In the footnotes of its latest quarterly filing Goosehead Insurance (GSHD), a home, auto, and life insurer, says it spent $6.5 million on books of business or customer accounts in the six months ended June 30, 2023.

The amount is $1.2 million more than the $5.3 million reported in the Investing Activities section of the company’s Cash Flow statement under the line “Cash consideration paid for asset acquisitions”. Later, when explaining why the year-over-year change in Investing Activities, Goosehead stated:

“This increase was primarily driven by $5.3 million in cash paid for purchases of books of business…”

We can’t reconcile this number either.

The figure in the explanation is inconsistent with media reports during the period indicating Goosehead paid $5.5 million cash for 15,000 customer accounts from Vivint Smart Home.

The $1.2 million potential discrepancy between the footnote and cash flow statement is approximately 5.7% of Goosehead’s current cash balance.

It’s possible there was another non-cash transaction, with $1.2 recorded as books of business and an offsetting $1.2 million recorded somewhere in the liabilities section. If the transaction was non-cash or cash did not change hands during the quarter, there would be no impact on the statement of the cash flows.

Or even if for some reason the company included the books of business net of amortization— we estimate approximately $0.4 based on an 8-year useful life estimate— the “Cash consideration paid for asset acquisitions” line item should read, according to our analysis, $6.1 million rather than $5.2 million.

The limited disclosure makes it difficult to reconcile the $6.4 million in the footnote or understand the $1.2 million difference.

Unfortunately, Goosehead doesn’t appear interested in helping us better understand its accounting.

Goosehead did not immediately respond after DuDil contacted the firm about the inconsistency.