Ryan Specialty (RYAN) Q1 2026 Earnings Transcript

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DATE

Thursday, April 30, 2026 at 4:45 p.m. ET

CALL PARTICIPANTS

• Executive Chairman — Patrick Ryan
• Chief Executive Officer — Timothy Turner
• Chief Financial Officer — Janice Hamilton
• CEO of Underwriting Managers — Miles Wuller

TAKEAWAYS

• Total Revenue -- $795 million, reflecting 15% year-over-year growth, with organic revenue growth of 11.8% and contributions from M&A adding over 2 percentage points.
• Adjusted EBITDAC -- $232 million, up 15.7%, with margin expanding by 10 basis points to 29.2%.
• Adjusted Earnings Per Share -- $0.47, representing a 20% increase.
• Stock Repurchases -- $40 million of shares repurchased during the quarter.
• Organic Growth Guidance -- Updated to mid-single digits, defined by Janice Hamilton as "somewhere between the 4% to 6% range effectively."
• Q2 Organic Growth Expectation -- Guidance projects organic growth near 0%, mainly due to continued property rate declines of 25% to 35% and intensified competition in the segment.
• Full-Year Adjusted EBITDAC Margin Guidance -- Projected to decline by approximately 100 to 150 basis points, driven primarily by revenue pressures, additional talent investments, and lower investment income.
• Leverage -- Ended the quarter with total net leverage at 3.3x, within the company's 3x–4x targeted range; willingness to temporarily exceed this for accretive M&A was stated.
• Empower Program -- Cumulative charge expected to total $160 million through 2028, targeting $80 million of annual run rate savings in 2029 with savings ramping in 2027 and 2028.
• AI and Digital Transformation -- Significant investments have resulted in reduced underwriting submission turnaround times from approximately 24 hours to under 2 hours in pilot areas; within Ryan Re, underwriters' average processing time per submission has dropped from 2 hours to minutes, with submission capacity per underwriter up roughly 10x.
• Segment Trends -- Property rates declined 25%-35% on large and catastrophe-exposed accounts; the property book "declined only moderately," while professional lines and construction activity contributed positively; momentum in data center-related activity cited.
• Capital Allocation Priorities -- M&A and share repurchase remain key, with "when the right strategic M&A opportunities present themselves... we'll have the financial capacity to execute on those opportunities."
• Option Grant Program -- Announced a onetime option grant funded by a portion of Patrick Ryan's holdings, structured to be neutral to share count and intended to align leadership with long-term objectives.
• Ryan Re Highlights -- Approaching $2 billion in premium; Markel renewal rights integration cited as exceeding expectations for Q1 organic growth contribution, with largest seasonal contribution in the first quarter.

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RISKS

• Janice Hamilton guided, "we are now guiding to organic revenue growth in the mid-single digits," a step down from prior high-single-digit guidance, due to intensifying property rate declines and competition resulting in a "meaningful decline in our property book for the full year."
• Full-year adjusted EBITDAC margin now expected to decline by 100 to 150 basis points, with the pressure "most pronounced in the second quarter," attributed to market conditions beyond prior expectations, ongoing investments, and lower fiduciary investment income.
• Patrick Ryan described operating in "one of the most volatile and reactive insurance markets I've ever witnessed," highlighting risk exposure from rapid pricing swings and increased competition.
• Janice Hamilton stated, "As of today, we are assuming Q2 organic growth to be near 0, with the biggest uncertainty being how property trends play out," signposting a risk of negative sequential momentum and ongoing sector volatility.

SUMMARY

Ryan Specialty Holdings (NYSE:RYAN) reported double-digit top- and bottom-line growth, but announced a downward revision in its 2026 organic revenue outlook to mid-single digits and a projected decline in adjusted EBITDAC margin of 100 to 150 basis points for the year. Management cited worsening property rate declines, heightened competition, and slower market conditions, with Q2 organic growth guided near 0% and margin pressure anticipated to be most significant in the company's seasonally largest property quarter. Investments in AI and operational efficiency are yielding lower processing times and efficiency gains, while leadership reaffirmed an active capital deployment strategy, including M&A and buybacks, with flexibility to exceed leverage targets for strategic opportunities.

• Management introduced a onetime stock option grant for broad leadership alignment, funded by Patrick Ryan, structured to be neutral to share count.
• An explicit commitment was stated to accelerate AI deployment both in wholesale and delegated authority segments, shortening underwriting turnaround times and amplifying underwriter productivity.
• Property segment challenges continued, with rates down 25%-35% and a "meaningful" book decline projected for the year, as competition intensified and selective risks shifted to admitted markets.
• Leverage ended at 3.3x, inside the preferred corridor, and willingness to exceed this boundary for accretive acquisitions was reiterated.
• Diversification into delegated authority and underwriting management is accelerating, with over $2.7 billion invested over three years, and these segments now comprise over half of net commissions.
• Ryan Re and the Markel renewal rights transaction provided outperformance for Q1, but seasonal effects imply a smaller impact in subsequent quarters.
• The Empower program remains on track for targeted savings, supporting further operational and technology investments, and cost flexibility amid market headwinds.

INDUSTRY GLOSSARY

• Delegated Authority: The practice whereby insurers (often through MGUs/MGAs) grant third parties the authority to underwrite, price, and bind coverage on their behalf, typically to enhance distribution and access niche markets.
• MGU/MGA: Managing General Underwriter (MGU) or Managing General Agent (MGA), an entity empowered by a carrier to underwrite and administer insurance business with significant autonomy, often focused on specialized classes of risk.
• Contingent Commissions: Performance-based payments by insurers to brokers or intermediaries, typically tied to underwriting profitability or volume thresholds.
• Sidecar (RAC Re): A reinsurance vehicle established to allow investors to participate in a defined portfolio of insurance or reinsurance risk, often specific to certain alternative capital strategies.
• Facultative Reinsurance: Transaction-specific reinsurance purchased for individual risks, rather than as part of a broader treaty arrangement.

Full Conference Call Transcript

Patrick 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 15%, driven by organic revenue growth of 11.8% and contributions from M&A. Adjusted EBITDAC grew 15.7% to $232 million. Adjusted EBITDAC margin expanded 10 basis points to 29.2%. Adjusted earnings per share grew 20% year-over-year to $0.47. We also repurchased $40 million of our stock. We are very pleased with our strong start to 2026, especially considering the headwinds our industry is facing.

