Breaking Down Equitable Holdings, Inc. (EQH) Financial Health: Key Insights for Investors

You've seen the headline: Equitable Holdings, Inc. (EQH) just reported a Q3 2025 net loss of $1.3 billion, a figure that can stop any investor cold, but honestly, that number is a one-time hit from their life reinsurance transaction, so you need to look past it. The real story is the underlying business momentum, which is strong. For the third quarter ending September 30, 2025, the company delivered adjusted non-GAAP operating earnings of $510 million, translating to $1.67 per share, a slight beat on some estimates, which is a key signal. Plus, their total assets under management and administration (AUM/A) hit a record $1.1 trillion, driven by organic growth-specifically, $1.1 billion in Retirement net inflows and a hefty $2.2 billion in Wealth Management advisory net inflows. We're going to break down how they plan to deploy the $1.5 billion in capital for shareholder value, what that high debt level means for future cash flow, and where the real opportunities lie in their integrated model, especially with the strategic acquisition of Stifel Independent Advisors.

Revenue Analysis

You need a clear picture of where Equitable Holdings, Inc. (EQH) makes its money, especially after a volatile 2025. The direct takeaway is that while the trailing twelve months (TTM) revenue is holding above the $12 billion mark, the core of the business-measured by adjusted operating earnings-is overwhelmingly driven by the Retirement segment. You're looking at a company that is fundamentally an annuities and retirement powerhouse, not a diversified financial giant in the way BlackRock is.

For the twelve months ending September 30, 2025, Equitable Holdings, Inc.'s TTM revenue was approximately $12.015 billion, representing a year-over-year increase of 9.43%. This growth rate is a solid rebound from the prior year's performance, where the 2024 annual revenue of $12.437 billion itself marked an 18.13% increase over 2023. That's a strong two-year run on the top line. Still, the quarterly revenue for Q3 2025, which came in at around $3.74 billion, missed consensus estimates, which is a reminder that revenue for a company like this can be lumpy and unpredictable.

Breakdown of Primary Revenue Sources

Equitable Holdings, Inc. operates through three primary, integrated business segments: Retirement, Asset Management (AllianceBernstein or AB), and Wealth Management. While the total revenue figure includes things like net investment income and derivative gains/losses, the relative importance of each segment is best seen through their contribution to adjusted operating earnings (a non-GAAP measure that strips out non-recurring items and market volatility, giving you a clearer view of core business profitability). Here's the quick math on where the profits are generated, based on Q3 2025 results:

• Retirement: Contributed 66% of adjusted operating earnings. This segment is the clear revenue engine, focused on annuities, particularly the Registered Index-Linked Annuities (RILAs).
• Asset Management (AB): Accounted for 25% of adjusted operating earnings. This is the fee-based, less capital-intensive part of the business.
• Wealth Management: Made up the remaining 9% of adjusted operating earnings. This segment is growing fast, though, with Q3 2025 advisory net inflows of $2.2 billion.

The Retirement segment is the backbone; everything else is a value-add.

Analysis of Significant Revenue Changes

The most significant change impacting the full 2025 fiscal year's reported net income-though not the TTM revenue itself-was a large, one-time life reinsurance transaction that closed in Q3 2025. This deal was a strategic move to reinsure approximately $30 billion of group annuity liabilities, which freed up capital but also resulted in a substantial reported net loss of $1.3 billion for the third quarter. What this estimate hides is the long-term benefit: it improves the consistency of future cash generation by reducing exposure to mortality volatility. Plus, the company is actively expanding its Wealth Management capabilities, notably with the acquisition of Stifel Independent Advisors, which has over 110 advisors and approximately $9 billion in assets under management (AUM). This move is defintely a clear signal of where future fee revenue growth is targeted. To dig deeper into how these segments drive the overall financial picture, you should read the full analysis: Breaking Down Equitable Holdings, Inc. (EQH) Financial Health: Key Insights for Investors.

Profitability Metrics

You need to know if Equitable Holdings, Inc. (EQH) is actually making money, or if the revenue is just a vanity metric. The quick answer is that EQH's underlying operational efficiency is strong, but a major one-time event severely skewed the GAAP (Generally Accepted Accounting Principles) net profit in the third quarter of 2025.

