Executive Summary

Q4 2024 delivered strong earnings power but softer flows: GAAP net revenues rose 15% y/y to $1.26B, adjusted operating margin expanded to 36.4% (+720 bps y/y), and adjusted diluted EPU increased 36% y/y to $1.05; total net outflows were $4.8B and AUM fell 2% q/q to $792.2B. Distribution per unit was $1.05 for the quarter .
Operating leverage inflected on cost actions and mix: NYC relocation savings and the Bernstein Research Services deconsolidation drove margin expansion; management affirmed a 2025 baseline adjusted operating margin of 33% and guided 2025 non-comp expenses to $600–$625M with ~$50M occupancy savings expected to drop to the bottom line .
Strategic growth vectors continued: record full‑year active fixed income flows, private markets AUM reached ~$70B, and insurance channel momentum accelerated (including ~$1B of new RGA commitments and deployment of ~20% of Equitable’s second $10B commitment) .
Fee rate stable but mix-sensitive; equity headwinds persist: firm‑wide fee rate was 39.8 bps in Q4 (vs. 39.9 bps in Q3), with institutional active equity redemptions and rates volatility weighing on mix; management remains constructive on fixed income reallocation and insurance‑oriented private strategies .

What Went Well and What Went Wrong

What Went Well

Margin and earnings strength on both GAAP and adjusted bases: adjusted operating margin rose to 36.4% (+720 bps y/y), adjusted operating income up 40% y/y, and adjusted diluted EPU to $1.05 (+36% y/y) .
Private markets and insurance momentum: “Our private markets AUM stands at $70 billion as of year-end, up 14% in 2024,” and AB has “deployed approximately 20% of Equitable's second $10 billion commitment,” while RGA made ~$1B of commitments across multiple strategies .
Performance fees upside: Fourth-quarter performance fees were strong and full-year performance fees rose 80% y/y to $227M, with management reiterating $70–$75M of more recurring, hurdle‑based performance fees in 2025 (private strategies) .

What Went Wrong

Flows weakened: total Q4 net outflows of $4.8B (vs. +$1.1B in Q3), with institutional outflows accelerating to $6.2B; AUM declined 2% q/q to $792.2B .
Equity headwinds/mix pressure: “Active equity outflows persisted,” notably in institutional; the firm‑wide fee rate ticked down to 39.8 bps from 39.9 bps on mix shifts, including pressure in higher‑fee non‑U.S. services .
Retail momentum moderated sequentially: retail net inflows slowed to $1.1B (from $5.4B in Q3) amid rates volatility; taxable fixed income AUM contracted as intermediate duration faced higher rates .

Financial Results

Headline P&L and EPS (Q4 2023 → Q3 2024 → Q4 2024)

Metric	Q4 2023	Q3 2024	Q4 2024	Consensus (Q4 2024)
GAAP Net Revenues ($MM)	1,090.7	1,085.5	1,257.6	N/A (SPGI unavailable)
Adjusted Net Revenues ($MM)	870.9	845.1	973.3	N/A
GAAP Operating Income ($MM)	238.5	365.3	317.5	N/A
GAAP Operating Margin (%)	20.6	33.2	25.0	N/A
Adjusted Operating Income ($MM)	253.9	264.2	354.4	N/A
Adjusted Operating Margin (%)	29.2	31.3	36.4	N/A
GAAP Diluted EPU ($)	0.71	1.12	0.94	N/A
Adjusted Diluted EPU ($)	0.77	0.77	1.05	N/A
Distribution per Unit ($)	0.77	0.77	1.05	N/A

Notes: S&P Global consensus estimates for Q4 2024 were unavailable at the time of analysis.

Performance/AUM KPIs (Q4 2023 → Q3 2024 → Q4 2024)

KPI	Q4 2023	Q3 2024	Q4 2024
GAAP Performance Fees ($MM)	62.0	28.8	168.7
Ending AUM ($B)	725.2	805.9	792.2
Average AUM ($B)	685.4	785.9	801.0
Total Net Flows ($B)	(1.8) (prior‑year Q4)	1.1	(4.8)
Firm‑wide Fee Rate (bps)	—	39.9	39.8

Flows by Distribution Channel (Q3 2024 vs Q4 2024)

Channel Net Flows ($B)	Q3 2024	Q4 2024
Institutional	(4.4)	(6.2)
Retail	5.4	1.1
Private Wealth	0.1	0.3
Total	1.1	(4.8)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted Operating Margin (baseline)	FY 2025	33% baseline (Q3 guide)	33% baseline reiterated	Maintained
Non‑Compensation Expense	FY 2025	—	$600–$625M	New
Occupancy Savings Flow‑through	FY 2025	~100–150 bps margin expansion timing (Q3)	~$50M annual occupancy savings to fully drop to bottom line	Reaffirmed/Specified
Compensation Ratio Accrual	Q1 2025	49% in Q1 prior year (reference)	Accrue at 48.5% (may adjust)	Lowered vs prior Q1
Effective Tax Rate (ABLP)	FY 2025	5%–6% for 2024 outcome guided (achieved 5.2%)	6%–7%	Raised vs 2024 actual
Recurring Hurdle‑Based Performance Fees	FY 2025	~$70–$75M (Q3 disclosed baseline)	$70–$75M reiterated	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
Fixed income reallocation	Q2: 9% organic FI growth; cash-to-bonds setup; strong retail/japan; pipeline support . Q3: +$6B active FI inflows; fee rate stabilization .	Rates volatility affected taxable FI flows; muni SMA demand robust; management remains constructive on 2025 FI demand .	Positive but volatile
Active equities	Q2: outflows persisted; performance improving; retail interest in value/growth . Q3: institutional outflows; retail equities modest inflows .	Outflows persisted esp. institutional; early‑year performance improving; narrative of breadth improvement .	Gradual improvement, still a headwind
Private markets/insurance	Q2: Private markets AUM $64B; Equitable initial $10B fully funded; NAV lending; interval fund launch . Q3: AUM $68B; public + private alt performance fees; pipeline alt weight high .	Private markets AUM $70B; deployed ~20% of second $10B; RGA ~$1B commitments; 2025 recurring fees $70–$75M .	Accelerating scaling
Fee rate	Q2: 39.4 bps, modest y/y pressure . Q3: 39.9 bps off lows .	39.8 bps; mix pressures (non‑U.S. equities, muni SMAs) .	Stable overall
Cost/margins	Q2: BRS deconsolidation; relocation; margin expansion timing . Q3: relocation done; 33% baseline FY25 .	2025 non‑comp guide $600–$625M; ~$50M occupancy savings .	On track
Corporate structure	—	C‑Corp conversion not compelling now (tax/index hurdles) .	Off table for now
Active ETFs	Q2: 15 ETFs/$4.6B . Q3/Q4: 17 strategies/$5.5B by year-end 2024; broadening distribution .	Growing

