the same time, we're building out the connections to the home carriers for Texas, and we'll test and pilot the product in Texas, and then a quick follow-on to other states where we can just replicate what we've built.
Pablo Singzon — Analyst, JPMorgan
Okay. Thank you.
Michael Zaremski — Analyst, Bank of Montreal
Hey, thanks. Just a quick one. On premiums coming out of Texas, I think last update, that was like very high thirties. And just curious if that's you expect that to stabilize and go back up, or are we still kind of mixing out of Texas a bit? Thanks.
Mark Jones Jr. — CFO and COO, Goosehead Insurance
Yeah, we're continuing to diversify outside of Texas. For the full year, Texas was 40% of the premium. For the fourth quarter, Texas was 38% of the premium. So that's been a really concerted effort by us just to, you know, reduce dependency on the Texas market. If you think about the last several years, that was probably the area where there was the most product constriction. So I just wanna make sure we've got appropriate coverage in the right geographies, where our carriers wanna be, where our agents can be successful. So you should probably expect to see the Texas proportion of total written premium continue to decline and, you know, as the rest of the country grows.
Michael Zaremski — Analyst, Bank of Montreal
Thanks.
Mark Miller — President and CEO, Goosehead Insurance
Sure. I just wanted to thank everybody for taking the time to join the call today. As you can see, it's an exciting time to be in the personal lines brokerage business, and we look forward to talking to everybody again in April with our first quarter results.