RYAN Ryan Specialty Holdings Inc

- Total Revenue grew 24.5% year-over-year to $663.5 million -

- Organic Revenue Growth Rate* of 11.0% year-over-year -

- Net Income of $42.6 million, or $0.10 per diluted share -

- Adjusted EBITDAC* grew 36.2% year-over-year to $216.0 million -

- Adjusted Net Income increased 28.9% year-over-year to $123.3 million, or $0.45 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 fourth quarter ended December 31, 2024.

Fourth Quarter 2024 Highlights

• Revenue grew 24.5% year-over-year to $663.5 million, compared to $532.9 million in the prior-year period
• Organic Revenue Growth Rate* was 11.0% for the quarter, compared to 16.5% in the prior-year period
• Net Income decreased 27.3% year-over-year to $42.6 million, compared to $58.5 million in the prior-year period. Diluted Earnings per Share was $0.10.
• Adjusted EBITDAC* increased 36.2% to $216.0 million, compared to $158.6 million in the prior-year period
• Adjusted EBITDAC Margin* of 32.6%, compared to 29.8% in the prior-year period
• Adjusted Net Income* increased 28.9% to $123.3 million, compared to $95.7 million in the prior-year period
• Adjusted Diluted Earnings per Share* increased 28.6% to $0.45, compared to $0.35 in the prior-year period
• Capital return to shareholders and LLC unit holders was $19.2 million of regular dividends and distributions

Full Year 2024 Highlights

• Revenue grew 21.1% year-over-year to $2,515.7 million compared to $2,077.5 million in the prior-year
• Organic Revenue Growth Rate* was 12.8% for the year, compared to 15.4% in the prior-year
• Net Income increased 18.2% year-over-year to $229.9 million, compared to $194.5 million in the prior-year. Diluted Earnings per Share was $0.71.
• Adjusted EBITDAC* increased 29.8% to $811.2 million, compared to $624.7 million in the prior-year
• Adjusted EBITDAC Margin* of 32.2%, compared to 30.1% in the prior-year
• Adjusted Net Income* increased 31.4% to $493.5 million, compared to $375.6 million in the prior-year
• Adjusted Diluted Earnings per Share* increased 29.7% to $1.79, compared to $1.38 in the prior-year
• Capital return to shareholders and LLC unit holders was $102.4 million, consisting of $27.1 million of special dividends and $75.3 million of regular dividends and distributions

“It was another outstanding year for Ryan Specialty,” said Patrick G. Ryan, Founder and Executive Chairman of Ryan Specialty. “For the year, we grew total revenue 21%, supported by organic growth of 12.8% and strong contributions from M&A, which added 7% to our top line. This marked our sixth consecutive year growing total revenue 20% or more. We expanded Adjusted EBITDAC margin 210 basis points year-over-year and grew Adjusted EPS by 30%. Along with our strong results, we executed our M&A strategy by closing 7 high quality acquisitions, which will add over $265 million in annualized revenue and further distinguish Ryan Specialty as an industry-leading international insurance services firm.”

“We produced excellent results in 2024, driven by significant new business growth while maintaining strong renewal retention,” added Tim Turner, Chief Executive Officer of Ryan Specialty. “Coupling these results with significant M&A not only increased our market share but greatly expanded our total addressable market. We could not be more proud of the outstanding success we had in executing our M&A strategy, as we had our largest year yet in terms of acquired revenue. We’ve carried that momentum into 2025 with the completion of the highly strategic acquisition of Velocity Risk Underwriters earlier this month. These acquisitions support our thesis of aligning specialized underwriting products with our distribution expertise across industries, expanding our capabilities, and offering clients diverse innovative solutions. These efforts reflect the resolve of our 5,200 talented teammates to execute with distinction and to provide best-in-class service to our clients and trading partners. We believe we remain well positioned to deliver sustainable and differentiated growth in 2025 and over the long term, and to create additional value for our shareholders.”

Summary of Fourth Quarter and Full Year 2024 Results

 

Three Months Ended December 31,

Change

Year Ended December 31,

Change

(in thousands, except percentages and per share data)

2024

2023

$

%

2024

2023

$

%

GAAP financial measures

 

 

 

 

 

 

 

 

Total revenue

$

663,529

 

$

532,863

 

$

130,666

 

24.5

%

$

2,515,710

 

$

2,077,549

 

$

438,161

21.1

%

Net commissions and fees

$

649,407

 

$

518,718

 

 

130,689

 

25.2

 

 

2,455,671

 

 

2,026,596

 

 

429,075

21.2

 

Compensation and benefits

$

410,252

 

$

331,735

 

 

78,517

 

23.7

 

 

1,591,077

 

 

1,321,029

 

 

270,048

20.4

 

General and administrative

$

104,532

 

$

73,586

 

 

30,946

 

42.1

 

 

352,050

 

 

276,181

 

 

75,869

27.5

 

Total operating expenses

$

554,211

 

$

436,526

 

 

117,685

 

27.0

 

 

2,087,898

 

 

1,718,468

 

 

369,430

21.5

 

Operating income

$

109,318

 

$

96,337

 

 

12,981

 

13.5

 

 

427,812

 

 

359,081

 

 

68,731

19.1

 

Net income

$

42,555

 

$

58,503

 

 

(15,948

)

(27.3

)

 

229,913

 

 

194,480

 

 

35,433

18.2

 

Net income attributable to Ryan Specialty Holdings, Inc.

