EQH

Equitable Holdings, Inc. 10-Q Summary: Q2 2026

Business Context and Reporting Period

This report covers the quarterly period ended June 30, 2026. Equitable Holdings, Inc. operates through three primary segments: Retirement, Asset Management, and Wealth Management, with remaining activities reported in Corporate and Other. The company is currently in the process of an all-stock merger with Corebridge Financial, Inc., which received stockholder approval on July 30, 2026, and is expected to close by the end of 2026.

Key Financial Metrics

Material Changes vs. Prior Period

• GAAP Net Loss vs. Profit: The company reported a GAAP net loss of $453 million for Q2 2026, compared to a loss of $349 million in Q2 2025. However, on a year-to-date basis, the company returned to profitability with $168 million in net income, a significant improvement from the $286 million loss in the same period in 2025.
• Derivative Volatility: Net derivative losses widened significantly to $2,055 million in Q2 2026 (from $1,374 million in Q2 2025) due to strong equity market appreciation (S&P 500 up ~15% in Q2 2026). This volatility is a primary driver of the GAAP loss despite strong underlying operations.
• Reinsurance Impact: The RGA Reinsurance Transaction completed in 2025 continues to materially reduce policyholder benefits and fee-type revenues. Policyholder benefits decreased by $352 million in Q2 2026 compared to the prior year.
• Operating Earnings Growth: Non-GAAP Operating Earnings, which excludes market volatility and one-time items, increased 39% year-over-year to $488 million in Q2 2026, driven by lower policyholder benefits and strong investment income.
• Segment Performance:
  • Retirement: Operating earnings rose to $402 million (Q2 2026) from $354 million (Q2 2025), supported by higher net investment income and fee-type revenue.
  • Asset Management: Operating earnings increased to $158 million, driven by higher average Assets Under Management (AUM) of $905.5 billion.
  • Wealth Management: Operating earnings grew to $63 million, aided by higher advisory fees and distribution fees.

Guidance, Outlook, and Risks

• Merger with Corebridge: The proposed transaction is expected to close by the end of 2026, subject to regulatory approvals. The combined entity will retain the name "Equitable Holdings, Inc."
• Market Environment: Management notes that while equity markets performed strongly in Q2 2026, volatility remains a risk due to geopolitical tensions, inflation concerns, and interest rate fluctuations. These factors impact hedging costs and fee income.
• Regulatory Developments: The NAIC is implementing new capital requirements for CLOs and asset-backed securities, and has adopted a principle-based reserving framework (VM-22) for non-variable annuities, which may increase reserve volatility.
• Capital Management: The company maintains a robust liquidity position with $17.2 billion in cash and cash equivalents. As of June 30, 2026, approximately $1.5 billion remains available under the share repurchase program.

Key Facts for Investor Verification

• Merger Status: Verify the timeline for regulatory approvals and the final closing date of the Corebridge merger.
• Derivative Hedging Effectiveness: Assess the correlation between equity market performance and the magnitude of net derivative losses to understand the sensitivity of GAAP earnings to market swings.
• Reinsurance Run-off: Monitor the ongoing impact of the RGA reinsurance transaction on fee revenues and policyholder benefits in future quarters.
• Non-GAAP Reconciliation: Review the reconciliation of GAAP Net Income to Non-GAAP Operating Earnings to understand the magnitude of adjustments related to variable annuity features and investment gains/losses.
• Dividend Capacity: Note that Equitable Financial (NY) had no Ordinary Dividend capacity in 2026, while Equitable America (AZ) has an estimated capacity of $408 million, impacting cash flows to the holding company.