Ryan Specialty (RYAN): Revenue Growth + M&A Lift, But Leverage and Organic Slippage Demand Scrutiny

Opening: Mixed Signals — Strong Top Line, M&A-Funded, and a Q2 2025 Organic Slowdown#

Ryan Specialty [RYAN] reported FY2024 revenue of $2.52B, up +21.15% year-over-year, while the company’s market capitalization sits around $7.49B and the share price is about $58.51 on the NYSE on the latest quote [NYSE:RYAN]. Those headline numbers sit next to more disquieting developments: aggressive bolt-on deal activity in 2024 (cash paid for acquisitions ~$1.71B), a jump in goodwill and intangibles to $2.73B, and net debt moving to ~$2.92B—a leverage profile that meaningfully amplifies execution risk if organic growth stalls. Management signaled a deceleration of organic momentum in Q2 2025 even as acquisition-backed revenues sustained the top line, creating a tension between headline growth and the underlying, repeatable revenue engine.

This article connects the strategy (acquisition-led specialty expansion) to the execution evidenced in the financial statements, quantifies leverage and cash generation, and isolates the specific operational risks that Q2 2025 exposed. The data cited in the analysis are taken from the company’s FY2024 financials (filed 2025-02-21) and related quarterly disclosures Ryan Specialty filings and the company investor site Ryan Specialty Investor Relations.

Key takeaways#

Ryan Specialty delivered robust headline growth in FY2024, driven materially by acquisitions, but a closer read shows a bifurcated performance: strong cash generation and FCF, contrasted with rising leverage and a Q2 2025 organic slowdown. The company converted acquisitions into scale—total assets rose to $9.65B—but integration timing and E&S market capacity shifts compressed the visible path to sustainable organic growth. Free cash flow is strong in absolute terms ($467.87M in FY2024), which provides runway for integration and debt service, yet the company’s net debt to FY2024 EBITDA runs roughly ~4.88x on a straight calculation using FY2024 figures, underscoring sensitivity to margin and earnings volatility. Investors should watch organic premium momentum, synergy realization from recent deals, and the cadence of debt reduction or additional equity issuance as determining factors for risk-adjusted upside.

Financial performance and earnings quality: growth by acquisition with mixed income signals#

Ryan Specialty’s income statement shows consistent revenue expansion over the last three years: $1.43B (2021), $1.73B (2022), $2.08B (2023) and $2.52B (2024). These figures imply consecutive YoY increases of approximately +20.98% (2022), +20.23% (2023) and +21.15% (2024), for a three-year growth run that equates to a compounded annual growth rate in the low +20% range (three-year CAGR ≈ +20.79%) based on the raw revenue series company FY files.

However, the composition of that growth matters. The cash flow statement shows acquisitions net outflows of -$1.71B in FY2024, and acquisition activity has been a recurring theme across recent years. The company’s reported goodwill and intangible assets increased to $2.73B at year-end 2024 from $2.26B in 2023, consistent with a buy-and-build model that elevates headline revenue but introduces integration and amortization pressure.

There is an important data inconsistency in the consolidated reporting that bears noting and which we flag for readers: the FY2024 income statement in the dataset reports net income of $94.67M while the FY2024 cash flow statement lists net income of $229.91M for the same period. When encountering this conflict, we present both figures and use them carefully: the lower net income figure tracks the company’s reported profitability metrics (net margin 3.76% per the income statement), while the cash-flow net income is better aligned with cash conversion and operating cash flow metrics. For cash-generation and leverage coverage analysis the cash-flow statement and operating cash flow (FY2024 operating cash flow $514.87M) are more informative, but readers should expect the company’s formal filings and footnotes to reconcile the difference between the two net income line items (for example, items excluded from operating cash flow or non-cash adjustments and changes in consolidation accounting). We flag the inconsistency and recommend investors confirm the reconciliation in the most recent 8-K/10-Q/10-K notes Ryan Specialty filings.

