Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you discuss the sustainability of the run rate achieved this quarter in the services segment?
A: David Hisey, CFO: The services business is sustainable, having built a robust portfolio of products that is gaining traction. The verification waterfall, in particular, has seen significant interest. The company is well-positioned in the market and expects to maintain this run rate.
Q: Given the current interest rates and the expected pace of housing recovery, how do you see your margins trending over the next 12 to 18 months?
A: David Hisey, CFO: Margins are expected to improve as the market recovers, although reaching the target pretax margins will likely align with a more normalized market around 2026. The company has taken strategic expense actions and reallocated resources to improve efficiency.
Q: Can you provide insights into the performance of the Real Estate Solutions segment, particularly how it managed to outperform typical mortgage market trends this quarter?
A: David Hisey, CFO: The segment's success is attributed to strategic acquisitions and the ability to offer a comprehensive suite of services, which has allowed for significant cross-selling opportunities. The segment has grown considerably from its inception, with credit data and valuation services showing strong performance.
Q: Are there any geographic targets for potential M&A, particularly with regard to building up scale?
A: David Hisey, CFO: The company is focused on both direct and agency growth strategies, targeting economically attractive states and MSAs. While California is not a priority for aggressive expansion due to strong competition, the company aims to solidify its existing positions there.
Q: How is the company handling vendor diversification in response to recent cyber incidents?
A: David Hisey, CFO: The incidents have prompted lenders to diversify their vendor bases, which benefits Stewart as it provides an opportunity to gain a fair share of business. The company is well-positioned to capitalize on this shift, especially as market conditions improve.
Q: What is the outlook for the Real Estate Solutions business, and what are the fastest growing segments within it?
A: David Hisey, CFO: The outlook is positive, with continued growth expected, particularly in credit data services. The company is focused on expanding its service offerings and leveraging its position to enhance cross-selling opportunities, which should drive further growth despite challenging market conditions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
