Equitable Holdings, Inc. Q1 FY2026 earnings call

• Announcement of planned merger with CoreBridge to create a world-class platform.
• First quarter non-GAAP operating earnings of $1.62 per share, up 25% vs Q1 2025.
• Assets under management ended the quarter at $1.1 trillion, up 9% year over year.
• Organic growth in retirement sales and flows, with total sales up 10% YOY and $1.3 billion net inflows.
• Wealth Management had $2 billion of advisory net inflows, 13% organic growth rate over last 12 months.
• Asset management earnings grew 11% YOY, AB has record institutional pipeline of nearly $28 billion.
• Merger with CoreBridge aligns with five critical attributes for long-term success, including providing exceptional customer experience, strong distribution, competitive scale, consistent growth in earnings/cash flow, and owning multiple financial services businesses.

Retirement: First quarter earnings excluding notable items were $394 million. Net interest margin increased 3% sequentially. Asset management: AB reported earnings of $140 million, up 11% year-over-year. Wealth management: Experienced 22% increase in earnings. Corporate and other: Reported a loss of $98 million in the quarter after adjusting for notable items.

• Expect earnings per share growth to exceed the high end of the 12% to 15% target range in 2026.
• Now expect full-year portfolio return to be below prior 8% to 9% guidance due to lower first half returns.
• Remain committed to 60 to 70% payout ratio target for 2026.
• Project at least 10% accretion to EPS and cash generation on a run rate basis by year-end 2028 from merger.

Market volatility can impact AUM and earnings. Credit risk and potential downturn in credit markets. Integration risks related to the merger with CoreBridge.

Your first question comes from Wes Carmichael with Wells Fargo: Q: On retirement segment, do still think spread compression abating?

A: Spread stabilized in Q1, expect spread income to grow as general account excluding embedded derivatives grow. Next question from Sunit Kamat with Jeffries: Q: On buybacks pace and coordination with CoreBridge?

A: Expect to be active in market, coordinate to maintain accretion. Next question from Ryan Krueger with KBW: Q: On 10% plus synergies conservatism?

A: 6% to 8% from expense synergies, remainder from tax and capital, expect upside. Next question from Tom Gallagher with Evercore ISI: Q: On MVA gains in retirement and merger's institutional spread business?

A: MVA gains from MBA, institutional spread business is an opportunity with larger balance sheet. Next question from Joel Hurwitz with Dowling and Partners: Q: On mortality perspective and flow reinsurance?

A: Mortality was favorable, flow reinsurance used on RILA product, may look at other products. Next question from Alex Scott with Barclays: Q: On cash flow and excess capital with merger?

A: Comfortable with cash flow guidance, merger allows better use of excess capital. Next question from Yaron Kinnar with Mizuho: Q: On capital deployment and EPS growth target?

A: Comfortable with EPS growth target, windows allow capital deployment. Next question from Wilma Burtis with Raymond James: Q: On buyback limits and capital tax benefits?

A: No specific limits, capital tax benefits expected more on investor day. Next question from Pablo Singson with JP Morgan: Q: On mortality and VM22 impact?

A: Mortality favorable, comfortable with corporate guidance, VM22 diligence done. Next question from Tracy Bangigi with Wolf Research: Q: On P-gap changes and AB stake?

A: PGAAP has moving parts, no plan to change AB stake. Next question from Mark Hughes with Truist: Q: On Ryla business competitive environment and merger distribution benefit?

A: Strong Ryla sales, merger expands distribution reach and scale.