Our first quarter results on both the top line and bottom line speak to the resiliency of the platform we have built. Our founding thesis was to provide innovative specialty insurance solutions to brokers, agents and carriers. That's exactly what we have done. We created a true specialty insurance services firm, expanding our offerings far beyond wholesale broking. We have built one of the most efficient and effective insurance distribution platforms in the world. Through RT Specialty, the second largest wholesale broker, we've assembled world-class expertise across industry verticals, serving global retailers as well as the tens of thousands of retail brokers in the U.S. Ryan Specialty is the largest delegated underwriting authority provider.

We deliver leading underwriting solutions, supported by strong alignment and governance, distribution at scale and our position at the intersection of the biggest secular tailwinds in insurance, all driving sustainable, profitable growth. Together, RT Specialty and RSUM form a distribution engine of unmatched scale, sophistication and breadth in the specialty insurance market. This distribution platform is built to unlock all of the innovative solutions we're capable of building. Through our strategic alliances and executive level relationships with key carriers, we've holistically changed the conversation. This goes beyond trust and strong returns. It has evolved into the development of innovative products and solutions to address the complex needs of our clients.

Take one of the largest mutual carriers in the country as an example. Our relationship started many years ago when they were looking for access to specialty risk and has evolved into the creation of a new reinsurance market. Over the last 6 years, we created a remarkable business through our reinsurance managing underwriter, Ryan Re, which is strategically positioned to capitalize on expanded opportunities and is quickly approaching $2 billion in premium. We've made acquisitions and brought in top talent across both benefits and alternative risk. With their support, we are building unique capabilities in structured solutions, capital management and funding through group captive or single cell captives.

Separately, for a leading global property carrier, we expanded their reach into specialty lines they've never participated in before and are exploring various additional opportunities together. For a blue-chip specialty carrier, we have developed unique solutions throughout our firm across RT, RSUM and with new capital management capabilities, allowing us to launch our flagship alternative capital sidecar, RAC Re. These are not isolated stories. They are the compounding outputs of a distribution platform that gets stronger and more strategic with each relationship. Built on the strength of industry-leading underwriting results, we innovate alongside our clients and capital trading partners and deliver unique solutions that we believe cannot be easily replicated by our competitors.

The depth and durability of these strategic alliances, the breadth of products and solutions we deliver to the market and the scale of capital we manage on behalf of our trading partners are the dimensions of value that capture what this platform is truly capable of and what will define our story over time. Our strategy is to continue widening our moat, leveraging the operational flexibility created by Empower and building into the white space that we believe no one else in our industry can match. Turning to the market. We continue to operate in one of the most volatile and reactive insurance markets I've ever witnessed. While volatility in market cycles is inevitable.

We are feeling the effects of this across our business, particularly in wholesale brokerage, where we now expect more tempered growth in 2026. With that said, I am very proud of our brokers and underwriters as they're delivering impressive growth in the face of significant pricing pressures and broader economic uncertainty. Turning to AI, which Tim will expand on shortly. I want to say a few words. Through automation and AI, we believe we are unlocking the capacity of our people to more efficiently and effectively do what our clients and trading partners value most. We solve for complexity through our expert-led advice and advocacy and a culture of execution and innovation.

We believe our scale, specialized talent, proprietary data, the breadth of trading relationships with brokers and carriers and the significant volume of transactions flowing through our platform and Ryan Specialty, a clear net beneficiary of the AI-driven transformation reshaping our industry. Lastly, on capital allocation, beyond our modest and sustainable dividend, we view both M&A and our share repurchase program as key priorities. We will continue to do what we believe is right for our shareholders, particularly given the continued spread between public and private multiples and the dislocation between our current valuation and our confidence in the near- and long-term outlook of our business.

Make no mistake about it, when the right strategic M&A opportunities present themselves, ones that fit our 3 M&A criteria, strong cultural fit, strategic and accretive. We will be the first in line for those high-quality assets, and we'll have the financial capacity to execute on those opportunities. As we look forward, we are confident in our ability to innovate, invest and continue to strengthen and diversify our offerings within the specialty insurance market. Our relentless efforts to navigate this transitioning market all while investing in areas of accelerating growth, give us strong conviction that we will generate industry-leading organic growth over time and remain a leader in the specialty lines insurance sector for years to come.

Before I turn the call over to Tim, I want to share one more thing with you. We have announced a onetime option grant program in the second quarter, funded entirely by a portion of my own holdings to make sure the broader team is properly aligned over the long term. It is structured to be neutral to the company's outstanding share count and will function as a direct reinvestment for me into the team that has built this platform. I believe in this team, I believe in this platform, and I believe in the direction Ryan Specialty is heading.

As we look forward to the work of the next several years, I want every leader at this company to be aligned to our mission, and I'm offering a meaningful piece of my own capital to support that conviction. With that, I'm pleased to turn the call over to our Chief Executive Officer, Tim Turner. Tim?

Timothy Turner: Thank you very much, Pat. I am very proud of how our team performed this quarter. We remain hyper-focused on successfully executing what we can control. Diving right into our results by specialty, our wholesale brokerage specialty continues to deliver in a transitioning market. In property, our team navigated a very challenging environment. Rates continue to decline with large and cat-exposed accounts down 25% to 35%. Capacity continued to increase across insurance, reinsurance and alternative capital and competition intensified broadly, including in the admitted market. However, despite these trends, our property book declined only moderately in the quarter, and we are extremely proud of these results. Again, we are controlling what we can control.

We are focused on winning head-to-head against our competitors and capturing new business from the steady flow into the E&S channel. In casualty, the trends remain net favorable for Ryan Specialty, yet the picture is bifurcated. In high hazard large account classes like transportation, habitational, health care, social and human services and public entity, loss trends driven by social inflation continue to drive meaningful rate increases, in many cases, exceeding 10%. At the same time, there is growing competition for small and medium hazard risks. We saw select carriers looking to deploy new capital, adding competitive pressure within the E&S market.

Our professional lines team significantly outperformed the market despite continued yet moderating pricing pressure and aided our growth in the quarter. We also had strong construction activity in Q1. We remain optimistic about this pipeline heading into the balance of the year and are well positioned as the leading wholesale broker in the construction space. We are encouraged by the momentum of data center activity we saw this quarter, further supported by a strong pipeline. As we have noted in the past, this business is inherently lumpy and the timing of large project findings is difficult to predict. Taking these trends together, we're anticipating more moderate casualty growth in 2026.

Now turning to our delegated authority specialties, which include both binding authority and underwriting management. Our binding authority specialty continued to perform well, though the environment showed signs of heightened competition. We saw pockets of small commercial business move toward the admitted market, consistent with what we've described last quarter. Our underwriting management specialty had an excellent quarter with strong results across transactional liability, international specialty, casualty, financial lines and reinsurance. Zooming in on the transactional liability, our practice once again performed exceptionally well, supported by the investments we've made over the past few years and a more constructive global M&A outlook.

