Underwriting profitability remains highly cyclical, with the combined ratio fluctuating from a peak of 110.3% in 2024Q3 to 86.0% by 2025Q4, indicating significant sensitivity to episodic loss events.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 |
|---|
| Revenue | 6.01B | 7.45B | 6.12B | 6B | 7.59B | 9.21B | 7.08B | 6.2B | 5.75B | 5.77B | 5.58B | 5.18B | 4.68B | 4.96B | 4.54B | 3.82B | 3.91B | 4.05B | 4.37B | 6.08B |
| Revenue Growth % | -4.22% | 21.64% | 2.04% | -21.02% | -17.58% | 30.14% | 14.21% | 7.9% | -0.41% | 3.46% | 7.74% | 10.64% | -5.61% | 9.12% | 18.88% | -2.2% | -3.46% | -7.35% | -28.12% | - |
| Medical Costs & Claims | 1.55B | 326.6M | 2.36B | 2.29B | 3.32B | 3.58B | 2.76B | 2.32B | 2.25B | 2.31B | 2.29B | 2.15B | 1.92B | 2.17B | 1.77B | 1.62B | 1.54B | 346.71M | 509.56M | 875.86M |
| Medical Cost Ratio % | 25.74% | 4.39% | 38.63% | 38.15% | 43.66% | 38.8% | 39.04% | 37.43% | 39.21% | 40.11% | 41.07% | 41.5% | 41.09% | 43.74% | 38.93% | 42.28% | 39.5% | 8.57% | 11.67% | 14.41% |
| Gross Profit | 4.47B | 7.12B | 3.76B | 3.71B | 4.28B | 5.64B | 4.32B | 3.88B | 3.49B | 3.45B | 3.29B | 3.03B | 2.76B | 2.79B | 2.77B | 2.21B | 2.36B | 3.7B | 3.86B | 5.2B |
| Gross Margin % | 74.26% | 95.61% | 61.37% | 61.85% | 56.34% | 61.2% | 60.96% | 62.57% | 60.79% | 59.89% | 58.93% | 58.5% | 58.91% | 56.26% | 61.07% | 57.72% | 60.5% | 91.43% | 88.33% | 85.59% |
| Gross Profit Growth % | - | 89.52% | 1.25% | -13.29% | -24.13% | 30.64% | 11.27% | 11.06% | 1.1% | 5.15% | 8.52% | 9.86% | -1.16% | 0.51% | 25.79% | -6.7% | -36.12% | -4.1% | -25.81% | - |
| Operating Expenses | 3.57B | 6.29B | 3.59B | 3.44B | 3.95B | 4B | 3.39B | 2.97B | 2.88B | 3.01B | 2.81B | 2.59B | 2.41B | 2.48B | 2.31B | 2.07B | 2.15B | 3.5B | 3.97B | 5.41B |
| OpEx / Revenue % | 59.43% | 84.52% | 58.66% | 57.27% | 52.05% | 43.38% | 47.92% | 47.98% | 50.18% | 52.17% | 50.36% | 50.14% | 51.42% | 49.99% | 50.78% | 54.31% | 55.07% | 86.38% | 90.99% | 89.02% |
| Depreciation & Amortization | 218.3M | 216.2M | 207.4M | 188.5M | 167.5M | 158.4M | 149M | 129M | 125.93M | 128.05M | 99.05M | 85.6M | 85.6M | 74.92M | 74.95M | 76.89M | 80.64M | 82.47M | 95.24M | 94.82M |
| Combined Ratio % | 85.18% | 88.9% | 97.3% | 95.43% | 95.71% | 82.19% | 86.96% | 85.4% | 89.39% | 92.28% | 91.43% | 91.64% | 92.51% | 93.73% | 89.71% | 96.59% | 94.57% | 94.95% | 102.65% | 103.44% |
| Operating Income | 891.4M | 826.2M | 165.4M | 274.4M | 325.7M | 1.64B | 923M | 905M | 609.54M | 445.33M | 477.58M | 432.76M | 350.56M | 310.71M | 467.41M | 130.29M | 212.11M | 204.34M | -115.92M | -208.83M |
| Operating Margin % | 14.82% | 11.1% | 2.7% | 4.57% | 4.29% | 17.81% | 13.04% | 14.6% | 10.61% | 7.72% | 8.57% | 8.36% | 7.49% | 6.27% | 10.29% | 3.41% | 5.43% | 5.05% | -2.65% | -3.44% |
| Operating Income Growth % | - | 399.52% | -39.72% | -15.75% | -80.16% | 77.82% | 1.99% | 48.47% | 36.87% | -6.75% | 10.36% | 23.45% | 12.83% | -33.52% | 258.73% | -38.57% | 3.8% | 276.29% | 44.49% | - |
| EBITDA | 1.11B | 1.04B | 372.8M | 462.9M | 493.2M | 1.8B | 1.07B | 1.03B | 735.47M | 573.38M | 576.63M | 518.36M | 436.16M | 385.62M | 542.36M | 207.18M | 292.75M | 286.82M | -20.67M | -114.02M |
