8-K: Equitable Holdings Resegments, Reports Q2 Loss

Equitable Holdings, Inc. announced a strategic resegmentation of its financial reporting, effective retrospectively from Q3 2025, alongside a reported net loss attributable to Holdings of $349 million for the second quarter of 2025.

Summary

• Equitable Holdings, Inc. (EQH) has reorganized its financial reporting segments, effective retrospectively from the third quarter of 2025, following a transaction that closed on July 31, 2025.
• The Individual Retirement and Group Retirement segments have been combined into a single 'Retirement' segment.
• The legacy business and life insurance operations, previously part of the Protection Solutions segment, are now reported within the 'Corporate and Other' segment.
• The resegmentation only alters the reporting structure and has no impact on previously reported Consolidated Financial Statements.
• Net income attributable to Holdings for Q2 2025 was a loss of $349 million, compared to a $428 million income in Q2 2024.
• Non-GAAP Operating Earnings for Q2 2025 were $352 million, a decrease from $495 million in Q2 2024.
• Total Assets Under Management (AUM) increased to $959.7 billion as of June 30, 2025, up from $892.5 billion a year prior.
• Total Assets Under Administration (AUA) grew to $110.3 billion as of June 30, 2025, from $94.8 billion in Q2 2024.

Sentiment

Score: 4

Explanation: While the resegmentation is a positive strategic step for clarity and AUM/AUA showed growth, the significant net income loss and decline in Non-GAAP Operating Earnings for the quarter and half-year, coupled with a widening loss in the Corporate and Other segment and increased debt-to-capital, indicate a challenging financial performance. The positive strategic move is overshadowed by the negative financial results.

Positives

• Strategic resegmentation aims to provide a clearer picture of operating performance and align with how the chief operating decision maker assesses performance.
• Total Assets Under Management (AUM) increased to $959.7 billion as of June 30, 2025, from $892.5 billion as of June 30, 2024.
• Total Assets Under Administration (AUA) increased to $110.3 billion as of June 30, 2025, from $94.8 billion as of June 30, 2024.
• Asset Management segment operating earnings increased to $131 million in Q2 2025 from $101 million in Q2 2024, and to $257 million in 1H 2025 from $207 million in 1H 2024.
• Wealth Management segment operating earnings increased to $50 million in Q2 2025 from $44 million in Q2 2024, and to $95 million in 1H 2025 from $86 million in 1H 2024.
• Non-GAAP Operating Return on Equity (TTM) remained strong at 21.1% as of June 30, 2025, slightly down from 22.4% at year-end 2024 but up from 19.3% in Q2 2024.

Negatives

• Net income attributable to Holdings was a loss of $349 million in Q2 2025, a significant decline from an income of $428 million in Q2 2024.
• Net income attributable to Holdings for the first half of 2025 was a loss of $286 million, compared to an income of $520 million in the first half of 2024.
• Non-GAAP Operating Earnings decreased to $352 million in Q2 2025 from $495 million in Q2 2024.
• Non-GAAP Operating Earnings for the first half of 2025 decreased to $773 million from $972 million in the first half of 2024.
• Retirement segment operating earnings decreased to $351 million in Q2 2025 from $410 million in Q2 2024, and to $728 million in 1H 2025 from $792 million in 1H 2024.
• Corporate and Other segment operating loss widened to $180 million in Q2 2025 from a loss of $60 million in Q2 2024, and to $307 million in 1H 2025 from a loss of $113 million in 1H 2024.
• Return on Equity (ex. AOCI) (TTM) declined to 4.9% as of June 30, 2025, from 8.8% as of June 30, 2024.
• Debt to capital (ex. AOCI) increased to 33.5% as of June 30, 2025, from 27.2% as of June 30, 2024.
• Asset Management net flows were negative $6.7 billion in Q2 2025 and negative $4.3 billion in 1H 2025.

Risks

• Conditions in financial markets and the broader economy, including geopolitical conflicts, changes in tariffs and trade barriers, equity market declines and volatility, interest rate fluctuations, and impacts on goodwill.
• Operational factors such as reliance on dividends from subsidiaries, protection of confidential customer information, operational failures by the company or service providers, potential strategic transactions, changes in accounting standards, and catastrophic events.
• 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.
• Effectiveness of reinsurance and hedging programs.
• Product-specific risks, including variable annuity guaranteed benefits features, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting dividend payments by insurance subsidiaries, and key product distribution relationships.
• Reliance on 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 productive 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 business risks, including strong industry competition, information systems failures or compromises, and protecting intellectual property.

Future Outlook

The company's investor presentation contains forward-looking statements regarding projections, estimates, forecasts, and other financial and performance metrics, as well as projections of market expectations. However, no specific quantitative guidance or updated outlook is provided in this filing beyond the recast historical data.

Management Comments

• Our financial reporting presentation was revised to reflect the reorganization of the Company's reportable segments to reflect how the Company's chief operating decision maker now makes operating decisions and assesses performance.

Industry Context

The resegmentation aligns with a broader industry trend towards increased transparency and clearer reporting structures, allowing investors to better understand the performance drivers of distinct business lines within diversified financial services companies. The growth in AUM/AUA reflects a generally positive market environment for asset and wealth management, though the shift from actively-managed to passive services remains a competitive factor.

Comparison to Industry Standards

• The filing does not provide specific comparisons to comparable companies, projects, or global benchmarks. Therefore, a direct assessment against industry standards with specific comparable entities cannot be made based solely on the provided information.

Corporate Governance

Legal Proceedings

• The filing mentions 'certain gross legal expenses related to the COI litigation of $106 million for the three months ended June 30, 2024' as part of 'Other adjustments' in the Non-GAAP reconciliation. This is a historical expense, not a new or ongoing proceeding being announced.

Stakeholder Impact

• Shareholders will receive clearer financial reporting aligned with management's operational view, but face a significant net loss and decreased operating earnings for the recent periods.
• Investment Professionals/Analysts are provided with recast historical data to facilitate analysis under the new segment structure, aiding in more precise valuation and performance assessment.
• Customers are not indicated to be directly impacted on products or services by the resegmentation itself.
• Employees are not indicated to be directly impacted on employment or roles by the resegmentation itself.

Next Steps

• The company will continue to report under the new segment structure retrospectively from Q3 2025.
• Investors are encouraged to evaluate the changes using the provided recast historical segment financial results and investor briefing.

Key Dates

Recommendation

The resegmentation is a positive strategic move for transparency and operational alignment, which could improve long-term investor understanding. However, the significant net loss and decline in Non-GAAP Operating Earnings for Q2 and 1H 2025, coupled with an increase in debt-to-capital, present near-term financial headwinds. While AUM/AUA growth is encouraging, the overall financial performance suggests caution. A 'hold' recommendation is appropriate as investors should monitor the performance of the newly structured segments and the company's ability to return to profitability in subsequent quarters before making further investment decisions.

Keywords

Equitable Holdings, EQH, Segment Reporting, Financial Restatement, Insurance, Asset Management, Wealth Management, Retirement Solutions, SEC Filing, 8-K, Financial Results, Corporate Governance, Risk Management