Seaton noted that commercial refinance represented roughly 40% of commercial premiums in 2025 versus a historical level around 30%, citing some lenders moving to shorter loan maturities that can drive more frequent refinancing. In response to analyst questions, he added that he expects this refinancing dynamic to remain a “tailwind” for several years and that premiums are “basically the same” for commercial purchase and refinance transactions.Commercial title revenue increased 35% to $339 million, supported ...

Financial Data and Key Metrics Changes - The company generated adjusted EPS of $1.99, a 47% improvement from the prior year [5] - GAAP earnings were $2.05 per diluted share, with adjusted earnings including one-time benefits of $28 million or $0.20 per diluted share [12] - Adjusted revenue in the title segment was $1.9 billion, up 14% compared to the same quarter of 2024 [13] - Personnel costs increased by 11% to $581 million, primarily due to incentive compensation [16] - The effective tax rate was 25.7%, higher than the normalized rate of 24% [20] Business Line Data and Key Metrics Changes - Commercial revenue grew by 35% to $339 million, driven by higher average revenue per order and transaction volumes [13][14] - Closed orders increased by 10% in the commercial segment, while average revenue per order rose by 22% [14] - Residential purchase revenue decreased by 4%, with closed orders down by 7% [14] - Refinance revenue increased by 47%, driven by a 44% increase in closed orders [14] Market Data and Key Metrics Changes - Existing home sales are approximately 4 million units, below the normalized level of 5.5 million units [6] - Open purchase orders were down 7% in the fourth quarter, indicating continued weakness in purchase revenue [10] - Refinance open orders were up 72% in January, suggesting a positive trend for the first quarter [10] Company Strategy and Development Direction - The company aims to be the best title and escrow company in the industry, focusing on modern AI-powered products to improve customer experience and operational efficiency [11] - The launch of Endpoint and Sequoia AI is expected to provide a competitive advantage and improve margins over time [8][36] - The company plans to roll out Endpoint nationally over the next two years and expand Sequoia AI capabilities [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting growth across major revenue drivers despite uncertainty [9][10] - The company anticipates a record revenue year in the commercial segment, with a strong pipeline [9] - Management noted that the rate lock-in effect is expected to fade, allowing for improved affordability in the housing market [10] Other Important Information - The company has gained 90 basis points of organic market share over the last 12 months [10] - The bank subsidiary has quickly grown 1031 exchange deposits from $94 million to over $300 million [9] - The company is focused on investing in technology and maintaining a strong balance sheet while returning capital to shareholders [60] Q&A Session Summary Question: Can you help us think about the potential improvement over 2025 in commercial? - Management is optimistic about 2026, noting broad-based strength and a strong pipeline, but specific growth percentages are uncertain [24] Question: What is the contribution from data centers to commercial premiums? - Data centers accounted for roughly 10% of premiums, with significant growth expected [25][26] Question: How should we think about margin impacts from Sequoia and Endpoint? - The margin drag is expected to gradually alleviate as investments in modern platforms increase [36] Question: What are the primary drivers of the adjusted pretax margin expansion? - The higher margin is driven by commercial tailwinds and effective expense management [50] Question: What are the capital allocation priorities heading into 2026? - The first priority is investing in core business technology, followed by acquisitions and returning capital to shareholders [56][58] Question: What is the expected impact of the Texas title insurance rate reduction? - The rate change is expected to lower total revenue and net operating revenue in the title segment by about 50 basis points [86] Question: What is the guidance for investment income for Q1 or the full year? - Investment income for 2026 is expected to be roughly flat compared to 2025 [93]

