Financial Performance - Net income attributable to Principal Financial Group (PFG) for Q1 2025 was $48 million, a significant decrease from $532.5 million in Q1 2024[7] - Non-GAAP net income attributable to PFG, excluding exited business, was $299 million, down 20% from $376.4 million in Q1 2024[7] - Non-GAAP net income attributable to PFG, excluding exited business, was $299.4 million in 1Q25, down from $376.4 million in 1Q24[31] - Total segment pre-tax operating earnings for 1Q25 were $485.1 million, slightly up from $472.2 million in 1Q24[31] - The Corporate segment experienced a loss of $105.6 million in 1Q25, worsening from a loss of $88.9 million in 1Q24[31] - Total income (loss) from exited business in Q1 2025 was $(251.3) million, compared to a profit of $156.1 million in Q1 2024[38] Earnings and Dividends - Non-GAAP operating earnings for Q1 2025 increased by 10% to $1.81 per diluted share, compared to $1.65 in Q1 2024[6] - The company raised its common stock dividend for Q2 2025 to $0.76 per share, marking a 7% increase from Q2 2024[6] - Non-GAAP operating earnings for 1Q25 increased to $414.5 million, compared to $394.3 million in 1Q24, reflecting a growth of 2.7%[31] Assets and Capital - Assets under management (AUM) reached $718 billion, contributing to total assets under administration (AUA) of $1.7 trillion[6] - The company reported a strong financial position with $1.75 billion of excess and available capital[6] - Total assets as of 1Q25 were $313.0 billion, a slight decrease from $313.7 billion in 4Q24[34] - Stockholders' equity available to common stockholders increased to $11,216.8 million in Q1 2025 from $11,086.4 million in Q4 2024, representing a growth of 1.17%[36] - Book value per common share increased to $49.85 in 1Q25 from $49.01 in 4Q24[34] - Book value per common share, excluding cumulative change in fair value of funds withheld embedded derivative, rose to $53.70 in Q1 2025, slightly up from $53.69 in Q4 2024[36] Revenue and Expenses - Operating revenues less pass-through expenses for Investment Management reached $416.0 million in Q1 2025, up from $398.6 million in Q1 2024, indicating a growth of 4.4%[40] - Commissions and other expenses in Investment Management for Q1 2025 were $37.7 million, slightly higher than $36.9 million in Q1 2024[40] - Pre-tax operating earnings for the Investment Management segment decreased by 5% to $116.3 million in Q1 2025[10] Market and Sales Performance - Retirement and Income Solutions (RIS) recurring deposits increased by 9% to $13.8 billion, with strong Pension Risk Transfer (PRT) sales of $0.8 billion[8] - Life Insurance business market premium and fees increased by 20% in Q1 2025 compared to the previous year[8] Tax and Capital Gains - Total GAAP income taxes for Q1 2025 showed a benefit of $34.0 million, compared to an expense of $95.1 million in Q1 2024[38] - Net realized capital gains (losses) adjusted for Q1 2025 were $(115.1) million, a significant decline from $(17.9) million in Q1 2024[38] - The total net realized capital gains (losses) after-tax adjustments for Q1 2025 were $2.0 million, a recovery from $(17.0) million in Q1 2024[38] Forward-Looking Statements - Forward-looking statements indicate ongoing strategies for growth and potential share repurchases, though actual results may differ[25] Variances and Changes - Significant variances in 1Q25 included lower than expected variable investment income across multiple segments[23] - The cumulative change in fair value of funds withheld embedded derivative decreased to $(2,215.6) million in Q1 2025 from $(2,381.3) million in Q4 2024[36] - Noncontrolling interest reported a loss of $(51.5) million in Q1 2025, compared to a loss of $(44.9) million in Q4 2024[36]

Core Viewpoint - Principal Financial Group, Inc. (PFG) is expected to report first-quarter 2025 earnings on April 24, with a consensus estimate of $1.85 per share, reflecting a 12.1% increase year-over-year, despite a negative earnings surprise in the previous quarter [1][7]. Group 1: Earnings and Revenue Expectations - The first-quarter results are anticipated to show a rise in fee revenues, higher yields, favorable market performance, and increased sales of single premium group annuities [2]. - Operating revenues are projected to increase to $3.97 billion, marking a nearly 4.4% rise from the same quarter last year [3]. - Net investment income is expected to reach $1.1 billion, benefiting from higher yields and average invested assets [6]. Group 2: Expense and Performance Factors - Operating expenses are likely to increase to $1.3 billion due to higher benefits, claims, and settlement expenses [7]. - Investment Management is expected to see improved performance from higher management fee revenues, although this may be offset by lower performance fee revenues and increased variable compensation expenses [4]. Group 3: Market and International Operations - International Pension operations are expected to benefit from increased earnings from equity method investments in Brazil and favorable market performance, although foreign currency headwinds may offset some gains [5]. - Assets under management are likely to improve due to favorable market performance across equity, fixed income, and real estate [6]. Group 4: Earnings Prediction Model - The earnings prediction model indicates a potential earnings beat for Principal Financial, supported by a positive Earnings ESP of +0.31% and a Zacks Rank of 3 [8][9].

