Radian Group Inc (NYSE:RDN) reported financial results for the fourth quarter and full year of 2025, delivering a mixed performance relative to Wall Street expectations. The company's earnings per share surpassed analyst forecasts, while its top-line revenue fell short of estimates, painting a nuanced picture of its operational performance during the period.
Earnings and Revenue Performance
The mortgage insurer posted adjusted diluted net operating income of $1.16 per share for the fourth quarter, exceeding the consensus analyst estimate of $1.09. This represents a year-over-year increase from $1.13 per share in Q4 2024. For the full year 2025, adjusted earnings per share were $4.45, up from $4.39 in the prior year.
On the revenue front, the company reported total revenues of $300.5 million for the quarter. This figure missed analyst estimates of approximately $333.8 million and declined slightly from $303.2 million in the prior quarter. The year-over-year comparison shows a modest increase from $292.7 million in Q4 2024.
Key financial highlights from the quarter include:
- Net premiums earned: $237 million, consistent with the previous quarter.
- Provision for losses: $22 million, up from $18 million in Q3 2025.
- Adjusted pretax operating income: $204 million, compared to $220 million in Q4 2024.
- Book value per share: Increased to $35.29, up 13% from $31.33 at the end of 2024.
Market Reaction and Strategic Context
The market's initial reaction to the earnings release appears muted to slightly negative in the near term, with the stock down approximately 2.7% over the past month. This reaction likely reflects the revenue miss and a slight year-over-year dip in key profitability metrics like pretax income, despite the earnings per share beat. Investors may also be weighing the company's ongoing strategic shift.
A significant portion of the earnings discussion centered on Radian's transformational acquisition of Inigo Limited, a Lloyd's of London specialty insurer, which was completed in early February 2026 for $1.67 billion. CEO Rick Thornberry framed the move as a pivotal step to evolve Radian from a leading U.S. mortgage insurer into a "global multi-line specialty insurer." The company expects the acquisition to double its annual revenue and provide mid-teens percentage accretion to earnings per share in 2026.
Concurrently, Radian is progressing with its plan to divest its Mortgage Conduit, Title, and Real Estate Services businesses, which are now reported as discontinued operations. The company is in active discussions with potential acquirers and expects to complete the divestiture plan by the end of the third quarter of 2026.
Core Business Metrics and Outlook
The performance of Radian's core mortgage insurance business showed both strength and emerging pressures:
- New Insurance Written (NIW): Remained robust at $15.9 billion for Q4, up from $13.2 billion in the year-ago period. Full-year 2025 NIW reached $55.2 billion.
- Insurance in Force: Grew to $282.5 billion, up from $275.1 billion at the end of 2024.
- Credit Performance: The percentage of primary loans in default increased to 2.56%, up from 2.44% a year ago. The provision for losses rose, contributing to a loss ratio of 9% for the quarter, compared to 0% in Q4 2024.
Regarding future performance, management's commentary focused on the accretive impact of the Inigo acquisition. While no specific quantitative financial outlook for 2026 was provided in the press release beyond the acquisition's expected benefits, current analyst estimates project sales of approximately $983.7 million and revenue of $4.58 billion for the full year 2026. For the upcoming first quarter, analysts are estimating sales of about $239.8 million.
For a detailed breakdown of historical earnings and future analyst estimates, you can view more information here.
Disclaimer: This article is for informational purposes only and is not intended as investment advice. The information presented should not be construed as a recommendation to buy, sell, or hold any security. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
