Equitable (NYSE:EQH) Q4 2025 Earnings call February 05, 2026 10:00 AM ET Company ParticipantsAlex Scott - CFAErik Bass - Head of Investor RelationsMark Pearson - CEO and PresidentNick Lane - PresidentOnur Erzan - PresidentRobin Raju - CFOTom Gallagher - Senior Managing DirectorConference Call ParticipantsJimmy Bhullar - Equity Research AnalystJoel Hurwitz - Equity Research AnalystMichael Ward - Equity Research AnalystSuneet Kamath - Research AnalystWes Carmichael - CFA and Senior AnalystYaron Kinar - Managi ...

Equitable (NYSE:EQH) Q4 2025 Earnings call February 05, 2026 10:00 AM ET Company ParticipantsAlex Scott - CFAErik Bass - Head of Investor RelationsMark Pearson - CEO and PresidentNick Lane - PresidentOnur Erzan - PresidentRobin Raju - CFOTom Gallagher - Senior Managing DirectorConference Call ParticipantsJimmy Bhullar - Equity Research AnalystJoel Hurwitz - Equity Research AnalystMichael Ward - Equity Research AnalystSuneet Kamath - Research AnalystWes Carmichael - CFA and Senior AnalystYaron Kinar - Managi ...

Equitable (NYSE:EQH) Q4 2025 Earnings call February 05, 2026 10:00 AM ET Speaker8Hello, everyone. Thank you for joining us, and welcome to the Equitable Holdings full year and fourth quarter earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Eric Bass, Head of Investor Relations. Please go ahead.Speaker1 ...

Core Points - Corebridge Financial reported strong sales momentum in Q3, with record-high annuity sales and significant activity in Institutional Markets driving top-line growth [1] - The company achieved nearly $800 million in RILA product sales for Q3, totaling over $1.7 billion year-to-date [1] - Despite these sales achievements, profitability was impacted by higher compensation expenses and one-time charges, leading to earnings that fell short of Wall Street expectations [1] Financial Highlights - Revenue reached $5.63 billion, exceeding analyst estimates of $3.76 billion, representing a 34% year-on-year growth and a 49.7% beat [6] - Adjusted EPS was $0.96, missing analyst expectations of $1.08 by 11.4% [6] - Adjusted Operating Income was $647 million, below analyst estimates of $792 million, with an 11.5% margin, marking an 18.3% miss [6] - The company's market capitalization stands at $15.59 billion [6] Analyst Insights - CFO Elias Habayeb discussed spread yield compression in Individual Retirement, attributing it to asset reallocations from the VA transaction [6] - Concerns regarding private credit exposure were addressed, with Habayeb noting that most private placements are investment grade and diversified [6] - CEO Kevin Hogan highlighted the strategic value of the Group Retirement (VALIC) business, focusing on the transition to fee-based income through advisor-led wealth management [6] - Hogan also mentioned strong pipelines in GIC and PRT, while projecting a step-down in insurance company dividends post-VA transaction [6] - Clarifications were made regarding capital return pacing and regulatory risks associated with private credit allocations [6]

