AB — AllianceBernstein Holding L.P.

Summary of AllianceBernstein Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Assets Under Management (AUM): Reached a record $867 billion at year-end 2025, driven by market appreciation and strong sales.
• Adjusted Earnings: Q4 adjusted earnings were $0.96 per unit, down 9% year-over-year. Full-year adjusted earnings increased 2% to $3.33 per unit.
• Net Revenues: Q4 net revenues were $957 million, down 2% year-over-year. Full-year revenues were flat at $3.5 billion.
• Performance Fees: Q4 performance fees were $82 million, down from $133 million in the prior year. Full-year performance fees totaled $172 million, a 24% decline year-over-year but above guidance.
• Operating Margin: Adjusted operating margin for the year was 33.7%, at the upper end of the 30%-35% target range.

2. Strategic Updates and Business Highlights:

• Private Wealth Growth: The Bernstein private wealth business managed $156 billion in AUM, contributing approximately 37% of total revenues in 2025.
• Private Markets Expansion: The private markets platform grew to $82 billion in AUM, up 18% year-over-year, with $9 billion in deployments across all channels.
• SMA Franchise: Reached $62 billion in AUM, growing 12% organically, with strong performance in municipal strategies.
• Collaboration with Equitable: Enhanced commercial real estate lending capabilities expected to onboard over $10 billion in new long-duration assets by year-end 2026.

3. Forward Guidance and Outlook:

• Performance Fee Expectations: For 2026, private market strategies are expected to contribute $70-$80 million in performance fees, with public market strategies contributing at least $10-$20 million.
• Expense Guidance: Non-compensation expenses are projected to be between $625 million and $650 million in 2026, reflecting investments in technology and operational build-out.
• Private Markets Target: AUM target for private markets remains $90 billion to $100 billion by 2027, with ongoing opportunities for expansion.

4. Bad News, Challenges, or Points of Concern:

• Net Outflows: Total net outflows for 2025 were $9.4 billion, with $3.8 billion in Q4, primarily driven by active equity redemptions and taxable fixed income outflows.
• Equity Performance: Equity performance softened, with relative returns declining across one, three, and five-year periods, particularly in U.S. large-cap growth strategies.
• Retail Channel Weakness: Retail flows saw $3.5 billion in net outflows in Q4, ending a two-year streak of organic gains, driven by active equity redemptions.

5. Notable Q&A Insights:

• Asia High Yield Funds: Onur Erzan discussed macro factors affecting demand in Asia, including FX risks, but noted strong structural demand for U.S. dollar-denominated strategies.
• Private Wealth Seasonality: Erzan highlighted tax-related seasonality impacts in Q2 but expressed confidence in the pipeline for new ultra-high-net-worth clients due to M&A activity.
• Private Credit Exposure: Erzan indicated that AB's exposure to software companies within private credit is not significant, with no material changes in loss experience observed.
• Growth Beyond 2027: Seth Bernstein mentioned that while the current target for private markets AUM is set for 2027, they are ambitious about future growth opportunities.

This summary encapsulates the key financial metrics, strategic initiatives, outlook, challenges, and insights from the Q&A session, providing a comprehensive overview of AllianceBernstein's performance and future direction.