Equitable Holdings First Quarter 2025 Earnings Results April 29, 2025 Equitable Note Regarding Forward-Looking Statements and Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "believes," "anticipates," "intends," "seeks," "aims," "plans," "assumes," "estimates," "projects," "should," "would," "could," "may," "will," "shall" or variations of such words are generally part of fo ...

Equitable Holdings, Inc. (EQH) came out with quarterly earnings of $1.35 per share, missing the Zacks Consensus Estimate of $1.49 per share. This compares to earnings of $1.43 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -9.40%. A quarter ago, it was expected that this company would post earnings of $1.61 per share when it actually produced earnings of $1.57, delivering a surprise of -2.48%.Over the last four quarters, the ...

Table of Contents | Consolidated Financials and Key Metrics | Page | | --- | --- | | Key Metrics Summary | 4 | | Consolidated Statements of Income (Loss) | 5 | | Consolidated Balance Sheets | 6 | | Consolidated Capital Structure | 7 | | Operating Earnings (Loss) by Segment and Corporate and Other | 8 | | Assets Under Management and Administration | 9 | | Sales Metrics by Segment | 10 | | Select Metrics from Business Segments | | | Individual Retirement | | | Statements of Operating Earnings (Loss) and Summa ...

Company Overview - Equitable Holdings, Inc. (EQH) is headquartered in New York and operates in the Finance sector [3] - The stock has experienced a price change of -4.39% since the beginning of the year [3] Dividend Information - The company currently pays a dividend of $0.24 per share, resulting in a dividend yield of 2.13% [3] - This yield is higher than the Insurance - Multi line industry's yield of 1.56% and the S&P 500's yield of 1.73% [3] - The annualized dividend of $0.96 has increased by 2.1% from the previous year [4] - Over the last 5 years, Equitable Holdings has increased its dividend 5 times, averaging an annual increase of 9.51% [4] - The current payout ratio is 16%, indicating that the company paid out 16% of its trailing 12-month EPS as dividends [4] Earnings Growth Expectations - For the fiscal year, EQH anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 at $7.13 per share, reflecting a year-over-year growth rate of 20.24% [5] Investment Considerations - Dividends are favored by investors as they enhance stock investing profits, reduce overall portfolio risk, and offer tax advantages [6] - High-growth firms or tech start-ups typically do not provide dividends, while established companies are viewed as better dividend options [7] - EQH is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7]

Shares of Equitable Holdings (NYSE: EQH ) have been an excellent performer over the past year, adding over 60%. The company has benefited from its ongoing transformation and strong capital position, which have enabled significant capital returns. This year, itOver fifteen years of experience making contrarian bets based on my macro view and stock-specific turnaround stories to garner outsized returns with a favorable risk/reward profile. If you want me to cover a specific stock or have a question for an art ...

