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DATE
Thursday, April 23, 2026 at 8:30 a.m. ET
CALL PARTICIPANTS
- Chief Executive Officer — Frederick Eppinger
- Chief Financial Officer — David C. Hisey
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TAKEAWAYS
- Adjusted EPS -- $0.78, with adjusted net income of $24 million, up from $7 million.
- Adjusted revenue growth -- 28% year over year to $781 million, driven by both Title and Real Estate Solutions segments.
- Reported Net Income -- $17 million, corresponding to a diluted EPS of $0.55.
- Adjusted Margin -- 4.3%, an increase from 1.8% last year.
- Direct Title Revenues -- Rose 17%, attributed to improved orders and Main Street Commercial growth exceeding 20%.
- Domestic Commercial Revenue -- Increased 35%, with fee per file up 33% to $21,000.
- National Commercial Services -- Delivered 40% year-over-year growth, led by energy, industrial, site development, data center, and retail asset classes.
- Agency Revenues -- Up 25% to $333 million, with net agency revenues up 23% after agent retention, aided by gains in key states and commercial transactions.
- Agency Commercial Offering -- Expanded 46% year over year, alongside 15% residential growth in agency channel.
- Title Segment Operating Revenues -- Up $104 million, or 21%, supporting pretax income increase over 100% on both GAAP and adjusted bases.
- Title Loss Ratio -- Improved to 3.1%, compared to 3.5% last year; management expects 2026 average to range from 3.5%-4%.
- Real Estate Solutions Revenues -- Grew 66% in the first quarter, largely from MCS acquisition; non-MCS businesses grew more than 20%.
- RES Adjusted Pretax Margin -- 12.5%, up from roughly 10% last year, with expectations for margins improving further into the low-teens range over the full year.
- International Revenues -- Increased 10%, with Canadian non-commercial revenue up 9% and commercial revenue up 14% despite market headwinds.
- Operating Expense Ratios -- Employee cost ratio improved to 29% versus 31%, while other operating expenses rose slightly to 28% due to RES.
- Book Value Per Share -- $54 as of March 31, with total stockholders’ equity at $1.4 billion.
- Cash and Investments -- $420 million in excess of statutory premium requirements, maintaining a strong liquidity position.
- Net Cash Used in Operations -- $4 million outflow, improved from $30 million in the prior-year quarter, attributable to higher net income.
- MCS Acquisition Impact -- MCS contributed $40 million in quarterly revenue, with integration described as "pretty standalone," and expected to support margin improvement in the RES segment.
- Nationwide Appraisal Network (NAN) Acquisition -- $40 million purchase, anticipated to contribute around $30 million in revenue over the next three quarters, with incremental margins in the low double digits and integration costs expected initially.
- Acquisition Pipeline and Capital -- $70 million in available liquidity remains for further acquisition activity, with leadership targeting transactions mainly in the $20 million-$50 million range.
- Market Outlook -- Management now forecasts overall residential market growth at 3%-5% for the year, with commercial expected to remain more resilient.
- 2026 Title Loss Guidance -- Management expects the title loss ratio to average 3.5%-4% for the year.
SUMMARY
Stewart Information Services Corporation (STC +3.87%) delivered one of its strongest quarters historically, highlighted by rapid advances in adjusted net income, margin expansion, and strategic execution across segments. Acquisitions, notably MCS and Nationwide Appraisal Network, drove significant revenue gains and enhanced the company's presence in the Real Estate Solutions business, while additional capital remains on hand to pursue further inorganic growth in a targeted and disciplined manner. Margin improvements materialized in both Title and Real Estate Solutions, underpinned by operational efficiencies and favorable claims experience, as management continued to invest in growing Main Street Commercial, agency operations, and geographic reach in Canada. Management provided updated guidance reflecting a more cautious outlook for residential growth due to macro uncertainties, while expressing confidence in commercial pipeline momentum and the sustainability of agency channel share gains.
- Management emphasized the counter-cyclical characteristics of MCS and the diversification benefit to segment operating results, highlighting that "there is not a lot of integration with the rest of the company except for the normal things you think about—financial stuff."
