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 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Transition Period from to Commission File Number 001-16707 Prudential Financial, Inc. (Exact Name of Registrant as Specified in its Charter) (State or Other Jurisdiction of Inco ...

Prudential Financial, Inc. (NYSE:PRU) Q1 2025 Earnings Conference Call May 1, 2025 11:00 AM ET Company Participants Bob McLaughlin - VP, IR Andy Sullivan - CEO Yanela Frias - CFO Conference Call Participants Ryan Krueger - KBW Tom Gallagher - Evercore ISI Bob Huang - Morgan Stanley Suneet Kamath - Jefferies Joel Hurwitz - Dowling Partners John Barnidge - Piper Sandler Elyse Greenspan - Wells Fargo Jimmy Bhullar - JPMorgan Jack Matten - BMO Capital Markets Wes Carmichael - Autonomous Research Alex Scott - Ba ...

Core Insights - Prudential reported a revenue of $13.41 billion for the quarter ended March 2025, reflecting a 38.2% decrease year-over-year and a surprise of -7.71% compared to the Zacks Consensus Estimate of $14.53 billion [1] - The earnings per share (EPS) was $3.29, which is an increase from $3.12 in the same quarter last year, resulting in an EPS surprise of +2.49% against the consensus estimate of $3.21 [1] Financial Performance Metrics - Assets Under Management and Administration (PGIM) for institutional customers stood at $620.2 billion, below the average estimate of $632.98 billion [4] - Retail customer assets were reported at $240.6 billion, significantly lower than the estimated $374.12 billion [4] - Total assets under management for PGIM were $1,385.3 billion, compared to the average estimate of $1,401.42 billion [4] - Total revenues from U.S. businesses were $7.71 billion, a decline of 51.7% year-over-year, and below the average estimate of $8.50 billion [4] - International businesses generated total revenues of $4.74 billion, slightly above the estimated $4.60 billion, with a year-over-year change of +0.5% [4] - Adjusted operating income from policy charges and fee income was $1.11 billion, close to the average estimate of $1.12 billion [4] - Net investment income was reported at $4.52 billion, slightly above the average estimate of $4.47 billion [4] - Premiums totaled $6.45 billion, below the estimated $7.67 billion [4] - Corporate and other revenues reported a loss of $17 million, significantly lower than the average estimate of $70.97 million, representing a year-over-year change of -156.7% [4] - Individual life revenues from U.S. businesses were $1.52 billion, slightly below the estimated $1.57 billion, reflecting a -4.1% change year-over-year [4] - Group insurance revenues from U.S. businesses were $1.75 billion, exceeding the estimated $1.64 billion, with a year-over-year increase of +7% [4] Stock Performance - Prudential's shares have returned -6.9% over the past month, contrasting with the Zacks S&P 500 composite's -0.2% change [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Viewpoint - Prudential (PRU) reported quarterly earnings of $3.29 per share, exceeding the Zacks Consensus Estimate of $3.21 per share, and showing an increase from $3.12 per share a year ago, indicating a 2.49% earnings surprise [1] Financial Performance - The company posted revenues of $13.41 billion for the quarter ended March 2025, which was 7.71% below the Zacks Consensus Estimate, and a decrease from $21.7 billion in the same quarter last year [2] - Over the last four quarters, Prudential has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Prudential shares have declined approximately 12.2% since the beginning of the year, compared to a 5.5% decline in the S&P 500 [3] - The current Zacks Rank for Prudential is 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.51 on revenues of $13.96 billion, and for the current fiscal year, it is $13.81 on revenues of $57.36 billion [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Insurance - Multi line industry, to which Prudential belongs, is currently ranked in the top 17% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Another company in the same industry, Kemper (KMPR), is expected to report quarterly earnings of $1.48 per share, reflecting a year-over-year increase of 38.3% [9]

