EQH — Equitable Holdings, Inc.

EQH Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Full Year Non-GAAP Operating Earnings: $5.64 per share ($6.21 adjusted for notable items), up 1% YoY.
• Q4 Non-GAAP Operating Earnings: $513 million ($1.73 per share), with net income of $215 million.
• Organic Cash Generation: $1.6 billion for 2025, expected to increase to $1.8 billion in 2026, aiming for $2 billion by 2027.
• Assets Under Management and Administration: Reached a record $1.1 trillion, up 10% YoY.
• Shareholder Returns: $1.8 billion returned 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.

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, reducing mortality exposure by 75% and freeing up $2 billion of capital.
• Wealth Management Performance: Achieved $200 million in annual earnings two years ahead of schedule, with a 13% organic growth rate.
• Retirement Segment: Generated $5.9 billion in net flows, supported by record RILA sales.
• AllianceBernstein (AB): Experienced mixed results with net outflows of $11.3 billion but strong growth in private markets (AUM up 18%).

3. Forward Guidance and Outlook

• 2026 Expectations: Projecting approximately $1.8 billion in organic cash generation and EPS growth exceeding 12%-15%.
• Retirement Earnings Growth: Anticipated mid- to high single-digit growth, with spreads expected to stabilize in the second half of 2026.
• Wealth Management: Forecasting continued double-digit earnings growth.
• Corporate and Other Losses: Expected to be in the range of $350 million to $400 million, incorporating elevated mortality assumptions.

4. Bad News, Challenges, or Points of Concern

• Elevated Mortality Claims: Contributed to earnings pressure in 2025, with a noted $25 million adverse impact in Q4.
• Competitive Pressures: Increased competition in the RILA market could impact market share and pricing discipline.
• AB Performance: Mixed dynamics with significant net outflows, particularly related to low-fee outflows from the RGA transaction.
• Earnings Per Share Growth Lag: Currently below target due to mortality claims, with a need for improvement in 2026 to meet long-term goals.

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.
• RILA Market Dynamics: Despite increased competition, EQH maintains a strong position due to its established distribution network and product offerings.
• Valuation Gap: Management acknowledged the valuation disparity between EQH and AB, emphasizing a focus on growth and execution to close the gap.
• Mortality Exposure: Future mortality risks are expected to be manageable due to the recent reinsurance deal, but management remains vigilant about potential volatility.

Overall, EQH demonstrated solid financial performance and strategic positioning, while facing challenges from competitive pressures and elevated mortality claims. The outlook for 2026 appears optimistic, with expectations for improved earnings and cash generation.