Financial Performance - The Individual Retirement segment reported a total First Year Premium (FYP) of $18,560 million for the year ended December 31, 2024, up from $14,226 million in 2023, representing a growth of 30.5%[36] - Gross premiums for the year ended December 31, 2024, were $4,693 million, compared to $3,806 million in 2023, indicating an increase of 23.3%[59] - Total revenues for the year ended December 31, 2024, reached $4,559 million, up from $4,261 million in 2023, marking a year-over-year increase of 7.0%[94] - The Protection Solutions segment's total reserves increased to $36,961 million in 2024, compared to $34,521 million in 2023, reflecting a growth of 7.0%[107] - Total net long-term outflows for actively managed investment services were $2.2 billion in 2024, compared to $7.0 billion in 2023 and $3.6 billion in 2022[90] Assets Under Management (AUM) - Total Assets Under Management (AUM) reached $792.2 billion as of December 31, 2024, up from $725.2 billion in 2023, representing an increase of 9.1%[88] - Average Assets Under Management (AUM) increased to $768.5 billion in 2024 from $680.3 billion in 2023, representing a growth of approximately 12.8%[91] - Institutional clients accounted for 41% of AUM, while retail and private wealth clients represented 42% and 17% respectively as of December 31, 2024[71] - The company’s total AUM by investment service included $331.7 billion in equities, $295.8 billion in fixed income, and $164.7 billion in alternatives/multi-asset solutions as of December 31, 2024[89] Product Performance - Structured Capital Strategies (SCS) contributed $12,205 million to FYP in 2024, an increase of 17.3% from $10,401 million in 2023[36] - The company introduced SCS Income in 2021, a new version of SCS that includes a GMxB feature, enhancing product offerings[34] - The company’s variable annuity products generated $40.654 billion in Account Value (AV) for 2024, compared to $36.470 billion in 2023, reflecting a growth of 11.9%[63] - The company’s tax-exempt AV increased to $29.519 billion in 2024, compared to $26.519 billion in 2023, reflecting a growth of 11.3%[63] - Variable Universal Life (VUL) annualized premiums rose to $223 million in 2024, up from $210 million in 2023, indicating an increase of 6.2%[103] Distribution Channels - Equitable Advisors represented 35% of the variable annuity FYP in 2024, while third-party distribution channels accounted for 65%[39] - The distribution channels for sales comprised approximately 66% through Equitable Advisors and 34% through third-party firms in 2024[64] - The total first year premium from third-party distribution increased to $793 million in 2024, a significant rise from $390 million in 2023[65] Market Strategy - The company targets affluent and high net worth individuals, with a focus on retirement income and tax-deferred growth opportunities[37] - The company aims to expand its presence in the tax-exempt 403(b)/457(b) markets, which represent 53% of FYP in the Group Retirement segment for 2024[60] - The Institutional lifetime income market accounted for 15% of the Group Retirement business, highlighting a diverse revenue stream[49] Regulatory Environment - Equitable Financial is primarily regulated by the Superintendent of the NYDFS, with oversight in all 50 states and territories[154] - The RBC of each insurance subsidiary of Equitable Financial was in excess of the required RBC levels as of the most recent annual statutory financial statements[179] - New York's Regulation 213 significantly increases the statutory basis reserves for variable annuity obligations, potentially affecting the capacity to distribute dividends[176] - The NAIC's Liquidity Stress Test and Group Capital Calculation (GCC) framework were codified in New York in August 2023, with the first GCC filing required by June 30, 2024[171] Investment Management - Approximately $12.1 billion of private placements were transferred from Taxable Fixed Income into Alternatives/Multi-Asset during the three months ended September 30, 2024[92] - Actively managed fixed income services saw inflows of $24.6 billion in 2024, a significant increase from $12.3 billion in 2023[90] - Performance-based fees for investment advisory services increased to $271 million in 2024, compared to $145 million in 2023, representing an increase of 86.2%[93] Technology and Innovation - The company emphasizes continuous investment in technology and digital capabilities to enhance advisor productivity and client satisfaction[125] - Equitable Advisors has approximately 4,600 financial advisors, focusing on deep client relationships and integrated technology[125] Life Insurance Market - The life insurance industry remains competitive, with no single company dominating the market, emphasizing the importance of product features, pricing, and service[113] - The total in-force face amount for life insurance products decreased to $409.2 billion in 2024 from $412.3 billion in 2023, a decline of 0.8%[107] - Individual life insurance annualized premium increased to $241 million in 2024, up from $232 million in 2023, representing a growth of 3.9%[112] Employee Benefits - Employee benefits gross premiums rose to $439 million in 2024, compared to $372 million in 2023, reflecting a significant increase of 18%[118] - The annualized premium for employee benefits increased to $120 million in 2024, up from $104 million in 2023, a rise of 15.4%[118] - Group life insurance sales grew to $148 million in 2024, up from $127 million in 2023, marking a 16.5% increase[118] Reinsurance Transactions - Equitable Financial reinsured all variable annuity contracts issued outside New York prior to October 1, 2022, to its affiliate, Equitable America, effective April 1, 2023[145] - Equitable Financial ceded 90% of its fixed deferred annuity business sold prior to 2015 to a non-affiliated reinsurer on a coinsurance basis[145] - Equitable Financial completed a reinsurance transaction in May 2023, reinsuring virtually all net retained General Account liabilities to mitigate the impacts of Regulation 213[177] Compliance and Risk Management - The company is subject to extensive regulation by the SEC and FINRA, including capital requirements and sales practices scrutiny for its broker-dealer subsidiaries[190] - The Dodd-Frank Act and related regulations expose the company to operational, compliance, and execution risks, including central counterparty insolvency risk[207] - The NAIC's Risk Management and Own Risk and Solvency Assessment Model Act mandates insurers to maintain a risk management framework and conduct internal risk assessments[166]

