Ryan Specialty (RYAN)

Insurance specialty broker Ryan Specialty (NYSE:RYAN) reported Q3 CY2025 results beating Wall Street’s revenue expectations, with sales up 24.8% year on year to $754.6 million. Its non-GAAP profit of $0.47 per share was in line with analysts’ consensus estimates.

Company Overview

Founded in 2010 by insurance industry veteran Patrick Ryan, Ryan Specialty (NYSE:RYAN) is a wholesale insurance broker and underwriting manager that helps retail brokers place complex or hard-to-place risks with insurance carriers.

The insurance brokerage industry, while influenced by insurance pricing cycles, benefits from durable secular tailwinds as rising risk complexity (climate, data privacy), regulatory scrutiny, and insurance pricing inflation. These increase demand for professional risk-management advice. Brokers operate models that rely on commissions and fees tied to premium volumes and growing contributions from recurring advisory, benefits, and compliance services. Scale is a key advantage, enabling better carrier access, stronger data and benchmarking, and efficient deployment of technology and compliance investments, which in turn supports ongoing industry consolidation. The headwinds are labor intensity and wage inflation for producers, regulatory complexity (this cuts both ways, as you can see), and execution risk when integrating new digital tools into legacy workflows.

Ryan Specialty's main competitors include other wholesale insurance brokers such as Amwins Group, CRC Insurance Services (a subsidiary of Truist Financial), Brown & Brown (NYSE:BRO), and Marsh & McLennan's (NYSE:MMC) wholesale operations.

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $2.96 billion in revenue over the past 12 months, Ryan Specialty is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.

As you can see below, Ryan Specialty’s 26.6% annualized revenue growth over the last five years was incredible. This is a great starting point for our analysis because it shows Ryan Specialty’s demand was higher than many business services companies.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Ryan Specialty’s annualized revenue growth of 22.3% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Ryan Specialty’s organic revenue averaged 12.8% year-on-year growth. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Ryan Specialty reported robust year-on-year revenue growth of 24.8%, and its $754.6 million of revenue topped Wall Street estimates by 2.9%.

Looking ahead, sell-side analysts expect revenue to grow 16.5% over the next 12 months, a deceleration versus the last two years. Still, this projection is admirable and indicates the market is baking in success for its products and services.

Ryan Specialty has been an efficient company over the last five years. It was one of the more profitable businesses in the business services sector, boasting an average adjusted operating margin of 16.5%.

Analyzing the trend in its profitability, Ryan Specialty’s adjusted operating margin rose by 4.2 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Ryan Specialty generated an adjusted operating margin profit margin of 14.7%, up 1.2 percentage points year on year. This increase was a welcome development and shows it was more efficient.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Ryan Specialty’s full-year EPS grew at an astounding 17.4% compounded annual growth rate over the last four years, better than the broader business services sector.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Ryan Specialty’s astounding 23.1% annual EPS growth over the last two years aligns with its revenue trend. This tells us it maintained its per-share profitability as it expanded.

In Q3, Ryan Specialty reported adjusted EPS of $0.47, up from $0.41 in the same quarter last year. This print was close to analysts’ estimates. Over the next 12 months, Wall Street expects Ryan Specialty’s full-year EPS of $1.97 to grow 17.4%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Ryan Specialty has shown terrific cash profitability, enabling it to reinvest, return capital to investors, and stay ahead of the competition while maintaining an ample cushion. The company’s free cash flow margin was among the best in the business services sector, averaging 18.9% over the last five years.

Ryan Specialty’s free cash flow clocked in at $155.5 million in Q3, equivalent to a 20.6% margin. This result was good as its margin was 5.1 percentage points higher than in the same quarter last year. Its cash profitability was also above its five-year level, and we hope the company can build on this trend.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? A company’s ROIC explains this by showing how much operating profit it makes compared to the money it has raised (debt and equity).

Although Ryan Specialty has shown solid business quality lately, it historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 9.8%, somewhat low compared to the best business services companies that consistently pump out 25%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. On average, Ryan Specialty’s ROIC increased by 2 percentage points annually over the last few years. its rising ROIC is a good sign and could suggest its competitive advantage or profitable growth opportunities are expanding.

Ryan Specialty reported $153.5 million of cash and $3.67 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $960.5 million of EBITDA over the last 12 months, we view Ryan Specialty’s 3.7× net-debt-to-EBITDA ratio as safe. We also see its $147.8 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We were impressed by how significantly Ryan Specialty blew past analysts’ organic revenue expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock remained flat at $51.85 immediately following the results.

Updated: December 23, 2025 at 11:42 PM EST

Before making an investment decision, investors should account for Ryan Specialty’s business fundamentals and valuation in addition to what happened in the latest quarter.

There is a lot to like about Ryan Specialty. First of all, the company’s revenue growth was exceptional over the last five years. On top of that, its powerful free cash flow generation enables it to stay ahead of the competition through consistent reinvestment of profits, and its astounding EPS growth over the last four years shows its profits are trickling down to shareholders.

Ryan Specialty’s P/E ratio based on the next 12 months is 22.5x. Analyzing the business services landscape today, Ryan Specialty’s positive attributes shine bright. We think it’s one of the best businesses in our coverage and like the stock at this price.

Wall Street analysts have a consensus one-year price target of $65.63 on the company (compared to the current share price of $51.72), implying they see 26.9% upside in buying Ryan Specialty in the short term.