Stewart Reports Fourth Quarter and Full Year 2024 Results

• Total revenues of $665.9 million ($664.2 million on an adjusted basis) compared to $582.2 million ($577.4 million on an adjusted basis) in the prior year quarter
• Net income of $22.7 million ($31.5 million on an adjusted basis) compared to $8.8 million ($16.6 million on an adjusted basis) in the prior year quarter
• Diluted earnings per share of $0.80 ($1.12 on an adjusted basis) compared to prior year quarter diluted EPS of $0.32 ($0.60 on an adjusted basis)
• Full year 2024 net income of $73.3 million ($94.4 million on an adjusted basis) compared to 2023 net income of $30.4 million ($66.6 million on an adjusted basis)
• Full year 2024 diluted earnings per share of $2.61 ($3.35 on an adjusted basis) compared to $1.11 ($2.42 on an adjusted basis) for 2023

HOUSTON, Feb. 5, 2025 /PRNewswire/ -- Stewart Information Services Corporation (NYSE: STC) today reported net income attributable to Stewart of $22.7 million ($0.80 per diluted share) for the fourth quarter 2024, compared to $8.8 million ($0.32 per diluted share) for the fourth quarter 2023. On an adjusted basis, net income for the fourth quarter 2024 was $31.5 million ($1.12 per diluted share) compared to $16.6 million ($0.60 per diluted share) in the fourth quarter 2023. Pretax income before noncontrolling interests for the fourth quarter 2024 was $35.4 million ($47.3 million on an adjusted basis) compared to $18.8 million ($29.1 million on an adjusted basis) for the fourth quarter 2023.

Fourth quarter 2024 results included $1.7 million of pretax net realized and unrealized gains, primarily related to net gains from fair value changes of equity securities investments and an acquisition liability adjustment, partially offset by losses from a sale of an office and an investment impairment. Fourth quarter 2023 results included $4.8 million of pretax net realized and unrealized gains, primarily driven by net gains from fair value changes of equity securities investments and an acquisition liability adjustment.

"We are pleased with our fourth quarter and full year 2024 results as they demonstrate both our progress and resilience in these continued challenging macro-housing conditions," commented Fred Eppinger, chief executive officer. "We continue to improve on our operations to win share and fortify our position and look forward to continuing to do so in 2025. We remain focused on our pursuit of growth and margin improvement across all business lines."  

Selected Financial Information
Summary results of operations are as follows (dollars in millions, except per share amounts, pretax margin and adjusted pretax margin, and amounts may not add as presented due to rounding):

Title Segment
Summary results of the title segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin):

Title segment operating revenues in the fourth quarter 2024 improved $59.8 million, or 12 percent, driven by increased revenues from our direct and agency title operations, while total segment operating expenses increased $41.0 million, or 8 percent, compared to the fourth quarter 2023. Agency retention expenses in the fourth quarter 2024 increased $13.7 million, or 6 percent, consistent with the $16.6 million, or 6 percent, increase in gross agency revenues compared to the prior year quarter.

Total title segment employee costs and other operating expenses for the fourth quarter 2024 increased $27.1 million, or 11 percent, compared to the prior year quarter, primarily due to increased incentive compensation expenses related to higher title revenues, higher outside search expenses resulting from higher commercial revenues, and increased severance expenses, primarily related to an executive retirement announced in September 2024. As a percentage of operating revenues, total segment employee costs and other operating expenses slightly improved to 48.7 percent in the fourth quarter 2024 compared to 49.1 percent in the prior year quarter.

Title loss expense in the fourth quarter 2024 was $20.7 million, which was comparable to the fourth quarter 2023, primarily as a result of our overall favorable claim experience offsetting the incremental title loss expense related to increased title revenues. As a percentage of title revenues, title loss expense was 3.7 percent for the fourth quarter 2024 compared to 4.1 percent in the prior year quarter.

In addition to the net realized and unrealized gains presented above, non-GAAP adjustments to the title segment's pretax income for the fourth quarters 2024 and 2023 included $8.1 million and $9.1 million, respectively, of total acquisition intangible asset amortization and related expenses, executive severance expenses and office closure costs (refer to Appendix A).

Direct title revenues information is presented below (dollars in millions):

Domestic non-commercial revenues in the fourth quarter 2024 improved by $8.7 million, or 6 percent, primarily due to increased total non-commercial domestic transactions compared to the fourth quarter 2023. Domestic commercial revenues in the fourth quarter 2024 increased by $28.0 million, or 50 percent, primarily due to a higher average transaction size and a 13 percent increase in commercial transactions compared to the prior year quarter. Fourth quarter 2024 average domestic commercial fee per file was $19,600, or 33 percent higher compared to $14,800 from the fourth quarter 2023, while average domestic residential fee per file was $2,900, or 8 percent lower compared to $3,200 from the prior year quarter, primarily due to a lower purchase transaction mix during the fourth quarter 2024.

