Fidelity National Financial(FNF) - 2025 Q2 - Quarterly Results

FNF Second Quarter 2025 Financial Results Overview Company Profile Fidelity National Financial, Inc. (FNF) is a leading provider of title insurance and real estate transaction services, also offering insurance solutions through its subsidiary F&G Annuities & Life, Inc - FNF is a leading provider of title insurance and transaction services in the real estate and mortgage industries[3] - FNF provides insurance solutions through its subsidiary F&G Annuities & Life, Inc. for retail annuity, life insurance, and institutional clients[3] Consolidated Financial Performance (Q2 2025 vs Q2 2024) FNF's net income and adjusted net income attributable to common stockholders decreased in Q2 2025 compared to Q2 2024, despite significant total revenue growth driven by strong title segment performance Consolidated Financial Performance (Q2 2025 vs Q2 2024): | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--------------------------------------- | :-------------- | :-------------- | :------- | | Net Income Attributable to Common Stockholders ($ million) | $278 | $306 | -9.15% | | Diluted EPS ($) | $1.02 | $1.12 | -8.93% | | Adjusted Net Income Attributable to Common Stockholders ($ million) | $318 | $338 | -5.92% | | Adjusted EPS ($) | $1.16 | $1.24 | -6.45% | | Total Revenue ($ million) | $3,635 | $3,158 | +15.11% | Key Company Highlights Despite a soft residential real estate market, FNF's Title segment achieved industry-leading pre-tax margins and strong adjusted net earnings, while the F&G segment reported record AUM and robust sales, supported by active capital allocation through share repurchases and dividends - The Title segment contributed $260 million in adjusted net earnings in Q2 2025, up from $241 million in Q2 2024[8] - The F&G segment contributed $89 million in adjusted net earnings in Q2 2025, down from $122 million in Q2 2024[8] - F&G achieved a record $69.2 billion in Assets Under Management (AUM) excluding flow reinsurance at quarter-end, a 13% increase from Q2 2024[7][8] - F&G's total sales reached $4.1 billion, one of the company's best sales quarters, with net sales of $2.7 billion[8] - FNF repurchased 2.9 million shares for $159 million and paid a common stock dividend of $0.50 per share, totaling $135 million in Q2[8][9] Segment Financial Results Title Segment The Title segment achieved industry-leading pre-tax margins and strong cash flow in Q2 2025, despite increased claims and investments in security, technology, and hiring, with robust commercial transaction volumes positioning it for a residential real estate market rebound Business Overview and CEO Commentary The Title segment provides title insurance and related services, with the CEO highlighting industry-leading pre-tax margins, strong cash flow, strategic investments for long-term growth, and robust commercial transaction volumes in Q2 - The Title segment includes the company's title insurance underwriters and related businesses, offering core title insurance, escrow, and other title-related services such as loan subservicing, valuations, default services, and home warranties[10] - The segment achieved industry-leading pre-tax title margins and generated strong cash flow in Q2, which was reinvested into the business and returned to shareholders[11] - Q2 performance was impacted by increased claims and higher investments in security, technology, and hiring, aimed at positioning the business for long-term growth[11] - Commercial transaction volumes remained strong, with both national and local revenue increasing over 22% year-over-year[11] Q2 2025 Financial and Operational Highlights The Title segment reported $2.2 billion in total revenue for Q2 2025, a 15% year-over-year increase, driven by 12% growth in direct title premiums, 7% in agency title premiums, and 22% in commercial revenue, with adjusted pre-tax title margin at 15.5% Title Segment Q2 2025 Financial Highlights (YoY): | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--------------------------------------- | :-------------- | :-------------- | :------- | | Total Revenue ($ billion) | $2.2 | $1.9 | +15.8% | | Total Revenue Excluding Recognized Gains/Losses ($ billion) | $2.2 | $2.0 | +8.0% | | Direct Title Premiums ($ million) | $632 | $564 | +12.1% | | Agency Title Premiums ($ million) | $839 | $784 | +7.0% | | Commercial Revenue ($ million) | $333 | $273 | +22.0% | | Adjusted Pre-tax Title Margin (%) | 15.5% | 16.2% | -0.7 percentage points | | Adjusted Pre-tax Earnings ($ million) | $337 | $324 | +4.0% | - Daily refinance order openings increased by 28% and daily closings by 41%, both higher than Q2 2024[14] - Commercial order openings increased by 7% and closings by 15%, both higher than Q2 2024[14] - Total fee per file was $3,894 in Q2, a 4% increase from Q2 2024[14] F&G Segment The F&G segment achieved significant AUM growth (excluding flow reinsurance) to $69.2 billion in Q2 2025, a 13% year-over-year increase, driven by strong sales, despite a decrease in adjusted net earnings, with record retail channel sales and a strategic shift towards a more fee-based, higher-margin, and less capital-intensive business model Business Overview and CEO Commentary F&G, an FNF subsidiary, provides leading insurance solutions, with the CEO highlighting strong AUM growth (excluding flow reinsurance), reduced operating expenses relative to AUM, solid investment portfolio performance, and a commitment to transitioning to a more fee-based, higher-margin, and less capital-intensive business model - F&G, an FNF subsidiary, provides leading insurance solutions for retail annuity and life insurance clients, as well as institutional clients for funding agreements and pension risk transfer[15] - AUM excluding flow reinsurance reached $69.2 billion at the end of Q2, a 13% increase from Q2 2024, primarily driven by strong sales[16][18] - F&G's operating expense to AUM excluding flow reinsurance ratio decreased by 5 basis points, with further improvement expected in the second half of the year[16] - F&G is committed to achieving its mid-term Investor Day targets, moving towards a more fee-based, higher-margin, and less capital-intensive business model[16] Q2 2025 Financial and Sales Highlights F&G's adjusted net income attributable to common stockholders was $89 million in Q2 2025, down from $122 million in Q2 2024, partly due to lower-than-expected alternative investment income, with total sales of $4.1 billion including record retail channel sales exceeding $3.6 billion F&G Segment Q2 2025 Financial and Sales Highlights (YoY): | Metric | Q2 2025 | Q2 2024 | YoY Change | | :--------------------------------------- | :-------------- | :-------------- | :------- | | Net Income Attributable to Common Stockholders ($ million) | $33 | $171 | -80.7% | | Adjusted Net Income Attributable to Common Stockholders ($ million) | $89 | $122 | -27.1% | | AUM Excluding Flow Reinsurance ($ billion) | $69.2 | $61.4 | +12.7% | | Total Sales ($ billion) | $4.1 | $4.4 | -6.8% | | Retail Channel Sales (Record) ($ billion) | >$3.6 | N/A | +13% | | Institutional Market Sales (Pension Risk Transfer) ($ billion) | $0.5 | $0.3 | +66.7% | | Institutional Market Sales (Funding Agreements) ($ billion) | $0 | $0.9 | -100% | | Net Sales ($ billion) | $2.7 | $3.4 | -20.6% | - Alternative investment income was $68 million in Q2 2025, below management's long-term expected return of approximately 10%[18][53] - Q2 2024 adjusted net income included $13 million in actuarial model updates and adjustments[18][55] Detailed Financial Statements Second Quarter Segment Information (GAAP) This section provides detailed GAAP consolidated and segment financial results for FNF's Q2 2025 and Q2 2024, including revenue, expenses, pre-tax earnings, and net income attributable to common stockholders Q2 2025 GAAP Segment Information ($ million): | Metric | Consolidated | Title | F&G | Corporate and Other | Eliminations | | :-------------------------------- | :----------- | :---- | :---- | :------------------ | :---------- | | Total Revenue | $3,635 | $2,213 | $1,364 | $86 | $(28) | | Total Expenses | $3,253 | $1,846 | $1,307 | $100 | $0 | | Pre-tax Earnings (Loss) | $382 | $367 | $57 | $(14) | $(28) | | Net Income (Loss) Attributable to Common Stockholders | $278 | $277 | $33 | $(4) | $(28) | Q2 2024 GAAP Segment Information ($ million): | Metric | Consolidated | Title | F&G | Corporate and Other | Eliminations | | :-------------------------------- | :----------- | :---- | :---- | :------------------ | :---------- | | Total Revenue | $3,158 | $1,931 | $1,172 | $82 | $(27) | | Total Expenses | $2,700 | $1,696 | $918 | $86 | $0 | | Pre-tax Earnings (Loss) | $458 | $235 | $254 | $(4) | $(27) | | Net Income (Loss) Attributable to Common Stockholders | $306 | $159 | $171 | $3 | $(27) | Second Quarter Segment Information (Non-GAAP Adjustments) This section presents FNF's reconciliation from GAAP net income to adjusted net income for Q2 2025 and Q2 2024, detailing non-GAAP adjustments such as recognized gains/losses, market-related liability adjustments, purchase price amortization, and transaction costs Q2 2025 Non-GAAP Adjustments and Adjusted Earnings ($ million): | Metric | Consolidated | Title | F&G | Corporate and Other | Eliminations | | :--------------------------------------- | :----------- | :---- | :---- | :------------------ | :---------- | | Net Income (Loss) Attributable to Common Stockholders (GAAP) | $278 | $277 | $33 | $(4) | $(28) | | Total Non-GAAP Adjustments | $40 | $(17) | $56 | $1 | $0 | | Adjusted Net Income (Loss) Attributable to Common Stockholders | $318 | $260 | $89 | $(3) | $(28) | Q2 2024 Non-GAAP Adjustments and Adjusted Earnings ($ million): | Metric | Consolidated | Title | F&G | Corporate and Other | Eliminations | | :--------------------------------------- | :----------- | :---- | :---- | :------------------ | :---------- | | Net Income (Loss) Attributable to Common Stockholders (GAAP) | $306 | $159 | $171 | $3 | $(27) | | Total Non-GAAP Adjustments | $32 | $82 | $(49) | $(1) | $0 | | Adjusted Net Income (Loss) Attributable to Common Stockholders | $338 | $241 | $122 | $2 | $(27) | Year-to-Date Segment Information (GAAP) This section provides FNF's year-to-date GAAP financial results for the six months ended June 30, 2025, and 2024, including consolidated and segment-level revenue, expenses, and earnings Q2 2025 Year-to-Date GAAP Segment Information ($ million): | Metric | Consolidated | Title | F&G | Corporate and Other | Eliminations | | :-------------------------------- | :----------- | :---- | :---- | :------------------ | :---------- | | Total Revenue | $6,364 | $3,987 | $2,272 | $161 | $(56) | | Total Expenses | $5,871 | $3,449 | $2,241 | $181 | $0 | | Pre-tax Earnings (Loss) | $493 | $538 | $31 | $(20) | $(56) | | Net Income (Loss) Attributable to Common Stockholders | $361 | $404 | $15 | $(2) | $(56) | Q2 2024 Year-to-Date GAAP Segment Information ($ million): | Metric | Consolidated | Title | F&G | Corporate and Other | Eliminations | | :-------------------------------- | :----------- | :---- | :---- | :------------------ | :---------- | | Total Revenue | $6,457 | $3,594 | $2,741 | $176 | $(54) | | Total Expenses | $5,668 | $3,141 | $2,345 | $182 | $0 | | Pre-tax Earnings (Loss) | $789 | $453 | $396 | $(6) | $(54) | | Net Income (Loss) Attributable to Common Stockholders | $554 | $331 | $269 | $8 | $(54) | Year-to-Date Segment Information (Non-GAAP Adjustments) This section presents FNF's year-to-date reconciliation from GAAP net income to adjusted net income for the six months ended June 30, 2025, and 2024, detailing non-GAAP adjustments at both consolidated and segment levels Q2 2025 Year-to-Date Non-GAAP Adjustments and Adjusted Earnings ($ million): | Metric | Consolidated | Title | F&G | Corporate and Other | Eliminations | | :--------------------------------------- | :----------- | :---- | :---- | :------------------ | :---------- | | Net Income (Loss) Attributable to Common Stockholders (GAAP) | $361 | $404 | $15 | $(2) | $(56) | | Total Non-GAAP Adjustments | $170 | $14 | $154 | $2 | $0 | | Adjusted Net Income (Loss) Attributable to Common Stockholders | $531 | $418 | $169 | $0 | $(56) | Q2 2024 Year-to-Date Non-GAAP Adjustments and Adjusted Earnings ($ million): | Metric | Consolidated | Title | F&G | Corporate and Other | Eliminations | | :--------------------------------------- | :----------- | :---- | :---- | :------------------ | :---------- | | Net Income (Loss) Attributable to Common Stockholders (GAAP) | $554 | $331 | $269 | $8 | $(54) | | Total Non-GAAP Adjustments | $(10) | $40 | $(52) | $2 | $0 | | Adjusted Net Income (Loss) Attributable to Common Stockholders | $544 | $371 | $217 | $10 | $(54) | Summary Balance Sheet Information As of June 30, 2025, FNF's total assets and total equity attributable to common stockholders increased compared to December 31, 2024, primarily due to growth in cash and investment portfolios Summary Balance Sheet Information ($ million): | Metric | June 30, 2025 | December 