Principal Financial Group Inc.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 9 February 2026: press release. Guidance figures: 6 new. The quarter’s numbers.

Key takeaways

Full-year EPS at high end of target: Full-year non-GAAP operating EPS excluding significant variances was $8.55, up 12%, which the release places at the high end of the 9-12% target. Reported non-GAAP operating EPS was $8.27, up 19%. Source
Fourth-quarter EPS up 7% excluding variances: Fourth-quarter non-GAAP operating EPS excluding significant variances was $2.24, up 7% from $2.10. Reported fourth-quarter non-GAAP operating EPS was $2.19, up 13%. Source
GAAP net income down 43% in quarter: Net income attributable to PFG was $517.0 million in the quarter, down 43% from $905.4 million. Trailing twelve-month net income was $1,185.1 million, down 25%. Source
Record RIS deposits included PRT sales: RIS transfer deposits were $12 billion in 4Q25, up 35% from 4Q24, including over $1 billion of PRT sales. Full-year RIS transfer deposits were $35 billion, up 9%. Source
Full-year capital returns over $1.5 billion: Full-year 2025 capital returned was over $1.5 billion, including $0.9 billion of share repurchases and $0.7 billion of dividends. The CEO's quoted remarks cite $850 million of share repurchases. Source
2026 EPS growth range of 9-12%: Annual non-GAAP operating EPS growth of 9-12% for 2026, measured against 2025 results excluding significant variances. Source
Capital deployment planned at $1.5-1.8 billion: Planned 2026 capital deployment of $1.5 billion to $1.8 billion, including $0.8 billion to $1.1 billion of share repurchases and a 40% dividend ratio. Source

“We returned over $1.5 billion to shareholders in 2025, including $850 million in share repurchases, aligned with our diversified and disciplined capital deployment strategy.”
Deanna Strable, Chair, President and CEO of Principal ®

Guidance

Area	Period	Figure	Against last quarter
Non-GAAP operating EPS growth Source	2026	9-12 %	New
Free capital flow conversion Source	2026	75-85 %	New
Non-GAAP ROE Source	2026	15-17 %	New
Capital deployment Source	2026	$ 1.5-$1.8 billion	New
Share repurchases Source	2026	$0.8B - $1.1B	New
Dividend ratio Source	2026	40%	New

What changed from last quarter

New guidance: 2026 guidance appears in this release for the first time in these documents, covering EPS growth, free capital flow conversion, ROE and capital deployment. Source
New: First-quarter 2026 common dividend set at $0.80 per share, one cent above the $0.79 paid for fourth quarter 2025. Source

Full-year and fourth-quarter earnings

Full-year EPS at high end of target: Full-year non-GAAP operating EPS excluding significant variances was $8.55, up 12%, which the release places at the high end of the 9-12% target. Reported non-GAAP operating EPS was $8.27, up 19%. Source
Fourth-quarter EPS up 7% excluding variances: Fourth-quarter non-GAAP operating EPS excluding significant variances was $2.24, up 7% from $2.10. Reported fourth-quarter non-GAAP operating EPS was $2.19, up 13%. Source
GAAP net income down 43% in quarter: Net income attributable to PFG was $517.0 million in the quarter, down 43% from $905.4 million. Trailing twelve-month net income was $1,185.1 million, down 25%. Source

Significant variances and exited business

Significant variances lowered quarter earnings: Significant variances lowered fourth-quarter non-GAAP operating earnings by $10.6 million, or $0.05 per diluted share, mainly from lower than expected variable investment income. Source
Exited business income fell sharply: Exited business contributed $27.1 million of income in fourth quarter 2025, against $551.9 million in fourth quarter 2024. The trailing twelve-month result was a loss of $502.1 million. Source
Trailing-year variances: actuarial review, expense release: On a trailing twelve-month basis, significant variances also included impacts of the 2025 actuarial assumption review and a one-time expense accrual release across five segments. Source

“we enter 2026 well-positioned to once again deliver against our financial targets and create long-term value for shareholders.”
Deanna Strable, Chair, President and CEO of Principal ®

