Stewart Reports Strong 2024 Results, Driven by Title Segment Growth

Stewart Information Services Corporation (NYSE: STC) has reported its fourth quarter and full year 2024 results, showcasing significant improvements across various financial metrics. The title segment, in particular, has driven this growth, with operating revenues increasing by 12% to $562.7 million and adjusted pretax income surging by 61% to $50.5 million. This strong performance can be attributed to several key factors:

1. Increased revenues from direct and agency title operations: The title segment's operating revenues improved by $59.8 million, or 12%, driven by increased revenues from both direct and agency title operations. This growth reflects Stewart's ability to win market share and fortify its position in the face of challenging macro-housing conditions.
2. Improved gross agency revenues: Gross agency revenues increased by $16.6 million, or 6%, compared to the prior year quarter. This growth led to a corresponding increase in agency retention expenses of $13.7 million, or 6%, indicating a higher level of activity and engagement within the agency network.
3. Higher title revenues and incentive compensation expenses: Total title segment employee costs and other operating expenses increased by $27.1 million, or 11%, primarily due to increased incentive compensation expenses related to higher title revenues. This increase in expenses reflects Stewart's ability to attract and retain top talent, as well as its commitment to rewarding employees for their contributions to the company's success.
4. Higher commercial revenues and outside search expenses: The increase in commercial revenues resulted in higher outside search expenses, contributing to the overall increase in operating expenses. However, this growth demonstrates Stewart's ability to expand its commercial business and tap into new revenue streams.
5. Severance expenses related to an executive retirement: The title segment also incurred severance expenses, primarily related to an executive retirement announced in September 2024. These expenses contributed to the increase in operating expenses but are not expected to recur in the future.

Stewart's full year 2024 net income of $73.3 million (adjusted: $94.4 million) represents a 141.1% increase compared to 2023. This significant improvement in net income, along with the strong performance of the title segment, demonstrates Stewart's resilience and ability to navigate challenging market conditions. As the company continues to focus on growth and margin improvement across all business lines, investors can expect Stewart to maintain its momentum in 2025.

In conclusion, Stewart Information Services Corporation's fourth quarter and full year 2024 results highlight the company's progress and resilience in the face of challenging macro-housing conditions. The title segment's strong performance, driven by increased revenues and improved margins, has contributed significantly to Stewart's overall success. As the company continues to focus on growth and margin improvement, investors can expect Stewart to maintain its momentum in 2025.