10-K: Ryan Specialty Reports Strong Revenue Growth, Initiates Restructuring

Ryan Specialty Holdings, Inc. announced a 21.3% increase in total revenue for 2025, alongside a new three-year restructuring program and an increased quarterly dividend.

Summary

• Total revenue increased by 21.3% to $3,051.1 million for the year ended December 31, 2025, compared to $2,515.7 million in the prior year.
• Net income decreased by 6.9% to $214.2 million in 2025, down from $229.9 million in 2024.
• Diluted earnings per share (GAAP) decreased to $0.47 in 2025 from $0.71 in 2024.
• Adjusted diluted earnings per share (Non-GAAP) increased to $1.96 in 2025 from $1.79 in 2024.
• Organic revenue growth rate was 10.1% for 2025, following 12.8% in 2024 and 15.4% in 2023.
• The company completed five acquisitions in 2025, including Velocity Risk Underwriters, USQRisk Holdings, 360 Underwriting, J.M. Wilson Corporation, and Stewart Specialty Risk Underwriting Ltd., contributing $109.5 million in revenue.
• A new three-year restructuring program, 'Empower Program,' will commence in Q1 2026, aiming for $160 million in cumulative one-time charges through 2028 and expected annual savings of $80 million in 2029.
• The Board approved an 8.3% increase in the regular quarterly cash dividend to $0.13 per share of Class A common stock, payable March 10, 2026.
• A share repurchase program of up to $300 million of Class A common stock was authorized by the Board.
• Wholesale Brokerage net commissions and fees increased by 7.5% to $1,600.4 million, Binding Authority by 15.5% to $370.2 million, and Underwriting Management by 58.5% to $1,024.0 million in 2025.
• The company's Producer retention rate was 96% in 2025, with 71% of Producers growing their book of business.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, driven by robust revenue growth and strategic initiatives like the 'Empower Program' and continued acquisitions. While GAAP net income declined due to acquisition-related expenses, the strong Adjusted EPS and increased dividend signal underlying operational health and confidence in future performance.

Positives

• Total revenue increased significantly by 21.3% to $3,051.1 million in 2025, demonstrating strong top-line growth.
• Adjusted diluted earnings per share (Non-GAAP) grew by 9.5% to $1.96, indicating improved underlying profitability when excluding certain items.
• Organic revenue growth remained robust at 10.1% in 2025, reflecting successful business expansion and new client acquisition.
• Strategic acquisitions in 2025, including Velocity Risk Underwriters and USQRisk Holdings, expanded product capabilities and geographic footprint.
• The Producer retention rate of 96% and 71% of Producers growing their book of business highlight strong talent management and business development.
• The initiation of the 'Empower Program' is expected to generate $80 million in annual savings by 2029, enhancing future operational efficiencies.
• The Board increased the regular quarterly dividend by 8.3% to $0.13 per share, signaling confidence in future cash flows.
• Authorization of a $300 million share repurchase program indicates management's commitment to returning value to shareholders.

Negatives

• Net income (GAAP) decreased by 6.9% to $214.2 million in 2025, despite strong revenue growth, primarily due to increased expenses.
• Diluted earnings per share (GAAP) declined to $0.47 in 2025 from $0.71 in 2024.
• Fiduciary investment income decreased by $3.5 million, or 0.1%, due to a decline in interest rates compared to the prior-year period.
• Compensation and benefits expense increased by 13.3% to $1,803.4 million, driven by employee additions and business growth.
• General and administrative expense increased by 28.8% to $453.5 million, largely due to professional services, IT charges, and acquisition-related costs.
• Amortization expense surged by 73.9% to $274.4 million, primarily from intangible assets acquired in recent acquisitions.
• Interest expense, net, increased by 40.4% to $222.4 million, mainly due to increased debt from acquisition activity.
• A moderate pullback in the property portfolio was observed due to declining rates and increased direct placement opportunities for retailers.

