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Equitable Holdings, Inc. (EQH)·Q1 2025 Earnings Summary

Executive Summary

  • Non-GAAP operating EPS was $1.30, down 7% YoY, as elevated mortality in Protection Solutions and seasonal expense timing weighed on performance; adjusted operating EPS was $1.35 after notable items. Total revenues rose 105% YoY to $4.58B, aided by net derivative gains, while GAAP diluted EPS was $0.16 .
  • Strong organic growth continued: Retirement net inflows $1.6B, Wealth Management advisory net inflows $2.0B, and AllianceBernstein net inflows $2.4B; AUM/A was ~$1.01T .
  • Management reaffirmed balance sheet strength (combined NAIC RBC ~425%, HoldCo liquidity $1.1B after April actions) and expects the life reinsurance with RGA to close mid-2025, freeing >$2B capital; plans include an incremental $500M buyback post-close and lifting the quarterly dividend to $0.27 in Q2 .
  • Versus S&P Global consensus, Q1 EPS missed ($1.30 vs $1.48*) on mortality/expenses, while revenue beat ($4.58B vs $3.98B*)—a mixed print that keeps near-term stock catalysts focused on the RGA close, capital deployment and sustained net flow momentum (S&P Global).*

What Went Well and What Went Wrong

What Went Well

  • Retirement flows were resilient: Individual Retirement net inflows of $1.4B and Group Retirement net inflows of $192M, with IR first-year premiums up 6% YoY to $4.6B .
  • AllianceBernstein delivered $2.4B net inflows and 33.7% adjusted operating margin; management highlighted durable private markets momentum (AUM $75B) and strengthened ownership to ~69% in April .
  • Management emphasized robust capital and hedging posture: “We fully hedged the equity market and interest rate exposure underlying the product guarantees…protecting our capital position” .

What Went Wrong

  • Protection Solutions swung to a $(17)M operating loss on elevated mortality; CFO quantified ~$80M pretax mortality above expectations, reducing EPS by ~$0.20 .
  • Seasonal expense timing (benefits, payroll taxes, LTIs) pressured Individual Retirement; ~$10M pretax expense headwind should normalize next quarter .
  • April market volatility weighed on near-term asset management flows (tax season, Asia retail) despite a stronger institutional pipeline for AB .

Financial Results

Consolidated metrics (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenues ($USD Billions)$3.08 $3.62 $4.58
Non-GAAP Operating EPS ($)$1.53 $1.57 $1.30
GAAP Diluted EPS ($)$(0.47) $2.76 $0.16
Net Income ($USD Millions)$(134) $899 $63

Consensus vs Actual (S&P Global) — EPS and Revenue

MetricQ3 2024Q4 2024Q1 2025
EPS Consensus Mean ($)1.53*1.62*1.48*
EPS Actual ($)1.53*1.57*1.30*
Revenue Consensus Mean ($USD Billions)$3.85*$3.98*$3.98*
Revenue Actual ($USD Billions)$2.93*$3.83*$4.58*

All estimates data marked with * retrieved from S&P Global.

Segment operating earnings ($USD Millions)

SegmentQ3 2024Q4 2024Q1 2025
Individual Retirement225 240 216
Group Retirement141 132 130
Asset Management (AB)111 161 126
Protection Solutions46 32 (17)
Wealth Management50 47 46
Legacy27 38 24
Corporate & Other(99) (128) (104)

KPIs and flows

KPIQ3 2024Q4 2024Q1 2025
Individual Retirement Net Flows ($B)1.9 1.7 1.4
Group Retirement Net Flows ($B)(0.246) (0.134) 0.192
AB Net Flows ($B)1.1 (4.8) 2.4
WM Advisory Net New Assets ($B)1.9 0.8 2.0
AUM/A ($T)1.034 1.019 1.006
AB Adjusted Operating Margin (%)31.3% 36.4% 33.7%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Common Dividend per ShareQ2 2025$0.24$0.27 (planned) Raised
Share RepurchasesPost RGA close (mid-2025)60–70% payout ratio baseline+$500M incremental on top of payout ratio Raised
Cash GenerationFY 2025$1.6–$1.7B (Q4 guide) Comfortable toward lower end of range Maintained (biased lower)
Combined NAIC RBC RatioPost RGA close~425% YE 2024 +75–100 pts expected post-close Raised
AB OwnershipApril 2025~62% prior~69% after $760M AB unit purchase Increased
Alternatives Return (near-term)Q2 2025LT target 8–12%Below LT target expected in Q2 Lower near-term

