01—Abstract
Summary
Summary of the 10-Q filed May 6, 2026. Cited figures are marked; the original filing is the authoritative source.
Aflac Incorporated reported a strong first quarter for 2026, with net earnings reaching $1.0 billiona, a significant increase from $29 million in the prior year's first quarter.
This substantial growth was primarily driven by a rebound in investment performance, with net investment gains of $49 millionb compared to net investment losses of $963 million in Q1 2025. The company's total revenues also saw a notable increase to $4.3 billion, up from $3.4 billion year-over-year, largely due to these improved investment results. Operationally, adjusted earnings were $901 million, slightly down from $906 million in the prior year, reflecting the impact of a weaker yen on Aflac Japan's results.
The company continued its capital return program, repurchasing $1.0 billionc in common stock during the quarter. Shareholders' equity grew to $30.0 billion, and the company maintained a strong capital position, demonstrating resilience and effective management across its core insurance businesses in Japan and the U.S.
02—Key points
Key Highlights
- Net earnings surged to $1.0 billion ($1.98/share diluted) from $29 million ($0.05/share diluted) in the prior year, primarily due to improved investment income.
- Total revenues increased to $4.3 billion from $3.4 billion year-over-year, driven by a swing from net investment losses to gains.
- Adjusted earnings were $901 million ($1.75/share diluted), a slight decrease from $906 million ($1.66/share diluted) in Q1 2025, impacted by foreign currency translation effects.
- Aflac Japan's pretax adjusted earnings increased 5.1% to $759 million, despite a 6.4% decrease in net earned premiums, driven by improved investment income and lower benefits and claims.
- Aflac U.S. saw its pretax adjusted earnings increase 1.4% to $363 million, supported by growth in net earned premiums and adjusted net investment income.
- The company repurchased $1.0 billion of its common stock in the first quarter of 2026, underscoring its commitment to returning capital to shareholders.
- Shareholders' equity increased to $30.0 billion from $29.5 billion at year-end 2025, reflecting strong earnings and a positive impact from changes in discount rate assumptions on insurance reserves.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 6, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $4.35B$3.40B | +27.9% |
| SG&A Expenses | $771.00M$802.00M | −3.9% |
| Operating Expenses | $1.29B$1.31B | −1.5% |
| Interest Expense | $59.00M$49.00M | +20.4% |
| Net Income | $1.02B$29.00M | +3413.8% |
| EPS (Basic) | $1.99$0.05 | +3880.0% |
| EPS (Diluted) | $1.98$0.05 | +3860.0% |
| Shares Outstanding (Basic) | 513.07M544.71M | −5.8% |
| Shares Outstanding (Diluted) | 514.78M546.88M | −5.9% |
05—Questions
Frequently Asked Questions
What was the primary driver behind the significant increase in net earnings this quarter?
The primary driver was the substantial improvement in investment performance. Aflac swung from net investment losses of $963 million in Q1 2025 to net investment gains of $49 million in Q1 2026. This was partially offset by lower net earned premiums in Japan, but the investment turnaround significantly boosted overall profitability.
How did the weaker yen impact Aflac's results, and how is the company managing this?
The weaker yen had a negative impact on adjusted earnings, reducing diluted earnings per share by approximately $0.02. Aflac Japan's results are translated into U.S. dollars, so a weaker yen means fewer dollars are reported. The company employs hedging strategies, including foreign currency forwards and options, to mitigate this exposure, and closely monitors its investment and hedging programs.
What is the company's approach to capital allocation and shareholder returns?
Aflac is committed to returning capital to shareholders. During the first quarter of 2026, the company repurchased $1.0 billion of its common stock and declared a cash dividend of $0.61 per share, an increase of 5.2% compared to the prior year's first quarter. The company also has a remaining authorization for 105.3 million shares for future repurchases.
How is the company addressing the cybersecurity incident disclosed previously?
Aflac is continuing to manage the cybersecurity incident identified in June 2025. The company has completed notifications to impacted individuals and regulatory authorities. While incurred costs have been managed, the company continues to assess the full financial impact and potential insurance coverage. Management does not currently believe the incident will have a material impact on financial condition or results of operations.
06—Continue