Globe Life(GL) - 2025 Q2 - Quarterly Results

Globe Life Inc. Second Quarter 2025 Earnings Report Executive Summary & Highlights Globe Life Inc. achieved robust financial growth in Q2 2025, with increased diluted net income and operating income per share, strong life and health insurance performance, and active share repurchases Q2 2025 Financial Performance Overview This section provides a concise overview of Globe Life Inc.'s key financial metrics for the second quarter of 2025 | Metric | Q2 2025 | Q2 2024 | Y-o-Y Change | | :--------------------------------- | :------ | :------ | :----------- | | Diluted Net Income Per Share | $3.05 | $2.83 | +7.8% | | Diluted Net Operating Income Per Share | $3.27 | $2.97 | +10.1% | Key Operational Highlights This section highlights significant operational achievements and financial performance indicators for Globe Life Inc. during the quarter - For the six months ended June 30, 2025, Return on Equity (ROE) for net income was 18.8%, and net operating income ROE (excluding AOCI) was 14.4%[5] - Life insurance premiums for American Income Life and Liberty National divisions increased by 5% year-over-year[5] - Family Heritage division saw 20% growth in health insurance net sales, 9% in health insurance premiums, and 10% in average producing exclusive agents[5] - Direct to Consumer life insurance net sales increased 2% year-over-year and 24% sequentially; life underwriting income grew 8% to $69 million[5] - Life underwriting income increased by 6% year-over-year[5] - 1.9 million shares of common stock were repurchased during the quarter at a total cost of $226 million[5] Results of Operations This section details Globe Life Inc.'s Q2 2025 operating results, distinguishing between GAAP and non-GAAP financial metrics to highlight core business performance and trends Operating Summary (Non-GAAP) This section presents Globe Life's non-GAAP operating summary, focusing on key metrics used by management to assess core operational performance - Net operating income is a non-GAAP financial measure used by Globe Life management to assess operational performance, primarily excluding realized investment gains/losses and certain significant non-recurring items[7] Q2 2025 Operating Summary (Non-GAAP) | Metric | Q2 2025 (Per Share) | Q2 2024 (Per Share) | Y-o-Y Change (Per Share) | Q2 2025 (Thousands of USD) | Q2 2024 (Thousands of USD) | Y-o-Y Change (Thousands of USD) | | :------------------------------------- | :------------------ | :------------------ | :----------------------- | :------------------------- | :------------------------- | :------------------------------ | | Insurance Underwriting Income | $4.28 | $3.72 | 15% | $354,176 | $340,437 | 4% | | Excess Investment Income | $0.42 | $0.47 | (11)% | $34,828 | $42,791 | (19)% | | Debt Interest | ($0.42) | ($0.34) | 24% | ($34,885) | ($31,404) | 11% | | Parent Company Expenses | ($0.04) | ($0.03) | - | ($3,555) | ($3,130) | - | | Income Tax Expense | ($0.82) | ($0.75) | 9% | ($68,062) | ($68,857) | (1)% | | Equity-Based Compensation (Expense), After-Tax | ($0.14) | ($0.09) | - | ($11,407) | ($8,620) | - | | Net Operating Income | $3.27 | $2.97 | 10% | $271,095 | $271,217 | — | | Realized Gains (Losses), After-Tax | ($0.18) | ($0.11) | - | ($14,674) | ($9,945) | - | | Non-Operating Expenses | — | ($0.01) | - | — | ($993) | - | | Legal Litigation | ($0.04) | ($0.02) | - | ($3,672) | ($1,924) | - | | Net Income | $3.05 | $2.83 | - | $252,749 | $258,355 | - | | Weighted Average Diluted Shares | 82,793 | 91,441 | - | - | - | - | Management vs. GAAP Measures This section clarifies the distinction between management's non-GAAP metrics and GAAP measures, particularly regarding shareholder equity and book value - Management uses shareholder equity and book value per share, excluding Accumulated Other Comprehensive Income (AOCI), as non-GAAP metrics to better identify