Jackson Financial Inc. (JXN) Q2 2025 Earnings Summary

Executive Summary

Adjusted operating EPS of $4.87 beat Wall Street consensus of $4.64; GAAP diluted EPS was $2.34, reflecting non‑operating derivative marks typical of Jackson’s model . EPS consensus data from S&P Global: Primary EPS Consensus Mean = 4.639; actual = 4.87*.
Total retail annuity sales rose 4% YoY to $4.4B, with strength in fixed/fixed index ($470M vs. $85M YoY) and steady RILA at $1.4B; variable annuity sales moderated to $2.5B on lower lifetime benefit demand .
Capital and liquidity remained robust: TAC of ~$5.3B and estimated RBC ratio of 566% at JNLIC; holding company cash >$700M and Q2 free cash flow of $290M supported $216M capital return (buybacks + dividends) .
Non‑GAAP adjusted operating earnings declined YoY to $350M from $410M on lower fee income from reduced average VA AUM and assumption updates; spread income from RILA AUM and lower share count were partial offsets .
Narrative catalysts: continued diversification toward spread‑based products (RILA, fixed/fixed index), strong capital generation/free cash flow supporting 2025 capital return target of $700–$800M (unchanged), and incremental product and digital enhancements (e.g., Market Link Pro III, advisor tools) .

What Went Well and What Went Wrong

What Went Well

“We delivered another quarter of year‑over‑year growth in retail annuity sales… and exceeded $1 billion [free cash flow] over the twelve months” – Laura Prieskorn, CEO .
Fixed and fixed index annuity sales surged to $470M, aided by PPM America’s capabilities to source higher‑yielding assets for spread products .
Capital strength/returns: Q2 free cash flow of $290M, TAC ~$5.3B, RBC 566%, and $216M returned to common shareholders (buybacks + dividends) .

What Went Wrong

Adjusted operating earnings fell to $350M ($4.87/share) from $410M ($5.32/share) YoY, driven by lower fee income on reduced average VA AUM and less favorable assumption updates versus prior period .
Retail pretax AOE declined YoY ($417M vs. $465M) as VA fee headwinds outweighed spread benefits; RILA sales were “down slightly” YoY .
GAAP “Total revenues” printed negative in Q2 (−$471M) driven by net losses on derivatives/investments (−$3.187B), illustrating the volatility of non‑operating marks despite stable statutory capital/free cash flow .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Net Income attributable to common ($USD Millions)	$334	$(35)	$168
Diluted EPS (GAAP) ($)	$4.45	$(0.48)	$2.34
Adjusted Operating Earnings ($USD Millions)	$349	$376	$350
Adjusted Operating EPS ($)	$4.65	$5.10	$4.87
Total Revenues ($USD Millions)	$225	$3,750	$(471)

Segment Pretax Adjusted Operating Earnings ($MM)	Q2 2024	Q2 2025
Retail Annuities	$465	$417
Institutional Products	$29	$19
Closed Life & Annuity Blocks	$35	$22
Corporate & Other	$(56)	$(52)
Total	$473	$406

Retail Annuity Sales ($USD Billions)	Q2 2024	Q2 2025
Total Retail Annuity Sales	$4.2	$4.4
Variable Annuities	$2.7	$2.5
RILA	N/A	$1.4
Fixed & Fixed Index	$0.085	$0.470

