Stewart Information Services (STC) investor relations material

Executive summary

• Revenues rose 25% year-over-year to $899.2 million, with net income up 17% to $42.9 million adjusted, driven by growth across all business lines despite a challenging housing market.

• Diluted EPS was $1.39 adjusted, up from $1.34 last year, and pretax income before noncontrolling interests reached $62.8 million adjusted.

• Year-to-date, revenues grew 26% and adjusted pre-tax income rose 45%, reflecting successful organic and inorganic growth initiatives.

• Significant investments in talent and teams, totaling $8 million in the quarter, are expected to drive future organic growth, particularly in title and agency businesses.

• Maintained growth momentum in commercial, agency, and real estate solutions segments, with notable expansion in target geographies and MSAs.

Financial highlights

• Operating revenues grew to $880.97 million from $705.20 million year-over-year.

• Adjusted net income per diluted share was $1.39, up from $1.34 year-over-year.

• Employee cost ratio improved to 27% from 30%, while other operating expense ratio rose to 27% from 25% due to higher real estate solutions activity.

• Net cash from operations increased to $60.5 million from $53.4 million year-over-year.

• Book value per share was $55, with total cash and investments exceeding statutory requirements by $400 million.

Outlook and guidance

• Full-year revenue expected to grow around 20% and earnings by 30%, with margin improvement of about half a percentage point year-over-year.

• Management remains focused on growing all business lines and delivering best-in-class service despite ongoing housing market headwinds.

• Anticipates continued earnings growth outpacing revenue growth, but ratio may tighten in the second half due to increased investment in title segment.

• Commercial revenue growth expected to remain strong, though year-over-year comparisons will be challenging due to prior outsized growth.

• Pipeline of acquisitions expected to close in the next 60-120 days, funded by excess capital raised in late 2025.