Executive Summary

Q1 2025 was mixed: adjusted EPS of $0.72 missed S&P Global consensus ($0.96) on lower alternative investment income and spread pressure, while AUM reached new records; GAAP EPS was a loss of $(0.20) driven by mark‑to‑market items . EPS miss and a large revenue miss vs consensus reflect insurance accounting volatility rather than core growth deceleration; management emphasized headwinds are temporary and expects improvement through 2025 . Estimates marked with * from S&P Global.
Sales mix was deliberately tilted away from MYGA toward higher‑return FIA/PRT; gross sales fell 17% YoY to $2.9B, but ex‑MYGA rose 5% YoY; record AUM before flow reinsurance reached $67.4B (+16% YoY) .
Margins compressed: adjusted ROA was 0.68% (LTM 1.00% vs 1.06% in Q4), driven by excess cash from CLO prepayments amid lower cash yields, lower surrender income, timing of in‑force repricing, weaker owned distribution margin, and higher interest expense; management expects these to normalize in coming quarters .
Capital actions strengthened flexibility: $375M junior subs issued (Jan), $300M senior notes redeemed (Feb), $269M common equity raised (Mar); debt/capital ex‑AOCI at 26.7% (target ~25%) and RBC targeted ≥400% maintained .
Dividend maintained at $0.22/share for Q2 2025; equity raise timing drew investor questions and was cited as weighing on the stock, but deployment is targeted to profitable growth opportunities .

What Went Well and What Went Wrong

What Went Well
- Record scale: AUM before flow reinsurance hit $67.4B (+16% YoY); retained AUM $54.5B (+9% YoY) on strong indexed annuity momentum .
- Disciplined mix shift: Ex‑MYGA gross sales +5% YoY; FIA/RILA sales were $1.46B, in line YoY; funding agreements grew sharply ($525M vs $105M) .
- Credit quality robust: 96% IG fixed maturities, low impairments (2 bps in Q1; 6 bps 5‑yr avg); CLO portfolio seasoned and diversified .
- Management tone/confidence: “We remain confident that we will deliver on our medium‑term Investor Day targets” (CEO) .
What Went Wrong
- Margin compression: Adjusted ROA fell to 0.68% as spreads were pressured by excess cash from CLO prepayments amid lower cash rates, slower surrenders, weaker owned distribution margin (one‑time growth investment), and timing of in‑force repricing under rate volatility .
- Alternative investments underperformed: Alts were ~$63M below long‑term expectations in Q1, weighing on earnings .
- EPS and revenue below consensus: Q1 adjusted EPS $0.72 vs $0.96*; total GAAP revenue $908M vs $1.473B* estimates (insurance revenue volatility) [GetEstimates]. Values marked * from S&P Global.

Financial Results

Headline financials (GAAP unless noted)

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenues ($M)	$1,444	$1,559	$908
GAAP Diluted EPS ($)	$(0.08)	$2.50	$(0.20)
Adjusted Net Earnings ($M)	$156	$143	$91
Adjusted EPS ($)	$1.22	$1.12	$0.72
Adjusted ROA (%)	1.05%	1.06%	0.68%
Adjusted ROE ex‑AOCI (%)	9.1%	10.3%	9.7%

Versus S&P Global consensus

Metric	Q4 2024 Estimate*	Q4 2024 Actual	Surprise	Q1 2025 Estimate*	Q1 2025 Actual	Surprise
Primary EPS ($)	1.203	1.12	(0.083)	0.9615	0.72	(0.2415)
Revenue ($M)	1,337.5	1,559	+221.5	1,473.0	908	(565.0)

Values marked * retrieved from S&P Global.

Segment/product sales mix

Sales ($M)	Q3 2024	Q4 2024	Q1 2025
Indexed annuities (FIA/RILA)	1,847	1,797	1,461
Indexed Universal Life (IUL)	39	41	43
Funding Agreements (FABN/FHLB)	—	—	525
Pension Risk Transfer (PRT)	337	983	311
Fixed‑rate annuities (MYGA)	1,655	648	562
Gross Sales	3,878	3,469	2,902
Net Sales	2,386	2,438	2,181

Key performance indicators

KPI	Q3 2024	Q4 2024	Q1 2025
AUM (retained, $B)	52.46	53.82	54.55
AUM before flow reinsurance ($B)	62.88	65.27	67.40
AAUM ($B)	50.97	51.57	53.88
Cost of funds (%)	2.95%	2.96%	3.18%
Fixed income yield (ex alts/variable)	4.66%	4.59%	4.53%
Debt/Capital ex‑AOCI (%)	26.5%	26.8%	26.7%
Operating expense ratio (bps on AUM before flow)	62	60	58
BVPS ex‑AOCI ($)	42.28	44.28	43.31

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Investor Day medium‑term targets (Grow AUM ~50%; adjusted ROA ex significant items to 1.33–1.55%; adjusted ROE ex‑AOCI to 13–14%)	Medium term	As above	Reiterated “on track”	Maintained
Debt‑to‑capitalization ex‑AOCI	Long term	~25% target	26.7% in Q1, target unchanged	Maintained
RBC ratio (primary opco)	Ongoing	≥400% target	Manage at/above target	Maintained
Common dividend per share	Q2 2025	$0.22	$0.22 payable 6/30/2025	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (Q‑2)	Q4 2024 (Q‑1)	Q1 2025 (Current)	Trend
Sales mix/MYGA	Record retail; strong growth	Mix prioritized to FIA/PRT; MYGA reduced	Intentional MYGA pullback; ex‑MYGA sales +5% YoY; MYGA rebounded in April	Disciplined mix; MYGA tactical/lumpy
Spreads/Cost of funds	—	ROA expansion to 1.06%	Cost of funds rose to 3.18%; spread headwinds seen as temporary	Near‑term pressure, expected to improve
Alternatives	Alts and CLO prepay aided results	Alts below LT expectations in Q4	Alts ~$63M below LT expectations in Q1	Volatile; normalization expected
Capital actions	Issued $500M senior notes (Oct)	Completed 2024 issuances; RBC >410%	$375M juniors issued, $300M senior redeemed, $269M equity; target ~25% debt/cap	Liquidity enhanced; leverage stable
Surrenders/refinancing	Elevated mid‑2024	Elevated into Q4	Slower in Q1; April similar to Q1; expect similar Q2; longer‑term improves liability stickiness	Normalizing from high levels
RILA expansion	—	—	RILA gaining B/D platforms; medium‑term “billions” opportunity	New growth vector
Tariff/macro exposure	—	—	Portfolio resilient; limited direct tariff exposure	Addressed proactively

