Stewart Information Services (STC) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $3.1 million ($0.11 per diluted share), flat year-over-year, with adjusted net income rising to $7 million ($0.25 per share), and total revenues reaching $612 million, up 10% year-over-year.

• Title segment operating revenues grew 11% to $499.2 million, driven by commercial and agency operations, while real estate solutions segment revenues increased 17% to $97.1 million, supported by higher credit information services.

• Domestic commercial business saw 39% revenue growth, with strong performance in retail, mixed use, and energy asset classes.

• Title loss expense as a percentage of title operating revenues improved to 3.5% from 3.9% year-over-year, reflecting favorable claims experience.

• Adjusted results exclude net realized and unrealized gains from equity securities and acquisition-related expenses for clearer core performance assessment.

Financial highlights

• Adjusted pre-tax income for the title segment improved to $12 million, with pre-tax margin rising to 2% from 1% last year; adjusted pretax income rose to $11.2 million from $9.1 million.

• Domestic residential fee profile increased 13% to $3,300, offsetting a 9% decline in closed orders.

• Book value per share at March 31, 2025, was $50.16.

• Net cash used by operations in Q1 was $29.9 million, similar to last year.

• Employee costs as a percentage of operating revenues improved to 31.2% from 32.3% year-over-year, while other operating expenses increased to 27.0% from 25.6%.

Outlook and guidance

• Management expects improved market activity and financial performance in the second half of 2025 and into 2026, with home sales and originations forecast to rise.

• Title loss ratio expected to average in the low 4% range for full year 2025, with Q1 at 3.5%.

• Real estate solutions margins anticipated to normalize in the low teens for the remainder of the year.

• Commercial segment expected to deliver double-digit growth for the year, despite some market volatility.

• Management remains focused on cost management, automation, and integration of acquisitions to improve margins.