- Acquisition strategy is being executed predominantly outside competitive auction processes, supported by "dry powder" and recent targeted capital raises specifically for sector consolidation opportunities.
- Leadership is focused on Main Street Commercial as a channel for direct operations growth, citing ongoing targeted hiring and geographic expansion efforts.
- The company was recognized on the Forbes America’s Best Large Employers list, supporting ongoing efforts to attract and retain industry-leading talent.
INDUSTRY GLOSSARY
- Main Street Commercial: Refers to smaller-scale commercial real estate transactions serviced through direct title operations, distinct from large institutional or energy-focused deals.
- MCS: Mortgage Contracting Services, a provider of property preservation, inspection, and default-related services, now part of the Real Estate Solutions segment.
- NAN: Nationwide Appraisal Network, a recently acquired provider of real estate valuation and appraisal management services.
Full Conference Call Transcript
Frederick Eppinger: Thank you for joining us today for the Stewart Information Services Corporation first quarter 2026 earnings conference call. Yesterday, we released the financial results for the first quarter. I will kick off today’s call with an overview of our results and our current macro housing outlook, followed by a review of our results and strategic direction by business line. After my remarks, I will turn the call back over to David so he can further cover our results for the quarter. I am very pleased with the results in the first quarter this year.
As you know, the first quarter is typically the most impacted by seasonality, and on top of that, the residential transaction activity continued to be at historically low levels. In that environment, we delivered one of the best quarters in the company’s history with adjusted EPS of $0.78 and revenue growth of 28%. In the first quarter, each of our businesses showed strong revenue growth and improved earnings as we executed on our strategic priorities. Though first quarter existing home sales were muted, our direct operations, agency services, and national commercial services benefited from strong commercial growth. Our Real Estate Services segment also delivered strong results year-over-year, bolstered by our recent acquisition of MCS.
In the first quarter, along with 28% adjusted revenue growth, we delivered adjusted net income growth to $24 million, up from $7 million in the same quarter last year, and we delivered a 4.3% margin for the quarter, up from 1.8% in 2025. On our last call, I shared that we expected existing home sales to improve around 6% to 8% in 2026, beginning our journey back to a more normal existing home sales environment. While we anticipate some growth in the housing market, we foresee the potential for growth to be a bit more muted this year given the broader macro and geopolitical conditions and where we have seen interest rates move as a result.
We anticipate that we will continue to maintain our business momentum in the second quarter, but we could see the residential market continue to bounce along the bottom of around 4 million existing if ongoing geopolitical tensions prolong. In the first quarter, housing signals were mixed. As mentioned, existing home sales were relatively flat, down 1% compared to 2025. Median sale price growth was a bit weaker than in the past few quarters; however, it was positive, up just under 1% for the quarter. The pricing story currently varies significantly by market, and we are seeing more price negotiations, which may be helping homebuyers to balance rates. Interest rates remain a critical gauge for homebuyers entering the market.
And though we were confronted by difficult weather across the country in January, early in the quarter, we saw rates move closer to 6% and felt momentum in both purchase and refinance activity. March, however, saw the impact of rising global tensions, and rates exited the month around 6.3%, cooling activity a bit due to the increase itself but also because of the quick shift in rate and sentiment. We do anticipate some momentum will continue into the second quarter as rates remain at or below 2025 levels heading into the spring selling season. All in, our view of the residential market growth will be closer to 3% to 5% for the year.
We believe commercial, on the other hand, will remain more resilient and can continue to have solid growth. Turning to our business line results. Our direct operations business grew 10% in the first quarter compared to the same timeframe last year. The growth came from improved transaction activity. We have not deviated from our longstanding focus on gaining share in target MSAs through organic and inorganic efforts. We continue to see positive momentum in our strategic initiatives to grow commercial business out of direct operations, which we often refer to as Main Street Commercial. In the first quarter, our direct operations grew Main Street Commercial by more than 20% year-over-year.