Company Overview - Principal Financial (PFG) is expected to report a year-over-year increase in earnings due to higher revenues for the quarter ended March 2025, with earnings projected at $1.86 per share, reflecting a +12.7% change, and revenues expected to be $3.97 billion, up 4.5% from the previous year [1][3]. Earnings Expectations - The upcoming earnings report is scheduled for April 24, and the stock may rise if the reported numbers exceed expectations, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised 2.44% lower over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates a negative Earnings ESP of -0.33% for Principal Financial, suggesting that the Most Accurate Estimate is lower than the Zacks Consensus Estimate [11]. - The company currently holds a Zacks Rank of 3 (Hold), making it challenging to predict a beat on the consensus EPS estimate [11]. Historical Performance - In the last reported quarter, Principal Financial was expected to post earnings of $1.95 per share but delivered $1.94, resulting in a surprise of -0.51% [12]. - The company has not beaten consensus EPS estimates in any of the last four quarters, indicating a trend of underperformance [13]. Industry Comparison - Goosehead Insurance (GSHD), another player in the Zacks Insurance - Multi line industry, is expected to post earnings of $0.23 per share for the same quarter, reflecting a year-over-year change of -17.9%, with revenues projected at $78.25 million, up 21.4% [17]. - Goosehead has an Earnings ESP of 4.35% and has beaten consensus EPS estimates in each of the trailing four quarters, contrasting with Principal Financial's performance [18].

Core Viewpoint - Principal Financial Group, Inc. (PFG) is experiencing a short-term bullish trend, with its share price currently at $85.67, down 6.8% from its 52-week high of $91.98, while trading above its 50-day simple moving average (SMA) [1][2][3] Financial Performance - PFG has a market capitalization of $19.32 billion and an average trading volume of 1.48 million shares over the last three months [2] - Year-to-date, PFG shares have increased by 10.6%, outperforming the Finance sector's growth of 4% and the Zacks S&P 500 composite's growth of 2.4% [4][6] - The Zacks Consensus Estimate for PFG's 2025 earnings per share indicates a year-over-year increase of 22%, with revenues projected at $16.53 billion, reflecting a 5.7% improvement [9] Growth Drivers - Revenue growth is expected to improve due to higher premiums, fees, and improved net investment income across segments [10] - The Principal International segment is likely to benefit from increased single-premium annuity sales in Chile, with operating earnings supported by foreign currency tailwinds [10] - The Specialty Benefits Insurance business is anticipated to continue benefiting from record sales, strong retention, and employment growth [11] - Strong institutional flows across various asset classes are expected to drive positive net cash flow [11] Capital Management - PFG has a strong capital position with sufficient cash generation capabilities and liquidity, revising its RBC target to a range of 375% to 400% [13] - The company plans to deploy $1.4 billion to $1.7 billion in capital in 2025, including $700 million to $1 billion for share repurchases [15] - PFG raised its dividend by 9% for the sixth consecutive quarter, aligning with a targeted 40% dividend payout ratio, resulting in a solid dividend yield of 3.6% [14] Valuation and Market Position - PFG's return on equity in the trailing 12 months was 14.68%, surpassing the industry average of 14.18% [16] - The shares are trading at a price-to-earnings multiple of 9.85, higher than the industry average of 9.26, indicating a premium valuation [17] Conclusion - PFG's financial stability and favorable growth estimates suggest positive prospects, driven by strategic buyouts, effective capital deployment, and strong retention [18]