Ryan Re delivered an outstanding start to the year with strong renewal retention, especially considering the tough pricing environment. We are encouraged by the Markel portion of the book, which also displayed strong client retention and was supported by expanded relationships across casualty, specialty reinsurance and the London markets. As we do across our entire underwriting management specialty, we exercise underwriting discipline, leaning away from the property cat business where pricing did not meet our standards and leaning into risks with better risk-adjusted returns. Adding to what Pat said, I'd like to update you on our digital transformation and AI strategy.

We are making significant and responsible investments in AI leadership and infrastructure and are partnering with leading AI platforms to accelerate our progress. This is a top priority for our management team, and we've rapidly delivered numerous models to our 6,000-plus employees. We are moving quickly live in production in certain areas and are actively developing new tools. Our digital transformation and AI strategy is built around 3 principles: our clients, our people and our process. In practice, we invest behind workflows that improve client outcomes, make our people more productive and make our process faster and more reliable. Let's start with our clients, spanning across brokers, agents and carriers.

Faster speed to market, deeper risk analysis and even stronger advocacy. We are deploying AI that helps our underwriters triage a submission in minutes instead of hours, which benefits the flow in both directions. Our broker clients see improved turnaround times and the carriers receive better informed, higher-quality submissions. That is an improved client outcome. AI is also improving underwriting insights. In parts of Ryan Re, we are running enhanced portfolio level analytics like concentration analysis and risk modeling, which gives our carrier trading partners a level of analytical rigor that is extremely challenging to complete manually. Better data leads to better placements and better placements lead to stronger, longer-lasting trading relationships. This also means more proactive service.

As our broker workbench capabilities mature, we will enable automated coverage gap identification and AI-assisted cross-sell analysis. These maturing capabilities will assist our brokers in delivering more value to their retail trading partners by being increasingly proactive. The second of our 3 principles is our people. We want our brokers to broker and our underwriters to underwrite. Today, too much of their time is spent on manual processes, ingesting submissions, massaging data, chasing subjectivities and formatting proposals. Not only does AI and automation take that work off their plate, but it will enhance their productivity by giving them capabilities at a speed and scale that weren't possible before. And this goes beyond our brokers and underwriters.

We are changing how we train and develop talent. New hires will ramp up faster when our AI tools accelerate institutional knowledge, recommend next steps on unfamiliar risks and provide real-time guidance informed by decades of placement data. What used to take a junior broker 2 years to learn through experience, they will begin accessing in just months, accelerating our return on the most accretive investments we make. Across the organization, AI and automation are improving how we operate. We are enhancing our internal tools and systems to give our leaders better data to make timely informed decisions. When our people are equipped with tools that improve speed and efficiency, our clients get better outcomes.

The last of our 3 principles is our process. Put simply, this refers to our scale. We manage over $30 billion in premium across hundreds of products. We are thoughtful in how we're turning manual tasks into reimagined end-to-end automated workflows deployed across our firm. Within our underwriting management specialty, certain projects are beyond the pilot phase. AI-enabled and automated submission processing has reduced turnaround times from approximately 24 hours to under 2 hours and look promising to scale. This digital transformation will assist us in scaling this platform without proportional headcount growth, while maintaining the differentiated specialist expertise that defines us.

Lastly, on process, it means building the right foundation, a unified data and technology architecture for the next decade of growth. Now that we've covered our principles, let's talk about how this all fits together across our 2 disciplines: wholesale brokerage and delegated authority. On the brokerage side, we are building a submission gateway and broker workbench. These tools allow us to reimagine, redesign and automate the most time-consuming parts of the broker's day from submission, ingestion and clearance to carrier matching to detailed quote comparison from various carriers. On the delegated authority side, this is where our platform is most differentiated and where some of our most advanced capabilities are operating today.

Within Ryan Re, we have built an AI-powered underwriting platform for our facultative reinsurance business. We have reduced average processing time per submission from approximately 2 hours to minutes while increasing the number of submissions each underwriter can evaluate by roughly 10x. Within Velocity, our property catastrophe MGU, we deployed an AI-driven platform that scores every submission on appetite fit and propensity to bind. The result being an 11x uplift in submit to bind ratios for our highest appetite category compared to our lowest. Simultaneously, the speed to quote has improved by 36% on a median basis. These capabilities are changing how our underwriters work every day, and we are preparing to deploy them more broadly across the firm.

Lastly, I would like to remind everyone what business we're in and why we believe this platform will endure. We solve for complexity through expert-led advice and advocacy and a culture of execution and innovation. Every placement we touch requires specialist judgment on unique risks, negotiation across multiple carriers and advocacy when the contract needs to perform. That is not a data processing problem. It is an expertise problem and expertise is what we deliver. Disintermediation risk rises as complexity falls. Ryan Specialties portfolio sits on the other end of that spectrum. Now turning to a brief update on our talent investments. The recruiting class from late 2025 is performing very well and contributing to our new business growth.

We continue to expect these hires will become margin accretive within 2 to 3 years. Stepping back, we are very pleased with the first quarter. That said, we are clear-eyed about what lies ahead, and Janice will walk you through how we're thinking about the rest of the year. With that, I will now turn the call over to our CFO, Janice Hamilton. Thank you.

Janice Hamilton: Thanks, Tim. In Q1, total revenue grew to $795 million, up 15% period-over-period. Growth was driven by organic revenue growth of 11.8%, contributions from M&A, which added over 2 percentage points to our top line and contingent commissions as we continue to deliver strong underwriting profits for our carrier trading partners. As expected, Q1 was aided by Ryan Re, which had a strong start to the year as the Markel portion of the book contributed to our growth. Adjusted EBITDA grew 15.7% to $232 million. Adjusted EBITDAC margin of 29.2% expanded 10 basis points compared to the prior year period. Adjusted earnings per share grew 20% to $0.47. Our adjusted effective tax rate was 26%.

We expect a similar rate for the remainder of 2026. On capital allocation, we repurchased $40 million of our stock. As Pat described, our key priorities remain our M&A strategy as well as our repurchase program. When high-quality assets come to market that meet our criteria, we will be first in line and we'll have the capital to execute. We remain willing to temporarily go above our leverage corridor for compelling M&A opportunities that meet our criteria. We ended the quarter at 3.3x total net leverage on a credit basis, well within our 3 to 4x comfort corridor.

Based on the current interest rate environment, we expect GAAP interest expense net of interest income on our operating funds of approximately $222 million in 2026 with $58 million to be expensed in the second quarter. We are making good progress on our Empower program and are on track for a cumulative charge of approximately $160 million through 2028, delivering approximately $80 million of annual run rate savings in 2029, with savings ramping through 2027 and 2028. More than the savings themselves, Empower is creating the operational flexibility we need to invest behind the strategic opportunities Pat described. Now turning to our outlook.

