Principal Financial Group (PFG) Q4 2025 earnings summary

Executive summary

• Achieved strong 2025 results with 12% adjusted EPS growth, 15.7% ROE, and 92% free capital flow conversion, meeting or exceeding all financial targets.

• Returned over $1.5 billion to shareholders in 2025, including $851 million in share repurchases and $685 million in dividends.

• Strategic focus on retirement ecosystem, small/midsize businesses, and global asset management drove broad-based growth and margin expansion.

• Portfolio optimization continued with the sale of the Chile runoff annuities business, enhancing focus on higher-growth, capital-efficient segments.

• Announced a 7% increase in the first quarter 2026 dividend to $0.80 per share.

Financial highlights

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

• Q4 non-GAAP operating earnings were $499 million ($2.24 per share, up 7%); reported Q4 EPS up 13% to $2.19.

• Managed AUM reached $781 billion at year-end, up 10% year-over-year; AUA at $1.8 trillion.

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

• Free capital flow conversion was 92%, with disciplined capital deployment.

Outlook and guidance

• 2026 targets: 9–12% EPS growth, 75–85% free capital flow conversion, and 15–17% ROE, assuming normal market conditions.

• Capital deployment of $1.5–$1.8 billion planned, including $800 million–$1.1 billion in share repurchases and a 40% dividend payout ratio.

• Margin targets raised across RIS, Investment Management, International Pension, and Specialty Benefits segments.

• Seasonality expected to result in higher earnings and free capital flow in the second half of 2026.

• Announced divestitures to impact segment revenue growth in 2026, but immaterial to total company earnings.