business trends by removing interest rate fluctuation impacts[11] Key Financial Metrics for H1 2025 | Metric | June 30, 2025 | June 30, 2024 | | :----------------------------------- | :------------ | :------------ | | Net Income | $507,312 | $512,572 | | Net Operating Income | $530,432 | $535,316 | | Net Income Return on Equity (ROE) | 18.8% | 20.8% | | Net Operating Income ROE (Excluding AOCI) | 14.4% | 14.5% | Shareholder Equity and Book Value Per Share (Excluding AOCI) | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Shareholder Equity | $5,419,030 | $5,227,754 | | Impact of AOCI Adjustment Excluded | $1,983,868 | $2,189,620 | | Shareholder Equity (Excluding AOCI) | $7,402,898 | $7,417,374 | | Book Value Per Share | $66.07 | $58.06 | | Impact of AOCI Adjustment Excluded | $24.19 | $24.32 | | Book Value Per Share (Excluding AOCI) | $90.26 | $82.38 | Insurance Operations Performance Globe Life's insurance operations performed well in Q2 2025, with growth in both life and health premiums and net sales, driven by strong contributions from life insurance and significant health insurance net sales growth Overall Insurance Underwriting This section provides an overview of Globe Life's total insurance underwriting performance, detailing contributions from life and health segments - Life insurance accounted for 78% of the company's underwriting income and 69% of total premium revenue this quarter, while health insurance contributed 22% and 31% respectively[15] - Life insurance net sales increased by 1% and health insurance net sales by 19% this quarter[16] Insurance Premium Revenue (Thousands of USD) | Product Type | June 30, 2025 | June 30, 2024 | Y-o-Y Change | | :----------- | :------------ | :------------ | :----------- | | Life Insurance | $839,544 | $815,482 | 3% | | Health Insurance | $378,099 | $351,643 | 8% | | Total | $1,217,643| $1,167,125| 4% | Insurance Underwriting Income (Thousands of USD) | Metric | June 30, 2025 | 2025 Premium % | June 30, 2024 | 2024 Premium % | Y-o-Y Change | | :----------------------------- | :------------ | :------------- | :------------ | :------------- | :----------- | | Life Underwriting Income | $340,074 | 41% | $320,323 | 39% | 6% | | Health Underwriting Income | $98,057 | 26% | $100,488 | 29% | (2)% | | Total Underwriting Income | $438,131 | - | $420,811 | - | 4% | | Annuity and Other Income | $2,092 | - | $1,822 | - | - | | Administrative Expenses | ($86,047) | - | ($82,196) | - | - | | Insurance Underwriting Income | $354,176 | - | $340,437 | - | 4% | | Per Share | $4.28 | - | $3.72 | - | 15% | | Administrative Expense to Premium Ratio | 7.1% | - | 7.0% | - | - | Life Insurance Results by Distribution Channel This section details Globe Life's life insurance performance, broken down by various distribution channels, including premiums, net sales, and underwriting income - The company's life insurance distribution channels include American Income Life, Liberty National, Family Heritage, Direct to Consumer, and independent agency United American[23] Life Insurance Premiums (Thousands of USD) | Channel | June 30, 2025 | June 30, 2024 | Y-o-Y Change | | :----------------- | :------------ | :------------ | :----------- | | American Income | $445,511 | $423,534 | 5% | | Direct to Consumer | $246,223 | $248,839 | (1)% | | Liberty National | $97,263 | $92,197 | 5% | | Other | $50,547 | $50,912 | (1)% | | Total | $839,544 | $815,482 | 3% | Life Insurance Net Sales (Thousands of USD) | Channel | June 30, 2025 | June 30, 2024 | Y-o-Y Change | | :----------------- | :------------ | :------------ | :----------- | | American Income | $96,227 | $94,668 | 2% | | Direct to Consumer | $31,096 | $30,614 | 2% | | Liberty National | $24,615 | $25,889 | (5)% | | Other | $2,947 | $2,332 | 26% | | Total | $154,885 | $153,503 | 1% | Life Underwriting Income (Thousands of USD) | Channel | 2025 Amount | 2025 