Release Date: February 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: I was surprised to learn that your open orders in the Title business are accelerating into January despite the backup in rates. Could you give us more color on what's driving the strength in January? Are you taking market share? A: Michael Nolan, CEO: It's hard to determine on a monthly basis if we're taking market share, but we're encouraged by the 6% increase in purchase orders in the fourth quarter over last year. Refinance numbers were up 16% in January, indicating pent-up demand despite higher rates. We'll need more time to see how market share plays out.
Q: On your F&G earnings call, you mentioned benefits from FNF's majority ownership. Are there any material benefits or synergies critical to executing your growth plans, or could F&G execute well as a standalone entity? A: Chris Blunt, CEO of F&G: We've run F&G as a standalone business, but benefits like hard capital support and cybersecurity advancements have been significant. The ratings upgrade was crucial for channel expansion, which has been a major growth driver.
Q: What's your best guess on the impact of the data breach from the previous year on the Title margin expansion? A: Anthony Park, CFO: The impact was minor, possibly around 50 basis points on margin. We only had two days of disrupted transactions, and much of the revenue was recovered in December of last year.
Q: Can you discuss the sustainability of the strong commercial results and your confidence in continuing to grow off the $1.2 billion base? A: Michael Nolan, CEO: Starting in June, we've seen strong growth in national orders, averaging about 12% over the last three quarters. Clients and business partners are optimistic about 2025, and the office sector's recovery could further boost commercial volumes.
Q: How should we think about margins in 2025 compared to 2024, assuming market trends persist? A: Michael Nolan, CEO: Margins depend on factors like the mix of Direct and Agency, Commercial performance, and non-Title businesses. If 2025 sees more transactional volume, we expect better margins than in 2024, outperforming prior cycles with improved conditions.
Q: Can you break down the margin by segment? A: Anthony Park, CFO: In Q4 2024, Direct operations had a margin of over 23%, Agency was about 7.5%, National Commercial units were around 34%, Loan Care was 23%, and Home Warranty was flat compared to the prior year.
Q: Any impact from the wildfires on Q1 closings? A: Michael Nolan, CEO: The impact is minimal. While the fires are tragic, the affected areas don't have significant transactional volume, so the effect on our business is negligible.
Q: How have investments in efficiency and technology impacted the Title segment, and what are the future focus areas? A: Michael Nolan, CEO: We've moved to cloud data storage and integrated our operations on the SoftPro platform, enhancing efficiency. Future focus includes improving the closing process and leveraging AI for better customer and employee experiences.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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