Segment results

Retirement and Income Solutions earnings up 7%: RIS pre-tax operating earnings were $299.5 million, up 7% from $280.1 million, on net revenue of $754.1 million and a 39.7% operating margin. Source
Investment Management earnings up 2%: Investment Management pre-tax operating earnings were $166.7 million, up 2%, with a 38.3% operating margin. AUM of $593.9 billion was up 6%. Source
International Pension earnings up 25%: International Pension pre-tax operating earnings were $64.9 million, up 25%, on net revenue of $152.1 million, up 11%, with a 42.7% operating margin. Source
Specialty Benefits earnings down 3%: Specialty Benefits pre-tax operating earnings were $142.1 million, down 3%, on premium and fees of $845.8 million, up 3%, with a 16.8% operating margin. The prior-year quarter included a one-time model refinement. Source
Life Insurance earnings rose from $7.5 million: Life Insurance pre-tax operating earnings were $27.5 million, against $7.5 million in 4Q24. The company said the prior-year quarter was negatively affected by a GAAP-only regulatory closed block dividend adjustment. Source
Corporate losses narrowed slightly: Corporate pre-tax operating losses were $102.8 million, compared with $103.9 million in the prior-year quarter, a 1% decrease. Source

Assets, flows and deposits

AUM reached $781 billion: Assets under management were $781 billion, up 10% from $712.1 billion a year earlier, and are included in assets under administration of $1.8 trillion. Source
AUM net outflows in fourth quarter: AUM net cash flow was an outflow of $2.2 billion in 4Q25, against a $1.2 billion outflow in 4Q24. Full-year 2025 AUM net cash flow was an outflow of $8.8 billion. Source
Record RIS deposits included PRT sales: RIS transfer deposits were $12 billion in 4Q25, up 35% from 4Q24, including over $1 billion of PRT sales. Full-year RIS transfer deposits were $35 billion, up 9%. Source
Workplace and asset management sales grew: Workplace Savings and Retirement Solutions recurring deposits rose 5% for full-year 2025. Investment Management gross sales were $127 billion for the year, up 16%. Source
International Pension AUM up 24%: International Pension AUM was $154 billion, up 24% from a year earlier. Source

Capital and shareholder returns

Full-year capital returns over $1.5 billion: Full-year 2025 capital returned was over $1.5 billion, including $0.9 billion of share repurchases and $0.7 billion of dividends. The CEO's quoted remarks cite $850 million of share repurchases. Source
Fourth-quarter capital returns of $448 million: Capital returned in fourth quarter 2025 was $448 million, including $275 million of share repurchases and $172 million of common stock dividends. Source
Excess capital and RBC ratio disclosed: Excess and available capital was $1.6 billion. The statutory risk-based capital ratio for Principal Life Insurance Company was 406%. Source
Share count reduced to 217.4 million: End-of-period common shares outstanding were 217.4 million, down from 226.2 million a year earlier. Weighted average diluted shares for 4Q25 were 222.4 million. Source

2026 guidance

2026 EPS growth range of 9-12%: Annual non-GAAP operating EPS growth of 9-12% for 2026, measured against 2025 results excluding significant variances. Source
Free capital flow and ROE ranges: Free capital flow conversion of 75-85% and non-GAAP ROE of 15-17% for 2026. Conversion is based on non-GAAP net income excluding exited business. Source
Capital deployment planned at $1.5-1.8 billion: Planned 2026 capital deployment of $1.5 billion to $1.8 billion, including $0.8 billion to $1.1 billion of share repurchases and a 40% dividend ratio. Source

Coming up, as management said on 9 February 2026

First-quarter 2026 dividend payment date: The $0.80 first-quarter dividend is payable March 27, 2026, to holders of record as of March 11, 2026. Source

Figures management reported

Figure	Reported
Book value per share Source	$54.66 (4Q25) vs $49.01 (4Q24)
Book value per share excluding funds withheld derivative and AOCI Source	$57.25 (4Q25) vs $53.69 (4Q24)

Risks management discussed

External: Encaje performance and Latin American inflation were listed as significant variances for International Pension over the trailing twelve months. Source

Earlier plans management reported on

Met: Management states the 2025 objectives for earnings growth, return on equity and free capital flow were achieved. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Principal Financial Group Announces Full Year and

Fourth Quarter 2025 Results as well as 2026 Outlook

Raises first quarter 2026 common stock dividend

(Des Moines, Iowa) - Principal Financial Group® (Nasdaq: PFG) announced results for full year and fourth quarter 2025.

