8-K: Equitable Holdings Reports Q4, Full Year 2025 Results

Equitable Holdings announced a full year net loss of $1.4 billion in 2025, alongside strong organic cash generation and significant progress on its capital-light strategy.

Summary

• Equitable Holdings reported a full year net loss attributable to Holdings of $1.4 billion, or $(4.83) per share, for 2025, compared to net income of $1.3 billion, or $3.69 per share, in 2024.
• Non-GAAP operating earnings for the full year 2025 were $1.7 billion, or $5.64 per share, down from $2.0 billion, or $5.92 per share, in 2024.
• Adjusting for notable items, full year Non-GAAP operating earnings were $1.9 billion, or $6.21 per share.
• Fourth quarter 2025 net income attributable to Holdings was $215 million, or $0.70 per share, a decrease from $892 million, or $2.74 per share, in the fourth quarter of 2024.
• Fourth quarter 2025 Non-GAAP operating earnings were $513 million, or $1.73 per share, compared to $515 million, or $1.55 per share, in the prior year quarter.
• Total Assets Under Management/Administration (AUM/A) reached a record $1.1 trillion as of December 31, 2025, a 10% year-over-year increase.
• Organic cash generation for 2025 was $1.6 billion, with a projection to increase to approximately $1.8 billion in 2026 and $2 billion by 2027.
• The company returned $1.8 billion to shareholders in 2025, including $354 million in the fourth quarter, with a full year payout ratio of 68% (excluding incremental buybacks).
• Key strategic initiatives included reinsuring 75% of the inforce individual life block to RGA, freeing $2 billion of capital, and completing the first Bermuda reinsurance transaction.
• The company achieved $120 million of its targeted $150 million run-rate expense savings by 2027 and surpassed the targeted $110 million of incremental investment income from the general account.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a mixed report. While strategic execution, AUM/A growth, and future cash generation targets are positive, the significant full-year GAAP net loss and decline in Non-GAAP operating earnings present a notable concern for current performance.

Positives

• Total Assets Under Management/Administration (AUM/A) increased by 10% year-over-year to a record $1.1 trillion as of December 31, 2025.
• Organic cash generation was $1.6 billion in 2025, with projections to increase to $1.8 billion in 2026 and $2 billion by 2027.
• The company returned $1.8 billion to shareholders in 2025, including $354 million in the fourth quarter, maintaining a payout ratio at the upper end of its 60-70% target range.
• Successful execution of strategic initiatives, including reinsuring 75% of the inforce individual life block to RGA, which freed $2 billion of capital and reduced mortality exposure by 75%.
• Strong organic growth momentum in Retirement, Wealth Management, and AB Private Markets.
• Retirement segment reported full year net inflows of $5.9 billion and first year premiums up 11% to $22.4 billion.
• Wealth Management reported full year advisory net inflows of $8.4 billion, with total assets under administration reaching $122 billion (up 20%).
• Asset Management (AllianceBernstein) Private Markets business grew to $82 billion of assets under management.
• Achieved $120 million of the targeted $150 million run-rate expense savings by 2027.
• Surpassed the targeted $110 million of incremental investment income from the general account.
• The combined NAIC RBC ratio was approximately 475% at year end, above the company's target of 400%.
• Cash and liquid assets at Holdings were $1.1 billion at quarter end, remaining above the $500 million minimum target.

Negatives

• Full year 2025 net loss attributable to Holdings was $1.4 billion, a significant deterioration from net income of $1.3 billion in 2024.
• Full year 2025 net loss attributable to Holdings per common share was $(4.83), compared to net income of $3.69 per share in 2024.
• Full year 2025 Non-GAAP operating earnings decreased to $1.7 billion from $2.0 billion in 2024.
• Full year 2025 Non-GAAP operating earnings per common share decreased to $5.64 from $5.92 in 2024.
• Fourth quarter 2025 net income attributable to Holdings decreased significantly to $215 million from $892 million in the fourth quarter of 2024.
• Asset Management (AllianceBernstein) reported full year net outflows of $11.3 billion, which includes $4 billion of low-fee outflows related to the RGA transaction.
• Book value per common share including accumulated other comprehensive income (AOCI) was $(4.03) as of December 31, 2025, down from $0.19 in 2024.

