Lincoln National (LNC) Q2 2025 earnings summary

Executive summary

• Adjusted operating income rose 32% year-over-year to $427 million, marking the fourth consecutive quarter of growth, with all four business segments delivering double-digit sales growth and Group Protection achieving record earnings and a 12.5% margin.

• Net income for Q2 2025 was $699 million, down from $895 million in Q2 2024, impacted by capital market volatility and one-time items; adjusted operating income per diluted share was $2.36, up from $1.87.

• Strategic repositioning and the closed Bain Capital partnership have enhanced capital flexibility and accelerated strategic priorities.

• Life Insurance returned to positive earnings, with operating income of $32 million, and annuities posted their third-highest sales quarter.

• Retirement Plan Services saw strong deposit growth, up 10% year-over-year, despite net outflows.

Financial highlights

• Q2 2025 adjusted operating income available to common stockholders was $427 million ($2.36 per diluted share); net income was $688 million ($3.80 per diluted share); total revenues were $4.04 billion, down from $5.15 billion in Q2 2024.

• Group Protection operating earnings reached $173 million, up 33% year-over-year, with a margin of 12.5%; sales up 16% year-over-year.

• Annuities operating income was $287 million, down 3% year-over-year, with sales up 5% to $4.0 billion; net outflows of $1.2 billion.

• Life Insurance operating earnings improved to $32 million from a loss of $35 million in the prior year quarter; sales up 15% year-over-year.

• Retirement Plan Services operating earnings were $37 million, down from $40 million year-over-year; deposits up 10% year-over-year.

Outlook and guidance

• Group Protection margins are expected to remain in line with the second half of 2024, with a full-year 2025 margin above 9%, reflecting at least 100 basis points of improvement.

• Retirement Plan Services net flows are anticipated to turn positive in the third quarter, supported by a strong sales pipeline.

• Free cash flow conversion guidance for 2026 remains at 45%-60%, with longer-term potential for higher rates as capital from Bain is deployed.

• Management emphasized a more balanced business mix, capital flexibility, and focus on profitable growth with attractive risk-adjusted returns.

• Ongoing focus on managing interest rate and equity market risks, with active hedging strategies in place.