Ryan Specialty Holdings 2026 Q2 Earnings Call

Good afternoon. Thank you for joining us. With me on today's call is our CEO, Tim Turner, our CFO, Janice Hamilton, our CEO of Underwriting Managers, Miles Wuller, and our head of investor relations, Nick Messick. For the quarter, total revenue grew 7.2% to $917 million, primarily driven by organic revenue growth of 6.7%, as well as modest contributions from M&A. Adjusted EBITDA grew 6% to $327 million. Adjusted EBITDA margin declined 40 basis points to 35.7%. Adjusted earnings per share grew 12.1% to $0.74. For the first half of 2026, we've grown organic revenue by 8.9%, adjusted EBITDA by 9.8%, and adjusted earnings per share by 16.2%. In the quarter, we repurchased 8.1 million shares for $260 million and increased the authorization of the program by an additional $300 million to deploy opportunistically within our capital allocation framework.

We're pleased with these results, especially considering the headwinds our industry continues to face. Our top and bottom line results speak to the resiliency of the platform we built. What this quarter demonstrated is that even in a very challenging market, our people delivered, utilizing their differentiated capabilities to execute on behalf of our clients and carrier trading partners. We earn our clients' business, their respect and trust every day through continuously delivering innovative solutions, expanding into new products, deepening and broadening relationships with our retail broker clients and carrier trading partners while executing at consistently high levels. I want to make a few comments about our team. We work tirelessly in our efforts to control what we can control. Our brokers are exceptional pipeline builders. We win new business and produce unique solutions that others simply cannot replicate.

Some of our production is large and project-based and sits in our pipeline until the right micro or macro conditions push it through. We focus on building the pipeline. We cannot control when projects close. Additionally, our underwriters are disciplined product builders. They assess every risk with carrier profitability front of mind. Our industry-leading underwriting results, discipline, and strong governance structure attract the most sophisticated capital providers to our platform. Whether through an adjacent product or a de novo MGU, our speed to market lets us meet evolving client demand, driving strong new business growth, and the ability to expand our share of recurring and non-recurring business. Together, these capabilities of pipeline and product building are important characteristics that set us apart.

We continue to evolve as a leading specialty insurance services firm, always looking for ways to be broader or diversified or strategic while still staying true to our mission statement. Our differentiation is significant and meaningful. A leading platform with scale, but much more than that. It's the power of our combined platform and ecosystem, where each piece makes the whole more powerful than the sum of its parts. Powered by secular tailwinds and industry-best talent. An innovation machine built to expand and win in new markets, complemented by what we believe is a best-in-class M&A engine. The result, industry-leading growth and strong margins, all aligned by a disciplined capital allocation framework and an aligned leadership team. Tim will expand on these themes shortly. First, I want to unpack the innovation of our delegated underwriting authority strategy, where I believe we were the true first mover.

16 years ago, we anticipated the demand for specialty solutions from our retail broker clients and trading partners, and we led the structural changes that followed. Through continuous innovation, investment, and a well-executed M&A strategy, we built a comprehensive, diversified platform offering over 300 specialty insurance products. We continue to extend our lead, growing beyond traditional delegated authority channels by expanding into new specialties like reinsurance underwriting, alternative capital solutions, and broad-based benefit solutions. We continue to skate to where the puck is going, not where it is. Our differentiating capabilities, speed to market in emerging classes, portfolio breadth, and our track record of delivering underwriting profits for our carrier trading partners, all supported by aligned incentives, continue to attract the highest quality capital to our platform. Relationships that are deep and enduring with now more than 25 carriers that each back 10 or more of our 40 MGUs.

A balanced capital base with the majority of our premiums syndicated across multiple carriers, giving us the capacity to underwrite more products, expanding our reach. Lastly, a platform that is equipped to manage through the ever-evolving specialty insurance market. We built a delegated authority platform that we believe is unique to the industry, creating a significant moat. The combination of wholesale brokerage and delegated underwriting authority creates a distribution engine of unmatched scale and sophistication, which we believe is capable of delivering durable, differentiated growth for years to come. As we look forward, we remain confident in our ability to innovate, invest, and continue to strengthen and diversify our offerings as a leader in the specialty lines insurance services sector for years to come. With that, I'm pleased to turn the call over to our Chief Executive Officer, Tim Turner.

Tim? Thank you very much, Pat.

Ryan Specialty had a great second quarter as we delivered for our clients in a face of a very challenging property pricing environment. Before diving into the quarter and building on Pat's remarks, let me outline the eight factors that differentiate Ryan Specialty, both now and over the long term. One, we are an industry leader delivering innovative solutions at scale. We are uniquely positioned at the top of both specialty distribution and underwriting. This dual vantage point provides the widest view of specialty risk, offering us unique insights that provide us with a competitive advantage. We see the need sooner, innovate faster, hire the talent, build the product, and source the capital through deep carrier relationships. Our ability to anticipate and meet client demand deepens our relationships with our clients. This flywheel compounds over time.

Two, we operate in a market with secular tailwinds and have shown a unique ability to win share over time. The world continues to become riskier and more complex, driving flow into the specialty and E&S channels. Our clients, both retail brokers and carrier trading partners, are growing while consolidating panels. Delegated underwriting authority continues to take share of the commercial market from 9% in 2012 to 20% in 2025, and healthy E&S share gains supported by strong flow as well as carriers having made a significant commitment to the E&S market. Together, these trends compound in our favor. Tailwinds only reward those equipped to capture them. Which brings me to number three, our talent. We attract, retain, and develop the best talent in the industry. We continue to believe we are the destination of choice for the industry's A players.

Last year, we attracted the second-largest hiring class in our history. As they ramp up, they become increasingly accretive to our growth. We have one of the industry's highest producer and underwriter retention rates. Our culture, our platform, and our broad employee ownership keep our best people here. Four, our commitment to innovation and expanding our addressable market. Our innovation engine, aided by insights across $32 billion of premium, constantly identifies niches that require unique solutions, creating new sources of growth for our clients and trading partners. We've deepened our capabilities in niches like hospital and healthcare liability, public entity, sports and entertainment, and many more. We've launched over a dozen de novo specialty businesses with impressive speed to market.

As Pat described, we've expanded delegated underwriting authority outside the traditional MGA, MGU practice vertical. Through unique strategic relationships, we've built Ryan Re, our reinsurance managing underwriter, and are on track to place $2 billion in reinsurance premium this year. We've established in-house alternative capital management solutions. We've built a benefits division with distinguished capabilities and products, which are largely uncorrelated to the P&C cycle. We've invested significant resources into all aspects of alternative risk, including captive management and structured solutions. The market is ripe with these opportunities. We have the scale, talent, and speed to market to be early movers and scale rapidly. Five, we have what we believe is a best-in-class M&A engine that has consistently enhanced our growth profile and remains capable of doing so. We've added new talent and capabilities, new lines of business, and entered new geographies via acquisitions since our founding.

We remain disciplined in our approach to M&A, only moving forward when all of our criteria are met, a strong cultural fit, strategic, and accretive. 6, our platform is durable and we believe built to deliver industry-leading growth and strong margins. Years of deliberate reinvestment back into the business has built this platform. With our Empower program, we are creating more operational flexibility to keep investing in the future, investment that has the potential to widen our competitive moat and supports our goal of modest margin expansion in most years. 7, all of these differentiating factors are supported by our disciplined capital allocation framework. We will prioritize investing in talent, which is the most accretive investment we can make. We will be disciplined acquirers.