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First American Financial Corp.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 22 April 2026: press release. The quarter’s numbers.

Key takeaways

  • Adjusted EPS rose 58 percent: Adjusted diluted EPS was $1.33, against $0.84 a year earlier. Diluted EPS was $1.21, against $0.71, with net income of $125.1 million. Source
  • Title pretax income rose: Title segment pretax income was $167.0 million, against $106.8 million. Pretax margin was 9.6 percent, or 10.4 percent adjusted, against 7.2 percent and 7.9 percent a year earlier. Source
  • Open and closed title orders rose: U.S. direct title orders opened were 182,900, against 168,900, and orders closed were 119,900, against 110,300. Source
  • Commercial revenue rose 48 percent: Commercial revenue was $271.2 million, against $183.8 million a year earlier. Source
  • Personnel costs rose 13 percent: Personnel costs were $546 million, up $62 million, or 13 percent, against the prior-year quarter. Source
  • Title investment income rose 12 percent: Title segment investment income was $154 million, up $17 million, mainly from higher interest income on the investment portfolio and warehouse lending. Source

“Our results were driven by our commercial business, which achieved record first-quarter revenue.”

Mark Seaton, chief executive officer at First American Financial Corporation

Results and growth drivers

  • Adjusted EPS rose 58 percent: Adjusted diluted EPS was $1.33, against $0.84 a year earlier. Diluted EPS was $1.21, against $0.71, with net income of $125.1 million. Source
  • Revenue up 16 percent: Total revenue was $1.8 billion, or $1,838.0 million, against $1,582.3 million. Income before taxes was $161.8 million, against $96.6 million. Source
  • Net investment losses were $9 million: Net investment losses were $9 million, or 7 cents per diluted share, down from $11 million, or 8 cents. Purchase-related amortization was $7 million, or 5 cents, in both quarters. Source
  • Effective tax rate of 22.9 percent: The effective tax rate for the quarter was 22.9 percent, as reported in the release. Source

Title segment and order volumes

  • Title pretax income rose: Title segment pretax income was $167.0 million, against $106.8 million. Pretax margin was 9.6 percent, or 10.4 percent adjusted, against 7.2 percent and 7.9 percent a year earlier. Source
  • Direct premiums rose 21 percent: Direct premiums and escrow fees rose 21 percent, reflecting a 13 percent rise in average revenue per closed order and a 9 percent rise in closed direct orders. Source
  • Open and closed title orders rose: U.S. direct title orders opened were 182,900, against 168,900, and orders closed were 119,900, against 110,300. Source
  • Agent premiums rose 16 percent: Agent premiums are recorded about one quarter after direct premiums, and were up 16 percent versus a year earlier. Source
  • Information revenue rose 14 percent: Subservicing growth, demand for non-insured information products and Canadian refinance activity drove the increase, per management. Source

“In addition, investment income in our title segment grew 12 percent, despite a decline in the federal funds rate, in part due to continued success in capturing additional deposit sources at our bank.”

Mark Seaton, chief executive officer at First American Financial Corporation

Commercial business

  • Commercial revenue rose 48 percent: Commercial revenue was $271.2 million, against $183.8 million a year earlier. Source
  • Commercial average revenue per order: Commercial average revenue per order was $17,900, against $13,100 a year earlier. Source
  • Commercial order counts edged up: Commercial open orders were 27,500, against 26,600, and closed orders were 15,200, against 14,000. Source

Costs, margins and claims

  • Personnel costs rose 13 percent: Personnel costs were $546 million, up $62 million, or 13 percent, against the prior-year quarter. Source
  • Other operating expenses rose 13 percent: Other operating expenses were $277 million, up $31 million or 13 percent, from production expense on higher volumes and software spending. Source
  • Claim provision held at 3.0 percent: Provision for policy losses was $40 million, unchanged at 3.0 percent of title premiums and escrow fees. The ultimate loss rate for the current policy year is 3.75 percent. Source
  • Interest expense rose 34 percent: Interest expense was $27 million, up $7 million, from the warehouse lending business and deposit balances at the bank subsidiary. Source

“Beyond our financial results, we are committed to deploying AI solutions across the company to amplify the talents of our team, better serve our customers and strengthen our capabilities.”

Mark Seaton, chief executive officer at First American Financial Corporation

Investment income and balance sheet

  • Title investment income rose 12 percent: Title segment investment income was $154 million, up $17 million, mainly from higher interest income on the investment portfolio and warehouse lending. Source
  • Cash balance rose: Cash and cash equivalents were $2,436.2 million at March 31, against $1,387.3 million at December 31, 2025. Source
  • Reserve and notes balances: Reserve for claim losses was $1,166.3 million, against $1,169.6 million at year-end. Notes and contracts payable were $1,545.2 million. Source
  • Debt-to-capital ratio rose: Debt-to-capital was 32.2 percent, or 21.9 percent excluding $1.1 billion of secured financings payable. At year-end the ratio was 30.7 percent, and secured financings were $906 million. Source

Capital and shareholder returns

  • Buybacks of $33 million in quarter: The company repurchased 556,336 shares for $33 million, at an average price of $60.21 per share. Source
  • Repurchases continued into April: Through April 22, the company repurchased 295,872 shares in the second quarter for $18 million, at an average price of $61.61. Source
  • Dividend declared at $0.55: Cash dividends declared were $0.55 per share, against $0.54 a year earlier. The prior release also stated $0.55 for the fourth quarter of 2025. Source
  • Diluted share count declined: Weighted average diluted shares were 103.3 million, against 104.2 million a year earlier. Basic shares were 103.0 million. Source

Home Warranty and Corporate

  • Home Warranty revenue rose 2 percent: Pretax income was $26 million, up 4 percent. Pretax margin was 23.5 percent, or 23.8 percent adjusted, against 22.9 and 23.5 percent a year earlier. Source
  • Claim loss rate at 36 percent: The claim loss rate was 36 percent, against 37 percent last year, which management linked to small reductions in claim number and severity. Source
  • Corporate pretax loss of $31 million: Excluding net investment gains and losses, the Corporate pretax loss was $30 million, against $28 million a year earlier. Source

Strategy, AI and people

  • Data and AI seen as advantage: Management said its data assets, domain expertise and technology give it a competitive advantage as AI adoption accelerates. Source
  • Investment in people and products: Management said it will keep investing in people, processes and products as it works to extend its leadership position in the industry. Source
  • Workplace recognition for eleventh year: The company was named one of the 100 Best Companies to Work For in April, for the eleventh consecutive year. Source

Coming up, as management said on 22 April 2026

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

Figures management reported

FigureReported
Prior-year reserve development Sourcenet decrease of $10 million
Investment income Source$154 million (Title Insurance and Services segment)

Risks management discussed

  • Demand: Management referred to continued softness in the residential market while reporting the title margin for the quarter. Source

Other quarters

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.