On tangible profitability, FY2024 operating income was $427.81M (operating margin ~17.01% on the reported revenue), EBITDA was $598.63M, and gross profit was $924.63M (gross margin ~36.75%)—all indicating a healthy brokerage and underwriting mix at the gross and operating lines. Net margin per the income statement is modest (3.76%), reflecting either elevated interest, amortization, or acquisition-related impacts. Yet cash flow conversion is strong: operating cash flow of $514.87M and free cash flow of $467.87M suggest the underlying business is generating durable cash, even after heavy capital deployment for acquisitions company FY cash flows.

Table 1 below pulls the income statement trends together so the growth and margin dynamics are visible at a glance.

*Note: FY2024 cash-flow statement includes a differing net income line of $229.91M; both figures are presented in the body for transparency and should be reconciled in the company’s filings. Source: Ryan Specialty FY2024 filings (filed 2025-02-21) Ryan Specialty filings.

Balance sheet, leverage and cash flow: capacity to pay — for now — but sensitivity to earnings#

Ryan Specialty’s balance sheet expanded sharply in 2024. Total assets rose to $9.65B from $7.25B in 2023, driven largely by acquisitions and resulting goodwill/intangibles. Total liabilities increased to $8.55B, leaving shareholders’ equity at $627.66M. The company reported total debt of $3.46B with net debt of ~$2.92B after cash and short-term investments of $540.2M.

Those raw numbers imply a highly leveraged equity base. Calculating debt-to-equity using total debt divided by shareholders’ equity gives roughly ~5.52x (or 552%) at FY2024, consistent with the dataset’s high stated leverage metrics and the ratiosTTM indicators. Using FY2024 EBITDA of $598.63M and net debt $2.92B, the simple FY2024 net-debt-to-EBITDA ratio is approximately ~4.88x (2920 / 598.63). The company’s TTM net-debt-to-EBITDA in the dataset is reported at ~4.75x, suggesting similar leverage on trailing measures but underscoring that debt coverage will require sustained cash generation and/or successful deleveraging.

On the positive side, operating cash flow and free cash flow are robust in absolute terms: operating cash flow of $514.87M and free cash flow of $467.87M in FY2024 provide runway for interest, M&A integration, and scheduled debt service for the near term. Dividend outflows were -$80.24M in 2024, and the company did not record share repurchases in FY2024. The cash balance movements reflect heavy investing in acquisitions: net cash used in investing activities was -$1.76B in FY2024, driven by the -$1.71B acquisitions line item.

Table 2 summarizes balance sheet and cash-flow key figures.

Source: company balance sheet and cash flow schedules filed FY2024 Ryan Specialty filings.

The takeaway: Ryan Specialty has the cash generation to support near-term debt service and integration costs, but the enlarged balance sheet and high goodwill create earnings sensitivity to any material organic slowdown or underwriting deterioration.

Growth, M&A and the Q2 2025 deceleration: timing risk and integration execution#

Ryan Specialty’s growth model is explicitly acquisition-augmented. The FY2024 cash flow shows acquisitions of ~$1.71B, and management commentary around Q2 2025 emphasized that the cadence of acquisition contribution and certain renewal timing effects caused an organic slowdown in the quarter even as headline revenue stayed elevated. The company’s record of converting acquired distribution into cross-sell and higher-margin business will determine whether acquisitions are a durable organic growth lever or a short-term headline inflator.

In practice, M&A creates three key impacts on the financials. First, it immediately expands revenue and assets but often introduces short-term integration costs that compress GAAP net income. Second, it creates an intangible-heavy balance sheet that raises amortization and complicates return-on-capital pictures. Third, it makes organic-growth measurement noisier: investors must strip acquisition revenue to see underlying premium velocity. Ryan Specialty’s FY2024 numbers reflect all three: operating margins held up at the consolidated level, but net margins were thin and goodwill rose materially.

Q2 2025 specifically flagged timing risk: renewals in some specialty lines fell later than expected into subsequent quarters, and certain acquired businesses did not ramp cross-sell as quickly as modeled. In a market like excess & surplus (E&S), where capacity cycles and reinsurance pricing shifts are common, these timing and integration variances can create volatile quarter-to-quarter organic results even when strategic direction is sound.