Looking forward, we believe we will grow this operation in part through targeted acquisitions, and we have seen a pickup in opportunities in our pipeline for direct operations as well as opportunities that benefit our other business lines. We are thoughtful in our assessment of opportunities and expect to continue to grow the company in part by being acquisitive. Our national commercial services business delivered another impressive quarter of results. Energy continues to be our largest asset class, but other notable gainers in the quarter were our industrial site development, data center, and retail asset classes. In total, we grew national commercial services by 40% in the first quarter.
We remain focused on growing all of our asset classes through geographic expansion and acquisition of leading industry talent. Our agency services business delivered a very strong first quarter with revenues up 25% compared to 2025. Our agency partners confront the same housing headwinds as we do, so we consider this growth to be especially solid considering conditions. We are focused on growing this business through ramping up new agents and wallet share expansion of existing agents, with an emphasis on 15 target states. We saw strong progress towards our goals this quarter with solid year-over-year premium gains across most of our states.
In addition to geographic growth, we are focused on expanding our commercial offering for agents, and we are seeing success there, growing 46% in the first quarter compared to last year. This goes along with 15% residential growth as well. We will continue to build on the momentum we have made in recent years for our agents to differentiate our service and better our offerings for our agent partners. Our Real Estate Solutions business grew revenues by 66% in the first quarter compared to last year. Our recent transaction of MCS helped to strengthen our results for the first quarter. However, all of our other operations combined grew over 20% when compared to the first quarter of 2025.
The addition of MCS allows us to further our strategic priority for this segment, which is to win more share across the top 300 lenders and further our cross-selling efforts across our expanded product lines with existing customers. In the first quarter, we added to our Real Estate Solutions segment once more, Appraisal Network into Stewart Valuation Intelligence. Our appraisal company, National Appraisal Network, also known as NAN, helped strengthen our appraisals both in scale and deepen our talent base. In the first quarter, we delivered 12.5% adjusted margins, up from 9% last quarter.
For the full year, we fully expect to improve margins and deliver in the low-teens range for this segment and expect that our recent acquisition of MCS will help us improve our historical margin outlook. Moving to our international operations. We are focused on broadening our geographic presence in Canada, increasing our commercial penetration as well. In the first quarter, we grew our non-commercial revenue by 9% and our commercial revenue by 14% in a very challenged housing market. We believe we can build on our strong position in these markets and continue to grow share. As an enterprise, we are dedicated to being the premier titles and service real estate services company.
We are focused on strengthening the company for lasting success through targeted multi-pronged growth plans by business to further fortify our position. We thank our customers and agent partners for your trust and dedication to Stewart Information Services Corporation. We are committed to doing our best to continually improve our services for your benefit. For the Stewart Information Services Corporation team, thank you for your dedication and focus on growing this company together. We are able to execute at this level because of your steadfast commitment to our journey. In the first quarter, we celebrated our inclusion on the Forbes America’s Best Large Employers list.
We thank our employees for this recognition and are committed to being a destination for industry-leading talent. I am very proud of the progress we have made on our journey and feel that progress is visible in the results we delivered this quarter in spite of both macro and housing headwinds. David, I will turn it over to you to provide the update on our results.
Operator: We will now turn the call over to David C. Hisey for the financial results.
David C. Hisey: Good morning, everyone, and thank you, Frederick. I appreciate our employees and customers for their steadfast support amid a continuing challenging residential real estate market. Yesterday, Stewart Information Services Corporation reported strong first quarter results with both revenue and profitability improvement. Total first quarter revenues were $781 million, resulting in net income of $17 million, or diluted earnings per share of $0.55. On an adjusted basis, net income was $24 million, or diluted earnings per share of $0.78, compared to $7 million and diluted earnings per share of $0.25 last year.
Appendix A of our press release shows adjustments to our consolidated and segment results, primarily related to net realized and unrealized gains, acquired intangible asset amortization, acquisition-related expenses, and severance costs, which we use to evaluate operating performance. In our Title segment, operating revenues increased $104 million, or 21%, driven by strong results from our direct and agency title operations. As a result, pretax income increased $13 million, over 100%. On an adjusted basis, Title pretax income increased $14 million, also over 100%, with adjusted pretax margin of 4% compared to 2% last year. In our direct title business, direct title revenues increased $38 million, or 17%, while total open and closed orders improved from last year.
