Principal Financial Group · Earnings release

INVESTOR CONTACT:

MEDIA CONTACT:

Humphrey Lee

Sara Bonney

Principal Financial Group Announces

Second Quarter 2025 Results

Raises third quarter 2025 common

stock dividend

(Des Moines, Iowa) – Principal Financial Group®(Nasdaq: PFG) announced results for second quarter 2025.

Diluted earnings per common share

Net

income attributable to PFG

(in millions)

Net income attributable to PFG

Net income attributable to PFG

Non-GAAP net income attributable to PFG, excluding exited business1

Non-GAAP net income attributable to PFG, excluding exited business1

Non-GAAP operating earnings1

Non-GAAP operating earnings1

Second Quarter 2025 Highlights

·

Non-GAAP operating earnings per diluted share, excluding significant variances2of $2.07 increased 18% over prior year quarter

·

Returned $320 million of capital to shareholders, including $150 million of

share repurchases and $170 million of common stock dividends

·

Raised third quarter 2025 common stock dividend to $0.78

per share, a 2-cent increase over the second quarter 2025 dividend, an 8% increase over third quarter 2024 dividend and an 8% increase

on a trailing twelve-month basis

·

Assets under management (AUM) of $753 billion, which is included in assets

under administration (AUA) of $1.7 trillion

·

Strong financial position with $1.4 billion of excess and

available capital

Deanna Strable, President and CEO of Principal®

“Our continued focus on high-growth markets, competitive advantages, and execution led to strong EPS growth and continued ROE expansion in 2Q25, bringing ROE to the midpoint of our targeted range. We delivered on our commitment to return excess capital to shareholders, while maintaining our strong capital position.

We are well positioned to deliver on our full year enterprise outlook across our financial metrics and enter the second half of the year with momentum in our business and confidence in our strategy.”

1 Use of non-GAAP financial measures and their reconciliations

to the most directly comparable GAAP measures are included in this release. Non-GAAP operating earnings for total company is after tax.

2 The total company impacts of significant variances, is

after tax. See Exhibit 1 for details on the impact of 2Q 2025 and 2Q 2024 significant variances on net income attributable to PFG; non-GAAP

net income attributable to PFG, excluding exited business; and non-GAAP operating earnings.

Second Quarter Enterprise Results

In millions except percentages, earnings per share, or

otherwise noted

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Net income (loss) attributable to PFG

Non-GAAP net income attributable to PFG, excluding exited business

(5)%

Non-GAAP operating earnings

8%

Diluted earnings per common share

Net income (loss) attributable to PFG

Non-GAAP net income attributable to PFG, excluding exited business

Non-GAAP operating earnings

Non-GAAP operating earnings, excluding significant variances2

Assets under administration (billions)

7%

Assets under management (billions)

8%

AUM net cash flow (billions)

Second Quarter Segment Highlights

·

Retirement and Income Solutions (RIS) transfer deposits increased 8% over

2Q24; small to midsized business recurring deposits up 7% from the year ago quarter

·

Investment Management revenue increased 6% over 2Q24; margin improved 360

basis points from the year ago quarter to 38% due to increased management and performance fees and expense discipline

·

Specialty Benefits incurred loss ratio improved 130 basis points from 2Q24

·

Life Insurance premium and fees growth of 5% over 2Q24 driven by 17% growth

in the business market segment

Segment Results

In millions except percentages, or otherwise

noted

Retirement and Income Solutions

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings3

9%

0%

Net revenue4

2%

2%

Operating margin5

·

Pre-tax operating earnings increased $24.3 million

primarily due to higher net revenue and margin expansion while investing in the business.

·

Net revenue increased $13.0 million due to growth

in the business.

Investment Management

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

Operating revenues less pass-through expenses6

6%

5%

Operating margin7

Assets under management (billions)

7%

·

Pre-tax operating earnings increased $24.3 million primarily driven

by higher operating revenues less pass-through expenses and margin expansion.

·

Operating revenues less pass-through expenses increased $22.5 million

primarily due to higher management and performance fees.

3 Pre-tax operating earnings = operating earnings before

income taxes and after noncontrolling interest.

4 Net revenue = operating revenues less: benefits, claims

and settlement expenses, liability for future policy benefits remeasurement (gain) loss, market risk benefit remeasurement (gain) loss,

and dividends to policyholders.

5 Operating margin for Retirement and Income Solutions =

pre-tax operating earnings divided by net revenue.

