Financial Data and Key Metrics Changes - Adjusted non-GAAP earnings for Q2 2025 were $469 million, or $2.7 per share, representing an 18% increase in EPS compared to 2024 [6][16] - Reported non-GAAP operating earnings were $489 million, up 27% year over year, with EPS at $2.16, a 33% increase [15][16] - Total company managed AUM reached $753 billion, a 5% increase sequentially and an 8% increase year over year [8][11] - Net cash flow was negative $2.6 billion for the quarter, but showed improvement driven by positive net cash flow from global institutional clients [8][11] Business Line Data and Key Metrics Changes - In Retirement, overall RIS sales were $6 billion, a 7% year-over-year increase, driven by Workplace Savings and Retirement Solutions [9][10] - Principal Asset Management AUM increased to $723 billion, a 5% sequential increase, with sales of $33 billion, up 19% year over year [11][12] - Specialty Benefits saw a 10% growth in earnings, with a margin expansion of 100 basis points [12][20] - Life Insurance premium fees increased by 5% compared to 2024, driven by strong business market growth [21] Market Data and Key Metrics Changes - The market volatility in April impacted daily averages, leading to lower fee revenue for the quarter [7] - Positive market performance in May and June contributed to the increase in AUM [8] - The pension risk transfer (PRT) sales were $445 million, reflecting a more moderate quarter due to a smaller pipeline of opportunities [10][39] Company Strategy and Development Direction - The company remains focused on aligning revenue and expenses, with a disciplined approach to expense management while investing for growth [27][29] - Continued emphasis on capital return to shareholders, with $320 million returned in Q2, including $150 million in share repurchases [7][24] - The company is committed to maintaining a strong capital position and expects to deliver on full-year capital return targets of $1.4 billion to $1.7 billion [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, expecting full-year results to align with 2025 outlook and financial targets [8][9] - The company anticipates improved results in the latter half of 2025, particularly in investment management and performance fees [45][46] - Management acknowledged challenges in flows due to elevated markets but noted improvements in transfer deposits and account retention [61][62] Other Important Information - The company was recognized for its leadership in disability inclusion and AI application in financial services [13] - A $0.78 common stock dividend was announced for Q3, marking an 8% increase over the previous year [25] Q&A Session Summary Question: On overall expense levels - Management indicated a focus on aligning expenses with revenue, with continued margin expansion observed [27][29] Question: On spread balances within RIS - Management noted a decrease in investment-only issuance and emphasized a disciplined approach to PRT opportunities [32][34] Question: On competitive environment in PRT - Management acknowledged increased competition but remains optimistic about converting existing DB clients into PRT [39][40] Question: On variable investment income - Management reported improved performance in variable investment income, with expectations for better results in the latter half of 2025 [44][46] Question: On performance fees in investment management - Management confirmed that performance fees were primarily driven by alternative debt strategies and expect levels to be similar to 2024 [53][54] Question: On dental business outlook - Management highlighted competitive pressures but noted improvements in loss ratios and potential for growth in the second half of the year [81][84] Question: On asset management flows - Management acknowledged challenges in achieving positive flows but noted strong sales momentum and a robust pipeline of client opportunities [100][102]

Financial Data and Key Metrics Changes - Adjusted non-GAAP earnings for Q2 2025 were $469 million, or $2.7 per share, representing an 18% increase in EPS compared to 2024 [5][6] - Reported non-GAAP operating earnings were $489 million, up 27% year over year, with EPS at $2.16, a 33% increase [15][16] - Total company managed AUM reached $753 billion, a 5% increase sequentially and an 8% increase year over year [7][11] - Net cash flow was negative $2.6 billion for the quarter, but showed improvement sequentially [7][11] Business Line Data and Key Metrics Changes - In Retirement, overall RIS sales were $6 billion, a 7% year-over-year increase, driven by Workplace Savings and Retirement Solutions [9][10] - Principal Asset Management AUM increased to $723 billion, a 5% sequential increase, with sales of $33 billion, up 19% year over year [11][12] - Specialty Benefits saw a 10% growth in earnings, with a margin expansion of 100 basis points [12][21] - Life Insurance premium fees increased by 5% compared to 2024, driven by strong business market growth [22] Market Data and Key Metrics Changes - The market drop in April affected daily averages, impacting second quarter fee revenue, but a strong rebound in May and June provided positive momentum [6][7] - International Pension net revenue was impacted by foreign currency, but increased by 2% on a constant currency basis [20] Company Strategy and Development Direction - The company remains focused on disciplined expense management while investing for growth, aiming to align revenue and expenses effectively [29][31] - Continued emphasis on capital return targets, with $320 million returned to shareholders in Q2, including $150 million in share repurchases [6][24] - The company is committed to maintaining a strong capital position and expects to deliver on full-year capital return targets of $1.4 billion to $1.7 billion [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, expecting full-year results to align with 2025 outlook and financial targets [7][8] - The company anticipates improved results in the latter half of 2025, particularly in investment management and performance fees [48][49] - Management acknowledged the competitive environment in pension risk transfer (PRT) but remains optimistic about achieving targeted returns [40][42] Other Important Information - The company was recognized for its leadership in disability inclusion and AI application in financial services [13] - A $0.78 common stock dividend was announced for Q3, reflecting an 8% increase over the previous year [26] Q&A Session Summary Question: Overall expense levels and future focus - Management confirmed a continued focus on aligning expenses with revenue while maintaining investments in the business [29][31] Question: Spread balances within RIS - Management noted that investment-only issuance and PRT sales were moderate, emphasizing a disciplined approach to prioritizing returns over volume [34][38] Question: Competitive environment in PRT - Management acknowledged increased competition but remains optimistic about converting existing DB clients into PRT opportunities [40][42] Question: Variable investment income experience - Management indicated improved performance in variable investment income, with expectations for better results in the latter half of 2025 [47][49] Question: Dental business outlook - Management highlighted competitive pricing and renewal rates, with expectations for improved sales in the second half of the year [84][88]