Ryan Specialty Reports First Quarter 2024 Results

- Total Revenue grew 20.6% year-over-year to $552.0 million -

- Organic Revenue Growth Rate* of 13.7% year-over-year 1-

- Net Income of $40.7 million, or $0.13 per diluted share -

- Adjusted EBITDAC* grew 25.8% year-over-year to $157.2 million -

- Adjusted Net Income increased 32.9% year-over-year to $95.4 million, or $0.35 per diluted share -

Ryan Specialty Holdings, Inc. (NYSE: RYAN) (“Ryan Specialty” or the “Company”), a leading international specialty insurance firm, today announced results for the first quarter ended March 31, 2024.

First Quarter 2024 Highlights

  • Revenue grew 20.6% year-over-year to $552.0 million, compared to $457.6 million in the prior-year period
  • Organic Revenue Growth Rate* was 13.7% for the quarter, compared to 13.4% in the prior-year period 1
  • Net Income increased 11.6% year-over-year to $40.7 million, compared to $36.5 million in the prior-year period. Diluted Earnings per Share was $0.13
  • Adjusted EBITDAC* increased 25.8% to $157.2 million, compared to $125.0 million in the prior-year period
  • Adjusted EBITDAC Margin* of 28.5%, compared to 27.3% in the prior-year period
  • Adjusted Net Income* increased 32.9% to $95.4 million, compared to $71.8 million in the prior-year period
  • Adjusted Diluted Earnings per Share* increased 34.6% to $0.35, compared to $0.26 in the prior-year period
  • Total capital return to shareholders and LLC unit holders was $45.6 million, consisting of $27.1 million of special dividends and $18.5 million of regular dividends and distributions.

“We had a great start to 2024, driven by another quarter of double-digit organic growth and further enhancement of our margin profile,” said Patrick G. Ryan, Founder, Chairman and Chief Executive Officer of Ryan Specialty. “Our exceptional performance was highlighted by 13.7% organic revenue growth, a 120-basis point expansion of our Adjusted EBITDAC margin, and 34.6% growth in our Adjusted Diluted EPS. Our outstanding success continues to be broad-based across our Specialties and includes valuable contributions from our recent acquisitions. This momentum is a reflection of the resolve of our 4,400 talented teammates to execute with distinction and to provide best-in-class service to our clients and trading partners. We are also very pleased to have announced just yesterday the completion of our acquisition of Castel and the addition of this venerable team to our firm. This influx of additional top underwriting talent bolsters our delegated authority offering, enhances our international presence, and expands our total addressable market. I remain confident that 2024 will be another outstanding year for our firm as we are well positioned to deliver sustainable and differentiated profitable growth.”

1

Beginning in the first quarter of 2024, the Company changed its method of calculating Organic revenue growth rate, a non-GAAP measure. For more information on the revised calculation methodology, see “Organic Revenue Growth Rate Calculation Methodology” below.

Summary of First Quarter 2024 Results

 

 

Three Months Ended March 31,

 

 

Change

 

(in thousands, except percentages and per share data)

 

2024

 

 

2023

 

 

$

 

 

%

 

GAAP financial measures

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

552,046

 

 

$

457,599

 

 

$

94,447

 

 

 

20.6

%

Net commissions and fees

 

 

537,887

 

 

 

447,513

 

 

 

90,374

 

 

 

20.2

 

Compensation and benefits

 

 

373,527

 

 

 

307,722

 

 

 

65,805

 

 

 

21.4

 

General and administrative

 

 

75,867

 

 

 

51,699

 

 

 

24,168

 

 

 

46.7

 

Total operating expenses

 

 

479,397

 

 

 

387,512

 

 

 

91,885

 

 

 

23.7

 

Operating income

 

 

72,649

 

 

 

70,087

 

 

 

2,562

 

 

 

3.7

 

Net income

 

 

40,677

 

 

 

36,457

 

 

 

4,220

 

 

 

11.6

 

Net income attributable to Ryan Specialty Holdings, Inc.

 

 

16,535

 

 

 

13,160

 

 

 

3,375

 

 

 

25.6

 

Compensation and benefits expense ratio (1)

 

 

67.7

%

 

 

67.2

%

 

 

 

 

 

 

General and administrative expense ratio (2)

 

 

13.7

%

 

 

11.3

%

 

 

 

 

 

 

Net income margin (3)

 

 

7.4

%

 

 

8.0

%

 

 

 

 

 

 

Earnings per share (4)

 

$

0.14

 

 

$

0.12

 

 

 

 

 

 

 

Diluted earnings per share (4)

 

$

0.13

 

 

$

0.11

 

 

 

 

 

 

 

Non-GAAP financial measures*

 

 

 

 

 

 

 

 

 

 

 

 

Organic revenue growth rate (5)

 

 

13.7

%

 

 

13.4

%

 

 

 

 

 

 

Adjusted compensation and benefits expense

 

$

330,022

 

 

$

285,885

 

 

$

44,137

 

 

 

15.4

%

Adjusted compensation and benefits expense ratio

 

 

59.8

%

 

 

62.5

%

 

 

 

 

 

 

Adjusted general and administrative expense

 

$

64,802

 

 

$

46,699

 

 

$

18,103

 

 

 

38.8

%

Adjusted general and administrative expense ratio

 

 

11.7

%

 

 

10.2

%

 

 

 

 

 

 

Adjusted EBITDAC

 

$

157,222

 

 

$

125,015

 

 

$

32,207

 

 

 

25.8

%

Adjusted EBITDAC margin

 

 

28.5

%

 

 

27.3

%

 

 

 

 

 

 

Adjusted net income

 

$

95,417

 

 

$

71,785

 

 

$

23,632

 

 

 

32.9

%

Adjusted net income margin

 

 

17.3

%

 

 

15.7

%

 

 

 

 

 

 

Adjusted diluted earnings per share

 

$

0.35

 

 

$

0.26

 

 

 

 

 

 

 

* For a definition and a reconciliation of Organic revenue growth rate, Adjusted compensation and benefits expense, Adjusted compensation and benefits ratio, Adjusted general and administrative expense, Adjusted general and administrative expense ratio, Adjusted EBITDAC, Adjusted EBITDAC margin, Adjusted net income, Adjusted net income margin, and Adjusted diluted earnings per share to the most directly comparable GAAP measure, see “Non-GAAP Financial Measures and Key Performance Indicators” below.

 

(1)

Compensation and benefits expense ratio is defined as Compensation and benefits divided by Total revenue.

(2)

General and administrative expense ratio is defined as General and administrative expense divided by Total revenue.

(3)

Net income margin is defined as Net income divided by Total revenue.

(4)

See “Note 10, Earnings Per Share” of the unaudited quarterly consolidated financial statements.

(5)

The Organic revenue growth rate data presented in this table has been calculated using the revised calculation methodology adopted by the Company beginning in the first quarter of 2024. For more information, see “Organic Revenue Growth Rate Calculation Methodology” below.

First Quarter 2024 Review*

Total revenue for the first quarter of 2024 was $552.0 million, an increase of 20.6% compared to $457.6 million in the prior-year period. This increase was primarily due to continued solid Organic revenue growth of 13.7% (calculated using the revised calculation methodology adopted by the Company beginning in the first quarter of 2024), driven by new client wins and expanded relationships with existing clients, coupled with continued expansion of the E&S market, revenue from acquisitions completed within the trailing twelve months ended March 31, 2024, and increased Fiduciary investment income. We experienced growth across the majority of our property and casualty lines.

Total operating expenses for the first quarter of 2024 were $479.4 million, a 23.7% increase compared to the prior-year period. This increase was primarily due to an increase in Compensation and benefits expense compared to the prior-year period resulting from higher compensation due to revenue growth and higher restructuring and related expenses associated with ACCELERATE 2025, partially offset by savings associated with ACCELERATE 2025. General and administrative expense also increased compared to the prior-year period due to an increase in professional services in connection with revenue generating activities, higher travel and entertainment expense in connection with a difference in timing of certain events, and higher acquisition-related expenses.

Net income for the first quarter of 2024 increased 11.6% to $40.7 million, compared to $36.5 million in the prior-year period. The increase was mainly due to stronger year-over-year revenue growth.

Adjusted EBITDAC grew 25.8% to $157.2 million from $125.0 million in the prior-year period. Adjusted EBITDAC margin for the quarter was 28.5%, compared to 27.3% in the prior-year period. The increase in Adjusted EBITDAC was driven primarily by solid revenue growth, partially offset by increased Adjusted compensation and benefits expense, as well as higher Adjusted general and administrative expense.