Financial Performance and Assets - As of December 31, 2024, Principal Financial Group had $1,663.9 billion in assets under administration (AUA) and $712.1 billion in assets under management (AUM) [11]. - The Workplace Savings and Retirement Solutions (WSRS) segment managed over 43,000 defined contribution plans with $550.7 billion in assets, covering approximately 11.3 million eligible participants [22]. - Approximately 31% of WSRS account values were managed by Principal Asset Management, while 65% were managed by third-party asset managers [22]. - As of December 31, 2024, 90% of the $8.3 billion variable annuity account balances were allocated to mutual funds managed by Principal Asset Management [26]. - The company reported that $5.6 billion of the variable annuity separate account values had the Guaranteed Minimum Withdrawal Benefit (GMWB) rider [27]. - Principal Bank had approximately 772,000 customers and $8.8 billion in assets as of December 31, 2024 [36]. - Principal Trust Company managed approximately $658.6 billion in assets under administration as of December 31, 2024 [38]. - As of December 31, 2024, the Investment Management teams managed $559.1 billion in assets [45]. Insurance and Employee Benefits - The company had over 123,000 group dental and vision insurance policies in force covering over 3.0 million employees as of December 31, 2024 [68]. - The group life insurance business provided nearly $186 billion of group life insurance in force covering approximately 3.1 million employee lives as of December 31, 2024 [69]. - Long-term disability represented 59% of total group disability premium as of December 31, 2024 [70]. - The company administered approximately 716,000 individual life insurance policies with over $555.0 billion of individual life insurance in force as of December 31, 2024 [73]. - Interest sensitive products represented 18% of individual life insurance in force and generated 72% of individual life insurance annualized first year premium sales for the year ended December 31, 2024 [75]. - The company served approximately 2.2 million employee lives through over 69,000 contracts in group disability insurance as of December 31, 2024 [70]. - As of December 31, 2024, term life insurance products represented 80% of individual life insurance in force and 28% of individual life insurance annualized first year premium sales [78]. - Small and medium-sized business sales accounted for 100% of individual life sales and 71% of individual disability sales for the year ended December 31, 2024 [83]. Market Opportunities and Strategy - The company believes that small and medium-sized businesses represent an underserved market with attractive growth opportunities in retirement and employee benefit markets [13]. - The group insurance market is shifting towards voluntary/worksite products, presenting growth opportunities for the company [81]. - The company focuses on the Nonqualified Deferred Compensation and Business Solutions market to address financial challenges for business owners [83]. - The voluntary benefits platform is being enhanced to capitalize on the expanding market due to employer funding shifts [81]. Employee and Organizational Insights - As of December 31, 2024, the company employed approximately 19,700 people globally, with 12,000 in the U.S. and 7,700 outside the U.S. [112]. - The average tenure of employees was 8.8 years globally and 11.2 years in the U.S., with an annual turnover rate of 17.4% globally and 11.0% in the U.S. [119]. - The company has established eight employee resource groups (ERGs) to enhance inclusion and provide cultural insights as of December 31, 2024 [115]. - The company utilizes an enterprise people scorecard to monitor employee retention, learning, hiring, engagement, and productivity trends [117]. Risk Management and Regulatory Environment - The company’s risk management includes ongoing monitoring of various risk metrics and quarterly risk reporting to manage established risk appetites and tolerances [111]. - The company anticipates that acquisition and investment activities may increase the number and magnitude of mark-to-market adjustments on equity securities, trading securities, and derivative instruments, potentially reducing profitability and causing volatility in net income [145]. - Changes in laws or regulations could significantly increase compliance costs and reduce profitability, impacting how the company conducts business [164]. - The company is subject to various federal, state, and international regulations that may increase compliance costs and reduce profitability, particularly in the context of emerging ESG requirements [178]. - The company faces potential liabilities from assessments by state insurance guaranty associations, which could impact financial strength [167]. - Regulatory changes regarding cybersecurity and privacy may increase compliance costs and limit