For a financial services company like Equitable Holdings, Inc., which is a holding company for insurance and asset management businesses like AllianceBernstein, we look past the traditional gross profit (which is largely irrelevant without a cost of goods sold). Instead, we focus on operating profit and net profit margins to gauge true performance.

• Net Profit Margin (Q3 2025, GAAP): A net loss of $(1.3) billion in Q3 2025 on revenue of $1.45 billion resulted in a negative net margin of approximately -89.66%.
• Operating Profit Margin (Q3 2025, Non-GAAP Adjusted): The core business is far healthier, with Non-GAAP operating earnings (excluding notable items) of $510 million in Q3 2025. This translates to a robust operating margin of about 35.17%, showing strong control over recurring expenses.
• Full-Year Net Income (2025 Estimate): Analysts project a full-year net income of around $1.76 billion on estimated annual revenue of $13.635 billion, which suggests a normalized net profit margin closer to 12.91%.

Here's the quick math on the Q3 GAAP loss: it was primarily driven by a one-time impact from the life reinsurance transaction with RGA. That transaction, while creating over $2 billion of value and reducing future mortality exposure by 75%, hit the GAAP income statement hard. You have to look at the Non-GAAP operating earnings to see the defintely healthy daily business performance.

Profitability Trends and Operational Efficiency

Equitable Holdings, Inc. has shown a mixed but generally upward-moving trend in underlying profitability. Over the past five years, earnings have averaged a strong 40.4% annual growth. However, Q3 2025 revenue was down 52.8% year-over-year, which is a significant drop that reflects the changing nature of their business and the impact of the reinsurance deal. Still, the Non-GAAP operating earnings per share of $1.67 in Q3 2025 (excluding notable items) were up 2% from the prior year quarter, indicating organic growth momentum is still present in the core retirement and wealth management segments.

Operational efficiency is best viewed through the lens of cost management and the high operating margin. The 35.17% Non-GAAP operating margin in Q3 2025 is a clear indicator that the company is highly efficient at turning its fee and premium revenue into operating profit. In the financial sector, this margin shows that the integrated business model-Retirement, Wealth Management, and Asset Management (AllianceBernstein)-is working to keep administrative and acquisition costs in check relative to the scale of assets under management, which hit a record $1.1 trillion as of September 30, 2025.

Industry Comparison and Outlook

When you compare Equitable Holdings, Inc.'s profitability to the broader industry, the picture gets interesting. The recent net profit margin of 3.1% is low, but that is heavily influenced by the one-off items. For context, the unweighted average profit margin for large public health insurers was 5.3% in Q1 2025. The market's perception of EQH's future is reflected in its Price-to-Earnings (P/E) ratio, which is currently negative at -15.93 due to the GAAP net loss, but the stock trades at a premium P/E multiple relative to the industry average of 15x when considering forward earnings.

What this estimate hides is the market's expectation for a rebound, with analysts forecasting a potential net margin recovery to 12.5% over the next three years. The strong operating performance and the successful execution of the life reinsurance transaction, which frees up over $2 billion of capital for deployment, are the key drivers here. This strategic move is designed to enhance focus on their core growth areas. You can read more about their strategy here: Mission Statement, Vision, & Core Values of Equitable Holdings, Inc. (EQH).

Debt vs. Equity Structure

When you look at Equitable Holdings, Inc. (EQH)'s balance sheet, the first thing that jumps out is the sheer scale of their debt relative to equity, which tells a clear story about how they fund operations. The company is defintely leaning on debt, a common, but risky, strategy in financial services.

As of the second quarter of 2025, Equitable Holdings, Inc.'s debt structure is heavily weighted toward the long term. They reported $6.803 billion in Long-Term Debt and Capital Lease Obligations, while their Short-Term Debt and Capital Lease Obligation stood at $0 million. This means their financing strategy is focused on stability and managing interest rate risk over a longer time horizon, which is smart.