Domestic commercial revenues increased $25 million, or 35%, driven by higher transaction size and volume with growth across asset classes led by energy, industrial, site development, data centers, and retail. Average domestic commercial fee per file improved 33% to $21,000 compared to $15,800 last year. Average domestic residential fee per file in the first quarter was $3,300, consistent with last year. Total international revenues increased 10%, primarily driven by higher volumes. In our agency operations, gross agency revenues increased 25% to $333 million compared to $268 million last year, driven by improved volumes across our key agency states, including New York, Florida, Ohio, and Pennsylvania, and also helped by commercial transactions.
After agent retention, net agency revenues increased $11 million, or 23%. On title losses, the first quarter title loss ratio improved to 3.1%, compared to 3.5% last year, reflecting our continued favorable claims experience. We expect our title losses in 2026 to average in the 3.5% to 4% range. In our Real Estate Solutions segment, total revenues increased $64 million, or 66%, driven by growth in our credit information services operations and our MCS business, as Frederick noted. RES adjusted pretax income improved $11 million to $20 million, or over 100%, and adjusted pretax margin improved to 12.5% compared to approximately 10% last year. We continue to focus on managing our overall cost to serve and strengthening customer relationships.
We expect our margins to trend higher as those relationships mature. On our consolidated operating expenses, our employee cost ratio improved to 29% compared to 31% last year, primarily due to increased revenues. Our other operating expense ratio increased slightly to 28% due to higher expenses in the RES segment. Our financial position remains solid and well positioned to support our customers, employees, and the real estate market. Total cash and investments were approximately $420 million in excess of statutory premium requirements. Total stockholders’ equity at March 31 was approximately $1.4 billion, representing a book value of $54 per share.
And net cash used by operations improved to $4 million compared to $30 million in the prior-year quarter due to higher net income. Again, thank you to our customers and employees for their continued support. We remain confident in our ability to serve the real estate markets. I will now turn the call over to the operator for questions.
Operator: We will now open the call for questions. Thank you. We will take our first question from Bose Thomas George with KBW. Please go ahead. Your line is open.
Frederick Eppinger: Good morning, Bose.
Bose Thomas George: Hey, good morning. Just wanted to start on commercial. Obviously, the fee profile was up very nicely year-over-year. When you think about the trends over the next few quarters, how do you see the cadence of that year-over-year growth? Could it persist for a little while? When do the comps get a little more challenging?
Frederick Eppinger: That is a great question, Bose. What has happened is our pipeline is really quite good, and what we are seeing across the industry is the frequency of very large deals has increased. The other thing for us is we are winning more deals as we have had a good two-year run here of growing scale and capabilities. I think it is natural for our average to hover at this higher level. The other interesting thing for us, if you compared us to others, because we were small four or five years ago, our refi percentage is less. So we are a little bit bumpier on size of deal because it tends to be less refi softening of the numbers.
I am pretty confident that the business will continue. The growth year-over-year will jump around a bit for us, just because, if you recall, a couple of quarters last year grew 50% plus, and we were in a market that was growing half that. So there might be some comparisons, but I am bullish on our continued success as we go through the year on commercial. I would say the commercial in our direct operation—part of that is generated by our own staffing, if you will, putting skills back into the direct offices. I believe that has momentum both continuing and could increase over time for us because of the investments we are making there.
That is a little different for us because we were underpenetrated in what I call Main Street—the smaller end of commercial—compared to the big guys.
Bose Thomas George: Okay, great. Thanks. And then switching over to the ancillary, can you talk about the year-over-year growth rate outlook there with MCS now? Is what we saw in the first quarter a reasonable level for the rest of the year? And I think you guided to a margin in the low teens for that segment for the rest of the year?
Frederick Eppinger: Yes. On the margin first, I would say 11% to 12% was good. Now it is 12% to 13%, maybe even a little more. We have some work to do on some consolidation, but it is going to tick up to that 12.5% to 13%, maybe a little 13% plus. I feel good about the trends there, and it is a nice solid book of business. On growth, we grew most of the businesses outside of MCS. In total, I think there was 21% or something of growth, and there is good penetration expectations in that business. It could soften a little bit, but you are going to see pretty strong growth coming out of that.
