EQH Q2 Deep Dive: Reinsurance Transaction and Wealth Momentum Shape 2025 Outlook

August 12, 2025 at 03:12 AM EDT

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Financial services company Equitable Holdings (NYSE: EQH) fell short of the market’s revenue expectations in Q2 CY2025, but sales rose 5.1% year on year to $3.80 billion. Its non-GAAP profit of $1.10 per share was 15.4% below analysts’ consensus estimates.

Is now the time to buy EQH? Find out in our full research report (it’s free).

Equitable Holdings (EQH) Q2 CY2025 Highlights:

Revenue: $3.80 billion vs analyst estimates of $3.98 billion (5.1% year-on-year growth, 4.5% miss)
Adjusted EPS: $1.10 vs analyst expectations of $1.30 (15.4% miss)
Adjusted Operating Income: $529 million vs analyst estimates of $633 million (13.9% margin, 16.4% miss)
Adjusted EBITDA Margin: 9.3%
Market Capitalization: $16.02 billion

StockStory’s Take

Equitable Holdings’ second quarter results missed Wall Street’s estimates, with management attributing the shortfall primarily to elevated mortality claims within its Individual Life insurance block and softer fee-based earnings due to lower average equity market levels. CEO Mark Pearson described the quarter as impacted by “elevated individual life mortality claims,” while also noting progress on organic growth and strategic initiatives. The company pointed to robust net inflows in retirement and wealth management, as well as resilience in its asset management business, even as AllianceBernstein faced challenging industry conditions.

Looking ahead, Equitable Holdings’ forward guidance is anchored in the benefits expected from its recently completed Individual Life reinsurance transaction, reduced mortality exposure, and continued momentum in its core retirement and wealth management segments. Management anticipates that redeployment of freed capital and incremental share repurchases will support earnings per share growth in the second half of 2025. CFO Robin Raju noted, “EPS growth will certainly improve in the second half, and we’d expect to be back on track for the 12% to 15% [growth target] in 2026,” underscoring expectations for a return to targeted growth rates as strategic initiatives take effect.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to higher mortality claims, lower fee-based earnings, and continued execution on strategic capital initiatives, while highlighting organic growth in retirement and wealth management.

Elevated mortality claims: The Individual Life block experienced higher-than-expected mortality, which management said was concentrated among older policyholders and exacerbated by late-reported claims from a third-party administrator.
Wealth management net inflows: Wealth Management delivered $2 billion in advisory net inflows, with a trailing 12-month organic growth rate of 12%. Management credited improved adviser recruiting and 8% higher productivity for the segment’s performance.
Retirement segment momentum: The Retirement business generated $1.9 billion of net inflows, driven by strong sales of registered index-linked annuities (RILAs) and continued demand for in-plan annuities, supported by demographic trends such as baby boomers entering retirement.
Asset management headwinds and progress: AllianceBernstein recorded net outflows in active management, particularly in April, but returned to net inflows in June and grew its private markets assets under management by 20% year-over-year. Management sees the institutional pipeline as a sign of future recovery.
Capital redeployment and reinsurance: The closing of the Individual Life reinsurance deal with RGA released over $2 billion of capital, which Equitable is using to increase its AllianceBernstein stake, execute share repurchases, and strengthen its balance sheet. Management expects this to reduce earnings volatility and enhance future cash flow.

Drivers of Future Performance

Equitable Holdings’ outlook is shaped by reduced earnings volatility from the reinsurance transaction, capital redeployment, and continued organic growth across its core businesses.

Reduced mortality exposure: Management expects that reinsuring 75% of the Individual Life block will stabilize earnings by mitigating the impact of unexpected mortality claims, resulting in more predictable financial results going forward.
Capital deployment to drive EPS: Freed capital from the reinsurance transaction is being allocated to incremental share repurchases, increased ownership in AllianceBernstein, and selective debt reduction, with management projecting these actions will support accelerated earnings per share growth in the coming quarters.
Sustained organic growth: Growth in retirement, wealth management, and asset management is expected to continue, underpinned by demographic trends (such as increased retirements), advisor productivity improvements, and expansion in private markets and in-plan annuities. Management believes these factors will help achieve long-term cash generation and payout targets.

Catalysts in Upcoming Quarters

Looking forward, the StockStory team will be monitoring (1) the impact of the Individual Life reinsurance transaction on earnings volatility and cash flow, (2) the pace and effectiveness of share repurchases and capital deployment, and (3) continued organic growth in retirement and wealth management flows. Progress on expense management and execution of new product initiatives will also be key areas to watch.

Equitable Holdings currently trades at $53.08, up from $50.92 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).

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