EQH-PC — Equitable Holdings, Inc.

Summary of EQH-PC Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Full Year Non-GAAP Operating Earnings: $5.64 per share ($6.21 after notable items), up 1% from 2024.
• Fourth Quarter Non-GAAP Operating Earnings: $513 million or $1.73 per share; net income was $215 million.
• Organic Cash Generation: $1.6 billion for 2025, expected to rise to $1.8 billion in 2026, with a target of $2 billion by 2027.
• Assets Under Management and Administration: Reached a record $1.1 trillion, up 10% year-over-year.
• Shareholder Returns: Returned $1.8 billion to shareholders in 2025, including $500 million in share repurchases.
• Payout Ratio: 68% (excluding additional buybacks), at the high end of the 60%-70% target range.
• Adjusted Book Value Per Share: $33.84.

2. Strategic Updates and Business Highlights

• Core Growth Engines: Focus on U.S. retirement, asset management, and wealth management.
• Life Reinsurance Transaction: Completed with RGA, freeing $2 billion of capital and reducing mortality exposure by 75%.
• Retirement Segment: Net flows of $5.9 billion, 4% organic growth, driven by record RILA sales.
• Wealth Management: Achieved $8.4 billion in net inflows (13% organic growth), exceeding the target of $200 million in annual earnings two years ahead of schedule.
• AllianceBernstein (AB): Experienced mixed results with net outflows of $11.3 billion but strong growth in private markets, increasing AUM by 18% to $82 billion.

3. Forward Guidance and Outlook

• 2026 Expectations:
  • Organic cash generation projected at $1.8 billion.
  • EPS growth anticipated to exceed the 12%-15% target.
  • Retirement segment expected to see mid- to high single-digit growth in pretax earnings.
  • Wealth Management to sustain double-digit earnings growth.
  • Corporate and Other projected loss between $350 million to $400 million due to mortality claims.

4. Bad News, Challenges, or Points of Concern

• Elevated Mortality Claims: Contributed to earnings pressure in 2025, with a noted $25 million adverse mortality experience in Q4.
• Competitive Pressures: Increased competition in the RILA market, with concerns about maintaining market share and pricing discipline.
• Earnings Per Share Growth Lag: Currently below target due to mortality claims, with a need for improvement in 2026.
• Mixed Performance at AB: Despite strong private market growth, overall net outflows raise concerns about competitive positioning.

5. Notable Q&A Insights

• Private Credit Portfolio: Management expressed confidence in the quality and performance of their private credit investments, with minimal exposure to high-risk sectors.
• Wealth Management Growth: The increase in wealth planners was attributed to both internal promotions and external hires, with a focus on disciplined recruitment.
• Valuation Gap: Management acknowledged the valuation discrepancy between Equitable and AB, emphasizing a focus on execution and growth to close this gap.
• Mortality Exposure: Future mortality claims are expected to be more manageable post-RGA transaction, but there remains some volatility.
• RILA Market Dynamics: Management remains optimistic about maintaining leadership in the RILA market despite increased competition, emphasizing their unique distribution model and product innovation.

Overall, Equitable Holdings demonstrated solid growth and strategic positioning in key markets, while also facing challenges related to mortality claims and competitive pressures. The company remains focused on achieving its long-term financial targets and enhancing shareholder value.