- Alternative investment income was $60 million below expectations due to lower private equity and real estate returns and a $50 million unfavorable impact from the annual assumption update process.
- Capital position remains strong with cash and liquid assets at $3.9 billion, above the $3 billion minimum liquidity target.
- Group insurance had one of its best earnings quarters recently with strong underwriting results and a benefit ratio improved to 80.9%.
- Individual Life sales grew 10% year-over-year with improved earnings results.
- Institutional Retirement delivered $9 billion in sales, including robust Longevity Risk Transfer transactions.
- International businesses sales were up 4%, driven by retirement and savings products in Japan despite surrender headwinds.
- PGIM's assets under management increased by 8% to $1.4 trillion, with total net flows of $400 million including $2.6 billion institutional inflows and $2.8 billion retail outflows.
- Pretax adjusted operating income was $1.7 billion or $3.58 per share, up 9% from the prior year quarter.
- Year-to-date return on equity was over 14%.
Explore Similar Insights
- Adjusted operating margin was 18.5% for the quarter, a 150 basis point improvement over prior year, driven by strong organic growth and expense management.
- Free cash flow for the first half of 2025 was $217 million, down $88 million from prior year due to increased incentive costs, retirement program redesign, higher cash taxes, and absence of TRANZACT cash inflows.
- Health, Wealth & Career (HWC) segment revenue grew 4% with strong growth in Health at 8%, Wealth at 3%, Career at 1%, and flat growth in Benefits Delivery & Outsourcing (BD&O).
- HWC operating margin increased 190 basis points to 23.8%, and R&B operating margin improved 60 basis points to 21.2%, or 100 basis points excluding foreign exchange impact.
- Returned $591 million to shareholders via $500 million in share repurchases and $91 million in dividends during the quarter.
- Risk & Broking (R&B) segment revenue grew 6%, with Corporate Risk & Broking (CRB) growing 6% or 7% excluding book of business activity and fiduciary interest income.
- WTW delivered 5% organic revenue growth and 150 basis points of adjusted operating margin expansion in Q2 2025, with adjusted EPS of $2.86, up roughly 20% year-over-year.
- Assets Under Management (AUM) remained flat at $2.1 trillion, reflecting higher market values offset by net outflows.
- Earnings per share increased 25% year over year to $1.88, or $1.91 excluding notable items.
- Expenses increased 4% year over year, reflecting higher investments, merit increases, and revenue-related expenses, partially offset by efficiency savings.
- Firm-wide Assets Under Custody and Administration (AUCA) grew 11% year over year to $57.8 trillion.
- Net interest income rose 18% year over year to $1.2 billion, driven by reinvestment at higher yields and balance sheet growth.
- Pretax margin improved to 36%, with return on tangible common equity at 26%.
- Reported record revenue of $5.1 billion, up 9% year over year.
- Security Services and Markets and Wealth Services segments showed double-digit revenue growth, while Investment and Wealth Management revenue declined 3%.
- Adjusted EBITDA was $179 million with a margin of 50.8%, slightly above guidance due to positive asset mix and annual fee realization.
- Adjusted net income was $133 million or $1.57 per diluted share, a 15% increase in EPS from the prior quarter.
- GAAP operating margin was 26.8%, impacted by $53 million in acquisition-related restructuring and integration costs.
- Net leverage ratio improved to 1.2x, the lowest since IPO, and debt-to-equity ratio improved to 0.39.
- Revenue rose 60% from the prior quarter to $351.2 million, driven by the acquisition of Pioneer Investments.
- The Board increased the share repurchase authorization from $200 million to $500 million, the largest in company history.
- Total client assets increased by 76% quarter-over-quarter to over $300 billion, a record high for a quarter end.
- Agency RMBS modestly outperformed treasury hedges but underperformed swap hedges due to tightening swap spreads.
- Agency RMBS portfolio decreased 15% quarter-over-quarter due to risk management amid trade policy uncertainty.
- Debt-to-equity ratio decreased from 7.1x at the end of March to 6.5x at the end of June.
- Hedge notional declined from $4.5 billion to $4.3 billion, with hedge ratio increasing from 85% to 94%.
- Levered gross ROEs on higher coupons are in the low 20s, representing an attractive entry point for mortgage investors.
- Repurchase agreements collateralized by Agency RMBS and CMBS declined from $5.4 billion to $4.6 billion.
- Swap spreads tightened significantly, negatively impacting book value during the quarter.
- The $5.2 billion investment portfolio consisted of $4.3 billion in agency mortgages and $900 million in Agency CMBS.
- The economic return for the quarter was negative 4.8%, consisting of a $0.34 dividend per common share and a $0.76 decline in book value per common share.
Dafinchi