Ryan Specialty Holdings, Inc. Class A

Good afternoon and thank you for joining us today for Ryan Specialty Holdings' second quarter 2026 earnings conference call. In addition to this call, the company filed a press release with the SEC earlier this afternoon, which has also been posted to its website at ryanspecialty.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements. Investors should not place undue reliance on any forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today. Listeners are encouraged to review the more detailed discussion of these risk factors contained in the company's filings with the SEC. The company assumes no duty to update such forward-looking statements in the future except as required by law. Additionally, certain non-GAAP financial measures will be discussed on this call and should not be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. Reconciliations of these non-GAAP financial measures to the most closely comparable measures prepared in accordance with GAAP are included in the earnings release, which is filed with the SEC and available on the company's website. With that, I'd now like to turn the call over to the founder and executive chairman of Ryan Specialty, Pat Ryan.

Good afternoon and 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 Mezick. 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 brought 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 per 260 million and increased the authorization of the program by an additional 300 million to deploy opportunistically without a 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 that 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 an 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. A 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. But first, I want to unpack the innovation of our delegated underwriting authority strategy, where I believe we were the true first mover. Sixteen years ago, We anticipated the demand for specialty solutions for 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 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 Thank you for joining us. 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's 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's specialty both now and over the long term. 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. Thank you for watching. and healthy ENS share gains supported by strong flow as well as carriers having made a significant commitment to the ENS market. Together, these trends compound in our favor. But 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. 4. 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. and 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. 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. Thank you for watching. 8. Behind executing, delivering, and maintaining these differentiating factors sits our seasoned and aligned leadership team, the best team in the business, the team that wakes up early every day to out-hustle and out-work our competition and support our producers and underwriters to deliver the best possible solutions to our clients. Turning to our results by specialty. Our wholesale brokerage specialty continues to deliver in the face of significant cyclical industry challenges. In property, the market was every bit as challenging as we indicated last quarter. Pricing in many CAT exposed and large accounts declined materially as capacity continued to build. Competition remained tough, including from the admitted market. Yet our brokers fought vigorously, won head-to-head, had strong renewal retention, and captured new business from the steady flow into the ENS channel. The net of this is a property book that declined only modestly, better than our expectations, as our performance improved throughout the quarter, notably in June. In casualty, we had a very strong quarter across the book. Strong construction activity in Q1 continued into Q2 as the pipeline we had been building for some time began binding. We saw a better June than we expected, driven by a handful of large project-based wins, including construction and data center activity. As we have said before, this business is inherently lumpy and the timing of large project bindings is difficult to predict. We remain optimistic about our pipeline heading into the balance of the year and are well positioned as the leading wholesale broker in the construction space. Broadly, most casualty lines continue to be impacted by social inflation and challenging litigation trends, which continue to support the need for adequate pricing. At the same time, we are seeing more capital looking to grow in casualty, which introduces additional competition beyond what we've been seeing in small, commercial, and middle market. This is leading to some moderation of pricing in certain pockets. Our professional lines team once again significantly outperformed the market, despite continued pricing pressure, aiding our growth for the quarter. Now, turning to our delegated authority specialties, which include both binding authority and underwriting management. Our binding authority specialty saw heightened competition in the quarter, yet still grew revenue year over year. Thank you for joining us. We've been expanding our services to improve outcomes for our clients and trading partners, which is enhanced by our independence. We are navigating the competitive pressures the way we always do, relying on our talent, our product breadth and expertise, and our industry-leading service. Our underwriting management specialty had an excellent quarter with yet another impressive performance across transactional liability, Transportation, International Specialty, Casualty, and Reinsurance while exercising appropriate discipline relative to current market conditions. Transactional liability delivered exceptional results, topping our expectations. Growth continues to be supported by a more constructive global M&A environment and the investments we have made over several years. Within reinsurance, Ryan Rhee also delivered another excellent quarter with strong renewal retention, especially considering the tough pricing environment, and another strong yet smaller quarter with respect to the Markel portion of the book. With that said, not everything was in our favor this quarter. Within our builders' risk businesses, results continue to be under pressure, consistent with macro pressures we described over the last few quarters. We are not standing still. We are bringing more product to the market, competing for every account, and we are winning more than our share. RSUM also launched its own Lloyds Consortium stamp earlier this month. This consortium was about crafting underwriting capital outcomes at scale, delivering efficiency to clients, and further monetizing the platform and exceptional underwriting results. Beginning August 1st, it will take a 15% line on RSUM's syndicated business, further accelerating our innovation and speed to market. Now, turning to a quick update on our team, we also announced a planned leadership succession at RT Specialty. Brendan Mulshine will assume the role of CEO of RT Specialty. Ed McCormick will transition into the role of Vice Chairman of RT. I cannot say enough about how important Ed has been to the founding and building of not just RT, but Ryan's specialty itself. We are grateful he will continue as Vice Chairman, while Brendan is the perfect choice to lead RT's specialty into its next phase of growth. Lastly, I'd like to update you on our digital transformation and AI strategy. Our strategy remains anchored in the three principles we shared last quarter. Our clients, our people and our process. In practice, we invest in redesigning workflows that improve client outcomes, make our people more productive and make our processes faster and more reliable. Last quarter, Thank you for watching. and we are extending that capability into treaty underwriting with a platform in just years of prior submissions and claims at a scale or speed that no person could achieve in a reasonable amount of time. For our people, we're putting more tools in their hands. Thanks to a thoughtful rollout strategy, AI adoption and usage are accelerating across the firm. Thank you for joining us today. We started deploying a GenTech AI towards our property inspection process, sharpening underwriting accuracy and reducing cycle times by removing the need for thousands of manual touchpoints each month. As AI becomes a commodity that anyone can rent, our advantage is the proprietary data and hard-won expertise built into our platform that cannot be easily replicated. We are a clear net beneficiary of this transformation and it shows in how our people work every single day. In closing, we are very proud of our second quarter performance, particularly in the face of a complex and rapidly evolving insurance, macro, and geopolitical environment. Our performance is a testament to the resilience and durability of our people and platform. In the face of this intense competition, our teams continue to innovate, differentiate our services, and improve our value proposition to our clients. We retained high levels of existing business, won significant new business, expanded our market share, and continue to build our pipeline across the organization. each supported by the many factors that differentiate us. We are doing what we do best, controlling what we can control, adapting, executing, and overcoming challenging dynamics. With that, I will now turn the call over to our CFO, Janice Hamilton. Thank you.