$

13,754

 

$

22,846

 

 

(9,092

)

(39.8

)

 

94,665

 

 

61,037

 

 

33,628

55.1

 

Compensation and benefits expense ratio (1)

 

61.8

%

 

62.3

%

 

 

 

63.2

%

 

63.6

%

 

 

General and administrative expense ratio (2)

 

15.8

%

 

13.8

%

 

 

 

14.0

%

 

13.3

%

 

 

Net income margin (3)

 

6.4

%

 

11.0

%

 

 

 

9.1

%

 

9.4

%

 

 

Earnings per share (4)

$

0.11

 

$

0.19

 

 

 

$

0.78

 

$

0.53

 

 

 

Diluted earnings per share (4)

$

0.10

 

$

0.18

 

 

 

$

0.71

 

$

0.52

 

 

 

Non-GAAP financial measures*

 

 

 

 

 

 

 

 

Organic revenue growth rate

 

11.0

%

 

16.5

%

 

 

 

12.8

%

 

15.4

%

 

 

Adjusted compensation and benefits expense

$

369,250

 

$

310,416

 

$

58,834

 

19.0

%

$

1,426,674

 

$

1,222,342

 

$

204,332

16.7

%

Adjusted compensation and benefits expense ratio

 

55.6

%

 

58.3

%

 

 

 

56.7

%

 

58.8

%

 

 

Adjusted general and administrative expense

$

78,230

 

$

63,862

 

$

14,368

 

22.5

%

$

277,813

 

$

230,467

 

$

47,346

20.5

%

Adjusted general and administrative expense ratio

 

11.8

%

 

12.0

%

 

 

 

11.0

%

 

11.1

%

 

 

Adjusted EBITDAC

$

216,049

 

$

158,585

 

$

57,464

 

36.2

%

$

811,223

 

$

624,740

 

$

186,483

29.8

%

Adjusted EBITDAC margin

 

32.6

%

 

29.8

%

 

 

 

32.2

%

 

30.1

%

 

 

Adjusted net income

$

123,317

 

$

95,672

 

$

27,645

 

28.9

%

$

493,521

 

$

375,582

 

$

117,939

31.4

%

Adjusted net income margin

 

18.6

%

 

18.0

%

 

 

 

19.6

%

 

18.1

%

 

 

Adjusted diluted earnings per share

$

0.45

 

$

0.35

 

 

 

$

1.79

 

$

1.38

 

 

 

*

 

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 12, Earnings Per Share” of the annual consolidated financial statements.

Fourth Quarter 2024 Review*

Total revenue for the fourth quarter of 2024 was $663.5 million, an increase of 24.5% compared to $532.9 million in the prior-year period. This increase was primarily due to continued solid Organic revenue growth of 11.0%, 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 December 31, 2024, higher contingent commissions, and the impact of foreign exchange rates. We experienced growth across the majority of our property and casualty lines.

Total operating expenses for the fourth quarter of 2024 were $554.2 million, a 27.0% increase compared to the prior-year period. This increase was primarily due to higher Compensation and benefits expense resulting from higher compensation attributable to revenue growth, an increase in Acquisition related long-term incentive compensation, higher Acquisition-related expenses, and higher Amortization from recent M&A activity partially offset by savings associated with ACCELERATE 2025, as well as lower Change in contingent consideration due to a downward adjustment on the US Assure earn-out. General and administrative expense also increased compared to the prior-year period to accommodate revenue growth and an increase in Acquisition-related expense.

Net income for the fourth quarter of 2024 decreased 27.3% to $42.6 million, compared to $58.5 million in the prior-year period. The decrease was due to higher Income tax expense and higher Interest expense, net partially offset by strong revenue growth.

Adjusted EBITDAC grew 36.2% to $216.0 million from $158.6 million in the prior-year period. Adjusted EBITDAC margin for the quarter was 32.6%, compared to 29.8% in the prior-year period. The increase in Adjusted EBITDAC was driven primarily by solid revenue growth, partially offset by higher Adjusted compensation and benefits expense, as well as higher Adjusted general and administrative expense.

Adjusted net income for the fourth quarter of 2024 increased 28.9% to $123.3 million, compared $95.7 million in the prior-year period. Adjusted net income margin was 18.6%, compared to 18.0% in the prior-year period. Adjusted diluted earnings per share for the fourth quarter of 2024 increased 28.6% to $0.45, compared to $0.35 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.

Liquidity and Financial Condition

As of December 31, 2024, the Company had Cash and cash equivalents of $540.2 million and outstanding debt principal of $3.3 billion.

Quarterly Dividend

On February 20, 2025, the Company's board of directors (the "Board") declared and increased the Company's regular quarterly dividend by 9.1% to $0.12 per share on the outstanding Class A common stock. The regular quarterly dividend will be payable on March 18, 2025 to stockholders of record as of the close of business on March 4, 2025. A portion of the dividend, $0.05 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 holders of the LLC Common Units (as defined below).

Full Year 2025 Outlook*

The Company is initiating its full year 2025 outlook for Organic Revenue Growth Rate and Adjusted EBITDAC Margin as follows:

• Organic Revenue Growth Rate guidance for full year 2025 to be between 11.0% – 13.0%
• Adjusted EBITDAC Margin guidance for full year 2025 to be between 32.5% – 33.5%

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 and Adjusted EBITDAC margin, see “Non-GAAP Financial Measures and Key Performance Indicators” below.

