EQH Q3 2025 Earnings Call Summary

1Key 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: Reached a record $1.1 trillion, up 4% sequentially and 7% year-over-year.

Retirement Net Flows: $1.1 billion, driven by growth in RILA sales, despite seasonal impacts.

Wealth Management Advisory Net Inflows: $2.2 billion, reflecting a 12% annualized growth rate.

Debt Reduction: $500 million to improve leverage ratio and capital flexibility.

Shareholder Returns: $757 million returned, including $676 million in share repurchases, with a full-year payout ratio expected at the upper end of the 60%-70% target range.

2Strategic Updates and Business Highlights

Capital Allocation: $1.5 billion allocated to drive shareholder value and growth, including $200 million for Asset and Wealth Management initiatives.

Acquisitions: Announced acquisition of Stifel Independent Advisors, expected to add $10 million to Wealth Management earnings by 2027.

Investment in Private Markets: Allocated $100 million to support AB's investment in FCA Re, enhancing exposure to Asia-focused private credit assets.

Growth Strategy: Focus on three core businesses—Retirement, Asset Management, and Wealth Management—leveraging synergies for organic growth.

3Forward Guidance and Outlook

2027 Financial Targets: Confident in achieving targets, including $2 billion in annual cash generation and 12%-15% EPS CAGR.

Wealth Management Growth: Expected to continue double-digit earnings growth, driven by asset growth and improved advisor productivity.

Retirement Business: Anticipated continued strong flows and improved net interest margins as older RILA blocks run off.

4Bad News, Challenges, or Points of Concern

GAAP Loss: The significant GAAP net loss reflects volatility and challenges in the life business, although the reinsurance transaction is expected to stabilize results moving forward.

Mortality Experience: Unfavorable mortality experience impacted earnings, though expected to normalize with the reinsurance agreement in place.

Asset Management Outflows: AB reported total net outflows of $2.3 billion, primarily due to low-fee assets transferred as part of the reinsurance transaction.

Competitive Pressures: Increased competition in the RILA market, with concerns about aggressive product features from competitors.

5Notable Q&A Insights

Private Credit Strategy: Management expressed confidence in the private credit asset class, emphasizing strong underwriting processes and risk compensation.

RILA Market Dynamics: Differentiation through innovative product offerings and privileged distribution channels was highlighted as key to maintaining competitive advantage.

Cash Management: The company plans to maintain a minimum of $500 million in HoldCo cash, with expectations to end Q4 above $1 billion.

Future M&A and Buybacks: Management indicated flexibility in capital allocation between M&A opportunities and share buybacks, with a focus on driving EPS growth. Overall, Equitable Holdings demonstrated solid financial performance in Q3 2025, supported by strategic initiatives and a focus on organic growth, despite facing challenges in mortality experience and competitive pressures in certain markets. The outlook remains positive with confidence in achieving long-term financial targets.