Principal Financial Group (PFG) Q4 2025 earnings summary

Executive summary

• Achieved strong 2025 results with non-GAAP operating EPS up 12% year-over-year, at the high end of the 9-12% target range, and 15.7% ROE, supported by robust capital generation and diversified business mix.

• Returned over $1.5B to shareholders in 2025 through share repurchases and dividends.

• Assets under management reached $781B, with assets under administration at $1.8T, and margin expansion driven by disciplined execution.

• Strategic focus on retirement ecosystem, small/midsize businesses, and global asset management delivered broad-based growth and competitive advantages.

• Continued portfolio optimization with divestitures of non-core international businesses, enhancing focus on higher-growth, capital-efficient segments.

Financial highlights

• Full-year non-GAAP operating earnings were $1.9B ($8.55 per share, +12%); reported EPS up 19% to $8.27; Q4 non-GAAP operating EPS $2.24 (+7%).

• Non-GAAP operating ROE reached 15.7%, up 120 bps, at the high end of the 14%-16% target.

• Margins expanded 80 bps to 31% for 2025; compensation and operating expenses rose 2%.

• Returned $1.5B to shareholders in 2025 ($851M share repurchases, $684M dividends); Q4 capital return was $448M.

• Book value per common share (excluding certain adjustments) increased to $57.25 from $53.69 year-over-year.

Outlook and guidance

• 2026 targets: 9%-12% EPS growth, 75%-85% free capital flow conversion, 15%-17% ROE (raised from prior range).

• Capital deployment guidance for 2026: $1.5-$1.8B, including $800M-$1.1B in share repurchases and a 40% dividend payout ratio.

• Margin targets raised across RIS (38%-41%), Investment Management (35%-39%), International Pension (46%-50%), and Specialty Benefits (14%-17%).

• Specialty Benefits premium/fee growth target updated to 5%-9%; Life premium/fee growth expected at -2% to -4% due to realignment.

• Seasonality expected: higher earnings and free capital flow in 2H 2026; higher 1Q26 expenses in Investment Management and higher loss ratios in Benefits and Protection in 1H26.