Ryan Specialty Promotes “Double-Digit Organic Growth” to Kick Off 2024
Ryan Specialty has revealed its financial results for the first quarter ending March 31, highlighting strong growth across several key metrics.
The company reported a 20.6% increase in total revenue, reaching $552 million compared to $457.6 million in the same period last year. This robust growth was primarily driven by a 13.7% increase in organic revenue, with the company implementing a revised estimation method starting this quarter to better track and report organic performance.
Several factors contributed to this growth, including new customer acquisitions, strengthened relationships with existing clients, an uptick in the Excess & Surplus (E&S) market, revenue from recent acquisitions, and a rise in trustee investment income.
Operational Costs and Efficiency
Operating expenses for the quarter increased by 23.7%, totaling $479.4 million. The rise was mainly due to higher compensation and benefits costs in line with revenue growth, as well as restructuring costs related to the Accelerate 2025 initiative. Despite these increases, savings from the program helped mitigate some of the costs. General and administrative expenses also grew, driven by higher professional service fees, increased travel and entertainment expenditures, and additional costs related to acquisitions.
Profit Growth and Strong Margin Performance
Despite rising operating costs, Ryan Specialty saw an 11.6% increase in net income, reaching $40.7 million compared to $36.5 million in Q1 of the prior year.
The company’s Adjusted EBITDAC (Earnings Before Interest, Taxes, Depreciation, Amortization, and Change in Fair Value of Deferred Compensation) rose by 25.8%, reaching $157.2 million, with its margin expanding to 28.5% from 27.3% a year earlier.
Moreover, Adjusted Net Income saw a remarkable 32.9% increase, totaling $95.4 million, while the Adjusted Total Compensation Margin improved to 17.3%, up from 15.7% last year. The company also reported a 34.6% increase in Adjusted Diluted Earnings Per Share (EPS), which climbed to $0.35 from $0.26 in the previous year.
Accelerate 2025 Initiative and Future Outlook
By the end of the quarter, Ryan Specialty reported cash and equivalents totaling $665.4 million, along with outstanding debt of $2.0 billion. The company also provided updates on its Accelerate 2025 restructuring program, estimating one-time charges of about $110 million for 2024, with expected annual savings of around $60 million starting in 2025.
Looking ahead, Patrick G. Ryan, Founder, Chairman, and CEO of Ryan Specialty, praised the company’s strong performance during the quarter.
“We had a great start to 2024, driven by another quarter of double-digit organic growth and further improvement of our margin profile,” Ryan said. “Our exceptional performance continues to be broad-based across our specialties, including significant contributions from our recent acquisitions.”
Ryan also highlighted the strategic acquisition of Castel, which was completed in the days leading up to the earnings announcement. “This addition of top-tier underwriting talent strengthens our appointed capacity, expands our global presence, and increases our total addressable market,” he said.
Ryan expressed confidence that 2024 would be another remarkable year for the company, as Ryan Specialty is strategically positioned to deliver sustainable and differentiated profitable growth.