Adjusted net income for the first quarter of 2024 increased 32.9% to $95.4 million, compared to $71.8 million in the prior-year period. Adjusted net income margin was 17.3%, compared to 15.7% in the prior-year period. Adjusted diluted earnings per share for the first quarter of 2024 increased 34.6% to $0.35, compared to $0.26 in the prior-year period.

* For the definition of each of the non-GAAP measures referred to above, as well as a reconciliation of such non-GAAP measures to their most directly comparable GAAP measures, see “Non-GAAP Financial Measures and Key Performance Indicators” below.

First Quarter 2024 Net Commissions and Fees by Specialty and Revenue by Type

Growth in Net commissions and fees in all specialties was primarily driven by solid organic growth.

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

(in thousands, except percentages)

 

2024

 

 

% of

total

 

 

2023

 

 

% of

total

 

 

Change

 

Wholesale Brokerage

 

$

323,445

 

 

 

60.1

%

 

$

285,850

 

 

 

63.9

%

 

$

37,595

 

 

 

13.2

%

Binding Authorities

 

 

88,635

 

 

 

16.5

 

 

 

69,526

 

 

 

15.5

 

 

 

19,109

 

 

 

27.5

 

Underwriting Management

 

 

125,807

 

 

 

23.4

 

 

 

92,137

 

 

 

20.6

 

 

 

33,670

 

 

 

36.5

 

Total Net commissions and fees

 

$

537,887

 

 

 

 

 

$

447,513

 

 

 

 

 

$

90,374

 

 

 

20.2

%

The following table sets forth our revenue by type of commission and fees:

 

 

Three Months Ended March 31,

 

 

 

 

 

 

 

(in thousands, except percentages)

 

2024

 

 

% of

total

 

 

2023

 

 

% of

total

 

 

Change

 

Net commissions and policy fees

 

$

494,445

 

 

 

91.9

%

 

$

413,571

 

 

 

92.4

%

 

$

80,874

 

 

 

19.6

%

Supplemental and contingent commissions

 

 

29,256

 

 

 

5.5

 

 

 

26,331

 

 

 

5.9

 

 

 

2,925

 

 

 

11.1

 

Loss mitigation and other fees

 

 

14,186

 

 

 

2.6

 

 

 

7,611

 

 

 

1.7

 

 

 

6,575

 

 

 

86.4

 

Total net commissions and fees

 

$

537,887

 

 

 

 

 

$

447,513

 

 

 

 

 

$

90,374

 

 

 

20.2

%

Liquidity and Financial Condition

As of March 31, 2024, the Company had Cash and cash equivalents of $665.4 million and outstanding debt principal of $2.0 billion.

ACCELERATE 2025

The Company is updating the ACCELERATE 2025 restructuring program as additional opportunities have been identified to drive continued growth and innovation, deliver sustainable productivity improvements over the long term, and accelerate margin improvement. The updated program will result in approximately $110 million of cumulative one-time charges through 2024, with an expectation that the program will generate annual savings of approximately $60 million in 2025.

Quarterly Dividend

On May 2, 2024, the Company's board of directors (the "Board") declared a regular quarterly dividend of $0.11 per share on the outstanding Class A common stock. The regular quarterly dividend will be payable on May 28, 2024, to stockholders of record as of the close of business on May 14, 2024. A portion of the dividend, $0.04 per share, will be funded by free cash flow from Ryan Specialty, LLC and will be paid to all holders of the Company's Class A common stock and the common units of Ryan Specialty, LLC.

Organic Revenue Growth Rate Calculation Methodology

In the first quarter of 2024 the Company revised its calculation methodology for the non-GAAP metric of Organic Revenue Growth Rate. Organic Revenue Growth Rate, which is now defined as the percentage change in Net commissions and fees, as compared to the same period for the prior year, adjusted to eliminate revenue attributable to acquisitions for the first twelve months of ownership, and other items such as contingent commissions and the impact of changes in foreign exchange rates. The revised calculation methodology starts from a net commissions and fees growth rate rather than total revenues and excludes contingent commissions, thereby fully removing the impact of Fiduciary investment income and contingent commissions from both the current period and base period. The legacy calculation methodology started from a total revenue growth rate and adjusted for the change in Fiduciary investment income and contingent commissions thereby leaving Fiduciary investment income and contingent commissions in the base period. We believe the revised calculation methodology is a more robust disclosure, a more widely used calculation methodology, and provides investors with a metric that is better representative of our core business performance. Organic Revenue Growth Rate is a key metric used by management and our Board to assess our financial performance and allows management and investors to evaluate business growth from existing clients.

Full Year 2024 Outlook*

The Company is maintaining its full year 2024 outlook for Organic Revenue Growth Rate (under the legacy calculation methodology) and Adjusted EBITDAC Margin. The full year 2024 outlook (under the revised Organic Revenue Growth Rate calculation methodology, as discussed above) is as follows:

  • Organic Revenue Growth Rate guidance for full year 2024 is between 12.5% – 14.0%
  • Adjusted EBITDAC Margin guidance for full year 2024 is between 31.0% – 31.5%

The Company is unable to provide a comparable outlook for, or a reconciliation to, Total revenue growth rate or Net income margin because it cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. Its inability to do so is due to the inherent difficulty in forecasting the timing of items that have not yet occurred and quantifying certain amounts that are necessary for such reconciliation, including variations in effective tax rate, expenses to be incurred for acquisition activities, and other one-time or exceptional items.

* For a definition of Organic revenue growth rate, see “Organic Revenue Growth Rate Calculation Methodology” above. For a definition of Adjusted EBITDAC margin, see “Non-GAAP Financial Measures and Key Performance Indicators” below.

Conference Call Information

Ryan Specialty will host a conference call today at 5:00 PM ET to discuss these results. A live audio webcast of the conference call will be available on the Company’s website at ryanspecialty.com in its Investors section.

The dial-in number for the conference call is (877) 451-6152 (toll-free) or (201) 389-0879 (international). Please dial the number 10 minutes prior to the scheduled start time.

A webcast replay of the call will be available on the Company’s website at ryanspecialty.com in its Investors section for one year following the call.

About Ryan Specialty

Founded in 2010, Ryan Specialty (NYSE: RYAN) is a service provider of specialty products and solutions for insurance brokers, agents, and carriers. Ryan Specialty provides distribution, underwriting, product development, administration, and risk management services by acting as a wholesale broker and a managing underwriter with delegated authority from insurance carriers. Our mission is to provide industry-leading innovative specialty insurance solutions for insurance brokers, agents, and carriers. Learn more at ryanspecialty.com.

Forward-Looking Statements

All statements in this release and in the corresponding earnings call that are not historical are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and involve substantial risks and uncertainties. For example, all statements the Company makes relating to its estimated and projected costs, expenditures, cash flows, growth rates and financial results, its plans, anticipated amount and timing of cost savings relating to the restructuring plan, or its plans and objectives for future operations, growth initiatives, or strategies and the statements under the caption “Full Year 2024 Outlook” are forward-looking statements. Words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely” and variations of such words and similar expressions are intended to identify such forward-looking statements. All forward-looking statements are subject to risks and uncertainties, known and unknown, that may cause actual results to differ materially from those that the Company expected. Specific factors that could cause such a difference include, but are not limited to, those disclosed previously in the Company’s filings with the Securities and Exchange Commission (“SEC”).

For more detail on the risk factors that may affect the Company’s results, see the section entitled "Risk Factors" in our most recent annual report on Form 10-K filed with the SEC, and in other documents filed with, or furnished to, the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Given these factors, as well as other variables that may affect the Company’s operating results, you are cautioned not to place undue reliance on these forward-looking statements, not to assume that past financial performance will be a reliable indicator of future performance, and not to use historical trends to anticipate results or trends in future periods. The forward-looking statements included in this press release and on the related earnings call relate only to events as of the date hereof. The Company does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement after the date of this release, whether as a result of new information, future events, changes in assumptions, or otherwise.