The platform we have built positions us to navigate this environment with discipline, yet we want to be transparent about the recent trends we are seeing today. As Tim mentioned, current market conditions in both property and casualty continue to evolve rapidly. And as a result, for the full year, we are now guiding to organic revenue growth in the mid-single digits. Our guidance embeds continued property rate declines of 25% to 35% for the most cat-exposed lines and now incorporates the more recent acceleration in competition more broadly, resulting in a meaningful decline in our property book for the full year.

In casualty, we are assuming more moderate growth across our book, reflecting growing competition for small and medium hazard risks and new capital being deployed, which Tim described. We continue to expect organic growth to fluctuate quarter-to-quarter. As we have discussed, the second quarter is our seasonally largest property quarter. As of today, we are assuming Q2 organic growth to be near 0, with the biggest uncertainty being how property trends play out. On margins, we are now guiding to a full year adjusted EBITDAC margin that will be down approximately 100 to 150 basis points year-over-year. The pressure will be most pronounced in the second quarter, where we are assuming Q2 margins to be in the low 30s.

That said, the year-over-year decline reflects the revenue impact of the current and evolving market conditions beyond what we described last quarter, the continued absorption of our talent investments, lower fiduciary investment income and higher health care and benefits costs. At the same time, we are taking thoughtful action across our cost structure, advancing the operational efficiencies underway through Empower, accelerating the integration of our recent acquisitions and continuing to leverage our digital transformation and AI strategy. These actions are designed to protect our ability to responsibly invest in the areas driving growth and position the platform to capitalize when the market returns.

Looking ahead, we continue to expect modest margin expansion in most years, supported by Empower and the natural operating leverage of our growing platform. Before I close, I want to make one important point about our guidance. Our mid-single-digit organic guidance for 2026 reflects what we can see and quantify based on the trends in the market that are impacting our near-term growth. We are encouraged by the momentum we've gained in the strategic alliances and executive level relationships that Pat and Tim described and look forward to updating you in future quarters.

Through innovation, we have and will continue to create new differentiated opportunities to aid our growth over time, which is entirely unique to the scale and expertise we have built at Ryan Specialty and something we believe cannot be easily replicated by our wholesale broker peers. This is the framework we want investors to understand. The diversification we have built and the platform we are continuing to expand are not theoretical. They are tangible compounding sources of growth. I am proud of how our team is executing through this environment, continuing to deliver for our clients, advancing our technology and AI investments and driving the Empower program forward with great collaboration.

In closing, our first quarter results are a testament to the dedication of our team and the strength of the platform we've built. We are navigating through a transitioning market, and we are doing so with discipline, transparency and a clear focus on the levers within our control. With that, we thank you for your time and would like to open up the call for Q&A. Operator?

Operator: [Operator Instructions] Our first question will come from Elyse Greenspan at Wells Fargo.

Elyse Greenspan: I guess my first question is on the updated organic growth. I know you did guide the Q2 to be flat. But I guess, how do you define mid-single digits, I guess, is that within range of 4%? Or where are you looking, I guess, for the full year? And then within that mid-single-digit guide, I'm assuming you're expecting property to decline for the full year and see like modest growth within casualty. But can you help us think through, I guess, the moving pieces of how you're expecting organic growth to trend over the course of the year while bucketing in what mid-single digit means?

Janice Hamilton: Yes, sure. Elyse, this is Janice. So thank you for the question. All good parts. Hopefully, I can pick them all up here. So maybe just starting with your first one on the mid-single digits. So that is a step down from the high single that we had previously guided to. We think about that, kind of, either side of 5%. We've historically not -- or we've historically guided with a bit more precision with specific numbers, but we think about that just to help you out somewhere between the 4% to 6% range effectively.

When we think about how organic growth will play out for the remainder of the year, obviously, we had a really strong start to the year with 11.8%. The additional help that we gave on the second quarter, we typically don't guide by quarter. So we wanted to make sure that just given the concentration of property within the second quarter being our biggest property quarter and the trends that we're seeing, the intensification of some of that competition that is continuing to interact also with the 25% to 35% rate reductions that we've seen that there is a risk that our property book combined with the rest of the portfolio could be effectively near 0 for the second quarter.

Playing that out for the remainder of the year, third and fourth quarters obviously are helped out by business mix. That concentration in property disappears. And then when we think about the full year being at that mid-single digits, we've also got other elements of where we think underwriting managers and other parts of the book will go, but then also the build-in or the buildup of the new talent that we brought on in the second half of last year.

Elyse Greenspan: And then my follow-up is on margin, right? Recognizing, right, the new guidance obviously factors in, right, this mid-single-digit growth combined, right? You guys are obviously investing in talent, right, that you started to do towards the end of last year. Can you guys help us think through like I understand it takes a couple of years for the hires to be margin accretive and then there's also time to benefit revenue. But how do you guys balance, right, just making these investments now, right, at a time when growth is lower, right? So you're going to see lower growth and then even more pressure on your margin as we're going through what you call like a transitionary period.

Janice Hamilton: Yes. So Elyse, I would just start with the guide for what we've just updated, that includes the impact on the top line pressures from a revenue perspective. So we were expecting to be moderately down -- flat to moderately down over where we ended last year. We're now projecting to be 100 to 150 basis points down, and that does reflect the increased pressures on our top line. Similar to the conversation that we just had around the organic, we expect that impact to be most pronounced in the second quarter, just given the concentration of property. But we are taking thoughtful actions around our cost structure.

And we really think about the timing and the opportunity and the flexibility that Empower affords us to do that. There are a lot of opportunities we have to advance our operational efficiency program. We are going to be focused on accelerating, integrating our platforms in terms of technology and then also just leveraging our AI and digital transformation strategy. So all of those together create additional flexibility to allow us to continue to invest in the platform.

Elyse Greenspan: And then one more, if I could. The second quarter organic for the property book to decline meaningfully. How much of that is within your MGU book of business?

Janice Hamilton: Elyse, I would say that when we think about the concentration of property, obviously, we've talked primarily about wholesale brokerage being where the concentration of that is coming from. We talked about the tempering of growth in that area. But I would also mention, and I think Tim shared this as well, that as we continue to face pricing pressures, the importance of exercising discipline in underwriting managers becomes paramount. We want to ensure that we're delivering profitable underwriting results for our carriers. And we will look past certain property risks if they don't meet our return threshold.

Operator: Our next question comes from Alex Scott with Barclays.