Risks

• Conditions in the financial markets and economy, including geopolitical conflicts, changes in tariffs and trade barriers, U.S. government shutdowns, equity market declines and volatility, interest rate fluctuations, impacts on goodwill, and changes in liquidity and cost of capital.
• Operational factors, such as reliance on subsidiary dividends, protection of confidential customer information, operational failures by the company or service providers, potential strategic transactions, changes in accounting standards, and catastrophic events like pandemics.
• Credit, counterparty, and investment risks, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates, and economic downturns adversely affecting investments.
• Risks associated with reinsurance and hedging programs.
• Risks related to products, structure, and product distribution, including variable annuity guaranteed benefits, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting dividend payments from insurance subsidiaries, and key product distribution relationships.
• Risks related to estimates, assumptions, and valuations, including risk management policies, potential inadequacy of reserves, experience differing from pricing expectations, amortization of deferred acquisition costs, and financial models.
• Risks specific to the Asset Management segment, such as fluctuations in assets under management and the industry-wide shift from actively-managed to passive investment services.
• Challenges in recruitment and retention of key employees and experienced financial professionals.
• Subjectivity in determining allowances and impairments on investments.
• Legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation, and tax reform.
• Risks related to the company's common stock.
• General risks, including strong industry competition, information systems failing or being compromised, and protecting intellectual property.

Future Outlook

Equitable Holdings expects Non-GAAP earnings per share growth to accelerate in 2026 and remains focused on achieving its targeted 12-15% EPS CAGR for 2023-2027. The company projects organic cash generation to increase from $1.6 billion in 2025 to approximately $1.8 billion in 2026 and is on track to reach $2 billion by 2027. Strong cash flows are anticipated to allow consistent capital return to shareholders, with payout ratios at the upper end of the 60-70% target range.

Management Comments

• "In 2025, Equitable Holdings made significant progress on our journey to become a more capital light company focused on three core growth engines of Retirement, Asset Management and Wealth Management."
• "The execution of our individual life reinsurance transaction with RGA freed $2 billion of capital and reduced our exposure to mortality by 75%. We used the proceeds to invest in growing AllianceBernstein and Equitable Advisors as well as to accelerate capital return to shareholders, actions which we believe will create a more valuable company."
• "Our business model positions us well to be a long-term winner in each of our core markets. We continue to see strong organic growth momentum in Retirement, Wealth Management and AB Private Markets, ending the year with a record $1.1 trillion of assets under management and administration. This bodes well for future growth in earnings and cash flows."
• "Looking to 2026, we expect Non-GAAP earnings per share growth to accelerate and remain focused on achieving our targeted 12-15% EPS CAGR for 2023-2027."
• "We also project cash generation to increase from $1.6 billion in 2025 to approximately $1.8 billion in 2026 and are on track to reach $2 billion by 2027."
• "Our strong cash flows allow us to consistently return capital to shareholders, with payout ratios at the upper end of our 60-70% target range. Equitable is well positioned in attractive, growing markets, and I'm confident in our ability to execute on the opportunity in front of us."

Industry Context

StockSavvy.ai notes Equitable Holdings' strategic pivot towards a more capital-light business model, emphasizing growth in Wealth Management and AB Private Markets, aligns with a broader industry trend among financial services firms. Many insurers and asset managers are seeking to reduce capital-intensive liabilities and expand into fee-based, higher-margin segments. The significant reinsurance transaction with RGA is a clear example of this strategic realignment, aiming to optimize capital and enhance shareholder value by focusing on core growth engines.

Legal Proceedings

• The company incurred certain gross legal expenses related to COI (Cost of Insurance) litigation of $106 million for the year ended December 31, 2024.
• A bespoke deal to repurchase Universal Life (UL) policies from one entity was completed, which disposed of the risk of additional COI litigation by that entity related to those UL policies.

Stakeholder Impact

• Shareholders face a significant full-year GAAP net loss, but benefit from substantial capital returns ($1.8 billion in 2025) and a positive outlook for future Non-GAAP EPS growth and cash generation.
• Employees are subject to risks related to recruitment and retention of key personnel and financial professionals.
• Customers in Retirement and Wealth Management segments benefit from strong net inflows and growth in assets under administration, indicating continued service and product demand.

Next Steps

• Host an earnings conference call on February 5, 2026, at 10 a.m. ET to discuss results.
• Continue efforts to achieve targeted $150 million of run-rate expense savings by 2027.
• Work towards increasing cash generation to approximately $1.8 billion in 2026 and $2 billion by 2027.
• Maintain focus on achieving targeted 12-15% Non-GAAP EPS CAGR for 2023-2027.

Key Dates

Recommendation

Equitable Holdings reported a substantial full-year GAAP net loss, which is a significant concern. However, the company demonstrated strong operational execution in its strategic shift towards a more capital-light model, evidenced by the RGA reinsurance transaction, robust organic cash generation, and growth in its Wealth Management and AB Private Markets segments. The positive outlook for accelerating Non-GAAP EPS growth and increasing cash generation in 2026 and 2027 suggests future potential. Given the mixed performance—a notable GAAP loss contrasted with strategic progress and optimistic forward guidance—a 'hold' recommendation is appropriate. Investors should monitor the company's ability to translate its strategic initiatives into improved GAAP profitability and sustained Non-GAAP EPS growth.

Keywords

Equitable Holdings, EQH, financial results, Q4 2025, full year 2025, earnings, AUM, AUA, capital management, reinsurance, wealth management, asset management, retirement, financial services, SEC filing, AllianceBernstein