The quarter cleared revenue expectations but missed the earnings bar. Published consensus was approximately $1.34 of EPS and $556.6 million of revenue; Radian delivered $1.14 of adjusted operating EPS and $575.0 million of revenue, meaning a roughly $0.20 EPS miss despite an $18.4 million revenue beat.
| Metric | Q2 2026 | Q1 2026 | Q2 2025 | Expectation |
|---|---|---|---|---|
| Adjusted diluted operating EPS | $1.14 | $1.27 | $1.11 | ~$1.34 |
| Revenue | $575 million | $466 million | $299 million | ~$556.6 million |
| Net income from continuing operations | $118 million | $129 million | $154 million | — |
| Adjusted pretax operating income | $196 million | $232 million | $191 million | — |
| Mortgage adjusted pretax operating income | $208 million | $221 million | $216 million | — |
| Specialty adjusted pretax operating income | $29 million | $40 million | N/A | — |
| Mortgage combined ratio | 35.8% | 30.2% | 30.4% | — |
| Specialty combined ratio | 97.7% | 85.3% | N/A | — |
| Primary mortgage insurance in force | $284.0 billion | $281.7 billion | $276.7 billion | — |
| PMIERs excess available assets | $1.45 billion | $1.60 billion | $2.04 billion | — |
The revenue beat is mostly the Inigo acquisition showing up, not stronger underlying profitability. Net premiums earned jumped to $503.7 million from $402.5 million sequentially, with Specialty contributing $267.4 million versus $164.4 million in Q1; Specialty represented more than half of consolidated premiums but produced only $28.6 million of adjusted pretax operating income. The Mortgage segment remained highly profitable, but its adjusted pretax operating income fell to $207.8 million from $220.8 million, while the Corporate loss widened to $40.6 million from $29.1 million. (Segment Information)
Specialty execution weakened materially in its first full quarter under Radian. Specialty's combined ratio deteriorated to 97.7% from 85.3% in Q1, as the loss ratio rose to 63.3% and the expense ratio to 34.4%. The $169.2 million provision for losses included reserves for expected and potential Middle East conflict claims, partly offset by $24.2 million of favorable prior-year reserve development. That combination leaves the diversification strategy producing scale, but not yet the level of underwriting profitability the market was evidently expecting. (Segment Information; Specialty results)
Mortgage fundamentals were solid, but not enough to offset Specialty and acquisition-related drag. Primary insurance in force reached a record $284.0 billion, new insurance written rose 14% year over year to $16.3 billion, and the default rate declined to 2.47% from 2.51% sequentially. However, the Mortgage combined ratio increased to 35.8% from 30.2%, and consolidated GAAP EPS fell to $0.87 from $1.11 year over year. The company excluded $39 million of Inigo purchase-accounting, intangible-amortization and acquisition-related costs from adjusted results, but even on that preferred measure EPS still missed consensus. (Mortgage supplemental information; Financial Highlights; Non-GAAP Financial Measure Reconciliations)
Capital returns and simplification continue, but liquidity and capital cushions are thinner. Radian repurchased $76 million of shares, paid $37 million of dividends, received a $200 million dividend from Radian Guaranty and retained $686 million of remaining repurchase authorization after July activity. Divestitures are nearing completion, with assets held for sale falling to $64 million from $280 million at March 31. Offsetting that progress, holding-company liquidity was $412 million, PMIERs excess available assets declined to $1.45 billion, and the company still had $75 million outstanding on its revolving facility after repaying $125 million of the $200 million drawn in January. (Capital and Liquidity Update; Balance Sheets; Financial Highlights)
Read the original 8-K on SEC EDGAR ↗