Core Insights - Principal Financial Group, Inc. (PFG) shares have increased by 4.6% year to date, outperforming the industry growth of 1.9% but underperforming the Finance sector and the Zacks S&P 500 composite returns of 8.3% and 6% respectively [1][7][20] Company Performance - PFG has a market capitalization of $18.15 billion, with an average trading volume of 1.2 million shares over the last three months [4] - The shares are trading at a price-to-earnings multiple of 9.47, which is higher than the industry average of 8.68, and the company has a Value Score of A [5][8] Growth Projections - The Zacks Consensus Estimate for PFG's 2025 earnings per share indicates a year-over-year increase of 15.4%, with revenues estimated at $16.22 billion, reflecting a 3.7% year-over-year improvement [9] - For 2026, earnings per share and revenues are projected to increase by 12.7% and 5% respectively from the 2025 estimates [9] Dividend and Capital Deployment - PFG raised its dividend for the seventh consecutive quarter in Q2 2025, supporting a dividend yield of 3.7%, which is higher than the industry average of 2.7% [7][18] - The company targets $1.4 billion to $1.7 billion in capital deployments for 2025, planning to allocate 35-45% of net income for share buybacks and about 10% for strategic M&A activities [19] Strategic Advantages - PFG is expected to benefit from long-term revenue growth driven by higher premiums, fees, and improved net investment income across its segments [12][13] - The company maintains a strong capital position with sufficient cash generation capabilities and liquidity, revising its RBC target to a range of 375%-400% [17] - PFG's extensive distribution network and operational discipline are anticipated to enhance asset management growth [16] Market Position - The average price target from 13 analysts for PFG is $85.31 per share, indicating a potential upside of 6.8% from the last closing price [10] - PFG's financial stability and favorable growth estimates suggest positive prospects, although the premium valuation may lead investors to seek a better entry point [20]

Core Viewpoint - Principal Financial Group, Inc. (PFG) has shown a year-to-date (YTD) share price increase of 1.9%, outperforming the industry growth of 1.7% and the S&P 500 decline of 1.8%, but underperforming the Finance sector's return of 3.9% [1] Group 1: Financial Performance - PFG's market capitalization stands at $17.68 billion, with an average trading volume of 1.5 million shares over the last three months [4] - The Zacks Consensus Estimate for PFG's 2025 earnings per share indicates a year-over-year increase of 15.6%, with revenues projected at $16.19 billion, reflecting a 3.5% improvement [10] - The company expects earnings per share and revenues to grow by 11.8% and 4.3%, respectively, in 2026 compared to 2025 estimates [10] Group 2: Growth Drivers - PFG's revenue growth is anticipated to improve due to higher premiums, fees, and enhanced net investment income across its segments [11] - The company benefits from its leadership in retirement and long-term savings, group benefits, and global asset management, which contribute to solid operating earnings [12] - The Specialty Benefits Insurance business is expected to thrive from record sales, strong retention, and employment growth, positively impacting pre-tax operating earnings [13] Group 3: Capital Management - PFG has a strong capital position with sufficient cash generation capabilities, revising its RBC target to a range of 375% to 400% [15] - The company plans to deploy $1.4 billion to $1.7 billion in capital in 2025, allocating 35-45% of net income for share buybacks and about 10% for strategic M&A activities [18] - PFG raised its dividend for the seventh consecutive quarter, reflecting a 7% increase year-over-year and a solid dividend yield of 3.4%, higher than the industry average of 2% [16] Group 4: Valuation - PFG's shares are trading at a price-to-earnings multiple of 9.34, which is higher than the industry average of 8.74, indicating an expensive valuation [6][9] - Despite the premium valuation, the company is expected to benefit from strategic buyouts, strong retention, and effective capital deployment [19]

