AllianceBernstein L.P.(AB) - 2025 Q3 - Quarterly Results

Financial Performance - GAAP net income per unit for Q3 2025 was $0.79, down 29.5% from $1.12 in Q3 2024[19] - Adjusted net income per unit increased by 11.7% to $0.86 compared to $0.77 in Q3 2024[27] - Third quarter net revenues were $1.137 billion, reflecting a 4.8% increase from $1.085 billion in Q3 2024[14] - Total revenues for Q3 2025 were $1,152.35 million, representing a 4.1% increase compared to $1,106.70 million in Q3 2024[40] - Net income attributable to AB Unitholders for Q3 2025 was $259.26 million, a decrease of 25.1% from $345.97 million in Q3 2024[40] - The operating income for Q3 2025 was $283.48 million, down 22.4% from $365.28 million in Q3 2024[40] - The company reported a net income of $73,751,000 for the three months ended September 30, 2025, up from $70,248,000 in the previous quarter[47] - Adjusted net income for the same period was $79,446,000, compared to $83,878,000 in the prior quarter, indicating a decrease of 5.2%[47] Assets Under Management - Total assets under management (AUM) reached $860.1 billion, a 6.7% increase from $805.9 billion in Q3 2024[6] - The average assets under management increased to $840.8 billion as of September 30, 2025, up from $785.9 billion a year earlier[42] - Ending assets under management as of September 30, 2025, were $860.1 billion, an increase from $805.9 billion a year earlier[42] - The total assets under management (AUM) at the end of the period were $860,100,000, a decrease from $829,100,000 at the beginning of the period[44] Cash Distributions - Cash distribution per unit of $0.86 is scheduled for payment on November 20, 2025[3] - The distribution per unit for Q3 2025 was $0.86, an increase of 11.7% compared to $0.77 in Q3 2024[41] - The total cash paid for AB Holding Units purchased in Q3 2025 was $4.1 million, significantly lower than $38.6 million in Q3 2024[30] Net Flows and Outflows - The firm experienced $2.3 billion in total net outflows in Q3 2025, an improvement from $6.7 billion in Q2 2025[7] - Institutional channel net outflows were $1.8 billion, while retail channel net outflows improved to $1.7 billion from $4.8 billion in Q2 2025[9] - The net cash flows for the total distribution channels in Q3 2025 were negative at $(16.9) million, reflecting redemptions and terminations[43] - The company experienced net outflows of $(2,300,000) in total, with actively managed equity experiencing outflows of $(6,400,000)[45] - Investment performance contributed $33,300,000 to net flows, with a total of $281,300,000 in equity at the end of the period[44] Employee Metrics - As of September 30, 2025, AllianceBernstein had 4,457 employees, an increase from 4,292 employees as of September 30, 2024[28] - Employee compensation and benefits for Q3 2025 totaled $450.79 million, a 6.1% increase from $424.89 million in Q3 2024[40] Adjusted Operating Metrics - Adjusted operating income rose 15% to $302 million, with an adjusted operating margin of 34.2%, up 290 basis points from 31.3% in Q3 2024[26] - Adjusted net revenues for the same period were $884,672,000, compared to $844,434,000 in the prior quarter, reflecting a growth of 4.0%[46] - The adjusted operating margin for the three months was 34.2%, compared to 32.3% in the previous quarter[46] - Adjusted operating income reflects the offset from economically hedging market exposure of long-term incentive compensation-related investments[57] - Adjusted net revenues exclude equity income or loss from equity method investments, as these do not represent core business operations[53] Other Notable Events - The company aims to increase private markets AUM to between $90 billion and $100 billion by 2027[2] - The company identified an error in billing practices by a third-party service provider, leading to reimbursement of overbilled amounts, which were excluded from adjusted operating income[62] - The board granted equity awards to executives, which are recorded as compensation expense but excluded from non-GAAP measures due to their non-cash nature[58] - Effective April 1, 2024, the company will record all income or loss associated with joint ventures as equity method investment income, excluding these amounts from adjusted operating income[61] - The company aims to fully divest from joint ventures, considering related income or loss as temporary and non-core[61]