| EBITDA Margin % | 18.45% | 14% | 6.09% | 7.72% | 6.49% | 19.53% | 15.14% | 16.68% | 12.8% | 9.94% | 10.34% | 10.02% | 9.32% | 7.78% | 11.94% | 5.42% | 7.49% | 7.09% | -0.47% | -1.88% |
| Interest Expense | 163.7M | 157M | 149.6M | 132.5M | 93M | 72.4M | 57M | 48M | 40.98M | 35.99M | 32.21M | 29.11M | 19.25M | 15.3M | 9.07M | 12.06M | 14.88M | 19.82M | 27.21M | 42.61M |
| Non-Operating Income | -163.7M | -157M | -149.6M | -132.5M | -93M | -72.4M | -57M | -48M | -40.98M | -35.99M | -32.21M | -29.11M | -19.25M | -15.3M | -9.07M | -12.06M | -14.88M | -19.82M | -27.21M | -42.61M |
| Pretax Income | 891.4M | 826.2M | 165.4M | 274.4M | 325.7M | 1.64B | 923M | 905M | 609.54M | 445.33M | 477.58M | 432.76M | 350.56M | 310.71M | 467.41M | 130.29M | 212.11M | 204.34M | -115.92M | -208.83M |
| Pretax Margin % | 14.82% | 11.1% | 2.7% | 4.57% | 4.29% | 17.81% | 13.04% | 14.6% | 10.61% | 7.72% | 8.57% | 8.36% | 7.49% | 6.27% | 10.29% | 3.41% | 5.43% | 5.05% | -2.65% | -3.44% |
| Income Tax | 216.2M | 201M | 32.8M | 58.9M | 60.4M | 392.2M | 223M | 195M | 133.64M | 23.47M | 134.1M | 143.9M | 116.34M | 123.64M | 165.68M | 51.71M | 83.15M | 70.07M | -43.43M | -86.39M |
| Effective Tax Rate % | 24.25% | 24.33% | 19.83% | 21.47% | 18.54% | 23.9% | 24.16% | 21.55% | 21.92% | 5.27% | 28.08% | 33.25% | 33.19% | 39.79% | 35.45% | 39.69% | 39.2% | 34.29% | 37.47% | 41.37% |
| Net Income | 672.7M | 621.8M | 131.1M | 216.8M | 263M | 1.24B | 696M | 707M | 474.5M | 423.05M | 342.99M | 288.09M | 233.53M | 186.37M | 301.04M | 78.28M | 127.83M | 122.39M | -84M | -142.98M |
| Net Margin % | 11.19% | 8.35% | 2.14% | 3.61% | 3.46% | 13.47% | 9.83% | 11.41% | 8.26% | 7.33% | 6.15% | 5.57% | 4.99% | 3.76% | 6.63% | 2.05% | 3.27% | 3.02% | -1.92% | -2.35% |
| Net Income Growth % | 324.15% | 374.29% | -39.53% | -17.57% | -78.81% | 78.32% | -1.56% | 49% | 12.16% | 23.34% | 19.06% | 23.36% | 25.31% | -38.09% | 284.59% | -38.77% | 4.44% | 245.69% | 41.25% | - |
| EPS (Diluted) | 6.51 | 6.00 | 1.26 | 2.07 | 2.45 | 11.14 | 6.16 | 6.22 | 4.19 | 3.76 | 3.09 | 2.62 | 2.15 | 1.71 | 2.77 | 0.73 | 1.20 | 1.18 | -0.81 | -1.37 |
| EPS Growth % | 330.46% | 376.19% | -39.13% | -15.51% | -78.01% | 80.84% | -0.96% | 48.45% | 11.44% | 21.68% | 17.94% | 21.86% | 25.73% | -38.27% | 279.45% | -39.17% | 1.69% | 245.68% | 40.88% | - |
| EPS (Basic) | - | 6.02 | 1.26 | 2.08 | 2.46 | 11.18 | 6.18 | 6.26 | 4.21 | 3.79 | 3.10 | 2.65 | 2.18 | 1.74 | 2.83 | 0.74 | 1.22 | 1.18 | -0.81 | -1.37 |
| Diluted Shares Outstanding | 103.3M | 103.7M | 104.3M | 104.6M | 107.3M | 111.4M | 113.02M | 113.66M | 113.28M | 112.44M | 111.16M | 109.83M | 108.69M | 109.1M | 108.54M | 106.91M | 106.18M | 104.01M | 104.01M | 104.01M |
Mortgage origination volume volatility
As reported in recent financial filings, First American Financial experienced a sharp 90.9% revenue contraction in 2026Q1, highlighting the extreme sensitivity of the firm's top-line performance to the prevailing mortgage origination environment and the ongoing lock-in effect impacting residential real estate transaction volumes across the United States.
