Principal Financial Group Announces First Quarter 2025 Results

Raises second quarter 2025 common stock dividend

DES MOINES, Iowa--(BUSINESS WIRE)-- Principal Financial Group^® (Nasdaq: PFG) announced results for first quarter 2025.

Diluted earnings per common share	1Q25			Net income attributable to PFG (in millions)	1Q25
Net income attributable to PFG	$0.21			Net income attributable to PFG	$48
Non-GAAP net income attributable to PFG, excluding exited business1	$1.31			Non-GAAP net income attributable to PFG, excluding exited business1	$299
Non-GAAP operating earnings1	$1.81			Non-GAAP operating earnings1	$415

First Quarter 2025 Highlights Non-GAAP operating earnings per diluted share, excluding significant variances2 of $1.92 increased 10% over prior year quarter Returned $369 million of capital to shareholders, including $200 million of share repurchases and $169 million of common stock dividends Raised second quarter 2025 common stock dividend to $0.76 per share, a 1-cent increase over the first quarter 2025 dividend, a 7% increase over second quarter 2024 dividend and a 9% increase on a trailing twelve month basis; the dividend will be payable on June 27, 2025, to shareholders of record as of June 2, 2025 Assets under management (AUM) of $718 billion, which is included in assets under administration (AUA) of $1.7 trillion Strong financial position with $1.75 billion of excess and available capital			Deanna Strable, President and CEO of Principal®   “Strong business fundamentals, continued growth, and our strategic focus on higher growth markets drove 10% 1Q25 EPS growth and 14% ROE in the quarter. We continue to deliver on our commitment to return excess capital to shareholders, while maintaining our strong capital position. We enter 2Q25 in a dynamic market environment. However, we are confident the strength and resilience of our integrated and diversified portfolio of businesses will continue to deliver value for our customers and shareholders.”

First Quarter Enterprise Results
In millions except percentages, earnings per share, or otherwise noted
		Three Months Ended,						Trailing Twelve Months,
		1Q25		1Q24		% Change		1Q25		1Q24		% Change
Net income (loss) attributable to PFG		$48.1		$532.5		N/M		$1,086.6		$1,295.8		(16)%
Non-GAAP net income attributable to PFG, excluding exited business		$299.4		$376.4		(20)%		$1,428.2		$1,544.4		(8)%
Non-GAAP operating earnings		$414.5		$394.3		5%		$1,660.7		$1,630.3		2%
Diluted earnings per common share
Net income (loss) attributable to PFG		$0.21		$2.22		N/M
Non-GAAP net income attributable to PFG, excluding exited business		$1.31		$1.58		(17)%
Non-GAAP operating earnings		$1.81		$1.65		10%
Non-GAAP operating earnings, excluding significant variances2		$1.92		$1.75		10%
Assets under administration (billions)		$1,661.6		$1,624.3		2%
Assets under management (billions)		$717.9		$708.5		1%
AUM net cash flow (billions)		$(4.4)		$(0.6)		N/M

First Quarter Segment Highlights

• Retirement and Income Solutions (RIS) recurring deposits up 9% to $13.8 billion and strong PRT sales of $0.8 billion
• Principal Asset Management non-affiliated private real estate net cash flow of positive $1.1 billion; net cash flow of positive $0.7 billion in Mexico and SE Asia locally managed strategies
• Specialty Benefits incurred loss ratio improved 40 basis points from 1Q24 due to more favorable underwriting experience in group disability and group life
• Life Insurance business market premium and fees increased 20%

Segment Results
In millions except percentages, or otherwise noted except percentages or otherwise noted)
Retirement and Income Solutions
			Three Months Ended,						Trailing Twelve Months,
			1Q25		1Q24		% Change		1Q25		1Q24		% Change
Pre-tax operating earnings3			$283.7		$262.2		8%		$1,077.7		$1,063.8		1%
Net revenue4			$724.2		$691.4		5%		$2,833.7		$2,731.6		4%
Operating margin5			39.2%		37.9%				38.0%		38.9%

• Pre-tax operating earnings increased $21.5 million primarily due to higher net revenue and margin expansion while investing in the business.
• Net revenue increased $32.8 million due to favorable market performance and growth in the business, outpacing fee compression.