Risks

• Failure to successfully recruit and retain senior management, revenue producers, or other key employees, and inadequate succession planning.
• Potential loss of relationships with insurance carriers or clients, or becoming dependent on a limited number of trading partners.
• Errors or ineffectiveness in underwriting models, or insufficient skill of underwriters, harming reputation and relationships.
• Damage to the company's brand or reputation due to negative perceptions, publicity, or negligent/fraudulent behavior by business partners.
• Risks associated with evaluating and integrating acquisitions, and introducing new products, lines of business, or markets.
• Inability to successfully recover from disasters or business continuity problems, leading to financial loss, human capital loss, or regulatory actions.
• Impact of third parties performing key functions acting in ways that harm the business.
• Difficulty in maintaining the company's culture as it grows, potentially affecting talent retention, innovation, and operational effectiveness.
• Negative effects from the cyclicality of and economic conditions in the markets, including reduced insurer capacity or migration of business to the Admitted market.
• Exposure to various international risks, including compliance with evolving legal/regulatory obligations, staffing difficulties, and exchange rate fluctuations.
• Significant competitive pressures in wholesale brokerage, binding authority, and underwriting management businesses.
• Decreases in premiums or commission rates set by insurers, or actions by insurers seeking repayment of commissions.
• Termination or changes in contracts governing MGAs or MGUs, which could reduce revenues.
• Decreased supplemental or contingent commissions due to failure to meet profitability, volume, or growth thresholds.
• Inability to collect receivables, adversely affecting results of operations and cash flows.
• Disintermediation within the insurance industry and shifts away from traditional insurance markets.
• Risk of impairment of goodwill and intangibles, potentially leading to material charges.
• Challenges with properly assessing, adapting to, and managing the adoption and use of artificial intelligence (AI), leading to reputational harm, competitive harm, or legal liability.
• Inability to maintain strong growth and generate sufficient revenue to maintain profitability as costs increase.
• Loss of clients or business due to consolidation within the retail insurance brokerage industry.
• Inability to achieve the intended results of the restructuring program ('Empower'), impacting business and financial condition.
• Substantial investment required for growth strategy (new offices, product lines, distribution channels, hiring) may adversely affect results.
• Unavailability or inaccuracy of client and third-party data for pricing and underwriting insurance policies.
• Competitiveness and cyclicality of the reinsurance industry, affecting investment returns and commissions.
• Occurrence of natural or man-made disasters, leading to declines in business and increases in claims.
• Impact of pandemics or other outbreaks of contagious diseases on business, financial condition, and supply chain.
• Economic and political conditions of countries and regions of operation adversely impacting business.
• Failure or takeover of financial institutions used by the company, leading to substantial losses.
• Inability to respond quickly to operational or financial problems or promote cooperation among geographically dispersed offices.
• Scrutiny and changing expectations regarding corporate responsibility and stakeholder interests, imposing additional costs or risks.
• Breaches in security causing significant system/network disruption or business interruption.
• Improper disclosure of confidential, personal, or proprietary data, leading to regulatory scrutiny, legal liability, or reputation damage.
• Failure to protect intellectual property rights, or allegations of infringement, harming reputation and competitive ability.
• Governmental regulation reducing profitability, limiting growth, or increasing competition, including data privacy and cybersecurity laws.
• Subject to E&O claims and other legal proceedings, which if resolved unfavorably, could have an adverse effect.
• Handling of client funds and surplus lines taxes exposing the company to complex fiduciary regulations.
• Changes in tax laws or regulations adversely affecting business, cash flow, or results of operations.
• Proposed tort reform legislation decreasing demand for casualty insurance, reducing commission revenues.
• Regulations affecting insurance carriers impacting operations.
• Substantial indebtedness adversely affecting financial flexibility and competitive position, and subjecting the company to contractual restrictions.
• Inability to generate sufficient cash flow to service all indebtedness, potentially forcing asset sales or equity raises.
• Further changes in U.S.-based credit markets affecting borrowing availability and terms.
• Credit ratings downgrades increasing financing costs and operational risk.
• Risks related to payments required by the Tax Receivable Agreement (TRA), which may be substantial and exceed actual tax benefits.
• Organizational structure, including the TRA, conferring benefits upon Ryan Parties that do not equally benefit other common stockholders, potentially leading to conflicts of interest.
• Dual-class common stock structure concentrating voting control with the Ryan Parties, limiting influence of other stockholders.
• Provisions in corporate governance documents making acquisition more difficult and potentially preventing management replacement.
• Designation of Delaware courts as exclusive forum for certain litigation, potentially limiting stockholders' ability to choose a favorable forum.
• Future sales of a substantial number of Class A common stock adversely affecting its price.
• Share repurchase program may not be fully consummated or enhance long-term shareholder value, and could affect stock price or cash reserves.
• Issuance of preferred stock in the future could make acquisition difficult or adversely affect Class A common stock holders.