Premium % | 2024 Amount | 2024 Premium % | Y-o-Y Change | | :----------------- | :---------- | :------------- | :---------- | :------------- | :----------- | | American Income | $204,533 | 46% | $192,662 | 45% | 6% | | Direct to Consumer | $68,959 | 28% | $63,848 | 26% | 8% | | Liberty National | $33,446 | 34% | $31,072 | 34% | 8% | | Other | $33,136 | 66% | $32,741 | 64% | 1% | | Total | $340,074| 41% | $320,323| 39% | 6% | Health Insurance Results by Distribution Channel This section presents Globe Life's health insurance performance, categorized by distribution channel, including underwriting income, premiums, and net sales Health Underwriting Income (Thousands of USD) | Channel | 2025 Amount | 2025 Premium % | 2024 Amount | 2024 Premium % | Y-o-Y Change | | :----------------- | :---------- | :------------- | :---------- | :------------- | :----------- | | United American | $12,402 | 8% | $16,571 | 11% | (25)% | | Family Heritage | $40,927 | 35% | $36,611 | 35% | 12% | | Liberty National | $24,372 | 51% | $26,400 | 55% | (8)% | | American Income | $19,325 | 62% | $19,092 | 62% | 1% | | Direct to Consumer | $1,031 | 5% | $1,814 | 10% | (43)% | | Total | $98,057 | 26% | $100,488| 29% | (2)% | Health Insurance Premiums (Thousands of USD) | Channel | June 30, 2025 | June 30, 2024 | Y-o-Y Change | | :----------------- | :------------ | :------------ | :----------- | | United American | $163,978 | $149,230 | 10% | | Family Heritage | $115,856 | $105,855 | 9% | | Liberty National | $47,631 | $47,705 | — | | American Income | $31,422 | $30,721 | 2% | | Direct to Consumer | $19,212 | $18,132 | 6% | | Total | $378,099 | $351,643 | 8% | Health Insurance Net Sales (Thousands of USD) | Channel | June 30, 2025 | June 30, 2024 | Y-o-Y Change | | :----------------- | :------------ | :------------ | :----------- | | United American | $25,454 | $18,228 | 40% | | Family Heritage | $29,561 | $24,570 | 20% | | Liberty National | $8,182 | $8,356 | (2)% | | American Income | $4,749 | $5,792 | (18)% | | Direct to Consumer | $786 | $839 | (6)% | | Total | $68,732 | $57,785 | 19% | Producing Exclusive Agent Count This section provides the average quarterly count of producing exclusive agents across Globe Life's key distribution channels Quarterly Average Producing Exclusive Agent Count | Channel | June 30, 2025 | June 30, 2024 | Y-o-Y Change | March 31, 2025 | | :----------------- | :------------ | :------------ | :----------- | :------------- | | American Income | 12,241 | 11,869 | 3% | 11,510 | | Liberty National | 3,882 | 3,700 | 5% | 3,688 | | Family Heritage | 1,498 | 1,361 | 10% | 1,417 | Investment Performance and Portfolio Globe Life's investment division experienced a decline in excess investment income in Q2 2025, yet maintained a robust, predominantly investment-grade fixed-income portfolio with an improved effective yield Excess Investment Income This section analyzes Globe Life's excess investment income, a key metric for evaluating the investment division's performance - Management uses excess investment income, defined as net investment income less accrued interest on policy liabilities, to evaluate the investment division's performance[32] Excess Investment Income (Thousands of USD) | Metric | June 30, 2025 | June 30, 2024 | Y-o-Y Change | | :------------------------- | :------------ | :------------ | :----------- | | Net Investment Income | $282,169 | $285,636 | (1)% | | Interest on Policy Liabilities | ($247,341) | ($242,845) | 2% | | Excess Investment Income | $34,828 | $42,791 | (19)% | | Excess Investment Income Per Share | $0.42 | $0.47 | (11)% | - Net investment income decreased by 1%, while average invested assets remained largely flat; accrued interest on policy liabilities and average policy liabilities both increased by 2%[36] Investment Portfolio Composition This section details the composition of Globe Life's investment