31, 2024 | Change | | :--------------------------------------- | :----------------- | :------------------ | :----- | | Cash and Investment Portfolio | $71,294 | $67,094 | +$4,200 | | Total Assets | $102,331 | $95,263 | +$7,068 | | Notes Payable | $4,397 | $4,321 | +$76 | | Title Claim Reserves | $1,695 | $1,713 | -$18 | | Total Equity Attributable to Common Stockholders | $7,906 | $7,754 | +$152 | Supplemental Information Conference Call Information FNF will host a conference call on Thursday, August 7, 2025, at 11:00 AM ET to discuss its Q2 2025 results, with a live webcast and replay available on the FNF investor relations website - FNF will host a conference call on Thursday, August 7, 2025, at 11:00 AM ET to discuss its Q2 2025 results[18] - A live webcast and replay of the conference call will be available on the FNF investor relations website at fnf.com[18][19] About FNF and F&G Fidelity National Financial, Inc. (FNF) is the largest title insurance company in the U.S., operating through multiple underwriters, while F&G, part of the FNF family of companies, is a leading provider of insurance solutions for retail annuity, life, and institutional clients - FNF is the largest title insurance company in the U.S., operating through title insurance underwriters including Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title, and National Title of New York[20] - F&G, part of the FNF family of companies, is a leading provider of insurance solutions for retail annuity and life insurance clients, as well as institutional clients, headquartered in Des Moines, Iowa[21] Definitions of Non-GAAP Financial Measures This section defines various non-GAAP financial measures used by FNF, including adjusted net income attributable to common stockholders, AUM, AUM excluding flow reinsurance, average AUM (AAUM), and sales, which provide additional insights beyond GAAP standards - Adjusted net income attributable to common stockholders is a non-GAAP economic measure that assesses financial performance by adjusting net income (loss) to remove market valuation impacts and non-recurring items[4][59] - Assets Under Management (AUM) includes total invested assets at amortized cost, investments in unconsolidated affiliates, related party loans and investments, accrued investment income, and cash and cash equivalents at period-end[61][62] - AUM excluding flow reinsurance builds upon AUM by including flow reinsurance assets[63] - Sales of annuity, IUL, funding agreement, and non-life contingent PRT products are recorded as deposit liabilities under GAAP but are presented as non-GAAP measures to enhance understanding of business trends[65] Forward-Looking Statements and Risk Factors This press release contains forward-looking statements based on management's beliefs and assumptions, subject to various risks and uncertainties that could cause actual results to differ materially, including economic changes, capital market volatility, weak real estate activity, acquisition challenges, reliance on title insurance distribution, intense competition, government regulation, and cybersecurity threats - Forward-looking statements are based on management's beliefs and assumptions, and actual results may differ materially due to risks and uncertainties[26] - Risks and uncertainties include changes in general economic, business, political crisis, war, and pandemic conditions; consumer spending; government spending; volatility and strength of capital markets; investor and consumer confidence; foreign currency exchange rates; commodity prices; inflation levels; changes in trade policies; tariffs and trade sanctions; trade wars; supply chain disruptions; weak or adverse changes in the level of real estate activity (which may be caused by high or rising interest rates, limited mortgage funding availability, or a weak U.S. economy); the company's inability to find suitable acquisition candidates; the company's reliance on title insurance underwriters' distribution as a primary source of cash flow; intense competition faced by F&G and the company's operating subsidiaries; compliance with extensive governmental regulation of operating subsidiaries, including title insurance and services and privacy and data protection laws; and system damage, failures, interruptions, cyberattacks, and intrusions, or unauthorized data disclosures[26][27]