Taylor Scott: Could you describe, I guess, thinking more medium term, what kind of spread do you think you can make over sort of the retail brokerage business? And I think the knee-jerk would be this feeling like growth is coming down closer to where some of the retailers have been. But on the other hand, there's some unique pressure from price on you guys. So I just wanted to understand like where net new business is and how you view that just kind of making a broad comparison.

Patrick Ryan: This is Pat. We're anticipating and realizing today the same as our founding thesis. Our role as the intermediary, as an adviser, and an advocate, that role that we're playing brings specialty insurance solutions to brokers, agents and carriers. That's all expanding, particularly providing services to carriers. However, in the soft market, pricing is a headwind. I've been through several soft markets and price does get to be a driver. But it doesn't replace the value proposition that our people bring to our clients. So we're working our way through. We're fighting through, and we're fighting effectively. And we did have a good first quarter. But we don't have the same trajectory that we've had in a hard market.

Incidentally, the conditions that caused that hard market are still out there. But as we all know, there were some benign results in wind and other perils and carriers made a lot of money. And so they're buying market share. So we knew we'd be in a soft market, and we built this platform really with that in mind, and we've positioned the firm to really work its way through effectively, and we're confident that we will. And we base that on, we have the largest and most effective distribution capabilities in our niche, thousands of relationships with large and small brokers. As we've said many times, they use us when they need us.

But we are constantly expanding the services that we provide so that they need us more. And you're seeing that in our diversification strategy. That diversification strategy was not accidental. That was well thought through, planned for a long time. And that allows us to create new and innovative products and bring new solutions to our retail brokers and yes, even some of our wholesale broker competitors. So creating these new innovative products and solutions strengthens us in reinsurance underwriting. And as Janice mentioned, or Tim mentioned, in facultative property, so expanding the reinsurance capabilities. We're growing very nicely in benefits.

And that's tied in also to our alternative risk strategy because alternative risk is growing nicely and bringing solutions to clients who want to put up some of their own capital. So we're applying that same principle on our benefits, whether it be employers are being put in the group captives. And so constantly improving our solutions that we bring to our broker clients. So we've got these strong strategic alliances. And I would submit that no one else in our space has those strategic alliances that allow us to create new solutions, allow us to bring more new capital to our clients' needs.

And frankly, those trading -- special trading relationships really make us enthusiastic about our future, but they also enhance our ability to attract and retain talent. And all of this is about talent. Talent gets a little more of a pressure when it's a pricing phenomenon like we're having in a soft market. But we know how to grow in a soft market. But we want to be transparent. We want to make sure that you understand the headwinds we're facing but also understand the tailwinds that we have. So we're in a cycle here that is putting pressure on. But we're absolutely positioned to take advantage when the market turns, and it will.

And I would say that we still believe that we will be the industry organic leader, having industry organic revenue growth translating into profit growth over time. Tim, if you want to add anything to that.

Timothy Turner: No, I think that covered it, Pat. We're very optimistic that we can grow even in a softening market. And again, our creative, innovative culture gives us that confidence. We have the tools, we have the products, we have the talent, and we look forward to this challenge, and we know we can do it. Thank you.

Taylor Scott: As a follow-up, I just wanted to ask about the broader macro environment and just some more volatility, a little more uncertainty out there. Is that affecting things, whether it's construction here in the U.S. or some of the business you do in Europe?

Timothy Turner: I'll let Miles talk more about Europe, Alex. But I would say this that our construction float is very strong. There's a little bit of pressure from interest rates. We've mentioned it before. The opportunities are as strong as they've ever been in construction, but there's a delay from submit to quote to buy. So our quotes and our winning RFPs are sitting for a little bit longer. But we are binding them. We're getting a lot of traction in the actual data center area and crypto opportunities. So we remain very bullish on our construction pipeline.

Miles Wuller: I'll touch on transactional liability, which is a global product for RSUM. The space remains quite resilient despite macro uncertainties. The market is working extremely efficiently. There's substantial capital on the sidelines. There's efficient access to debt leverage. And so we're seeing dollar value of deals continue to increase. Unit count of deals is down slightly, but we continue to take more than our fair share of those deals in both transactional rep and warranty as well as tax indemnity.

Operator: Our next question will come from Bob Huang with Morgan Stanley. [Operator Instructions]

Jian Huang: Can you hear me now?

Operator: Yes.

Jian Huang: Okay. Perfect. Sorry about that. My first question is about the broader macro environment. Just given there is likely higher expected inflation due to the Middle East conflict and inflation into the U.S. Is there any conversation or thoughts on how that might ultimately flow into pricing? When do you think pricing will start to reflect higher inflation through exposure units or through pricing initially? Just curious your view on that.

Miles Wuller: Well, so Tim spoke about RT's construction practice. And so maybe I'll tackle that through the lens of RSUM's builders' risk practice, which does tend to service more of the small and midsized builders risk part of the marketplace. Certainly, we would benefit from more certainty in that space. Borrowing rates remain higher, inflation remains high, and the war creates certainty in the smaller part of our -- the U.S. economy. But I think the same outcome, as I said on the -- we've all said in the larger risk and the transactional risks, we have the product, we have the quotes. We're winning more than our share.

And we will all simply benefit from more shovels going in the ground as a result of stability. But yes, we are taking inflation into account as we price risk in real time. It does remain a factor in keeping rates firm in certain classes.

Jian Huang: Okay. Maybe a follow-up on data center because I want to unpack some of the commentary you had already. If we look at the larger brokers increasing their data center facility size meaningfully versus last quarter, can you maybe talk about the competitive environment here? It feels like the layer that you're playing with, I have a hard time seeing significant competition against you in the data center space. Is that right? And can you maybe give us more commentary around the pipeline for data centers, the great growth contribution in the next few quarters specifically?

Timothy Turner: Sure, Bob. For starters, as we've mentioned, we know we're the industry leader in construction in the wholesale market. And we know that our pipeline is full of opportunities for data centers. Having said that, there's quite a difference between property and casualty opportunities with data centers. So we would have to break that down for you. But it all leads to what Pat says frequently, the brokers use us when they need us. And right now, there's a real strain on capacity in the valuation of these projects. And there's a completed operations exposure that long-tail casualty underwriters are leery of.

So there's a lot of pressure on building towers and limits in space, and our services are in high demand. So we see this as a great opportunity going forward, all part and parcel of our construction practice group.

Operator: Our next question will come from Tracy Benguigui with Wolfe Research.