Management Commentary

“2024 was a transformative year... we successfully executed on key initiatives to improve our financial profile and expanded our investment and distribution capabilities.” (Seth Bernstein, CEO) .
“Our private markets AUM stands at $70 billion as of year-end, up 14% in 2024… we have now deployed approximately 20% of Equitable's second $10 billion commitment.” (Seth Bernstein) .
“As of 4Q ’24, the firm‑wide fee rate was 39.8 bps… influenced by mix, including higher muni SMAs and non‑U.S. equity outflows; while mix dependent near term, we’re selective with growth initiatives to mitigate fee erosion.” (Jacqueline Marks, CFO) .
“We maintain guidance of $70–$75 million of recurring hurdle‑based performance fees for 2025, driven by our private markets capabilities.” (Jacqueline Marks) .

Q&A Highlights

Corporate structure: Management sees C‑Corp conversion as value‑dilutive given a modeled mid‑20s tax rate and index inclusion hurdles; not ruling it out long term but “the math didn’t really add up” currently .
Fixed income flows: Despite Q4 rates volatility, AB continues to see strong interest in fixed income, especially muni SMAs and short/intermediate duration; January trends remained constructive .
Non‑comp and margin path: 2025 non‑comp expense guided to $600–$625M and ~$50M occupancy savings intended to flow through; baseline 33% adjusted operating margin reiterated .
Insurance/alternatives: Insurance pipeline fee rate ~45 bps with new mandates; partnerships (e.g., RGA) support NAV lending, mortgages, and middle‑market loans; interval fund building RIA/broker‑dealer access .
Active ETFs: 17 strategies/$5.5B AUM by year end; scaling through RIAs and expected broader wirehouse shelves as products season and grow .

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q4 2024 were unavailable at the time of analysis due to data access limits; as a result, we did not include “vs. consensus” comparisons in the tables above. Where applicable, management’s guidance and reported outcomes are presented from company documents .
Implications: Strong performance fees and margin upside versus internal/company guidance suggest upward bias to 2025 operating leverage assumptions; however, mix-driven fee rate sensitivity and institutional active equity redemptions could temper top‑line assumptions absent broader equity breadth .

Key Takeaways for Investors

Earnings power improving: Adjusted margin at 36.4% (seasonally strong Q4) and baseline 33% for 2025 underpin a more durable operating profile; the relocation/BRS actions provide structural tailwinds .
Private markets/insurance as growth engines: $70B private markets platform, recurring 2025 hurdle fees of $70–$75M, and insurance mandates (RGA, Equitable) position AB for fee‑accretive growth .
Fixed income reallocation remains a multi‑year theme: Expect flows to improve as duration extensions continue; AB is well‑positioned in muni SMAs, income strategies, and active FI ETFs .
Mix management is key: Fee rate stability (~39.8–39.9 bps) depends on mix (equities, muni SMAs, alts); watch institutional active equity outflows and non‑U.S. equity performance for near‑term fee dynamics .
Capital returns track adjusted earnings: Q4 distribution of $1.05/unit reflects policy to distribute 100% of adjusted earnings; continued performance/margin execution supports payout visibility .
Corporate structure unlikely to change near term: C‑Corp conversion remains off the table given tax/index implications; focus stays on organic/inorganic product expansion and insurance/private credit scaling .
Near‑term setup: Watch monthly AUM/flows (Dec preliminary AUM fell to $792B; Q4 firmwide net outflows ~$5B) and Q1 seasonality; any improvement in institutional equity redemption pace or sustained FI inflows can re‑accelerate net flows .

Appendix: Additional Flow/AUM Detail (Q4 2024)

By channel (Q4): Institutional AUM $321.4B; Retail $334.3B; Private Wealth $136.5B; total $792.2B .
Net flows (Q4): Institutional $(6.2)B; Retail +$1.1B; Private Wealth +$0.3B; total $(4.8)B .
December 2024 preliminary AUM declined to $792B from $813B in November; quarter‑ended net outflows ~$5.0B .

Sources: AB Q4 2024 8‑K/press release and exhibits ; Q4 2024 earnings call transcript ; Q3 2024 press release/8‑K/call ; Q2 2024 press release/8‑K/call ; Monthly AUM press releases .

ALLIANCEBERNSTEIN HOLDING L.P. (AB)·Q4 2024 Earnings Summary