Earnings Call Themes & Trends

TopicQ3 2024 (Previous Mentions)Q4 2024 (Previous Mentions)Q1 2025 (Current)Trend
Macro volatility & hedgingMarket-neutral hedging noted; stable RBC RBC ~425%, hedging reiterated “Fully hedged” guarantees; capital position relatively insensitive to markets Stable to positive
RILA demand / retirement salesIR net inflows $1.9B; strong sales IR net inflows $1.7B; strong sales Robust April RILA demand; demographic tailwinds Strengthening
Protection Solutions mortalityImproved vs PY in Q3 Net mortality higher; PS OE $32M Elevated mortality drove PS $(17)M; RGA reinsurance to reduce volatility Deteriorated; mitigation underway
Capital returns$330M returned (65% payout) $335M returned; payout within target $335M returned; plan +$500M post-RGA; dividend lift Stable to increasing
AB private markets$68B PM AUM $70B PM AUM $75B PM AUM; pipeline strong Improving
Rates/flows (Asia)——April flows pressured by rate uncertainty; Asia retail sensitive Mixed near-term
Regulatory/legal—COI litigation costs cited historically No new items emphasized Stabilizing

Management Commentary

  • “Non-GAAP operating earnings per share of $1.30, or $1.35 after adjusting for notable items… we continue to see strong organic growth momentum across our businesses” — Mark Pearson .
  • “We fully hedged the equity market and interest rate exposure underlying the product guarantees…protecting our capital position” — Mark Pearson .
  • “Mortality claims…came in approximately $80 million above our expectations…this underscores why we decided to reinsure 75% of our individual life block to RGA” — Robin Raju .
  • “We plan to increase our quarterly cash dividend…to $0.27…and execute $500 million of incremental share repurchases post close” — Management .

Q&A Highlights

  • Demand/sales: April was “robust” for RILA sales; demographic trends and need for downside protection support continued demand .
  • Expenses normalization: ~$10M pretax seasonal expense in Individual Retirement should normalize in Q2; fee income remains equity-sensitive .
  • Leverage & buybacks: Additional buybacks beyond $500M would likely be accompanied by debt repayment to keep leverage within rating agency expectations .
  • AB flows/pipeline: April flow pressure (tax season, Asia rate uncertainty), but institutional pipeline grew by “several billion dollars” and private assets growth continues with ~$6.5B remaining commitment from EQH .
  • LifePath DC income solution: ~$250M of inflows expected in Q2; timing can be lumpy .
  • Spreads: IR spread income saw quarterly noise with short-rate resets; expected steady growth with general account expansion tied to RILA .
  • Cash generation: FY25 at lower end of $1.6–$1.7B; 2027 $2.0B target reaffirmed, with AB ownership and RGA transaction viewed as accretive to earnings/cash per share .
  • RBC post-RGA: Expect +75–100 pts increase after extraordinary dividend to HoldCo; stress test implies ample cushion .

Estimates Context

  • Q1 2025: EPS missed consensus ($1.30 vs $1.48*), driven by elevated mortality and seasonal expense timing; revenue beat ($4.58B vs $3.98B*) as reported GAAP revenue included $0.80B net derivative gains (mixed non-GAAP relevance) (S&P Global).*
  • Q4 2024: EPS modest miss ($1.57 vs $1.62*); revenue miss ($3.83B vs $3.98B*). Q3 2024 EPS in-line ($1.53 vs $1.53*), revenue below ($2.93B vs $3.85B*) (S&P Global).*
  • Estimate counts: ~11 EPS estimates and ~5 revenue estimates across the periods (S&P Global).*

All estimates comparisons marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term EPS pressure from Protection Solutions mortality should abate post-RGA reinsurance close—monitor closing milestones mid-2025 and the subsequent $500M buyback execution .
  • Organic growth engines are intact: sustained Retirement RILA demand, WM advisory inflows, and AB margins; April volatility effects appear transitory per AB pipeline commentary .
  • Balance sheet and capital flexibility provide downside protection and optionality; RBC expected to rise +75–100 pts post-RGA while HoldCo liquidity remains >$1B after April actions .
  • Dividend uplift to $0.27 and ongoing payout of 60–70% of operating earnings reinforce the capital return story; watch for leverage management alongside incremental buybacks .
  • Track IR spread income trajectory and expense normalization in Q2 to confirm margin recovery; fee income remains equity-sensitive .
  • AB private markets’ growth (to $75B) and broader distribution (Asia retail, private wealth) are key medium-term drivers; monitor rate path impact on flows and margins .
  • Alternative investments are guided below LT targets in Q2; consider the near-term drag versus long-term 8–12% objectives .