Financial Performance - Total adjusted operating income before income taxes for Q1 2025 was $1,520 million, a 6% increase compared to Q1 2024[6]. - Adjusted operating income for U.S. Businesses increased by 16% year-over-year to $931 million in Q1 2025[6]. - After-tax adjusted operating income for Q1 2025 was $1,188 million, reflecting a 7% increase from the previous year[6]. - Net income attributable to Prudential Financial, Inc. decreased by 38% year-over-year to $707 million in Q1 2025[6]. - Earnings per share (diluted) for Q1 2025 was $1.96, down 37% from $3.12 in Q1 2024[10]. - Total revenues for Q1 2025 were $13,412 million, a decrease of 38% compared to Q1 2024's $21,706 million[19]. - Total revenues for Q1 2025 decreased by 73% to $3,105 million compared to $11,538 million in Q1 2024[45]. - Total revenues for Q1 2025 were $7,706 million, a 52% decrease compared to $15,973 million in Q1 2024[40]. - Total revenues for Q1 2025 decreased by 4% to $1,515 million compared to Q1 2024[63]. - Total revenues for Q1 2025 were $(17) million, a significant decline of 157% compared to Q1 2024[79]. Shareholder Returns - Dividends paid in Q1 2025 amounted to $486 million, a 2% increase from the previous year[6]. - Total capital returned to shareholders in Q1 2025 was $736 million, a 1% increase year-over-year[6]. Assets and Liabilities - Total assets under management and administration reached $1,702.5 billion in Q1 2025, compared to $1,678.9 billion in Q1 2024, indicating growth[17]. - Total assets as of March 31, 2025, amounted to $739,262 million, a slight increase from $735,587 million at the end of 2024[22]. - Total liabilities as of March 31, 2025, were $707,040 million, compared to $705,461 million at the end of 2024, showing a marginal increase[22]. - The company's equity increased to $30,203 million as of March 31, 2025, from $28,187 million at the end of 2024, representing an increase of approximately 7%[22]. Investment Performance - Total investment income for Q1 2025 was $4,519 million, a decrease from $4,120 million in Q1 2024, with realized losses of $673 million compared to $183 million in the previous year[91]. - The yield on fixed maturities increased to 4.38% in Q1 2025 from 4.12% in Q1 2024, with investment income amounting to $3,313 million, up from $3,068 million[91]. - The total amount of equity securities at fair value was $8,309 million, representing 1.8% of the total investment portfolio[82]. - Commercial mortgage and other loans generated $449 million in investment income with a yield of 4.73% in Q1 2025, compared to $363 million and a yield of 4.36% in Q1 2024[100]. Policyholder Accounts - Interest credited to policyholders' account balances increased by 20% to $1,083 million in Q1 2025 from $902 million in Q1 2024[19]. - Policyholders' account balances rose to $170,278 million, up from $166,254 million at the end of 2024, indicating a growth of about 2%[22]. - Interest credited to policyholders' account balances was $1,083 million, a decrease of 30% from $1,641 million in Q1 2024[104]. Operational Metrics - Operating return on average equity based on adjusted operating income was 13.8% for Q1 2025, up from 12.7% in Q1 2024[6]. - The number of Prudential Advisors increased to 2,906 in Q1 2025, up from 2,752 in Q1 2024[17]. - Operating expenses for Q1 2025 were $1,624 million, a decrease of 11.4% from $1,832 million in Q1 2024[104]. Business Segments - PGIM's total revenues for Q1 2025 were $985 million, a decrease of 1% compared to $990 million in Q1 2024[30]. - Total revenues for the group insurance segment increased to $1,748 million in Q1 2025, representing a 7% increase from $1,634 million in Q1 2024[58]. - International businesses reported total revenues of $4,738 million in Q1 2025, a 1% increase from $4,713 million in Q1 2024[71]. Market Position - Common stock market capitalization at the end of Q1 2025 was $39,535 million, down from $42,158 million at the end of Q1 2024[19]. - Prudential's financial strength ratings as of April 30, 2025, include A+ from A.M. Best and AA- from Standard & Poor's for The Prudential Insurance Company of America[153]. - The company’s common stock is traded on the New York Stock Exchange under the symbol PRU[154].

Group 1: Prudential (PRU) - Prudential shares increased by 9.2% to close at $103.91, following a broader market rally after President Trump announced a 90-day pause of reciprocal tariffs for most countries [1] - The stock experienced a 9.9% loss over the past four weeks prior to this surge [1] - The consensus EPS estimate for Prudential's upcoming quarterly report is $3.34, reflecting a year-over-year increase of 7.1%, while revenues are expected to be $14.58 billion, down 32.8% from the previous year [2] - Over the last 30 days, the consensus EPS estimate for Prudential has been revised 1.3% lower, indicating a negative trend in earnings estimate revisions [3] - Prudential currently holds a Zacks Rank of 3 (Hold) [3] Group 2: James River Group (JRVR) - James River Group's consensus EPS estimate for the upcoming report has decreased by 51.1% over the past month to $0.24, which is a 38.5% decline from the previous year's report [4] - The company currently has a Zacks Rank of 5 (Strong Sell) [4] - In the last trading session, James River Group's stock closed 3.5% higher at $4.10, with a 0.5% return over the past month [3]