Fourth Quarter 2024 and Full Year 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 December 31,

 

Period over Period

(in thousands, except percentages)

2024

 

% of total

 

2023

 

% of total

 

Change

Wholesale Brokerage

$

374,837

 

57.7

%

 

$

342,718

 

66.1

%

 

$

32,119

 

9.4

%

Binding Authority

 

74,617

 

11.5

 

 

 

67,414

 

13.0

 

 

 

7,203

 

10.7

 

Underwriting Management

 

199,953

 

30.8

 

 

 

108,586

 

20.9

 

 

 

91,367

 

84.1

 

Total Net commissions and fees

$

649,407

 

 

 

$

518,718

 

 

 

$

130,689

 

25.2

%

 

Year Ended December 31,

 

Period over Period

(in thousands, except percentages)

2024

 

% of total

 

2023

 

% of total

 

Change

Wholesale Brokerage

$

1,489,077

 

60.6

%

 

$

1,319,056

 

65.1

%

 

$

170,021

 

12.9

%

Binding Authority

 

320,379

 

13.0

 

 

 

275,961

 

13.6

 

 

 

44,418

 

16.1

 

Underwriting Management

 

646,215

 

26.3

 

 

 

431,579

 

21.3

 

 

 

214,636

 

49.7

 

Total Net commissions and fees

$

2,455,671

 

 

 

$

2,026,596

 

 

 

$

429,075

 

21.2

%

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

 

Three Months Ended December 31,

 

Period over Period

(in thousands, except percentages)

2024

 

% of total

 

2023

 

% of total

 

Change

Net commissions and policy fees

$

603,603

 

92.9

%

 

$

498,612

 

96.1

%

 

$

104,991

 

21.1

%

Supplemental and contingent commissions

 

30,224

 

4.7

 

 

 

10,094

 

1.9

 

 

 

20,130

 

199.4

 

Loss mitigation and other fees

 

15,580

 

2.4

 

 

 

10,012

 

1.9

 

 

 

5,568

 

55.6

 

Total Net commissions and fees

$

649,407

 

 

 

$

518,718

 

 

 

$

130,689

 

25.2

%

 

Year Ended December 31,

 

Period over Period

(in thousands, except percentages)

2024

 

% of total

 

2023

 

% of total

 

Change

Net commissions and policy fees

$

2,310,384

 

94.1

%

 

$

1,935,851

 

95.5

%

 

$

374,533

 

19.3

%

Supplemental and contingent commissions

 

88,842

 

3.6

 

 

 

56,375

 

2.8

 

 

 

32,467

 

57.6

 

Loss mitigation and other fees

 

56,445

 

2.3

 

 

 

34,370

 

1.7

 

 

 

22,075

 

64.2

 

Total Net commissions and fees

$

2,455,671

 

 

 

$

2,026,596

 

 

 

$

429,075

 

21.2

%

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 2025 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: Organic revenue growth rate represents the percentage change in Net commissions and fees, as compared to the same period for the year prior, adjusted to eliminate revenue attributable to acquisitions for the first twelve months of Ryan Specialty's ownership, and other items such as contingent commissions and the impact of changes in foreign exchange rates.

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. For the year ended December 31, 2024, Acquisition-related expense included a $4.5 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 5, Restructuring” of the annual 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 is composed of charges related to discontinued prepaid incentive programs. For the three months ended December 31, 2024, Other non-operating loss (income) was composed of $3.2 million of income related to a decrease in our blended state tax rates and foreign tax credit impact on the TRA remeasurement, and $0.1 million of sublease income offset by $0.2 million of TRA contractual interest and related expense. For the three months ended December 31, 2023, Other non-operating loss (income) included a $10.4 million charge related to the change in the TRA liability caused by a change in our blended state tax rates. For the twelve months ended December 31, 2024, Other non-operating loss (income) consisted of $18.1 million of expense related to term loan modifications and $1.3 million of TRA contractual interest and related expense offset by $3.4 million of income related to a decrease in our blended state tax rates and foreign tax credit impact on the TRA remeasurement and $0.5 million of sublease income. For the twelve months ended December 31, 2023, Other non-operating loss (income) included $10.4 million charge related to the change in the TRA liability caused by a change in our blended state tax rates. Equity-based compensation reflects non-cash equity-based expense. For the twelve months ended December 31, 2024, Equity-based compensation included $4.6 million of expense associated with the removal of equity transfer restrictions for an executive officer of the Company. Initial Public Offering (the "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 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.

Credit Adjusted EBITDAC: Credit Adjusted EBITDAC is defined as Adjusted EBITDAC as further adjusted without duplication for: acquired EBITDAC from the beginning of the applicable twelve month reference period through the acquisition close date, certain annualized run rate expected cost savings and initiatives, and certain other adjustments as permitted in calculating leverage ratios under our debt agreements. The Company presents Credit Adjusted EBITDAC as an additional measure of liquidity and leverage. The calculation of Credit Adjusted EBITDAC pursuant to our debt agreements permits certain estimates and assumptions that may differ from actual results.