data insights, affecting business operations [175]. Financial Stability and Investment Risks - Financial strength ratings for Principal Life and PNLIC include A+ ("Superior") from A.M. Best and AA− ("Very Strong") from Fitch, indicating strong financial stability [88]. - The statutory surplus of each of the U.S. life insurance companies exceeded the minimum risk-based capital requirements as of December 31, 2024 [95]. - The company held $53.0 billion in fixed maturities, representing 66% of total U.S. invested assets, with approximately 5% rated below investment grade as of December 31, 2024 [141]. - The international investment operations held $2.5 billion in fixed maturities, accounting for 41% of total international invested assets as of December 31, 2024 [142]. - The commercial mortgage loan portfolio was valued at $14.7 billion, representing 17% of total invested assets, with no loans in foreclosure as of December 31, 2024 [143]. - Approximately $12.3 billion, or 85%, of the U.S. commercial mortgage loans had balloon payment maturities, which historically have a higher default rate [144]. - The company reported gross unrealized losses on fixed maturities of $4,246.2 million pre-tax as of December 31, 2024, with $4,081.7 million of these losses being in a continuous unrealized loss position for over twelve months [152]. - The company faces risks related to environmental liability exposure from its commercial mortgage loan portfolio and real estate investments, which may harm financial strength and reduce profitability [150]. Competitive Landscape and Market Challenges - The company faces pressure to lower prices due to competition from other insurance companies, which may adversely affect revenues and profitability [192]. - A downgrade in financial strength or credit ratings could lead to increased policy surrenders, reduced new sales, and higher costs of capital, negatively impacting profitability [193]. - Revenues from asset management and accumulation products are primarily fee-based, and significant client terminations or withdrawals may reduce assets under management (AUM), adversely affecting revenues [195]. - The company is exposed to risks from guarantees in certain products, which may decrease net income or increase volatility if hedging strategies prove ineffective [197]. - International operations face political, legal, and operational risks that could reduce profitability, particularly in emerging markets [198]. Technological and Operational Risks - Cybersecurity risks pose significant threats, including unauthorized access and potential reputational damage, which could adversely affect profitability [220]. - Disruptions in information technology and infrastructure could lead to operational impairments and reputational damage [219]. - The company may face costly litigation related to intellectual property infringement claims, which could result in significant liability and operational restrictions [215]. - Loss of key vendor relationships could adversely affect business operations and lead to financial losses [221]. - The company must maintain effective controls to prevent cybersecurity incidents, as failures could result in legal liabilities and competitive disadvantages [220]. Future Outlook and Strategic Considerations - The company may need to fund deficiencies in its Closed Block assets, which could impact financial stability if cash flows are insufficient [202]. - Future acquisitions may present integration challenges and unforeseen liabilities, potentially impairing expected benefits and goodwill [206]. - Technological advances and societal changes may disrupt the business model, requiring significant expenditures to adapt to evolving customer preferences [211]. - Climate change may impact mortality and morbidity rates, asset prices, and overall economic conditions, posing risks to profitability [210]. - The company's ability to attract and retain qualified employees is critical for operational success, facing intense competition in various professional fields [216]. - The performance of investments directly impacts the ability to increase and retain Assets Under Management (AUM), with potential cash outflows if qualified portfolio managers are not retained [218]. - The company relies on a variety of distribution channels, including internal digital channels and independent brokers, to sell its products and services [217].

