Supplemental insurance provider Aflac (NYSE: AFL) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 12.7% year on year to $4.87 billion. Its non-GAAP profit of $1.57 per share was 7.3% below analysts’ consensus estimates.

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Commenting on the company's results, Aflac Incorporated Chairman and Chief Executive Officer Daniel P. Amos stated: "Aflac delivered solid earnings for the quarter and the year. These results reflect our focused efforts to execute on our strategy of creating long-term value for shareholders.

Company Overview

Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.

Revenue Growth

Insurance companies generate revenue three ways. The first is the core insurance business itself, represented in the income statement as premiums earned. The second source is investment income from investing the “float” (premiums collected but not yet paid out as claims) in assets such as fixed-income assets and equities. The third is fees from policy administration, annuities, and other value-added services. Aflac’s demand was weak over the last five years as its revenue fell at a 4.1% annual rate. This wasn’t a great result and is a sign of poor business quality.

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. Aflac’s annualized revenue growth of 1.1% over the last two years is above its five-year trend, but we were still disappointed by the results. Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.

This quarter, Aflac reported year-on-year revenue growth of 12.7%, and its $4.87 billion of revenue exceeded Wall Street’s estimates by 10.5%.

Net premiums earned made up 79.4% of the company’s total revenue during the last five years, meaning insurance operations are Aflac’s largest source of revenue.

Our experience and research show the market cares primarily about an insurer’s net premiums earned growth as investment and fee income are considered more susceptible to market volatility and economic cycles.

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Book Value Per Share (BVPS)

Insurers are balance sheet businesses, collecting premiums upfront and paying out claims over time. Premiums collected but not yet paid out, often referred to as the float, are invested and create an asset base supported by a liability structure. Book value per share (BVPS) captures this dynamic by measuring these assets (investment portfolio, cash, reinsurance recoverables) less liabilities (claim reserves, debt, future policy benefits). BVPS is essentially the residual value for shareholders.

We therefore consider BVPS very important to track for insurers and a metric that sheds light on business quality. While other (and more commonly known) per-share metrics like EPS can sometimes be lumpy due to reserve releases or one-time items and can be managed or skewed while still following accounting rules, BVPS reflects long-term capital growth and is harder to manipulate.

Aflac’s BVPS grew at a sluggish 3.2% annual clip over the last five years. However, BVPS growth has accelerated recently, growing by 22.3% annually over the last two years from $38.00 to $56.85 per share.

Over the next 12 months, Consensus estimates call for Aflac’s BVPS to shrink by 3.2% to $53.62, a sour projection.

Key Takeaways from Aflac’s Q4 Results

We were impressed by how significantly Aflac blew past analysts’ book value per share expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its EPS missed. Overall, this print had some key positives. Investors were likely hoping for more, and shares traded down 3.4% to $111.05 immediately following the results.

Should you buy the stock or not? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).