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 2025 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 December 31,

 

Year Ended December 31,

(in thousands, except percentages and per share data)

2024

 

2023

 

2024

 

2023

Revenue

 

 

 

 

 

 

 

Net commissions and fees

$

649,407

 

 

$

518,718

 

 

$

2,455,671

 

 

$

2,026,596

 

Fiduciary investment income

 

14,122

 

 

 

14,145

 

 

 

60,039

 

 

 

50,953

 

Total revenue

$

663,529

 

 

$

532,863

 

 

$

2,515,710

 

 

$

2,077,549

 

Expenses

 

 

 

 

 

 

 

Compensation and benefits

 

410,252

 

 

 

331,735

 

 

 

1,591,077

 

 

 

1,321,029

 

General and administrative

 

104,532

 

 

 

73,586

 

 

 

352,050

 

 

 

276,181

 

Amortization

 

60,134

 

 

 

27,674

 

 

 

157,845

 

 

 

106,799

 

Depreciation

 

2,965

 

 

 

2,468

 

 

 

9,785

 

 

 

9,038

 

Change in contingent consideration

 

(23,672

)

 

 

1,063

 

 

 

(22,859

)

 

 

5,421

 

Total operating expenses

$

554,211

 

 

$

436,526

 

 

$

2,087,898

 

 

$

1,718,468

 

Operating income

$

109,318

 

 

$

96,337

 

 

$

427,812

 

 

$

359,081

 

Interest expense, net

 

48,532

 

 

 

29,667

 

 

 

158,448

 

 

 

119,507

 

(Income) from equity method investment in related party

 

(4,721

)

 

 

(2,849

)

 

 

(18,231

)

 

 

(8,731

)

Other non-operating loss (income)

 

(3,534

)

 

 

10,343

 

 

 

15,041

 

 

 

10,380

 

Income before income taxes

$

69,041

 

 

$

59,176

 

 

$

272,554

 

 

$

237,925

 

Income tax expense

 

26,486

 

 

 

673

 

 

 

42,641

 

 

 

43,445

 

Net income

$

42,555

 

 

$

58,503

 

 

$

229,913

 

 

$

194,480

 

GAAP financial measures

 

 

 

 

 

 

 

Revenue

$

663,529

 

 

$

532,863

 

 

$

2,515,710

 

 

$

2,077,549

 

Compensation and benefits

 

410,252

 

 

 

331,735

 

 

 

1,591,077

 

 

 

1,321,029

 

General and administrative

 

104,532

 

 

 

73,586

 

 

 

352,050

 

 

 

276,181

 

Net income

 

42,555

 

 

 

58,503

 

 

 

229,913

 

 

 

194,480

 

Total revenue growth rate

 

24.5

%

 

 

22.5

%

 

 

21.1

%

 

 

20.4

%

Compensation and benefits expense ratio (1)

 

61.8

%

 

 

62.3

%

 

 

63.2

%

 

 

63.6

%

General and administrative expense ratio (2)

 

15.8

%

 

 

13.8

%

 

 

14.0

%

 

 

13.3

%

Net income margin (3)

 

6.4

%

 

 

11.0

%

 

 

9.1

%

 

 

9.4

%

Earnings per share (4)

$

0.11

 

 

$

0.19

 

 

$

0.78

 

 

$

0.53

 

Diluted earnings per share (4)

$

0.10

 

 

$

0.18

 

 

$

0.71

 

 

$

0.52

 

Non-GAAP Financial Measures (Unaudited)

 

 

Three Months Ended December 31,

 

Year Ended December 31,

(in thousands, except percentages and per share data)

2024

 

2023

 

2024

 

2023

Non-GAAP financial measures*

 

 

 

 

 

 

 

Organic revenue growth rate

 

11.0

%

 

 

16.5

%

 

 

12.8

%

 

 

15.4

%

Adjusted compensation and benefits expense

$

369,250

 

 

$

310,416

 

 

$

1,426,674

 

 

$

1,222,342

 

Adjusted compensation and benefits expense ratio

 

55.6

%

 

 

58.3

%

 

 

56.7

%

 

 

58.8

%

Adjusted general and administrative expense

$

78,230

 

 

$

63,862

 

 

$

277,813

 

 

$

230,467

 

Adjusted general and administrative expense ratio

 

11.8

%

 

 

12.0

%

 

 

11.0

%

 

 

11.1

%

Adjusted EBITDAC

$

216,049

 

 

$

158,585

 

 

$

811,223

 

 

$

624,740

 

Adjusted EBITDAC margin

 

32.6

%

 

 

29.8

%

 

 

32.2

%

 

 

30.1

%

Adjusted net income

$

123,317

 

 

$

95,672

 

 

$

493,521

 

 

$

375,582

 

Adjusted net income margin

 

18.6

%

 

 

18.0

%

 

 

19.6

%

 

 

18.1

%

Adjusted diluted earnings per share

$

0.45

 

 

$

0.35

 

 

$

1.79

 

 

$

1.38

 

Consolidated Balance Sheets (Unaudited)

 

(in thousands, except share and per share data)

December 31, 2024

 

December 31, 2023

ASSETS

 

 

 

CURRENT ASSETS

 

 

 

Cash and cash equivalents

$

540,203

 

 

$

838,790

Commissions and fees receivable – net

 

389,758

 

 

 

294,195

Fiduciary cash and receivables

 

3,739,727

 

 

 

3,131,660

Prepaid incentives – net

 

9,219

 

 

 

8,718

Other current assets

 

109,951

 

 

 

62,229

Total current assets

$

4,788,858

 

 

$

4,335,592

NON-CURRENT ASSETS

 

 

 

Goodwill

 

2,646,676

 

 

 

1,646,482

Customer relationships

 

1,392,048

 

 

 

572,416

Other intangible assets

 

83,674

 

 

 

38,254

Prepaid incentives – net

 