KPIs / Capital & Cash	Q4 2024	Q1 2025	Q2 2025
JNLIC TAC ($B)	$5.1	$5.2	$5.3
JNLIC Estimated RBC (%)	572%	585%	566%
Holding Co. Free Cash Flow ($MM)	$767 (FY24)	$213	$290
Holding Co. Cash & Highly Liquid ($MM)	>$700	>$600	>$700
Capital Returned to Common ($MM)	$148 (Q4)	$231 (Q1)	$216 (Q2)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total capital return to common	FY 2025	$700–$800M (set Feb 19, 2025)	$700–$800M (unchanged through Q2)	Maintained
Free capital generation	FY 2025	>$1B under normal markets (Q4 call)	On pace to exceed >$1B (Q1 confirmation)	Maintained
JNLIC RBC ratio target (minimum)	Ongoing	≥425% (policy level)	566% reported; target unchanged	Maintained
Common dividend per share	Q3 2025	$0.80 per share	$0.80 declared for Q3 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
Product mix diversification (RILA, fixed, VA)	RILA $1.5B; diversified mix; VA w/o benefits up; fixed/fixed index expansion	RILA $1.2B; fixed/fixed index $174M; advisory momentum >$1B run-rate	RILA $1.4B; fixed/fixed index $470M; VA $2.5B (down YoY)	Diversification continues; fixed/fixed index strengthening
Capital return & liquidity	FY25 target $700–$800M; holdco liquidity >$700M	$231M returned in Q1; holdco cash >$600M	$216M returned in Q2; holdco cash >$700M	Sustained execution on returns and liquidity
Hedging program & MRB dynamics	More economic hedging improved non‑operating stability; net hedge gain in Q4	Q1 net hedge loss; MRB offset; options increased to manage volatility	Net hedging gain vs. prior year’s loss; derivative marks drove negative GAAP revenue	Stable capital generation despite market volatility
Advisory/technology enablement	Advisory sales milestone ($1B)	Advisory growth; tools for RIAs	New digital advisor experience & Product Match Pro launched (July)	Building advisor channel capabilities
PPM America / asset sourcing	Portfolio quality; limited below‑IG exposure	Spread income benefits from bond yields	PPM AUM up ~20% YoY to $83.5B; asset sourcing capabilities highlighted	Strengthening investment platform support

Management Commentary

“We delivered another quarter of year‑over‑year growth in retail annuity sales… and exceeded $1 billion [free cash flow] over the twelve months ended June 30, 2025.” – Laura Prieskorn, CEO .
On Q2 operating drivers: higher spread income from RILA AUM and lower share count offset by reduced VA fee income and assumption updates .
On capital strength: TAC ~$5.3B; estimated RBC 566%; holdco cash >$700M; Q2 free cash flow $290M .
Segment remarks: Retail pretax AOE down YoY on lower VA AUM; Institutional pretax AOE down on lower spread income; Closed Block impacted by higher benefits/assumptions; Corporate & Other improved slightly .

Q&A Highlights

Note: The Q2 2025 earnings call transcript could not be retrieved due to a document database inconsistency. Highlights below reflect Q1 2025 Q&A to contextualize management stance.

Brooke Re capitalization and risk framework: capital well above minimum operating level; scenarios needing capital would involve extreme, prolonged volatility and deep equity/interest rate shocks (GFC/COVID‑like) .
Free capital generation outlook: normalized >$1B without one‑time tax tailwinds; equity market sensitivity acknowledged but guidance viewed as reasonable .
Strategy on spread‑based products without alt‑asset partnerships: competitive in RILA and disciplined in MYGA/FIA; RILA AUM ~$12B .
Advisory growth: fee‑based channel rising with tools and product wrappers; >$1B advisory run‑rate as of Q1 .

Estimates Context

Metric	Consensus (Q2 2025)	Actual (Q2 2025)	Surprise
Primary EPS ($)	4.639*	4.87	+0.23, +5% – bold beat
Revenue ($USD)	$1.745B*	$(0.471)B	−$2.216B – bold miss (note: insurer GAAP “revenue” impacted by derivative marks)

Values retrieved from S&P Global*. Analyst coverage depth: EPS estimates (n=5); Revenue (n=1). Given Jackson’s accounting, revenue is not a primary indicator of operating performance; adjusted operating earnings and capital/free cash flow are more relevant .

Key Takeaways for Investors

EPS beat vs. consensus driven by spread income growth and buybacks, despite VA fee headwinds; focus on adjusted operating earnings per share as the stock’s near‑term narrative anchor .
Mix shift toward spread‑based products is progressing: fixed/fixed index momentum and steady RILA support more resilient earnings and capital generation through cycles .
Capital generation/free cash flow remain strong, underpinning the unchanged FY25 capital return target ($700–$800M) and dividend sustainability ($0.80/share) .
GAAP revenue volatility from derivatives is non‑operating and does not impair statutory capital or cash generation; traders should focus on AOE, TAC/RBC, and SSB returns rather than GAAP “revenue” prints .
Watch VA AUM trend and surrender dynamics: lower VA fee income was a meaningful Q2 headwind; equity markets and exchange activity can sway near‑term fee trajectory .
Product/digital launches (Market Link Pro III, advisor tools) and PPM’s asset sourcing are catalysts for distribution reach and spread earnings expansion .
Medium‑term thesis: diversified annuity mix, stable hedging/capital framework, and consistent cash return provide an attractive risk‑adjusted profile as VA fee headwinds normalize with market conditions .