The dramatic revenue swing in the most recent quarter suggests that the company's reliance on transactional volume remains a significant vulnerability. Investors should monitor whether the firm can sustain its market position during periods of low refinance activity, as the current trajectory appears heavily dependent on external macroeconomic factors rather than internal growth initiatives.
Based on the provided income statement data, the combined ratio fluctuated significantly, reaching a peak of 110.3% in 2024Q3 before improving to 86.0% by 2025Q4, which indicates that underwriting profitability is highly susceptible to episodic loss events and the broader housing market cycle.
The volatility in the combined ratio suggests that the company struggles to maintain consistent underwriting margins during periods of market stress. While the recent improvement to 86.0% is encouraging, it warrants further investigation into whether this reflects sustainable operational efficiency or merely a temporary reduction in claims frequency.
According to the historical data, the company's operating income has demonstrated extreme sensitivity to revenue fluctuations, with operating margins appearing to compress rapidly when transaction volumes decline, as evidenced by the negative operating income reported during the 2024Q3 period of market contraction.
The high fixed cost base associated with maintaining proprietary title plants appears to limit the company's ability to scale expenses downward during downturns. This structural reality suggests that management's efforts to integrate digital platforms like Endpoint are critical for achieving long-term operating leverage and reducing the firm's sensitivity to cyclical volume drops.
As indicated by the quarterly loss ratio data, which ranged from 4.1% to 54.3% over the last ten quarters, the company's net income appears to be significantly influenced by actuarial adjustments that may obscure the underlying core performance of the title insurance business.
The wide variance in loss ratios suggests that investors should be cautious about relying on headline net income as a proxy for operational health. It is possible that prior-year reserve releases or adjustments are smoothing earnings, which warrants further investigation into the long-term adequacy of the company's loss reserves.
Quick answers to the most common questions about buying FAF stock.
For fiscal year 2025, First American Financial Corporation (FAF) reported total revenue of $7.45B. This represents a 22.5% increase compared to $6.08B in 2007.
First American Financial Corporation (FAF) is profitable, generating $621.8M in net income for the fiscal year ending 2025 with a net profit margin of 8.4%.
First American Financial Corporation (FAF) reported an operating income of $826.2M, resulting in an operating profit margin of 11.1%. This margin reflects the operational efficiency of the business before interest and taxes.
First American Financial Corporation (FAF) generated $7.12B in gross profit for the year, representing a gross profit margin of 95.6%. This demonstrates the company's core pricing power and production efficiency.