Non-GAAP Financial Measures and Key Performance Indicators

In assessing the performance of the Company’s business, non-GAAP financial measures are used that are derived from the Company’s consolidated financial information, but which are not presented in the Company’s consolidated financial statements prepared in accordance with GAAP. The Company considers these non-GAAP financial measures to be useful metrics for management and investors to facilitate operating performance comparisons from period to period by excluding potential differences caused by variations in capital structures, tax positions, depreciation, amortization, and certain other items that the Company believes are not representative of its core business. The Company uses the following non-GAAP measures for business planning purposes, in measuring performance relative to that of its competitors, to help investors to understand the nature of the Company's growth, and to enable investors to evaluate the run-rate performance of the Company. Non-GAAP financial measures should be viewed as supplementing, and not as an alternative or substitute for, the consolidated financial statements prepared and presented in accordance with GAAP. The footnotes to the reconciliation tables below should be read in conjunction with the audited consolidated financial statements in our Annual Report on form 10-K filed with the SEC. Industry peers may provide similar supplemental information but may not define similarly-named metrics in the same way and may not make identical adjustments.

Organic revenue growth rate: Under our legacy calculation methodology, Organic revenue growth rate represented the percentage change in Total revenue, as compared to the same period for the year prior, adjusted for revenue attributable to recent acquisitions during the first 12 months of Ryan Specialty’s ownership, and other adjustments such as changes in contingent commissions, changes in fiduciary investment income, and the impact of changes in foreign exchange rates. Under our revised calculation methodology, Organic revenue growth rate represents the percentage change in Net commissions and fees revenue, as compared to the same period for the year prior, adjusted for Net commissions and fees attributable to recent acquisitions during the first 12 months of Ryan Specialty’s ownership, and other adjustments such as the removal of the impact of contingent commissions and the impact of changes in foreign exchange rates. For more information, see “Organic Revenue Growth Rate Calculation Methodology” above.

Adjusted compensation and benefits expense: Adjusted compensation and benefits expense is defined as Compensation and benefits expense adjusted to reflect items such as (i) equity-based compensation, (ii) acquisition and restructuring related compensation expenses, and (iii) other exceptional or non-recurring compensation expenses, as applicable. The most directly comparable GAAP financial metric is Compensation and benefits expense.

Adjusted general and administrative expense: Adjusted general and administrative expense is defined as General and administrative expense adjusted to reflect items such as (i) acquisition and restructuring related general and administrative expenses, and (ii) other exceptional or non-recurring general and administrative expenses, as applicable. The most directly comparable GAAP financial metric is General and administrative expense.

Adjusted compensation and benefits expense ratio: Adjusted compensation and benefits expense ratio is defined as the Adjusted compensation and benefits expense as a percentage of Total revenue. The most directly comparable GAAP financial metric is Compensation and benefits expense ratio.

Adjusted general and administrative expense ratio: Adjusted general and administrative expense ratio is defined as the Adjusted general and administrative expense as a percentage of Total revenue. The most directly comparable GAAP financial metric is General and administrative expense ratio.

Adjusted EBITDAC: Adjusted EBITDAC is defined as Net income before Interest expense, net, Income tax expense, Depreciation, Amortization, and Change in contingent consideration, adjusted to reflect items such as (i) equity-based compensation, (ii) acquisition-related expenses, and (iii) other exceptional or non-recurring items, as applicable. Acquisition-related expense includes one-time diligence, transaction-related, and integration costs. In 2024, Acquisition-related expense includes a $2.5 million charge related to a deal-contingent foreign exchange forward contract associated with the Castel acquisition. The remaining charges in both years represent typical one-time diligence, transaction-related, and integration costs. Acquisition-related long-term incentive compensation arises from changes to long-term incentive plans associated with acquisitions. Restructuring and related expense consists of compensation and benefits, occupancy, contractors, professional services, and license fees related to the ACCELERATE 2025 program. The compensation and benefits expense included severance as well as employment costs related to services rendered between the notification and termination dates and other termination payments. See “Note 4, Restructuring” of the unaudited quarterly consolidated financial statements for further discussion of ACCELERATE 2025. The remaining costs that preceded the restructuring plan were associated with professional services costs related to program design and licensing costs. Amortization and expense consists of charges related to discontinued prepaid incentive programs. For the three months ended March 31, 2024, Other non-operating loss (income) consisted of $1.9 million of expense related to fees associated with our term loan repricing offset by $0.1 million of sublease income. For the three months ended March 31, 2023, Other non-operating income included $0.1 million of sublease income. Equity-based compensation reflects non-cash equity-based expense. IPO related expenses include compensation-related expense primarily related to the expense for new awards issued at IPO as well as expense related to the revaluation of existing equity awards at IPO. Total revenue less Adjusted compensation and benefits expense and Adjusted general and administrative expense is equivalent to Adjusted EBITDAC. For a breakout of compensation and general and administrative costs for each addback refer to the Adjusted compensation and benefits expense and Adjusted general and administrative expense tables below. The most directly comparable GAAP financial metric to Adjusted EBITDAC is Net income.

Adjusted EBITDAC margin: Adjusted EBITDAC margin is defined as Adjusted EBITDAC as a percentage of Total revenue. The most directly comparable GAAP financial metric is Net income margin.

Adjusted net income: Adjusted net income is defined as tax-effected earnings before amortization and certain items of income and expense, gains and losses, equity-based compensation, acquisition related long-term incentive compensation, acquisition-related expenses, costs associated with our Initial Public Offering (the “IPO”), and certain exceptional or non-recurring items. The Company will be subject to United States federal income taxes, in addition to state, local, and foreign taxes, with respect to its allocable share of any net taxable income of Ryan Specialty, LLC (together with its parent New Ryan Specialty, LLC and their subsidiaries, the “LLC”). For comparability purposes, this calculation incorporates the impact of federal and state statutory tax rates on 100% of the Company's adjusted pre-tax income as if the Company owned 100% of Ryan Specialty, LLC. The most directly comparable GAAP financial metric is Net income.

Adjusted net income margin: Adjusted net income margin is defined as Adjusted net income as a percentage of Total revenue. The most directly comparable GAAP financial metric is Net income margin.

Adjusted diluted earnings per share: Adjusted diluted earnings per share is defined as Adjusted net income divided by diluted shares outstanding after adjusting for the effect if 100% of the outstanding LLC Common Units (“LLC Common Units”), together with the shares of Class B common stock, vested Class C Incentive Units, and unvested equity awards were exchanged into shares of Class A common stock as if 100% of unvested equity awards were vested. The most directly comparable GAAP financial metric is Diluted earnings per share.

The reconciliation of the above non-GAAP measures to each of their most directly comparable GAAP financial measure is set forth in the reconciliation table accompanying this release.

With respect to the Organic revenue growth rate and Adjusted EBITDAC margin outlook presented in the “Full Year 2024 Outlook” section of this press release, the Company is unable to provide a comparable outlook for, or a reconciliation to, Total revenue growth rate or Net income margin because it cannot provide a meaningful or accurate calculation or estimation of certain reconciling items without unreasonable effort. Its inability to do so is due to the inherent difficulty in forecasting the timing of items that have not yet occurred and quantifying certain amounts that are necessary for such reconciliation, including variations in effective tax rate, expenses to be incurred for acquisition activities, and other one-time or exceptional items.

Consolidated Statements of Income (Unaudited)

 

 

Three Months Ended

March 31,

 

(in thousands, except percentages and per share data)

 

2024

 

 

2023

 

Revenue

 

 

 

 

 

 

Net commissions and fees

 

$

537,887

 

 

$

447,513

 

Fiduciary investment income

 

 

14,159

 

 

 

10,086

 

Total revenue

 

$

552,046

 

 

$

457,599

 

Expenses

 

 

 

 

 

 

Compensation and benefits

 

 

373,527

 

 

 

307,722

 

General and administrative

 

 

75,867

 

 

 

51,699

 

Amortization

 

 

27,988

 

 

 

25,185

 

Depreciation

 

 

2,080

 

 

 

2,192

 

Change in contingent consideration

 

 

(65

)

 

 

714

 

Total operating expenses

 

$

479,397

 

 

$

387,512

 

Operating income

 

$

72,649

 

 

$

70,087

 

Interest expense, net

 

 

29,400

 

 

 

29,468

 

(Income) from equity method investment in related party

 

 

(5,606

)

 

 

(1,995

)

Other non-operating loss (income)

 

 

1,752

 

 

 

(138

)

Income before income taxes

 

$

47,103

 

 

$

42,752

 

Income tax expense

 

 

6,426

 

 

 

6,295

 

Net income

 

$

40,677

 

 

$

36,457

 

GAAP financial measures

 

 

 

 

 

 

Total revenue

 

$

552,046

 

 

$

457,599

 

Net commissions and fees

 

 

537,887

 

 

 

447,513

 

Compensation and benefits

 

 

373,527

 

 

 