6 The company has provided reconciliations of the non-GAAP

measures to the most directly comparable U.S. GAAP measures at the end of the release. The company has determined this measure is more

representative of underlying operating revenues growth for Investment Management as it removes commissions and other expenses that are

collected through fee revenue and passed through expenses with no impact to pre-tax operating earnings.

7 Operating margin for Investment Management = pre-tax operating

earnings adjusted for noncontrolling interest divided by operating revenues less pass-through expenses.

International Pension

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

Net revenue

1%

Operating margin8

Assets under management (billions)

·

Pre-tax operating earnings increased $22.8 million primarily due to

higher net revenue.

·

Net revenue increased $17.8 million primarily due to favorable encaje

performance in the current quarter compared to unfavorable performance in the year ago quarter.

Specialty Benefits

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

1%

Premium and fees

3%

4%

Operating margin9

Incurred loss ratio

·

Pre-tax operating earnings increased $18.9 million

due to growth in the business and more favorable underwriting experience.

·

Premium and fees increased $26.7 million driven by

growth in the business.

·

Incurred loss ratio improved to 60.2% driven by more

favorable underwriting experience primarily in group disability and group life.

8 Operating margin for International Pension = pre-tax operating

earnings divided by net revenue.

9 Operating margin for Benefits and Protection = pre-tax

operating earnings divided by premium and fees.

Life Insurance

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings (losses)

Premium and fees

5%

1%

Operating margin

·

Pre-tax operating earnings decreased $3.6 million driven by higher claims severity.

·

Premium and fees increased $11.0 million as strong business market growth offset the runoff of the legacy life business.

Corporate

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating losses

6%

·

Pre-tax operating losses decreased $22.2 million primarily due to higher net investment income and lower operating expenses.

Common Stock Dividend

·

The company is announcing a third quarter cash dividend of $0.78 per share to holders of common shares. The dividend will be payable on Sept 26, 2025, to shareholders of record as of Sept 4, 2025.

Exhibit 1

Principal Financial Group

Impact of Significant Variances10 on

Net Income Attributable to PFG; Non-GAAP Net Income Attributable to PFG, Excluding Exited Business; and Non-GAAP Operating Earnings

In millions except per share data

Three Months Ended,

Trailing Twelve Months,

Net income (loss) attributable to PFG

$

$

$

$

(Income) loss from exited business

-

-

Non-GAAP net income (loss) attributable to PFG, excluding exited business

Net realized capital (gains) losses, as adjusted

-

-

Non-GAAP operating earnings

Income taxes

Non-GAAP pre-tax operating earnings

$

$

$

$

Per diluted share:

Net income (loss) attributable to PFG

$

$

(Income) loss from exited business

-

-

Non-GAAP net income (loss) attributable to PFG, excluding exited business

Net realized capital (gains) losses, as adjusted

-

-

Non-GAAP operating earnings

$

$

Weighted average diluted common shares outstanding

Segment pre-tax operating earnings (losses):

Retirement and Income Solutions

$

$

$

$

Investment Management

-

-

International Pension

Principal Asset Management

Specialty Benefits

Life Insurance

Benefits and Protection

Corporate

-

Total segment pre-tax operating earnings (losses)

$

$

$

$

Income statement line item details of significant variances are

available in our earnings conference call presentation on our website.

10 Significant variances (SVs) in 2Q25 include 1) lower than

expected variable investment income in RIS, Specialty Benefits, and Life Insurance, partially offset by higher than expected variable

investment income in Corporate; 2) impact of higher than expected encaje performance, partially offset by Latin American inflation in

International Pension; 3) impact from a one-time expense accrual release in RIS, Investment Management, Specialty Benefits, Life Insurance

and Corporate. SVs in 2Q24 include 1) impact of lower than expected encaje performance in International Pension; 2) lower than expected

variable investment income in RIS, Specialty Benefits, and Life Insurance; 3) GAAP-only regulatory closed block dividend adjustment in

Life Insurance. SVs on a trailing twelve months in 2Q25 include 1) lower than expected variable investment income in RIS, International

Pension, Specialty Benefits, and Life Insurance, partially offset by higher than expected variable investment income in Corporate; 2)

impacts of 2024 actuarial assumption review; 3) higher than expected encaje performance and Latin American inflation in International

Pension; 4) impact from a one-time expense accrual release in RIS, Investment Management, Specialty Benefits, Life Insurance, and Corporate.;

5) impact of GAAP-only regulatory closed block adjustment in Life Insurance; 6) impact of model refinement in Specialty Benefits. SVs

on a trailing twelve months in 2Q24 include 1) lower than expected variable investment income in RIS, International Pension, Specialty

Benefits, Life Insurance partially offset by higher than expected variable investment income in Corporate; 2) impacts of 2023 actuarial

assumption review; 3) higher than expected encaje performance, Latin American inflation, Latin American non-economic LDTI discount rate

impacts, and other items in International Pension; 4) impact of GAAP-only regulatory closed block adjustment in Life Insurance.