Diluted earnings per common share	2025	4Q25	Net income attributable to PFG (in millions)	2025	4Q25
Net income attributable to PFG	$5.25	$2.32	Net income attributable to PFG	$1,185	$517
Non-GAAP net income attributable to PFG, excluding exited business	$7.48	$2.20	Non-GAAP net income attributable to PFG, excluding exited business	$1,687	$490
Non-GAAP operating earnings	$8.27	$2.19	Non-GAAP operating earnings	$1,866	$488
Non-GAAP operating earnings excluding significant variances	$8.55	$2.24	Non-GAAP operating earnings excluding significant variances	$1,930	$499

Full Year and Fourth Quarter 2025 Highlights

Full-year non-GAAP operating earnings per diluted share, excluding significant variances of $8.55 increased 12%, at the high end of our 9-12% target; reported full-year non-GAAP operating earnings per diluted share increased 19%
4Q25 non-GAAP operating earnings per diluted share, excluding significant variances of $2.24 increased 7% over prior year quarter; reported 4Q25 non-GAAP operating earnings per diluted share increased 13%
Returned over $1.5 billion of capital to shareholders for full year 2025, including $0.9 billion of share repurchases and $0.7 billion of common stock dividends
Returned $448 million of capital to shareholders in 4Q25, including $275 million of share repurchases and $172 million of common stock dividends
Announced common stock dividend increase of $0.01 to $0.80 per share in the first quarter 2026; representing a 7% increase over the first quarter 2025 dividend
Assets under management (AUM) of $781 billion, which is included in assets under administration (AUA) of $1.8 trillion
Strong financial position with $1.6 billion of excess and available capital, including statutory risk-based capital (RBC) ratio for Principal Life Insurance Company of 406%

Deanna Strable, Chair, President and CEO of Principal® "Principal delivered strong 2025 results. We achieved our objectives across earnings growth, return on equity, and free capital flow, supported by consistent execution, sustained momentum, and the strength of our diversified businesses. We returned over $1.5 billion to shareholders in 2025, including $850 million in share repurchases, aligned with our diversified and disciplined capital deployment strategy. With a strong capital position and momentum across our strategic growth areas, we enter 2026 well-positioned to once again deliver against our financial targets and create long-term value for shareholders.”

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.

The total company impacts of significant variances, is after tax. See Exhibit 1 for details on the impact of 4Q 2025 and 4Q 2024 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

2026 Outlook Guidance

9-12% annual non-GAAP operating earnings per diluted share (EPS) growth
75-85% free capital flow conversion
15-17% non-GAAP ROE
$1.5-$1.8 billion capital deployment, which includes $0.8B - $1.1B of share repurchases and a 40% dividend ratio

Fourth Quarter Enterprise Results

In millions except percentages, earnings per share, or otherwise noted

	Three Months Ended,			Trailing Twelve Months,
4Q25	4Q24	% Change	4Q25	4Q24	% Change
Net income (loss) attributable to PFG	$517.0	$905.4	(43)%	$1,185.1	$1,571.0	(25)%
Non-GAAP net income attributable to PFG, excluding exited business	$489.9	$353.5	39%	$1,687.2	$1,505.2	12%
Non-GAAP operating earnings	$488.0	$448.1	9%	$1,865.5	$1,640.5	14%
Non-GAAP operating earnings, excluding significant variances	$498.6	$484.6	3%	$1,929.7	$1,799.3	7%
Diluted earnings per common share
Net income (loss) attributable to PFG	$2.32	$3.92	(41)%	$5.25	$6.68	(21)%
Non-GAAP net income attributable to PFG, excluding exited business	$2.20	$1.53	44%	$7.48	$6.40	17%
Non-GAAP operating earnings	$2.19	$1.94	13%	$8.27	$6.97	19%
Non-GAAP operating earnings, excluding significant variances	$2.24	$2.10	7%	$8.55	$7.65	12%
Assets under administration (billions)	$1,814.6	$1,663.9	9%
Assets under management (billions)	$781.0	$712.1	10%
AUM net cash flow (billions)	$(2.2)	$(1.2)	N/M	$(8.8)	$(5.0)	N/M