307,722

 

General and administrative

 

 

75,867

 

 

 

51,699

 

Net income

 

 

40,677

 

 

 

36,457

 

Compensation and benefits expense ratio

 

 

67.7

%

 

 

67.2

%

General and administrative expense ratio

 

 

13.7

%

 

 

11.3

%

Net income margin

 

 

7.4

%

 

 

8.0

%

Earnings per share

 

$

0.14

 

 

$

0.12

 

Diluted earnings per share

 

$

0.13

 

 

$

0.11

 

Non-GAAP Financial Measures (Unaudited)

 

 

Three Months Ended

March 31,

 

(in thousands, except percentages and per share data)

 

2024

 

 

2023

 

Non-GAAP financial measures

 

 

 

 

 

 

Organic revenue growth rate (1)

 

 

13.7

%

 

 

13.4

%

Adjusted compensation and benefits expense

 

$

330,022

 

 

$

285,885

 

Adjusted compensation and benefits expense ratio

 

 

59.8

%

 

 

62.5

%

Adjusted general and administrative expense

 

$

64,802

 

 

$

46,699

 

Adjusted general and administrative expense ratio

 

 

11.7

%

 

 

10.2

%

Adjusted EBITDAC

 

$

157,222

 

 

$

125,015

 

Adjusted EBITDAC margin

 

 

28.5

%

 

 

27.3

%

Adjusted net income

 

$

95,417

 

 

$

71,785

 

Adjusted net income margin

 

 

17.3

%

 

 

15.7

%

Adjusted diluted earnings per share

 

$

0.35

 

 

$

0.26

 

(1)

The Organic revenue growth rate data presented in this table has been calculated using the revised calculation methodology. For more information, see “Organic Revenue Growth Rate Calculation Methodology” above.

Consolidated Balance Sheets (Unaudited)

(in thousands, except share and per share data)

 

March 31,

2024

 

 

December 31,

2023

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

665,420

 

 

$

838,790

 

Commissions and fees receivable – net

 

 

299,162

 

 

 

294,195

 

Fiduciary cash and receivables

 

 

3,181,352

 

 

 

3,131,660

 

Prepaid incentives – net

 

 

8,149

 

 

 

8,718

 

Other current assets

 

 

62,289

 

 

 

62,229

 

Total current assets

 

$

4,216,372

 

 

$

4,335,592

 

NON-CURRENT ASSETS

 

 

 

 

 

 

Goodwill

 

 

1,647,252

 

 

 

1,646,482

 

Customer relationships

 

 

546,722

 

 

 

572,416

 

Other intangible assets

 

 

45,043

 

 

 

38,254

 

Prepaid incentives – net

 

 

15,756

 

 

 

15,103

 

Equity method investment in related party

 

 

56,016

 

 

 

46,099

 

Property and equipment – net

 

 

42,671

 

 

 

42,427

 

Lease right-of-use assets

 

 

121,596

 

 

 

127,708

 

Deferred tax assets

 

 

382,636

 

 

 

383,816

 

Other non-current assets

 

 

42,438

 

 

 

39,312

 

Total non-current assets

 

$

2,900,130

 

 

$

2,911,617

 

TOTAL ASSETS

 

$

7,116,502

 

 

$

7,247,209

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

230,709

 

 

$

136,340

 

Accrued compensation

 

 

184,254

 

 

 

419,560

 

Operating lease liabilities

 

 

19,615

 

 

 

21,369

 

Tax Receivable Agreement liabilities

 

 

22,075

 

 

 

 

Short-term debt and current portion of long-term debt

 

 

39,374

 

 

 

35,375

 

Fiduciary liabilities

 

 

3,181,352

 

 

 

3,131,660

 

Total current liabilities

 

$

3,677,379

 

 

$

3,744,304

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

Accrued compensation

 

 

30,012

 

 

 

24,917

 

Operating lease liabilities

 

 

147,700

 

 

 

154,457

 

Long-term debt

 

 

1,942,542

 

 

 

1,943,837

 

Tax Receivable Agreement liabilities

 

 

338,942

 

 

 

358,898

 

Other non-current liabilities

 

 

5,174

 

 

 

41,152

 

Total non-current liabilities

 

$

2,464,370

 

 

$

2,523,261

 

TOTAL LIABILITIES

 

$

6,141,749

 

 

$

6,267,565

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

Class A common stock ($0.001 par value; 1,000,000,000 shares authorized, 118,737,470 and 118,593,062 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively)

 

 

119

 

 

 

119

 

Class B common stock ($0.001 par value; 1,000,000,000 shares authorized, 141,486,229 and 141,621,188 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively)

 

 

142

 

 

 

142

 

Class X common stock ($0.001 par value; 10,000,000 shares authorized, 640,784 shares issued and 0 outstanding at March 31, 2024 and December 31, 2023)

 

 

 

 

 

 

Preferred stock ($0.001 par value; 500,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2024 and December 31, 2023)

 

 

 

 

 

 

Additional paid-in capital

 

 

459,456

 

 

 

441,997

 

Retained earnings

 

 

88,537

 

 

 

114,420

 

Accumulated other comprehensive income

 

 

6,096

 

 

 

3,076

 

Total stockholders’ equity attributable to Ryan Specialty Holdings, Inc.

 

$

554,350

 

 

$

559,754

 

Non-controlling interests

 

 

420,403

 

 

 

419,890

 

Total stockholders’ equity

 

$

974,753

 

 

$

979,644

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

7,116,502

 

 

$

7,247,209

 

Consolidated Statements of Cash Flows (Unaudited)

 

 

Three Months Ended March 31,

 

(in thousands)

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net income

 

$

40,677

 

 

$

36,457

 

Adjustments to reconcile net income to cash flows used in operating activities:

 

 

 

 

 

 

(Income) from equity method investment in related party

 

 

(5,606

)

 

 

(1,995

)

Amortization

 

 

27,988

 

 

 

25,185

 

Depreciation

 

 

2,080

 

 

 

2,192

 

Prepaid and deferred compensation expense

 

 

918

 

 

 

2,212

 

Non-cash equity-based compensation

 

 

17,310

 

 

 

17,879

 

Amortization of deferred debt issuance costs

 

 

3,409

 

 

 

3,039

 

Amortization of interest rate cap premium

 

 

1,739

 

 

 

1,739

 

Deferred income tax expense

 

 

2,139

 

 

 

2,875

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

Commissions and fees receivable – net

 

 

(4,751

)

 

 

(1,212

)

Accrued interest liability

 

 

5,958

 

 

 

(4,743

)

Other current and non-current assets

 

 

2,061

 

 

 

11,197

 

Other current and non-current accrued liabilities

 

 

(210,461

)

 

 

(254,036

)

Total cash flows used in operating activities

 

$

(116,539

)

 

$

(159,211

)

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

Business combinations – net of cash acquired and cash held in a fiduciary capacity

 

 

 

 

 

(102,059

)

Capital expenditures

 

 

(7,628

)

 

 

(2,793

)

Total cash flows used in investing activities

 

$

(7,628

)

 

$

(104,852

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

Repayment of term debt

 

 

 

 

 

(4,125

)

Payment of contingent consideration

 

 

 

 

 

(4,477

)

Tax distributions to non-controlling LLC Unitholders

 

 

 

 

 

(264

)

Receipt of taxes related to net share settlement of equity awards

 

 

130

 

 

 

404

 

Taxes paid related to net share settlement of equity awards

 

 

(130

)

 

 

(404

)

Dividends paid to Class A common shareholders

 

 

(40,021

)

 

 

 

Distributions to non-controlling LLC Unitholders

 

 

(5,617

)

 

 

 

Payment of accrued return on Ryan Re preferred units

 

 

(1,883

)

 

 

 

Net change in fiduciary liabilities

 

 

37,326

 

 

 

(20,754

)

Total cash flows used in financing activities

 

$

(10,195

)

 

$

(29,620

)

Effect of changes in foreign exchange rates on cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity

 

 

(657

)

 

 

85

 

NET CHANGE IN CASH, CASH EQUIVALENTS, AND CASH AND CASH EQUIVALENTS HELD IN A FIDUCIARY CAPACITY

 

$

(135,019

)

 

$

(293,598

)

CASH, CASH EQUIVALENTS, AND CASH AND CASH EQUIVALENTS HELD IN A FIDUCIARY CAPACITY—Beginning balance

 

 

1,756,332

 

 

 

1,767,385

 