There is a lot of momentum. Given my view that the RES growth is going to be marginal, particularly for the next quarter or two, I feel we can sustain, with our momentum, somewhere around a 15% growth rate for the overall company. It might be a little less or more, but when I look under the hood in all of these businesses, even with a low resi market, our share growth is good—like in agency—and the trends feel pretty good. So that is how I think about it in total. I think we have established a little bit of momentum right now.
David C. Hisey: And Bose, just real quick to give a little more color. We had mentioned that MCS was a little over $160 million a year, so it is roughly $40 million a quarter on revenue. When you take that effect out, you can get to that 20% that Frederick was talking about. It is slightly seasonal, so it is a little less than that in the first quarter, but the $40 million is good the rest of the quarters.
Operator: Our next question comes from Geoffrey Murray Dunn with Dowling & Partners. Please go ahead. Your line is open.
Frederick Eppinger: Good morning, Geoffrey.
Geoffrey Murray Dunn: Good morning. First, could you share what the mix of commercial is in your agency line?
David C. Hisey: In agency?
Frederick Eppinger: Yes. It has to be parallel to what we have, but it will not have a lot of energy or big stuff. Agents typically do not have those mega deals. They will have some smaller in the data center space, but it is a pretty broad CRE kind of mix without the energy on top, because energy and the huge deals tend to be direct business. I feel good about it in agency. If you recall, we have always been strong as an underwriter for agents, but our commercial was very skewed to New York.
Historically, the company was very good in New York, but our ability to reach our commercial capacity to other big commercial-oriented agents across the country was much weaker. We also did not have the facility when we had big multi-location deals to facilitate that. So we created something called a concierge service that facilitates that. We have also instituted what we call direct-issue capabilities, so in certain places where they do not have licenses, we can finish the account. We now have capabilities in that space as good as anybody.
In my view, that has been one of those areas we have been growing now for six quarters at a very high rate, because people have started shifting parts of their book to us because we are a credible offering.
Geoffrey Murray Dunn: Okay. And then I wanted to dig a little bit more into the RES margin. If I remember correctly, PropStream has a very strong margin. MCS, I think you are talking close to 20%, and then you are double digit in Informative. And the challenge, I think, has been—the rest of the businesses. So what is the margin first—is that correct? And then what is the margin opportunity on those other businesses, maybe thinking about some extra—you know, move to margin to the venture.
Frederick Eppinger: Yes. The margin is a little more consistent than you think. Pricing is teeny—so yes, it has a little bit higher margins—but it is a very small business. MCS was higher, but the others hover around that 12% target that we have. Is there opportunity to improve that? Yes. For example, appraisal in my view—we have some good supply and there is work we are still doing because of the acquisition. That could be high single digits to low double digits and could go up a little bit. I am shooting for, in most of the businesses, around that 12% margin, and those are the ones where we have our volume.
Our remote online notary tools are a very small business. It is really a tool for our business. We do a little bit of outside sales, but it is really for delivering for ourselves and our agent partners. It is not really a core of the growth or the margin. I feel pretty good about the breadth. Seasonality obviously in the appraisal and the notarization/signature businesses—those are cyclical; they are just like the rest of our businesses. MCS is a tad countercyclical to that because it is in the default area and it is less volatile quarter to quarter. The pattern of that is helpful to us too.
As I said, I think we were at this 12% overall, moving into the 13% to 14% range. If the market comes back—if the market is at 5 million—just like our other businesses, that thing can get to [inaudible] right? They may have some cyclical nature to them because of the volume. It is a very solid portfolio now, and it is a lot stronger now that we got the scale up in appraisal and we got MCS into the mix.
Geoffrey Murray Dunn: Great. Thank you.
Operator: We will move next with Oscar Nieves Santana with Stephens Inc. Please go ahead. Your line is open.
