Summary of Principal Financial Group (PFG) Q3 2025 Earnings Call

1Key Financial Results and Metrics

Adjusted Earnings Per Share (EPS): $2.10, up 19% year-over-year; year-to-date adjusted EPS increased 14%.

Return on Equity (ROE): Expanded significantly, now at the high end of the target range.

Free Capital Flow Conversion Ratio: Over 90%, tracking above target.

Capital Returned to Shareholders: $400 million in Q3, including $225 million in share repurchases and an 8% increase in dividends.

Total Managed Assets Under Management (AUM): $784 billion, a 4% sequential increase.

Net Cash Flow: $400 million for the quarter, reflecting positive flows primarily in Investment Management.

2Strategic Updates and Business Highlights

Retirement Ecosystem: Strong growth in Workplace Savings and Retirement Solutions (WSRS) with 13% year-over-year growth in transfer deposits. Total Retirement Investment Solutions (RIS) sales reached $7 billion, up 8% year-over-year.

Small and Midsized Business (SMB): WSRS SMB recurring deposits grew 8%, with transfer deposits increasing by 27%.

Global Asset Management: Gross sales in Investment Management rose to $32 billion, up 19% year-over-year, with strong demand in private markets generating $1.7 billion in net inflows.

Specialty Benefits: Pre-tax operating earnings reached a record $147 million, up 28% year-over-year, driven by improved underwriting results.

3Forward Guidance and Outlook

PFG expects to meet full-year enterprise financial targets, bolstered by strong performance in the first three quarters.

Continued commitment to returning capital to shareholders, with a target of $1.4 billion to $1.7 billion for the full year, including elevated share buybacks in Q4.

Positive sentiment regarding the growth of the retirement business and asset management capabilities, with expectations for continued momentum.

4Bad News, Challenges, or Points of Concern

Actuarial Assumption Review: Recent model refinements led to a net unfavorable impact on GAAP earnings, although it is not expected to affect future business performance.

Investment Performance: Some areas, particularly multi-asset products, have underperformed, impacting flows and necessitating ongoing attention to risk management and talent acquisition.

Market Volatility: The potential for volatility in performance fees and net flows due to changing market conditions and investor sentiment.

5Notable Q&A Insights

Margin Expansion: Management expressed confidence in continued margin expansion, supported by disciplined expense management and strong underwriting results.

Investment Management Flows: Positive trends in net cash flow were noted, with expectations for continued strength in private markets and emerging market fixed income.

M&A Strategy: PFG remains disciplined regarding M&A opportunities, focusing on strategic alignment and cultural fit, while prioritizing organic growth.

Private Credit Market: The company maintains a cautious but optimistic view on private credit, emphasizing strong underwriting practices and low exposure to high-risk entities.

Wealth Management Initiatives: Early metrics from the advisory services initiative indicate strong plan sponsor adoption and increased roll-ins, although full impact will take time to materialize. Overall, PFG demonstrated strong financial performance in Q3 2025, with robust growth across key business segments and a positive outlook for the remainder of the year, despite some challenges in investment performance and market volatility.