Earnings Conference Call

and Chief Executive Officer Deanna Strable and Executive Vice President and Chief Financial Officer Joel Pitz will lead a discussion

of results and the impacts on future prospects, asset quality and capital adequacy during a live conference call, which can be accessed

as follows:

·

Via live Internet webcast. Please go to investors.principal.com at least 10-15 minutes prior to the start of the call to register, and to download and install any necessary audio software.

·

Analysts who will be asking questions will be sent a dial in number and authorization code in advance of the call.

·

Replay of the earnings call via webcast as well as a transcript of the call will be available after the call at investors.principal.com.

The company’s financial supplement and slide presentation is

currently available at investors.principal.com, and may be referred to during the call.

Forward Looking Statements

This release contains statements that constitute forward-looking statements

within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to share repurchases and planned

dividends, the realization of our growth and business strategies and results from ongoing operations. Forward-looking statements are

made based upon our current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking

statements are not guarantees of future performance and actual results may differ materially from the results anticipated in the forward-looking

statements. We describe risks, uncertainties and factors that could cause or contribute to such material differences in our filings with

the Securities and Exchange Commission, including in the “Risk Factors” and “Note Concerning Forward-Looking Statements”

sections in our annual report on Form 10-K for the year ended Dec. 31, 2024, as updated or supplemented from time to time in

subsequent filings. We assume no obligation to update any forward-looking statement for any reason, which speaks as of its date.

Use of Non-GAAP Financial Measures

The company uses a number of non-GAAP financial measures that management

believes are useful to investors because they illustrate the performance of normal, ongoing operations, which is important in understanding

and evaluating the company’s financial condition and results of operations. They are not, however, a substitute for U.S. GAAP financial

measures. Therefore, the company has provided reconciliations of the non-GAAP measures to the most directly comparable U.S. GAAP measure

at the end of the release. The company adjusts U.S. GAAP measures for items not directly related to ongoing operations. However, it is

possible these adjusting items have occurred in the past and could recur in future reporting periods. Management also uses non-GAAP measures

for goal setting, as a basis for determining employee and senior management awards and compensation and evaluating performance on a basis

comparable to that used by investors and securities analysts.

About Principal®11

Principal Financial Group® (Nasdaq: PFG) is a global

financial company with approximately 20,000 employees12 passionate about improving the wealth and well-being of people and

businesses. In business for 146 years, we’re helping over 70 million customers12 plan, insure, invest, and retire, while

working to support the communities where we do business, and building an inclusive workforce. Principal® is proud to be

recognized as one of the 2025 World’s Most Ethical Companies13 and named as a “Best Places to Work in Money

Management14.” Learn more about Principal and our commitment to building a better future at principal.com.

###

Summary of Principal Financial Group® and Segment Results

(in millions)

Three Months Ended,

Trailing Twelve Months,

Principal Financial Group, Inc. Results

Net income (loss) attributable to PFG

$

$

$

$

(Income) loss from exited business

Non-GAAP net income (loss) attributable to PFG excluding exited business

$

$

$

$

Net realized capital (gains) losses, as adjusted

Non-GAAP Operating Earnings*

$

$

$

$

Income taxes

Non-GAAP Pre-Tax Operating Earnings

$

$

$

$

Segment Pre-Tax Operating Earnings (Losses):

Retirement and Income Solutions

$

$

$

$

Principal Asset Management

Benefits and Protection

Corporate

Total Segment Pre-Tax Operating Earnings

$

$

$

$

11 Principal, Principal and symbol design and Principal Financial

Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.