Financial Data and Key Metrics Changes - Adjusted non-GAAP earnings per share growth in 2024 was 11%, driven by strong top-line growth across the enterprise and market tailwinds, offsetting foreign currency impacts [23][24] - Total company assets under management reached over $700 billion, up 3% from 2023 [24] - The company ended the year with $1.6 billion of excess and available capital, including approximately $830 million at the holding company above the targeted level [24][25] - The return on equity (ROE) improved by 90 basis points year over year, with a target of 14% to 16% for 2025 [26] Business Line Data and Key Metrics Changes - The retirement ecosystem is a strategic focus, extending beyond recordkeeping to include asset management, participant advice, and income solutions [21] - Small and mid-sized businesses (SMBs) are identified as key growth drivers, with the company having solutions tailored to their needs [22] - Global asset management efforts are being enhanced through private capabilities and joint venture partnerships [22] Market Data and Key Metrics Changes - The company reported strong market performance despite volatility, which helped offset foreign currency headwinds and net cash flow [24] - The focus on SMBs aligns with their significant role in job creation and economic contribution in the U.S. [22] Company Strategy and Development Direction - The company is committed to a growth strategy centered on the retirement ecosystem, SMBs, and global asset management, which are seen as high-growth opportunities [21][22] - The leadership transition to CEO Deanna Strehbel is aimed at building upon the previous strategic agenda and enhancing value for customers, employees, and shareholders [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and its ability to capitalize on market opportunities [23] - The company is well-positioned for continued strength and growth, with a focus on disciplined execution of its strategic areas [21] Other Important Information - The company returned $1.7 billion of capital to shareholders in 2024, including share buybacks and a 10% increase in the annual common stock dividend [26] - A new share repurchase program for $1.5 billion was approved, in addition to nearly $800 million remaining from the previous authorization [26] Q&A Session Summary Question: Were there any questions regarding the proposals on the ballot? - There were no questions pertaining to the proposals, and all other questions would be addressed at the end of the meeting [16][18] Question: Any closing comments from management? - There were no further questions, and the business portion of the meeting was adjourned [29][30]

Core Insights - Deriva Energy has successfully completed a $127 million debt financing for two operating energy assets, Ledyard Wind and Pisgah Ridge Solar [1][2] - The financing was provided by Principal Asset Management and MetLife Investment Management, highlighting strong investor confidence in Deriva's renewable energy projects [2][3] - Deriva Energy, a leader in clean energy, operates over 6,200 MW of assets and has over 10,500 MW in development across the U.S. [4] Financing Details - The portfolio includes Ledyard Wind, a 207 MW wind facility in Iowa, and Pisgah Ridge, a 250 MW solar facility in Texas, both of which began commercial operations in 2022 [2] - Both projects have long-term power purchase agreements with high-quality corporate purchasers, ensuring stable revenue streams [2] - This marks the second debt financing arranged with Principal Asset Management and MetLife Investment Management since Brookfield's acquisition of Deriva in October 2023 [3] Company Background - Deriva Energy, formerly known as Duke Energy Renewables, is headquartered in Charlotte, North Carolina, and is a portfolio company of Brookfield, a major player in renewable power and climate transition assets [4] - The company is recognized for its significant operational capacity and ongoing development in the clean energy sector [4]

Group 1 - Principal Financial Group, Inc. (NASDAQ: PFG) operates in retirement, asset management, and life insurance sectors but lacks a competitive advantage compared to peers in these segments [1] - The current valuation of Principal Financial Group appears to be underwhelming when compared to its competitors [1]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 1-16725 (Commission file number) PRINCIPAL FINANCIAL GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 42-1520346 (I.R.S. Employer Identification Number) (S ...

