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01/11 03:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects strong financial performance, with increased revenue, asset management, and shareholder returns. Despite some concerns over tax-free spin-offs and sustainable earnings from equity investments, the company's strategic partnerships and growth potential, especially in the Title and F&G segments, are promising. The Q&A session further supports optimism with positive outlooks for 2026 and strong engagement with new platforms. The market is likely to respond positively, with a stock price increase between 2% to 8% over the next two weeks.
Adjusted Pretax Title Earnings $410 million, an $87 million or 27% increase over the third quarter of 2024. This increase was driven by strong performance across the business, including commercial and refinance, as well as centralized and home warranty operations. Disciplined expense management also contributed to strong incremental margins.
Adjusted Pretax Title Margin 17.8%, up 190 basis points from 15.9% in the third quarter of 2024. This improvement reflects strong performance across the business and disciplined expense management.
Refinance Orders Opened Per Day 1,600 per day in the third quarter, up from 1,300 in the sequential quarter. This represents a 15% increase over the third quarter of 2024 and a 22% increase over the second quarter of 2025. The increase was driven by a 30 basis point decrease in 30-year mortgage rates during the quarter.
Direct Commercial Revenue More than $1 billion in the first 9 months of 2025, up 27% over $801 million in the first 9 months of 2024. This was the best third quarter in history, with a 34% increase in commercial revenue over the third quarter of 2024, driven by a 38% increase in national revenues and a 29% increase in local revenues.
Total Revenue (Consolidated) $4 billion in the third quarter. Excluding net recognized gains and losses, total revenue was $3.9 billion compared with $3.3 billion in the third quarter of 2024. The increase was primarily due to mark-to-market accounting treatment of equity and preferred stock securities.
Net Earnings $358 million, including net recognized gains of $176 million, versus $266 million, including $269 million of net recognized gains in the third quarter of 2024. Adjusted net earnings were $439 million or $1.63 per diluted share compared with $356 million or $1.30 per share for the third quarter of 2024.
Title Segment Revenue $2.3 billion in the third quarter, excluding net recognized losses of $38 million, compared with $2 billion in the third quarter of 2024. Direct premiums increased 19%, agency premiums increased 13%, and escrow, title-related, and other fees increased 9%.
F&G Assets Under Management (AUM) $71.4 billion at September 30, up 14% over the prior year quarter. This includes retained assets under management of $56.6 billion.
F&G Adjusted Net Earnings $139 million in the third quarter compared with $135 million for the third quarter of 2024. This reflects strong operating performance from their underlying, spread-based, and fee-based businesses.
Share Repurchases 631,000 shares repurchased for a total of $37.5 million at an average price of $59.37 per share during the third quarter. Year-to-date, $627 million has been returned to shareholders through common dividends and share repurchases.
inHere digital transaction platform: Engaged 85% of residential sales transactions and reached more than 860,000 unique users. Enhanced identity verification processes to combat impersonation and wire fraud.
AI tools deployment: Integrated AI tools enterprise-wide to enhance productivity and margin efficiency. Thousands of employees actively engaging with AI through structured training and pilot programs.
Commercial activity: Direct commercial revenue exceeded $1 billion in the first 9 months of 2025, up 27% from 2024. Achieved the best third quarter in history with a 34% increase in commercial revenue over 2024.
F&G segment growth: Assets under management crossed $70 billion, up 14% over the prior year. Gross sales reached $4.2 billion, with net sales retained at $2.8 billion.
Title business performance: Adjusted pretax title earnings of $410 million, a 27% increase over 2024. Adjusted pretax title margin improved to 17.8% from 15.9% in 2024.
Expense management: Disciplined expense management contributed to strong incremental margins.
F&G equity ownership change: Board approved a distribution of approximately 12% of F&G's outstanding shares to FNF shareholders, increasing F&G's public float to 30%.
Capital allocation: Returned $627 million to shareholders year-to-date through dividends and share repurchases. Ended the quarter with $733 million in cash and short-term liquid investments.
Low Transactional Environment in Title Business: The Title business is operating in a low transactional environment, which could limit revenue growth despite strong performance in other areas.
Subdued Office Sector in Commercial Activity: The office sector remains subdued, contributing minimally to commercial activity, which could impact overall commercial revenue growth.
Rising Impersonation and Wire Fraud: The rise in impersonation and wire fraud in property sales poses a risk to customer trust and operational security.
Declining Interest and Investment Income: Interest and investment income is expected to decline in the coming quarters, which could impact overall financial performance.
Dependence on Mortgage Rate Trends: The business is highly sensitive to changes in mortgage rates, which could affect refinance and purchase order volumes.
Economic Uncertainty and Fed Rate Cuts: Projected Federal Reserve rate cuts and economic uncertainties could impact investment income and financial stability.
Wage Inflation and Higher Risk and Technology Spend: Increased spending on wages, risk management, and technology could pressure margins and operational efficiency.
Title Business Outlook: The company expects quarterly interest and investment income to trend down from $109 million in Q3 to around $100 million in Q4, with a further decline of $5 million per quarter through 2026, assuming an additional 75 basis points of Fed rate cuts over the next 9 months. The Title business is expected to continue generating steady free cash flow, enabling investments in acquisitions and technology for long-term growth.
Commercial Activity: The company remains optimistic about commercial activity, with a strong inventory of deals to close. It anticipates 2025 to be its third-best commercial year ever, with potential added contributions from the office sector in 2026.
F&G Segment Growth: F&G's assets under management (AUM) are expected to grow further, building on the $70 billion milestone achieved in Q3 2025. The company foresees opportunities to increase the value of the F&G business, supported by strong operating performance in spread-based and fee-based businesses.
F&G Public Float Increase: The company plans to distribute approximately 12% of F&G's outstanding shares to FNF shareholders, increasing F&G's public float from 18% to 30%. This is expected to enhance market liquidity, broaden institutional ownership, and unlock shareholder value.
Common Dividends Paid: $406 million quarterly common dividend paid in the first 9 months of 2025.
Increase in Cash Dividend: Announced increase in cash dividend as part of shareholder value return.
Share Repurchases: Repurchased 631,000 shares for $37.5 million in the third quarter at an average price of $59.37 per share.
Year-to-Date Share Repurchases: Total share repurchases of $221 million year-to-date, including $172 million in the third quarter.
The earnings call reflects strong financial performance, with increased revenue, asset management, and shareholder returns. Despite some concerns over tax-free spin-offs and sustainable earnings from equity investments, the company's strategic partnerships and growth potential, especially in the Title and F&G segments, are promising. The Q&A session further supports optimism with positive outlooks for 2026 and strong engagement with new platforms. The market is likely to respond positively, with a stock price increase between 2% to 8% over the next two weeks.
The company's earnings call reveals strong financial performance with increased premiums and significant gross sales. Despite a slight decline in gross sales, the company maintains a positive outlook with strong July performance and commercial momentum. The Q&A section highlights confidence in maintaining margins, active share buybacks, and effective capital management. While there are concerns about personnel expenses, the overall sentiment is positive, supported by strategic recruiting and commercial growth. The company's proactive approach to economic scenarios and capital allocation further supports a positive outlook.
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