Fidelity National Financial, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Title Business Strengths: Strong performance across commercial, refinance, centralized, and home warranty operations. Adjusted pretax title earnings and margin improved. Disciplined expense management contributed to incremental margins.
• Technology Initiatives: inHere digital transaction platform engaged 85% of residential sales transactions and reached over 860,000 unique users. Enhanced identity verification and AI tools deployed enterprise-wide to improve productivity and security.
• F&G Update: AUM before flow reinsurance reached $71.4 billion. F&G's gross sales, core sales, and net sales retained showed growth.
• Equity Ownership Change: Board approved changing FNF's equity ownership stake in F&G, planning to distribute ~12% of F&G's common stock to FNF shareholders, retaining majority ownership.

Segment Performance

• Title Business: Delivered adjusted pretax title earnings of $410 million, an $87 million (27%) increase from Q3 2024, with an adjusted pretax title margin of 17.8% (up 190 basis points from 15.9% in Q3 2024). Title segment revenue was $2.3 billion in Q3 2025. Purchase daily orders opened had an 8% sequential decline in Q3 but September was higher due to mortgage rate decrease. Refinance orders opened were 1,600 per day in Q3 (up from 1,300 in prior quarter) and 2,100 per day in September. Commercial revenue in first 9 months of 2025 was over $1 billion (up 27% year-over-year). Total orders opened averaged 5,800 per day in Q3.
• F&G Segment: Assets under management before flow reinsurance crossed $70 billion at end of Q3 (up 14% year-over-year). Gross sales were $4.2 billion, core sales $2.2 billion, net sales retained $2.8 billion. Adjusted net earnings for F&G segment were $139 million in Q3 2025 (compared to $135 million in Q3 2024).

Guidance

• Title Segment: Expected quarterly interest and investment income to trend down from $109 million in Q3 to around $100 million in Q4 and decline further in subsequent quarters. Expected $30 million per quarter in dividend income from F&G. Title claims paid were $58 million, $12 million lower than provision.
• F&G Segment: AUM before flow reinsurance expected to continue growth.
• Equity Distribution: Distribution of F&G shares to unlock shareholder value and enhance market liquidity.

Risks

• Market Volatility: Fluctuations in mortgage rates can impact refinance volumes and commercial activity.
• Regulatory Changes: Potential changes in regulations affecting title and insurance businesses could impact operations and margins.
• Economic Conditions: Low transactional environment for purchases could affect title business performance.

Question and Answer

Q: In terms of the spin of the 12% to F&G, could you have spun the whole piece out tax-free? And then does this spin at this 12% as a taxable dividend change your ability to dividend the remainder tax-free?

A: Yes, could have spun whole tax-free; dropping below 80% makes full spin tax-free off the table, but other distributions possible.

Q: Just a follow-up on the FG distribution. Maybe outline other options? And intention to hold FG longer term?

A: Other options possible; current plan is to retain majority ownership, distribution to unlock value and enhance FG's market liquidity.

Q: Title margin this quarter of 17.8%. Update on initiatives impact and margin outlook?

A: Legal settlement boosted income, elevated health claims offset; Q4 typically weak for purchases, commercial expected to do well; margin outlook for Q4 good, next year dependent on purchase and rate environment.

Q: Earnings from equity investments. Sustainability?

A: Volatile; some positive marks recently, but not sustainable for modeling.

Q: Daily count for refis in October?

A: Just over 1,800 orders per day in October, down from September but above Q3 average.

Q: Commercial refi mix and trend?

A: Refi opens up double digits year-over-year, showing customers are refinancing, not as locked up as thought, but not significant overall volume.

Q: inHere engagement. Expand on 85% engagement?

A: 85% of orders engaged with inHere platform, 860,000 unique users, showing growth and secure customer experience.