portfolio, highlighting the dominance of fixed-income securities and their credit quality Investment Portfolio Book Value as of June 30, 2025 | Investment Type | Amount (Thousands of USD) | Percentage of Total | | :------------------------------- | :------------------------ | :------------------ | | Fixed Maturity Securities at Fair Value | $17,365,354 | 87% | | Mortgage Loans | $455,767 | 2% | | Policy Loans | $718,621 | 4% | | Other Long-Term Investments | $1,268,624 | 6% | | Short-Term Investments | $116,724 | 1% | | Total | $19,925,090 | - | Fixed Maturity Securities Portfolio by Asset Class as of June 30, 2025 (Amortized Cost, Net of Credit Loss Allowance) | Asset Class | Investment Grade (Thousands of USD) | Below Investment Grade (Thousands of USD) | Total Amortized Cost, Net (Thousands of USD) | | :------------------------------- | :---------------------------------- | :---------------------------------------- | :------------------------------------------- | | Corporate Bonds | $14,628,153 | $491,174 | $15,119,327 | | Municipal Bonds | $3,303,151 | — | $3,303,151 | | Government, Agency, and GSEs | $450,798 | — | $450,798 | | Collateralized Debt Obligations | — | — | — | | Other Asset-Backed Securities | $64,518 | $11,648 | $76,166 | | Total | $18,446,620 | $502,822 | $18,949,442 | - 97% of fixed maturity securities were rated "investment grade" based on amortized cost (net of credit loss allowance) and fair value[41] - The annualized tax-equivalent effective yield for the fixed maturity securities portfolio was 5.29% in Q2 2025, up from 5.26% in the prior year period[41] Investment Acquisitions This section outlines Globe Life's investment acquisition activities, detailing fixed-income and other investment purchases during the period Fixed Maturity Acquisitions | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------- | :------------ | :------------ | | Amount (Thousands of USD) | $263,252 | $240,669 | | Average Annual Effective Yield | 6.4% | 6.2% | | Average Rating | A | A | | Average Life (to next call) | 31.2 | 32.2 | | Average Life (to maturity) | 33.8 | 34.8 | Other Investment Acquisitions (Thousands of USD) | Investment Type | June 30, 2025 | June 30, 2024 | | :------------------- | :------------ | :------------ | | Limited Partnerships | $36,985 | $81,725 | | Mortgage Loans | $31,215 | $33,761 | | Common Stock | $1,342 | $2,044 | | Other Invested Assets | — | $1,500 | | Total | $69,542 | $119,030 | Capital Management and Outlook Globe Life Inc. actively managed capital in Q2 2025 through share repurchases, maintaining strong liquidity and capital positions, and reaffirmed its full-year 2025 net operating income guidance Share Repurchase Program This section details Globe Life's share repurchase activities during the quarter, aimed at enhancing shareholder value - The company repurchased 1.9 million shares of Globe Life Inc. common stock at a total cost of $226 million, with an average price of $121.13 per share this quarter[48] Liquidity and Capital Position This section assesses Globe Life's liquidity and capital strength, emphasizing the stable cash flow generated by its core insurance operations - Globe Life's operations, primarily basic protection life and supplemental health insurance policies, generate strong and stable cash flows unaffected by stock market fluctuations[49] - The parent company maintains ample liquidity to meet additional capital requirements of its insurance subsidiaries[49] Earnings Guidance for FY2025 This section provides Globe Life's reaffirmed earnings guidance for diluted net operating income per share for the full fiscal year 2025 - Globe Life anticipates diluted net operating income per share for the year ending December 31, 2025, to be between $14.25 and $14.65, reaffirming previous guidance[50] Additional Information This section provides disclosures on non-GAAP financial