Financial Performance - The company reported non-GAAP operating earnings of $415 million, a 5% increase compared to Q1 2024[5] - Non-GAAP operating earnings per diluted share (EPS) reached $1.81, reflecting a 10% growth from Q1 2024[5] - The company returned $370 million of excess capital to shareholders, including $200 million in share repurchases and $170 million in common stock dividends[4] - The common stock dividend was raised to $0.76 for Q2 2025, a 7% increase from Q2 2024 and a 9% increase on a trailing twelve-month (TTM) basis[4] - Total company Assets Under Management (AUM) stood at $718 billion, a 1% increase compared to Q4 2024[6] Segment Performance - Retirement and Income Solutions (RIS) pre-tax operating earnings, excluding significant variances, increased by 9%[11] - RIS recurring deposits grew by 9% year-over-year, with Small and Medium Business (SMB) recurring deposit growth at 12%[2, 14] - Principal Asset Management non-affiliated private real estate Net Cash Flow (NCF) was +$1.1 billion[2, 9] - Mexico and Southeast Asia locally managed strategies saw a NCF of +$0.7 billion[2, 9] - Life Insurance business market premium and fee growth increased by 20%[4, 24] - Specialty Benefits incurred loss ratio improved by 40 bps from 1Q24[2] Capital and Liquidity - The company's excess and available capital position was $1.75 billion, including $400 million pre-funding of Q2 2025 maturity[4, 5] - The debt to capital ratio was 22.3%, pro forma for Q2 2025 debt maturity[4, 5]

Financial Data and Key Metrics Changes - First quarter adjusted non-GAAP earnings were $439 million or $1.92 per diluted share, representing a 10% increase in EPS compared to Q1 2024 [9][17] - Total company managed AUM increased to $718 billion at the end of the quarter, reflecting positive market performance and favorable exchange rates [9][10] - Net cash flow was negative $4 billion in the quarter, primarily due to low-fee institutional fixed income withdrawals [10] Business Line Data and Key Metrics Changes - In retirement, positive account value net cash flow was $400 million, with small and mid-sized market flows increasing to $1.3 billion, up from $1 billion in the prior year [11] - Pension risk transfer volume grew to $800 million in the quarter, maintaining a leading position in the industry [11] - Specialty benefits saw strong underwriting results, but overall growth was impacted by lower dental sales and the absence of new PFML markets [12][24] Market Data and Key Metrics Changes - Strong local investment management flows of $700 million were recorded in Mexico and Southeast Asia, indicating the benefits of global business reach [10] - The S&P 500 and small/mid-cap indices finished the quarter down, while international equities and fixed income products delivered positive returns [19] - Foreign exchange rates positively impacted AUM by $8 billion due to improved spot rates [19] Company Strategy and Development Direction - The company is focused on growth across the retirement ecosystem, small and mid-sized businesses, and global asset management, which are seen as significant market growth opportunities [8] - A disciplined approach to aligning expenses with revenue is emphasized, with actions already underway to support this strategy [7][31] - The company aims to maintain a diversified portfolio to navigate market volatility effectively [35] Management's Comments on Operating Environment and Future Outlook - The current market environment is described as dynamic and unpredictable, with significant volatility impacting fee revenue in retirement and asset management [6][7] - Management remains confident in the company's diversified business model and its ability to deliver growth despite market challenges [35][41] - The company anticipates continued focus on expense management and aligning costs with revenue to mitigate macroeconomic impacts [39][44] Other Important Information - The company returned $370 million to shareholders in Q1, including $200 million in share repurchases and a $0.76 common stock dividend, reflecting a 9% growth rate on a trailing twelve-month basis [30] - Principal was recognized as one of the 2025 World's Most Ethical Companies, highlighting its commitment to ethical practices [14] Q&A Session Summary Question: EPS growth outlook amidst uncertainty - Management acknowledged the dynamic environment and reiterated confidence in a diverse portfolio, which is crucial during volatile times [34][35] Question: Flexibility on expense management - Management emphasized a proven track record of aligning expenses with revenue and highlighted ongoing efforts to manage costs effectively [43][44] Question: Client behavior in asset management - Management noted an improvement in the pipeline and increased activity in mandates, indicating a positive trend despite market volatility [50][52] Question: Hardship withdrawals in retirement - Management reported no significant increase in hardship withdrawals, with participant behavior remaining stable [58][60] Question: Mortality in the life business - Management indicated that mortality results can be volatile, but overall mortality remains aligned with expectations, despite a specific large claim impacting results [66][68] Question: Growth of spread-based products in retirement - Management confirmed strong performance in spread-based businesses, with significant growth in registered index-linked annuity sales and pension risk transfer [72] Question: Specialty benefits and dental pricing - Management acknowledged competitive pressures in dental sales but emphasized a disciplined approach to pricing and maintaining consistent renewals [84][86] Question: Dynamics in the small and medium-sized business market - Management expressed confidence in the resilience of the SMB market, noting that it has historically performed well through various economic cycles [114][115]

