Equitable (EQH) Q2 2024 earnings summary

Executive summary

• Non-GAAP operating earnings were $494 million ($1.43 per share), up 23% year-over-year; adjusted EPS was $1.52, up 20% and above annualized growth guidance.

• Net income was $428 million for Q2 2024, reflecting modest hedge impacts and minimal realized gains/losses, down from $759 million in Q2 2023 due to lower market risk benefit gains and higher interest credited to policyholders.

• Assets under management and administration rose 11% year-over-year to a record $986 billion, driven by market tailwinds and positive net inflows across all business lines.

• $325 million was returned to shareholders in Q2 via dividends and buybacks, maintaining a payout ratio within the 60%-70% target.

• On track for $1.4–$1.5 billion cash generation in 2024, with about half from non-insurance businesses and a goal of $2 billion annually by 2027.

Financial highlights

• Total revenues for Q2 2024 were $3.51 billion, up from $2.38 billion in Q2 2023, with increases in policy charges, net investment income, and investment management fees.

• Non-GAAP operating earnings were $494 million, up 23% year-over-year; adjusted for notable items, $525 million ($1.52/share), up 20%.

• Net investment income increased by over $130 million year-over-year, with new money invested at 5.6%.

• Annualized return on alternative investments was 5%, below the long-term assumption of 8%-12%.

• Earnings per diluted share were $1.23 for Q2 2024, compared to $2.06 in Q2 2023.

Outlook and guidance

• Expect 12%-15% annualized Non-GAAP EPS growth through 2027.

• 2024 cash generation expected at $1.4–$1.5 billion; 2027 target of $2 billion annual cash generation.

• Approximately 50% of 2024 cash generation expected from non-insurance businesses.

• Strategic targets for 2027 include $150 million in net expense savings and $110 million in incremental general account investment income.

• Management expects continued volatility due to market conditions, interest rates, and regulatory changes.