measures, cautions regarding forward-looking statements and associated risks, and details for the upcoming earnings conference call webcast Non-GAAP Measures Disclosure This section clarifies the use of non-GAAP financial measures in Globe Life's press release, emphasizing their supplementary role to GAAP - Globe Life includes non-GAAP measures in its press release to enhance investor understanding of management's business perspective, serving as supplementary information rather than GAAP alternatives to increase transparency[51] Caution Regarding Forward-Looking Statements This section provides a cautionary statement regarding forward-looking information, outlining various factors that could cause actual results to differ materially - This press release may contain forward-looking statements as defined by federal securities laws, reflecting management's current expectations but not guaranteeing future performance[52] - Actual results could differ materially from forward-looking statements due to various foreseeable and unforeseeable events or developments, including economic conditions, regulatory changes, market trends, interest rate fluctuations, litigation outcomes, cybersecurity risks, and natural disasters[52] - The company expressly disclaims any obligation to update or revise any forward-looking statements due to new information, future developments, or otherwise[53] Earnings Release Conference Call Webcast This section provides details for accessing the live audio webcast of Globe Life's Q2 2025 earnings conference call and its subsequent replay - Globe Life will provide a live audio webcast of its Q2 2025 earnings conference call on July 24, 2025, at 11:00 AM ET[55] - The webcast and replay will be available on the "Calls and Meetings" page of the company's investor website at https://investors.globelifeinsurance.com[55](index=55&type=chunk) Appendix: GAAP Condensed Consolidated Statements of Operations This appendix presents Globe Life Inc.'s condensed consolidated GAAP statements of operations for Q2 and H1 2025, detailing key financial data including revenues, benefits, expenses, and net income GAAP Condensed Consolidated Statements of Operations (Thousands of USD) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Revenues: | | | | | | Life insurance premiums | $839,544 | $815,482 | $1,669,407 | $1,619,747 | | Health insurance premiums | $378,099 | $351,643 | $747,890 | $692,662 | | Other premiums | — | — | — | — | | Total premiums | $1,217,643 | $1,167,125 | $2,417,297 | $2,312,409 | | Net investment income | $282,169 | $285,636 | $562,783 | $568,214 | | Realized gains (losses) | ($18,574) | ($12,589) | ($18,489) | ($24,388) | | Other income | $49 | $74 | $118 | $150 | | Total revenues | $1,481,287 | $1,440,246 | $2,961,709 | $2,856,385 | | Benefits and Expenses: | | | | | | Life policyholder benefits | $519,355 | $518,792 | $1,029,111 | $1,038,663 | | Health policyholder benefits | $229,924 | $205,423 | $463,853 | $407,750 | | Other policyholder benefits | $6,719 | $11,479 | $13,799 | $21,074 | | Total policyholder benefits | $755,998 | $735,694 | $1,506,763 | $1,467,487 | | Amortization of deferred acquisition costs | $111,401 | $101,915 | $216,916 | $201,393 | | Commissions, premium taxes, and non-deferred acquisition costs | $157,411 | $149,802 | $321,734 | $297,912 | | Other operating expenses | $108,293 | $99,108 | $217,039 | $192,322 | | Interest expense | $34,885 | $31,404 | $69,877 | $60,025 | | Total benefits and expenses | $1,167,988 | $1,117,923 | $2,332,329 | $2,219,139 | | Income before income taxes | $313,299 | $322,323 | $629,380 | $637,246 | | Income tax benefit (expense) | ($60,550) | ($63,968) | ($122,068) | ($124,674) | | Net income | $252,749 | $258,355 | $507,312 | $512,572 | | Basic net income per share | $3.09 | $2.83 | $6.13 | $5.53 | | Diluted net income per share | $3.05 | $2.83 | $6.07 | $5.51 |