Summary of Principal Financial Group (PFG) Conference Call - February 10, 2025 Company Overview - **Company**: Principal Financial Group (PFG) - **Industry**: Insurance and Financial Services - **Key Participants**: Amy Friedrich (President of Benefits & Protection), Michael Ward (Vice President & Senior Analyst - US Insurance) Core Business Segments - **Benefits and Protection**: Encompasses all insurance businesses, with a focus on specialty benefits and group benefits as growth engines [3][2] - **Life Insurance**: Transitioned from retail to business market, focusing on individual life insurance solutions for business owners [3][2] - **Affiliated Distribution**: Involves a network of 1,200 financial professionals contributing to production in securities, mutual funds, asset management, and retirement business [4][2] Market Focus and Growth Strategy - **Small and Mid-Sized Businesses (SMB)**: PFG targets the SMB market, which is a significant driver of U.S. job growth, with over 100,000 employer relationships [6][7] - **Product Expansion**: Expanded product offerings to include worksite and voluntary products such as critical illness, hospital indemnity, and accident insurance [9][10] - **Distribution Strategy**: Focuses on regional relationships rather than large national ones, emphasizing partnerships with distributors serving the SMB market [11][12] Employer and Employee Sentiment - **Employer Well-Being Index**: Approximately 58% of employers describe their businesses as growing, indicating healthy demand for benefits [20][21] - **Employee Concerns**: Inflation and personal finance are top concerns for employees, but interest in voluntary products remains high [25][26] Voluntary Products and Market Trends - **Voluntary Product Growth**: Coverage count in voluntary and worksite products grew by over 60% from 2021 to 2023, indicating strong demand [27][28] - **Simplified Billing**: PFG emphasizes the importance of streamlined billing processes for small employers to enhance product uptake [29][30] Technology and AI Integration - **AI in Disability Claims**: PFG utilizes AI to improve the disability claims experience, enhancing recovery rates and return-to-work capabilities [36][37] - **Human-Assisted AI**: AI applications are complemented by human oversight to ensure quality in underwriting and claims processing [45][46] Competitive Landscape and Market Opportunities - **Market Saturation**: The large employer market is saturated, while the mid-market and small business segments present growth opportunities [49][50] - **Greenfield Opportunities**: PFG is focused on expanding its presence in the small business segment, which is under-penetrated, with about 50-60% saturation [52][55] Product Performance and Pricing Strategy - **Dental and Vision Products**: Increased utilization post-COVID has led to adjustments in pricing strategies to reflect inflationary trends [56][57] - **Life and Disability Products**: Positive performance in life and disability segments, with a focus on maintaining competitive pricing for renewals [62][63] Future Growth and Acquisition Strategy - **Organic Growth Focus**: PFG emphasizes organic growth but remains open to strategic acquisitions that align with its growth platforms [65][66] - **Bundled Products**: The company favors bundled offerings that combine employer-paid and voluntary coverages to enhance customer retention and satisfaction [67][68] Mortality and Morbidity Trends - **Monitoring Trends**: PFG is observing trends in mortality and morbidity, particularly related to new drug classes and their impact on the working population [71][75] - **Neutral Outlook**: Currently, there is no significant change in mortality or morbidity trends over the long term, but PFG continues to monitor these closely [76][77]

