FG Q3 Deep Dive: Fee-Based Earnings and Distribution Expansion Support Outperformance

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Its non-GAAP profit of $1.22 per share was 25.4% above analysts’ consensus estimates.Is now the time to buy FG? Find out in our full research report (it’s free for active Edge members). Revenue: $1.69 billion vs analyst estimates of $1.40 billion (16.5% year-on-year growth, 20.8% beat)Adjusted EPS: $1.22 vs analyst estimates of $0.97 (25.4% beat)Market Capitalization: $4.15 billionF&G Annuities & Life delivered a strong Q3, with management highlighting robust sales momentum and record assets under management as primary drivers for the positive results. CEO Christopher Blunt attributed the outperformance to “one of our best sales quarters in history, the launch of our new reinsurance sidecar, and strong performance across the business.” The company’s focus on balancing spread-based earnings with the expansion of fee-based, higher-margin products contributed to both sales and margin growth. Management also credited disciplined capital allocation and operating expense control as significant contributors to the quarter’s performance.Looking ahead, F&G Annuities & Life’s outlook is shaped by its ongoing transition to a more fee-based, capital-light business model and continued expansion in core annuity and life insurance products. Management expects demographic trends, particularly the growing retirement population’s need for guaranteed income, to sustain demand for annuities. President and CFO Conor Murphy noted, “We expect continued strong demand for retirement savings products, including a growing demand for annuities by consumers and financial advisors for retirement security.” The company also anticipates further efficiency gains as it leverages scale and continues to optimize its distribution strategy.Management attributed the quarter’s performance to strong sales growth, the launch of the reinsurance sidecar, and continued operating efficiency, while highlighting a strategic focus on expanding fee-based earnings.Sales diversification across products: Management reported strength across all product lines, including fixed index annuities (FIA), MYGA, and pension risk transfer (PRT), with the new reinsurance sidecar helping capture more fee-based revenue and improve margins.Distribution channel expansion: The company’s own distribution portfolio, spanning independent marketing organizations (IMOs) in both life and annuity segments, performed ahead of expectations and is expected to generate over $80 million in EBITDA for 2025, supporting profitable growth.Flow reinsurance and sidecar adoption: F&G continued to shift toward a capital-light, fee-based model by increasing the use of flow reinsurance and launching a reinsurance sidecar for accumulation-focused FIA sales, which management believes will drive a 50-50 balance between retained and reinsured sales.Expense ratio improvements: Operating expense as a percentage of assets under management (AUM) declined from 62 basis points in the prior year to 52 basis points in Q3, with expectations to reach 50 basis points by year-end, reflecting ongoing efficiency initiatives and scale benefits.Increased public float and shareholder base: The announced distribution of F&G shares by its majority owner, FNF, is expected to boost the company’s public float from 18% to 30%, potentially increasing institutional ownership and market visibility.Terms and Privacy PolicyPrivacy & Cookie SettingsMore InfoS&P 5006,728.80 +8.48 (+0.13%)Dow 3046,987.10 +74.80 (+0.16%)Nasdaq23,004.54 -49.46 (-0.21%)Russell 20002,432.82 +14.00 (+0.58%)VIX19.08 -0.42 (-2.15%)Gold4,009.80 +18.80 (+0.47%)PortfolioSign in to access your portfolioSign inTop gainersGMED Globus Medical, Inc. 83.89 +22.18 (+35.94%)FROG JFrog Ltd. 60.00 +12.74 (+26.96%)EOSE Eos Energy Enterprises, Inc. 18.26 +2.97 (+19.42%)OS OneStream, Inc. 22.74 +3.66 (+19.18%)EXPE Expedia Group, Inc. 258.25 +38.55 (+17.55%)Top losersUI Ubiquiti Inc. 612.19 -147.38 (-19.40%)PRMB Primo Brands Corporation 14.46 -3.24 (-18.31%)RUN Sunrun Inc. 17.13 -3.29 (-16.11%)DIOD Diodes Incorporated 44.28 -7.53 (-14.53%)DOCS Doximity, Inc. 54.29 -8.29 (-13.25%)Most activeNVDA NVIDIA Corporation 188.15 +0.07 (+0.04%)OPEN Opendoor Technologies Inc. 6.56 0.00 (0.00%)ACHR Archer Aviation Inc. 8.18 -0.70 (-7.88%)PLUG Plug Power Inc. 2.6500 +0.1400 (+5.58%)PFE Pfizer Inc. 24.43 +0.01 (+0.04%)Earnings eventsMy earnings eventsEarnings eventsTrending tickersBTC-USD Bitcoin USD 101,922.34 -387.65 (-0.38%)PYPL PayPal Holdings, Inc. 66.22 -0.04 (-0.06%)ETH-USD Ethereum USD 3,421.88 -24.48 (-0.71%)XRP-USD XRP USD 2.29 -0.03 (-1.19%)SPOT Spotify Technology S.A. 616.91 -1.29 (-0.21%)Top economic events