CASH, CASH EQUIVALENTS, AND CASH AND CASH EQUIVALENTS HELD IN A FIDUCIARY CAPACITY—Ending balance

 

$

1,621,313

 

 

$

1,473,787

 

Reconciliation of cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity

 

 

 

 

 

 

Cash and cash equivalents

 

 

665,420

 

 

 

704,746

 

Cash and cash equivalents held in a fiduciary capacity

 

 

955,893

 

 

 

769,041

 

Total cash, cash equivalents, and cash and cash equivalents held in a fiduciary capacity

 

$

1,621,313

 

 

$

1,473,787

 

Reconciliation of Organic Revenue Growth Rate

Legacy Calculation Methodology Applied to Current Period

 

 

 

Three Months Ended March 31,

 

(in thousands, except percentages)

 

2024

 

 

2023

 

Current period Total revenue

 

$

552,046

 

 

$

457,599

 

Prior period Total revenue

 

 

457,599

 

 

 

386,890

 

Change in Total revenue

 

$

94,447

 

 

$

70,709

 

 

 

 

 

 

 

 

Mergers and acquisitions revenue

 

$

28,539

 

 

$

6,101

 

Change in other

 

 

7,264

 

 

 

14,778

 

Organic revenue growth

 

$

58,644

 

 

$

49,830

 

 

 

 

 

 

 

 

Total revenue growth rate (GAAP) (1)

 

 

20.6

%

 

 

18.3

%

Less: Mergers and acquisitions (2)

 

 

(6.2

)

 

 

(1.6

)

Change in other (3)

 

 

(1.6

)

 

 

(3.8

)

Organic revenue growth rate (Non-GAAP)

 

 

12.8

%

 

 

12.9

%

(1)

Calculated by dividing the change in Total revenue by the prior period Total revenue.

(2)

Calculated by taking the mergers and acquisitions revenue, representing the first 12 months of net commissions and fees revenue generated from acquisitions, divided by prior period Total revenue.

(3)

Calculated by taking the change in other, representing the year-over-year change in contingent commissions, fiduciary investment income, and foreign exchange rates, divided by prior period Total revenue.

Revised Calculation Methodology Applied to Current Period

 

 

 

Three Months Ended March 31,

 

(in thousands, except percentages)

 

2024

 

 

2023

 

Current period Net commissions and fees revenue

 

$

537,887

 

 

$

447,513

 

Less: Current period contingent commissions

 

 

(24,503

)

 

 

(21,635

)

Net Commissions and fees revenue excluding contingent commissions

 

$

513,385

 

 

$

425,878

 

 

 

 

 

 

 

 

Prior period Net commissions and fees revenue

 

$

447,513

 

 

$

386,681

 

Less: Prior year contingent commissions

 

 

(21,635

)

 

 

(15,209

)

Prior period Net commissions and fees revenue excluding contingent commissions

 

$

425,878

 

 

$

371,472

 

 

 

 

 

 

 

 

Change in Net commissions and fees revenue excluding contingent commissions

 

$

87,507

 

 

$

54,406

 

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions

 

 

(28,539

)

 

 

(5,373

)

Impact of change in foreign exchange rates

 

 

(323

)

 

 

797

 

Organic revenue growth (Non-GAAP)

 

$

58,644

 

 

$

49,830

 

 

 

 

 

 

 

 

Net commissions and fees revenue growth rate (GAAP)

 

 

20.2

%

 

 

15.7

%

Less: Impact of contingent commissions (1)

 

 

0.3

 

 

 

(1.1

)

Net commissions and fees revenue excluding contingent commissions growth rate (2)

 

 

20.5

%

 

 

14.6

%

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions (3)

 

 

(6.7

)

 

 

(1.4

)

Impact of change in foreign exchange rates (4)

 

 

(0.1

)

 

 

0.2

 

Organic Revenue Growth Rate (Non-GAAP)

 

 

13.7

%

 

 

13.4

%

(1)

Calculated by subtracting Net commissions and fees revenue growth rate from net commissions and fees revenue excluding contingent commissions growth rate.

(2)

Calculated by dividing the change in Total net commissions & fees revenue excluding contingent commissions by prior year net commissions and fees excluding contingent commissions.

(3)

Calculated by taking the mergers and acquisitions net commissions and fees revenue excluding contingent commissions, representing the first 12 months of net commissions and fees revenue generated from acquisitions, divided by prior period net commissions and fees revenue excluding contingent commissions.

(4)

Calculated by taking the change in foreign exchange rates divided by prior period net commissions and fees revenue excluding contingent commissions.

Reconciliation of Adjusted Compensation and Benefits Expense to Compensation and Benefits Expense

 

 

Three Months Ended

March 31,

 

(in thousands, except percentages)

 

2024

 

 

2023

 

Total revenue

 

$

552,046

 

 

$

457,599

 

Compensation and benefits expense

 

$

373,527

 

 

$

307,722

 

Acquisition-related expense

 

 

(226

)

 

 

(1,016

)

Acquisition related long-term incentive compensation

 

 

1,627

 

 

 

(578

)

Restructuring and related expense

 

 

(26,184

)

 

 

(730

)

Amortization and expense related to discontinued prepaid incentives

 

 

(1,412

)

 

 

(1,634

)

Equity-based compensation

 

 

(9,515

)

 

 

(6,635

)

Initial public offering related expense

 

 

(7,795

)

 

 

(11,244

)

Adjusted compensation and benefits expense (1)

 

$

330,022

 

 

$

285,885

 

Compensation and benefits expense ratio

 

 

67.7

%

 

 

67.2

%

Adjusted compensation and benefits expense ratio

 

 

59.8

%

 

 

62.5

%

(1)

Adjustments made to Compensation and benefits expense are described in the definition of Adjusted EBITDAC in “Non-GAAP Financial Measures and Key Performance Indicators.”

Reconciliation of Adjusted General and Administrative Expense to General and Administrative Expense

 

 

Three Months Ended

March 31,

 

(in thousands, except percentages)

 

2024

 

 

2023

 

Total revenue

 

$

552,046

 

 

$

457,599

 

General and administrative expense

 

$

75,867

 

 

$

51,699

 

Acquisition-related expense

 

 

(8,211

)

 

 

(2,174

)

Restructuring and related expense

 

 

(2,854

)

 

 

(2,826

)

Adjusted general and administrative expense (1)

 

$

64,802

 

 

$

46,699

 

General and administrative expense ratio

 

 

13.7

%

 

 

11.3

%

Adjusted general and administrative expense ratio

 

 

11.7

%

 

 

10.2

%

(1)

Adjustments made to General and administrative expense are described in the definition of Adjusted EBITDAC in “Non-GAAP Financial Measures and Key Performance Indicators.”

Reconciliation of Adjusted EBITDAC to Net Income

 

 

Three Months Ended

March 31,

 

(in thousands, except percentages)

 

2024

 

 

2023

 

Total revenue

 

$

552,046

 

 

$

457,599

 

Net income

 

$

40,677

 

 

$

36,457

 

Interest expense, net

 

 

29,400

 

 

 

29,468

 

Income tax expense

 

 

6,426

 

 

 

6,295

 

Depreciation

 

 

2,080

 

 

 

2,192

 

Amortization

 

 

27,988

 

 

 

25,185

 

Change in contingent consideration

 

 

(65

)

 

 

714

 

EBITDAC

 

$

106,506

 

 

$

100,311

 

Acquisition-related expense

 

 

8,437

 

 

 

3,190

 

Acquisition related long-term incentive compensation

 

 

(1,627

)

 

 

578

 

Restructuring and related expense

 

 

29,038

 

 

 

3,556

 

Amortization and expense related to discontinued prepaid incentives

 

 

1,412

 

 

 

1,634

 

Other non-operating loss (income)

 

 

1,752

 

 

 

(138

)

Equity-based compensation

 

 

9,515

 

 

 

6,635

 

IPO related expenses

 

 

7,795

 

 

 

11,244

 

(Income) from equity method investments in related party

 

 

(5,606

)

 

 

(1,995

)

Adjusted EBITDAC (1)

 

$

157,222

 

 

$

125,015

 

Net income margin

 

 

7.4

%

 

 

8.0

%

Adjusted EBITDAC margin

 

 

28.5

%

 

 

27.3

%

(1)

Adjustments made to Net income are described in the definition of Adjusted EBITDAC in “Non-GAAP Financial Measures and Key Performance Indicators.”