Core Insights - Principal Financial Group, Inc. (PFG) reported first-quarter 2025 operating net income of $1.81 per share, which missed the Zacks Consensus Estimate by 2.1%, but increased 10% year over year [1] - The company experienced a 5.5% year-over-year increase in operating revenues to $4 billion, driven by higher premiums, fees, and net investment income, surpassing the Zacks Consensus Estimate by 0.9% [1][2] Financial Performance - Total expenses rose 7% year over year to $3.7 billion, attributed to higher benefits, claims, and settlement expenses, but was lower than the estimated $4.1 billion [2] - As of March 31, 2025, assets under management (AUM) reached $717.9 billion, reflecting a 1.3% year-over-year increase [2] Segment Performance - **Retirement and Income Solution**: Revenues increased 7.4% year over year to $2 million, with pre-tax operating earnings rising 8% to $283.7 million, although below the estimate of $315.1 million [3] - **Investment Management**: Revenues grew 4.2% year over year to $453.7 million, but pre-tax operating earnings decreased 5% to $116.3 million, missing the estimate of $155.9 million [4] - **International Pension**: Revenues rose 6.2% year over year to $237.8 million, with pre-tax operating earnings climbing 10% to $71.2 million, exceeding the estimate of $63.1 million [5] - **Specialty Benefits**: Revenues increased 4.2% year over year to $883.9 million, while pre-tax operating earnings rose 4% to $106 million, but both figures missed estimates [6] - **Life Insurance**: Revenues decreased 2.2% year over year to $330.5 million, yet pre-tax operating earnings surged 36% to $13.3 million, although below the estimate of $27.3 million [7] - **Corporate**: Pre-tax operating losses widened to $105.6 million, exceeding the estimate of a loss of $71.5 million [8] Financial Update - As of March 31, 2025, cash and cash equivalents were $3.9 billion, down 7% year over year, while long-term debt increased 10% to $4.3 billion [9] - Book value per share was $53.70, a slight decrease of 0.1% year over year [9] Dividend and Share Repurchase - Principal Financial returned $369 million to shareholders, including $200 million in share repurchases and $169 million in dividends [10] - The board raised the second-quarter dividend by 7% to 76 cents, marking a 9% increase on a trailing 12-month basis [10]

Core Insights - Principal Financial (PFG) reported a revenue of $4.01 billion for the quarter ended March 2025, reflecting a year-over-year increase of 5.5% [1] - The earnings per share (EPS) for the quarter was $1.81, up from $1.65 in the same quarter last year, although it fell short of the consensus estimate of $1.85 by 2.16% [1] Financial Performance Metrics - Assets under management (AUM) for Investment Management reached $555.8 billion, exceeding the average estimate of $550.36 billion [4] - AUM for International Pension was reported at $133.5 billion, surpassing the average estimate of $123.45 billion [4] - Total AUM stood at $717.9 billion, above the average estimate of $687.46 billion [4] - Revenue from Premiums and other considerations was $1.75 billion, slightly below the average estimate of $1.78 billion, marking a year-over-year increase of 4% [4] - Revenue from Fees and other revenues was $1.08 billion, compared to the average estimate of $1.13 billion, with a year-over-year change of 2.4% [4] - Net investment income revenue was $1.17 billion, slightly above the average estimate of $1.16 billion, reflecting an 8.7% year-over-year increase [4] - In the Principal Asset Management Segment, net investment income was $166.70 million, below the estimate of $168.27 million, but up 10.8% year-over-year [4] - Specialty Benefits in the Benefits and Protection Segment reported total revenue of $883.90 million, below the average estimate of $903.31 million, with a year-over-year change of 4.2% [4] - Life Insurance fees and other revenues were $110.70 million, exceeding the average estimate of $105.24 million, representing a year-over-year increase of 5.3% [4] Stock Performance - Over the past month, shares of Principal Financial have returned -13.5%, compared to a -5.1% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]