17,442

 

 

 

15,103

Equity method investment in related party

 

70,877

 

 

 

46,099

Property and equipment – net

 

50,209

 

 

 

42,427

Lease right-of-use assets

 

133,256

 

 

 

127,708

Deferred tax assets

 

448,289

 

 

 

383,816

Other non-current assets

 

18,589

 

 

 

39,312

Total non-current assets

$

4,861,060

 

 

$

2,911,617

TOTAL ASSETS

$

9,649,918

 

 

$

7,247,209

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

CURRENT LIABILITIES

 

 

 

Accounts payable and accrued liabilities

$

249,200

 

 

$

136,340

Accrued compensation

 

486,322

 

 

 

419,560

Operating lease liabilities

 

22,107

 

 

 

21,369

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

 

51,732

 

 

 

35,375

Fiduciary liabilities

 

3,739,727

 

 

 

3,131,660

Total current liabilities

$

4,549,088

 

 

$

3,744,304

NON-CURRENT LIABILITIES

 

 

 

Accrued compensation

 

49,362

 

 

 

24,917

Operating lease liabilities

 

159,231

 

 

 

154,457

Long-term debt

 

3,231,128

 

 

 

1,943,837

Tax Receivable Agreement liabilities

 

436,296

 

 

 

358,898

Deferred tax liabilities

 

39,922

 

 

 

55

Other non-current liabilities

 

86,606

 

 

 

41,097

Total non-current liabilities

 

4,002,545

 

 

 

2,523,261

TOTAL LIABILITIES

$

8,551,633

 

 

$

6,267,565

STOCKHOLDERS’ EQUITY

 

 

 

Class A common stock ($0.001 par value; 1,000,000,000 shares authorized, 125,411,089 and 118,593,062 shares issued and outstanding at December 31, 2024 and 2023, respectively)

 

125

 

 

 

119

Class B common stock ($0.001 par value; 1,000,000,000 shares authorized, 136,456,313 and 141,621,188 shares issued and outstanding at December 31, 2024 and 2023, respectively)

 

136

 

 

 

142

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

 

—

 

 

 

—

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

 

—

 

 

 

—

Additional paid-in capital

 

506,258

 

 

 

441,997

Retained earnings

 

122,939

 

 

 

114,420

Accumulated other comprehensive income (loss)

 

(1,796

)

 

 

3,076

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

 

627,662

 

 

 

559,754

Non-controlling interests

$

470,623

 

 

$

419,890

Total stockholders’ equity

 

1,098,285

 

 

 

979,644

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

9,649,918

 

 

$

7,247,209

Consolidated Statements of Cash Flows (Unaudited)

 

 

Year Ended December 31,

(in thousands)

2024

 

2023

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net income

$

229,913

 

 

$

194,480

 

Adjustments to reconcile net income to cash flows provided by operating activities:

 

 

 

(Income) from equity method investment in related party

 

(18,231

)

 

 

(8,731

)

Amortization

 

157,845

 

 

 

106,799

 

Depreciation

 

9,785

 

 

 

9,038

 

Prepaid and deferred compensation expense

 

30,834

 

 

 

12,192

 

Non-cash equity-based compensation

 

78,995

 

 

 

69,743

 

Amortization of deferred debt issuance costs

 

23,930

 

 

 

12,172

 

Amortization of interest rate cap premium

 

6,955

 

 

 

6,955

 

Deferred income tax expense

 

16,798

 

 

 

7,134

 

Deferred income tax expense from common control reorganizations

 

9,519

 

 

 

18,356

 

(Gain) loss on Tax Receivable Agreement

 

(2,099

)

 

 

11,170

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Commissions and fees receivable – net

 

(22,007

)

 

 

(44,185

)

Accrued interest liability

 

20,337

 

 

 

934

 

Other current and non-current assets

 

(20,668

)

 

 

5,773

 

Other current and non-current liabilities

 

(7,038

)

 

 

75,373

 

Total cash flows provided by operating activities

$

514,868

 

 

$

477,203

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

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

 

(1,708,737

)

 

 

(446,682

)

Asset acquisitions

 

—

 

 

 

—

 

Capital expenditures

 

(47,001

)

 

 

(29,776

)

Repayments of prepaid incentives

 

—

 

 

 

228

 

Total cash flows used in investing activities

$

(1,755,738

)

 

$

(476,230

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Proceeds from Senior Secured Notes

 

1,187,400

 

 

 

—

 

Borrowings on Revolving Credit Facility

 

1,250,000

 

 

 

—

 

Repayments on Revolving Credit Facility

 

(1,250,000

)

 

 

—

 

Debt issuance costs paid

 

(25,536

)

 

 

—

 

Proceeds from term debt

 

107,625

 

 

 

—

 

Repayment of term debt

 

(8,250

)

 

 

(16,500

)

Payment of interest rate cap premium, net

 

—

 

 

 

—

 

Finance lease and other costs paid

 

—

 

 

 

—

 

Payment of contingent consideration

 

—

 

 

 

(4,477

)

Tax distributions to non-controlling LLC Unitholders

 

(82,702

)

 

 

(71,674

)

Receipt of taxes related to net share settlement of equity awards

 

27,930

 

 

 

7,811

 

Taxes paid related to net share settlement of equity awards

 

(27,460

)

 

 

(8,785

)

Payment of Tax Receivable Agreement liabilities

 

(21,578

)

 

 

(16,206

)

Dividends paid to Class A common shareholders

 