Core Viewpoint - Prudential Financial Inc. (PRU) has underperformed in the past year, with a share price decline of 16.2%, contrasting with the industry's slight decline of 0.7% and the S&P 500's decrease of 2.1% [1] Group 1: Stock Performance - PRU shares are currently trading below the 50-day moving average, indicating a bearish trend [1] - The market capitalization of Prudential Financial is $33.94 billion, with an average trading volume of 1.91 million shares over the last three months [1] Group 2: Valuation Metrics - PRU shares are trading at a price to forward 12-month earnings ratio of 6.64X, which is lower than the industry average of 8.04X, presenting a better entry point for investors [4] - The company has a Value Score of B, indicating relative affordability compared to peers [4] Group 3: Growth Projections - The Zacks Consensus Estimate projects a year-over-year increase of 12.4% in earnings per share for Prudential Financial in 2025, with further increases of 6.3% and 3.6% for 2026 earnings per share and revenues, respectively [5] Group 4: Market Demand and Competitive Edge - There is a significant demand for retirement benefit products among baby boomers, with projections indicating that nearly 25% of the U.S. population will be 65 years or older by 2050 [6] - Prudential's extensive distribution network, strong product portfolio, and brand image provide a competitive advantage [6] Group 5: Strategic Initiatives - The company is focused on long-term growth through strategic initiatives, including programmatic acquisitions and partnerships in emerging markets [7][9] - Prudential has a strong international presence, particularly in Japan and Brazil, which are expected to contribute significantly to earnings growth [10] Group 6: Dividend Policy - Prudential Financial has consistently increased its dividend for the past 16 years, balancing business growth investments with capital returns to shareholders [11] Group 7: Business Challenges - The company faces challenges related to its exposure to products like annuities and universal life, which may strain capital due to low interest rates [13] - Sales of individual annuities are expected to remain low in the near term as the company adjusts its product offerings [13]

Company Overview - HighPeak is an innovative, early-stage company leveraging AI technology, machine learning, and proprietary data to deliver accurate life planning data in the market [5] - The company is backed by Prudential Financial, a global financial services leader with approximately $1.5 trillion in assets under management as of December 31, 2024 [6] Leadership and Vision - Sharon Rodriguez, CEO of HighPeak, is leading efforts to transform financial planning for advisors by integrating healthcare costs, longevity insights, and financial risk analysis [1][2] - Rodriguez joined HighPeak in 2023 and has a multifaceted background as a corporate buyer, startup founder, and venture investor, equipping her to drive innovation and growth [3] Product and Technology - HighPeak provides an AI-powered platform that generates precise, real-time forecasts on healthcare costs, longevity, and financial risk, moving beyond traditional planning tools [2][4] - The platform aims to equip financial advisors with tools to anticipate future healthcare expenses confidently, enabling the creation of financial plans that reflect real-world health expenses [4] Market Strategy - HighPeak is focused on expanding partnerships and enhancing predictive capabilities to meet the growing demand for tailored financial planning solutions [4] - The company is launching solutions specifically designed for financial advisors, establishing a strong foundation for broader market expansion [3]

Core Viewpoint - Prudential Financial's recent earnings report showed mixed results, with adjusted operating income missing estimates but showing year-over-year growth. The company is facing a downward trend in estimates, leading to questions about its future performance leading up to the next earnings release [1][2][15]. Financial Performance - Adjusted operating income for Q4 2024 was $2.96 per share, missing the Zacks Consensus Estimate by 9.7%, but increased by 16.5% year over year [2]. - Total revenues reached $13 billion, a 1% increase year over year, but fell short of the Zacks Consensus Estimate by 8% [3]. - Total benefits and expenses were $11.6 billion, a slight decrease of 0.03% year over year, and also lower than the estimate of $13.2 billion [4]. Segment Performance - Prudential Global Investment Management (PGIM) reported adjusted operating income of $259 million, a 50.6% increase year over year, exceeding the estimate of $236.2 million [5]. - PGIM's assets under management grew to $1.375 trillion, a 6% increase year over year [6]. - The U.S. Businesses segment saw adjusted operating income decrease by 10.7% year over year to $860 million, missing the estimate of $1.1 billion [7]. - International Businesses reported adjusted operating income of $742 million, a decrease of 0.8% year over year, but higher than the estimate of $735.8 million [8]. - Corporate and Other incurred an adjusted operating loss of $490 million, an improvement from a loss of $653 million a year ago [9]. Capital Management - Prudential returned $720 million to shareholders through share repurchases of $250 million and dividends of $470 million in Q4 [10]. - The board authorized a share repurchase program of up to $1 billion and increased the quarterly cash dividend by 4% to $1.35 per share, marking the 17th consecutive year of dividend increases [11]. Financial Position - As of the end of Q4, cash and cash equivalents were $18.5 billion, down 4.7% from the end of 2023, while total debt increased by 3.2% to $20.1 billion [12]. - Assets under management and administration rose by 3.3% year over year to $1.69 trillion, with adjusted book value per common share at $95.82, a decrease of 0.8% year over year [13]. Full-Year Update - For 2024, adjusted operating income was $12.62 per share, a 6% increase from 2023, but missed the Zacks Consensus Estimate by 4.7%. Total revenues for the year were $68 billion, a 35% increase from 2023, but also missed estimates by 1.6% [14]. Market Outlook - Estimates for Prudential have been trending downward, indicating a potential shift in market sentiment. The company currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [17].

Prudential Financial Inc. (PRU) shares are trading at a discount compared to the Zacks Multi-line Insurance industry. It is currently trading at a price-to-earnings multiple of 7.62X, which is lower than the industry average of 8.74X, the Finance sector’s 16.87X and the Zacks S&P 500 Composite’s 22.23X. The insurer has a Value Score of A.Image Source: Zacks Investment ResearchThe insurer has a market capitalization of $39.12 billion. The average volume of shares traded in the last three months was 1.56 mill ...