Financial Data and Key Metrics Changes - Non-GAAP operating earnings were $455 million, or $1.48 per share, down 6% year over year on a per-share basis [4][14] - Adjusted for notable items, non-GAAP operating EPS was $1.67, up 2% compared to the prior year [5][14] - Total assets under management reached a record $1.1 trillion, up 4% sequentially and 7% year over year [5][14][16] - The consolidated GAAP net loss was $1.3 billion, primarily due to a one-time impact from asset transfers related to the life reinsurance transaction [14] Business Line Data and Key Metrics Changes - Retirement businesses generated $1.1 billion of net flows during the quarter, driven by growth in umbrella sales [5] - Wealth management had $2.2 billion of advisory net inflows, reflecting a 12% annualized growth rate [5] - Asset management reported total net outflows of $2.3 billion, but excluding low-fee assets transferred to RGA, net inflows were $1.7 billion [5][18] Market Data and Key Metrics Changes - The retirement segment saw a 7% increase in RILA sales, achieving record sales in nine of the last ten quarters [31][44] - Private markets assets increased 17% year over year to $80 billion, on track to meet the $90-$100 billion target by 2027 [5][13] Company Strategy and Development Direction - The company focuses on three core growth businesses: retirement, asset management, and wealth management, which provide synergies and flywheel benefits [8][9] - Key strategic pillars include defending and growing existing businesses, scaling high-growth wealth management, and investing in high-potential opportunities [8][9] - The acquisition of Stifel Independent Advisors aims to enhance the wealth management business, expected to close in the first half of 2026 [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2027 financial targets, supported by strong organic growth momentum and increased assets under management [4][23] - The company anticipates continued double-digit growth in wealth management earnings, driven by asset growth and improved advisor productivity [11][18] - Management expects to see less volatility in life results going forward due to the benefits of the life reinsurance transaction [14][35] Other Important Information - The company returned $757 million to shareholders, including $676 million in share repurchases, and reduced outstanding debt by $500 million [7][21] - The adjusted debt to capital ratio was reported at 24.5% [16] - The consolidated tax rate for the quarter was 17%, below the normal expectation of 20% [20][21] Q&A Session Summary Question: Perspectives on the private credit environment and underwriting process - Management views private credit as a good asset class and emphasizes the importance of underwriting capabilities [25][28] Question: Differentiation in the RILA market amidst increased competition - The company maintains a sustainable edge through attractive yields, privileged distribution, and a track record of innovation [31][32] Question: Comments on unfavorable mortality experience and expectations for normalization - Management noted that retained experience was only about $10 million worse than expected, indicating modest impact from mortality [35] Question: Strategy for capital deployment from the RGA deal - The company plans to balance capital returns and acquisitions, emphasizing the ability to do both due to excess capital [58][59] Question: Growth opportunities in the spread lending business - The company has significant capacity to grow the FABN business, having issued about $4.5 billion year to date [61]

Summary of Corebridge Financial (CRBD) 2025 Conference Call Company Overview - **Company**: Corebridge Financial (CRBD) - **Industry**: Life Insurance and Retirement Solutions - **Key Executives**: Kevin Hogan (CEO), Elias Hebbeyeb (CFO) Key Points and Arguments Company Performance and Strategy - Corebridge has successfully executed its strategies since its IPO three years ago, achieving a 12-14% Return on Equity (ROE) in 2024, as initially targeted [3][4] - The company has maintained a payout ratio of 60-65% and a Risk-Based Capital (RBC) ratio of 400%, while growing its business [4] - Annual sales volume has increased by approximately 30% since the IPO [5] - Corebridge has returned $6 billion to shareholders since the IPO, demonstrating strong capital management [5] Variable Annuity Transaction - Corebridge exited its entire variable annuity business, which had been in decline for eight years, through a transaction with Venerable, generating $2.1 billion in proceeds [8][10] - The transaction was seen as a significant value creation opportunity, with a multiple of around seven times earnings [10] - Proceeds from the transaction will primarily be used for shareholder buybacks and further organic growth investments [11] Expense Management - The CoreBridge Forward program has successfully reduced annual expenses by $400 million through outsourcing, IT modernization, and improved procurement practices [15][16][17] - The company aims to continue driving down unit costs through further automation and digitization [18] Market Trends and Growth Opportunities - The aging population in the U.S. is a significant driver for the annuity market, with 4 million people turning 65 annually [22][23] - There is a growing awareness among individuals about the need for self-managed retirement planning, contributing to increased demand for annuities [23] - The adviser community is becoming more professionalized, further supporting the growth of fixed income investments [24] Competitive Environment - Corebridge is currently achieving targeted margins despite increased competition in the annuity space [27] - The company has a diverse product range and strong relationships with distribution partners, allowing it to navigate competitive cycles effectively [28][29] Group Retirement Business - There is a gradual shift from spread-based to fee-based income in the group retirement business, with fee income now representing a significant portion of earnings [34][36] - Corebridge is investing in its adviser base and digital tools to enhance productivity and efficiency [37] Pension Risk Transfer Market - The pipeline for U.S. pension risk transfer remains strong, despite some slowdowns due to external volatility [43][44] - Corebridge focuses on full plan terminations, which are more economically attractive [45] Life Insurance Business - Corebridge has outperformed the market in life insurance, driven by investments in automated underwriting and a focus on middle-market products [51] - The company has a competitive advantage due to its digital capabilities and disciplined risk management [52] Collaboration with Nippon Life - Corebridge is exploring mutual commercial opportunities with Nippon Life, focusing on product development, investments, and digital technologies [53][54] Capital Deployment and M&A - Corebridge is focused on shareholder value creation through dividends and buybacks, with no immediate M&A opportunities identified [59][60] Additional Important Insights - The company has simplified its structure by divesting international subsidiaries and focusing on U.S. retirement and life insurance [6] - Corebridge's automated underwriting process allows 80% of transactions to be processed without human intervention, enhancing efficiency [52] - The company is actively exploring in-plan annuity opportunities, recognizing the potential for growth in this area [40][42]

