Executive Summary

EPS and revenue beat with resilient margins. Diluted adjusted operating EPS was $5.46 vs S&P Global consensus $5.20; GAAP diluted EPS was $5.40. Total revenue was $793.3M vs consensus $789.9M, while adjusted operating revenue was $796.0M, up 7% YoY . Primary EPS and revenue consensus from S&P Global marked with asterisks below (Values retrieved from S&P Global).
ISP momentum offset softer life sales. ISP sales rose 15% YoY to $3.5B; ending client asset values reached a record $120B (+14% YoY). Term Life margins held (benefits & claims 57.5%, operating margin 23.0%) despite lower policies issued (-11% YoY) and productivity at 0.20 .
Guidance: Term Life full‑year ratios maintained (ADP ~5%, claims ~58%, DAC+comm ~12%, operating margin ~22%); opex +$40M (6–8%) reiterated. Management raised FY ISP sales outlook to “above 10%,” up from “less than double digits” last quarter .
Capital return and balance sheet remain supportive. PRI repurchased $129M and declared a $1.04 dividend; RBC ~490% with $371M holdco cash, supporting buybacks and growth investments .

What Went Well and What Went Wrong

What Went Well
- ISP strength and mix tailwinds: Sales +15% YoY ($3.5B), asset‑based fees +17% YoY on mix shift to managed accounts and Canadian funds; demand for variable annuities elevated. CEO: “Continued growth in our Investment and Savings Products segment… fueled another quarter of strong financial results.”
- Stable Term Life profitability: Benefits & claims 57.5% (largely consistent YoY) and operating margin 23.0% despite softer volumes; pre‑tax income +5% YoY .
- Capital strength and returns: $129M buybacks, $1.04 dividend declared; RBC ~490%. CFO: “We remain confident in our ability to maintain a strong capital position while… returning capital to stockholders.” .
What Went Wrong
- Life sales softness: Policies issued (-11% YoY) and productivity (0.20) at the low end amid cost‑of‑living pressures; recruits (-16% YoY) and new reps (-10% YoY) also lower .
- ISP sales-based margin compression: Sales-based variable margin totaled 1.23% vs 1.27% a year ago as variable growth-related expenses and commission true‑ups ran higher (CFO) .
- Data methodology correction: Restated Canadian mutual fund outflows/rollforward statistics (immaterial to financials); net flows remained positive after restatement .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($M)	$788.1	$804.8	$793.3
Adjusted Operating Revenues ($M)	$790.1	$803.6	$796.0
Net Income (Cont. Ops) ($M)	$167.7	$169.1	$178.3
Diluted EPS (GAAP, Cont. Ops)	$4.98	$5.05	$5.40
Diluted Adjusted Operating EPS (non‑GAAP)	$5.03	$5.02	$5.46
Adjusted Net Operating Income ($M)	$169.2	$168.1	$180.4

Estimates vs Actual (S&P Global for consensus; asterisked values are from S&P Global)

EPS: Primary EPS Consensus Mean $5.20* vs actual $5.46 → beat (Values retrieved from S&P Global).
Revenue: Consensus $789.9M* vs actual $793.3M → beat (Values retrieved from S&P Global).

Metric (Q2 2025)	Consensus	Actual
Primary EPS	5.20*	5.46
Revenue ($M)	789.9*	793.3
# EPS Estimates	9*	—
# Revenue Estimates	4*	—

Segment performance (Adjusted Operating)

Segment	Q2 2024	Q1 2025	Q2 2025
Term Life Revenues ($M)	426.9	457.8	441.8
ISP Revenues ($M)	260.9	290.8	298.3
Corporate & Other Revenues ($M)	53.0	54.9	55.9
Term Life Pre‑tax Income ($M)	147.8	146.8	155.0
ISP Pre‑tax Income ($M)	74.8	81.3	79.4
Corporate & Other Pre‑tax Income ($M)	0.9	(8.0)	2.7

KPIs

KPI	Q2 2024	Q1 2025	Q2 2025
Life‑Licensed Sales Force	145,789	152,167	152,592
Recruits	96,563	100,867	80,924
New Life‑Licensed Reps	14,402	12,339	12,903
Policies Issued	100,768	86,415	89,850
Life Productivity (policies/rep/month)	0.23	0.19	0.20
Issued Term Life Face Amount ($B)	33.2	28.5	30.3
ISP Product Sales ($B)	3.1	3.6	3.5
Avg Client Asset Values ($B)	103.0	113.0	114.0
Closed U.S. Mortgage Volume ($M)	99.6	93.5	132.8

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Term Life Adjusted Direct Premiums growth	FY 2025	Around 5% (unchanged)	Around 5%	Maintained
Term Life Benefits & Claims Ratio	FY 2025	~58% (unchanged)	~58%	Maintained
Term Life DAC + Insurance Commissions Ratio	FY 2025	~12% (unchanged)	~12%	Maintained
Term Life Operating Margin	FY 2025	~22% (unchanged)	~22%	Maintained
Consolidated Other Operating Expenses	FY 2025	+$40M (6–8%) (unchanged)	+$40M (6–8%)	Maintained
ISP Sales Growth	FY 2025	Less than double digits (prior commentary)	Above 10%	Raised
Dividend	Q3 2025	—	$1.04 per share, payable Sep 15, 2025	Announced