Reconciliation of Adjusted Net Income to Net Income

 

 

Three Months Ended

March 31,

 

(in thousands, except percentages)

 

2024

 

 

2023

 

Total revenue

 

$

552,046

 

 

$

457,599

 

Net income

 

$

40,677

 

 

$

36,457

 

Income tax expense

 

 

6,426

 

 

 

6,295

 

Amortization

 

 

27,988

 

 

 

25,185

 

Amortization of deferred debt issuance costs (1)

 

 

3,409

 

 

 

3,039

 

Change in contingent consideration

 

 

(65

)

 

 

714

 

Acquisition-related expense

 

 

8,437

 

 

 

3,190

 

Acquisition related long-term incentive compensation

 

 

(1,627

)

 

 

578

 

Restructuring and related expense

 

 

29,038

 

 

 

3,556

 

Amortization and expense related to discontinued prepaid incentives

 

 

1,412

 

 

 

1,634

 

Other non-operating loss (income)

 

 

1,752

 

 

 

(138

)

Equity-based compensation

 

 

9,515

 

 

 

6,635

 

IPO related expenses

 

 

7,795

 

 

 

11,244

 

(Income) from equity method investments in related party

 

 

(5,606

)

 

 

(1,995

)

Adjusted income before income taxes (2)

 

$

129,151

 

 

$

96,394

 

Adjusted tax expense (3)

 

 

(33,734

)

 

 

(24,609

)

Adjusted net income

 

$

95,417

 

 

$

71,785

 

Net income margin

 

 

7.4

%

 

 

8.0

%

Adjusted net income margin

 

 

17.3

%

 

 

15.7

%

(1)

Interest expense, net includes amortization of deferred debt issuance costs.

(2)

Adjustments made to Net income are described in the definition of Adjusted EBITDAC in “Non-GAAP Financial Measures and Key Performance Indicators.”

(3)

The Company is subject to United States federal income taxes, in addition to state, local, and foreign taxes, with respect to our allocable share of any net taxable income of the LLC. For the three months ended March 31, 2024 this calculation of adjusted tax expense is based on a federal statutory rate of 21% and a combined state income tax rate net of federal benefits of 5.12% on 100% of adjusted income before income taxes as if the Company owned 100% of the LLC. For the three months ended March 31, 2023, this calculation of adjusted tax expense is based on a federal statutory rate of 21% and a combined state income tax rate net of federal benefits of 4.53% on 100% of adjusted income before income taxes as if the Company owned 100% of the LLC.

Reconciliation of Adjusted Diluted Earnings per Share to Diluted Earnings per Share

 

 

Three Months Ended

March 31,

 

 

 

2024

 

 

2023

 

Earnings per share of Class A common stock – diluted

 

$

0.13

 

 

$

0.11

 

Less: Net income attributed to dilutive shares and substantively vested RSUs (1)

 

 

(0.07

)

 

 

(0.06

)

Plus: Impact of all LLC Common Units exchanged for Class A shares (2)

 

 

0.09

 

 

 

0.09

 

Plus: Adjustments to Adjusted net income (3)

 

 

0.20

 

 

 

0.13

 

Plus: Dilutive impact of unvested equity awards (4)

 

 

 

 

 

(0.01

)

Adjusted diluted earnings per share

 

$

0.35

 

 

$

0.26

 

 

 

 

 

 

 

 

(Share count in '000)

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding – diluted

 

 

269,922

 

 

 

266,978

 

Plus: Impact of all LLC Common Units exchanged for Class A shares (2)

 

 

 

 

 

 

Plus: Dilutive impact of unvested equity awards (4)

 

 

4,854

 

 

 

4,670

 

Adjusted diluted earnings per share diluted share count

 

 

274,776

 

 

 

271,648

 

(1)

Adjustment removes the impact of Net income attributed to dilutive awards and substantively vested RSUs to arrive at Net income attributable to Ryan Specialty Holdings, Inc. For the three months ended March 31, 2024 and 2023, this removes $17.7 million and $17.4 million of Net income, respectively, on 269.9 million and 267.0 million Weighted-average shares of Class A common stock outstanding - diluted, respectively. See “Note 10, Earnings Per Share” of the unaudited quarterly consolidated financial statements.

(2)

For comparability purposes, this calculation incorporates the Net income that would be distributable if all LLC Common Units (together with shares of Class B common stock) and vested Class C Incentive units were exchanged for shares of Class A common stock. For the three months ended March 31, 2024 and 2023, this includes $24.1 million and $23.3 million of Net income, respectively, on 269.9 million and 267.0 million Weighted-average shares of Class A common stock outstanding - diluted, respectively. For the three months ended March 31, 2024, 140.4 million weighted average outstanding LLC Common Units were considered dilutive and included in the 269.9 million Weighted-average shares of Class A common stock outstanding - diluted within Diluted EPS. For the three months ended March 31, 2023, 143.4 million weighted-average outstanding LLC Common Units were considered dilutive and included in the 267.0 million Weighted-average shares of Class A common stock outstanding - diluted within Diluted EPS. See “Note 10, Earnings Per Share” of the unaudited quarterly consolidated financial statements.

(3)

Adjustments to Adjusted net income are described in the footnotes of the reconciliation of Adjusted net income to Net income in “Adjusted Net Income and Adjusted Net Income Margin” on 269.9 million and 267.0 million Weighted-average shares of Class A common stock outstanding - diluted for the three months ended March 31, 2024 and 2023, respectively.

(4)

For comparability purposes and to be consistent with the treatment of the adjustments to arrive at Adjusted net income, the dilutive effect of unvested equity awards is calculated using the treasury stock method as if the weighted-average unrecognized cost associated with the awards was $0 over the period, less any unvested equity awards determined to be dilutive within the Diluted EPS calculation disclosed in “Note 10, Earnings Per Share” of the unaudited quarterly consolidated financial statements. For the three months ended March 31, 2024 and 2023, 4.9 million and 4.7 million shares were added to the calculation, respectively.

Historical Presentation of Organic Revenue Growth Applying Revised Calculation Methodology

 

 

Year Ended

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Year Ended

 

(in thousands, except percentages)

 

Dec. 31, 2019

 

 

Mar. 31, 2020

 

 

Jun. 30, 2020

 

 

Jun. 30, 2020

 

 

Sep. 30, 2020

 

 

Sep. 30, 2020

 

 

Dec. 31, 2020

 

 

Dec. 31, 2020

 

Current period Net commissions and fees revenue

 

$

758,447

 

 

$

207,085

 

 

$

246,049

 

 

$

453,134

 

 

$

236,698

 

 

$

689,832

 

 

$

326,852

 

 

$

1,016,684

 

Less: Current period contingent commissions

 

 

(16,398

)

 

 

(9,887

)

 

 

(4,358

)

 

 

(14,245

)

 

 

(2,400

)

 

 

(16,645

)

 

 

(3,262

)

 

 

(19,907

)

Net Commissions and fees revenue

excluding contingent commissions

 

$

742,049

 

 

$

197,198

 

 

$

241,691

 

 

$

438,889

 

 

$

234,298

 

 

$

673,187

 

 

$

323,591

 

 

$

996,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior period Net commissions and fees revenue

 

$

606,961

 

 

$

147,991

 

 

$

200,541

 

 

$

348,532

 

 

$

191,517

 

 

$

540,049

 

 

$

218,398

 

 

$

758,447

 

Less: Prior year contingent commissions

 

 

(11,203

)

 

 

(7,559

)

 

 

(3,964

)

 

 

(11,523

)

 

 

(2,157

)

 

 

(13,680

)

 

 

(2,718

)

 

 

(16,398

)

Prior period Net commissions and fees revenue

excluding contingent commissions

 

$

595,758

 

 

$

140,432

 

 

$

196,577

 

 

$

337,009

 

 

$

189,360

 

 

$

526,369

 

 

$

215,680

 

 

$

742,049

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Net commissions and fees revenue

excluding contingent commissions

 

$

146,291

 

 

$

56,765

 

 

$

45,114

 

 

$

101,880

 

 

$

44,938

 

 

$

146,818

 

 

$

107,911

 

 

$

254,729

 

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions

 

 

(40,899

)

 

 

(11,846

)

 

 

(8,179

)

 

 

(20,025

)

 

 

(18,205

)

 

 

(38,231

)

 

 

(57,664

)

 

 

(96,042

)

Impact of change in foreign exchange rates

 

 

1,336

 

 

 

80

 

 

 

583

 

 

 

662

 

 

 

(405

)

 

 

258

 

 

 

(2,398

)

 

 

(1,992

)

