Principal Financial Group reported strong 2025 results, hitting the high end of EPS and ROE targets and expanding margins across segments. Management raised several margin targets for 2026 and provided a confident outlook, while also announcing the sale of a runoff annuities business in Chile as part of ongoing portfolio optimization. Full-year 2025 EPS of $8.55 was at the high end of the 9-12% growth target, with ROE of 15.7% at the top of the range and free capital flow conversion of 92%.
Buzzberg readROE target raised to 15-17% for 2026Principal Financial Group reported strong 2025 results, hitting the high end of EPS and ROE targets and expanding margins across segments. Management raised several margin targets for 2026 and provided a confident outlook, while also announcing the sale of a runoff annuities business in Chile as part of ongoing portfolio optimization. Full-year 2025 EPS of $8.55 was at the high end of the 9-12% growth target, with ROE of 15.7% at the top of the range and free capital flow conversion of 92%.Read full analysisCollapse analysis
Principal Financial Group reported strong 2025 results, hitting the high end of EPS and ROE targets and expanding margins across segments. Management raised several margin targets for 2026 and provided a confident outlook, while also announcing the sale of a runoff annuities business in Chile as part of ongoing portfolio optimization. Full-year 2025 EPS of $8.55 was at the high end of the 9-12% growth target, with ROE of 15.7% at the top of the range and free capital flow conversion of 92%.
2026 guidance maintains the 9-12% EPS growth target, raises the ROE target to 15-17%, and targets $1.5-1.8 billion of capital deployment.
Raised operating margin targets for RIS, Investment Management, International Pension, and Specialty Benefits segments.
The company announced the sale of its Chile runoff annuities business, which had $65 million in revenue and $30 million in pre-tax earnings in 2025, expecting the deal to close in Q3 2026.
Revenue$4.5767B
reported
EPS$2.19
reported
Gross margin46.93%
reported
Op margin13.89%
reported
What changed this quarter
01
Guidance
ROE target raised to 15-17% for 2026
Guidance tone
02
Buybacks
Capital deployment target raised to $1.5-$1.8 billion in 2026
Full-year 2025 EPS of $8.55 was at the high end of the 9-12% growth target, with ROE of 15.7% at the top of the range and free capital flow conversion of 92%.
03
Demand
Private markets net cash flow positive $3.5 billion in 2025
Management repeatedly emphasized strong 2025 results, raised several margin targets, and expressed confidence in delivering 2026 targets, citing momentum and strategic positioning.
04
Demand
Managed account adoption up 51% in 2025
Private markets net cash flow positive $3.5 billion in 2025. Management repeatedly emphasized strong 2025 results, raised several margin targets, and expressed confidence in delivering 2026 targets, citing momentum and strategic positioning.
AI, capex & demand read
AI
Platform & monetization
Management discussed leveraging data and emerging technologies, including AI, to deepen engagement and improve customer experience, but provided no specific revenue or product metrics.
Demand
Bookings & conversion
Private markets net cash flow positive $3.5 billion in 2025. Management repeatedly emphasized strong 2025 results, raised several margin targets, and expressed confidence in delivering 2026 targets, citing momentum and strategic positioning.
Tone · Confident
Management repeatedly emphasized strong 2025 results, raised several margin targets, and expressed confidence in delivering 2026 targets, citing momentum and strategic positioning.
Supply-chain alpha
A1
Principal is not seeing any meaningful impact on employment growth from AI adoption, challenging the narrative that AI is causing job losses in their SMB customer base. Their proprietary survey shows 85% of SMB employers expect AI to leave staffing levels stable or higher.
“we are not seeing any meaningful impact. Employment growth remains positive. It remains stable from a growth perspective.”
Despite negative total net cash flow, private markets generated positive net cash flow of $3.5 billion, and the mix is shifting to higher-fee 'development-oriented strategies' that use leverage, which distorts traditional fee-rate metrics (bps of AUM) but should boost revenue and performance fees.
“Because these strategies are anchored around committed or invested capital other than reported AUM, you could see the mix create some temporary mismatch on average free rates”