Equitable Holdings, Inc.

Hello and welcome to Equitable Holdings Inc. third quarter earnings call. Please note that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you'd like to ask a question during that time, please press star followed by one on your telephone keypad. Thank you. I'd now like to hand the call over to Eric Bass, head of investor relations. You may now go ahead, please.

Thank you. Good morning and welcome to Equitable Holdings' third quarter 2025 earnings call. Materials for today's call can be found on our website at ir.equitableholdings.com. Before we begin, I would like to note that some of the information we present today is forward-looking and subject to certain SEC rules and regulations regarding disclosure. Our results may differ materially from those expressed in or indicated by such forward-looking statements. Please refer to the Safe Harbor language on slide two of our presentation for additional information. Joining me on today's call are Mark Pearson, President and Chief Executive Officer of Equitable Holdings, Robin Raju, our Chief Financial Officer, Nick Lane, President of Equitable Financial, Seth Bernstein, Alliance Bernstein's President and Chief Executive Officer, and Tom Simeone, Alliance Bernstein's Chief Financial Officer. During this call, we will be discussing certain financial measures that are not based on generally accepted accounting principles, also known as non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures and related definitions may be found on the investor relations portion of our website and in our earnings release, slide presentation and financial supplement. I will now turn the call over to Mark.

Good morning and thank you for joining today's call. Equitable Holdings delivered solid third quarter results marked by continued organic growth momentum and increased earnings power across our businesses. We also allocated $1.5 billion of capital to drive shareholder value and future growth. successfully redeploying a large portion of the proceeds from our individual life reinsurance transaction with RGA. This includes approximately $200 million of investments to help accelerate growth in asset and wealth management. Looking forward, our integrated business model positions us well to be a long-term winner in retirement, asset management, and wealth management, and we remain confident in achieving each of our 2027 financial targets. On slide three, I'll provide a few highlights from the third quarter. Non-GAAP operating earnings were $455 million, or $1.48 per share, down 6% year over year on a per share basis. Adjusting for notable items, non-GAAP operating EPS was $1.67, which is up 2% compared to the prior year. As expected, Earnings rebounded from the first half of the year, helped by growth in each of our core businesses and the completion of the life reinsurance transaction. I'm also pleased that we saw only small impacts from our annual assumption review, validating our conservative approach to assumption setting. We ended the quarter with record assets under management of $1.1 trillion, up 4% sequentially, which bodes well for future growth in earnings. We will also see additional benefits for management actions to enhance yields in our investment portfolio and drive productivity savings. Organic growth momentum remains strong, supported by our flywheel business model. Our retirement businesses generated $1.1 billion of net flows during the quarter, driven by continued growth in our wireless sales. As a reminder, flows tend to be lower in the third quarter due to seasonality in the K through 12 teachers business, and we did not have any material institutional flows in the period. Wealth management had another strong quarter with $2.2 billion of advisory net inflows, a 12% annualized growth rate. Advisor productivity increased 8% year over year. Turning to asset management, AB reported total net outflows of $2.3 billion, which includes $4 billion of low-fee assets transferred to RGA as part of the life reinsurance transaction. Excluding this, AB had net inflows of $1.7 billion, driven by the private wealth and institutional channels. Private markets assets increased 17% year over year to $80 billion and are on track to achieve AB's $90 to $100 billion target by 2027. Moving to capital deployment, we use $1.5 billion to drive shareholder value and make investments for future growth. During the quarter, we returned $757 million to shareholders, including $676 million of share repurchases. We completed most of our planned $500 million of incremental buybacks and expect our full-year payout ratio to be at the upper end of our 60% to 70% target range. We also reduced outstanding debt by $500 million, to manage our leverage ratio and give us more capital flexibility moving forward. Finally, we announced two strategic transactions that help scale our wealth management and AB private markets businesses. We are acquiring Stifel Independent Advisors, which has over 110 advisors and $9 billion of advisory assets. In addition, we are allocating $100 million to support AB's investment in FCA RE, an Asia-focused sidecar established by Fortitude RE and Carlyle. AB will become a key investment partner for Fortitude and initially manage $1.5 billion of private credit assets for FCA RE. I