Financial Data and Key Metrics Changes - Adjusted operating income increased by 32% year over year, reaching $427 million or $2.36 per diluted share [4][27] - Net income available to common stockholders was $688 million or $3.80 per diluted share, reflecting positive market risk benefits [27] - The estimated RBC ratio remained above 420%, consistent with the company's strategy to maintain a capital buffer above the 400% target [43] Business Line Data and Key Metrics Changes - Group Protection business achieved record earnings of $173 million, up 33% year over year, with a margin increase to 12.5% [28][18] - Annuities generated operating income of $287 million, slightly down from $297 million in the prior year, primarily due to traditional variable annuity outflows [35] - Life Insurance reported operating earnings of $32 million, a significant improvement from an operating loss of $35 million in the prior year [40] Market Data and Key Metrics Changes - All four business segments delivered double-digit sales growth in the first half of the year, with notable contributions from previously non-key products [8] - Retirement Plan Services saw first-year sales increase by nearly 50% year over year, with total deposits up by 10% [22] Company Strategy and Development Direction - The company is focused on increasing risk-adjusted returns, reducing volatility, and growing its franchise through a disciplined growth strategy [5][24] - Strategic investments are being made in higher-margin products and segments, enhancing digital capabilities, and optimizing the operating model [7][8] - The company aims to deepen its strategic moat and evolve into a more agile, scalable organization [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory, emphasizing the importance of disciplined execution and strategic clarity [25][48] - The economic backdrop remains volatile, but the company is committed to delivering long-term value and sustainable growth [8][24] Other Important Information - The company has launched a Bermuda-based reinsurance subsidiary to enhance its investment strategy [7] - The alternative investment portfolio achieved a 10% annualized return, contributing positively to overall earnings [27][47] Q&A Session Summary Question: On group and the shift into smaller local markets and supplemental health products - Management highlighted the successful execution of a targeted segment strategy, particularly in local markets and supplemental health, which are expected to drive margin expansion [50][51] Question: On the restructuring of the Life Captives - Management indicated that specifics on the impact of restructuring on earnings and free cash flow would be provided once more concrete details are available, with potential impacts expected in the following year [62][64] Question: On RILA product sales and market competition - Management reported a 32% increase in RILA sales year over year, attributing growth to the introduction of a second-generation product and expanding distribution segments [67][69] Question: On free cash flow conversion guidance - Management expressed confidence in the long-term free cash flow conversion rate being above previous targets, especially with the deployment of Bain Capital [74][76] Question: On distribution strategies in the group business - Management emphasized the importance of strategic broker relationships and investments in digital capabilities to enhance competitive differentiation and drive growth [80][82] Question: On external reinsurance solutions - Management is exploring options for external reinsurance focused on the legacy life block, with the potential for less reliance on structured deals due to deployable excess capital [88]

