First American Financial (NYSE:FAF) Delivers Strong Q4 CY2025 Numbers

First American Financial (NYSE:FAF) Delivers Strong Q4 CY2025 Numbers

Petr Huřťák

Thu, February 12, 2026 at 6:44 AM GMT+9 4 min read

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FAF

-3.32%

Title insurance provider First American Financial (NYSE:FAF) reported Q4 CY2025 results beating Wall Street’s revenue expectations , with sales up 21.6% year on year to $2.05 billion. Its non-GAAP profit of $1.99 per share was 38.8% above analysts’ consensus estimates.

Is now the time to buy First American Financial? Find out in our full research report.

First American Financial (FAF) Q4 CY2025 Highlights:

**Revenue:** $2.05 billion vs analyst estimates of $1.78 billion (21.6% year-on-year growth, 15.2% beat)

**Pre-tax Profit:** $287.4 million (14% margin)

**Adjusted EPS:** $1.99 vs analyst estimates of $1.43 (38.8% beat)

**Market Capitalization:** $6.78 billion

Company Overview

Tracing its roots back to 1889 when California was experiencing its first major real estate boom, First American Financial (NYSE:FAF) provides title insurance, settlement services, and risk solutions for residential and commercial real estate transactions across the United States and internationally.

Revenue Growth

Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third. Unfortunately, First American Financial’s 1% annualized revenue growth over the last five years was weak. This fell short of our benchmarks and is a tough starting point for our analysis.

First American Financial Quarterly Revenue

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. First American Financial’s annualized revenue growth of 11.4% over the last two years is above its five-year trend, suggesting its demand recently accelerated.

First American Financial Year-On-Year Revenue Growth

Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, First American Financial reported robust year-on-year revenue growth of 21.6%, and its $2.05 billion of revenue topped Wall Street estimates by 15.2%.

Net premiums earned made up 81% of the company’s total revenue during the last five years, meaning First American Financial barely relies on non-insurance activities to drive its overall growth.

First American Financial Quarterly Net Premiums Earned as % of Revenue

While insurers generate revenue from multiple sources, investors view net premiums earned as the cornerstone - its direct link to core operations stands in sharp contrast to the unpredictability of investment returns and fees.

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Net Premiums Earned

Insurers sell policies then use reinsurance (insurance for insurance companies) to protect themselves from large losses. Net premiums earned are therefore what’s collected from selling policies less what’s paid to reinsurers as a risk mitigation tool.

First American Financial’s net premiums earned was flat over the last five years, much worse than the broader insurance industry and in line with its total revenue.

When analyzing First American Financial’s net premiums earned over the last two years, we can see that growth accelerated to 7.4% annually. Since two-year net premiums earned grew slower than total revenue over this period, it’s implied that other line items such as investment income grew at a faster rate. While these additional streams certainly contribute to the bottom line, their impact can vary. Some firms have shown greater success and long-term consistency in investing their float compared to peers. However, sharp fluctuations in the fixed income and equity markets can significantly affect short-term performance.

First American Financial Trailing 12-Month Net Premiums Earned

Key Takeaways from First American Financial’s Q4 Results

It was good to see First American Financial beat analysts’ EPS expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this quarter featured some important positives. The stock traded up 2.3% to $65.80 immediately after reporting.

Sure, First American Financial had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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