Tracy Benguigui: Pat, you've been in the industry for many decades and seen many cycles. I was struck by your comments that we're in one of the most volatile and reactive markets you ever witnessed. So when I look at turning points in prior wholesale markets, what is different today? Or if I ask this differently, has the E&S market changed so much that what is ahead is less known? Like it used to be that E&S was a dirty word no longer as carriers are well capitalized. Is that part of it?

Patrick Ryan: Well, I would say that the rapid increase in property and casualty rates starting back in '19, second half of '19. That rapid and prolonged rise in rates was -- I've never seen anything like that. And then we have a very risky world out there. And the risks have not diminished. They've just taken the hiatus, some of them have. And so what shocked me is how rapidly property rates have declined and now certain parts of casualty. And it's generally understood that casualty results in '21, '22, '23 are putting pressure on reserves, and it's still early. So some people have said caustic remarks about what underwriters are doing.

We're not going to say that, but we are saying that it's surprising how quickly declines have emerged. And so it's that whipsaw volatility. And as you know, when you're coming off large increases and then you get large decreases, that puts so much pressure on new business because you're renewing the business, but you're renewing at a lot lower rate. And as you know, we're a straight commission business. And so we rise and fall with how the pricing of our products are being presented to the marketplace. So that's what I mean when I say I've never seen anything like that, particularly because so many hard markets in the past were event driven. This really wasn't an event.

This was a recognition of how the world has changed with climate issues and litigation issues, all the litigation finance. None of that has subsided. And so it's surprising that people would take their products or their profits and reinvest so aggressively, property movement into casualty because it seems to have a better rate environment. All of that is sort of that's what's starting to surprise me. And I think it surprised a lot of people. We're one big storm away from some adjustments. And I can't -- I'm not going to comment about people's behavior. It's just surprising that it is so dramatically swing up and swing down as quickly as we have done.

Tracy Benguigui: Got it. And you guys tend to talk about how flow is so much more important than pricing. But if I listen to the commentary today, I think it's been mostly on pricing, particularly wholesale that's informing your outlook on organic. Can you touch on if you're though contemplating any reverse flow or even on the underwriting management business, are you seeing any type of MGA cancellations?

Timothy Turner: Tracy, I'll start by kind of showing some of the statistics that we've all seen in the marketplace. We know that the non-admitted property and casualty market, the flow into the channel is up 8%, and we're outpacing that as a company. So our opportunities and the flow of business into the channel remain very strong and healthy. And so we -- a lot of our optimism comes from that. We're getting lots of opportunities. It's just the price. The price continues to go down in property and starting to see some headwinds in casualty. But we're confident that the flow will continue. The business has been restructured. Pat talked about the cycles gone by.

But one of the biggest changes has been that we now have instead of a dozen or so E&S companies, we have over 100, so structural change there. The percentage of non-admitted business was 4%, 5% pre second quarter of '19, and now it's up to 24%. So it's a very, very healthy flow into our channel. We believe that it will stay in the channel, most of it. We don't see -- we see some moderation back into the admitted standard market, but not very much. It's moderate. And again, the stamping evidence is strong. So we remain very positive that we'll be able to capture our fair share of that flow.

Tracy Benguigui: Can I ask also about MGAs? Have they need carriers? How are those relationships going? Anyone cancel a relationship? Is that play in your outlook at all?

Miles Wuller: This is Miles. I appreciate the question. It's actually quite the contrary where we continue to attract substantial capital from existing and new partners almost on a daily or weekly basis. I'd add to what my colleagues have said that Ryan's $12 billion delegated platform wins through standard of care, alignment and material investment in our people and our platform. And the reality is that the carriers are printing record ROEs, profit, combined ratios, none of that is at all coincidental. I think we've had a role in this. We've pushed substantial rate, terms and conditions and innovation.

Beyond that, through the MGs and distribution, we've guided the highest hazard risk into the monoline -- excuse me, the highest hazard modeling risk into the E&S market where the balance sheets have the best chance of the proper risk-adjusted returns. And the outcome isn't that surprising. There's substantial insurance, reinsurance and alternative capital coming to support the channel. So there is a lot of talk in the industry where the world is always, I guess, essentially looking for an enemy who's driving this. But the answer is really pretty simple. It's an abundance of capital that was driving price pressure through new facilities, the easing of terms and conditions on existing facilities and even existing balance sheets.

But as it pertains to, I believe, our role in the delegated space, over 40% of E&S premium is delegated today and delegated is approximately 20% of the U.S. commercial P&C marketplace. So I'm actually quite proud of RSUM's or all of Ryan's delegated underwriting contribution to the exceptional results in the carrier community. And we're convinced that Ryan will continue to contribute to thoughtful underwriting and leading underwriting profit into the future, and that's represented in our forecast.

Operator: Our next question will come from Meyer Shields with Keefe, Bruyette, & Woods.

Meyer Shields: Am I connected?

Janice Hamilton: Yes, Meyer.

Meyer Shields: Okay. Great. So really a couple of quick questions. First, I just wanted to confirm that the change in the margin guidance for 2026, is there anything in that other than the change in expected organic growth?

Janice Hamilton: Meyer, I would say the simplest thing, the change from where we were last quarter to now is as a result of the top line change.

Meyer Shields: Okay. Great. And I'm wondering -- so we're in clearly a weird environment right now in terms of pricing. When you take a 3- to 5-year outlook across the cycle, has your view on Ryan's organic growth potential in that environment changed at all?

Janice Hamilton: Meyer, would you mind repeating that one?

Meyer Shields: Yes. I'm wondering, I understand that there are particularly surprising and pronounced pricing pressures in 2026. But if you take a step back and say, okay, over the next 3 to 5 years, has your view of the organic growth opportunity changed from that perspective?

Patrick Ryan: My perspective on it, Meyer, it's Pat, is that we are much stronger today than we've ever been. We have so much more to offer our brokers and our carriers and these strategic alliances that the opportunity for innovation has never been greater. The data that we're now managing much more effectively as most people are because of the pressure of AI and the opportunity through AI, there's tremendous opportunity to utilize that data to innovate new product. And the way we get organic growth is by bringing innovation and empowering our people to execute on that. And so absolutely remain very, very bullish on being long-term industry leader in organic growth.

And we have not given up on double digit. We just are suffering from these price reductions. But in terms of the quality of our solutions, they just keep improving and the quantity keeps improving dramatically because of the innovation. So -- and I would add one other thing. And that is that AI, as Tim talked about, is going to allow us or provide the opportunity for us to take people who are doing administrative support work and get them into the field. And there's nothing more successful than having more boots on the ground talking to clients. And so AI is opening that opportunity for us, and we are moving towards availing ourselves of that opportunity.

