Primerica's (NYSE:PRI) Q3 Sales Top Estimates

Financial services company Primerica (NYSE:PRI) announced better-than-expected revenue in Q3 CY2025, with sales up 8.5% year on year to $839.9 million. Its non-GAAP profit of $6.33 per share was 14.2% above analysts’ consensus estimates.

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“Our third quarter results reflect solid and consistent performance across all segments,” said Glenn Williams, Chief Executive Officer of Primerica, Inc.

Company Overview

With a sales force of over 140,000 licensed representatives operating on an independent contractor model, Primerica (NYSE:PRI) provides term life insurance, investment products, and other financial services to middle-income households in the United States and Canada.

Revenue Growth

Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third. Luckily, Primerica’s revenue grew at a decent 8.4% compounded annual growth rate over the last five years. Its growth was slightly above the average insurance company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within financials, a half-decade historical view may miss recent interest rate changes, market returns, and industry trends. Primerica’s annualized revenue growth of 8.7% over the last two years aligns with its five-year trend, suggesting its demand was stable.

This quarter, Primerica reported year-on-year revenue growth of 8.5%, and its $839.9 million of revenue exceeded Wall Street’s estimates by 1.8%.

Net premiums earned made up 57.3% of the company’s total revenue during the last five years, meaning Primerica’s growth drivers strike a balance between insurance and non-insurance activities.

While insurers generate revenue from multiple sources, investors view net premiums earned as the cornerstone - its direct link to core operations stands in sharp contrast to the unpredictability of investment returns and fees.

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Net Premiums Earned

When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are therefore gross premiums less what’s ceded to reinsurers as a risk mitigation and transfer strategy.

Primerica’s net premiums earned has grown at a 6.5% annualized rate over the last five years, slightly worse than the broader insurance industry and slower than its total revenue.

When analyzing Primerica’s net premiums earned over the last two years, we can see that growth decelerated to 4.1% annually. Since two-year net premiums earned grew slower than total revenue over this period, it’s implied that other line items such as investment income grew at a faster rate. These extra revenue streams are important to the bottom line, yet their performance can be inconsistent. Some firms have been more successful and consistent in managing their float, but sharp fluctuations in the fixed income and equity markets can dramatically affect short-term results.

In Q3, Primerica produced $454.5 million of net premiums earned, up 3.4% year on year and in line with Wall Street Consensus estimates.

Key Takeaways from Primerica’s Q3 Results

It was good to see Primerica beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 3.1% to $263.10 immediately after reporting.

Primerica may have had a good quarter, but does that mean you should invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.