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GENWORTH FINANCIAL INC (GNW)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered $1.94B total revenue and $0.28 diluted EPS, with adjusted operating income of $17M ($0.04/share) as Enact remained the primary earnings driver while LTC posted a larger remeasurement loss .
  • Versus estimates (S&P Global), Primary EPS came in slightly below consensus ($0.04 vs $0.05), while revenue consensus was not available; GAAP EPS benefited from net investment gains and a $34M tax valuation allowance release .
  • Management announced a new $350M buyback authorization and raised expected 2025 capital returns from Enact to ~$500M; GNW now expects ~$405M from Enact for 2025 vs prior ~$325M, and targets $200–$225M of GNW share repurchases in 2025 .
  • Strategic catalysts: CareScout’s Assurance standalone LTC product launched (approved in 37 states), Seniorly acquisition closed, and Enact executed new reinsurance and a $435M revolver; GLIC RBC ratio was ~303% (slightly down QoQ) .

What Went Well and What Went Wrong

What Went Well

  • Enact delivered $134M adjusted operating income with a favorable $45M pre-tax reserve release; primary insurance in-force rose YoY to $272.3B, and estimated PMIERs sufficiency remained strong at 162% .
  • GNW enhanced shareholder returns: new $350M buyback authorization and $76M repurchased in Q3 at $8.44/share; Enact 2025 capital return outlook increased to ~$500M (GNW share ~$405M) .
  • CareScout execution: launched Assurance standalone LTC product; closed acquisition of Seniorly, expanding into senior living; Quality Network coverage exceeds 95% of 65+ U.S. population with ~950 matches in Q3 .

What Went Wrong

  • Long-Term Care (LTC) adjusted operating loss widened to $(100)M, driven by unfavorable actual variances ($107M) from lower terminations and higher benefit utilization; liability remeasurement loss increased to $(113)M .
  • Consolidated LTC statutory pre-tax loss of $(75)M and GLIC RBC ratio declined slightly to ~303% from ~304% in Q2, reflecting claim growth and utilization pressures as the block ages .
  • Enact’s adjusted operating income declined YoY and QoQ due to a smaller reserve release (Q3 reserve release $45M vs $48M in Q2 and $65M in Q3 2024), while PMIERs sufficiency ratio eased vs prior year .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Total Revenue ($USD Millions)1,880 1,786 1,796 1,935
Net Income ($USD Millions)85 54 51 116
Diluted EPS (GAAP) ($)0.19 0.13 0.12 0.28
Adjusted Operating Income ($USD Millions)48 51 68 17
Adjusted Operating EPS (Diluted) ($)0.11 0.12 0.16 0.04
Primary EPS Consensus Mean (S&P Global) ($)0.140.020.05
Primary EPS Actual vs SPGI ($)0.110.160.04
Revenue Consensus Mean (S&P Global) ($USD Millions)N/AN/AN/A

Note: Primary EPS and Revenue consensus are S&P Global metrics; revenue consensus was unavailable. The Primary EPS consensus mean row and actual vs SPGI row are S&P Global data.*
Values retrieved from S&P Global.*

Margins (S&P Global):

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Net Income Margin %4.52%*3.02%*—5.99%*
EBIT Margin %10.05%*8.51%*—9.87%*
EBITDA Margin %10.60%*9.13%*—10.35%*

Values retrieved from S&P Global.*

Segment Adjusted Operating Income ($USD Millions):

SegmentQ3 2024Q2 2025Q3 2025
Enact148 141 134
Long-Term Care Insurance(46) (37) (100)
Life and Annuities (Total)(27) (7) 4
Corporate & Other(27) (29) (21)

KPIs (Enact):

KPIQ3 2024Q2 2025Q3 2025
Primary NIW ($USD Millions)13,591 13,254 14,048
Loss Ratio (%)5% 10% 15%
Primary Insurance In-Force ($USD Millions)268,003 269,754 272,349
PMIERs Sufficiency Ratio (%)173% 165% 162%
Pre-tax Reserve Release ($USD Millions)65 48 45
Net Investment Income ($USD Millions)62 66 68

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GNW Share RepurchasesFY 2025Not specified (prior authorization balance only in Q2) $200–$225M expected allocation New range provided (raised clarity)
Enact Capital Returns (Total)FY 2025~$500M not previously stated; GNW previously expected ~$325M receipt ~$500M total from Enact; GNW expects ~$405M Raised return outlook; GNW receipt raised from ~$325M to ~$405M
GNW Buyback AuthorizationCurrentPrior authorization; $80M remaining at Q2 New $350M authorization; $76M executed in Q3 Increased authorization
CareScout Services InvestmentFY 2025Previously indicated ongoing platform build-out (no range)~$45–$50M in 2025 Formalized range (maintained)
GLIC Consolidated RBC RatioQ3 2025304% (Q2 2025 estimate) ~303% (Q3 2025 estimate) Slightly lowered