Financial Data and Key Metrics Changes - The company achieved an adjusted non-GAAP earnings per share (EPS) growth of 11% for 2024, with a strong 16% increase in the fourth quarter, driven by top-line growth and equity market tailwinds [10][34] - The free capital flow conversion ratio ended the year at the midpoint of the targeted range of 75% to 85%, and return on equity (ROE) improved by 90 basis points year-over-year, on track to achieve the 14% to 16% target in 2025 [11][35] - Total capital returned to shareholders was $1.7 billion in 2024, including share buybacks and a 10% increase in the annual common stock dividend [12][51] Business Line Data and Key Metrics Changes - In the Retirement segment, recurring deposits increased by 7% in 2024, with pension risk transfer (PRT) sales reaching nearly $900 million in the fourth quarter, totaling over $3 billion for the year [20][24] - Asset Management ended the year with $683 billion of assets under management (AUM), with net flows improving compared to 2023, despite a $28 billion negative impact from foreign exchange [25][26] - Specialty Benefits experienced a 7% growth in premiums and fees, with a favorable loss ratio of 60.4% for the year [28][44] Market Data and Key Metrics Changes - The S&P 500 gained 25% in 2024, contributing to favorable market conditions for the company's performance [36] - The company managed to offset foreign exchange impacts on AUM through strong equity market performance, resulting in a 3% year-over-year increase in total company-managed AUM [18][37] - The company reported positive institutional and retail flows in the fourth quarter, despite typical seasonal weaknesses in U.S. retirement sales [19] Company Strategy and Development Direction - The company focuses on three strategic areas for sustained growth: the broad retirement ecosystem, small and midsized businesses (SMB), and global asset management [13] - Recent expansions in the retirement ecosystem include new personalized and passive target date offerings, addressing evolving needs [14] - The company aims to maintain a disciplined approach to growth in the SMB segment, leveraging strong customer relationships and a track record of above-market growth [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate changes in the Chilean pension reform, viewing it as an opportunity for long-term growth [68][70] - The outlook for 2025 includes reaffirmed targets of 9% to 12% EPS growth, 75% to 85% free capital flow conversion, and 14% to 16% ROE [54][56] - Management highlighted the importance of maintaining financial flexibility while returning excess capital to shareholders, targeting $1.4 billion to $1.7 billion in capital deployments for 2025 [55][126] Other Important Information - The company received recognition as one of America's Most Just Companies and as a Best Place to Work in Money Management for the 13th consecutive year [30][31] - The company maintains a strong capital position with $1.6 billion of excess and available capital, supporting its growth initiatives [50][51] Q&A Session Summary Question: Initial thoughts on the pension reform in Chile - Management is optimistic about the reform providing clarity for future operations and believes it will improve system efficiency [68][70] Question: Thoughts on increasing private assets in 401(k) plans - Management sees significant opportunities for increased use of private assets in retirement plans but acknowledges regulatory hurdles that need to be addressed [72][75] Question: Stabilization of participant withdrawals in RIS - Management noted improved retention rates and lower withdrawal rates, contributing to a positive outlook for 2025 [80][84] Question: Expectations for real estate transactional activity and variable investment income - Management anticipates a gradual recovery in the commercial real estate market and expects improved returns in 2025 for the variable investment income portfolio [92][98] Question: Impact of litigation in the PRT market - Management has not seen litigation migrate to the smaller end of the market and remains confident in their PRT business [102][106] Question: Underwriting discipline in Specialty Benefits - Management is exercising underwriting discipline due to competitive pressures, particularly in the dental market, while maintaining a focus on profitable growth [108][115]

Core Insights - Principal Financial Group, Inc. (PFG) reported a fourth-quarter 2024 operating net income of $1.94 per share, which missed the Zacks Consensus Estimate by 0.5%, but increased by 6% year over year [1][15] - Total revenues surged 76.6% year over year to $4.7 billion, exceeding the Zacks Consensus Estimate by 17.9% [2] Financial Performance - Total expenses decreased by 4.2% year over year to $3.6 billion, lower than the estimate of $4.4 billion [3] - As of December 31, 2024, assets under management (AUM) were $712 billion, part of total assets under administration (AUA) of $1.7 trillion [3] Segment Analysis - **Retirement and Income Solution**: Revenues fell 6.3% year over year to $2.1 billion, missing