UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________ FORM 10-Q ____________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to Commission File Number: 001-40645 ____________ RYAN SPECIALTY HOLDINGS, INC. (Exact name of registrant as specified in its charter) ...

Core Viewpoint - Ryan Specialty Group reported quarterly earnings of $0.39 per share, matching the Zacks Consensus Estimate, and showing an increase from $0.35 per share a year ago [1] - The company posted revenues of $690.17 million for the quarter, exceeding the Zacks Consensus Estimate by 1.16%, and up from $552.05 million year-over-year [2] Earnings Performance - The earnings surprise for the previous quarter was -4.26%, with actual earnings of $0.45 per share compared to an expected $0.47 [1] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [1] Revenue Performance - Ryan Specialty has topped consensus revenue estimates two times over the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $0.68 on revenues of $850.22 million, and for the current fiscal year, it is $2.09 on revenues of $3.08 billion [7] Stock Performance - Ryan Specialty shares have increased by approximately 2.1% since the beginning of the year, contrasting with a -5.3% decline in the S&P 500 [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating expectations of underperformance in the near future [6] Industry Outlook - The Insurance - Brokerage industry is currently ranked in the bottom 14% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the outlook for the industry can materially affect stock performance [5][8]

Ryan Specialty Group (RYAN) Q1 2025 Earnings Call May 01, 2025 04:45 PM ET Company Participants Patrick Ryan - Founder & Executive ChairmanTimothy Turner - CEOJeremiah Bickham - PresidentJanice Hamilton - CFOElyse Greenspan - Managing DirectorMeyer Shields - Managing DirectorRobert Cox - Vice President - Equity Research Conference Call Participants Alex Scott - Equity Research AnalystMichael Zaremski - Managing Director & Senior Equity Research Analyst Operator Good afternoon, and thank you for joining us t ...

Financial Data and Key Metrics Changes - Total revenue grew by 25% to $690 million, driven by organic revenue growth of 12.9% and contributions from M&A adding 13 percentage points [3][23] - Adjusted EBITDAC increased by 27.5% to $200 million, with an adjusted EBITDAC margin expanding by 60 basis points to 29.1% [4][23] - Adjusted earnings per share rose by 11.4% to $0.39, while there was a GAAP net loss of $4 million due to a nonrecurring deferred tax expense [23][24] Business Line Data and Key Metrics Changes - The casualty specialty experienced strong growth with high renewal retention and new business, particularly in habitational risks, transportation, construction, and healthcare [14] - The property specialty showed modest growth despite a challenging environment, with continued pricing declines but high renewal retention [12][13] - The delegated authority specialties, including binding authority and underwriting management, had strong organic growth, particularly in casualty and transactional liability [15][16] Market Data and Key Metrics Changes - The E&S market is expected to grow in importance, with risks moving into this market due to its ability to handle complex and uncertain loss environments [9][10] - The company noted a robust flow of business into the specialty channels, particularly in casualty, indicating strong market demand [31] Company Strategy and Development Direction - The company aims to continue delivering innovative solutions, executing its M&A strategy, and increasing profitability while investing in its platform [6][20] - The focus on M&A has significantly expanded the total addressable market and enhanced capabilities to serve clients [5][19] - The company is committed to balancing investments in talent and technology with margin expansion to ensure sustainable growth [21][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the current uncertain economic environment, citing a diversified business model and specialized expertise [6][24] - The company anticipates continued organic growth and profitability, despite challenges in the property market [27][73] Other Important Information - The acquisition of USQ Risk is expected to add approximately $11 million in annualized revenue and enhance the company's capabilities in alternative risk offerings [19] - The company maintains a robust M&A pipeline, focusing on strategic and accretive opportunities [20][76] Q&A Session Summary Question: Can you discuss the sustainability of upper single-digit inorganic revenue growth? - Management indicated a strong double-digit flow of business into the channel, with a robust M&A pipeline, suggesting optimism for future growth [31] Question: What is the potential for scaling the USQ Risk acquisition? - Management emphasized the strategic nature of the acquisition and the potential for significant organic growth through new talent and capabilities [34][37] Question: Can you provide insights on technology investments and their impact on growth? - The company is streamlining workflows and experimenting with AI solutions to enhance operational efficiency and client service [44] Question: How do you expect property growth to trend in the upcoming quarters? - Management acknowledged the challenges in property but expressed confidence in maintaining modest growth through strong new business and retention [72][73] Question: What is the current state of the M&A pipeline? - The company has a robust pipeline of small, medium, and large deals, with a willingness to temporarily exceed leverage comfort for the right opportunities [76][78]

- Total Revenue grew25.0%year-over-year to$690.2 million- - Organic Revenue Growth Rate*1o2f.9%year-over-year - - Net Income o$f (4.4) million, or$(0.22)per diluted share - - Adjusted EBITDAC* gre2w7.5%year-over-year to$200.5 million- - Adjusted Net Income increas1e3d.0%year-over-year to$107.8 million- - Adjusted Diluted Earnings Per Share grew 11.4$%0.o3r9per diluted share - May 1, 2025 | CHICAGO,—ILRyan Specialty Holdings, Inc. (NYSE: RYAN) ("Ryan Specialty" or the "Company"), a leading international spec ...