Investment Management
			Three Months Ended,						Trailing Twelve Months,
			1Q25		1Q24		% Change		1Q25		1Q24		% Change
Pre-tax operating earnings			$116.3		$122.2		(5)%		$572.9		$548.6		4%
Operating revenues less pass-through expenses6			$416.0		$398.6		4%		$1,686.0		$1,611.7		5%
Operating margin7			29.0%		31.0%				34.9%		34.3%
Assets under management (billions)			$555.8		$541.2		3%

• Pre-tax operating earnings decreased $5.9 million primarily driven by elevated seasonal expenses, partially offset by higher operating revenues less pass-through expenses.
• Operating revenues less pass-through expenses increased $17.4 million primarily due to 5% higher management fees from higher AUM.

International Pension
			Three Months Ended,						Trailing Twelve Months,
			1Q25		1Q24		% Change		1Q25		1Q24		% Change
Pre-tax operating earnings			$71.2		$64.9		10%		$288.7		$268.4		8%
Net revenue			$146.7		$149.3		(2)%		$620.3		$628.0		(1)%
Operating margin8			48.5%		43.5%				46.5%		42.7%
Assets under management (billions)			$133.5		$139.1		(4)%

• Pre-tax operating earnings increased $6.3 million primarily due to margin expansion, partially offset by foreign currency headwinds.
• Net revenue decreased $2.6 million primarily due to foreign currency headwinds.

Specialty Benefits
			Three Months Ended,						Trailing Twelve Months,
			1Q25		1Q24		% Change		1Q25		1Q24		% Change
Pre-tax operating earnings			$106.2		$102.0		4%		$463.8		$467.2		(1)%
Premium and fees			$831.5		$801.3		4%		$3,287.4		$3,114.2		6%
Operating margin9			12.8%		12.7%				14.1%		15.0%
Incurred loss ratio			60.7%		61.1%				60.4%		60.1%

• Pre-tax operating earnings increased $4.2 million due to growth in the business, higher net investment income, and more favorable underwriting experience.
• Premium and fees increased $30.2 million driven by growth in the business.
• Incurred loss ratio improved to 60.7% driven by more favorable underwriting experience primarily in group disability and group life.

Life Insurance
			Three Months Ended,						Trailing Twelve Months,
			1Q25		1Q24		% Change		1Q25		1Q24		% Change
Pre-tax operating earnings (losses)			$13.3		$9.8		36%		$7.1		$82.9		(91)%
Premium and fees			$235.1		$234.0		0%		$928.6		$931.4		0%
Operating margin			5.7%		4.2%				0.8%		8.9%

• Pre-tax operating earnings increased $3.5 million as a favorable change in a GAAP-only regulatory closed block dividend adjustment was partially offset by higher mortality experience.
• Premium and fees increased $1.1 million as strong business market growth offset the runoff of the legacy life business.

Corporate

Three Months Ended,

Trailing Twelve Months,

1Q25

1Q24

% Change

1Q25

1Q24

% Change

Pre-tax operating losses

$(105.6)

$(88.9)

(19)%

$(392.3)

$(389.6)

(1)%

• Pre-tax operating losses increased $16.7 million primarily due to lower net investment income and higher operating expenses.