Future Outlook

The company expects to continue its growth strategy through attracting and developing talent, leading with innovation in evolving markets, pursuing strategic acquisitions, deepening retail broker relationships, and building its international delegated authority business. The 'Empower Program' is projected to generate approximately $80 million in annual savings by 2029, allowing for continued strategic investments in growth, talent, and technology. The company anticipates continued growth in the specialty and E&S markets due to increasing complexity of risks, although property market dynamics may see continued shifts in 2026.

Management Comments

• Our plan for continued growth includes positioning ourselves as a pioneer in ever-changing markets, attracting and developing industry-leading talent, broadening our product offerings organically and inorganically, and further entrenching our deep industry relationships.
• We believe that as risks become more complex, the E&S market will continue to become more material and wholesale brokers that do not have sufficient scale or the financial and intellectual capital to invest in the required specialty capabilities will struggle to compete effectively.
• Our ability to retain top talent is a core objective of our strategy, exemplified by the fact that from 2020 through 2025 our annual retention rate has been 96% or greater.
• We believe in the relentless pursuit of innovation in order to respond to evolving market conditions and to reach underserved specialty markets.
• We believe that both M&A consolidation and panel consolidation have a long runway for Binding Authority. We believe that both M&A consolidation and the use and reliance on scaled delegated Underwriting Management will continue to grow.
• We will continue to prioritize strategic investments that support revenue growth such as investments in talent, de novo formations, product innovation and solutions, M&A, and technology in order to maximize long-term value creation, which could have a short-term margin impact.

Industry Context

StockSavvy.ai notes that Ryan Specialty operates within a growing Excess & Surplus (E&S) market, which has outpaced the Admitted market's growth (10.6% CAGR vs. 4.4% CAGR from 2010-2024). The company's strategy of focusing on complex, hard-to-place risks aligns with the industry trend of increasing demand for specialty solutions. Consolidation among retail insurance brokers and P&C carriers is driving wholesale panel consolidation, benefiting scaled intermediaries like Ryan Specialty. The company's investment in AI and digital platforms like RT Connector positions it to leverage technological advancements in the insurance sector, a key trend in the evolving insurtech landscape. However, the filing also highlights a shift in property market trends in H2 2024 and 2025, with increased capacity and declining rates, allowing retailers to place coverage directly, indicating dynamic and competitive market conditions.

Comparison to Industry Standards

• Ryan Specialty is the second-largest U.S. P&C insurance wholesale broker and the largest U.S. P&C managing underwriter based on 2024 premium volume, as published in Business Insurance, indicating a leading market position.
• The U.S. E&S market grew at a CAGR of 10.6% between 2010 and 2024, compared to 4.4% for the U.S. Admitted market, demonstrating Ryan Specialty's focus on a higher-growth segment.
• E&S market share as a percentage of total U.S. commercial insurance premium increased from 13.5% in 2010 to 25.7% in 2024, showing a significant industry shift that benefits Ryan Specialty's business model.
• The company's 2025 organic revenue growth rate of 10.1% is strong, especially when compared to the broader P&C market growth rates, suggesting effective competitive positioning and market share gains.
• The company's Producer retention rate of 96% is indicative of a highly attractive work environment and strong talent management, which is crucial in a competitive industry for specialized professionals.

Management Changes

Corporate Governance

Legal Proceedings

• The company is subject to litigation, regulatory, and other governmental investigations and claims arising in the ordinary course of business operations, including E&O claims.
• Loss contingencies of $3.2 million were recorded for outstanding matters as of December 31, 2025, excluding loss recoveries.
• In 2022, the company incurred losses related to policies underwritten by an unsatisfactory insurance carrier, leading to $2.5 million in expense in 2022, with no further expense recognized since. The company collected $22.1 million from E&O insurance carriers related to this claim in 2025.

