Equitable Holdings, Inc. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Equitable Holdings, Inc. operates as a diversified financial services organization with three primary reportable segments: Retirement, Asset Management, and Wealth Management, alongside a Corporate and Other category. A significant corporate development occurred on March 26, 2026, when the Company entered into a definitive merger agreement with Corebridge Financial, Inc. (the "Proposed Transaction"), expected to close by the end of 2026 subject to regulatory and shareholder approvals.
Key Financial Metrics
| Metric (in millions) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenues | $4,230 | $4,576 |
| Net Income (Loss) Attributable to Holdings | $621 | $63 |
| Net Income Available to Common Shareholders | $607 | $49 |
| Diluted EPS | $2.14 | $0.16 |
| Non-GAAP Operating Earnings | $472 | $421 |
| Net Investment Income | $1,284 | $1,248 |
| Total Assets | $310,382 | $317,990 |
| Cash and Cash Equivalents | $9,904 | $12,462 |
| Long-Term Debt | $3,837 | $3,835 |
Material Changes vs. Prior Period
- Profitability Surge: Net income attributable to Holdings increased by $558 million (886%) compared to Q1 2025. This was primarily driven by a $499 million loss recorded in Q1 2025 related to the novation of legacy variable annuity policies, which did not recur in 2026.
- Reinsurance Impact: Policyholders' benefits decreased by $374 million, largely due to the RGA reinsurance transaction completed in July 2025, which ceded 75% of the individual life insurance block and Closed Block.
- Derivative Volatility: Net derivative gains decreased by $219 million to $580 million, driven by a larger equity market decline in Q1 2026 compared to Q1 2025.
- Revenue Mix: Total revenues declined 7.6% year-over-year. Fee-type revenue decreased by $148 million due to the RGA transaction, partially offset by higher advisory fees in Asset Management and Wealth Management.
- Investment Portfolio: The General Account investment portfolio yielded 4.43% net investment income. Fixed maturities held at fair value showed gross unrealized losses of $6.4 billion, primarily due to interest rate increases.
Guidance, Outlook, and Risks
Management Commentary: Management emphasizes the use of Non-GAAP Operating Earnings to evaluate underlying profitability, excluding volatile items such as variable annuity product features and investment gains/losses. Operating Earnings increased $51 million year-over-year to $472 million.
Outlook: The Company anticipates the Corebridge merger to close by the end of 2026. The transaction is expected to generate run-rate expense synergies and projected cost savings, though integration risks remain.
Risks and Contingencies:
- Merger Execution: Completion of the Corebridge transaction is subject to regulatory approvals, shareholder votes, and the absence of material adverse effects. Failure to close could result in a $475 million termination fee.
- Market Sensitivity: Results remain sensitive to equity market volatility and interest rate fluctuations, which impact variable annuity guarantees (MRBs) and hedging costs.
- Regulatory Environment: The Company faces evolving regulatory standards, including NAIC updates on CLO capital requirements, principle-based reserving (VM-22), and reinsurance asset adequacy testing (AG 55).
- Litigation: The Company estimates a reasonably possible range of losses for pending litigation matters up to approximately $100 million in excess of accrued amounts.
Investor Verification Checklist
- Merger Status: Verify the progress of regulatory approvals and shareholder votes for the Corebridge Financial merger.
- Reinsurance Settlement: Confirm the final accounting treatment and cash flow impacts of the RGA reinsurance transaction.
- Derivative Hedging: Review the effectiveness of hedging programs against equity market declines and interest rate changes in subsequent quarters.
- Capital Management: Monitor the $1.9 billion remaining capacity in the share repurchase program and dividend sustainability.
- Statutory Capital: Assess the impact of new NAIC regulations (VM-22, AG 55) on statutory surplus and risk-based capital (RBC) ratios.