Organic revenue growth (Non-GAAP)

 

$

106,728

 

 

$

44,999

 

 

$

37,518

 

 

$

82,517

 

 

$

26,328

 

 

$

108,845

 

 

$

47,850

 

 

$

156,695

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net commissions and fees revenue growth rate (GAAP)

 

 

25.0

%

 

 

39.9

%

 

 

22.7

%

 

 

30.0

%

 

 

23.6

%

 

 

27.7

%

 

 

49.7

%

 

 

34.0

%

Less: Impact of contingent commissions (1)

 

 

(0.4

)

 

 

0.5

 

 

 

0.2

 

 

 

0.2

 

 

 

0.1

 

 

 

0.2

 

 

 

0.3

 

 

 

0.3

 

Net commissions and fees revenue

excluding contingent commissions growth rate (2)

 

 

24.6

%

 

 

40.4

%

 

 

22.9

%

 

 

30.2

%

 

 

23.7

%

 

 

27.9

%

 

 

50.0

%

 

 

34.3

%

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions (3)

 

 

(6.9

)

 

 

(8.4

)

 

 

(4.2

)

 

 

(5.9

)

 

 

(9.6

)

 

 

(7.3

)

 

 

(26.7

)

 

 

(12.9

)

Impact of change in foreign exchange rates (4)

 

 

0.2

 

 

 

0.1

 

 

 

0.3

 

 

 

0.2

 

 

 

(0.2

)

 

 

 

 

 

(1.1

)

 

 

(0.3

)

Organic Revenue Growth Rate (Non-GAAP)

 

 

17.9

%

 

 

32.1

%

 

 

19.0

%

 

 

24.5

%

 

 

13.9

%

 

 

20.6

%

 

 

22.2

%

 

 

21.1

%

(1)

Calculated by subtracting Net commissions and fees revenue growth rate from net commissions and fees revenue excluding contingent commissions growth rate.

(2)

Calculated by dividing the change in Total net commissions & fees revenue excluding contingent commissions by prior year net commissions and fees excluding contingent commissions.

(3)

Calculated by taking the mergers and acquisitions net commissions and fees revenue excluding contingent commissions, representing the first 12 months of net commissions and fees revenue generated from acquisitions, divided by prior period net commissions and fees revenue excluding contingent commissions.

(4)

Calculated by taking the change in foreign exchange rates divided by prior period net commissions and fees revenue excluding contingent commissions.

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Year Ended

 

(in thousands, except percentages)

 

Mar. 31, 2021

 

 

Jun. 30, 2021

 

 

Jun. 30, 2021

 

 

Sep. 30, 2021

 

 

Sep. 30, 2021

 

 

Dec. 31, 2021

 

 

Dec. 31, 2021

 

Current period Net commissions and fees revenue

 

$

311,344

 

 

$

389,846

 

 

$

701,190

 

 

$

352,610

 

 

$

1,053,800

 

 

$

378,379

 

 

$

1,432,179

 

Less: Current period contingent commissions

 

 

(12,607

)

 

 

(2,651

)

 

 

(15,258

)

 

 

(4,816

)

 

 

(20,074

)

 

 

(2,921

)

 

 

(22,995

)

Net Commissions and fees revenue

excluding contingent commissions

 

$

298,737

 

 

$

387,195

 

 

$

685,932

 

 

$

347,793

 

 

$

1,033,726

 

 

$

375,457

 

 

$

1,409,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior period Net commissions and fees revenue

 

$

207,085

 

 

$

246,049

 

 

$

453,134

 

 

$

236,698

 

 

$

689,832

 

 

$

326,852

 

 

$

1,016,684

 

Less: Prior year contingent commissions

 

 

(9,887

)

 

 

(4,358

)

 

 

(14,245

)

 

 

(2,400

)

 

 

(16,645

)

 

 

(3,262

)

 

 

(19,907

)

Prior period Net commissions and fees revenue

excluding contingent commissions

 

$

197,198

 

 

$

241,691

 

 

$

438,889

 

 

$

234,298

 

 

$

673,187

 

 

$

323,591

 

 

$

996,778

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Net commissions and fees revenue

excluding contingent commissions

 

$

101,539

 

 

$

145,504

 

 

$

247,043

 

 

$

113,495

 

 

$

360,539

 

 

$

51,867

 

 

$

412,405

 

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions

 

 

(62,947

)

 

 

(74,296

)

 

 

(137,233

)

 

 

(44,412

)

 

 

(181,693

)

 

 

(1,730

)

 

 

(183,409

)

Impact of change in foreign exchange rates

 

 

(354

)

 

 

(981

)

 

 

(1,290

)

 

 

(426

)

 

 

(1,648

)

 

 

125

 

 

 

(1,412

)

Organic revenue growth (Non-GAAP)

 

$

38,238

 

 

$

70,227

 

 

$

108,520

 

 

$

68,657

 

 

$

177,198

 

 

$

50,261

 

 

$

227,585

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net commissions and fees revenue growth rate (GAAP)

 

 

50.3

%

 

 

58.4

%

 

 

54.7

%

 

 

49.0

%

 

 

52.8

%

 

 

15.8

%

 

 

40.9

%

Less: Impact of contingent commissions (1)

 

 

1.2

 

 

 

1.8

 

 

 

1.6

 

 

 

(0.6

)

 

 

0.8

 

 

 

0.2

 

 

 

0.5

 

Net commissions and fees revenue

excluding contingent commissions growth rate (2)

 

 

51.5

%

 

 

60.2

%

 

 

56.3

%

 

 

48.4

%

 

 

53.6

%

 

 

16.0

%

 

 

41.4

%

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions (3)

 

 

(31.9

)

 

 

(30.7

)

 

 

(31.3

)

 

 

(19.0

)

 

 

(27.0

)

 

 

(0.5

)

 

 

(18.4

)

Impact of change in foreign exchange rates (4)

 

 

(0.2

)

 

 

(0.4

)

 

 

(0.3

)

 

 

(0.2

)

 

 

(0.2

)

 

 

 

 

 

(0.1

)

Organic Revenue Growth Rate (Non-GAAP)

 

 

19.4

%

 

 

29.1

%

 

 

24.7

%

 

 

29.2

%

 

 

26.4

%

 

 

15.5

%

 

 

22.9

%

(1)

Calculated by subtracting Net commissions and fees revenue growth rate from net commissions and fees revenue excluding contingent commissions growth rate.

(2)

Calculated by dividing the change in Total net commissions & fees revenue excluding contingent commissions by prior year net commissions and fees excluding contingent commissions.

(3)

Calculated by taking the mergers and acquisitions net commissions and fees revenue excluding contingent commissions, representing the first 12 months of net commissions and fees revenue generated from acquisitions, divided by prior period net commissions and fees revenue excluding contingent commissions.

(4)

Calculated by taking the change in foreign exchange rates divided by prior period net commissions and fees revenue excluding contingent commissions.

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Year Ended

 

(in thousands, except percentages)

 

Mar. 31, 2022

 

 

Jun. 30, 2022

 

 

Jun. 30, 2022

 

 

Sep. 30, 2022

 

 

Sep. 30, 2022

 

 

Dec. 31, 2022

 

 

Dec. 31, 2022

 

Current period Net commissions and fees revenue

 

$

386,681

 

 

$

490,227

 

 

$

876,908

 

 

$

407,551

 

 

$

1,284,459

 

 

$

427,402

 

 

$

1,711,861

 

Less: Current period contingent commissions

 

 

(15,209

)

 

 

(6,730

)

 

 

(21,939

)

 

 

(3,039

)

 

 

(24,978

)

 

 

(5,810

)

 

 

(30,788

)

Net Commissions and fees revenue

excluding contingent commissions

 

$

371,472

 

 

$

483,498

 

 

$

854,970

 

 

$

404,512

 

 

$

1,259,481

 

 

$

421,592

 

 

$

1,681,073

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior period Net commissions and fees revenue

 

$

311,344

 

 

$

389,846

 

 

$

701,190

 

 

$

352,610

 

 

$

1,053,800

 

 

$

378,379

 

 

$

1,432,179

 

Less: Prior year contingent commissions

 

 

(12,607

)

 

 

(2,651

)

 

 

(15,258

)

 

 

(4,816

)

 

 

(20,074

)

 

 

(2,921

)

 

 

(22,995

)

Prior period Net commissions and fees revenue

excluding contingent commissions

 

$

298,737

 

 

$

387,195

 

 

$

685,932

 

