NMI Holdings (NMIH) Q2 Revenue Up 7%

Core Viewpoint - NMI Holdings reported strong second quarter results for 2025, exceeding analyst expectations in both non-GAAP EPS and revenue, while also indicating a shift in claims expenses and loss metrics [1][5][6]. Financial Performance - Non-GAAP EPS for Q2 2025 was $1.22, surpassing the estimate of $1.20, and reflecting a year-over-year increase of 1.7% [2]. - Revenue reached $173.8 million, exceeding the forecast of $149.57 million and showing a 7.2% increase from $162.1 million in Q2 2024 [2][5]. - Net premiums earned were $149.1 million, up 5.6% from $141.2 million in Q2 2024 [2]. - Adjusted net income was $96.5 million, slightly down by 1.1% from $97.6 million in Q2 2024 [2]. Claims and Loss Metrics - The loss ratio increased to 9.0% from 0.2% in Q2 2024, driven by higher claims expenses which rose to $13.4 million from $0.3 million in the prior year [2][6]. - Default inventory was reported at 6,709, up from 4,904 in the prior year, indicating a modest increase in loans currently in default [8][9]. Business Overview - NMI Holdings specializes in private mortgage insurance for high loan-to-value mortgages, enabling borrowers to qualify for loans with smaller down payments [3]. - The company maintains critical relationships with government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, which are essential for its business model [4]. Operational Efficiency - Operating expenses were controlled at $29.5 million, with an expense ratio of 19.8%, showing slight improvement from the previous year [7]. - The company reported a strong capital position with a book value per share of $32.08, up 4% quarter-over-quarter and 16% year-over-year [7]. Future Outlook - Management did not provide explicit financial guidance for Q3 or fiscal 2025 but emphasized a focus on capital strength and high-quality risk selection [12]. - The company continues to utilize reinsurance as a risk management strategy, with $32.7 million in reinsurance recoverables at period-end [10].