First American Financial Corp.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 11 February 2026: press release. The quarter’s numbers.

Read the filing

Key takeaways

• Earnings and revenue rose sharply: Fourth-quarter diluted EPS was $2.05 against $0.69, and adjusted EPS was $1.99 against $1.35. Total revenue was $2.0 billion, up 22 percent; adjusted revenue rose 15 percent. Source
• Title margin improved year on year: Title Insurance and Services pretax margin was 14.9 percent, or 14.0 percent adjusted, against 7.9 percent and 11.8 percent a year earlier. Segment pretax income was $288 million. Source
• Commercial revenue up 35 percent: Commercial revenues were $339 million, up 35 percent, and commercial average revenue per order was $18,600 against $15,200. Management cited continued momentum across most asset classes. Source
• Closed direct title orders climbed: Domestic closed direct title orders rose 14 percent, and average revenue per closed order rose 4 percent. Fourth-quarter open orders were 167,400, against 147,100. Source
• Operating cash flow higher: Cash flow from operations was $369 million in the fourth quarter, against $324 million. For the year it was $951 million, against $897 million. Source
• Debt-to-capital fell to 30.7 percent: Debt-to-capital was 30.7 percent, or 21.9 percent excluding $906 million of secured financings payable. The third quarter ratio was 33.0 percent. Source
• AI and data initiatives advancing: Management described its proprietary data and technology capabilities as building durable competitive differentiation for long-term value creation. Source

“These results reflect both market tailwinds and our continued focus on operating leverage.”

Mark Seaton, chief executive officer at First American Financial Corporation

What changed from last quarter

• New guidance: Directional 2026 expectations were given for commercial, purchase and refinance activity. The previous release gave no 2026 expectations. Source
• New: The Corporate segment recorded a $15 million insurance recovery this quarter, which the third quarter release did not report. Source

Results and growth drivers

• Earnings and revenue rose sharply: Fourth-quarter diluted EPS was $2.05 against $0.69, and adjusted EPS was $1.99 against $1.35. Total revenue was $2.0 billion, up 22 percent; adjusted revenue rose 15 percent. Source
• Full-year earnings and revenue higher: Full-year diluted EPS was $6.00 against $1.26, with adjusted EPS of $6.05 against $4.40. Full-year total revenue was $7.5 billion, up 22 percent. Source
• Venture gains lifted net investment result: Net investment gains were $15 million, or 11 cents per diluted share, against losses of $86 million a year earlier. The gains came mainly from the venture portfolio. Source
• Tax rate above normalized level: The effective tax rate was 25.7 percent against a normalized 24 percent, reducing earnings by 4 cents per diluted share, mainly from non-insurance income taxed at a higher rate. Source

Segments and regions

• Title margin improved year on year: Title Insurance and Services pretax margin was 14.9 percent, or 14.0 percent adjusted, against 7.9 percent and 11.8 percent a year earlier. Segment pretax income was $288 million. Source
• Title revenue up 21 percent: Title segment total revenues were $1.9 billion, up 21 percent. Direct premiums and escrow fees rose 19 percent on a 14 percent increase in closed direct orders. Source
• Home Warranty margin rose: Home Warranty revenue was $110 million, up $8 million, with pretax margin of 21.1 percent against 18.1 percent. The claim loss rate fell to 40.1 percent from 43.7 percent. Source
• Corporate loss narrowed on recovery: The Corporate segment pretax loss was $24 million, against $45 million a year earlier. Excluding investment gains and losses, the adjusted pretax loss was $10 million. Source

“adjusted revenue up 15 percent and adjusted earnings per share up 47 percent, reflecting solid execution across the company”

Mark Seaton, chief executive officer at First American Financial Corporation

Products, customers and orders

• Commercial revenue up 35 percent: Commercial revenues were $339 million, up 35 percent, and commercial average revenue per order was $18,600 against $15,200. Management cited continued momentum across most asset classes. Source
• Average revenue per order rose: Average revenue per direct title order rose to $4,350 from $4,201 a year earlier, mainly from a 22 percent rise in commercial average revenue per order. Source
• Closed direct title orders climbed: Domestic closed direct title orders rose 14 percent, and average revenue per closed order rose 4 percent. Fourth-quarter open orders were 167,400, against 147,100. Source
• Refinance share of orders higher: Refinance was 41 percent of residential orders in the fourth quarter, against 31 percent a year earlier. Purchase open orders per day were 1,100, against 1,178. Source
• Information and other revenues up 15 percent: Information and other revenues were $274 million, up 15 percent, from Canadian refinance activity, subservicing growth and higher demand for non-insured information products. Source
• Refinance order counts revised: Prior-period refinance and total order counts were revised to add home equity orders previously excluded. Reported revenues did not change. Source

Costs, margins and claims

• Personnel costs rose on incentives: Title personnel costs were $581 million, up $57 million or 11 percent, mainly from higher incentive compensation tied to improved financial performance. Source
• Other operating costs up, Canada release offsets: Title other operating expenses were $282 million, up 7 percent, on higher production and software expense. A $13 million reserve release in Canada partly offset the increase. Source
• Claims provision held at 3.0 percent: The provision for policy losses was $44 million, or 3.0 percent of title premiums and escrow fees, unchanged from last year. The ultimate loss rate for the current policy year is 3.75 percent. Source
• Success ratio fell to 47 percent: The success ratio was 47 percent against 56 percent a year earlier. Expenses rose $76 million for each $160 million increase in net operating revenues. Source

“We remain optimistic that the combination of our proprietary data and technology capabilities are building durable competitive differentiation that will drive long-term value creation.”

Mark Seaton, chief executive officer at First American Financial Corporation

Capital, cash and returns to shareholders

• Operating cash flow higher: Cash flow from operations was $369 million in the fourth quarter, against $324 million. For the year it was $951 million, against $897 million. Source
• Debt-to-capital fell to 30.7 percent: Debt-to-capital was 30.7 percent, or 21.9 percent excluding $906 million of secured financings payable. The third quarter ratio was 33.0 percent. Source
• Buybacks and dividend rate: The company repurchased 2.1 million shares for $122 million in 2025. The annual dividend rate of $2.20 follows a 2 percent raise, and the third quarter repurchased 597,726 shares for $34 million. Source

Strategy, investment and people

• AI and data initiatives advancing: Management described its proprietary data and technology capabilities as building durable competitive differentiation for long-term value creation. Source
• Software amortization raised depreciation: Title depreciation and amortization was $55 million, up 8 percent, reflecting higher amortization of internally developed software. Source
• Named a top workplace for tenth year: The company was named one of the 100 Best Companies to Work For by Great Places to Work and Fortune Magazine for the tenth consecutive year. Source

Coming up, as management said on 11 February 2026

• Monthly title order counts posted: Opened and closed title order counts for U.S. direct title operations are posted about 10 to 12 days after each month ends. Source

Figures management reported

Risks management discussed

• Operational: Home Warranty claim loss rate was held down by fewer claims, but claim severity rose. Source
• External: Interest income from operating cash fell on lower average balances and lower short-term interest rates, partly offsetting the investment income gain. Source

Earlier plans management reported on

• On track: Management said execution of its strategic technology initiatives, particularly those leveraging AI, is progressing as planned. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.