 

$

347,793

 

 

$

1,033,726

 

 

$

375,457

 

 

$

1,409,183

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Net commissions and fees revenue

excluding contingent commissions

 

$

72,735

 

 

$

96,302

 

 

$

169,037

 

 

$

56,718

 

 

$

225,755

 

 

$

46,135

 

 

$

271,890

 

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions

 

 

(10,555

)

 

 

(11,041

)

 

 

(21,595

)

 

 

(9,882

)

 

 

(31,502

)

 

 

(8,490

)

 

 

(39,992

)

Impact of change in foreign exchange rates

 

 

477

 

 

 

1,256

 

 

 

1,652

 

 

 

1,539

 

 

 

3,217

 

 

 

1,410

 

 

 

4,561

 

Organic revenue growth (Non-GAAP)

 

$

62,657

 

 

$

86,517

 

 

$

149,094

 

 

$

48,375

 

 

$

197,470

 

 

$

39,054

 

 

$

236,459

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net commissions and fees revenue growth rate (GAAP)

 

 

24.2

%

 

 

25.7

%

 

 

25.1

%

 

 

15.6

%

 

 

21.9

%

 

 

13.0

%

 

 

19.5

%

Less: Impact of contingent commissions (1)

 

 

0.1

 

 

 

(0.8

)

 

 

(0.5

)

 

 

0.7

 

 

 

(0.1

)

 

 

(0.7

)

 

 

(0.2

)

Net commissions and fees revenue

excluding contingent commissions growth rate (2)

 

 

24.3

%

 

 

24.9

%

 

 

24.6

%

 

 

16.3

%

 

 

21.8

%

 

 

12.3

%

 

 

19.3

%

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions (3)

 

 

(3.5

)

 

 

(2.9

)

 

 

(3.1

)

 

 

(2.8

)

 

 

(3.0

)

 

 

(2.3

)

 

 

(2.8

)

Impact of change in foreign exchange rates (4)

 

 

0.2

 

 

 

0.3

 

 

 

0.2

 

 

 

0.4

 

 

 

0.3

 

 

 

0.4

 

 

 

0.3

 

Organic Revenue Growth Rate (Non-GAAP)

 

 

21.0

%

 

 

22.3

%

 

 

21.7

%

 

 

13.9

%

 

 

19.1

%

 

 

10.4

%

 

 

16.8

%

(1)

Calculated by subtracting Net commissions and fees revenue growth rate from net commissions and fees revenue excluding contingent commissions growth rate.

(2)

Calculated by dividing the change in Total net commissions & fees revenue excluding contingent commissions by prior year net commissions and fees excluding contingent commissions.

(3)

Calculated by taking the mergers and acquisitions net commissions and fees revenue excluding contingent commissions, representing the first 12 months of net commissions and fees revenue generated from acquisitions, divided by prior period net commissions and fees revenue excluding contingent commissions.

(4)

Calculated by taking the change in foreign exchange rates divided by prior period net commissions and fees revenue excluding contingent commissions.

 

 

Three Months Ended

 

 

Three Months Ended

 

 

Six Months Ended

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

Three Months Ended

 

 

Year Ended

 

 

Three Months Ended

 

(in thousands, except percentages)

 

Mar. 31, 2023

 

 

Jun. 30, 2023

 

 

Jun. 30, 2023

 

 

Sep. 30, 2023

 

 

Sep. 30, 2023

 

 

Dec. 31, 2023

 

 

Dec. 31, 2023

 

 

Mar. 31, 2024

 

Current period Net commissions and fees revenue

 

$

447,513

 

 

$

573,020

 

 

$

1,020,533

 

 

$

487,345

 

 

$

1,507,878

 

 

$

518,718

 

 

$

2,026,596

 

 

$

537,887

 

Less: Current period contingent commissions

 

 

(21,635

)

 

 

(4,502

)

 

 

(26,136

)

 

 

(4,487

)

 

 

(30,624

)

 

 

(8,404

)

 

 

(39,028

)

 

 

(24,503

)

Net Commissions and fees revenue

excluding contingent commissions

 

$

425,878

 

 

$

568,518

 

 

$

994,396

 

 

$

482,858

 

 

$

1,477,254

 

 

$

510,313

 

 

$

1,987,568

 

 

$

513,385

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior period Net commissions and fees revenue

 

$

386,681

 

 

$

490,227

 

 

$

876,908

 

 

$

407,551

 

 

$

1,284,459

 

 

$

427,402

 

 

$

1,711,861

 

 

$

447,513

 

Less: Prior year contingent commissions

 

 

(15,209

)

 

 

(6,730

)

 

 

(21,939

)

 

 

(3,039

)

 

 

(24,978

)

 

 

(5,810

)

 

 

(30,788

)

 

 

(21,635

)

Prior period Net commissions and fees revenue

excluding contingent commissions

 

$

371,472

 

 

$

483,498

 

 

$

854,970

 

 

$

404,512

 

 

$

1,259,481

 

 

$

421,592

 

 

$

1,681,073

 

 

$

425,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in Net commissions and fees revenue

excluding contingent commissions

 

$

54,406

 

 

$

85,021

 

 

$

139,427

 

 

$

78,346

 

 

$

217,773

 

 

$

88,721

 

 

$

306,494

 

 

$

87,507

 

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions

 

 

(5,373

)

 

 

(6,053

)

 

 

(11,486

)

 

 

(16,980

)

 

 

(28,563

)

 

 

(18,190

)

 

 

(46,496

)

 

 

(28,539

)

Impact of change in foreign exchange rates

 

 

797

 

 

 

13

 

 

 

852

 

 

 

(739

)

 

 

350

 

 

 

(922

)

 

 

(479

)

 

 

(323

)

Organic revenue growth (Non-GAAP)

 

$

49,830

 

 

$

78,981

 

 

$

128,793

 

 

$

60,628

 

 

$

189,560

 

 

$

69,609

 

 

$

259,519

 

 

$

58,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net commissions and fees revenue growth rate (GAAP)

 

 

15.7

%

 

 

16.9

%

 

 

16.4

%

 

 

19.6

%

 

 

17.4

%

 

 

21.4

%

 

 

18.4

%

 

 

20.2

%

Less: Impact of contingent commissions (1)

 

 

(1.1

)

 

 

0.7

 

 

 

(0.1

)

 

 

(0.2

)

 

 

(0.1

)

 

 

(0.4

)

 

 

(0.2

)

 

 

0.3

 

Net commissions and fees revenue

excluding contingent commissions growth rate (2)

 

 

14.6

%

 

 

17.6

%

 

 

16.3

%

 

 

19.4

%

 

 

17.3

%

 

 

21.0

%

 

 

18.2

%

 

 

20.5

%

Less: Mergers and acquisitions Net commissions and fees revenue excluding contingent commissions (3)

 

 

(1.4

)

 

 

(1.3

)

 

 

(1.3

)

 

 

(4.2

)

 

 

(2.3

)

 

 

(4.3

)

 

 

(2.8

)

 

 

(6.7

)

Impact of change in foreign exchange rates (4)

 

 

0.2

 

 

 

 

 

 

0.1

 

 

 

(0.2

)

 

 

 

 

 

(0.2

)

 

 

 

 

 

(0.1

)

Organic Revenue Growth Rate (Non-GAAP)

 

 

13.4

%

 

 

16.3

%

 

 

15.1

%

 

 

15.0

%

 

 

15.0

%

 

 

16.5

%

 

 

15.4

%

 

 

13.7

%

(1)

Calculated by subtracting Net commissions and fees revenue growth rate from net commissions and fees revenue excluding contingent commissions growth rate.

(2)

Calculated by dividing the change in Total net commissions & fees revenue excluding contingent commissions by prior year net commissions and fees excluding contingent commissions.

(3)

Calculated by taking the mergers and acquisitions net commissions and fees revenue excluding contingent commissions, representing the first 12 months of net commissions and fees revenue generated from acquisitions, divided by prior period net commissions and fees revenue excluding contingent commissions.

(4)

Calculated by taking the change in foreign exchange rates divided by prior period net commissions and fees revenue excluding contingent commissions.

 

Contacts

Investor Relations

Nicholas Mezick

Director, Investor Relations

Ryan Specialty

IR@ryanspecialty.com

Phone: (312) 784-6152



Media Relations

Alice Phillips Topping

SVP, Chief Marketing & Communications Officer

Ryan Specialty

Alice.Topping@ryanspecialty.com

Phone: (312) 635-5976

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