Related Party Transactions

• The company holds a 47% interest in Ryan Investment Holdings, LLC (RIH), which has a 50% non-controlling interest in Geneva Re Partners, LLC (GRP). GRP wholly owns Geneva Re, a Bermuda-regulated reinsurance company. RIH is considered a related party variable interest entity under common control.
• Patrick G. Ryan, through a trust, has committed to personally fund any additional capital contributions to RIH for its investment in GRP.
• The company acquired a 9.9% interest in Velocity Specialty Insurance Company (VSIC) for $16.6 million on May 1, 2025, and accounts for it under the equity method.
• Ryan Re, a wholly-owned subsidiary, provides administrative and underwriting services to Geneva Re, receiving a service fee equal to 115% of incurred administrative costs. Revenue from Geneva Re was $1.6 million in 2025.
• Velocity Claims, LLC and Velocity (wholly-owned subsidiaries) have a claims management agreement with VSIC, receiving compensation equal to 1% of indemnity and expenses paid on claims. Revenue from VSIC was $0.3 million in 2025.
• The company charters executive jets from Executive Jet Management (EJM), to which Mr. Ryan indirectly leases aircraft. The company receives a discount below market rates when chartering Mr. Ryan's aircraft. Expense related to business usage was $0.9 million in 2025.
• In April 2021, Mr. Ryan personally guaranteed up to $10.0 million of the company's financial obligations under an agency agreement with certain insurance companies affiliated with National Indemnity Company, without consideration from the company. Mr. Ryan will not personally guarantee any further obligations.

Stakeholder Impact

• **Shareholders (Class A Common Stock)**: Benefit from increased quarterly dividends and a new share repurchase program, indicating direct return of capital. However, the dual-class structure and anti-takeover provisions limit their influence on corporate control. GAAP EPS decline may be a concern, but Adjusted EPS growth provides a positive view.
• **LLC Unitholders (including Ryan Parties)**: Benefit from tax distributions and the Tax Receivable Agreement, which provides substantial cash payments based on tax benefits. The Ryan Parties maintain significant voting control due to the dual-class structure.
• **Employees**: Benefit from strong talent retention (96% rate), career advancement opportunities, and significant investments in human capital (e.g., Ryan Specialty University). The 'Empower Program' may involve some restructuring, but is aimed at long-term efficiency and growth.
• **Customers (Retail Brokers, Agents, Carriers)**: Benefit from expanded product offerings, enhanced intellectual capital, and broader distribution reach through strategic acquisitions and innovation (e.g., generative AI, RT Connector). The company's 'no retail operations' strategy avoids channel conflicts with retail brokers.
• **Creditors**: The company's substantial indebtedness and increased interest expense are relevant. Compliance with debt covenants and the ability to generate sufficient cash flow to service debt are critical. Credit rating upgrade from Moody's (B1 to Ba3) is positive for creditors.
• **Regulatory Bodies**: The company is subject to extensive and evolving regulations globally, including data privacy, cybersecurity, and broker compensation. Non-compliance risks fines and reputational damage. The company's efforts to align with frameworks like NIST Cybersecurity Framework are important for regulatory adherence.

Next Steps

• Commence the three-year 'Empower Program' in the first quarter of 2026 to streamline operations and enhance efficiencies.
• Pay a regular quarterly cash dividend of $0.13 per share on March 10, 2026, to shareholders of record on February 24, 2026.
• Continue to pursue strategic acquisitions to enhance human capital, product capabilities, and geographic footprint.
• Further invest in talent, de novo formations, product innovation, and technology to support revenue growth.
• Monitor and adapt to evolving market conditions, particularly shifts in property market trends and the E&S market.

Key Dates

Recommendation

Ryan Specialty demonstrates strong revenue growth and strategic expansion through acquisitions and innovation, which are positive long-term indicators. The initiation of the 'Empower Program' and increased dividend signal management's confidence and commitment to shareholder returns. However, the decline in GAAP Net Income and Diluted EPS, coupled with substantial increases in amortization and interest expenses due to acquisition-related debt, presents a mixed financial picture. While Adjusted EPS shows underlying strength, the significant debt levels and ongoing restructuring costs warrant a 'hold' recommendation. Investors should monitor the successful execution of the 'Empower Program' and the integration of recent acquisitions to ensure these investments translate into sustainable GAAP profitability and improved cash flow.

Keywords

Specialty Insurance, Wholesale Brokerage, Underwriting Management, Binding Authority, E&S Market, Insurance Intermediary, SEC Filing, 10-K, Financial Results, Acquisitions, Empower Program, Dividend, Share Repurchase, Risk Management, Corporate Governance, Cybersecurity, Tax Receivable Agreement, Dual-Class Stock