EQH-PC — Equitable Holdings, Inc.

Summary of Equitable Holdings, Inc. Q3 2025 Earnings Call

1. Key Financial Results and Metrics

• Non-GAAP Operating Earnings: $455 million, or $1.48 per share, down 6% year-over-year on a per-share basis. Adjusted for notable items, non-GAAP operating EPS was $1.67, up 2% year-over-year.
• GAAP Net Loss: $1.3 billion, primarily due to a one-time impact from asset transfers related to the life reinsurance transaction.
• Assets Under Management (AUM): Reached a record $1.1 trillion, up 4% sequentially and 7% year-over-year.
• Capital Deployment: $1.5 billion allocated to drive shareholder value, including $757 million returned to shareholders (with $676 million in share repurchases).
• Adjusted Book Value per Share: $33.59, with a debt-to-capital ratio of 24.5%.

2. Strategic Updates and Business Highlights

• Organic Growth: Strong momentum in core businesses, particularly in Retirement and Wealth Management. Retirement businesses generated $1.1 billion in net flows, while Wealth Management saw $2.2 billion in advisory net inflows.
• Acquisitions: Announced the acquisition of Stifel Independent Advisors, adding over 110 advisors and $9 billion in advisory assets. Allocated $100 million to support AB's investment in FCA Re, enhancing private credit capabilities.
• Wealth Management Growth: Earnings expected to reach $200 million in 2025, two years ahead of plan, with a focus on recruiting experienced advisors and scaling operations.
• Investment Strategy: Continued focus on private credit and alternative investments, with a successful track record in the market.

3. Forward Guidance and Outlook

• 2027 Financial Targets: Confident in achieving targets, including $2 billion in annual cash generation and 12% to 15% EPS CAGR.
• Wealth Management Forecast: Expect continued double-digit earnings growth driven by asset growth and improved advisor productivity.
• Capital Management: Anticipate maintaining a payout ratio at the upper end of the 60% to 70% range, with ongoing buybacks and strategic investments.

4. Bad News, Challenges, or Points of Concern

• GAAP Losses: The significant GAAP net loss due to the life reinsurance transaction raises concerns about volatility in reported earnings.
• Mortality Experience: Unfavorable mortality experience impacted earnings, with $10 million worse-than-expected results in August and September. However, this is expected to normalize with the reinsurance in place.
• DAC Amortization Increase: Higher DAC amortization due to increased surrenders and growth in sales, which may pressure future earnings.
• Competitive Pressures in RILA Market: Increased competition and aggressive pricing strategies from new entrants could impact margins and sales.

5. Notable Q&A Insights

• Private Credit Strategy: Management expressed confidence in the private credit market, emphasizing strong underwriting capabilities and risk management.
• RILA Market Dynamics: Noted that while competition has increased, Equitable's established distribution and innovative product offerings provide a competitive edge.
• Cash Flow Management: The company is focused on maintaining robust cash flows, with expectations to exceed $1 billion in HoldCo cash by the end of Q4.
• Future M&A and Investments: Management indicated a balanced approach to using remaining capital from the RGA deal for both share buybacks and strategic acquisitions, depending on market conditions.

Overall, Equitable Holdings demonstrated solid performance in Q3 2025, with strong organic growth and strategic investments, while also navigating challenges related to mortality experience and competitive pressures.