AFL

Aflac is a high-quality accident & health insurer whose reported results are dominated by Aflac Japan, and the FY2025 numbers show the double-edge of that exposure. Revenue fell to $17.2B (-9.3%) — the fourth decline in five years, from $21.6B in FY2021 — and net income dropped 33% to $3.65B with diluted EPS off 29% to $6.82. The 10-K makes clear much of this is translation-driven: 'in periods when the Japanese yen weakens against the dollar, translating Japanese yen into U.S. dollars causes fewer U.S. dollars to be reported,' and yen weakness also 'adversely affect[s] the value of the Company's Japanese yen-denominated investments in U.S. dollar terms.' So the top-line shrinkage overstates operational decay, but the earnings hit is real and the hedging program carries its own risk — management warns that a sharp yen strengthening 'could cause cash strain at the Parent Company' via collateral and settlement requirements, and that long-term yen weakening could drive 'significant derivative losses' and rollover hedge-cost pressure.

Underneath the currency noise the balance sheet is a genuine strength. Stockholders' equity grew 13% to $29.5B, liabilities/equity is a conservative 2.95x for an insurer, cash held at $6.25B, and retained earnings rose to $54.7B. Capital return is aggressive and shareholder-friendly: $3.53B of buybacks (+26%) plus $1.20B of dividends (+10%) returned $4.73B — more than the year's net income — shrinking the share count 5.5%. That buyback intensity is a real per-share tailwind even in a flat-revenue world.