First American Financial (FAF) Q4 2025 earnings summary

Executive summary

• Adjusted EPS for Q4 was $1.99, up 47% year-over-year, with GAAP EPS at $2.05 including $28M in one-time benefits; Q4 revenue rose 22% to $2.05B, and full year revenue increased 22% to $7.5B.

• Commercial revenue grew 35% year-over-year in Q4 and 32% for the year, reflecting broad-based strength across asset classes and increased refinance activity.

• Residential market remained weak, with existing home sales well below normalized levels due to rate lock-in and affordability constraints.

• Technology initiatives advanced, including the launch of Endpoint and Sequoia AI platforms, aiming for national rollout by 2027.

• Named one of the 100 Best Companies to Work For by Fortune for the tenth consecutive year.

Financial highlights

• Adjusted title segment revenue was $1.9B, up 14% year-over-year; Q4 net income was $212M ($2.05 per share), up from $72M ($0.69) last year.

• Commercial revenue reached $339M in Q4, a 35% increase; average revenue per order (ARPO) set a record at $18,600, up 22%.

• Purchase revenue declined 4% due to a 7% drop in closed orders, partially offset by a 4% ARPO increase.

• Refinance revenue rose 47%, with closed orders up 44% and ARPO up 2%.

• Repurchased 2.1M shares for $122M and raised the dividend by 2% to $2.20 per share.

Outlook and guidance

• Management expects an improving real estate market in 2026, with record commercial business, moderate purchase growth, and a meaningful pickup in refinance activity.

• Strategic technology initiatives, especially those leveraging AI, are expected to drive long-term value.

• Purchase revenue expected to improve as rate lock-in fades, but growth will be modest and lag industry forecasts.

• Refinance activity is unpredictable but showed strong open order growth in January (+72%).

• Investment income for 2026 expected to be flat versus 2025, supported by higher balances and 1031 exchange deposits.