Fidelity National Financial, Inc. 2026 Q2 Earnings Call

Please go ahead. Thanks, operator, welcome everyone.

I'm joined today by Mike Nolan, CEO, and Tony Park, CFO. We look forward to addressing your questions following our prepared remarks. F&G's management team, including Conor Murphy, CEO and President, and Mark Wiltse, Interim CFO, will also be available for Q&A. We're also glad to welcome F&G's incoming CFO, Michael Bailey, who joined the company earlier this week and will listen in on today's call. Today's earnings call may include forward-looking statements and projections under the Private Securities Litigation Reform Act, which do not guarantee future events or performance. We do not undertake any duty to revise or update such statements to reflect new information, subsequent events, or changes in strategy. Please refer to our most recent quarterly and annual reports and other SEC filings for details on important factors that could cause actual results to differ materially from those expressed or implied.

This morning's discussion also includes non-GAAP measures, which management believes are relevant in assessing the financial performance of the business. Non-GAAP measures have been reconciled to GAAP where required and in accordance with SEC rules within our earnings materials available on the company's investor website. Please note that today's call is being recorded and will be available for webcast replay. With that, I'll hand the call over to Mike Nolan.

Thank you, Lisa, good morning. We are very pleased with our second quarter results, which reflect sustained momentum across our company. Both of our businesses are well-positioned for the current market and for longer-term growth. I'd also like to thank our employees for achieving another quarter of industry-leading performance. We are generating greater momentum in sequential daily opened orders in purchase and refinance relative to our peers, while also delivering strength in commercial revenue trending towards historic highs. All of this is a direct result of their exceptional contributions to stay ahead of our competition. Starting with Title, we delivered adjusted pre-tax Title earnings of $448 million for the second quarter, up 33% over the second quarter of 2025. This generated an industry-leading adjusted pre-tax Title margin of 17.8% for the second quarter, an increase of 230 basis points over the second quarter of 2025.

Our second quarter results reflect continued strong performance across the business, highlighted by strength in our commercial, residential and agency businesses. Additionally, our disciplined expense management drove strong incremental margins. Looking at our Title results more closely, starting with purchase, U.S. existing home sales remain at historically low levels at around the 4 million annual pace due to elevated mortgage rates and housing market dynamics. We were encouraged to see increases in daily purchase orders opened over the prior year and sequential quarters, steadily outperforming relative to peers. Our daily purchase orders opened were up 3% over the second quarter of 2025, up 7% over the first quarter of 2026, and up 4% for the month of July versus the prior year. Our refinance volumes continue to be responsive to 30-year mortgage rates, although accounting for only 7% of our direct revenue in the second quarter.

Refinance orders opened were 1,600 per day in the second quarter as compared to 1,300 in the second quarter of 2025 and 2,000 in the first quarter of 2026. Volumes remained resilient at 1,500 per day in the month of July as mortgage rates moved higher. Our refinance orders open per day were up 16% over the second quarter of 2025, down 22% from the first quarter of 2026, and up 15% for the month of July versus the prior year. For commercial, we were on track for a very strong and potentially record year, with direct commercial revenue of $778 million in the first six months, up 24% over $626 million in the first half of 2025. We continue to see growth in both national and local markets' daily orders opened, up 3% and 10% respectively in the second quarter over the second quarter of 2025.

Total commercial orders opened were 919 per day, up 7% over the second quarter of 2025, up 1% over the first quarter of 2026, and up 2% for the month of July versus the prior year. We remain bullish on commercial due to several factors. First, we have a strong pipeline of commercial deals slated to close with broad strength across geographies and asset classes, including industrial data centers, multifamily, affordable housing, retail, and energy. Next, our scale and expertise position us to participate in the largest transactions in the market. We closed 29 transactions generating over $1 million each in premiums in the second quarter across multiple asset classes in both our direct and agency businesses. This is reflected in our higher trending commercial fee profile. Third, our current performance reflects the U.S. office real estate market in the early stage of a fragmented recovery.