Based on 2025 results excluding significant variances. See Exhibit 1 for details on the impact of 4Q 2025 and 4Q 2024 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

Based on non-GAAP net income attributable to PFG, excluding income or loss from exited business.

Non-GAAP return on equity, excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment.

Full Year Segment Highlights

Retirement and Income Solutions (RIS) transfer deposits of $35 billion increased 9% from 2024; Workplace Savings and Retirement Solutions (WSRS) recurring deposits increased 5% over the same period
Investment Management gross sales of $127 billion increased 16% from 2024 with non-affiliated gross sales growth of 18%; operating margin of 36% expanded 90 bps over 2024
International Pension AUM of $154 billion, up 24% from a year ago
Specialty Benefits operating margin of 16% expanded 170 bps from 2024 on strong underwriting experience

Fourth Quarter Segment Highlights

Record RIS transfer deposits of $12 billion, up 35% from 4Q24; including over $1 billion of PRT sales; operating margin of 40% expanded 130 bps over 4Q24
Investment Management gross sales of $35 billion increased 12% from 4Q24
Specialty Benefits 4Q25 operating margin of 17% driven by continued strong experience in group life and group disability and improved group dental results

Segment Results

In millions except percentages, or otherwise noted except percentages or otherwise noted)

Retirement and Income Solutions

	Three Months Ended,			Trailing Twelve Months,
4Q25	4Q24	% Change	4Q25	4Q24	% Change
Pre-tax operating earnings	$299.5	$280.1	7%	$1,185.6	$1,056.2	12%
Net revenue	$754.1	$729.2	3%	$2,943.9	$2,800.9	5%
Operating margin	39.7%	38.4%		40.3%	37.7%

Pre-tax operating earnings increased $19.4 million primarily due to higher net revenue and disciplined expense management.
Net revenue increased $24.9 million due to growth in the business and favorable market performance.

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

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

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

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

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.

Investment Management

	Three Months Ended,			Trailing Twelve Months,
4Q25	4Q24	% Change	4Q25	4Q24	% Change
Pre-tax operating earnings	$166.7	$163.9	2%	$614.4	$578.8	6%
Operating revenues less pass-through expenses	$441.8	$435.7	1%	$1,730.8	$1,668.6	4%
Operating margin	38.3%	38.3%		36.3%	35.4%
Assets under management (billions)	$593.9	$559.1	6%

Pre-tax operating earnings increased $2.8 million primarily due to higher operating revenues less pass-through expenses.
Operating revenues less pass-through expenses increased $6.1 million primarily due to higher management fees, resulting from higher AUM.

International Pension

	Three Months Ended,			Trailing Twelve Months,
4Q25	4Q24	% Change	4Q25	4Q24	% Change
Pre-tax operating earnings	$64.9	$52.1	25%	$315.8	$282.4	12%
Net revenue	$152.1	$136.8	11%	$645.9	$622.9	4%
Operating margin	42.7%	38.1%		48.9%	45.3%
Assets under management (billions)	$153.9	$124.3	24%

Pre-tax operating earnings increased $12.8 million due to higher net revenue and disciplined expense management.
Net revenue increased $15.3 million primarily due to growth in the business and more favorable encaje returns.

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.

