Executive Summary

Q3 delivered a record adjusted operating EPS of $4.26, up 28% y/y, with AOI after tax of $1.521B and net income EPS of $4.01; PGIM AUM reached $1.47T and capital returned was $731M (repurchases $250M; dividends $481M). Management cited broad earnings growth and momentum across businesses, with year-to-date operating ROE over 15% .
Results beat S&P Global consensus: EPS $4.26 vs $3.72*; revenue $17.88B* vs $13.88B*, and normalized net income $1.43B vs $1.31B* (see Estimates Context) (Values retrieved from S&P Global).
Business drivers: higher net investment spread (incl. stronger alternatives), favorable underwriting, and continued sales/flow strength across Retirement and International; U.S. Group Insurance benefit ratio at 82.8% remained below target range mid‑point, reflecting adequate pricing and underwriting .
Strategic progress: PGIM’s transition to a unified asset manager model and actions to expand margins; diversification in retirement/insurance offerings; continued derisking and balance sheet optimization (parent highly liquid assets $3.9B) . A near-term catalyst is further PGIM margin progress and steady pension risk transfer (PRT)/longevity activity; stabilization of Japan surrenders remains a watch item (see prior calls) .

What Went Well and What Went Wrong

What Went Well
- Record AOI EPS; broad-based earnings growth across all businesses; y/y AOI EPS +28% as management emphasized momentum in sales/flows and favorable markets .
- U.S. Businesses AOI rose to $1.149B on stronger spread (including alternatives) and underwriting; Retirement Strategies AOI hit $966M with Institutional at $480M and Individual at $486M; sales included a $2.3B jumbo PRT and $1.5B of longevity risk transfer .
- PGIM AUM rose to $1.470T (+5% y/y); net inflows of $2.4B with fixed income strength; management is “quickly evolving to a unified asset manager model” to drive margins and scale private/public credit .
What Went Wrong
- Corporate & Other loss remained sizable at $(327)M (AOI), albeit improved y/y (lower expenses, FX remeasurement tailwind) .
- Group Insurance benefit ratio at 82.8% (Q3), though improved, remains an area to monitor versus the 83–87% target range, with variability possible on claims trends .
- Realized investment losses remained a headwind at $(574)M pre-tax, partly offset by favorable change in value of market risk benefits (+$324M) and continued sensitivity to alternatives; y/y comparisons remain affected by non-operating items .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Total Revenues ($USD Millions)	$13,412	$13,506	$16,239
Adjusted Operating EPS (Diluted)	$3.29	$3.58	$4.26
Net Income EPS (Diluted)	$1.96	$1.48	$4.01
Operating ROE (%)	13.8%	14.9%	17.5%

Segment AOI before income taxes ($USD Millions)

Segment	Q1 2025	Q2 2025	Q3 2025
PGIM	$156	$229	$244
U.S. Businesses	$931	$955	$1,149
International Businesses	$848	$761	$881
Corporate & Other	$(415)	$(280)	$(327)
Total AOI Before Tax	$1,520	$1,665	$1,947

Selected KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
PGIM AUM ($USD Billions)	$1,385.3	$1,440.7	$1,470.0
Total AUM + AUA ($USD Trillions)	$1.7025	$1.7735	$1.8066
Parent Highly Liquid Assets ($B)	$4.9	$3.9	$3.9
Capital Returned ($M)	$736	$735	$731
Dividend per Share	$1.35	$1.35	$1.35
Group Insurance Benefit Ratio (%)	81.3%	80.9%	82.8%

Estimates vs Actuals (S&P Global)

Metric	Consensus	Actual	Surprise
Adjusted/Primary EPS ($)	3.72*	4.26	+0.54*
Revenue ($B)	13.88*	17.88*	+3.99*
Normalized Net Income ($B)	1.31*	1.431	+0.12*

Note: Revenue comparisons use S&P Global revenue definition; company’s AOI “Total revenues” exclude certain items (see footnotes in filings). Values marked with * retrieved from S&P Global (Capital IQ).

Guidance Changes

Metric	Period	Previous Guidance	Current Update	Change
Core AOI EPS growth	Through 2027	5–8% CAGR (intermediate-term)	Reiterated; not updated quarterly	Maintained
PGIM AOI margin	Intermediate-term	Path toward ~30% (intermediate target)	Reaffirmed path; near-term variability from volatility	Maintained
Group Insurance Benefit Ratio	Ongoing target	83%–87% range	Q3 at 82.8%; target unchanged	Maintained
Free cash flow target	Ongoing	~65% of net income (over time)	Framework reiterated; quarter-to-quarter lumpy	Maintained
Japan ESR disclosure	Timing	Preliminary ESR in summer 2025	Plan unchanged; manage to AA strength	Maintained
Quarterly dividend	December 2025	—	$1.35 declared for Dec 11, 2025	N/A (declaration)

Earnings Call Themes & Trends

Note: The Q3 2025 earnings call transcript was not available at time of writing; themes below reference Q1/Q2 commentary and Q3 disclosures.