Oscar Nieves Santana: Good morning. You mentioned earlier the acquisition of Nationwide Appraisal Network, which was announced right after the end of the first quarter. What details can you share about that transaction in terms of the purchase price and how it was financed, and also the expected contributions to the financials, both in terms of revenue and margins?
Frederick Eppinger: NAN is small—about a $40 million transaction. You will probably get about $30 million to run through the next three quarters or so. The incremental margin is what I described; we should get into the low double digits. There are going to be some integration costs and transition costs out of the gate here. As far as the proceeds, if you recall in December, when we raised $150 million, I said I saw some promising, interesting things that I wanted to pursue to complement our business. There are a half dozen or so things that were quite warm that help both in the RES area and in the direct operations area. That is what we are pursuing.
We had essentially free cash on hand that we used for that, and we have other dry powder for the other transactions I am talking about. What I am trying to do is, in each of these businesses—particularly on the services side—if they are relatively fragmented businesses that are rolling up, what you are seeing is the financial buyers in a lot of those businesses—they bought in 2021, they overpaid, etc.—they are withdrawing.
It has made a lot of people pause, and so what you are going to be able to do, at least I think, in some of these businesses is build a leadership position—which we have done in RES—and again, it sets up nicely for us to get the scale in these businesses. In the direct side, because the commercial market is a little bit better and there is a little bit more light at the end of the tunnel, agents are making a little bit of money, and they are much more willing. These folks that we have been talking to for months—we are getting at trading prices that make sense for both of us with an earn-out.
Our target list—there are a couple in particular that I feel are higher probability in the next six months. That is why we raised the money. That is why we have it available for these transactions. We will see how it happens. We spend a lot of time reaching out, making contacts, developing a pipeline, figuring out how these things fit and how they help our talent base. My view is there is a chance things are going to start happening, and I want to make sure we are capitalized enough to take advantage of it. We do not like competing or auctions. Most of what we do is we try to make this happen on a one-on-one basis.
Oscar Nieves Santana: That is very helpful. I have a couple of follow-ups related to that. Do you have an updated expectation, given what you mentioned about the pickup in the pipeline, about how much capital you could be deploying through the end of the year? And also, can you share some of your learnings so far related to the MCS integration process?
Frederick Eppinger: On MCS, I am thrilled. MCS was a leader in their space, and I could not be more pleased with the leadership team and their ability to continue to grow and set us up with a high reputation in that space. It also completed a little bit of [inaudible] there are some other places I am looking to evolve capabilities, but it really rounds out our presence in the default marketplace. Because of the nature of that business, there is not a lot of integration with the rest of the company except for the normal things you think about—financial stuff. So it is a pretty standalone business model.
But there will be cross-sell opportunity and relationship opportunities that come from it. It is doing everything we expected it to do, and I am thrilled by it. As far as capital, again, the things that I talked about in December are well within our excess capital availability—within the money we raised and the roughly $70 million on top of that available. So it is in that range of availability as we go forward. What is the probability of it happening? I do not know. I just want us to be prepared, to be truthful.
I would also tell you that in the next two or three years—let us say two years—I think a few of the gems in our marketplace are going to become available. There are only a handful of things in the title business—[inaudible]—assets that are going to be [inaudible]. Somewhere in the next couple, three years, they could become available. I do not do capital planning for those because they are so rare. If it happens, it happens, and it will stand on its own and justify the returns. In the normal course, as you know, most of the deals we do are in that $20 million to $50 million range.
We have really good line of sight to the pipeline, so in the normal course we are going to use our available capital.
Oscar Nieves Santana: Super helpful. I will get back in the queue. Thank you.
Operator: Thank you. At this time, there are no further questions in queue. I will now turn the meeting back to Frederick for closing remarks.
Frederick Eppinger: Thank you so much for your interest in Stewart Information Services Corporation. To summarize, I feel very good about the company. I do not think we have ever been this strong as far as talent and position in the marketplace. Hopefully, even with a difficult market, we can continue our momentum. I am pleased with the progress we are making so far. Again, I just want to thank everybody for their interest in the company.
Operator: Thank you. This brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.