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

Specialty Benefits

	Three Months Ended,			Trailing Twelve Months,
4Q25	4Q24	% Change	4Q25	4Q24	% Change
Pre-tax operating earnings	$142.1	$147.2	(3)%	$531.4	$459.6	16%
Premium and fees	$845.8	$823.6	3%	$3,362.7	$3,257.2	3%
Operating margin	16.8%	17.9%		15.8%	14.1%
Incurred loss ratio	57.6%	56.5%		58.7%	60.5%

Pre-tax operating earnings decreased $5.1 million primarily due to the favorable one-time model refinement impact in 4Q24.
Premium and fees increased $22.2 million driven by growth in the business.
Incurred loss ratio remained below our targeted range at 57.6%, driven by continued strong experience in group life and group disability and improved group dental results.

Life Insurance

	Three Months Ended,			Trailing Twelve Months,
4Q25	4Q24	% Change	4Q25	4Q24	% Change
Pre-tax operating earnings (losses)	$27.5	$7.5	N/M	$(8.2)	$3.6	N/M
Premium and fees	$236.2	$225.4	5%	$958.2	$927.5	3%
Operating margin	11.6%	3.3%		(0.9)%	0.4%

Pre-tax operating earnings increased $20.0 million driven by growth in the business, expense management discipline, and improved mortality experience. Additionally, 4Q24 was negatively impacted by a GAAP-only regulatory closed block dividend adjustment.
Premium and fees increased $10.8 million as strong business market growth outpaced the run-off of the legacy life business.

Corporate

	Three Months Ended,			Trailing Twelve Months,
4Q25	4Q24	% Change	4Q25	4Q24	% Change
Pre-tax operating losses	$(102.8)	$(103.9)	1%	$(381.2)	$(375.6)	(1)%

Pre-tax operating losses decreased $1.1 million.

Common Stock Dividend

Announced a first quarter cash dividend of $0.80 per share to holders on common shares. This represents: one-cent increase over fourth quarter of 2025 and a 7% increase over the prior year quarter.
The first quarter dividend will be payable on March 27, 2026, to shareholders of record as of March 11, 2026.

Exhibit 1

Principal Financial Group

Impact of Significant Variances 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,
	4Q25	4Q24	4Q25	4Q24
Net income (loss) attributable to PFG	$(10.6)	$(36.5)	$(70.5)	$(175.7)
(Income) loss from exited business	-	-	6.1	20.6
Non-GAAP net income (loss) attributable to PFG, excluding exited business	(10.6)	(36.5)	(64.4)	(155.1)
Net realized capital (gains) losses, as adjusted	-	-	0.2	(3.7)
Non-GAAP operating earnings	(10.6)	(36.5)	(64.2)	(158.8)
Income taxes	(2.8)	(8.8)	(15.5)	(39.4)
Non-GAAP pre-tax operating earnings	$(13.4)	$(45.3)	$(79.7)	$(198.2)
Per diluted share:
Net income (loss) attributable to PFG	$(0.05)	$(0.16)	$(0.31)	$(0.74)
(Income) loss from exited business	-	-	0.02	0.09
Non-GAAP net income (loss) attributable to PFG, excluding exited business	(0.05)	(0.16)	(0.29)	(0.65)
Net realized capital (gains) losses, as adjusted	-	-	0.01	(0.03)
Non-GAAP operating earnings	$(0.05)	$(0.16)	$(0.28)	$(0.68)
Weighted average diluted common shares outstanding	222.4	231.2	225.7	235.3
Segment pre-tax operating earnings (losses):
Retirement and Income Solutions	$(6.5)	$(16.0)	$(36.1)	$(95.2)
Investment Management	-	-	4.8	-
International Pension	-	(13.6)	36.3	8.2
Principal Asset Management	-	(13.6)	41.1	8.2
Specialty Benefits	(4.0)	5.7	1.4	(16.9)
Life Insurance	(2.9)	(16.0)	(105.6)	(106.3)
Benefits and Protection	(6.9)	(10.3)	(104.2)	(123.2)
Corporate	-	(5.4)	19.5	12.0
Total segment pre-tax operating earnings (losses)	$(13.4)	$(45.3)	$(79.7)	$(198.2)