Financial Performance and Risks - Approximately 5% and 3% of the company's revenues for the years ended December 31, 2024, and 2023, respectively, were generated outside of the United States, exposing the company to currency risk from exchange rate fluctuations [218]. - The company is subject to various risks including changes in tax laws, decreased commission revenues due to proposed tort reform legislation, and potential adverse effects from outstanding debt [22]. - The company is experiencing increased scrutiny regarding compensation practices in the insurance brokerage industry, which may affect future revenue streams [252]. - The company’s ability to generate sufficient cash flow to service all indebtedness is subject to various economic and competitive factors beyond its control [273]. - The company may incur additional indebtedness in the future, which could exacerbate risks associated with its substantial indebtedness [272]. - The company is subject to ongoing and periodic tax audits, and unfavorable outcomes could result in higher tax costs, penalties, and interest [261]. - Changes in tax legislation, including those arising from the OECD's BEPS project, could materially impact the company's effective tax rate and cash tax liabilities [262]. - The company may face operational risks and increased financing costs if credit ratings are downgraded, affecting access to financing sources [276]. Cybersecurity and Compliance - The company has experienced cybersecurity incidents, including fraudulent activities and security breaches, but these have not had a material impact on its business strategy or financial condition to date [224]. - The company must comply with the Health Insurance Portability and Accountability Act (HIPAA) due to its entry into employee benefits insurance products, increasing regulatory complexity [247]. - The company is monitoring the evolving landscape of artificial intelligence regulations, which could impose additional compliance requirements [249]. - The company faces significant regulatory exposure due to evolving data protection laws, including potential fines for noncompliance with the EU GDPR [242]. - The California Consumer Privacy Act (CCPA) requires increased transparency and data subject rights, affecting how the company manages personal information [244]. - The U.K. Data Protection Act allows for fines up to £17.5 million or 4% of worldwide turnover, whichever is higher, impacting the company's operations [243]. - The company faces risks related to corporate responsibility and stakeholder interest practices, which could impose additional costs or expose it to new risks [219]. Corporate Governance and Ownership - The Ryan Parties control 82% of the Class B common stock, allowing them to influence significant corporate transactions [288]. - As of December 31, 2024, the Ryan Parties control approximately 76% of the voting power of the outstanding capital stock, significantly influencing corporate decisions [309]. - The dual-class common stock structure allows Class B common stock holders to control the outcome of matters requiring stockholder approval, potentially affecting the market price of Class A common stock [314]. - The concentration of ownership by the Ryan Parties may deprive Class A common stockholders of opportunities to receive a premium for their shares in a sale of the company [309]. - Provisions in the corporate governance documents could make it more difficult for stockholders to replace current management or initiate actions opposed by the Board [316]. - The Director Nomination Agreement allows the Ryan Parties to designate nominees for the Board based on their ownership percentage, potentially leading to disproportionate representation [310]. - The company has opted out of Section 203 of the DGCL, which could discourage third-party acquisitions and affect stockholder actions [315]. Financial Obligations and Tax Agreements - As of December 31, 2024, the company had a total outstanding indebtedness of $3,300 million, including $400 million related to 4.375% Senior Secured Notes and $1,200 million related to 5.875% Senior Secured Notes [267]. - The company has commitments available to be borrowed under the Revolving Credit Facility of $1,399.7 million, which would be secured on a first-priority basis if borrowed [267]. - The company expects to use cash flow from operations to meet current and future financial obligations, which may limit cash flow availability for working capital and capital expenditures [268]. - The company may need to incur debt to finance payments under the Tax Receivable Agreement if cash resources are insufficient [295]. - The Tax Receivable Agreement requires the Company to make cash payments equal to 85% of the tax benefits realized, which may be substantial [291]. - The LLC is obligated to make tax distributions quarterly to LLC Unitholders based on net taxable income, which may exceed the overall effective tax rate applicable to corporate taxpayers [302]. - As of December 31, 2024, the Company