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    JXN
    Earnings call· Jun 2026(Q2 FY26)

    Jackson Financial Q2 FY26 earnings call JXN

    Aug 4, 2026 Source

    Executive summary

    Jackson Financial Q2 FY26 — Record Adjusted Operating Earnings and Strong Capital Generation

    Jackson Financial delivered a strong second quarter, driven by record adjusted operating earnings and robust capital generation, positioning the company to meet its full-year financial targets. The company continues to diversify its business mix towards spread-based products, supported by strategic partnerships and product innovation, while maintaining a strong capital and liquidity position. Executive leadership transitions were announced, with confidence expressed in the incoming team to continue the company's strategic vision.

    Highlights

    5

    • Achieved a new quarterly record for adjusted operating earnings of $7.30 per diluted share.

    • Total adjusted capital increased nearly 9% year-over-year to $5.8 billion.

    • Free cash flow for H1 2026 was $575 million, a 14% increase from last year.

    • Retail annuity sales accelerated to nearly $6 billion, a 34% increase from a year ago.

    • RILA sales reached a record $2.3 billion, marking the fourth consecutive quarter of over $2 billion in RILA sales.

    Concerns

    3

    • Limited partnership results were below the long-term 10% return assumption, resulting in an unfavorable impact of $0.36 per share on adjusted operating EPS.

    • Strong equity market performance influenced variable annuity surrender activity, leading to net outflows in that segment.

    • Required capital growth included impacts related to equity markets and sales patterns inherent in the RBC framework, creating a headwind in the quarter.

    Guidance & targets

    3
    CategoryTargetConfidence
    Free Capital Generation
    $1.2 billion
    high materiality
    High
    Capital Return to Common Shareholders
    $900 million to $1.1 billion
    high materiality
    High
    Effective Tax Rate
    15%
    medium materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Retail Annuity
    Strong sales across all products, particularly RILA and FIA, driving diversification towards spread-based business. Net outflows declined, and distribution network expanded significantly.
    Total Sales: ~$6 billionTotal Sales Growth YoY: 34%RILA AUM: >$26 billionRILA Sales: $2.3 billionRILA Sales Growth YoY: 69%FIA Account Values (H1 FY26): $6.3 billionFIA Account Values Growth (H1 FY26): 28%FIA Sales (H1 FY26): $1.3 billionFIA Sales (Q2 FY26): $812 millionFIA Sales Growth YoY (Q2 FY26): 73%Non-variable Annuity Net Inflows: $2.9 billionNon-variable Annuity Net Inflows Growth YoY: 65%Non-variable Annuity Net Inflows Growth QoQ: 16%Advisory Sales from non-VA products (Q2 FY26): 50%Advisory Sales from RILA, FIA, Elite Access (H1 FY26): 80%In-force book (spread-based & investment-only VA): 40%Net Outflows Improvement (H1 FY26 YoY): 20%New Advisors Added (since 2025): 1,500Reactivated Advisors (since 2025): 2,300Producers selling new FIA product (new/reactivated): 60%
    		————
    Institutional
    Sales increased year-over-year and sequentially, reflecting effective opportunistic sales strategy.
    Sales: $1.4 billion
    		————
    PPM America
    AUM exceeded $100 billion, benefiting from growth in Jackson's spread-based businesses and third-party AUM.
    AUM: >$100 billion
    		————

    Operational metrics

    44
    Adjusted operating earnings (pretax, ex-notables)
    $648 millionincreased 50% year-over-year
    Q2 FY26

    Meaningfully higher than Q1 FY26.

    Adjusted operating earnings (pretax)
    $618 million
    Q2 FY26

    Reported pretax adjusted operating earnings for the quarter.

    Adjusted operating EPS
    $7.30
    Q2 FY26

    New quarterly record.

    Adjusted operating EPS (ex-notables, normalized tax)
    $7.6855% increase versus Q2 last year
    Q2 FY26

    Excluding $0.36 of notable items and normalizing for tax rate difference.

    Limited partnership impact on EPS
    $0.36
    Q2 FY26

    Unfavorable impact due to results below long-term 10% return assumption.

    Effective tax rate
    15.2%
    Q2 FY26

    Consistent with 15% guidance.

    Total account value (retail annuities & institutional)
    >$295 billion10% increase from prior quarter
    Q2 FY26

    Included a greater percentage of spread-based account growth.

    Adjusted operating earnings growth
    >20%
    H1 FY26

    Growth through the first half of the year.

    Capital returned to shareholders
    $547 million
    H1 FY26

    In the form of common shareholder dividends and share repurchases.

    After-tax statutory capital generation
    $656 million
    Q2 FY26

    Benefiting from strong equity market performance and continued growth in spread-based businesses.

    Free capital generation
    $304 million
    Q2 FY26

    Reflecting estimated change in required capital associated with new business production.

    Capital returned to common shareholders
    $290 million38% increase on a per diluted share basis compared to prior year quarter
    Q2 FY26

    Supported by strong free capital generation and free cash flow.