We're not making any predictions, but for one, we'll have more people out dealing with clients in the quite near term because of the streamlining of our back-office work and taking very talented people that are now experienced enough to go out and work with clients and be successful. In my past life, I experienced the value of bringing young talented people into the marketplace and letting them loose to go out and make calls and develop business. And so our strategy to recruit, train, develop people and bring them into the industry is going to accelerate the impact. That's my opinion.

Operator: Our next question will come from Rob Cox with Goldman Sachs.

Robert Cox: Yes. My first question was just on retail brokers. I think there's some industry discussion that retailers are working to keep growth as the environment gets more challenging. Are you seeing retail brokers pushing harder to pivot business into retail or admitted markets? And are you seeing retailers look to internalize wholesale business? And is that embedded in your guidance at all?

Timothy Turner: Rob, it's Tim. Yes, we are seeing some of that activity, but it's not a lot, and it's not a meaningful amount. There are retailers, global and national, as you know, that have wholesale solutions. For the most part, they're very small and they don't interfere with our flow. But there's pressure, and there's pressure to go direct when they can, and we deal with that every day. But there's 100 wholesale-only P&C companies now in the U.S. and the high hazard classes of business that we're in are very technical and they require expert marketing expertise to achieve the best results for the client. And I would say majority by far of the retailers in the U.S. know that.

And they'll continue to count on us. And again, our flow is as strong as it's ever been. So we see a little bit of activity to your question but it's not meaningful.

Robert Cox: Okay. That's helpful. And just as a follow-up, yes, I'm curious if you're seeing any insurance product innovation around artificial intelligence and if that's flowing into the E&S market at all?

Timothy Turner: No, we have not seen any particular product innovation around that. We've seen coverage enhancements. We've seen some coverage tightening, if you will, carriers creating manuscript endorsements around the exposure. So there's a heightened awareness about what the potential losses could be. So our professional liability brokers are fast at work. And I believe it's inevitable that there'll be new products that emerge from the AI explosion.

Robert Cox: Okay. And if I could squeeze one more in. I just wanted to ask; did you guys quantify the RAC Re and Ryan Re deal benefit to organic growth in the quarter? And maybe how much you expect them to contribute next quarter as well?

Miles Wuller: Rob, it's Miles here. We do not break those out by line. But I mean, I think behind the numbers that we published, we're proud that across the entire underwriting segment with extremely attractive growth despite the property headwinds, new product development, incremental capital under management, taking share from others and compounding that core organic growth to get to total growth, we had continued increase in profit commissions. And then on top of that would be the Markel transaction, as you highlighted.

Patrick Ryan: Going to the Ryan Re part of the question, Rob. We have tremendous, talented team. They've seamlessly taken over Markel Re and growing it really nicely. We can't predict any other subscale reinsurers, but it's certainly a great solution for Markel. And we just have a very, very strong team of management at Ryan Re. And that reinsurance capability permeates our entire strategy in that alternative risk is reinsurance. Our benefits is in funding through group captives, that's reinsurance, facultative capabilities that they have just launched. That's another service to other capital providers where they'll be facilitating facultative coverages. So there's a long runway on reinsurance. And this is not accidental.

When I retired from Aon, I said we will not become a competitor as a retail broker or as a reinsurance broker. But I love the reinsurance industry. And it was wide open for an MGU to partner with real solid capital like Nationwide Mutual and get innovated. And that's what's happening, and we're enthusiastic about the future of reinsurance as part of our portfolio.

Janice Hamilton: And Rob, just on the question of organic as well. Ryan Re was something that we called out as a contributor. We knew and we expected that with the Markel renewal rights deal, that would have an impact on our first quarter organic, which it did. It was a strong contributor, and it exceeded our expectations as well. Going back to what I said earlier on the call with Elyse just around business mix, we do expect Ryan Re and the Markel book to contribute to our organic for the remainder of the year, but the largest renewal is actually in the first quarter.

So just from a seasonality perspective, we would expect the most significant impact to happen in the first quarter.

Operator: Our next question will come from Andrew Kligerman with TD Cowen.

Andrew Kligerman: Can you hear me?

Patrick Ryan: Yes.

Andrew Kligerman: Okay. Great. My first question is around delegated authority, which is now actually more than half of net commissions, and it's led by delegated -- I'm sorry, by underwriting management at 37.7%. So I'm wondering in the underwriting management area, what's the deal pipeline looking like? And is there a point when delegated authority is more than 2/3 of net commissions within the next 5 years, say?

Patrick Ryan: Well, that's a really interesting and important question because so much of the -- what we call our diversification strategy involves delegated authority. In fact, most of it does. So just by virtue of that, and the already good growth that we have in existing facilities, it's going to become a larger percentage for sure. That was part of the founding thesis, and that's got a lot of runway, Andrew. So we've got a great distribution business in wholesale broking. But as we've said, we're way more than a wholesaler. We love the wholesale broking business. It's been a fantastic growth business and will continue to be. But the diversity around that, these are more than adjacencies.

These are really core businesses that integrate very nicely. So yes, I mean, delegators has continued to be a larger percentage.

Miles Wuller: Andrew, you asked about -- you asked about pipeline, so I just want to chime in. The focus is on organic buildouts on the platform and launching new products off of the M&A of the last 2 years. And I'd also highlight that the benefit of diversification of the platform is our ability to be an increased solution provider to our capital partners by creating more touch points across the distribution chain, binding programs, MGUs, alternative capital, alternative risk benefits. And we're able to offer a much more holistic approach solving the carrier needs as well, create more FS, create stickiness and create more special relationships that Pat opened with in his intro.

Andrew Kligerman: Got it. And my follow-up is around just MGAs, MGUs in general. Some of the specialty carriers and maybe it's just talking their own books, but they've been very critical of MGAs and MGUs and how they're pricing in this declining or decelerating environment. Why is the Ryan MGA platform, the underwriting management platform, why is that different? What kind of distinguishes Ryan from kind of commentary that we're hearing?

Patrick Ryan: Millions of dollars, hundreds of millions of dollars of investment. Most MGAs are started by capital backing some underwriters who have a following. We never believed that, that was the appropriate strategy. We always believe the appropriate strategy is to find a niche that needs delegated authority and to equip that with the top-quality services that any carrier would provide. That's actuarial, that's data science, that's cat modeling, and it's great underwriters and it's an overall culture. Culture #1 is we have a duty of care to the capital provider to make an underwriting profit and represent them appropriately in the marketplace. That's not the way historically, MGAs have come and gone in the business.

