F&g Annuities (FG) Q2 Revenue Up 16%

Core Insights - F&g Annuities & Life reported adjusted earnings per share of $0.77 for Q2 2025, exceeding analyst expectations of $0.62, despite significant year-over-year declines in both adjusted and net profits [1][2] - The company experienced robust asset growth, with assets under management reaching $69.2 billion, a 12.7% increase from the previous year, driven by strong retail channel sales [5][12] - Institutional sales faced challenges, with a notable drop in funding agreements and total gross sales declining by 7% year-over-year [6][11] Financial Performance - Adjusted earnings per share (Non-GAAP) for Q2 2025 was $0.77, down 30% from $1.10 in Q2 2024 [2] - Revenue (GAAP) increased to $1.36 billion, surpassing estimates of $1.18 billion, and up 16.4% from $1.17 billion in Q2 2024 [2] - Net earnings per diluted share (GAAP) fell sharply to $0.26, an 83.2% decrease from $1.55 in Q2 2024 [2][7] Business Overview and Strategy - F&g Annuities & Life specializes in retirement and life insurance products, including indexed annuities and indexed universal life insurance, sold through a diverse network of retail and institutional channels [3][4] - The company has expanded its distribution channels significantly, partnering with independent agents, banks, and broker-dealers, which has contributed to asset growth [4][10] - Strategic partnerships, particularly with Blackstone for investment management, are central to the company's business model [4][12] Sales Performance - Retail channel sales reached a record $3.6 billion, a 13% increase year-over-year, with indexed annuity sales at $1.7 billion (up 3%) and multiyear guaranteed annuities rising 29% to $1.9 billion [5][10] - In contrast, institutional segment sales dropped to $0.5 billion from $1.2 billion in Q2 2024, with funding agreements falling to zero [6][11] Expense Management and Returns - The ratio of operating expenses to assets under management improved, declining by 5 basis points compared to Q2 2024 [8] - Book value per share, excluding AOCI, increased by 2% to $43.39 [8] - The adjusted return on average equity, excluding AOCI, improved to 8.8%, a 0.4 percentage point increase from Q2 2024 [9] Future Outlook - Management is confident in achieving medium-term strategic targets, focusing on distribution expansion and a shift towards fee-based, higher-margin business [14] - No formal forward guidance on revenue or net earnings was provided for upcoming periods [14]