Equitable Holdings, Inc. Q4 FY2025 earnings call

• Equitable has refined its business mix to focus on U.S. retirement, asset management, and wealth management. - Reshaped balance sheet via life reinsurance transaction with RGA, freeing $2 billion of capital and reducing mortality exposure by 75%. - 2025 full year non-GAAP operating earnings were $5.64 per share, up 1% over 2024; organic cash generation was $1.6 billion. - 2025 assets under management and administration ended at a record $1.1 trillion, up 10% year-over-year. - Retirement had $5.9 billion net flows, Wealth Management had $8.4 billion net inflows, and AllianceBernstein had net outflows but strong private markets growth. - Progress on strategic initiatives: $150 million expense savings by 2027, with $120 million in run rate results; $110 million incremental investment income from private markets.

Retirement: Full year 2025 net flows were $5.9 billion, a 4% organic growth rate. Fourth quarter pretax earnings increased 4% year-over-year and 2% sequentially. Asset Management (AllianceBernstein): 2025 full year adjusted operating margin was 33.7%, at the upper end of the targeted range; fourth quarter earnings were up 4% sequentially. Wealth Management: Full year 2025 net inflows were $8.4 billion, a 13% organic growth rate; fourth quarter earnings increased 40% year-over-year. Corporate and Other: Fourth quarter loss was $123 million due to onetime expenses, elevated mortality, and a lower tax rate.

• 2026 organic cash generation expected to increase to approximately $1.8 billion, aiming for $2 billion in 2027. - 2026 retirement pretax earnings expected mid- to high single-digit growth; Asset Management results sensitive to markets, AB expects performance fees $80M-$100M; Wealth Management forecast double-digit earnings growth. - Corporate and Other projected full year loss $350M-$400M, with quarterly volatility due to mortality. - Expect 2026 EPS growth excluding notable items to exceed 12%-15% target.

• Elevated mortality claims in 2025 impacted earnings. - Volatility in Individual Life business due to large face amounts and older issue ages. - Private credit portfolio exposure, though immaterial and underweight industry benchmarks. - Competition in wealth management affecting adviser recruitment and retention.

Q: Just wanted to start with private credit again. It seems like your stock trades like a private equity company except on the days when those stocks go up. And I know you have some slides in the back talking about private credit, but can you just talk a little bit about how you're feeling about the quality of what you have in the portfolio?

A: Sure, Suneet. We look forward to the multiple of those private credit companies for Equitable over time. But we added Slide 16 in the earnings presentation to give some a little bit more disclosure on our private credit portfolio. So private credit, if you take a step back, it's about 16% of our total GA. Within that, almost 50% of that is within corporate private placements, which is nothing new for insurance companies over time. There has been some recent noise about software. That's typically found in the direct lending portion of the portfolio. That's about 4% of the private credit portfolio or 1% direct lending is 1% of the total GA. Software specifically within the direct lending is a small portion of that. It's 15 basis points of the total general account. So it's really immaterial for us, and we're underweight the industry benchmarks on our software exposure within that for Equitable and the general account. Maybe I'll pass to Onur to speak about private credit at AllianceBernstein within the broader client portfolios as well.

Q: One of the things we're hearing is competition for advisers has been increasing and then there's pretty sizable packages being offered. When I look at your 12% growth in wealth planning, just curious how much of that is coming from external hires versus internal promotions? And what is your sort of target market in terms of the practices that you go after?

A: Yes. Thanks. This is Nick. Look, we're very encouraged by our organic growth rate that we see coming from our existing advisers. That was $8.4 billion of net flows for the year. We bring a distinct model out to the space, given our people, our planning and our platform. We're one of the few platforms that continue to bring new advisers into the industry, and that gives us a pipeline to grow wealth planners, as Mark highlighted, which were up 12% year-over-year and have more than doubled since we IPO-ed back in 2018. We're very pleased with the progress of our EXP hiring efforts. We recruited $1.4 billion in assets for the year in 2025. As it's a large addressable market. There are about 150,000 Series 7 producers, about 12,000 a year are looking for new homes. We hired a 20-year veteran to run our EXP hires, knows the market well and has built a disciplined approach here at Equitable. We are very intentional about the type of advisers we target and believe we have a distinct model for EXP hires who are looking to grow their businesses or transition their practices to other advisers. So we've got an edge. We'll remain disciplined. We're very bullish about our organic growth drivers and productivity in wealth planners, and we see EXPs as a force multiple on top of that.