Real Estate Solutions Segment
Summary results of the real estate solutions segment are as follows (dollars in millions, except pretax margin and adjusted pretax margin):

Fourth quarter 2024 operating revenues increased $25.6 million, or 42 percent, primarily due to increased revenues from our credit information and valuation services operations compared to the fourth quarter 2023. On a combined basis, the segment's employee costs and other operating expenses increased $26.2 million, or 49 percent, primarily driven by higher vendor prices for credit information services and increased employee count in anticipation of new customers and related revenue. Non-GAAP adjustments to pretax income shown in the schedule above were primarily related to acquisition intangible asset amortization expenses (refer to Appendix A).

Corporate Segment
The segment's fourth quarter 2024 results included net expenses attributable to corporate operations of $9.7 million, which were comparable to the prior year quarter, and a $1.1 million unrealized loss related to an investment impairment.

Expenses
Consolidated employee costs in the fourth quarter 2024 increased by $21.3 million, or 12 percent, compared to the fourth quarter 2023, primarily driven by higher incentive compensation on overall improved revenues, increased salaries primarily due to higher employee counts in commercial services and real estate solutions, and higher executive severances expenses primarily related to a title segment executive retirement announced in September 2024. As a percentage of total operating revenues, employee costs improved to 30.7 percent in the fourth quarter 2024 compared to 31.6 percent in the prior year quarter.

Consolidated other operating expenses in the fourth quarter 2024 increased $31.9 million, or 25 percent, primarily driven by higher service expenses and outside search fees related to higher revenues from real estate solutions and commercial title operations, respectively, partially offset by lower office closures compared to the fourth quarter 2023. As a percentage of total operating revenues, fourth quarter 2024 total other operating expenses increased to 24.5 percent compared to 22.5 percent in the prior year quarter, primarily due to increased real estate solutions service expenses.

Other
Net cash provided by operations in the fourth quarter 2024 was $68.0 million compared to $39.5 million in the fourth quarter 2023, primarily driven by the higher consolidated net income in the fourth quarter 2024. 

Fourth Quarter Earnings Call
Stewart will hold a conference call to discuss the fourth quarter 2024 earnings at 8:30 a.m. Eastern Time on Thursday, February 6, 2025. To participate, dial (800) 343-5172 (USA) or (203) 518-9856 (International) – access code STCQ424. Additionally, participants can listen to the conference call through Stewart's Investor Relations website at https://investors.stewart.com/news-and-events/events/default.aspx. The conference call replay will be available from 11:00 a.m. Eastern Time on February 6, 2025 until midnight on February 13, 2025 by dialing (800) 753-5479 (USA) or (402) 220-2675 (International).

About Stewart
Stewart (NYSE-STC) is a global real estate services company, offering products and services through our direct operations, network of Stewart Trusted Providers™ and family of companies. From residential and commercial title insurance and closing and settlement services to specialized offerings for the mortgage and real estate industries, we offer the comprehensive service, deep expertise and solutions our customers need for any real estate transaction. At Stewart, we are dedicated to becoming the premier title services company and we are committed to doing so by partnering with our customers to create mutual success. Learn more at stewart.com.

Cautionary statement regarding forward-looking statements. Certain statements in this press release are "forward-looking statements", including statements related to Stewart's future business plans and expectations, including our plans to achieve market growth and pretax margin improvements. Forward-looking statements, by their nature, are subject to various risks and uncertainties that could cause our actual results to differ materially. Such risks and uncertainties include the volatility of general economic conditions and adverse changes in the level of real estate activity, as well as a number of other risk and uncertainties discussed in detail in our documents filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023, and if applicable, as supplemented by any risk factors contained in our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K filed subsequently. Additional information will also be set forth in our Annual Report on Form 10-K for the year ended December 31, 2024. We expressly disclaim any obligation to update, amend or clarify any forward-looking statements contained in this press release to reflect events or circumstances that may arise after the date hereof, except as may be required by applicable law.

ST-IR

Appendix A
Non-GAAP Adjustments

Management uses a variety of financial and operational measurements other than its financial statements prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) to analyze its performance. These include: (1) adjusted revenues, which are reported revenues adjusted for net realized and unrealized gains and losses and (2) adjusted pretax income and adjusted net income, which are reported pretax income and reported net income after earnings from noncontrolling interests, respectively, adjusted for net realized and unrealized gains and losses, acquisition intangible asset amortization and other expenses (acquisition-related), office closure costs, executive severance expenses, and other nonrecurring expenses. Adjusted diluted earnings per share (adjusted diluted EPS) is calculated using adjusted net income divided by the diluted average weighted outstanding shares. Adjusted pretax margin is calculated using adjusted pretax income divided by adjusted total revenues. Management views these measures as important performance measures of core profitability for its operations and as key components of its internal financial reporting. Management believes investors benefit from having access to the same financial measures that management uses.

Below are reconciliations of the non-GAAP financial measures used by management to the most directly comparable GAAP measures for the quarter and year ended December 31, 2024 and 2023 (dollars in millions, except shares, per share amounts and pretax margins, and amounts may not add as presented due to rounding).

SOURCE Stewart Information Services Corporation