Jackson Financial Inc. (JXN) Q3 2025 Earnings Summary

Executive Summary

Adjusted operating EPS of $6.16 beat S&P Global consensus of $5.45, driven by higher spread income from record RILA sales and institutional AUM growth, lower OpEx, and a reduced share count; GAAP diluted EPS was $0.92 . EPS consensus figures from S&P Global: $5.45*.
Revenue of $1.416B missed consensus $1.890B as derivative/funds-withheld volatility compressed GAAP revenues; adjusted operating earnings more accurately reflected underlying performance . Revenue consensus figures from S&P Global: $1.890B*.
RILA sales hit a record $2.1B (+28% YoY), retail annuity sales reached $5.4B (+2% YoY), and institutional sales were $1.0B (+34% YoY), underpinning diversified growth and spread earnings .
Capital strength improved: JNL RBC ratio rose to an estimated 579% (vs. 566% in Q2), TAC increased to $5.6B, and holding company cash/liquids reached $751M; the board increased buyback authorization by $1B and declared a $0.80 common dividend .
Management expects to exceed the top end of the FY25 capital return target ($700–$800M), with trailing 12-month free cash flow near $1B and return to shareholders of $805M .

What Went Well and What Went Wrong

What Went Well

“Adjusted operating earnings of $433 million increased over 20% from the year-ago quarter led by our retail annuities business,” with per-share strength from spread income and lower share count .
Record RILA sales ($2.1B), broader distribution (500+ new advisors), and new JPMorgan Chase RILA relationship strengthened spread earnings and product diversification .
Capital and liquidity strengthened: RBC 579%, TAC $5.6B, holding company cash/liquids $751M; buyback authorization increased by $1B and $0.80 dividend declared .

What Went Wrong

GAAP revenue missed consensus due to derivative/funds-withheld volatility; total revenues declined YoY ($1.416B vs. $2.121B) even as underlying AOE improved .
Fixed and fixed index annuity sales fell to $444M (-57% YoY) on opportunistic pricing and prior-year strength; closed block earnings were pressured sequentially by higher mortality .
Variable annuity net outflows remained elevated, influenced by policyholder behavior/surrender dynamics amid strong equity markets; surrender rate upticked in Q3 given contract moneyness .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenues ($USD Billions)	$2.121	$3.750	-$0.471	$1.416
Net Income - Common ($USD Millions)	-$480	-$35	$168	$65
Diluted EPS - Net ($)	-$6.37	-$0.48	$2.34	$0.92
Adjusted Operating EPS ($)	$4.60	$5.10	$4.87	$6.16

Segment Pretax Adjusted Operating Earnings ($USD Millions)	Q3 2024	Q3 2025
Retail Annuities	$458	$494
Institutional Products	$17	$31
Closed Life & Annuity Blocks	$7	$15
Corporate & Other	-$71	-$35
Total	$411	$505

Margins	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Net Income Margin %	-21.74%*	N/A*	N/A*	5.30%*
EBIT Margin %	30.32%*	N/A*	N/A*	-7.67%*
Values retrieved from S&P Global.*

KPIs	Q1 2025	Q2 2025	Q3 2025
Retail Annuity Sales ($USD Billions)	$4.0	$4.4	$5.4
Variable Annuity Sales ($USD Billions)	$2.7	$2.5	$2.9
RILA Sales ($USD Billions)	$1.2	$1.4	$2.1
Fixed & Fixed Index Annuity Sales ($USD Billions)	$0.174	$0.470	$0.444
Institutional Sales ($USD Billions)	—	—	$1.0
JNL TAC ($USD Billions)	$5.2	$5.3	$5.6
JNL RBC Ratio (%)	585%	566%	579%
Free Cash Flow ($USD Millions)	$213	$290	$216
Holding Co. Cash/Liquids ($USD Millions)	>$600	>$700	$751