Management Commentary

CEO (press release): “Despite some near-term headwinds, F&G’s solid foundation is underpinned by a conservatively positioned investment portfolio... We remain confident that we will deliver on our medium-term Investor Day targets” .
CEO (call): “We gave up some spread during the first quarter… the 4 main drivers were excess cash due to CLO prepayments with a drop in cash rates, lower surrender income… weaker owned distribution margin… and timing of in‑force pricing changes… We would expect each of these drivers to improve throughout 2025” .
CFO (call): “Adjusted ROA was 68 bps… LTM adjusted ROA of 100 bps, down 6 bps from Q4 LTM… RBC at or above 400%, long-term target ~25% debt to capitalization… BVPS ex‑AOCI $43.31” .
CEO on RILA: “Adding broker-dealers pretty consistently… in the medium term, we think [RILA] can be in the billions for us” .

Q&A Highlights

RILA growth/runway: Management expects RILA to scale to “billions” over the medium term as broker‑dealer access expands .
Equity raise rationale: Capital to deploy into profitable new business; timing at quarter‑end limited immediate use; investor concern noted as weighing on stock .
Cost of funds/spread: Sequential jump tied to lower surrenders, lower cash yields on excess cash, and timing of repricing; expected to improve as surrenders normalize and repricing catches up .
MYGA cadence: Tactical; MYGA volumes rebounded strongly in April without sacrificing FIA/IUL momentum .
Alternatives/LPs: Direct lending nearer expectations; LPs (PE/RE) underperformed in Q1; diversified across 37 funds with long‑duration value proposition .
RBC sensitivity: No change to ≥400% target despite market volatility .

Estimates Context

Q1 2025: Adjusted EPS of $0.72 missed S&P Global consensus $0.96 by ~$0.24; total revenues $908M missed $1.473B by ~~$565M. Miss drivers: alts below plan (~~$63M), spread pressure from excess cash/low cash yields, slower surrenders, timing of in‑force repricing, and higher interest expense; management expects normalization in 2025 . Values marked * retrieved from S&P Global.
Q4 2024: Adjusted EPS $1.12 modestly below $1.20 consensus; revenue $1.56B beat $1.34B on strong PRT/funding and investment income . Values marked * retrieved from S&P Global.

KPIs and Operating Drivers (detail)

Sales/flows: Gross sales $2.9B; net sales $2.2B; ex‑MYGA sales +5% YoY; PRT $311M; FABN/FHLB $525M .
AUM: Retained AUM $54.5B; AUM before flow reinsurance $67.4B; AAUM $53.9B YTD .
Book value/capital: BVPS ex‑AOCI $43.31; debt/cap ex‑AOCI 26.7% .
Investment yields: Fixed income yield 4.53% (ex alts/variable) down 6 bps seq.; credit 96% IG; CLO $3.7B, 89% IG, diversified by 85 managers .

Other Q1 2025 Press Releases

Dividend declaration: $0.22 per common share payable June 30, 2025; preferred quarterly dividend also declared .
PRT positioning: Cumulative PRT sales >$7B; top‑10 PRT ranking for fourth consecutive year (FY24 $2.2B; Q1’25 $300M) .

Earnings Call Themes & Trends Table

(see “Earnings Call Themes & Trends” section above for tabular tracking.)

Key Takeaways for Investors

Core growth intact: Record AUM and healthy net sales suggest continued scale benefits even as Q1 margin headwinds weighed on EPS .
Margin re‑acceleration likely: Management identified specific, largely transitory spread headwinds (excess cash, surrenders, repricing timing) and expects improvement as 2025 progresses .
Mix discipline supports ROE: Tactical MYGA management and growing fee income from flow reinsurance and owned distribution should underpin medium‑term ROE expansion toward Investor Day targets .
Capital flexibility enhanced: Recent debt refinancing and equity raise support organic growth; leverage near target with RBC at/above 400% .
Alternative investments are a swing factor: LPs underperformed this quarter; normalization of alts could provide upside to ANE versus Q1 run‑rate .
Tactical watch items: Track cost of funds trajectory, surrenders, and alts in Q2; watch RILA platform additions and MYGA cadence as rate/credit conditions evolve .
Income stability: Dividend held at $0.22; if margin normalization occurs as guided, cash generation and potential for future dividend increases remains intact over medium term .

Footnotes and sources:

Q1 2025 earnings press release and financials: .
Q1 2025 8‑K Item 2.02 and financial supplement: .
Q1 2025 earnings call transcript: .
Prior quarters: Q4 2024 press release/financials ; Q3 2024 press release/financials .
Other press releases: Dividend ; PRT ranking .
Estimates table values from S&P Global via GetEstimates (Primary EPS Consensus Mean, Revenue Consensus Mean). Values with * are retrieved from S&P Global.

F&G Annuities & Life, Inc. (FG)·Q1 2025 Earnings Summary