Stewart Information Services Q1 Earnings Call Highlights

Key Points

• Stewart posted a strong Q1 2026, with $781 million in revenue, GAAP net income of $17 million (adjusted net income $24 million) and adjusted diluted EPS of $0.78, while adjusted revenue rose 28% year‑over‑year and adjusted margin expanded to 4.3% from 1.8% a year earlier.
• Growth was driven largely by commercial activity: title operating revenues rose $104 million (21%), title pre‑tax income more than doubled, domestic commercial revenues increased 35% and average domestic commercial fee per file jumped 33% to $21,000, while national commercial services grew 40%.
• Management is more cautious on the residential market, now forecasting 3%–5% existing‑home sales growth in 2026 (down from a prior 6%–8% outlook); Q1 sales were roughly flat and mortgage rates near 6%–6.3% could keep transactions subdued near ~4 million existing home sales.

Stewart Information Services NYSE: STC reported strong first-quarter 2026 results, delivering what CEO Fred Eppinger called “one of the best quarters in the company’s history” despite seasonally softer conditions and a U.S. housing market he described as operating at “historically low levels.”

On the call, Eppinger and CFO David Hisey pointed to broad-based revenue growth across Stewart’s direct operations, agency services, national commercial services, and real estate solutions businesses, with commercial-related activity providing a significant tailwind.

Quarterly results show revenue growth and improved profitability

Hisey said Stewart generated total first-quarter revenues of $781 million, with net income of $17 million and diluted EPS of $0.55. On an adjusted basis, Stewart reported net income of $24 million and adjusted diluted EPS of $0.78, compared with adjusted net income of $7 million and adjusted diluted EPS of $0.25 in the prior-year quarter.

Eppinger said adjusted revenue rose 28% year-over-year, while adjusted net income increased by $24 million compared with the first quarter of 2025. He also said Stewart delivered a 4.3% margin for the quarter, up from 1.8% a year earlier.

Hisey noted the company’s adjusted figures exclude items “primarily related to net realized and unrealized gains, acquired intangible asset amortization, acquisition-related expenses, and severance costs,” which management uses to evaluate operating performance.

Housing outlook: residential recovery seen as more muted

Management discussed mixed housing signals and a more cautious view on 2026 existing-home sales growth than previously expected. Eppinger said Stewart had earlier anticipated existing home sales improving 6% to 8% in 2026, but now expects growth to be closer to 3% to 5% given macroeconomic and geopolitical conditions and interest-rate volatility.

Eppinger said existing home sales in the first quarter were “relatively flat,” down about 1% from 2025, while median sale price growth was “positive,” up “just under 1%.” He also said pricing trends vary significantly by market and that Stewart is seeing “more price negotiations.”

On mortgage rates, Eppinger said early-quarter activity improved as rates moved closer to 6%, but momentum cooled later as rates ended March around 6.3% amid rising global tensions. He added that Stewart anticipates some momentum continuing into the second quarter as rates remain at or below 2025 levels entering the spring selling season, though the residential market could “continue to bounce along the bottom of around 4 million existing home sales for the next quarter” if geopolitical tensions persist.

Commercial activity drove growth across title operations

Stewart’s title segment results benefited from growth in both direct and agency operations. Hisey said title operating revenues increased $104 million, or 21%, while title pre-tax income rose $13 million, or over 100%. On an adjusted basis, title pre-tax income increased $14 million, with an adjusted pre-tax margin of 4% versus 2% in the prior-year period.

In direct title, Hisey said revenues increased $38 million, or 17%, supported by improved open and closed orders. Domestic commercial revenues increased $25 million, or 35%, which he attributed to higher transaction size and volume and growth across asset classes led by energy, industrial, site development, data centers, and retail.

Hisey also highlighted improved economics in commercial transactions, saying average domestic commercial fee per file rose 33% to $21,000 from $15,800 a year earlier. Average domestic residential fee per file was $3,300, consistent with the prior-year quarter.