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Capital Return to Common Shareholders	FY 2025	$700–$800MM (range referenced in mgmt commentary)	Expect to exceed top end of range	Raised
Common Dividend per Share	Q4 2025	$0.80 (ongoing)	$0.80 declared for Q4 2025	Maintained
Share Repurchase Authorization	As of Sep 2025	Prior authorization	+$1B increase to authorization	Raised
Free Capital Generation	FY 2025	>$1B expectation	Pace well above $1B	Maintained/Above
Effective Tax Rate (AOE)	Ongoing	~15% guidance	Used in AOE adjustments	Maintained
RBC Minimum Target	Ongoing	≥425%	579% actual in Q3	Maintained (actual strengthened)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2025)	Trend
Hedging & Brook RE	Economic hedging enhanced stability; April stress handled without capital contributions; Brook RE capitalization strong versus risk framework	MRB gain $226M offset hedge loss; RILA provides natural equity offset; hedging efficiency emphasized vs peers	Stable and improving efficiency
Policyholder Behavior/Lapses	All-in surrender/benefit rate down vs Q4’24; elevated net outflows from aging/moneyness	Surrender rate uptick with strong equity; YTD surrender ~12% decomposed (7% surrenders, 4% withdrawals, 1% death)	Mixed—market-driven uptick
RILA/Product Innovation	RILA +Income, NY availability; advisory channel growth; RILA AUM ~$12B (early 2025)	Record $2.1B RILA sales; RILA 3.0 launch; 500+ new advisors; JPM relationship	Accelerating
Capital Return/Liquidity	$0.80 dividend; >$600M holding cash; confident on FY25 capital return target	$210M returned in Q3; $751M holding cash; expect to exceed FY25 target; +$1B buyback authorization	Strengthening
Spread Products & PPM	Fixed/fixed index growth opportunistic; diversified new business; PPM capabilities supporting yields	PPM sourcing higher-yield assets; spread earnings lifting AOE; fixed index suite momentum	Positive momentum
Institutional Products	Opportunistic approach; account value $10.4B (Q2)	Sales $1.0B (+34% YoY), net flows $447M; account value $10.9B	Growing

Management Commentary

CEO: “Retail annuity sales reached their highest level since we became an independent company… record RILA sales… Free cash flow was $719 million… returned $210 million to common shareholders… risk-based capital ratio… 579%… cash and liquid securities… over $750 million” .
CFO: “Adjusted operating earnings were $433 million… strong performance from our spread products… exposure to commercial office loans and below investment-grade securities is less than 2% and 1%, respectively” .
CFO on hedging: “A $226 million gain [MRB] more than offset the loss on our hedges… RILA provides a natural offset to the equity risk of our variable annuity guarantees” .
CFO on capital generation: “After-tax statutory capital generation was $579 million… free cash flow at the holding company was $216 million… free cash flow yield of about 14%” .

Q&A Highlights

Policyholder behavior: YTD surrender ~12% (7% full surrenders, 4% withdrawals, 1% death). Q3 surrender uptick was market-driven; assumptions will be reviewed in Q4 .
RBC strategy: Substantial excess over 425% target; ratio likely to come down over time via diversified spread growth rather than a one-off capital release .
Hedging vs peers: Structure avoids VM21 constraints; if RILA equity risk surpasses VA, external hedging simply shifts without new reserve requirements .
Potential reinsurance/M&A: Open to high-quality VA blocks and complementary life blocks, but always compared versus buyback value .

Estimates Context

Metric	Consensus (S&P Global)	Actual	Surprise
Primary EPS Consensus Mean ($)	5.45*	6.16	Bold beat
Revenue Consensus Mean ($USD Billions)	1.890*	1.416	Bold miss
Primary EPS - # of Estimates	5*	—	—
Revenue - # of Estimates	1*	—	—
Values retrieved from S&P Global.*

Implications: Consensus EPS likely moves higher given breadth of spread earnings and reduced share count; revenue forecasts may need continued normalization for GAAP volatility driven by derivatives/funds-withheld, with more investor focus on AOE as the performance anchor .

Key Takeaways for Investors

Strong AOE beat and record RILA sales underscore earnings diversification; focus on spread products and PPM sourcing will remain a core EPS driver .
GAAP revenue volatility persists; underwriting and hedging economics (AOE/MRB) are better indicators of performance and capital generation .
Capital return is a clear catalyst: +$1B buyback authorization, $0.80 dividend, and management signaling >$800M FY25 capital return .
Balance sheet is resilient: RBC 579%, TAC $5.6B, $751M holding cash/liquids; supports buybacks while funding spread growth .
Variable annuity outflows remain elevated but market-driven; surrender dynamics will be revisited in Q4 assumptions review—watch February update .
Hedging structure differentiates JXN versus peers; RILA/VA offset and Brook RE framework reduce capital sensitivity to equity moves .
Near-term trading: Position for capital-return announcements and RILA momentum; medium-term thesis: sustained free cash flow (~14% yield cited) and diversified earnings support multiple expansion .

Note: Where metrics are marked with an asterisk (*), values were retrieved from S&P Global.