Great-West Lifeco (GWO) Q4 2025 earnings summary

Executive summary

• Achieved record base earnings of $4.649 billion for 2025, up 11% year-over-year, and base EPS up 12%, surpassing medium-term objectives, with double-digit growth in Retirement and Wealth segments, especially at Empower, driving a shift to capital-light business lines.

• Leadership transition completed, with strong cash generation enabling continued capital deployment, including $1.6 billion in share buybacks and a 10% increase in quarterly dividend to $0.67 per share.

• Total client assets reached $3.3 trillion, with strong growth in higher-margin assets under management or advisement.

• Total shareholder return was strong in 2025, supported by enhanced shareholder focus and disciplined capital allocation.

• Continued focus on capital-efficient business mix and shareholder value.

Financial highlights

• FY2025 base earnings reached $4.649 billion, up 11% year-over-year; base EPS rose 12% to $5.03; net earnings were $3.96 billion.

• Base ROE reached 18.2%, with U.S. segment surpassing 20% for the first time; net ROE at 15.5%.

• Total client assets ended at $3.3 trillion, with over $1 trillion in higher-margin assets; AUMA at $1.1 trillion.

• Share repurchases totaled $1.6 billion in 2025; renewed NCIB allows for repurchase of up to 20 million shares in 2026.

• LICAT ratio at 128%, down from 131% in Q3; leverage ratio at 28% as of December 31, 2025.

Outlook and guidance

• On track to achieve medium-term base ROE objective of 19%+, with 2025 base ROE at 18.2%.

• Empower expected to deliver double-digit base earnings growth in 2026 and continued positive net plan flows.

• Plan to generate over 70% of base earnings from capital-light businesses.

• If M&A opportunities are limited, capital will continue to be returned to shareholders.

• Effective tax rate expected to rise to ~18% by 2028 due to business mix and tax changes.