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3)	Trend
PGIM strategy/margins	Targeting ~30% margins over time; broad public/private platform; near-term volatility weighed on seed/co-investments	Continued unification to a single asset manager model; margin expansion actions underway	Improving structure; margins still sensitive to markets
Alternatives/Investment spread	Q1 alternatives below plan; acknowledged sensitivity and provided VII sensitivities	Q3 U.S. spread benefited from higher alternative income	Positive contributor in Q3; remains cyclical
Retirement (PRT/LRT)	Strong 2024 PRT; Q1 noted episodic flows, normalization possible; long-term opportunity intact	Q3 Institutional sales $6.4B incl. $2.3B jumbo PRT; LRT $1.5B	Solid pipeline; episodic but supportive
Japan/ESR and surrenders	Headwinds from USD policies; stabilization signs; preliminary ESR timing; reinsurance tools (Prismic/external)	No new ESR number; capital strength reiterated; international AOI up y/y	Stabilizing; managing capital proactively
Legacy runoff/derisking	Continuous optimization; VA/GUL runoff drag quantified over 2025	Continued runoff impact embedded; Corporate & Other loss improved y/y	Ongoing drag but diminishing over time
Capital returns	Balanced dividends/buybacks; FCF ≈65% of NI over time	Q3 returned $731M; dividend $1.35/share	Consistent execution

Management Commentary

“Our third quarter adjusted operating income earnings per share reached a record-high, up 28% from the year-ago quarter, driven by earnings growth in every business… resulting in year-to-date adjusted operating return on equity of over 15%.” – Andy Sullivan, CEO .
“We are quickly evolving to a unified asset manager model in PGIM and have taken actions to drive margin expansion… These actions will support our growth… and position us to be a global leader in investment, insurance, and retirement security.” .
Segment detail: U.S. Businesses AOI $1.149B, driven by higher spread (incl. alternatives) and underwriting; Retirement Strategies AOI $966M; Institutional account value $299B; Q3 sales $6.4B incl. $2.3B jumbo PRT and $1.5B LRT .
International Businesses AOI $881M (+$115M y/y) on higher spread (incl. alternatives) and underwriting .

Q&A Highlights

The Q3 2025 call transcript was not available. Investor focus from recent calls (Q1 2025) centered on:

Capital deployment and derisking: Continuous optimization across organic/inorganic uses; further shrinking legacy exposures remains a tool but no pipeline item to discuss .
PGIM margins: Intermediate path toward ~30% remains; near-term affected by volatility and incentive seasonality .
Japan ESR/surrenders: Manage to AA strength; preliminary ESR planned for summer 2025; surrenders tied to FX showing signs of stabilizing; ~$100M 2025 earnings headwind from 2024 surrenders .
Retirement earnings emergence and PRT market: Sales benefits flow through over time; 2025 market likely “normalize” vs robust 2024, but long-term opportunity remains large .
Capital return framework: Free cash flow ≈65% of net income over time; pacing can be lumpy .

Estimates Context

EPS: $4.26 actual vs $3.72* consensus (beat). Revenue: $17.88B* actual vs $13.88B* consensus (beat). Normalized net income: $1.431B actual vs $1.309B* consensus (beat). Values retrieved from S&P Global.
Implications: Upward revisions likely for AOI EPS/segment AOI given stronger alternatives and underwriting in Q3; watch for sustainability of alternative returns and the cadence of PRT/LRT transactions into Q4.
Note: S&P Global “Revenue” differs from the company’s AOI “Total revenues,” which exclude certain items per non‑GAAP framework .

Key Takeaways for Investors

Quality beat with record AOI EPS and strong operating ROE; breadth of contribution (U.S., International, PGIM) supports durability, though alternatives remain a swing factor .
Retirement momentum continues: jumbo PRT and longevity risk transfer volumes underscore competitiveness; earnings emergence should build as 2024–2025 cohorts season .
PGIM execution is a medium-term re‑rating lever: unification and expense discipline aim to expand margins; AUM tailwinds from fixed income and private credit growth persist .
International improving: Japan/EM sales growth with improving underwriting/spreads; ESR implementation remains a 2026 focus, but capital tools and AA strength are reiterated .
Capital return remains steady (dividend $1.35; $250M buyback in Q3) with ~$0.73B returned; liquidity robust at $3.9B; expect ongoing balance between growth investment and returns .
Watch list: alternative investment income normalization, group claims trends vs 83–87% target, PRT pipeline cadence into Q4, and updates on PGIM margin trajectory and Japan ESR.

Additional context: Other Q3 press releases (e.g., FinHealth Spend Report; Global Retirement Pulse Survey) were issued on Oct 29 and Oct 27, respectively, but did not affect financials .

PRUDENTIAL FINANCIAL INC (PRU)·Q3 2025 Earnings Summary