Financial Data and Key Metrics Changes - Adjusted non-GAAP earnings for Q2 2025 were $469 million, or $2.7 per share, representing an 18% increase in EPS compared to 2024 [5][6] - Reported non-GAAP operating earnings were $489 million, up 27% year over year, with EPS at $2.16, a 33% increase [15][16] - Total company managed AUM reached $753 billion, a 5% increase sequentially and an 8% increase year over year [7][11] - Net cash flow was negative $2.6 billion for the quarter, but showed improvement sequentially [7][11] Business Line Data and Key Metrics Changes - In Retirement, overall RIS sales were $6 billion, a 7% year-over-year increase, driven by Workplace Savings and Retirement Solutions [9][10] - Principal Asset Management AUM increased to $723 billion, a 5% sequential increase, with sales of $33 billion, up 19% year over year [11][12] - Specialty Benefits saw a 10% growth in earnings, with a margin expansion of 100 basis points [12][21] - Life Insurance premium fees increased by 5% compared to 2024, driven by strong business market growth [22] Market Data and Key Metrics Changes - The market drop in April affected daily averages, impacting second quarter fee revenue, but a strong rebound in May and June provided positive momentum [6][7] - International Pension net revenue was impacted by foreign currency, but increased by 2% on a constant currency basis [20] Company Strategy and Development Direction - The company remains focused on disciplined expense management while investing for growth, aiming to align revenue and expenses effectively [29][31] - Continued emphasis on capital return targets, with $320 million returned to shareholders in Q2, including $150 million in share repurchases [6][24] - The company is committed to maintaining a strong capital position and expects to deliver on full-year capital return targets of $1.4 billion to $1.7 billion [24][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the second half of the year, expecting full-year results to align with 2025 outlook and financial targets [7][8] - The company anticipates improved results in the latter half of 2025, particularly in investment management and performance fees [48][49] - Management acknowledged the competitive environment in pension risk transfer (PRT) but remains optimistic about achieving targeted returns [40][42] Other Important Information - The company was recognized for its leadership in disability inclusion and AI application in financial services [13] - A $0.78 common stock dividend was announced for Q3, reflecting an 8% increase over the previous year [26] Q&A Session Summary Question: Overall expense levels and future focus - Management confirmed a continued focus on aligning expenses with revenue while maintaining investments in the business [29][31] Question: Spread balances within RIS - Management noted that investment-only issuance and PRT sales were moderate, emphasizing a disciplined approach to prioritizing returns over volume [34][38] Question: Competitive environment in PRT - Management acknowledged increased competition but remains optimistic about converting existing DB clients into PRT opportunities [40][42] Question: Variable investment income experience - Management indicated improved performance in variable investment income, with expectations for better results in the latter half of 2025 [47][49] Question: Dental business outlook - Management highlighted competitive pricing and renewal rates, with expectations for improved sales in the second half of the year [84][88]

Financial Data and Key Metrics Changes - First quarter reported adjusted net earnings were $91 million or $0.72 per share, compared to $108 million or $0.86 per share in the first quarter of 2024, reflecting a decrease of $17 million primarily driven by margin compression and higher interest expense [27][28] - First quarter adjusted return on assets (ROA) was 68 basis points, pressured from near-term headwinds, with a last twelve-month adjusted ROA of 100 basis points, down six basis points from the previous quarter [29] - Reported adjusted return on equity (ROE), excluding AOCI, was 9.7%, up 2.3% over the first quarter of 2024 [29] Business Line Data and Key Metrics Changes - F&G reported record assets under management (AUM) before flow reinsurance of $67.4 billion as of March 31, reflecting a 169% increase compared to the first quarter of 2024 [21] - Gross sales were $2.9 billion, a 17% decrease from the first quarter of 2024, primarily due to lower MYGA sales, while indexed annuity sales remained strong at $1.5 billion [21][22] - Pension risk transfer (PRT) sales were $311 million, down from $584 million in the first quarter of 2024, with funding agreements at $525 million compared to $105 million in the prior year [23] Market Data and Key Metrics Changes - The investment portfolio is well matched to the liability profile, with 96% of fixed maturities being investment grade, and credit-related impairments averaging six basis points over the last five years [12][29] - The fixed income yield was 4.53% in the first quarter, a decrease of three basis points from the first quarter of 2024, reflecting the runoff of higher-yielding in-force assets [13] Company Strategy and Development Direction - The company continues to diversify earnings between spread-based and fee-based sources, with a focus on optimizing return on capital and maintaining pricing discipline [19][20] - F&G is committed to achieving its 2023 Investor Day targets while navigating near-term headwinds and macro uncertainty [31] Management's Comments on Operating Environment and Future Outlook - Management believes that the near-term headwinds are temporary and expects improvement in sales and profitability throughout 2025 [7][9] - The company remains confident in its business model's resilience and its ability to generate long-term shareholder value despite current market volatility [84] Other Important Information - The company has successfully completed recent capital markets activities, including issuing $375 million of junior subordinated notes and a public offering of 8 million shares of common stock [30][31] - The owned distribution portfolio is performing well, with double-digit annual growth of EBITDA expected over the medium term [19] Q&A Session Summary Question: Growth opportunity for the Ryla product - Management expressed excitement about the Ryla product, noting that it has taken time to get onto platforms but is now adding broker dealers consistently, with medium-term potential in the billions [35][38] Question: Impact of lower industry volume on own distribution - Management indicated that the slowdown in owned distribution was balanced between industry volume and investments supported by the company, with a rebound observed in April [39][40] Question: Thoughts on capital deployment after raising common equity - Management stated that the capital raised would be deployed thoughtfully into new business, maintaining a disciplined approach to pricing and capital allocation [43][44] Question: Cost of funds increase and market competition - Management acknowledged the increase in cost of funds and attributed it to lower surrender income and market volatility, but remains disciplined in pricing [47][48] Question: Performance of the alternatives portfolio - Management noted that the direct lending portfolio performed well, while the limited partnerships came in lower than expectations, impacting overall yield [75][76] Question: Surrender activity expectations - Management projected that surrender activity would remain similar in Q2 compared to Q1, with ongoing uncertainty regarding future surrenders [78][80]