   

Exhibit 1
Principal Financial Group
Impact of Significant Variances10 on Net Income Attributable to PFG; Non-GAAP Net Income Attributable to PFG, Excluding Exited Business; and Non-GAAP Operating Earnings
In millions except per share data
	Three Months Ended,						Trailing Twelve Months,
		1Q25			1Q24			1Q25			1Q24
Net income (loss) attributable to PFG	$	(24.7	)	$	(25.1	)	$	(175.3	)	$	(90.0	)
(Income) loss from exited business		-			-			20.6			(0.1	)
Non-GAAP net income (loss) attributable to PFG, excluding exited business		(24.7	)		(25.1	)		(154.7	)		(90.1	)
Net realized capital (gains) losses, as adjusted		-			-			(3.7	)		4.2
Non-GAAP operating earnings		(24.7	)		(25.1	)		(158.4	)		(85.9	)
Income taxes		(5.6	)		(8.8	)		(36.2	)		43.4
Non-GAAP pre-tax operating earnings	$	(30.3	)	$	(33.9	)	$	(194.6	)	$	(42.5	)
Per diluted share:
Net income (loss) attributable to PFG	$	(0.11	)	$	(0.10	)
(Income) loss from exited business		-			-
Non-GAAP net income (loss) attributable to PFG, excluding exited business		(0.11	)		(0.10	)
Net realized capital (gains) losses, as adjusted		-			-
Non-GAAP operating earnings	$	(0.11	)	$	(0.10	)
Weighted average diluted common shares outstanding		228.8			239.4
Segment pre-tax operating earnings (losses):
Retirement and Income Solutions	$	(21.0	)	$	(20.0	)	$	(96.2	)	$	(13.6	)
Investment Management		-			-			-			-
International Pension		-			(2.9	)		11.1			(10.3	)
Principal Asset Management		-			(2.9	)		11.1			(10.3	)
Specialty Benefits		(5.0	)		(4.0	)		(17.9	)		5.7
Life Insurance		(0.6	)		(14.0	)		(92.9	)		(33.5	)
Benefits and Protection		(5.6	)		(18.0	)		(110.8	)		(27.8	)
Corporate		(3.7	)		7.0			1.3			9.2
Total segment pre-tax operating earnings (losses)	$	(30.3	)	$	(33.9	)	$	(194.6	)	$	(42.5	)

Income statement line item details of significant variances are available in our earnings conference call presentation on our website.

Earnings Conference Call

On Friday, Apr. 25, 2025, at 10:00 a.m. (ET), President and Chief Executive Officer Deanna Strable and Senior Vice President and Interim Chief Financial Officer Joel Pitz will lead a discussion of results and the impacts on future prospects, asset quality and capital adequacy during a live conference call, which can be accessed as follows:

• Via live Internet webcast. Please go to investors.principal.com at least 10-15 minutes prior to the start of the call to register, and to download and install any necessary audio software.
• Analysts who will be asking questions will be sent a dial in number and authorization code in advance of the call.
• Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at investors.principal.com.

The company’s financial supplement and slide presentation is currently available at investors.principal.com, and may be referred to during the call.

Forward Looking Statements

This release contains statements that constitute forward‑looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to share repurchases and planned dividends, the realization of our growth and business strategies and results from ongoing operations. Forward‑looking statements are made based upon our current expectations and beliefs concerning future developments and their potential effects on us. Such forward‑looking statements are not guarantees of future performance and actual results may differ materially from the results anticipated in the forward-looking statements. We describe risks, uncertainties and factors that could cause or contribute to such material differences in our filings with the Securities and Exchange Commission, including in the “Risk Factors” and “Note Concerning Forward-Looking Statements” sections in our annual report on Form 10-K for the year ended Dec. 31, 2024, as updated or supplemented from time to time in subsequent filings. We assume no obligation to update any forward-looking statement for any reason, which speaks as of its date.

Use of Non-GAAP Financial Measures

The company uses a number of non-GAAP financial measures that management believes are useful to investors because they illustrate the performance of normal, ongoing operations, which is important in understanding and evaluating the company’s financial condition and results of operations. They are not, however, a substitute for U.S. GAAP financial measures. Therefore, the company has provided reconciliations of the non-GAAP measures to the most directly comparable U.S. GAAP measure at the end of the release. The company adjusts U.S. GAAP measures for items not directly related to ongoing operations. However, it is possible these adjusting items have occurred in the past and could recur in future reporting periods. Management also uses non-GAAP measures for goal setting, as a basis for determining employee and senior management awards and compensation and evaluating performance on a basis comparable to that used by investors and securities analysts.

