Principal Financial Group · Earnings release

Exhibit

INVESTOR CONTACT:

MEDIA CONTACT:

Humphrey Lee

Sara Bonney

Principal Financial Group Announces First Quarter

Raises second quarter 2025 common stock dividend

(Des

Moines, Iowa) – Principal Financial Group® (Nasdaq: PFG) announced results for first 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

First Quarter 2025 Highlights

·

Non-GAAP operating earnings per diluted share, excluding significant variances2 of $1.92 increased 10% over prior year quarter

·

Returned $369 million of capital to shareholders, including $200 million of share repurchases and $169 million of common stock dividends

·

Raised second quarter 2025 common stock dividend to $0.76 per share, a 1-cent increase over the first quarter 2025 dividend, a 7% increase over second quarter 2024 dividend and a 9% increase on a trailing twelve month basis; the dividend will be payable on June 27, 2025, to shareholders of record as of June 2, 2025

·

Assets under management (AUM) of $718 billion, which is included in assets under administration (AUA) of $1.7 trillion

·

Strong financial position with $1.75 billion of excess and available capital

Deanna Strable, President and CEO of Principal®

“Strong business fundamentals, continued growth, and our strategic focus on higher growth markets drove 10% 1Q25 EPS growth and 14% ROE in the quarter. We continue to deliver on our commitment to return excess capital to shareholders, while maintaining our strong capital position.

We enter 2Q25 in a dynamic market environment. However, we are confident the strength and resilience of our integrated and diversified portfolio of businesses will continue to deliver value for our customers and shareholders.”

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 1Q 2025 and 1Q 2024 significant variances on net income attributable to PFG;

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

First 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

N/M

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

(8)%

Non-GAAP operating earnings

5%

2%

Diluted earnings per common share

Net income (loss) attributable to PFG

N/M

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)

2%

Assets under management (billions)

1%

AUM net cash flow (billions)

N/M

First Quarter Segment Highlights

·

Retirement and Income Solutions (RIS) recurring deposits up 9% to $13.8 billion and strong

PRT sales of $0.8 billion

·

Principal Asset Management non-affiliated private real estate net cash flow

of positive $1.1 billion; net cash flow of positive $0.7 billion in Mexico and SE Asia locally managed strategies

·

Specialty Benefits incurred loss ratio improved 40 basis points from 1Q24 due to more favorable

underwriting experience in group disability and group life

·

Life Insurance business market premium and fees increased 20%

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

8%

1%

Net revenue4

5%

4%

Operating margin5

·

Pre-tax operating earnings increased $21.5 million primarily due

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

·

Net revenue increased $32.8 million due to favorable market performance

and growth in the business, outpacing fee compression.

Investment Management

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

(5)%

4%

Operating revenues less pass- through expenses6

4%

5%

Operating margin7

Assets under management (billions)

3%

·

Pre-tax operating earnings decreased $5.9 million primarily driven by elevated seasonal

expenses, partially offset by higher operating revenues less pass-through expenses.

·

Operating revenues less pass-through expenses increased $17.4 million primarily due

to 5% higher management fees from higher AUM.

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

8%

Net revenue

(2)%

(1)%

Operating margin8

Assets under management (billions)

(4)%

·

Pre-tax operating earnings increased $6.3 million primarily due to margin expansion,

partially offset by foreign currency headwinds.

·

Net revenue decreased $2.6 million primarily due to foreign currency headwinds.

Specialty Benefits

Three Months Ended,

Trailing Twelve Months,

% Change

% Change

Pre-tax operating earnings

4%

(1)%

Premium and fees

4%

6%

Operating margin9

Incurred loss ratio

·

Pre-tax operating earnings increased $4.2 million due to growth in

the business, higher net investment income, and more favorable underwriting experience.

·

Premium and fees increased $30.2 million driven by growth in the

business.

·

Incurred loss ratio improved to 60.7% 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

0%

0%

Operating margin

·

Pre-tax operating earnings increased $3.5 million as a favorable

change in a GAAP-only regulatory closed block dividend adjustment was partially offset by higher mortality experience.

·

Premium and fees increased $1.1 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

(1)%

·

Pre-tax operating losses increased $16.7 million primarily due to

lower net investment income and higher operating expenses.

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 1Q25 include 1) lower than expected variable investment income in RIS, Specialty

Benefits, Life Insurance and Corporate; 2) impact of GAAP-only regulatory closed block adjustment in Life Insurance. SVs in 1Q24 include

1) impact of higher than expected encaje performance in International Pension; 2) 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. SVs on a trailing twelve months in 1Q25 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) impact of model refinement in Specialty Benefits; 4) lower than expected encaje performance and

Latin American inflation in International Pension; 5) impact of GAAP-only regulatory closed block adjustment in Life Insurance.SVs on a trailing twelve months in 1Q24 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) mortality experience true- ups in RIS; 5) impact of LDTI model refinement in Specialty

Benefits; 6) impact of GAAP-only regulatory closed block adjustment in Life Insurance.

Earnings Conference Call

and Chief Executive Officer Deanna Strable and Senior Vice President and Interim 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

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 145 years, we’re helping approximately 70 million customers12plan, 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 2024 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,

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 1Q 2025 and 1Q 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

$

$

$

$