(80,236

)

 

 

—

 

Distributions to non-controlling LLC Unitholders

 

(22,209

)

 

 

—

 

Payment of accrued return on Ryan Re preferred units

 

(2,130

)

 

 

—

 

Net change in fiduciary liabilities

 

114,003

 

 

 

97,221

 

Total cash flows provided by (used in) financing activities

$

1,166,857

 

 

$

(12,610

)

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

 

(1,514

)

 

 

584

 

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

$

(75,527

)

 

$

(11,053

)

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

$

1,680,805

 

 

$

1,756,332

 

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

 

 

 

Cash and cash equivalents

$

540,203

 

 

$

838,790

 

Cash and cash equivalents held in a fiduciary capacity

 

1,140,602

 

 

 

917,542

 

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

$

1,680,805

 

 

$

1,756,332

 

Reconciliation of Organic Revenue Growth Rate

 

 

Three Months Ended December 31,

 

Year Ended December 31,

(in thousands, except percentages)

2024

 

2023

 

2024

 

2023

Current period Net commissions and fees revenue

$

649,407

 

 

$

518,718

 

 

$

2,455,671

 

 

$

2,026,596

 

Less: Current period contingent commissions

 

(28,434

)

 

 

(8,404

)

 

 

(73,175

)

 

 

(39,028

)

Net Commissions and fees revenue

excluding contingent commissions

$

620,973

 

 

$

510,314

 

 

$

2,382,496

 

 

$

1,987,568

 

 

 

 

 

 

 

 

 

Prior period Net commissions and fees revenue

$

518,718

 

 

$

427,402

 

 

$

2,026,596

 

 

$

1,711,861

 

Less: Prior period contingent commissions

 

(8,404

)

 

 

(5,810

)

 

 

(39,028

)

 

 

(30,788

)

Prior period Net commissions and fees revenue

excluding contingent commissions

$

510,314

 

 

$

421,592

 

 

$

1,987,568

 

 

$

1,681,073

 

 

 

 

 

 

 

 

 

Change in Net commissions and fees revenue excluding contingent commissions

$

110,659

 

 

$

88,721

 

 

$

394,928

 

 

$

306,494

 

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

 

(54,282

)

 

 

(18,190

)

 

 

(141,972

)

 

 

(46,496

)

Impact of change in foreign exchange rates

 

(272

)

 

 

(922

)

 

 

(791

)

 

 

(479

)

Organic revenue growth (Non-GAAP)

$

56,105

 

 

$

69,609

 

 

$

252,165

 

 

$

259,519

 

 

 

 

 

 

 

 

 

Net commissions and fees revenue growth rate (GAAP)

 

25.2

%

 

 

21.4

%

 

 

21.2

%

 

 

18.4

%

Less: Impact of contingent commissions (1)

 

(3.5

)

 

 

(0.4

)

 

 

(1.3

)

 

 

(0.2

)

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

 

21.7

%

 

 

21.0

%

 

 

19.9

%

 

 

18.2

%

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

 

(10.6

)

 

 

(4.3

)

 

 

(7.1

)

 

 

(2.8

)

Impact of change in foreign exchange rates (4)

 

(0.1

)

 

 

(0.2

)

 

 

0.0

 

 

 

0.0

 

Organic Revenue Growth Rate (Non-GAAP)

 

11.0

%

 

 

16.5

%

 

 

12.8

%

 

 

15.4

%

(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 December 31,

 

Year Ended December 31,

(in thousands, except percentages)

2024

 

2023

 

2024

 

2023

Total Revenue

$

663,529

 

 

$

532,863

 

 

$

2,515,710

 

 

$

2,077,549

 

Compensation and Benefits Expense

$

410,252

 

 

$

331,735

 

 

$

1,591,077

 

 

$

1,321,029

 

Acquisition-related expense

 

(10,202

)

 

 

(856

)

 

 

(15,373

)

 

 

(4,186

)

Acquisition related long-term incentive compensation (1)

 

(7,907

)

 

 

6,036

 

 

 

(24,946

)

 

 

4,334

 

Restructuring and related expense

 

(4,253

)

 

 

(9,244

)

 

 

(39,929

)

 

 

(22,651

)

Amortization and expense related to discontinued prepaid incentives

 

(1,309

)

 

 

(1,648

)

 

 

(5,160

)

 

 

(6,441

)

Equity-based compensation

 

(12,382

)

 

 

(7,940

)

 

 

(52,038

)

 

 

(31,047

)

IPO related expenses

 

(4,949

)

 

 

(7,667

)

 

 

(26,957

)

 

 

(38,696

)

Adjusted Compensation and Benefits Expense (2)

$

369,250

 

 

$

310,416

 

 

$

1,426,674

 

 

$

1,222,342

 

Compensation and Benefits Expense Ratio

 

61.8

%

 

 

62.3

%

 

 

63.2

%

 

 

63.6

%

Adjusted Compensation and Benefits Expense Ratio

 

55.6

%

 

 

58.3

%

 

 

56.7

%

 

 

58.8

%

(1)

 

In the fourth quarter of 2023, Acquisition related long-term incentive compensation includes a $6.8 million expense reversal related to the claw back of an All Risks LTIP payment from a terminated employee

(2)

 

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 December 31,

 

Year Ended December 31,

(in thousands, except percentages)

2024

 

2023

 

2024

 

2023

Total Revenue

$

663,529

 

 

$

532,863

 

