Enact Holdings' second quarter results were shaped by a mix of disciplined underwriting and continued credit strength, despite revenue landing just below Wall Street's expectations. Management highlighted robust new insurance written and resilient borrower credit metrics, noting that embedded equity and effective loss mitigation contributed to a significant reserve release. CEO Rohit Gupta pointed to the company’s ability to “navigate a complex macroeconomic environment,” emphasizing that favorable delinquency trends and strong persistency helped offset ongoing industry headwinds, including affordability challenges and regional home price softness.
Is now the time to buy ACT? Find out in our full research report (it’s free).
Enact Holdings (ACT) Q2 CY2025 Highlights:
- Revenue: $304.9 million vs analyst estimates of $308.3 million (2% year-on-year growth, 1.1% miss)
- Adjusted EPS: $1.15 vs analyst estimates of $1.11 (3.8% beat)
- Adjusted Operating Income: $221.8 million (72.8% margin, 8.5% year-on-year decline)
- Market Capitalization: $5.56 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions.
Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated.
Here is what has caught our attention.
Our Top 5 Analyst Questions From Enact Holdings’s Q2 Earnings Call
- Douglas Michael Harter (UBS) asked about seasoning of recent origination vintages and effects of regional home price weakness. CEO Rohit Gupta and CFO Dean Mitchell responded that credit performance remains strong due to resilient borrower fundamentals and that risk-based pricing adjusts for regional softness.
- Richard Barry Shane (JPMorgan) questioned whether lower industry new insurance written was a result of market share shifts or smaller addressable market. CEO Rohit Gupta explained that industry size remains comparable to last year, with high mortgage rates and tariff uncertainty suppressing origination but private mortgage insurance usage remains steady.
- Richard Barry Shane (JPMorgan) also asked about the factors behind the increased capital return plan. Gupta clarified that strong credit performance and bottom-line strength drove the higher guidance, though the final amount will depend on future market and business conditions.
- Mihir Bhatia (Bank of America) inquired about the outlook for delinquencies and whether recent headlines about home price declines manifested in portfolio stress. Gupta and Mitchell confirmed that borrower resiliency and seasonal patterns have kept delinquency trends stable, with no significant credit deterioration observed.
- Bose Thomas George (KBW) asked about trends in embedded home price appreciation (HPA) and its impact on claims. Mitchell stated that while HPA has slowed, it remains a meaningful mitigant to loss, supporting ongoing reserve releases and prudent claim rate assumptions.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be watching (1) trends in new insurance written and persistency as the housing market adapts to affordability pressures, (2) any shifts in delinquency rates or claims as regional home prices fluctuate, and (3) the impact of regulatory changes or new GSE guidelines on Enact’s capital allocation strategy. Expansion of the Enact Re platform and execution on capital returns will also be key areas of focus.
Enact Holdings currently trades at $37.72, up from $34.39 just before the earnings. Is the company at an inflection point that warrants a buy or sell? See for yourself in our full research report (it’s free).
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