Executive Summary

Q2 2025 delivered an adjusted operating EPS of $3.58, an 9% sequential increase and 9% above consensus, on after-tax adjusted operating income of $1.284B; revenue was $13.51B, modestly above consensus, with segment strength in PGIM and International offsetting assumption-update charges and market-risk-benefit losses .
EPS and revenue both beat Wall Street: adjusted EPS $3.58 vs. $3.22 consensus (+11%); revenue $13.51B vs. $13.40B consensus (+1%); prior quarter revenue had missed by ~$1.1B, highlighting improvement this quarter* .
Management advanced the PGIM integration into a unified asset management business including a ~$1T public/private credit platform, cited strong investment performance and sales across retirement and insurance, and returned $735M to shareholders ($250M buybacks; $485M dividends) .
Near-term headwinds included assumption updates (net after-tax charges: $0.37/share to net income; $0.10/share to AOI) and continued market risk benefit losses; CEO emphasized sustainable growth, operating efficiency, and unified PGIM strategy as catalysts .
We could not locate a Q2 2025 earnings call transcript in the document set; themes reflect Q2 press release plus Q1/Q4 call trends to frame the narrative trajectory .

What Went Well and What Went Wrong

What Went Well

Adjusted operating EPS and revenue beat consensus; AOI rose year over year to $1.284B, with PGIM AOI up 11% YoY to $229M on higher asset management fees; International AOI up to $761M on underwriting and spread gains .
Strategic execution: launched PGIM’s unified multi-manager structure and ~$1T credit platform to drive efficiencies and cross-selling; CEO: “Our new structure enables us to better serve clients… and to drive operating efficiencies, cross-selling opportunities, and increased revenue over time.” .
Commercial momentum: Institutional Retirement sales of $8.9B (LRT $5.6B, including second Dutch deal); PGIM AUM grew to $1.441T (+8% YoY) with positive institutional inflows; Group Insurance AOI improved, and Individual Life swung to $108M AOI with sales up 10% .

What Went Wrong

Assumption update headwinds reduced reported EPS by $0.37 and AOI by $0.10 per share; U.S. Businesses AOI declined YoY, pressured by lower fees net of distribution costs and assumption effects .
Market risk benefit and realized losses weighed on GAAP results: MRB losses of $426M pre-tax and realized investment losses of $516M pre-tax drove net income EPS to $1.48 despite strong AOI .
Retail flows softness at PGIM: third-party retail outflows of $2.8B amid equity volatility; Individual Retirement sales fell 10% YoY on lower RILA momentum, even as net investment spreads improved .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenues ($USD Billions)	$13.01	$13.41	$13.51
Net Income EPS (Diluted)	$(0.17)	$1.96	$1.48
Adjusted Operating EPS (Diluted)	$2.96	$3.29	$3.58
Operating ROE % (AOI-based)	12.2%	13.8%	14.9%

Segment AOI (pre-tax)

Segment AOI ($USD Millions)	Q4 2024	Q1 2025	Q2 2025
PGIM	$259	$156	$229
U.S. Businesses	$860	$931	$955
International Businesses	$742	$848	$761
Corporate & Other	$(490)	$(415)	$(280)
Total AOI (pre-tax)	$1,371	$1,520	$1,665

Key KPIs

KPI	Q4 2024	Q1 2025	Q2 2025
PGIM AUM ($USD Billions)	$1,375.2	$1,385.3	$1,440.7
Institutional Retirement Net Account Value ($USD Billions, net)	$279.19	$284.98	$298.41
Institutional Retirement Sales ($USD Millions)	$10,249	$7,051	$8,854
Individual Retirement Net Account Value ($USD Billions, net)	$127.12	$124.07	$131.52
Individual Retirement Sales ($USD Millions)	$3,636	$3,473	$3,135
Group Insurance Annualized New Biz Premiums ($USD Millions, total)	$63	$400	$77
Individual Life Sales ($USD Millions)	$326	$210	$223
International Sales (Constant $USD Millions)	$519	$586	$541
Parent Highly Liquid Assets ($USD Billions)	$4.6	$4.9	$3.9

Estimate Comparison (S&P Global)

Metric	Q4 2024	Q1 2025	Q2 2025
Adjusted Operating EPS – Consensus Mean ($)	$3.26*	$3.18*	$3.22*
Adjusted Operating EPS – Actual ($)	$2.96	$3.29	$3.58
Revenue – Consensus Mean ($USD Billions)	$14.47*	$14.56*	$13.40*
Revenue – Actual ($USD Billions)	$12.52	$13.47	$13.51

Values with asterisks retrieved from S&P Global.

Highlights vs Estimates:

Q2 2025: EPS beat (+$0.36 vs $3.22*), revenue beat (+$0.11B vs $13.40B*) .
Q1 2025: EPS beat, revenue miss (actual $13.47B vs $14.56B*) .
Q4 2024: EPS miss, revenue miss .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core Adjusted Operating EPS Growth	Through 2027	5%–8% CAGR (introduced Q4 call; reiterated Q1 call)	Reiterated; path not linear due to 2025 headwinds	Maintained
PGIM Adjusted Operating Margin	Intermediate term	25%–30% target	Reiterated; near-term volatility impacts seed/co-investment; “path towards 30%”	Maintained
Global Retirement & Insurance Operating Expense Ratio	2025–2027	8.5%–10.5%, trending down	No change disclosed in Q2 release	Maintained
Assumption Update – One-time AOI impacts	Q2 2025	Pre-announced: IRS $(80)M; Institutional $(30)M; Life +$60M	Reflected in Q2 results; net after-tax charge $36M to AOI ($0.10/share)	Implemented
Assumption Update – Ongoing Quarterly AOI impacts	Post-Q2	IRS $(20)M per quarter	To persist ongoing	New ongoing headwind
Dividend	Q3 2025 payable	$1.35/share (declared Feb 2025)	$1.35/share payable Sept 11, 2025	Maintained
Share Repurchases	CY 2025	Up to $1.0B authorized	Continued execution ($250M in Q2)	Ongoing

Earnings Call Themes & Trends

We could not locate a Q2 2025 call transcript; themes below reflect Q2 press release plus Q1/Q4 calls to show trajectory.