About Principal^®11

Principal Financial Group^® (Nasdaq: PFG) is a global financial company with approximately 20,000 employees¹² passionate about improving the wealth and well-being of people and businesses. In business for 145 years, we’re helping approximately 70 million customers¹² plan, insure, invest, and retire, while working to support the communities where we do business, and building an inclusive workforce. Principal^® is proud to be recognized as one of the 2025 World’s Most Ethical Companies¹³ and named as a “Best Places to Work in Money Management¹⁴.” Learn more about Principal and our commitment to building a better future at principal.com.

Summary of Principal Financial Group® and Segment Results
Principal Financial Group, Inc. Results	(in millions)
	Three Months Ended,						Trailing Twelve Months,
		1Q25			1Q24			1Q25			1Q24
Net income (loss) attributable to PFG	$	48.1		$	532.5		$	1,086.6		$	1,295.8
(Income) loss from exited business		251.3			(156.1	)		341.6			248.6
Non-GAAP net income (loss) attributable to PFG excluding exited business	$	299.4		$	376.4		$	1,428.2		$	1,544.4
Net realized capital (gains) losses, as adjusted		115.1			17.9			232.5			85.9
Non-GAAP Operating Earnings*	$	414.5		$	394.3		$	1,660.7		$	1,630.3
Income taxes		70.6			77.9			357.2			411.0
Non-GAAP Pre-Tax Operating Earnings	$	485.1		$	472.2		$	2,017.9		$	2,041.3
Segment Pre-Tax Operating Earnings (Losses):
Retirement and Income Solutions	$	283.7		$	262.2		$	1,077.7		$	1,063.8
Principal Asset Management		187.5			187.1			861.6			817.0
Benefits and Protection		119.5			111.8			470.9			550.1
Corporate		(105.6	)		(88.9	)		(392.3	)		(389.6	)
Total Segment Pre-Tax Operating Earnings	$	485.1		$	472.2		$	2,017.9		$	2,041.3

	Per Diluted Share
	Three Months Ended,
		1Q25		1Q24
Net income (loss) attributable to PFG	$	0.21	$	2.22
(Income) loss from exited business		1.10		(0.64	)
Non-GAAP net income (loss) excluding exited business	$	1.31	$	1.58
Net realized capital (gains) losses, as adjusted		0.50		0.07
Non-GAAP Operating Earnings	$	1.81	$	1.65
Impact of significant variances15		0.11		0.10
Non-GAAP Operating Earnings, excluding significant variances	$	1.92	$	1.75
Weighted-average diluted common shares outstanding (in millions)		228.8		239.4

*U.S. GAAP (GAAP) net income attributable to PFG versus non-GAAP operating earnings

Management uses non-GAAP operating earnings, which is a financial measure that excludes the effect of net realized capital gains and losses, as adjusted, income (loss) from exited business and other after-tax adjustments the company believes are not indicative of overall operating trends, for goal setting, as a basis for determining employee and senior management awards and compensation and evaluating performance on a basis comparable to that used by investors and securities analysts. Note: it is possible these adjusting items have occurred in the past and could recur in future reporting periods. While these items may be significant components in understanding and assessing our consolidated financial performance, management believes the presentation of non-GAAP operating earnings enhances the understanding of results of operations by highlighting earnings attributable to the normal, ongoing operations of the company’s businesses.

Selected Balance Sheet Statistics
	Period Ended,
		1Q25		4Q24
Total assets (in billions)	$	313.0	$	313.7
Stockholders’ equity (in millions)	$	11,268.3	$	11,131.3
Total common equity (in millions)	$	11,216.8	$	11,086.4
Total common equity excluding cumulative change in fair value of funds withheld embedded derivative and accumulated other comprehensive income (AOCI) other than foreign currency translation adjustment (in millions)	$	12,081.4	$	12,144.0
End of period common shares outstanding (in millions)		225.0		226.2
Book value per common share	$	49.85	$	49.01
Book value per common share excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment	$	53.70	$	53.69