has recorded Tax Receivable Agreement liabilities of $436.3 million associated with payments to current and certain former LLC Unitholders [291]. Market and Stock Performance - The company's quarterly operating results are expected to fluctuate significantly due to various factors, including market conditions and competition [325]. - Fluctuations in quarterly financial results may limit investors' ability to sell shares of Class A common stock, potentially affecting market price and liquidity [325]. - Key factors influencing stock price volatility include economic conditions, regulatory developments, and changes in investor perception [326]. - The company has declared its first cash dividend on February 27, 2024, and has paid dividends quarterly since then, but future dividends are not guaranteed [323]. - The company may issue preferred stock in the future, which could adversely affect holders of Class A common stock and depress its market price [324]. - Future sales of a substantial number of Class A common stock could adversely affect its market price, with significant pre-IPO equity holders not subject to sales restrictions [322]. - The company faces risks from potential securities class action litigation due to stock price volatility, which could incur substantial costs and divert management's attention [325].

Financial Data and Key Metrics Changes - For Q4 2024, total revenue grew 24.5% year-over-year to $664 million, driven by organic revenue growth of 11% and strong contributions from M&A [55][58] - Full year 2024 revenue surpassed $2.5 billion, up 21% year-over-year, with adjusted EBITDAC growing 30% to $811 million and adjusted EBITDAC margin expanding 210 basis points to 32.2% [11][58] - Adjusted earnings per share increased by 30% to $1.79 [12][58] Business Line Data and Key Metrics Changes - The casualty line of business showed exceptional performance, contributing significantly to organic growth [9][22] - The property line faced challenges with pricing deterioration, particularly in Q4, but still managed to grow due to strong market share gains [30][32] - Delegated Authority now accounts for nearly 45% of total revenue, reflecting the company's strategic focus on this segment [14] Market Data and Key Metrics Changes - The E&S (Excess and Surplus) market is expected to continue outpacing the admitted market, driven by increasing complexity and risks in the insurance landscape [41][42] - A recent market study indicated that 70% of carriers plan to increase their use of Delegated Authority in 2025, highlighting its growing importance [17] Company Strategy and Development Direction - The company executed its largest M&A year, completing seven acquisitions that added over $265 million in trailing revenue, enhancing its underwriting management capabilities [13][23] - The focus remains on expanding Delegated Underwriting Authority and enhancing specialized insurance services to meet evolving market demands [16][19] - The company aims for continued double-digit organic growth in 2025, supported by strategic investments and M&A activities [19][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another year of double-digit organic growth, driven by strong new business generation and resilience in casualty lines [22][41] - The company anticipates modest growth in property but remains bullish on its long-term potential due to ongoing risks and market dynamics [32][116] - The successful completion of the ACCELERATE 2025 program is expected to provide financial flexibility for future investments [50][59] Other Important Information - The company approved a 9% increase in its quarterly dividend, reflecting strong earnings growth and confidence in future performance [62] - The adjusted effective tax rate for 2024 was 26%, with expectations for slight changes in 2025 based on geographic mix and tax law changes [59] Q&A Session Summary Question: What are the assumptions for property in the organic revenue guidance? - Management indicated that while property pricing is soft, strong market share gains in new and renewal business are expected to offset this [70][75] Question: Can you elaborate on the margin guidance and investment plans for 2025? - Management confirmed that 2025 will see a higher-than-average investment year, balancing immediate delivery with long-term growth [77][80] Question: What is the outlook for organic growth across different specialties? - All specialties are expected to achieve double-digit organic growth, with particular strength in casualty and contributions from recent M&A [88][91] Question: How will M&A activity be affected by leverage? - Management stated that M&A activity will not slow due to leverage availability, as there is a robust pipeline of opportunities [92][94] Question: What are the expectations for fiduciary investment income in 2025? - The company is using the forward curve for interest rates in its fiduciary investment income forecast [96][97] Question: What is driving the opportunity for above-average investment? - Management emphasized the need for proactive investments in efficiencies and technology to maintain competitive advantage [101][102] Question: What is the conviction for multiyear organic growth above 10%? - Management remains confident in achieving double-digit organic growth, supported by strategic acquisitions and market trends [105][106] Question: What is the opportunity in personal lines? - The company is expanding its presence in high net worth personal lines through new MGUs and joint ventures, capitalizing on market demand [110]