Topic	Q4 2024 (Previous Mentions)	Q1 2025 (Previous Mentions)	Q2 2025 (Current Period)	Trend
EPS Growth Framework	Introduced 5%–8% core EPS growth and 13%–15% adj. ROE through 2027	Reiterated; noted 3–4pt drag in 2025 from runoff and Japan FX	Reiterated confidence; growth path emphasized, non-linear	Improving execution, near-term drag persists
PGIM Margin & Flows	PGIM AOI up on fees/incentives; AUM $1.375T	Low Q1 margin seasonally; seed/co-investment volatility; confident path to 25–30%	AUM $1.441T; institutional inflows $2.6B; retail outflows $2.8B; unified platform launch	Stabilizing; strategic integration positive
Retirement Strategies (PRT & RILA)	Record Institutional account values; strong LRT	Institutional sales $7B incl. ~$5B LRT; best structured settlement quarter	Institutional $8.9B sales incl. $5.6B LRT; RILA momentum slower; spreads higher	Healthy Institutional; mixed Individual
Japan & International	Diversified product; reinsurance actions	Elevated USD-denominated surrenders; stabilization signs; sales +15%	Constant-dollar sales +4% YoY; AOI up on underwriting, spread	Gradual improvement
Macro/Volatility & Alternatives	MRB swings impacted Q4 GAAP	Alt investment income ~$90M below expectations	GA Portfolio alt income ~$55–$75M below expectations	Continuing headwind

Management Commentary

CEO on Q2 strategy and PGIM: “Our new structure enables us to better serve clients… and to drive operating efficiencies, cross-selling opportunities, and increased revenue over time.”
Strategic priorities: “We remain focused on driving sustainable growth by sharpening our strategy, improving our financial performance, and fostering a high-performance culture.”
Q1 call framing: “We continue to expect 5% to 8% core adjusted operating EPS growth on average through 2027… performance may not be linear due to near-term headwinds.”
Capital strength: Cash and liquid assets above $3B target; AA financial strength supports growth investment and shareholder returns .

Q&A Highlights

PGIM margin trajectory: Management reaffirmed 25%–30% adjusted margin target over an intermediate term; near-term margin volatility tied to seed/co-investments but path remains intact .
PRT market dynamics and litigation: No observed impact on sector activity; 2025 market size likely normalizes due to decision-making delays amid volatility; long-term opportunity remains robust .
Growth mix: Organic remains priority; inorganic used selectively to extend leadership (e.g., Deer Path Capital) with disciplined capital deployment towards higher-growth, capital-efficient areas .
2025 EPS drag: Estimated 3–4pt headwind from block runoff and Japan FX pressure to diminish over time .

Estimates Context

Q2 2025 beat: Adjusted EPS $3.58 vs $3.22 consensus (+11%); revenue $13.51B vs $13.40B consensus (+1%)* .
Trajectory vs prior: Q1 2025 EPS also beat while revenue missed; Q4 2024 missed on both, impacted by realized losses and MRB dynamics .
Implications: Street models may raise AOI EPS on PGIM fee tailwinds, better underwriting, and unified platform synergies; revenue estimates modestly up as sales breadth improves. Values retrieved from S&P Global.

Key Takeaways for Investors

The quarter was cleanly ahead of consensus on both adjusted EPS and revenue; significant realized/MRB headwinds remain in GAAP but AOI trajectory is improving .
PGIM integration and ~$1T credit platform should support fee growth, margins, and cross-selling; watch for margin progression toward the 25%–30% target over the next 6–12 quarters .
Retirement Strategies continue to anchor earnings with strong Institutional LRT volumes; Individual spreads improved but sales mix is normalizing; monitor RILA demand and legacy VA runoff .
Japan/international stabilization is underway; FX and surrender pressure a 2025 drag, but underwriting and spread improvements suggest a more constructive setup into 2026 .
Shareholder returns remain robust ($735M in Q2; dividend $1.35/share maintained); cash/liquidity buffers and AA strength support continued buybacks/dividends .
Near-term modeling: include ongoing $(20)M/quarter AOI headwind in Individual Retirement from assumption updates; one-time impacts now embedded in Q2 actuals .
Trading lens: Positive estimate revision risk on AOI EPS and PGIM margin narrative; stock likely sensitive to signs of sustained retail flows at PGIM, RILA sales reacceleration, and clarity on MRB/realized volatility cadence .

Additional Detail and Cross-References

Assumption Update Effects: Net after-tax charges of $134M to GAAP net income ($0.37/share) and $36M to AOI ($0.10/share) .
MRB and Realized Volatility: Q2 pre-tax MRB losses $426M; realized investment losses $516M; market experience updates +$42M pre-tax .
Product Innovation: ActiveIncome insurance overlay launched with Dimensional UMA via FIDx, expanding lifetime income solutions for RIAs .
Capital Returned: $735M in Q2 (buybacks $250M; dividends $485M); dividends represent 5.6% yield on adjusted book value; adjusted BV/share $96.41 .

PRUDENTIAL FINANCIAL INC (PRU)·Q2 2025 Earnings Summary