Earnings Call Themes & Trends

Topic	Previous Mentions (Q‑2 and Q‑1)	Current Period (Q2 2025)	Trend
Cost of living / macro	Q4’24: “Cost of living pressure continued… expected to further affect middle‑income families in 2025” . Q1’25: “As economic uncertainty increases…” .	CEO cites “wait and see” behavior pressuring Life sales; productivity at 0.20 .	Persistent headwind, expected to normalize over time .
Mortality	—	Favorable vs long‑term assumptions; potential to revise assumptions in Q3 review .	Improving; potential favorable assumption change .
ISP mix / momentum	Q4’24: strong VA demand; sales +41% YoY . Q1’25: VA and managed accounts drove outperformance .	Sales +15% YoY; VA demand continues; FY sales growth now >10% .	Sustained strength; mix supportive of fees .
Sales force & recruiting	Q4’24 record 151,611 life‑licensed . Q1’25: 152,167 .	July recruiting >50k on incentive; focus on growing securities/mortgage licenses .	Growing breadth of licenses; recruiting responsive to incentives .
Technology & infrastructure	Q4’24: higher tech costs . Q1’25: continued investments .	Ongoing investments; opex guide reiterated .	Continued spend to support growth .
Capital & liquidity	RBC: 430% (Q4’24), 470% (Q1’25); buybacks/dividends active .	RBC ~490%; $129M buybacks; $371M holdco cash .	Strengthening capital and consistent returns .
Mortgage business	Q4’24 US vol $121.0M . Q1’25 $93.5M .	US $132.8M; Canada referral +30%; rate cuts could unlock refinancing .	Recovery underway; cyclical upside with rates .

Management Commentary

CEO (Glenn Williams): “Continued growth in our Investment and Savings Products segment, along with steady performance in Term Life, fueled another quarter of strong financial results.”
CFO (Tracy Tan): “Given the stable nature of our Term Life business, our full year guidance remains unchanged… ADP to grow around 5%… benefits and claims ratio around 58%… operating margin around 22%.”
CFO (on mortality): “We continue to see that the mortality has been favorable… quite a few percentages lower than our long term pre‑pandemic baseline… we will… consider changing long‑term assumptions” at Q3 review .
CEO (on ISP mix): “In uncertain times… variable annuity guarantees… have real appeal to consumers… partners take a long‑term view… we avoid products ‘beyond the pale’” .
CFO (on capital): “Holding company ended the quarter with $371M… RBC ratio was 490%… confident in maintaining a strong capital position while… returning capital” .

Q&A Highlights

Life sales headwinds and productivity: Management attributes softness to cost‑of‑living pressures and consumer “wait and see”; productivity may remain pressured near‑term but should normalize over time (mid‑range) as conditions stabilize .
Mortality and assumptions: Favorable mortality persists since 2022; Q3 assumption review may lower long‑term mortality assumptions, a potential earnings tailwind .
ISP sales trajectory: July was “still strong”; FY growth raised to >10% acknowledging tougher 2H comps; mix shift to VA and managed accounts continues .
Expense cadence: Some 2Q expense favorability was timing; tech investments likely ramp later in the year; full‑year +6–8% reiterated .
Capital deployment: RBC remains intentionally strong to support growth; company practically taking out the maximum permitted dividends from subs; prioritizes buybacks/dividends while supporting growth .

Estimates Context

S&P Global consensus (Q2 2025): EPS 5.20* vs actual 5.46; Revenue $789.9M* vs actual $793.3M — both beat (Values retrieved from S&P Global).
Forward consensus (as reference): For upcoming quarters, S&P Global shows Primary EPS estimates of 5.65* (Q4’25) and 5.49* (Q1’26), with revenue estimates of ~$836.5M* (Q4’25) and ~$846.9M* (Q1’26) (Values retrieved from S&P Global).
Implications: The EPS/revenue beat, raised ISP growth outlook (>10%), and potential favorable mortality assumption update in Q3 suggest upward bias to ISP revenue and consolidated EPS models; Term Life ratios and opex guidance were maintained, anchoring margin expectations .

Key Takeaways for Investors

Balanced engine: ISP momentum (+15% sales, record $120B AUA) offset softer Life volumes while Life margins stayed resilient (57.5% claims ratio; 23% operating margin) .
Quality beat: EPS and revenue beat consensus; non‑GAAP EPS +10% YoY; adjusted operating revenues +7% YoY .
Guidance intact with upside lever: Term Life ratios/opex guidance maintained; ISP sales growth raised to >10% on stronger demand and mix—supporting 2H run‑rate .
Potential Q3 catalyst: Annual assumption review may recognize structurally better mortality — possible reserve/earnings tailwind .
Capital deployment durable: $129M repurchases, $1.04 dividend, RBC ~490%, $371M holdco cash—ample capacity to fund growth and buybacks .
Watch near‑term headwinds: Life sales productivity likely remains at low end until consumer pressures ease; recruiting tactics (e.g., incentives) support field growth .
Trading lens: Narrative skew is positive on ISP strength and potential actuarial tailwinds; any clarity on mortality assumption changes and continued sales momentum are likely stock catalysts .

Note on Non‑GAAP: PRI presents adjusted operating metrics excluding investment gains/losses, mark‑to‑market adjustments, certain non‑recurring items, and coinsurance effects; reconciliations are provided in filings .

Estimates footnote: Asterisked consensus/estimate values are from S&P Global. Values retrieved from S&P Global.

Primerica, Inc. (PRI)·Q2 2025 Earnings Summary