Principal Financial Group, Inc.
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
(in millions, except as indicated)
	Period Ended,
		1Q25				4Q24
Stockholders’ Equity, Excluding Cumulative Change in Fair Value of Funds Withheld Embedded Derivative and AOCI Other Than Foreign Currency Translation Adjustment, Available to Common Stockholders:
Stockholders’ equity	$	11,268.3		$		11,131.3
Noncontrolling interest		(51.5	)			(44.9	)
Stockholders’ equity available to common stockholders		11,216.8				11,086.4
Cumulative change in fair value of funds withheld embedded derivative		(2,215.6	)			(2,381.3	)
AOCI, other than foreign currency translation adjustment		3,080.2				3,438.9
Stockholders’ equity, excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment, available to common stockholders	$	12,081.4		$		12,144.0
Book Value Per Common Share, Excluding Cumulative Change in Fair Value of Funds Withheld Embedded Derivative and AOCI Other Than Foreign Currency Translation Adjustment:
Book value per common share	$	49.85		$		49.01
Cumulative change in fair value of funds withheld embedded derivative and AOCI, other than foreign currency translation adjustment		3.85				4.68
Book value per common share, excluding change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment	$	53.70		$		53.69

Principal Financial Group, Inc.
Reconciliation of U.S. GAAP to Non-GAAP Financial Measures
(in millions)
	Three Months Ended,						Trailing Twelve Months,
		1Q25			1Q24			1Q25		1Q24
Income Taxes:
Total GAAP income taxes (benefit)	$	(34.0	)	$	95.1		$	162.6		$	241.8
Net realized capital gains (losses) tax adjustments		25.2			11.1			30.2			24.9
Exited business tax adjustments		63.0			(41.5	)		86.9			75.3
Income taxes related to equity method investments and noncontrolling interest		16.4			13.2			77.5			69.0
Income taxes	$	70.6		$	77.9		$	357.2		$	411.0
Net Realized Capital Gains (Losses):
GAAP net realized capital gains (losses)	$	(117.1	)	$	(0.9	)	$	(143.5	)	$	(7.1	)
Market value adjustments to fee revenues		(0.1	)		-			-			1.3
Net realized capital gains (losses) related to equity method investments		4.6			(10.3	)		(2.4	)		(1.7	)
Derivative and hedging-related revenue adjustments		(13.2	)		18.1			14.7			39.3
Certain variable annuity fees		17.0			18.2			70.1			73.1
Sponsored investment funds and other adjustments		7.1			5.9			31.1			23.2
Capital gains distributed – operating expenses		33.4			(35.6	)		(41.5	)		(77.7	)
Amortization of actuarial balances		(1.9	)		(0.2	)		(3.5	)		(0.4	)
Derivative and hedging-related expense adjustments		0.5			(1.3	)		(1.7	)		0.5
Market value adjustments of embedded derivatives		(22.0	)		(4.1	)		(42.6	)		(5.4	)
Market value adjustments of market risk benefits		(43.9	)		3.3			(91.1	)		(61.5	)
Capital gains distributed – cost of interest credited		6.1			(24.7	)		(29.8	)		(79.5	)
Net realized capital gains (losses) tax adjustments		25.2			11.1			30.2			24.9
Net realized capital gains (losses) attributable to noncontrolling interest, after-tax		(10.8	)		2.6			(22.5	)		(14.9	)
Total net realized capital gains (losses) after-tax adjustments		2.0			(17.0	)		(89.0	)		(78.8	)
Net realized capital gains (losses), as adjusted	$	(115.1	)	$	(17.9	)	$	(232.5	)	$	(85.9	)
Income (Loss) from Exited Business:
Pre-tax impacts of exited business:
Amortization of reinsurance gains (losses)	$	(26.4	)	$	(10.1	)	$	(605.9	)	$	(56.7	)
Other impacts of exited business		(106.2	)		(36.8	)		68.5			(136.6	)
Net realized capital gains (losses) on funds withheld assets		28.0			47.5			68.2			131.5
Change in fair value of funds withheld embedded derivative		(209.7	)		197.0			40.7			(262.1	)
Tax impacts of exited business		63.0			(41.5	)		86.9			75.3
Total income (loss) from exited business	$	(251.3	)	$	156.1		$	(341.6	)	$	(248.6	)