Core Viewpoint - Equitable Holdings, Inc. (EQH) reported mixed fourth-quarter 2024 results, with a 3.4% increase in shares post-reporting, despite challenges in investment results. Revenue growth in key segments, particularly Asset Management and Wealth Management, helped mitigate the downside [1][2]. Financial Performance - Adjusted earnings per share (EPS) for Q4 2024 were $1.57, missing the Zacks Consensus Estimate by 2.5%, but representing an 18% year-over-year increase [2]. - Operating revenues rose 11.3% year over year to $4 billion, although this figure was 1% below consensus estimates [2]. - Policy charges and fee income increased by 6.5% year over year to $638 million, while premiums improved by 3.9% to $292 million. Net investment income decreased by 1.7% year over year to $1.2 billion [3]. Expense and Income Analysis - Total benefits and other deductions fell by 18.9% year over year to $2.4 billion, significantly influenced by a negative change in market risk benefits from the previous year [4]. - Other operating costs and expenses decreased by 8.2% year over year, leading to a pre-tax income of $1.2 billion, compared to a loss of $817 million in the prior-year quarter [4]. Asset Management and Growth - Total assets under management (AUM) reached $918.8 billion at the end of Q4, marking an 8.9% year-over-year increase. Total AUM/A grew by 10% year over year to $1 trillion [5]. Segment Performance - Individual Retirement segment revenues rose 24.9% year over year to $978 million, exceeding the consensus estimate [6]. - Group Retirement revenues climbed 22% year over year to $305 million, also beating consensus expectations [6]. - Asset Management revenues increased by 16.3% year over year to $1.25 billion, with pre-tax income soaring 44.4% [7]. - Wealth Management segment revenues advanced 17.9% year over year to $481 million, although pre-tax income dipped slightly [8]. Financial Position - As of December 31, 2024, total investments and cash equivalents stood at $123.4 billion, an 11.8% increase from the end of 2023. Total assets rose by 6.9% to $295.9 billion [9]. - Long-term debt was reported at $3.8 billion, showing a slight increase from the previous year [9]. - Total equity decreased by 21.5% from the end of 2023 to $3.4 billion [10]. Capital Return Strategy - Equitable Holdings returned $335 million to shareholders in Q4, comprising a $75 million cash dividend and $260 million in share repurchases, with a payout ratio target of 60-70% of non-GAAP operating earnings for 2023-2027 [11]. Full-Year Overview - For the full year 2024, adjusted EPS was $5.93, up 29.2% year over year, with total revenues of $12.4 billion, reflecting an 18.1% increase [12]. - Policy charges and fee income grew by 4.8% year over year to $2.5 billion, while premiums increased by 5.3% to $1.2 billion [12]. - Pre-tax income nearly tripled year over year to $2.1 billion [12]. Future Outlook - The company aims to generate cash in the range of $1.6-$1.7 billion for 2025 and maintains a target of $2 billion in annual cash generation from 2023 to 2027. Non-GAAP operating EPS is expected to grow at a CAGR of 12-15% during the same period [13].