Valuation, multiples and where the market’s skepticism shows up#

On multiples, the dataset reports a TTM P/E in the range of ~132.59x driven by modest per-share earnings, while forward P/E consensus (aggregated) steps down through 2025–2027 (example: 2025 forward PE ~27.55x, 2026 ~22.27x). Enterprise value to EBITDA is reported around 14.94x TTM. Price-to-book is elevated at ~12.1x, reflecting the small equity base relative to enterprise value after heavy leverage and intangibles.

Those multiples encapsulate the market’s view that growth is present but must be converted into durable organic earnings. On one hand, the company’s forward estimates imply meaningful EPS expansion in 2025–2027 (analyst consensus in the dataset shows estimated EPS of $2.05 for 2025, $2.53 for 2026, and $3.02 for 2027), which, if realized, would materially compress current forward multiples. On the other hand, the premium multiple and elevated EV/EBITDA suggest investors are already paying for successful integration and sustained organic acceleration. If the Q2 2025 organic slowdown persists or acquisition economics disappoint, the premium could contract quickly.

Strategic implications and management execution: the integration imperative#

Ryan Specialty’s thesis rests on three linked execution tasks: integrating acquisitions to realize cross-sell and cost synergies, maintaining underwriting discipline to protect margins in E&S cycles, and managing capital (debt reduction or equity) to normalize leverage ratios. The FY2024 cash flow and balance sheet show the company has been willing to deploy substantial capital to grow, and free cash flow provides the mechanics to service that capital deployment. The execution risk is primarily operational: accelerate integration and reinsurance structuring to stabilize underwriting and margin, or face a more volatile earnings profile that will test the company’s premium valuation.

Historically, Ryan Specialty’s operating margins improved through 2022–2024 as scale and brokerage economics ramped. The challenge now is proving that pattern continues when acquisition-related amortization and interest expense are factored in. The company’s guidance language and Q2 2025 commentary focused on margin discipline and the pickup of synergies in later quarters. Those are measurable outcomes and should be watched closely.

What this means for investors (no recommendation)#

Investors assessing [RYAN] should weigh three observable facts: first, top-line growth is real and consistent—FY2024 revenue rose to $2.52B, reflecting both organic and acquisitive expansion. Second, cash generation is strong—FY2024 operating cash flow $514.87M and free cash flow $467.87M provide balance-sheet flexibility to execute integration and service debt. Third, leverage and valuation are elevated—net debt near $2.92B, net-debt-to-EBITDA roughly ~4.88x on FY2024 figures, and price/book of ~12.1x increase the bar for flawless execution.

From a monitoring perspective, three items should be high on an investor’s watchlist in the next two to four quarters: the reported organic revenue trend (does Q3–Q4 2025 show re-acceleration), the pace and visibility of realized synergies from FY2024 bolt-ons (timelines and run-rate benefits disclosed), and any capital allocation moves that address leverage (debt paydown, refinancings or equity actions). The interaction between E&S capacity cycles and Ryan Re or reinsurance partnerships will also be a determinant of underwriting margin stability.

Conclusion: A scalable platform, real cash generation, but execution- and leverage-sensitive#

Ryan Specialty demonstrates the core elements of a successful specialty platform: distribution scale, repeated M&A capability, and the cash flow to support both operations and acquisitions. Those strengths have produced sustained revenue growth (three-year CAGR in the low +20% range) and sizeable free cash flow. At the same time, the FY2024 balance sheet and Q2 2025 organic deceleration underline the central risk: this is a company whose upside depends on integration execution, reinsurance and underwriting discipline, and a clear path to deleveraging. Until those elements are demonstrably converted into repeatable organic acceleration and margin improvement, the market is likely to price the company with a premium that assumes the best-case execution scenario.

Investors should therefore treat the next several quarters as an outcome-focused period: metrics such as organic premium growth, synergy realization, adjusted EPS progression toward the 2025–2027 consensus, and tangible debt reduction will be the concrete markers that convert the acquisition-driven growth story into a lower-risk, enterprise value-justified trajectory.

For full detail on the figures cited in this article, consult Ryan Specialty’s FY2024 filings and quarterly reports Ryan Specialty filings and the company’s investor relations page Ryan Specialty Investor Relations.