Why did GAAP EPS rise 34% when adjusted operating earnings grew only 2%?

The GAAP figure includes a $219 million pretax favorable market impact on non-traditional long-duration products (such as variable annuity and UL guarantees) in Q2 2025, compared with a $60 million unfavorable impact a year earlier. Ameriprise excludes these market-driven swings from adjusted operating earnings, so the adjusted measure is a better guide to underlying operating performance. Year-to-date, GAAP net income actually fell 10%, reflecting the volatility of these items.

Are the client flow declines a concern for future growth?

Flows slowed meaningfully. Advice & Wealth Management client net flows dropped 35% year over year to $4.3 billion, and wrap flows fell 28% to $5.4 billion, while Asset Management posted $8.7 billion of net outflows. Management attributed much of this to market volatility, higher redemptions and seasonal tax payments, and noted a good initial response to the new Ameriprise Signature Wealth Program. Investors will likely watch whether flows recover in the second half of 2025.

How sustainable is the company's capital return program?

In Q2, Ameriprise returned $731 million, or 81% of adjusted operating earnings, and it cited significant excess capital and holding company liquidity. Long-term debt to capital improved to 33.6% from 40.5% a year earlier. The firm's free cash flow generation supports this payout level, but the program depends on continued earnings growth and stable capital markets.

What is the outlook for expenses and taxes?

Management expects full-year general and administrative expenses in Advice & Wealth Management to rise in the low-to-mid single-digit range, reflecting growth investments and volume-related costs. The operating effective tax rate for full-year 2025 is expected to be 20% to 22%; the Q2 operating rate was 21.7%.

Is this 8-K a formal financial filing, and what is the status of these results?

The results are furnished under Item 2.02 of Form 8-K as Exhibit 99.1, a press release, rather than filed as a formal financial statement. The filing states that the figures are based on preliminary asset valuations and may be revised in the company's Form 10-Q for the period ended June 30, 2025. Investors should treat the detailed results as preliminary until the 10-Q is released.

AMP 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed July 24, 2025. Cited figures are marked; the original filing is the authoritative source.

Ameriprise Financial reported second-quarter 2025 results that combined record client assets with mixed underlying momentum.

Adjusted operating EPS rose 7% to $9.11^a and GAAP EPS rose 34% to $10.73, but the GAAP gain was driven largely by a $219 million favorable market impact on non-traditional long-duration products, not by operations. Adjusted operating earnings grew only 2% to $900 million, and adjusted operating net revenues increased 4% to $4.3 billion, primarily from higher asset levels. Total assets under management, administration and advisement reached a record $1.6 trillion, up 9% year over year, and total client assets in Advice & Wealth Management hit $1.1 trillion.

Underlying flow trends were weaker. Advice & Wealth Management total client net flows fell 35% to $4.3 billion^b, and wrap net flows declined 28% to $5.4 billion. Asset Management posted $8.7 billion of net outflows, including $4.8 billion of institutional outflows that contained $1.6 billion tied to the exit of Lionstone.

Management attributed the softer flows to market volatility from trade policy uncertainty and normal seasonal tax payments. Pretax adjusted operating margin was 26.5%^c for the firm, with Advice & Wealth Management margin compressing to 28.9% from 31.1% a year earlier. Capital return remained a core part of the story.

Ameriprise returned $731 million^d to shareholders in the quarter, equal to 81% of adjusted operating earnings, through $158 million of dividends and $573 million of share repurchases. Year-to-date adjusted operating EPS was $18.61, up 10%, while year-to-date GAAP net income declined 10%. Management guided to low-to-mid single-digit growth in full-year Advice & Wealth Management general and administrative expenses and a 2025 operating effective tax rate of 20% to 22%.

02—Key points

Key Highlights

Adjusted operating EPS rose 7% to $9.11; GAAP EPS rose 34% to $10.73, aided by a $219 million favorable market impact on non-traditional long-duration products.
Adjusted operating earnings grew 2% to $900 million, and adjusted operating net revenues increased 4% to $4.3 billion, driven mainly by asset growth.
Total assets under management, administration and advisement hit a record $1.58 trillion, up 9% year over year; Advice & Wealth Management client assets reached a record $1.08 trillion, up 11%.
Client flows weakened: Advice & Wealth Management net flows fell 35% to $4.3 billion, and Asset Management recorded $8.7 billion of net outflows, including $1.6 billion from the Lionstone exit.
Advice & Wealth Management pretax adjusted operating margin fell to 28.9% from 31.1%, as expenses rose 9% with advisor productivity-related distribution costs growing faster than revenue.
Ameriprise returned $731 million to shareholders (81% of adjusted operating earnings), including $573 million of buybacks, and reported a 2025 operating tax rate guidance of 20% to 22%.
Year-to-date GAAP net income declined 10% to $1.64 billion, while year-to-date adjusted operating EPS grew 10% to $18.61.

03—Questions

Frequently Asked Questions

Why did GAAP EPS rise 34% when adjusted operating earnings grew only 2%?
The GAAP figure includes a $219 million pretax favorable market impact on non-traditional long-duration products (such as variable annuity and UL guarantees) in Q2 2025, compared with a $60 million unfavorable impact a year earlier. Ameriprise excludes these market-driven swings from adjusted operating earnings, so the adjusted measure is a better guide to underlying operating performance. Year-to-date, GAAP net income actually fell 10%, reflecting the volatility of these items.
Are the client flow declines a concern for future growth?
Flows slowed meaningfully. Advice & Wealth Management client net flows dropped 35% year over year to $4.3 billion, and wrap flows fell 28% to $5.4 billion, while Asset Management posted $8.7 billion of net outflows. Management attributed much of this to market volatility, higher redemptions and seasonal tax payments, and noted a good initial response to the new Ameriprise Signature Wealth Program. Investors will likely watch whether flows recover in the second half of 2025.
How sustainable is the company's capital return program?
In Q2, Ameriprise returned $731 million, or 81% of adjusted operating earnings, and it cited significant excess capital and holding company liquidity. Long-term debt to capital improved to 33.6% from 40.5% a year earlier. The firm's free cash flow generation supports this payout level, but the program depends on continued earnings growth and stable capital markets.
What is the outlook for expenses and taxes?
Management expects full-year general and administrative expenses in Advice & Wealth Management to rise in the low-to-mid single-digit range, reflecting growth investments and volume-related costs. The operating effective tax rate for full-year 2025 is expected to be 20% to 22%; the Q2 operating rate was 21.7%.
Is this 8-K a formal financial filing, and what is the status of these results?
The results are furnished under Item 2.02 of Form 8-K as Exhibit 99.1, a press release, rather than filed as a formal financial statement. The filing states that the figures are based on preliminary asset valuations and may be revised in the company's Form 10-Q for the period ended June 30, 2025. Investors should treat the detailed results as preliminary until the 10-Q is released.

04—Continue

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