 

$

2,515,710

 

 

$

2,077,549

 

General and Administrative Expense

$

104,532

 

 

$

73,586

 

 

$

352,050

 

 

$

276,181

 

Acquisition-related expense

 

(18,690

)

 

 

(6,891

)

 

 

(54,469

)

 

 

(19,088

)

Restructuring and related expense

 

(7,612

)

 

 

(2,833

)

 

 

(19,768

)

 

 

(26,626

)

Adjusted General and Administrative Expense (1)

$

78,230

 

 

$

63,862

 

 

$

277,813

 

 

$

230,467

 

General and Administrative Expense Ratio

 

15.8

%

 

 

13.8

%

 

 

14.0

%

 

 

13.3

%

Adjusted General and Administrative Expense Ratio

 

11.8

%

 

 

12.0

%

 

 

11.0

%

 

 

11.1

%

(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 December 31,

 

Year Ended December 31,

(in thousands, except percentages)

2024

 

2023

 

2024

 

2023

Total Revenue

$

663,529

 

 

$

532,863

 

 

$

2,515,710

 

 

$

2,077,549

 

Net Income

$

42,555

 

 

$

58,503

 

 

$

229,913

 

 

$

194,480

 

Interest expense, net

 

48,532

 

 

 

29,667

 

 

 

158,448

 

 

 

119,507

 

Income tax expense

 

26,486

 

 

 

673

 

 

 

42,641

 

 

 

43,445

 

Depreciation

 

2,965

 

 

 

2,468

 

 

 

9,785

 

 

 

9,038

 

Amortization

 

60,134

 

 

 

27,674

 

 

 

157,845

 

 

 

106,799

 

Change in contingent consideration (1)

 

(23,672

)

 

 

1,063

 

 

 

(22,859

)

 

 

5,421

 

EBITDAC

$

157,000

 

 

$

120,048

 

 

$

575,773

 

 

$

478,690

 

Acquisition-related expense

 

28,892

 

 

 

7,747

 

 

 

69,842

 

 

 

23,274

 

Acquisition related long-term incentive compensation (2)

 

7,907

 

 

 

(6,036

)

 

 

24,946

 

 

 

(4,334

)

Restructuring and related expense

 

11,865

 

 

 

12,077

 

 

 

59,697

 

 

 

49,277

 

Amortization and expense related to discontinued prepaid incentives

 

1,309

 

 

 

1,648

 

 

 

5,160

 

 

 

6,441

 

Other non-operating loss

 

(3,534

)

 

 

10,343

 

 

 

15,041

 

 

 

10,380

 

Equity-based compensation

 

12,382

 

 

 

7,940

 

 

 

52,038

 

 

 

31,047

 

IPO related expenses

 

4,949

 

 

 

7,667

 

 

 

26,957

 

 

 

38,696

 

(Income) from equity method investments in related party

 

(4,721

)

 

 

(2,849

)

 

 

(18,231

)

 

 

(8,731

)

Adjusted EBITDAC (3)

$

216,049

 

 

$

158,585

 

 

$

811,223

 

 

$

624,740

 

Net Income Margin

 

6.4

%

 

 

11.0

%

 

 

9.1

%

 

 

9.4

%

Adjusted EBITDAC Margin

 

32.6

%

 

 

29.8

%

 

 

32.2

%

 

 

30.1

%

(1)

 

In the fourth quarter of 2024, Change in contingent consideration included a $25.5 million decrease in valuation of the US Assure contingent consideration as a result of increased loss ratios impacting projected profit commissions.

(2)

 

For the year ended December 31, 2023, Acquisition related long-term incentive compensation includes a $6.8 million expense reversal related to the claw back of an All Risks LTIP payment from a terminated employee.

(3)

 

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 December 31,

 

Year Ended December 31,

(in thousands, except percentages)

2024

 

2023

 

2024

 

2023

Total Revenue

$

663,529

 

 

$

532,863

 

 

$

2,515,710

 

 

$

2,077,549

 

Net Income

$

42,555

 

 

$

58,503

 

 

$

229,913

 

 

$

194,480

 

Income tax expense

 

26,486

 

 

 

673

 

 

 

42,641

 

 

 

43,445

 

Amortization

 

60,134

 

 

 

27,674

 

 

 

157,845

 

 

 

106,799

 

Amortization of deferred debt issuance costs (1)

 

2,092

 

 

 

3,047

 

 

 

23,930

 

 

 

12,172

 

Change in contingent consideration

 

(23,672

)

 

 

1,063

 

 

 

(22,859

)

 

 

5,421

 

Acquisition-related expense

 

28,892

 

 

 

7,747

 

 

 

69,842

 

 

 

23,274

 

Acquisition related long-term incentive compensation

 

7,907

 

 

 

(6,036

)

 

 

24,946

 

 

 

(4,334

)

Restructuring and related expense

 

11,865

 

 

 

12,077

 

 

 

59,697

 

 

 

49,277

 

Amortization and expense related to discontinued prepaid incentives

 

1,309

 

 

 

1,648

 

 

 

5,160

 

 

 

6,441

 

Other non-operating loss

 

(3,534

)

 

 

10,343

 

 

 

15,041

 

 

 

10,380

 

Equity-based compensation

 

12,382

 

 

 

7,940

 

 

 

52,038

 

 

 

31,047

 

IPO related expenses

 

4,949

 

 

 

7,667

 

 

 

26,957

 

 

 

38,696

 