In response to an analyst question on whether the stronger commercial fee profile could persist, Eppinger said Stewart’s pipeline is “really quite good” and that the industry has seen a higher frequency of very large deals. He added that Stewart has been “leading more deals” after “a good two-year run” of building skills and capabilities, and he said he expects the average fee level to “hover at this higher level,” though year-over-year growth could “jump around” due to comparisons and deal mix.

Within direct operations, Eppinger said the business grew 10% year-over-year, with “Main Street Commercial” up more than 20%. He said Stewart expects to grow that operation in part through targeted acquisitions.

Stewart’s national commercial services business grew 40% in the quarter, which Eppinger attributed to energy remaining the largest asset class and strength in industrial, site development, data centers, and retail. He said the company remains focused on expanding geographically and recruiting “leading industry talent.”

Agency services and real estate solutions supported by growth initiatives and acquisitions

Agency services revenue increased 25% year-over-year, which Eppinger said was notable given housing headwinds impacting agents as well. Hisey said gross agency revenues increased to $333 million from $268 million, driven by improved volumes in key states including New York, Florida, Ohio, Pennsylvania, and commercial transactions. After agent retention, Hisey said net agency revenues increased to $11 million, up 23%.

Eppinger said Stewart is focused on growing agency services through ramping new agents and expanding wallet share among existing agents, with emphasis on 15 target states. He also said Stewart’s commercial offering for agents grew 46%, alongside 15% residential growth.

In real estate solutions (RES), Hisey said total revenues increased $64 million, or 66%, driven by growth in credit information services and the MCS business. Eppinger said the MCS acquisition strengthened first-quarter results, while Stewart’s other RES operations combined grew over 20% year-over-year. Eppinger also said Stewart acquired Nationwide Appraisal Network (NAN) into Stewart Valuation Intelligence, adding scale and deepening the appraisal talent base.

On profitability, Hisey said RES adjusted pre-tax margin improved to 12.5% from approximately 10% in the prior-year period, while Eppinger said the segment’s adjusted margins improved from 9% in the prior quarter. Eppinger said the company expects to improve full-year RES margins into the “low teen range,” and in Q&A he described an outlook of roughly 12.5% to 13% and potentially above 13% as consolidation work progresses.

Asked about the NAN transaction, Eppinger said the business is “small,” describing it as “about a $40 million thing,” with roughly $30 million expected to run through the remaining three quarters. He said the incremental margin should be “low double digits,” though Stewart expects integration and transition costs initially. Eppinger said Stewart used “free cash on hand,” and referenced the company’s previously raised $150 million as supporting a pipeline of potential transactions.

On the company’s title loss experience, Hisey said the first-quarter title loss ratio improved to 3.1% from 3.5% a year earlier and that Stewart expects 2026 title losses to average 3.5% to 4%.

Balance sheet and operating metrics

Hisey said Stewart ended the quarter with approximately $420 million in cash and investments in excess of statutory premium requirements. Stockholders’ equity was approximately $1.64 billion, representing a book value of $54 per share. Net cash used by operations improved to $4 million from $30 million in the prior-year quarter, which Hisey attributed to higher net income.

On expenses, Hisey said the employee cost ratio improved to 29% from 31% due primarily to higher revenues, while the other operating expense ratio increased slightly to 28% due to higher RES segment expenses.

In closing remarks, Eppinger said he felt “very good about the company,” adding that Stewart has not “ever been this strong as far as talent and position in the marketplace,” and expressed confidence the company can sustain momentum even in a difficult market.

About Stewart Information Services NYSE: STC

Stewart Information Services Corporation NYSE: STC is a publicly traded provider of title insurance and real estate transaction services. The company underwrites title insurance policies for residential and commercial properties, offering lenders and property owners protection against title defects and liens. Beyond title insurance, Stewart delivers a range of ancillary services, including closing and escrow administration, property valuation, and risk mitigation solutions designed to streamline the mortgage process and reduce operational complexity for clients.

In addition to core title and settlement services, Stewart offers technology-driven products aimed at enhancing transparency and efficiency in real estate transactions.

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