the estimate of $2.2 billion; pre-tax operating earnings increased 6% to $280.1 million, but missed the estimate of $828.5 million [4] - **Investment Management**: Revenues rose 9.6% year over year to $474.6 million; pre-tax operating earnings increased 27% to $163.9 million, with an operating margin expansion of 570 basis points to 38.3% [5] - **International Pension**: Revenues decreased 21.6% year over year to $239.8 million; pre-tax operating earnings dropped 40% to $52.1 million, with an operating margin contraction of 1,100 basis points to 38.1% [6] - **Benefits and Protection**: Revenues increased 2.7% year over year to $1.2 billion, beating the estimate of $1 billion; pre-tax operating earnings rose 7.1% to $154.7 million, exceeding the estimate of $40.7 million [7] - **Specialty Benefits**: Revenues grew 4.2% year over year to $873.3 million, surpassing the estimate of $801.8 million; pre-tax operating earnings increased 23% to $147.2 million, beating the estimate of $111.1 million [8] - **Life Insurance**: Revenues decreased 1.4% year over year to $329.3 million, beating the estimate of $280 million; pre-tax operating earnings declined 70% to $7.5 million, attributed to higher mortality [9][10] - **Corporate**: Pre-tax operating losses widened to $103.9 million from a loss of $88.5 million a year ago, exceeding the estimate of $92.4 million [11] Capital Management - Principal Financial returned $1.7 billion to shareholders in 2024, including $1 billion in share repurchases and $0.7 billion in dividends; the board raised the first-quarter dividend by 9% to 75 cents per share [13] - A new authorization for the repurchase of $1.5 billion of outstanding shares was approved, with approximately $0.8 billion remaining under the prior authorization as of December 31, 2024 [14] Full-Year Highlights - For 2024, operating net income was $6.97 per share, missing the Zacks Consensus Estimate by 0.2%, but increased 6% year over year; total operating revenues reached $15.63 billion, beating the consensus mark by 0.3% and increasing 6.6% year over year [15] 2025 Guidance - Principal Financial expects 9-12% annual non-GAAP operating earnings per diluted share growth, with an estimated 75-85% free capital flow conversion and a projected 14-16% non-GAAP return on equity [16]

Principal® RETIREMENT | ASSET MANAGEMENT | BENEFITS & PROTECTION Fourth Quarter 2024 Earnings and 2025 Outlook PRINCIPAL FINANCIAL GROUP February 6, 2025 Key takeaways Delivering on long-term quidance 11% EPS growth1 (9-12% target) 13.7% ROE2 (14-16% target) Delivering on long-term guidance | 11% | 13.7% | 80% | | --- | --- | --- | | EPS growth1 | ROE2 | FCF %3 | | (9-12% target) | | (75-85% target) | FY 2024 operating results Reported non-GAAP operating earnings5 $1,641M (+2% vs. FY 2023) Non-GAAP operatin ...

Core Insights - Principal Financial (PFG) reported $4.75 billion in revenue for Q4 2024, a 12% year-over-year increase, with an EPS of $1.94 compared to $1.83 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $4.03 billion by 17.89%, while the EPS fell short of the consensus estimate of $1.95 by 0.51% [1] Financial Performance Metrics - Assets under management (AUM) reached $712.1 billion, surpassing the average estimate of $695.7 billion [4] - Revenue from premiums and other considerations was $1.83 billion, below the average estimate of $1.92 billion, reflecting an 11.9% year-over-year decline [4] - Revenue from fees and other revenues was $1.12 billion, slightly above the average estimate of $1.09 billion, marking a 7.5% year-over-year increase [4] - Net investment income was reported at $1.12 billion, below the average estimate of $1.17 billion, showing a 0.4% year-over-year decline [4] - Principal Asset Management Segment's net investment income was $163.40 million, significantly below the average estimate of $194.07 million, representing a 26% year-over-year decrease [4] - Specialty Benefits in the Benefits and Protection Segment reported total revenue of $873.30 million, exceeding the average estimate of $858.19 million, with a 4.2% year-over-year increase [4] - Life Insurance segment's premiums and other considerations were $110.90 million, below the average estimate of $124.50 million, indicating an 8% year-over-year decline [4] Stock Performance - Shares of Principal Financial have returned +2.9% over the past month, outperforming the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]