Ryan Specialty (RYAN) - 2025 Q3 - Quarterly Results

Revenue Growth - Total revenue increased by 24.8% year-over-year to $754.6 million, compared to $604.7 million in the prior-year period[1] - Organic revenue growth rate was 15.0% for the quarter, up from 11.8% in the prior-year period[4] - Growth in net commissions and fees was driven by strong organic growth across all specialties, totaling $739.6 million, a 25.7% increase[15] - Total revenue for the three months ended September 30, 2025, was $754,577,000, a 24.8% increase from $604,694,000 in the same period of 2024[14] - Total revenue for the nine months ended September 30, 2025, was $2,299,913,000, a 24.2% increase from $1,852,181,000 in 2024[14] Net Income and Earnings - Net income rose 118.6% year-over-year to $62.6 million, compared to $28.6 million in the prior-year period[10] - Adjusted net income increased 15.9% to $131.7 million, with an adjusted net income margin of 17.5%[12] - Adjusted diluted earnings per share rose 14.6% to $0.47, compared to $0.41 in the prior-year period[12] - Net income for the three months ended September 30, 2025, was $62,603,000, compared to $28,643,000 in 2024, reflecting a significant increase[14] - Net income for the nine months ended September 30, 2025, was $182,919,000, down from $187,358,000 in 2024[14] Operating Performance - Adjusted EBITDAC grew 23.8% to $235.5 million, with an adjusted EBITDAC margin of 31.2%[11] - Adjusted EBITDAC for the nine months ended September 30, 2025, was $744,440,000, reflecting a 25.1% increase from $595,174,000 in 2024[57] - Adjusted EBITDAC margin for the three months ended September 30, 2025, was 31.2%, slightly down from 31.5% in 2024[45] - The adjusted EBITDAC margin is expected to be flat to modestly down for the full year 2025 compared to the prior year[21] Expenses and Ratios - Total operating expenses increased by 23.0% to $643.8 million, primarily due to higher compensation and benefits expenses[8] - Compensation and benefits expense ratio for the three months ended September 30, 2025, was 58.4%, down from 65.0% in 2024[44] - Compensation and benefits expense ratio improved to 59.0% for the nine months ended September 30, 2025, down from 63.8% in 2024[54] Cash Flow and Financial Position - Total cash flows provided by operating activities increased to $380,421,000 in 2025, up 49.0% from $255,228,000 in 2024[47] - Total cash flows used in investing activities decreased to $707,178,000 in 2025 from $1,286,437,000 in 2024, indicating a reduction of 45.0%[47] - Ending cash balance as of September 30, 2025, was $1,373,873,000, compared to $1,356,113,000 at the end of September 2024[47] - As of September 30, 2025, the company had cash and cash equivalents of $153.5 million and outstanding debt principal of $3.4 billion[18] Strategic Investments and Future Outlook - The company made substantial strategic investments in broking and underwriting talent, as well as technology during the quarter[3] - The firm is well positioned for future growth, focusing on delivering industry-leading organic growth and long-term shareholder value[3] - The company is revising its guidance presentation to reflect increased opportunities for hiring and investments in the business[20] - The company anticipates that the increased hiring and investment opportunities will impact the adjusted EBITDAC margin in the near term[20] - The organic revenue growth rate is projected to be in double digits for the full year 2025[21] Commissions and Fees - Net commissions and fees for the three months ended September 30, 2025, were $739,552,000, up 25.7% from $588,129,000 in 2024[44] - Net commissions and policy fees for the nine months ended September 30, 2025, were $2,083,983 thousand, a 22.1% increase from $1,706,781 thousand in 2024[17] - Supplemental and contingent commissions rose by 76.0% to $103,185 thousand for the nine months ended September 30, 2025, compared to $58,618 thousand in 2024[17] - Loss mitigation and other fees surged by 69.8% to $69,369 thousand for the nine months ended September 30, 2025, from $40,865 thousand in 2024[17] - Organic revenue growth rate (Non-GAAP) for the nine months ended September 30, 2025, was 11.4%, compared to 13.3% in 2024[48]