First American Financial (FAF) investor relations material

Executive summary

• Total revenue for Q1 2026 was $1.8 billion, up 16.2% year-over-year, with net income of $125.1 million ($1.21 per diluted share), a 69% increase from Q1 2025.

• Adjusted EPS reached $1.33, up 58% year-over-year, driven by record commercial revenue and higher investment income.

• Commercial revenue grew 48% to $271 million, with strong performance in energy, data centers, and industrial sectors.

• Residential purchase revenue declined 4% year-over-year, reflecting continued market weakness.

• AI-driven initiatives, including Endpoint and Sequoia, are driving operational efficiency and automation, with Endpoint automation at 30% and Sequoia automating 35% of refinance and 13% of purchase transactions.

Financial highlights

• Adjusted title segment revenue was $1.7 billion, up 17% year-over-year, with direct premiums and escrow fees up 21%.

• Commercial closed orders increased 9%, with average revenue per order up 36% to $17,900.

• Refinance revenue surged 76%, driven by a 57% increase in closed orders and a 13% rise in average revenue per order.

• Net investment income increased 12% to $154 million, despite net investment losses of $7.6–$9 million.

• Personnel and operating expenses each rose about 13% year-over-year, reflecting higher incentive compensation and benefits.

Outlook and guidance

• Commercial business expected to remain strong, with 2026 projected as a record year.

• Residential purchase market remains weak, with open purchase orders down 3% in April.

• Canadian refinance activity expected to persist through 2026 due to mortgage structure.

• AI platform rollouts and automation rates anticipated to drive incremental margin gains over the next several years.

• Management expects continued quarterly cash dividends at or above the current level, with sufficient liquidity for at least the next twelve months.