Principal Financial Group (PFG) Financials

Principal Financial Group (NASDAQ: PFG) showed a much stronger start to 2026 than it did in the first quarter of 2025, but the broader multi-year trend still looks mixed. Revenue remains solid, balance sheet leverage is manageable, and the company continues to generate cash. However, quarterly earnings are volatile, and the first quarter of 2026 was a sharp step down from the very strong fourth quarter of 2025.

What stands out most is that PFG’s results can swing materially quarter to quarter, largely because of investment gains/losses, insurance claims, and other non-interest items. That makes year-over-year comparisons more useful than sequential ones, but even on that basis the picture is uneven.

• Revenue rebounded sharply year over year in Q1 2026. Total revenue rose to $3.53 billion from $2.82 billion in Q1 2025, helped by stronger capital gains and premiums earned.
• Operating cash flow remained positive. PFG generated $187.1 million of operating cash flow in Q1 2026, supporting ongoing dividends and buybacks.
• Book equity held steady above $11 billion. Total common equity was $11.8 billion at March 31, 2026, up modestly from $11.2 billion a year earlier.
• Retained earnings continued to grow. Retained earnings increased to $18.3 billion from $17.5 billion in Q1 2025, reflecting the company’s long-term earnings base.
• PFG kept returning capital to shareholders. The company repurchased $235 million of stock and paid $173.5 million in dividends in Q1 2026.
• Liquidity appears substantial, but much of the balance sheet is tied to investment and separate account assets. Cash and short-term investments were large, but separate account assets/liabilities dominated the balance sheet.
• Mortgage servicing rights remain a meaningful asset. These were $21.1 billion in Q1 2026, which can help earnings but also adds valuation sensitivity.
• Q1 2026 earnings dropped sharply from Q4 2025. Common shareholder net income fell to $424.6 million from $517.0 million in Q4 2025, while EPS declined from $2.30 to $1.96.
• Profitability was much weaker than a year ago on a GAAP basis. Q1 2025 had only $48.1 million of common shareholder earnings, but the latest quarter’s improvement was still well below the unusually strong periods seen in 2024 and late 2025.
• Liabilities remain very large relative to equity. Total liabilities were $320.3 billion versus $11.8 billion of common equity, typical for an insurer but still a reminder of the business’s balance-sheet intensity.

Longer-term trend: PFG’s revenue and cash generation have generally been resilient over the last several years, but earnings have been volatile. In 2024, the company produced several strong quarters, including Q4 2024 with $905 million of common shareholder earnings and EPS of $3.95. But results weakened through parts of 2025, including a loss in Q3 2025 and much lower earnings in Q1 2025 before recovering again in Q4 2025.

Balance sheet trend: Total assets moved higher over the past year, from about $313.0 billion in Q1 2025 to $332.7 billion in Q1 2026. At the same time, equity also improved modestly. That suggests PFG is still growing its asset base, but investors should remember that its structure is heavily influenced by insurance and separate account balances rather than conventional operating assets.

Bottom line: PFG still looks financially stable, with decent liquidity, recurring cash flow, and a consistent capital-return policy. The main caution is earnings volatility, which makes the stock more dependent on investment markets and underwriting performance than a typical diversified financial company.