But we don't like being harnessed with that brand because we're totally different. It was part of the founding thesis that this was going to be an evolving -- quickly evolving change in the industry. We seized the opportunity, and we made the investments. And just to put an exclamation point on that, the $2.7 billion that we invested in '23, '24, part of '25 is all delegated authority. That's how much we believe in it. And so I said hundreds of millions, I should have said billions have been invested in that. So that's the difference between us and the run-of-the-mill new MGA.

But that run of the new MGA is putting a lot of pressure on pricing, but that's not us, but it's putting a lot of pressure on pricing. So a carrier who wants to put capital to work, doesn't have the talent, knows some underwriters that they did business with a company A and they get together and they form an MGA. The average life cycle of those kinds of MGAs is very short term. At Aon, we had MGAs for many, many, many years, decades now. We have purchased companies that are over 60 years old as MGAs. So we take a totally different approach to it.

Andrew Kligerman: That was super helpful, Pat. Maybe just real quickly, the Ryan stock option trust, that's funded entirely by you? Or are there some loans? I read it so quickly. I just wanted to make sure I understood it. Are there loans attached to that?

Patrick Ryan: Yes. You're talking about the option plan.

Andrew Kligerman: Yes, yes.

Janice Hamilton: Andrew, would you just mind repeating the question?

Andrew Kligerman: Yes. I just wanted to understand the dynamic. Is that -- is there some kind of loan that Pat is making and then funding it with the stock? Is that how it works?

Patrick Ryan: No. No, it's very simple. We have always believed in alignment. We've always believed in a reward system that gives people a long-term interest in their results. So we've, I think, been farsighted in sharing equity. We really believe we have a unique opportunity for our employees because of the tremendous pressure on our shares and the reduction in the share price. That is a unique opportunity to bring more of our people further along to align with all of our efforts, but aligned with our clients, aligned with our shareholders. So to align and reward certain employees. We believe it's a unique opportunity because of the dislocation. I consider it a direct investment in the platform.

I believe in the team, I believe in the platform. I believe in the direction we're going. And I want every leader in the company to be aligned in our mission; there I'm offering a meaningful piece of my own capital behind that conviction. There's no loan involved. It's a reward and it's an alignment. And by the way, it's good business.

Operator: Our final question will come from Mike Zaremski with Bank of Montreal.

Michael Zaremski: My first question is just trying to get some additional kind of macro context around the organic growth guide of mid-single digits. I guess in '25, the E&S market grew -- the U.S. E&S market grew about 7%. Ryan's organic was about 10%. Is there a way we could -- since a lot of us think kind of outside looking in, would your mid-single-digit guide imply the U.S. E&S market is still growing, growing a little bit, a lot, maybe 0%? Is there a way to kind of put that in context?

Timothy Turner: Well, I'll try to explain what we think is happening here with the E&S flow. I mentioned it earlier. We continue to see 8% plus growth of new E&S business coming into the market. So the flow remains very strong and very healthy, and we're capturing more than that. We're outpacing that. It's just the prices are coming down, and the premiums are coming down. But in terms of our market share, we're gaining market share all the time, and we're confident that we'll get even more market share this year. It's just, again, price effective flow at the moment, especially in property.

Michael Zaremski: Got it. So yes, taking market share. Okay, then I can -- we can work with that. Maybe just also sticking with kind of on a macro level. So back to maybe Meyer's question that over time, if the North Star is still kind of getting back to double-digit organic, how would you break down that organic between flow versus pricing? Is it kind of 50-50 or lopsided towards flow or pricing?

Timothy Turner: Well, it fluctuates constantly, not just property and casualty, but there's dozens of product lines within those verticals that have niche firming phenomenon is going on. Prices are going up on classes of business-like transportation, habitational, public entity, lots of health care verticals where, again, the pricing is actually going up, rates are rising, capacity is shrinking. So we give you a macro view of property and casualty, but there's so much more within these segments that are opportunistic for us. So it's kind of hard to break out those rates on a macro basis.

Patrick Ryan: I think an important point to add to that, when we say we're still aiming for and believe we can get to down the road back to double digit. We're getting scale in what we call our diversification strategy. We're getting scale, we're getting good scale. And so as that scale rises, it actually has a bigger, obviously, mathematical impact on organic. So the 2 core divisions, each are going to perform well as we believe. But on top of that, we have this diversification with reinsurance, with newly created, we call them de novo delegated authority opportunities, but also alternative risk with new product and of course, benefits.

Now those were all de novo, and so you've going through the growth pains, but they're getting scale. So they'll start to contribute more to the overall organic recovery over time.

Michael Zaremski: That's helpful. And just lastly, back to the, I think, $52 million stock grant. Any -- are there any terms and conditions that we should be aware of that the stock needs to hit certain hurdles or over certain time frames? Or is it just a straight stock grant that vests over x amount of years?

Patrick Ryan: It's the latter. It's 5-year vesting, years 3, 4 and 5.

Operator: And our final question of today will come from Rowland Mayor at RBC Capital Markets.

Rowland Mayor: Can you hear me?

Janice Hamilton: Yes.

Rowland Mayor: I wanted just a quick reminder on the timing of recent M&A. As we move through the year, I assume revenue growth should begin to converge with organic growth.

Janice Hamilton: Yes. So in terms of our M&A, and I think we shared this in our prepared remarks, the expectation is that more of our material opportunities are going to come potentially later in the year. So we would expect total revenue and organic to converge on that basis, excluding contingents.

Patrick Ryan: And the other part of that is that there are properties coming on the market, but not the quality that we're looking for generally. So there will be activity that we're not choosing not to participate in. We have line of sight out in time on potential really good strategic opportunities. But at the earliest, they'd be late in the year and probably '27. But in the meantime, we got a heck of a good investment opportunity in our own shares.

Rowland Mayor: Yes. And I did want to follow up on that. The authorization, I think, went in during the middle of the quarter. Is it better to think about the $40 million as for a go-forward basis is like the daily average volume or the $40 million overall?

Patrick Ryan: Well, the $40 million is just limited by time and the rules. But let's be clear that within the rules, we want to buy stock. And that's the plan. I think we got a few days that we have to stay dark, but not much longer.

Operator: There are no further questions at this time. I will now turn the call over to management for closing remarks.

Patrick Ryan: Yes. Well, this is Pat. I'm not going to repeat all the challenges, but we're -- we know we're in a challenging market, but we're also disciplined. I hope you believe, and I think you do, that we're transparent, and we have a really clear focus on the levers we have within our control to bounce back and we're looking at that. We're looking at doing everything we can to bounce back to improve the growth and the margin, which will drive the share price. So we're investing in technology in a significant way, talent always and expanding the capabilities that will allow us to emerge from this current cycle that we're in much stronger.

So thanks for your really good questions. Thanks for your support. We look forward to speaking with you next quarter. Thank you.

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