We believe this sector's eventual rebound will provide a potential tailwind as we look ahead. Finally, commercial real estate activity is sustained by ongoing property sale and refinance activity that contribute to overall order volumes as well. To bring it all together, total orders opened were steady and averaged 6,200 per day in the second quarter. For the month of July, total orders opened were 5,900 per day, up 7% over the prior year. Looking ahead, we expect commercial momentum to continue but remain cautious on residential purchase and refinance activity for the remainder of the year. We have also recently had higher strategic investment in active recruiting and a handful of attractive tuck-in acquisitions. While these strategic investments build the business for the long term, they do typically front-load expenses while revenues take a few months to ramp up and reach full productivity.

We expect to see this near-term effect on our results, including some modest compression to adjusted pre-tax title margin in the second half of the year. Over time, once mortgage rates improve, we believe residential purchase and refinance activity will accelerate and trend toward historical levels. This recovery represents additional earnings power given the operational leverage that we have built into our model. This operational leverage also comes through our technology and AI investments. As a reminder, FNF in the title industry hold a unique position in real estate transactions. FNF provides the rails upon which real estate transactions run by orchestrating complex multi-party settlements, safeguarding the movement of funds, and mitigating fraud in every transaction.

Through our continuing technology innovations and embedding AI tools into these workflows, we believe that we can drive significant value over time by enhancing efficiency in our customer's experience, reducing risk, and strengthening fraud prevention across real estate transactions. Momentum also continues with our inHere digital transaction platform that has scaled to a fully deployed enterprise solution. During 2025, inHere reached nearly 2.8 million unique users and engaged 80% of our residential sale transactions. For the first six months of 2026, we have maintained engagement at 80% of our residential sales transactions, demonstrating deep integration into daily workflows. This foundational technology drives efficiency, transparency, and a superior customer experience in the escrow closing process, with built-in compliance and enhanced fraud protection. We are in our seventh year of inHere and recently launched the property monitoring component in the second quarter in 35 states.

This service provides visibility and alerts for a property that is provided to customers as a complimentary post-closing service from FNF title companies. We have received positive feedback from our customers, and once property monitoring is fully deployed, our footprint is expected to far exceed others in the industry. These successful and pioneering investments in technology have and continue to play a critical role in our ability to maintain our industry-leading position for adjusted pre-tax title margin. Turning now to our F&G segment. I'd like to take a brief moment to congratulate Conor on his promotion to CEO and President of F&G, officially welcome Michael Bailey as CFO of F&G, and thank Mark Wiltse, who has recently served as interim CFO. Following F&G's recent executive leadership transition, we expect Conor and Mike to continue the strategic momentum toward a more fee-based, higher margin, and less capital-intensive business model.

As previously announced, Chris Blunt will continue as a director of F&G and as Peak Altitude's CEO, a business that Chris has been building. F&G has invested nearly $700 million in four owned distribution investments that generated $80 million of EBITDA for the full year 2025. Chris has launched a formal process to explore strategic alternatives for Peak Altitude to capture its significant growth opportunities and unlock that intrinsic value for both F&G's and FNF's shareholders. We believe that both F&G and subsidiary Peak Altitude have plenty of runway ahead to continue growing AUM, growing earnings, and growing shareholder value. I would also like to take a moment to personally thank Chris for all of his work and effort over the past few years leading F&G. Under Chris's leadership, F&G has significantly expanded its products and distribution and nearly tripled assets under management since joining the company in 2019.

Turning to F&G's results, assets under management before reinsurance have nearly reached the $75 billion threshold at June 30th. Gross AUM of $74.7 billion was up 8% over the prior year. On a standalone basis, F&G reported GAAP equity excluding AOCI of $6 billion at quarter end, and has grown its book value per share excluding AOCI to $45.93, up 68% since the 2020 acquisition. With that, let me now turn the call over to Tony to review FNF's second quarter financial performance and provide additional insights.