Core Insights - Ryan Specialty Group reported quarterly earnings of $0.45 per share, missing the Zacks Consensus Estimate of $0.47 per share, but showing an increase from $0.35 per share a year ago, resulting in an earnings surprise of -4.26% [1] - The company posted revenues of $663.53 million for the quarter ended December 2024, which was below the Zacks Consensus Estimate by 0.56%, and an increase from $532.86 million year-over-year [2] - The stock has gained approximately 8.1% since the beginning of the year, outperforming the S&P 500's gain of 4.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $689.23 million, and for the current fiscal year, it is $2.29 on revenues of $3.06 billion [7] - The estimate revisions trend for Ryan Specialty is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Insurance - Brokerage industry, to which Ryan Specialty belongs, is currently ranked in the top 29% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Revenue Performance - Total revenue for Q4 2024 increased by 24.5% year-over-year to $663.5 million, compared to $532.9 million in the prior-year period[1] - Full year 2024 total revenue grew by 21.1% to $2,515.7 million, compared to $2,077.5 million in the prior-year[4] - Total revenue for the year ended December 31, 2024, was $2,515,710, representing a 21.1% increase compared to $2,077,549 in 2023[46] - Total revenue for Q4 2024 reached $663.5 million, a 24.6% increase from $532.9 million in Q4 2023[15] - For the year ended December 31, 2024, total revenue was $2.52 billion, up 21.1% from $2.08 billion in 2023[15] Income and Earnings - Net income for Q4 2024 decreased by 27.3% year-over-year to $42.6 million, compared to $58.5 million in the prior-year period[13] - Adjusted net income for Q4 2024 increased by 28.9% to $123.3 million, with adjusted diluted earnings per share rising to $0.45[15] - Net income for the year ended December 31, 2024, was $229,913, compared to $194,480 in 2023, resulting in a net income margin of 9.1%[46] - Net income for Q4 2024 was $42.6 million, down 27.2% from $58.5 million in Q4 2023, resulting in a net income margin of 6.4%[15] - Adjusted diluted earnings per share for the year ended December 31, 2024, was $1.79, compared to $1.38 in 2023[47] Adjusted Metrics - Adjusted EBITDAC for Q4 2024 grew by 36.2% to $216.0 million, with an adjusted EBITDAC margin of 32.6%[14] - Adjusted EBITDAC for the year ended December 31, 2024, was $811,223, an increase from $624,740 in 2023, with an adjusted EBITDAC margin of 32.2%[47] - Adjusted EBITDAC for the year ended December 31, 2024, was $811.2 million, reflecting a significant increase from prior year adjustments[68] - Adjusted net income for Q4 2024 was $123.3 million, a 29.0% increase from $95.7 million in Q4 2023, with an adjusted net income margin of 18.6%[15] Growth and Acquisitions - The company executed 7 acquisitions in 2024, adding over $265 million in annualized revenue[5] - The company initiated guidance for full year 2025 organic revenue growth rate between 11.0% – 13.0%[19] - Organic revenue growth rate for Q4 2024 was 11.0%, compared to 16.5% in the prior-year period[10] - Organic revenue growth rate (Non-GAAP) for the year ended December 31, 2024, was 12.8%, compared to 15.4% in 2023[54] Expenses and Financial Position - Total operating expenses for the year ended December 31, 2024, were $2,087,898, up from $1,718,468 in 2023[46] - Compensation and benefits expense ratio for the year ended December 31, 2024, was 63.2%, slightly down from 63.6% in 2023[46] - The company incurred acquisition-related expenses of $69,842 for the year ended December 31, 2024, compared to $23,274 in 2023[59] - Long-term debt as of December 31, 2024, was $3,231,128, an increase from $1,943,837 in 2023[50] - Cash and cash equivalents as of December 31, 2024, were $540,203, a decrease from $838,790 in 2023[50] Segment Performance - Wholesale Brokerage segment generated $1,489,077 in revenue for 2024, up 12.9% from $1,319,056 in 2023[21] - Underwriting Management revenue surged by 49.7% to $646,215 in 2024, compared to $431,579 in 2023[21] - The Binding Authority segment reported a revenue increase of 16.1%, reaching $320,379 in 2024 from $275,961 in 2023[21] Cash Flow and Assets - Total cash flows provided by operating activities for the year were $514,868, compared to $477,203 in the previous year[52] - Total assets as of December 31, 2024, were $9,649,918, compared to $7,247,209 in 2023, indicating significant growth[50] - Cash and cash equivalents held in fiduciary capacity at the end of the period were $1,756,332, slightly down from $1,767,385 in the previous year[52] Other Information - The company declared a 9.1% increase in its regular quarterly dividend to $0.12 per share[17] - The company will host a conference call to discuss these results, scheduled for 5:00 PM ET[22] - Ryan Specialty is focused on providing innovative specialty insurance solutions for brokers, agents, and carriers[24] - Forward-looking statements indicate potential growth initiatives and strategies, subject to risks and uncertainties[26]