	Three Months Ended,						Trailing Twelve Months,
		1Q25			1Q24			1Q25			1Q24
Investment Management Operating Revenues Less Pass-Through Expenses:
Operating revenues	$	453.7		$	435.5		$	1,838.9		$	1,756.0
Commissions and other expenses		(37.7	)		(36.9	)		(152.9	)		(144.3	)
Operating revenues less pass-through expenses	$	416.0		$	398.6		$	1,686.0		$	1,611.7

1 Use of non-GAAP financial measures and their reconciliations to the most directly comparable GAAP measures are included in this release. Non-GAAP operating earnings for total company is after tax.

2 The total company impacts of significant variances, is after tax. See Exhibit 1 for details on the impact of 1Q 2025 and 1Q 2024 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

3 Pre-tax operating earnings = operating earnings before income taxes and after noncontrolling interest.

4 Net revenue = operating revenues less: benefits, claims and settlement expenses, liability for future policy benefits remeasurement (gain) loss, market risk benefit remeasurement (gain) loss, and dividends to policyholders.

5 Operating margin for Retirement and Income Solutions = pre-tax operating earnings divided by net revenue.

6 The company has provided reconciliations of the non-GAAP measures to the most directly comparable U.S. GAAP measures at the end of the release. The company has determined this measure is more representative of underlying operating revenues growth for Investment Management as it removes commissions and other expenses that are collected through fee revenue and passed through expenses with no impact to pre-tax operating earnings.

7 Operating margin for Investment Management = pre-tax operating earnings adjusted for noncontrolling interest divided by operating revenues less pass-through expenses.

8 Operating margin for International Pension = pre-tax operating earnings divided by net revenue.

9 Operating margin for Benefits and Protection = pre-tax operating earnings divided by premium and fees.

10 Significant variances (SVs) in 1Q25 include 1) lower than expected variable investment income in RIS, Specialty Benefits, Life Insurance and Corporate; 2) impact of GAAP-only regulatory closed block adjustment in Life Insurance. SVs in 1Q24 include 1) impact of higher than expected encaje performance in International Pension; 2) lower than expected variable investment income in RIS, International Pension, Specialty Benefits, and Life Insurance, partially offset by higher than expected variable investment income in Corporate. SVs on a trailing twelve months in 1Q25 include 1) lower than expected variable investment income in RIS, International Pension, Specialty Benefits, and Life Insurance, partially offset by higher than expected variable investment income in Corporate; 2) impacts of 2024 actuarial assumption review; 3) impact of model refinement in Specialty Benefits; 4) lower than expected encaje performance and Latin American inflation in International Pension; 5) impact of GAAP-only regulatory closed block adjustment in Life Insurance. SVs on a trailing twelve months in 1Q24 include 1) lower than expected variable investment income in RIS, International Pension, Specialty Benefits, Life Insurance partially offset by higher than expected variable investment income in Corporate; 2) impacts of 2023 actuarial assumption review; 3) higher than expected encaje performance, Latin American inflation, Latin American non-economic LDTI discount rate impacts, and other items in International Pension; 4) mortality experience true-ups in RIS; 5) impact of LDTI model refinement in Specialty Benefits; 6) impact of GAAP-only regulatory closed block adjustment in Life Insurance.

11 Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

12 As of March 31, 2025

13 Ethisphere, 2025

14 Pensions & Investments, 2023

15 See Exhibit 1 for details on the impact of 1Q 2025 and 1Q 2024 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250424343364/en/

INVESTOR CONTACT:

Humphrey Lee

877-909-1105, lee.humphrey@principal.com



MEDIA CONTACT:

Sara Bonney

515-878-0835, bonney.sara@principal.com

Source: Principal Financial Group