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

Significant variances (SVs) in 4Q25 include 1) lower than expected variable investment income in RIS, Specialty Benefits, and Life Insurance. SVs in 4Q24 include 1) lower than expected variable investment income in RIS, International Pension, Specialty Benefits, Life Insurance and Corporate; 2) impact of lower than expected encaje performance and Latin American inflation in International Pension; 3) impact of GAAP-only regulatory closed block adjustment in Life Insurance; 4) impact of model refinement in Specialty Benefits. SVs on a trailing twelve months in 4Q25 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 2025 actuarial assumption review; 3) higher than expected encaje performance and Latin American inflation in International Pension; 4) impact from a one-time expense accrual release in RIS, Investment Management, Specialty Benefits, Life Insurance, and Corporate. SVs on a trailing twelve months in 4Q24 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) higher than expected encaje performance and Latin American inflation in International Pension; 4) impact of GAAP-only regulatory closed block adjustment in Life Insurance; 5) impact of model refinement in Specialty Benefits.

Earnings Conference Call

On Tuesday, Feb. 10, 2026, at 10:00 a.m. (ET), Chair, President and Chief Executive Officer Deanna Strable and Executive Vice President and 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®

Principal Financial Group® (Nasdaq: PFG) is a global financial company with approximately 19,000 employees passionate about improving the wealth and well-being of people and businesses. In business for 146 years, we’re helping over 75 million customers 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 Companies and named as a “Best Place to Work in Money Management.” Learn more about Principal and our commitment to building a better future at principal.com.

Summary of Principal Financial Group® and Segment Results

	(in millions)
	Three Months Ended,		Trailing Twelve Months,
Principal Financial Group, Inc. Results	4Q25	4Q24	4Q25	4Q24
Net income (loss) attributable to PFG	$517.0	$905.4	$1,185.1	$1,571.0
(Income) loss from exited business	(27.1)	(551.9)	502.1	(65.8)
Non-GAAP net income (loss) attributable to PFG excluding exited business	$489.9	$353.5	$1,687.2	$1,505.2
Net realized capital (gains) losses, as adjusted	(1.9)	94.6	178.3	135.3
Non-GAAP Operating Earnings*	$488.0	$448.1	$1,865.5	$1,640.5
Income taxes	109.9	98.8	392.3	364.5
Non-GAAP Pre-Tax Operating Earnings	$597.9	$546.9	$2,257.8	$2,005.0
Segment Pre-Tax Operating Earnings (Losses):
Retirement and Income Solutions	$299.5	$280.1	$1,185.6	$1,056.2
Principal Asset Management	231.6	216.0	930.2	861.2
Benefits and Protection	169.6	154.7	523.2	463.2
Corporate	(102.8)	(103.9)	(381.2)	(375.6)
Total Segment Pre-Tax Operating Earnings	$597.9	$546.9	$2,257.8	$2,005.0

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.

As of December 31, 2025

Ethisphere, 2025

Pensions & Investments, 2023

	Per Diluted Share
	Three Months Ended,		Twelve Months Ended,
	4Q25	4Q24	4Q25	4Q24
Net income (loss) attributable to PFG	$2.32	$3.92	$5.25	$6.68
(Income) loss from exited business	(0.12)	(2.39)	2.23	(0.28)
Non-GAAP net income (loss) excluding exited business	$2.20	$1.53	$7.48	$6.40
Net realized capital (gains) losses, as adjusted	(0.01)	0.41	0.79	0.57
Non-GAAP Operating Earnings	$2.19	$1.94	$8.27	$6.97
Impact of significant variances	0.05	0.16	0.28	0.68
Non-GAAP Operating Earnings, excluding significant variances	$2.24	$2.10	$8.55	$7.65
Weighted-average diluted common shares outstanding (in millions)	222.4	231.2	225.7	235.3

*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,
	4Q25	4Q24
Total assets (in billions)	$341.4	$313.7
Stockholders’ equity (in millions)	$11,917.0	$11,131.3
Total common equity (in millions)	$11,883.9	$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)	$12,445.5	$12,144.0
End of period common shares outstanding (in millions)	217.4	226.2
Book value per common share	$54.66	$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	$57.25	$53.69

