Principal Financial Group (NasdaqGS:PFG) Q3 2025 Earnings Call October 28, 2025 10:00 AM ET Company ParticipantsDeanna Strable - CEOAmy Friedrich - President, Benefits and ProtectionChris Littlefield - President, Retirement, and Income SolutionsKamal Bhatia - President, Asset ManagementJoel Pitz - CFOHumphrey Lee - VP of Investor RelationsConference Call ParticipantsTom Gallagher - Senior Managing Director and Senior Equity AnalystSuneet Kamath - Research AnalystRyan Kruger - Life Insurance AnalystJimmy Bhu ...

Financial Data and Key Metrics Changes - The company reported a 13% year-over-year growth in adjusted earnings per share and a 14% increase year-to-date, exceeding target ranges [3][4] - Return on equity expanded significantly and is now at the high end of the target range [3] - Year-to-date free capital flow conversion ratio exceeded 90%, tracking above target [4] - The company returned $400 million to shareholders in the quarter, including $225 million in share repurchases [4][11] Business Line Data and Key Metrics Changes - Workplace Savings and Retirement Solutions (WSRS) transfer deposits grew 13% year-over-year, with total Retirement Investment Solutions (RIS) sales of $7 billion, an 8% increase [5][6] - Small and mid-sized business segment saw WSRS SMB recurring deposits grow 8% and transfer deposits increase 27% [7] - Global asset management gross sales reached $32 billion, up 19% year-over-year, with private markets generating net inflows of $1.7 billion [8][9] Market Data and Key Metrics Changes - Total company managed assets under management (AUM) increased to $784 billion, a 4% sequential increase [13] - International pension reported record AUM of $151 billion, a 9% year-over-year increase [15] Company Strategy and Development Direction - The company is focused on three significant profit pools: the retirement ecosystem, small and mid-sized businesses, and global asset management [4][9] - Continued investment in modernizing recordkeeping capabilities and enhancing retirement solutions [22][23] - The company aims to capitalize on opportunities in financial inclusion and fintech solutions [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering full-year enterprise financial targets based on strong performance and business momentum [4][17] - The economic environment has created challenges, but there are significant opportunities for growth in financial inclusion and retirement solutions [9][10] Other Important Information - The company raised its common stock dividend for the ninth consecutive quarter, reflecting confidence in continued growth [4][11] - The recent release of the Fourth Annual Global Financial Inclusion Index highlights the importance of digital solutions in advancing financial security [9] Q&A Session Summary Question: Expectations for margin expansion - Management expects margins to continue expanding due to strong underwriting results and disciplined expense management [18][20] Question: Areas of investment in growth initiatives - Investments are being made in modernizing recordkeeping capabilities and enhancing customer service for retirement plans [22][23] Question: Free capital flow conversion trends - The company maintains a strong capital position with a capital-efficient mix of business, allowing for organic growth and capital returns [26][27] Question: Changes in investment management flows and investor sentiment - Positive net cash flow of $800 million was reported, with growth across multiple channels, indicating strong investor sentiment [30][31] Question: Impact of performance fees - Performance fees are expected to remain modest, but there has been an uptick in transaction and borrower fee activity [34][35] Question: Update on the Bering Strategic Partnership - The partnership aims to enhance private market expertise and improve fee rates through collaboration [36][39] Question: Outlook on 401(k) business and industry consolidation - The company anticipates benefiting from industry consolidation and is focused on driving organic growth [41][44] Question: Update on private credit market performance - The company maintains a strong credit quality in its portfolio, with low credit losses reported [79][80] Question: Wealth management opportunity metrics - The company has seen a 90% plan sponsor adoption rate for advisory services, with a notable increase in roll-in transfers [87][88]