will discuss these transactions in more details in a minute. but they both offer attractive IRRs and are consistent with our strategy to scale adjacent businesses. Turning to slide four, we highlight our strategy to drive growth and create shareholder value. We are focused on three core growth businesses, retirement, asset management, and wealth management that have synergies and provide flywheel benefits. Participating in all three of these businesses allows us to capture the full retirement value chain. There are four key pillars to our strategy. Number one, defend and grow our retirement and asset management businesses. Secondly, scale our high growth and high multiple wealth management and private markets businesses. Third, see future growth by investing in high potential opportunities, like annuities and 401K plans and emerging asset management markets. And finally, be a force for good and deliver on our mission to help our clients secure their financial well-being so they can live long and fulfilling lives. On the next two slides, I will provide a deeper dive into our strategy for scaling adjacent businesses. First, I will focus on our wealth management business, which is a key growth driver for the company. Having affiliated distribution also provides a significant competitive advantage for Equitables retirement businesses. Wealth management has strong growth momentum with $6.2 billion of year-to-date advisory net inflows. Advisor productivity is up 8% year-over-year and 24% since 2022. Earnings are on track to reach $200 million in 2025, two years ahead of plan. We also allocated capital to enhance the strong organic growth momentum. We have increased our investment in experienced advisor recruiting, bringing in over $1.1 billion of recruited assets over the past 12 months. Earlier this year, we hired a new head of business development to build out our platform, and we have a strong pipeline and expect to ramp up recruited AUA over time. As I mentioned earlier, We also recently announced the acquisition of Stifel Independent Advisors, which has over 110 advisors and $9 billion of AUM. Stifel's advisors have similar characteristics to Equitable's advisors, creating a nice cultural fit. There are also meaningful operational synergies. We expect the transaction to close in the first half of 2026, and forecast it to add about $10 million to wealth management earnings in 2027. This is a good example of the type of bolt-on acquisition we will look at to help scale our wealth management business at a reasonable cost. Looking forward, assuming normal markets, we forecast wealth management earnings to continue growing at a double-digit rate, driven by asset growth and further advisory productivity improvement. In addition, margins should expand over time as the business scales. I would also note that our business does not have significant exposure to lower short-term interest rates. Cash suite income has accounted for only 15% of the segment's year-to-date earnings, and 100 basis points of Fed rate cuts would reduce annual earnings by only about circa $15 million. Turning to slide six. I want to highlight some examples of how Equitable is deploying capital to support growth at AB. Having access to Equitable's balance sheet is a competitive advantage for AB relative to most traditional asset managers, and the investments we make yield flywheel benefits across EQH. Our investments come in three primary forms. Number one, allocations from Equitable's general account portfolio. which can be used as seed capital to launch new strategies or permanent capital to scale existing offerings. To date, we have deployed over $17 billion of our $20 billion commitment to AB's private markets platform. Number two, in addition, we support team liftouts that bring new capabilities to AB. For example, in the past year, AB added private ABS and residential mortgage teams to expand its private markets offering, and Equitable was able to provide them with immediate capital to invest. Number three, finally, we helped finance M&A or strategic investments, either by providing cash or issuing AB units. We did this with the acquisition of Carvel in 2022, and more recently with the investments in the Ruby Reed, and FCA re-sidecars. These sidecar investments highlight some of the unique synergies between AB and Equitable. AB leveraged Equitable's insurance expertise in the due diligence process, and both firms benefit from developing a strategic partnership with a sponsor. These investments also provide Equitable with exposure to new insurance markets, such as pension risk transfer and Asia. AB has been able to leverage these investments to help deliver strong growth in private markets and third-party insurance, two key strategic focus areas for the company. Private markets AUM has grown at a 12% CAGR since 2022 and is on track to meet or exceed the 90 to 100 billion target by 2027. Third-party insurance general account AUM is up 36% since 2021, and AB has added six new mandates year-to-date. Stepping back, the recent actions we've taken to support the growth of AB and wealth management are good examples of us executing on our strategy and leveraging our unique flywheel benefits. I will now turn the call over to Robin to go through our financial results in more detail.