See Exhibit 1 for details on the impact of 4Q 2025 and 4Q 2024 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

(in millions, except as indicated)

	Period Ended,
	4Q25	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	$11,917.0	$11,131.3
Noncontrolling interest	(33.1)	(44.9)
Stockholders’ equity available to common stockholders	11,883.9	11,086.4
Cumulative change in fair value of funds withheld embedded derivative	(2,080.2)	(2,381.3)
AOCI, other than foreign currency translation adjustment	2,641.8	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	$12,445.5	$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	$54.66	$49.01
Cumulative change in fair value of funds withheld embedded derivative and AOCI, other than foreign currency translation adjustment	2.59	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	$57.25	$53.69

(in millions)

	Three Months Ended,		Trailing Twelve Months,
	4Q25	4Q24	4Q25	4Q24
Income Taxes:
Total GAAP income taxes (benefit)	$110.4	$209.9	$160.5	$291.7
Net realized capital gains (losses) tax adjustments	(7.7)	18.9	33.5	16.1
Exited business tax adjustments	(7.1)	(146.9)	129.8	(17.6)
Income taxes related to equity method investments and noncontrolling interest	14.3	16.9	68.5	74.3
Income taxes	$109.9	$98.8	$392.3	$364.5
Net Realized Capital Gains (Losses):
GAAP net realized capital gains (losses)	$53.7	$(88.6)	$27.7	$(27.3)
Market value adjustments to fee revenues	-	-	(0.1)	0.1
Net realized capital gains (losses) related to equity method investments	(0.3)	(3.7)	5.3	(17.3)
Derivative and hedging-related revenue adjustments	(25.2)	(6.4)	(101.4)	46.0
Certain variable annuity fees	17.2	17.4	68.0	71.3
Sponsored investment funds and other adjustments	17.1	10.7	41.5	29.9
Capital gains distributed - operating expenses	(15.4)	(26.4)	(31.4)	(110.5)
Amortization of actuarial balances	(5.2)	(1.2)	(14.5)	(1.8)
Derivative and hedging-related expense adjustments	0.1	(0.7)	1.6	(3.5)
Market value adjustments of embedded derivatives	(6.2)	(9.0)	(24.0)	(24.7)
Market value adjustments of market risk benefits	(19.5)	1.7	(100.1)	(43.9)
Capital gains distributed - cost of interest credited	0.4	(11.2)	(22.6)	(60.6)
Net realized capital gains (losses) tax adjustments	(7.7)	18.9	33.5	16.1
Net realized capital gains (losses) attributable to noncontrolling interest, after-tax	(7.1)	3.9	(61.8)	(9.1)
Total net realized capital gains (losses) after-tax adjustments	(51.8)	(6.0)	(206.0)	(108.0)
Net realized capital gains (losses), as adjusted	$1.9	$(94.6)	$(178.3)	$(135.3)
Income (Loss) from Exited Business:
Pre-tax impacts of exited business:
Amortization of reinsurance gains (losses)	$(19.0)	$(115.6)	$(84.1)	$(589.6)
Other impacts of reinsured business	(32.7)	38.3	(209.9)	137.9
Net realized capital gains (losses) on funds withheld assets	11.7	(18.2)	43.2	87.7
Change in fair value of funds withheld embedded derivative	74.2	794.3	(381.1)	447.4
Tax impacts of exited business	(7.1)	(146.9)	129.8	(17.6)
Total income (loss) from exited business	$27.1	$551.9	$(502.1)	$65.8

(in millions)

	Three Months Ended,		Trailing Twelve Months,
	4Q25	4Q24	4Q25	4Q24
Investment Management Operating Revenues Less Pass-Through Expenses:
Operating revenues	$482.7	$474.6	$1,887.5	$1,820.7
Commissions and other expenses	(40.9)	(38.9)	(156.7)	(152.1)
Operating revenues less pass-through expenses	$441.8	$435.7	$1,730.8	$1,668.6

Contacts
Humphrey Lee
877-909-1105, lee.humphrey@principal.com
Sara Bonney
515-878-0835, bonney.sara@principal.com