No formal guidance provided for consolidated revenue, margins, OpEx, OI&E, or tax rate.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
LTC sustainability and MIRAPContinued approvals; $31.6B NPV since 2012 (Q2); favorable seasonal mortality in Q1; ongoing benefit reductions $44M gross premium approvals in Q3; MIRAP NPV ~$31.8B; LTC A/E headwinds (utilization, lower terminations) Stable execution; near-term A/E pressure persists
CareScout expansionCare Plans launched (Q2); Quality Network to consumers; approvals via Compact in Q1 Assurance standalone LTC launched (37 states); Seniorly acquired; >95% coverage of 65+ population; >950 matches Q3 Accelerating product and network build
Capital returnsGNW buybacks ongoing; Enact dividends and new $350M repurchase program (Q1 note) New GNW $350M authorization; Enact 2025 capital returns ~$500M; GNW expects ~$405M Increasing returns
Legal/regulatoryFavorable AXA ruling announced (Q2); litigation updates Santander appeal permitted; potential ~$750M recovery; Supporting Our Seniors Act noted Process advancing; policy momentum
Enact risk and capitalStrong PMIERs; dividend raised to $0.21 (Q2) Forward quota share and XoL reinsurance for 2027; $435M revolver; PMIERs 162% Further de-risking and flexibility

Management Commentary

  • “We advanced the buildout of our CareScout growth platform with the launch of CareScout’s inaugural stand-alone long term care insurance product and the acquisition of Seniorly... the Board authorized a new $350 million share repurchase program” — Tom McInerney, CEO .
  • “Enact delivered $134 million in adjusted operating income... estimated PMIERs sufficiency ratio remained strong at 162%” — Jerome Upton, CFO .
  • “We have achieved approximately $31.8 billion of in-force rate actions... About 61% of policyholders offered a benefit reduction have elected to do so” — Jerome Upton, CFO .
  • “If the ruling is upheld, we expect to recover approximately $750 million... we will look to deploy [proceeds] in line with our priorities” — Tom McInerney, CEO .

Q&A Highlights

  • Long-term strategic resolution of LTC: Management reiterated legacy LTC is a long run-off (~30 years), while CareScout businesses are separate and can stand alone; focus remains on self-sustainability of legacy life companies and growth through CareScout .
  • Statutory earnings trends: Recent negative statutory results driven by LTC claims and utilization; prior year favorability included COVID-related terminations and legal settlements; expect break-even over time with quarter-to-quarter variability as MIRAP progresses .
  • Capital strategy: If AXA–Santander appeal is favorable, GNW expects ~$750M recovery (no taxes) with proceeds potentially supporting incremental shareholder returns, growth investment, and debt reduction .

Estimates Context

  • EPS vs S&P Global: Primary EPS Consensus Mean for Q3 2025 was $0.05 vs actual $0.04 — a slight miss; Q2 2025 consensus was $0.02 vs actual $0.16; Q3 2024 consensus was $0.14 vs actual $0.11.*
  • Revenue consensus unavailable from S&P Global; actual Q3 2025 revenue was $1,935M and Q3 2024 was $1,880M .
    Values retrieved from S&P Global.*

Where estimates may need to adjust: LTC A/E volatility and higher utilization likely temper near-term operating EPS expectations; stronger net investment gains and tax items boosted GAAP EPS this quarter, but are non-recurring .

Key Takeaways for Investors

  • Enact remains the core earnings engine; capital flexibility improved via new reinsurance and revolver, while PMIERs sufficiency remains strong at 162% .
  • LTC headwinds intensified (higher utilization, lower terminations), widening adjusted operating losses; expect continued quarterly variability until MIRAP impacts and benefit reductions further offset claims .
  • Shareholder return profile strengthened: GNW buyback authorization at $350M and 2025 repurchase plan of $200–$225M; Enact’s 2025 capital returns raised to ~$500M (GNW share ~$405M) .
  • Strategic growth: CareScout Assurance launched (37 states) and Seniorly acquisition expands into senior living; a scaled, tech-enabled platform increases potential recurring fees and diversified revenue streams .
  • Potential litigation upside: AXA–Santander appeal could yield ~$750M; not in guidance but a possible catalyst for incremental buybacks/debt reduction .
  • Trading implications: Near-term stock moves likely tied to buyback execution pace and Enact capital returns; watch Q4 assumption review outcomes and LTC A/E trends as key drivers of adjusted EPS trajectory .
  • Medium-term thesis: Value from Enact cash flows funding disciplined capital returns and CareScout investment, while LTC is managed toward self-sustainability without capital infusions .