    Total capital returned to common shareholders (since IPO)
    ~$3.3 billion
    Since IPO

    Exceeding initial market capitalization at IPO.

    Estimated RBC ratio
    538%
    Q2 FY26

    Comfortably above minimum target.

    RBC risk appetite
    425%
    Ongoing

    Stability in RBC levels supports focus on sustained free capital generation.

    Holding company cash and investments
    ~$1.4 billion
    Q2 FY26

    Well above updated minimum liquidity buffer, providing substantial financial flexibility. Increase from Q1 primarily reflects proceeds from senior debt issuance.

    Senior debt issued
    $750 million
    Q2 FY26

    Effectively prefunding $650 million of debt maturities due in 2027.

    Debt maturities prefunded
    $650 million
    2027

    Prefunded by $750 million senior debt issuance in Q2 FY26.

    Incremental holding company liquidity from debt issuance
    $100 million
    Q2 FY26

    From the $750 million senior debt issuance.

    Revolving credit facility expanded
    from $1 billion to $1.25 billion
    Q2 FY26

    Maturity extended from 2028 to 2031.

    Total available liquidity (Jackson Financial, Inc.)
    ~$4 billion
    Q2 FY26

    Including holding company cash, highly liquid securities, and undrawn revolving credit facility.

    Available liquidity (Jackson National Life)
    >$32 billion
    Q2 FY26

    Substantial liquidity resources at the operating company level.

    Cash and U.S. treasury securities (Jackson National Life)
    $6 billion
    Q2 FY26

    Part of Jackson National Life's available liquidity.

    Other highly liquid marketable securities (Jackson National Life)
    $23 billion
    Q2 FY26

    Part of Jackson National Life's available liquidity.

    Federal Home Loan Bank borrowing capacity
    $2.6 billion
    Q2 FY26

    Additional borrowing capacity through collateralized loan advance program.

    Total leverage ratio (excluding AOCI)
    ~23.4%
    Q2 FY26

    Among the strongest in its peer group.

    Total leverage ratio (adjusting for 2027 maturities)
    ~19.7%
    Q2 FY26

    Adjusted for the planned retirement of 2027 maturities.

    Fixed maturity portfolio market to book ratio
    96%
    Q2 FY26

    Reflects disciplined asset selection and prudent portfolio management.

    Exposure to below investment-grade securities
    1%
    Q2 FY26

    Very limited, consisting almost entirely of corporate bonds and loans.

    Corporate securities allocation in portfolio
    58%
    Q2 FY26

    Complemented by mortgage loans, asset-backed securities, and private equity.

    Private debt portfolio composition (traditional private placements)
    62%
    Q2 FY26

    Remainder allocated to infrastructure, asset-backed securities, and credit tenant leases.

    Separate account returns
    12.9%
    Q2 FY26

    Contributed to investment gains in variable annuity AUM.

    Investment gains in variable annuity AUM
    >$27 billion
    Q2 FY26

    Exceeded variable annuity net outflows by more than $22 billion.

    Variable annuity net outflows (exceeded by investment gains)
    >$22 billion
    Q2 FY26

    Investment gains in variable annuity AUM exceeded net outflows by this amount.

    All-in surrender rate (variable annuities)
    essentially flat sequentially and modestly higher than prior year quarter
    Q2 FY26

    Surrender activity influenced by equity market performance.

    Net hedge result (overall)
    $2 million gain
    Q2 FY26

    Modest gain after isolating volatility-related impacts.

    Net hedge result (RILA and FIA, GAAP)
    ~$200 million gain
    Q2 FY26

    Driven by hedge gains that more than offset reserve movements, but economically much closer to neutral.

    Net hedge result (RILA and FIA, economic basis)
    much closer to neutral
    Q2 FY26

    Despite a GAAP gain of ~$200 million, the economic result was near neutral.

    Net hedge result (VA, GAAP, ex-implied volatility)
    ~$200 million loss
    Q2 FY26

    Excluding the approximately $270 million benefit from implied volatility during the quarter.

    Net hedge result (Brooke Re basis)
    essentially flat
    Q2 FY26

    Brooke Re's capitalization remains well above internal risk management target and regulatory minimum operating capital level.

    New money yield vs overall portfolio yield
    ~100 basis points ahead
    Q2 FY26

    The new money yield was roughly 100 basis points ahead of the overall portfolio yield for the quarter.

    Pretax operating expenses (sequential change)
    $48 million lower
    Q2 FY26 vs Q1 FY26

    Benefited from normal seasonality, including compensation.

    Adjusted operating return on equity
    16.3%up from 12.7% for comparable period ending June 2025
    Trailing 12 months ended June 2026

    Reflects resilience and earnings power of the business.

    Distribution to holding company
    $325 million
    Q2 FY26

    Consistent with disciplined capital management approach.