Financial Data and Key Metrics Changes - The company generated adjusted EPS of $1.99, a 47% improvement from the prior year [5] - GAAP earnings were $2.05 per diluted share, with adjusted earnings including one-time benefits of $28 million or $0.20 per diluted share [12] - Adjusted revenue in the title segment was $1.9 billion, up 14% compared to the same quarter of 2024 [13] - Personnel costs increased by 11% to $581 million, primarily due to incentive compensation [16] Business Line Data and Key Metrics Changes - Commercial revenue grew by 35% to $339 million, driven by higher average revenue per order and transaction volumes [13][14] - Closed orders increased by 10% year-over-year, while average revenue per order rose by 22% to a record $18,600 per closing [14] - Residential purchase revenue decreased by 4%, reflecting a 7% decline in closed orders [14] - Refinance revenue increased by 47%, driven by a 44% increase in closed orders [14] Market Data and Key Metrics Changes - Existing home sales are running at approximately 4 million units, below the normalized level of 5.5 million units [6] - Open purchase orders were down 7% in the fourth quarter, indicating continued weakness in purchase revenue [10] - Refinance open orders were up 72% in January, suggesting a positive trend for the first quarter [10] Company Strategy and Development Direction - The company aims to be the best title and escrow company in the industry, focusing on modern AI-powered products to improve customer experience and operational efficiency [11] - The launch of the Endpoint platform and the Sequoia title production engine are key strategic initiatives, with plans for national rollout over the next two years [8][36] - The company is also focused on enhancing its competitive advantage through data assets and adjacent businesses [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting growth across major revenue drivers: commercial, purchase, and refinance [9] - The company anticipates a record revenue year for commercial, with a strong pipeline despite uncertainty [9] - Management noted that the rate lock-in effect is expected to fade, allowing for improved affordability in many markets [10] Other Important Information - The company ended the year with $94 million in 1031 exchange deposits, which have grown to over $300 million [9] - The effective tax rate for the quarter was 25.7%, higher than the normalized rate of 24% due to higher income from non-insurance businesses [20] Q&A Session Summary Question: Potential improvement in commercial revenue for 2026 - Management is optimistic about commercial revenue growth in 2026, citing strong momentum and a robust pipeline, but specific growth percentages are uncertain [24] Question: Contribution from data centers to commercial premiums - Data centers accounted for roughly 10% of commercial premiums, with significant growth expected [25][26] Question: Impact of Sequoia and Endpoint on margins - Management indicated that margin drag from legacy platforms will gradually alleviate as investments in modern platforms increase [34] Question: Drivers of adjusted pretax margin expansion - The higher margin is attributed to commercial tailwinds, effective expense management, and a favorable revenue mix [50] Question: Texas title insurance rate reduction impact - The rate change is expected to lower total revenue and net operating revenue in the title segment by about 50 basis points [86]

Financial Data and Key Metrics Changes - The company generated adjusted EPS of $1.99, a 47% improvement from the prior year [5] - GAAP earnings were $2.05 per diluted share, with adjusted earnings including one-time benefits of $28 million or $0.20 per diluted share [13] - Adjusted revenue in the title segment was $1.9 billion, up 14% compared to the same quarter of 2024 [13] - Personnel costs increased by 11% to $581 million, primarily due to incentive compensation [17] Business Line Data and Key Metrics Changes - Commercial revenue grew by 35% to $339 million, driven by higher average revenue per order and transaction volumes [13][14] - Closed orders increased by 10% year-over-year, while average revenue per order rose by 22% to a record $18,600 per closing [14] - Residential purchase revenue decreased by 4%, reflecting a 7% decline in closed orders [14] - Refinance revenue increased by 47%, driven by a 44% increase in closed orders [14] Market Data and Key Metrics Changes - Existing home sales are approximately 4 million units, below the normalized level of 5.5 million units [6] - Open purchase orders were down 7% in Q4, indicating continued weakness in purchase revenue [11] - Refinance open orders were up 72% in January, suggesting a positive trend for the first quarter [11] Company Strategy and Development Direction - The company aims to be the best title and escrow company in the industry, focusing on modern AI-powered products to improve customer experience and operational efficiency [12] - The launch of Endpoint and Sequoia AI is expected to provide a competitive advantage and improve margins over time [9][37] - The company plans to roll out Endpoint nationally over the next two years and expand Sequoia AI capabilities [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting growth across major revenue drivers: commercial, purchase, and refinance [10] - The company anticipates a record revenue year in commercial, with a strong pipeline despite uncertainties [10] - Management noted that the rate lock-in effect is expected to fade, allowing for improved affordability in many markets [11] Other Important Information - The company has gained 90 basis points of organic market share over the last 12 months [11] - The effective tax rate for the quarter was 25.7%, higher than the normalized rate of 24% due to higher income from non-insurance businesses [21] - The company ended the year with $94 million in 1031 deposits, expecting to grow to $1 billion by year-end [10] Q&A Session Summary Question: Can you help us think about the potential improvement over 2025 in commercial? - Management expressed optimism about commercial growth in 2026, citing strong momentum and a robust pipeline, but did not provide specific growth percentages [25] Question: Can you quantify the contribution from data centers to commercial premiums? - Data centers accounted for roughly 10% of premiums, with significant growth expected [26][30] Question: What is the expected impact on margins from technology investments like Sequoia and Endpoint? - Management indicated that margin drag from legacy platforms will gradually alleviate as new technologies are implemented, leading to improved margins over time [35][52] Question: How do you view the impact of the recent title insurance rate reduction in Texas? - The rate change is expected to lower total revenue and net operating revenue in the title segment by about 50 basis points, with limited offsets anticipated [83][85] Question: What is the guidance for investment income for 2026? - Management expects investment income to remain roughly flat compared to 2025, supported by higher commercial balances and longer-term investments [89][91]