Per Diluted Share

Three Months Ended,

Six Months Ended,

Net income (loss) attributable to PFG

$

$

$

$

(Income) loss from exited business

Non-GAAP net income (loss) excluding exited business

$

$

$

$

Net realized capital (gains) losses, as adjusted

Non-GAAP Operating Earnings

$

$

$

$

Impact of significant variances15

Non-GAAP Operating Earnings, excluding significant variances

$

$

$

$

Weighted-average diluted common shares outstanding (in millions)

*U.S. GAAP (GAAP) net income attributable to PFG versus non-GAAP

operating earnings

Management uses non-GAAP operating earnings, which is a financial measure

that excludes the effect of net realized capital gains and losses, as adjusted, income (loss) from exited business and other after-tax

adjustments the company believes are not indicative of overall operating trends, for goal setting, as a basis for determining employee

and senior management awards and compensation and evaluating performance on a basis comparable to that used by investors and securities

analysts. Note: it is possible these adjusting items have occurred in the past and could recur in future reporting periods. While these

items may be significant components in understanding and assessing our consolidated financial performance, management believes the presentation

of non-GAAP operating earnings enhances the understanding of results of operations by highlighting earnings attributable to the normal,

ongoing operations of the company’s businesses.

Selected Balance Sheet Statistics

Period Ended,

Total assets (in billions)

$

$

Stockholders’ equity (in millions)

$

$

Total common equity (in millions)

$

$

Total common equity excluding cumulative change in fair value of funds withheld embedded derivative and accumulated other comprehensive income (AOCI) other than foreign currency translation adjustment (in millions)

$

$

End of period common shares outstanding (in millions)

Book value per common share

$

$

Book value per common share excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment

$

$

15 See Exhibit 1 for details on the impact of 2Q 2025 and

2Q 2024 significant variances on net income attributable to PFG; non-GAAP net income attributable to PFG, excluding exited business;

and non-GAAP operating earnings.

Principal Financial Group, Inc.

Reconciliation of U.S. GAAP to Non-GAAP Financial

Measures

(in millions, except as indicated)

Period Ended,

Stockholders’ Equity, Excluding Cumulative Change in Fair Value of Funds Withheld Embedded Derivative and AOCI Other Than Foreign Currency Translation Adjustment, Available to Common Stockholders:

Stockholders’ equity

$

$

Noncontrolling interest

Stockholders’ equity available to common stockholders

Cumulative change in fair value of funds withheld embedded derivative

AOCI, other than foreign currency translation adjustment

Stockholders’ equity, excluding cumulative change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment, available to common stockholders

$

$

Book Value Per Common Share, Excluding Cumulative Change in Fair Value of Funds Withheld Embedded Derivative and AOCI Other Than Foreign Currency Translation Adjustment:

Book value per common share

$

$

Cumulative change in fair value of funds withheld embedded derivative and AOCI, other than foreign currency translation adjustment

Book value per common share, excluding change in fair value of funds withheld embedded derivative and AOCI other than foreign currency translation adjustment

$

$

Principal

Financial Group, Inc.

Reconciliation of U.S. GAAP to Non-GAAP Financial Measures

(in millions)

Three Months Ended,

Trailing Twelve Months,

Income Taxes:

Total GAAP income taxes (benefit)

$

$

$

$

Net realized capital gains (losses) tax adjustments

Exited business tax adjustments

Income taxes related to equity method investments and noncontrolling interest

Income taxes

$

$

$

$

Net Realized Capital Gains (Losses):

GAAP net realized capital gains (losses)

$

$

$

$

Market value adjustments to fee revenues

-

Net realized capital gains (losses) related to equity method investments

Derivative and hedging-related revenue adjustments

Certain variable annuity fees

Sponsored investment funds and other adjustments

Capital gains distributed – operating expenses

Amortization of actuarial balances

Derivative and hedging-related expense adjustments

Market value adjustments of embedded derivatives

Market value adjustments of market risk benefits

Capital gains distributed – cost of interest credited

Net realized capital gains (losses) tax adjustments

Net realized capital gains (losses) attributable to noncontrolling interest, after-tax

Total net realized capital gains (losses) after-tax adjustments

Net realized capital gains (losses), as adjusted

$

$

$

$

Income (Loss) from Exited Business:

Pre-tax impacts of exited business:

Amortization of reinsurance gains (losses)

$

$

$

$

Other impacts of exited business

Net realized capital gains (losses) on funds withheld assets

Change in fair value of funds withheld embedded derivative

Tax impacts of exited business

Total income (loss) from exited business

$

$

$

$

Principal Financial Group, Inc.

Reconciliation of U.S. GAAP to Non-GAAP Financial

Measures

(in millions)

Three Months Ended,

Trailing Twelve Months,

Investment Management Operating Revenues Less Pass-Through Expenses:

Operating revenues

$

$

$

$

Commissions and other expenses

Operating revenues less pass-through expenses

$

$

$

$