(Income) from equity method investments in related party

 

(4,721

)

 

 

(2,849

)

 

 

(18,231

)

 

 

(8,731

)

Adjusted Income before Income Taxes (2)

$

166,644

 

 

$

129,497

 

 

$

666,920

 

 

$

508,367

 

Adjusted tax expense (3)

 

(43,327

)

 

 

(33,825

)

 

 

(173,399

)

 

 

(132,785

)

Adjusted Net Income

$

123,317

 

 

$

95,672

 

 

$

493,521

 

 

$

375,582

 

Net Income Margin

 

6.4

%

 

 

11.0

%

 

 

9.1

%

 

 

9.4

%

Adjusted Net Income Margin

 

18.6

%

 

 

18.0

%

 

 

19.6

%

 

 

18.1

%

(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 and twelve months ended December 31, 2024, this calculation of adjusted income tax expense is based on a federal statutory rate of 21% and a combined state income tax rate net of federal benefits of 5.00% on 100% of our adjusted income before income taxes as if the Company owned 100% of the LLC. For the three and twelve months ended December 31, 2023, this calculation of adjusted income 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 our 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 December 31,

 

Year Ended December 31,

 

2024

 

2023

 

2024

 

2023

Earnings per share of Class A common stock – diluted

$

0.10

 

$

0.18

 

 

$

0.71

 

 

$

0.52

 

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

 

—

 

 

—

 

 

 

—

 

 

 

(0.03

)

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

 

0.06

 

 

0.04

 

 

 

0.14

 

 

 

0.24

 

Plus: Adjustments to Adjusted net income (3)

 

0.29

 

 

0.14

 

 

 

0.97

 

 

 

0.67

 

Plus: Dilutive impact of unvested equity awards (4)

 

—

 

 

(0.01

)

 

 

(0.03

)

 

 

(0.02

)

Adjusted diluted earnings per share

$

0.45

 

$

0.35

 

 

$

1.79

 

 

$

1.38

 

 

 

 

 

 

 

 

 

(Share count in '000s)

 

 

 

 

 

 

 

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

 

137,265

 

 

128,295

 

 

 

132,891

 

 

 

125,745

 

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

 

136,370

 

 

140,632

 

 

 

138,980

 

 

 

142,384

 

Plus: Dilutive impact of unvested equity awards (4)

 

3,358

 

 

3,534

 

 

 

4,417

 

 

 

4,137

 

Adjusted diluted earnings per share diluted share count

 

276,993

 

 

272,461

 

 

 

276,288

 

 

 

272,266

 

(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 December 31, 2024 and 2023, this removes $0.2 million and $0.4 million of Net income, respectively, on 137.3 million and 128.3 million Weighted-average shares of Class A common stock outstanding - diluted, respectively. For the twelve months ended December 31, 2024 and 2023, this removes $0.3 million and $4.2 million of Net income, respectively, on 132.9 million and 125.7 million Weighted-average shares of Class A common stock outstanding - diluted, respectively. See “Note 12, Earnings Per Share” of the annual 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 December 31, 2024 and 2023, this includes $28.8 million and $35.7 million of Net income, respectively, on 273.6 million and 268.9 million Weighted-average shares of Class A common stock outstanding - diluted, respectively. For the twelve months ended December 31, 2024 and 2023, this includes $135.2 million and $133.4 million of Net income, respectively, on 271.9 million and 268.1 million Weighted-average shares of Class A common stock outstanding - diluted, respectively. See “Note 12, Earnings Per Share” of the annual 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 273.6 million and 268.9 million Weighted-average shares of Class A common stock outstanding - diluted for the three months ended December 31, 2024 and 2023, respectively, and on 271.9 million and 268.1 million Weighted-average shares of Class A common stock outstanding- diluted for the twelve months ended December 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 12, Earnings Per Share” of the annual consolidated financial statements. For the three months ended December 31, 2024 and 2023, 3.4 million and 3.5 million shares were added to the calculation, respectively. For the twelve months ended December 31, 2024 and 2023, 4.4 million and 4.1 million shares were added to the calculation, respectively.

Reconciliation of Credit Adjusted EBITDAC to Net Income

 

(in thousands, except percentages)

Twelve Months Ended December 31, 2024

Total Revenue

$

2,515,710

 

Net Income

$

229,913

 

Interest expense, net

 

158,448

 

Income tax expense

 

42,641

 

Depreciation

 

9,785

 

Amortization

 

157,845

 

Change in contingent consideration (1)

 

(22,859

)

EBITDAC

$

575,773

 

Acquisition-related expense

 

69,842

 

Acquisition related long-term incentive compensation

 

24,946

 

Restructuring and related expense

 

59,697

 

Amortization and expense related to discontinued prepaid incentives

 

5,160

 

Other non-operating loss

 

15,041

 

Equity-based compensation

 

52,038

 

IPO related expenses

 

26,957

 

(Income) from equity method investments in related party

 

(18,231

)

Adjusted EBITDAC (2)

$

811,223

 

Credit adjustments (3)

 

87,930

 

Credit Adjusted EBITDAC

$

899,153

 

(1)

In the fourth quarter of 2024, Change in contingent consideration included a $25.5 million decrease in valuation of the US Assure contingent consideration as a result of increased loss ratios impacting projected profit commissions.

(2)

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

(3)

Adjustments made to Adjusted EBITDAC represent (without duplication) additional adjustments permitted under our debt agreements.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250220101124/en/

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