Financial Data and Key Metrics Changes - Non-GAAP operating earnings for the first quarter were $421 million or $1.30 per share, down 7% year over year on a per share basis, while adjusting for notable items, non-GAAP operating EPS was $1.35, down 3% compared to the prior year [7][20] - GAAP net income was $63 million in the quarter, lower than non-GAAP operating earnings due to non-economic hedging impacts [21] - The reported book value per share excluding AOCI was $27.62, while the adjusted book value per share including ownership in AB at market value was $39.96 [22] Business Line Data and Key Metrics Changes - The Protection Solutions segment reported a loss of $17 million due to high levels of large individual life mortality claims, which were approximately $80 million above expectations [8][23] - Retirement businesses produced $1.6 billion of net inflows, driven by momentum in the RILEH franchise and expansion of institutional offerings [8] - Wealth management business had $2 billion of advisory net inflows, with advisor productivity up 8% and a 12% organic growth rate on a trailing twelve-month basis [9] Market Data and Key Metrics Changes - The company experienced positive net flows across each of its three distribution channels, with total active net inflows of $2.7 billion [9] - The private markets business saw AUM increase by 20% year over year to $75 billion, with a strong pipeline [9] - The company noted that market volatility and tax payments pressured flows in April, but it remains well-positioned due to its diversified asset mix and global investment platform [9][11] Company Strategy and Development Direction - The company plans to close a reinsurance transaction with RGA, which will free up over $2 billion of capital and enhance focus on retirement, asset management, and wealth management [10][18] - The strategy emphasizes the combination of insurance and asset management to provide competitive advantages, with a focus on capturing synergies between Equitable and AB [17][92] - The company aims to maintain a strong balance sheet and predictable cash flows, leveraging its all-weather product portfolio to navigate market volatility [12][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate periods of macro volatility, highlighting strong underlying growth drivers and the need for retirement and investment advice [5][12] - The company anticipates that periods of market volatility will increase demand for its products, particularly buffered annuities [12][46] - Management remains optimistic about long-term growth prospects, driven by favorable demographic trends and a durable need for the advice and solutions offered [38] Other Important Information - The company returned $335 million to shareholders in the first quarter, representing an 80% payout ratio, and plans to increase its quarterly cash dividend by 13% [29][30] - The company has $2.2 billion of cash and liquid assets at holdings, up from $1.8 billion at the end of the fourth quarter [30] - The company is focused on maintaining financial flexibility and is prepared to take advantage of market opportunities as they arise [36][68] Q&A Session Summary Question: Can you size the extraordinary dividend planned for the holding company? - Management expects to take an extraordinary dividend of about $1 billion later in the year, following the $2 billion benefit from the life insurance company post-transaction with RGA [42] Question: Are you seeing incremental demand for your products given current market conditions? - Management reported robust sales in April, driven by demographic trends and heightened market volatility, with continued demand for their products [46][47] Question: What is the impact of seasonally elevated expenses and lower fee days on earnings? - Management indicated that the seasonal expenses and lower fee days had a pretax impact of about $10 million on individual retirement earnings, which is expected to normalize in the second quarter [50] Question: How do you view the leverage ratio and potential buybacks? - Management stated that any incremental buybacks would likely be accompanied by debt repayment to maintain leverage ratios in line with rating agency expectations [52] Question: What is the outlook for cash flow guidance given lower equity markets? - Management remains comfortable with the cash flow guidance of $1.6 billion to $1.7 billion for the year, despite being on the lower end due to current market conditions [91]