Financial Data and Key Metrics Changes - Total revenue grew by 20.5% to $605 million, with organic revenue growth of 11.8% and contributions from M&A adding nearly 7 percentage points to the top line [7][46] - Adjusted EBITDAC increased by 29.4% to $190 million, with an adjusted EBITDAC margin expanding by 220 basis points to 31.5% [9][47] - Adjusted diluted EPS grew by 28% to $0.41 per share [9][47] Business Line Data and Key Metrics Changes - The wholesale brokerage specialty and property practice both experienced strong growth despite short-term headwinds in property pricing [21][22] - The casualty practice showed excellent performance, driven by higher loss costs and social inflation, leading to double-digit growth [23][24] - Delegated authority specialties, including binding and underwriting management, performed well, particularly in M&A transactional liability and health care [25][26] Market Data and Key Metrics Changes - Property pricing saw a deterioration of 20% to 30% in Q3, but there are signs of stabilization and potential recovery in Q4 [28][60] - Casualty pricing accelerated across various classes, driven by increased loss costs and a shift of risks into the specialty and E&S market [28][66] - The E&S market remains firm, with expectations of continued growth driven by new risks entering the market [30][62] Company Strategy and Development Direction - The company is focused on maintaining independence and not competing with retail brokers, which is central to its client-first philosophy [15] - There is a commitment to delegated underwriting authority, which is expected to gain momentum as the market evolves [16] - The company aims to capitalize on panel consolidation trends, enhancing client outcomes and minimizing errors and omissions [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and growth potential, emphasizing the importance of client-first strategies and specialized expertise [12][13] - The outlook for Q4 is optimistic, with expectations of improved performance in property and casualty lines [57][62] - The company plans to continue executing its disciplined M&A strategy and investing in talent and technology to support long-term growth [53][35] Other Important Information - The company is concluding its Accelerate 2025 program, expecting to achieve annual savings of approximately $60 million by 2025 [49] - A quarterly dividend of $0.11 was declared, reflecting the company's commitment to returning value to shareholders [49] Q&A Session Summary Question: Organic growth expectations for Q4 - Management indicated that Q4 is off to a promising start, with expectations of improved results compared to Q3, despite challenges in the property market [56][57] Question: Impact of storms on contingent commissions - Management noted that contingent commissions have been increasing and are expected to continue, with no adverse impact from recent storms [63] Question: Insights on Innovisk Capital Partners transaction - The revenue impact from Innovisk is approximately $58 million, with expectations of a positive contribution to margins [64] Question: Trends in the casualty market - The casualty market is firming, with double-digit growth expected, particularly in high-hazard sectors [66] Question: Competition from the London market - The London market remains a strong partner, with competitive dynamics but no significant changes noted [71] Question: Challenges in finding E&S market capacity for transportation risk - Transportation remains a challenging area, but the company is well-prepared to address these challenges through its brokerage capabilities [73] Question: Changes in expense ratios - The changes in adjusted G&A and compensation ratios are attributed to the implementation of the Accelerate 2025 program [74] Question: Impact of fiduciary investment income - There is no direct correlation between the growth in delegated authority and fiduciary investment income trends [75] Question: Growth from panel consolidation - Panel consolidation is part of the overall growth strategy, contributing to new client wins and business share [78] Question: Evidence of property market stabilization - Management has observed signs of stabilization in the property market, with expectations of a flat to slightly positive rate environment [80] Question: Seasonality considerations for Q4 - There are no material changes to the seasonality of Q4, which remains a strong quarter for revenue [82]