Financial Data and Key Metrics Changes - Full year non-GAAP operating earnings were $2 billion or $5.93 per share, up 29% year-over-year on a per share basis [8] - Non-GAAP operating EPS was $6.18, which is up 20% compared to the prior year, exceeding the 12% to 15% annualized growth guidance [8] - Cash generation for 2024 was $1.5 billion, with a forecast of $1.6 billion to $1.7 billion for 2025, continuing the ramp to $2 billion by 2027 [9][50] - The company returned $1.3 billion to shareholders in 2024, equating to a 66% payout ratio, consistent with the 60% to 70% target range [10] Business Segment Data and Key Metrics Changes - Retirement segment reported full year net inflows of $7.1 billion, while wealth management saw $4 billion in net inflows [12] - AllianceBernstein (AB) reported full year active net inflows of $4.3 billion, achieving its second highest year ever for firmwide sales [12] - AB increased private markets AUM by 14% to $70 billion, supported by investments from Equitable's general account [13] Market Data and Key Metrics Changes - Assets under management and administration increased 10% year-over-year, exceeding $1 trillion [9] - The company established itself as a leader in the emerging in-plan guarantee market, highlighted by over $600 million net inflows from BlackRock's LifePath Paycheck offering [13] Company Strategy and Development Direction - The company is focused on defending and growing its core retirement and asset management businesses while scaling adjacent high-growth businesses [15] - Plans to seed future growth by exploring new emerging market opportunities, including in-plan guarantees and expansion in insurance asset management [16] - The integrated business model is expected to generate better economics by participating in the full value chain across retirement, asset management, and wealth management [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 12% to 15% annualized growth through 2027, with a strong cash flow and balance sheet enabling consistent capital returns to shareholders [21][50] - The company anticipates continued growth momentum in 2025, driven by favorable market conditions and strong demand for retirement solutions [44] Other Important Information - The company achieved $100 million of run-rate expense savings by year-end 2024, with plans to exceed $150 million by 2027 [10] - The establishment of a new Bermuda reinsurance subsidiary is expected to provide optionality for reinsuring in-force liabilities and support future growth [50] Q&A Session Summary Question: Bermuda entity's role in sustaining payout ratio - Management indicated that the Bermuda entity will support consistent cash flow and provide optionality for reinsuring in-force business and supporting new business growth [59] Question: C-corp conversion consideration for AllianceBernstein - AB's analysis suggests that its current structure is in the best interest of unitholders, and a conversion to a C-corp would lead to higher tax rates and significant dilution [66][68] Question: Guidance on protection earnings - Management guided protection earnings for 2025 to be at the lower end of the $200 million to $300 million range, citing volatility in mortality claims [72] Question: Update on BlackRock's LifePath Paycheck product - Expected similar inflows in 2025 as received in 2024, with significant growth potential in the $8 trillion 401(k) market for in-plan guaranteed solutions [76] Question: Trends in group retirement business - Positive flows in tax-exempt and institutional segments, with outflows primarily from legacy corporate segments [122] Question: Overall tax rates and expectations - Favorable audit results contributed to a lower tax rate in the quarter, with expectations for normalization going forward [128]

Core Insights - Equitable Holdings, Inc. reported $3.95 billion in revenue for Q4 2024, marking an 11.3% year-over-year increase, with EPS of $1.57 compared to $1.33 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $3.99 billion, resulting in a surprise of -1.01%, while the EPS also missed the consensus estimate of $1.61 by -2.48% [1] Financial Performance Metrics - Individual Retirement - Total Net Flows were $1.75 billion, exceeding the average estimate of $1.52 billion [4] - Individual Retirement - Total Account Value at the end of the period was $110.54 billion, slightly below the average estimate of $112.17 billion [4] - Segment revenues for Legacy were $129 million, surpassing the average estimate of $120.45 million [4] - Segment revenues for Wealth Management reached $481 million, exceeding the average estimate of $470.81 million [4] - Segment revenues for Corporate and Other were $224 million, falling short of the average estimate of $283.41 million [4] - Individual Retirement - Net Investment Income was $666 million, above the average estimate of $647.04 million [4] - Individual Retirement - Policy Charges, Fee Income, and Premiums were $223 million, exceeding the average estimate of $213.76 million [4] Stock Performance - Equitable Holdings' shares returned +8.4% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Equitable Holdings, Inc. reported quarterly earnings of $1.57 per share, missing the Zacks Consensus Estimate of $1.61 per share, but showing an increase from $1.33 per share a year ago, indicating a mixed performance in earnings expectations [1][2]. Financial Performance - The company posted revenues of $3.95 billion for the quarter ended December 2024, which was 1.01% below the Zacks Consensus Estimate, compared to $3.55 billion in the same quarter last year [2]. - Over the last four quarters, Equitable Holdings has surpassed consensus EPS estimates three times, but has not beaten consensus revenue estimates during this period [2]. Stock Performance - Equitable Holdings shares have increased approximately 12.9% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3]. - The current Zacks Rank for the stock is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.67 on revenues of $4.09 billion, and for the current fiscal year, it is $7.24 on revenues of $16.5 billion [7]. - The estimate revisions trend for Equitable Holdings is mixed, and future stock movements will depend on management's commentary during the earnings call [3][6]. Industry Context - The Financial - Miscellaneous Services industry, to which Equitable Holdings belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8].