    Industry KPIs

    1
    MetricValueDetails
    Capital returns$547 millionUSD

    Product announcements

    1
    ProductTypeDetails
    Market Link Pro 4 and Market Link Pro Advisory 4launch

    Deals & partnerships

    1
    TPGStrategic partnership to enhance investment capabilities and drive higher new money yields, particularly in direct lending.

    Collaboration with PPM America, focusing on direct lending in the lower middle market segment. Capital deployment building momentum, aligned with AUM targets.

    Risks & headwinds

    3
    Volatility in limited partnership valuationsQ2 FY26

    limited partnership results were below our long-term 10% return assumption, resulting in an unfavorable impact of $0.36 per share.

    Mitigation: remain confident in the underlying quality and long-term performance of these investments.

    Variable annuity surrender activity influenced by equity market performanceQ2 FY26

    all-in surrender rate was essentially flat sequentially and modestly higher than the prior year quarter.

    Mitigation: anticipate that policyholders with mature variable annuities will continue to take advantage of the high growth in their funds and their valued benefits and believe the impact on total net flows should recede over time.

    Required capital growth impacted by RBC frameworkQ2 FY26

    Required capital growth in the quarter also included impacts related to equity markets and sales patterns that are inherent in the RBC framework

    Mitigation: we would not expect the same level of headwind in future quarters if sales remain at current levels.

    What to watch in Q3 FY26

    5

    Free Capital Generation

    Next quarter (Q3 FY26)
    Current$304 million (Q2 FY26)
    TargetProgress towards $1.2 billion for FY26

    Why it matters

    This is a key financial target and indicator of underlying earnings power and capital return capacity.

    Based on results through the first half of 2026, we remain confident in achieving at least $1.2 billion in free capital generation for the full year.

    Q&A highlights

    8

    Inquired about the sustainability of the quarter's normalized earnings of $540 million (analyst's figure, not company's) and the drivers of the 30% sequential increase, given it was higher than expected.

    Don Cummings attributed the strong earnings to significant fee-based results from strong equity markets (S&P 500 up 15%, separate account returns up 13%) and substantial contribution from the spread business, with AUM up 14% sequentially and 50% year-over-year. He noted NII increase due to higher average AUM, improved total portfolio yield from new money invested at higher rates, and favorable LP marks. He indicated that higher equities and interest rates are beneficial, and the strategy to shift to spread products is working, suggesting continued strong earnings, though with some seasonality in expenses.

    “Higher equities, higher interest rates are good for our businesses. And while we're not providing full year financial guidance, there are a couple of indicators that I think bode well for us having drawn results going forward.”

    asked by Suneet Kamath · answered by Don Cummings

    2 min read6 chapters

    Detailed Narrative

    01

    Strong Financial Performance and Capital Position

    Jackson reported record adjusted operating earnings of $7.30 per diluted share, driven by strong fee income and spread-based income growth. Total adjusted capital reached $5.8 billion, up 9% year-over-year, and free cash flow for the first half of 2026 was $575 million, enabling $547 million in shareholder returns. The company maintains a robust capital position and liquidity, with an estimated RBC ratio of 538% and $4 billion in total available liquidity at the holding company.

    02

    Retail Annuity Sales Momentum and Diversification

    Retail annuity sales accelerated to nearly $6 billion in Q2, a 34% increase year-over-year, with strong growth across all products. RILA sales hit a new record of $2.3 billion, and fixed and fixed index annuity products saw their account values increase 28% to $6.3 billion in H1 2026. Spread-based products now represent 54% of total sales, reflecting a successful diversification strategy and a shift towards a more balanced in-force book.

    03

    Strategic Partnerships and Investment Capabilities

    The partnership with TPG and the investment expertise of PPM America are enhancing Jackson's ability to offer competitive spread-based products and drive higher new money yields. This collaboration is broadening investment opportunities and supporting the growth of the spread-based business, with capital deployment under the TPG arrangement building momentum.

    04

    Effective Hedging and Capital Management

    Jackson's shift to a more economic hedging approach has improved the consistency of hedging program outcomes, supporting more predictable capital generation. The overall net hedge result for the quarter was a modest $2 million gain, demonstrating the effectiveness of managing economic risk and preserving business model resilience, particularly with Brooke Re's capitalization remaining strong.

    05

    Executive Leadership Transition

    CEO Laura Prieskorn announced her retirement at year-end, with CFO Don Cummings appointed as the next President and CEO, and Brian Walta as the new CFO, both effective October 1. This transition reflects strong succession planning and confidence in the leadership team to guide Jackson through its next phase of growth and continue its strategic vision.

    06

    Investment Portfolio Quality and Discipline

    The company's investment portfolio is high-quality and defensively positioned, with 58% in corporate securities and a market-to-book ratio of 96%. Exposure to below investment-grade securities is very limited at 1%. The private debt portfolio, consisting of 62% traditional private placements, is conservatively positioned, with substantial capacity to deploy capital on attractive terms, reinforcing growth and diversification.

    AI-generated summary of the company’s earnings call. Not investment advice.