The real eye-opener is the Debt-to-Equity (D/E) ratio, which is a key measure of financial leverage (how much debt a company uses to finance its assets). Equitable Holdings, Inc.'s D/E ratio recently hit 11.87 as of November 2025. Here's the quick math: that is dramatically higher than the industry average for Life Insurance, which typically sits around 0.55 to 0.63. A high ratio isn't always a red flag in a capital-intensive sector like insurance, but a number this elevated signals a high reliance on external financing and a thin equity cushion against losses.

This high leverage has not gone unnoticed. In March 2025, S&P Global Ratings revised its outlook on Equitable Holdings, Inc. to negative from stable, specifically citing increased financial leverage. S&P forecasts the company's financial leverage could remain above its 40% threshold for longer than two years, potentially rising to the 43%-47% range. This is the market telling you to pay close attention to their debt management.

The company is actively managing its capital structure, balancing new debt with debt reduction and strategic equity moves. You saw this play out in 2025:

• Issued $500 million in 6.7% junior subordinated notes in March 2025.
• Used proceeds to repurchase preferred shares, a move that reduces the cost of capital.
• Announced a cash tender offer in September 2025 to buy back up to $500 million of outstanding debt securities.

This back-and-forth-issuing new long-term debt to fund share repurchases or debt tenders-shows a deliberate capital management strategy aimed at optimizing the mix of debt financing and equity funding, even as overall leverage rises. For a deeper dive into who is buying into this strategy, you should check out Exploring Equitable Holdings, Inc. (EQH) Investor Profile: Who's Buying and Why?

What this estimate hides is the regulatory capital structure, which is complex for insurers. Still, the bottom line is clear: Equitable Holdings, Inc. is a highly leveraged company, and its ability to service that debt is paramount. You need to monitor their fixed-charge coverage ratio closely. If it falls below 4x, S&P has indicated a potential ratings downgrade, which would make future borrowing more expensive.

Next Step: Check Equitable Holdings, Inc.'s Q4 2025 fixed-charge coverage ratio against the 4x threshold.

Liquidity and Solvency

You're looking at Equitable Holdings, Inc. (EQH)'s liquidity, and the initial glance at the current ratios might give you pause. Don't panic. For a financial holding company, especially one heavily involved in insurance and long-term retirement products, traditional liquidity metrics often look skewed. Their business model is built on long-term assets covering long-term liabilities, not on a high volume of short-term inventory and receivables.

As of late 2025, Equitable Holdings, Inc. (EQH) reported a Current Ratio and a Quick Ratio both hovering around 0.13 to 0.14. This is defintely low, meaning current assets don't cover current liabilities in the typical 1:1 ratio you'd want in a manufacturing firm. The low ratio reflects the structure of their balance sheet, where policy reserves and future obligations are large current liabilities, while a significant portion of their investment portfolio is classified as long-term. The real measure of their financial health isn't this ratio; it's their regulatory capital and holding company cash.

The trend in working capital, or rather the lack of it in the traditional sense, is being aggressively managed through strategic capital deployment. The company is generating significant cash flow from its operating subsidiaries and moving it up to the holding company. This is where the action is. For instance, in the second half of 2025, Equitable Holdings, Inc. expects to take $1.7 billion in dividends up to the holding company, which includes $0.7 billion from organic cash generation and $1.0 billion from the individual life reinsurance transaction with RGA. That's a clear signal of strong internal cash generation and capital optimization.

Here's the quick math on their recent cash movements:

• Holding Company Cash: Started Q1 2025 with $2.2 billion, which was later reduced to $1.1 billion following strategic transactions, and then stood at $0.8 billion at the end of Q2 2025.
• Q3 2025 Capital Deployment: The company deployed $1.5 billion of capital, which included $757 million for buybacks and dividends, $500 million for debt repayment, and about $200 million for growth investments.

The cash flow statements overview shows a company focused on returning capital and reducing debt, a strong sign of management confidence in future cash generation. The significant capital deployment in Q3 2025 is a clear action point. The quarterly Free Cash Flow (FCF) for Q3 2025 was $278 million, demonstrating continued positive operational cash generation. The key strength here is the Holding Company's liquidity target of $500 million minimum, which they are comfortably above, even after major capital deployment actions. This focus on holding company liquidity is the true measure of their near-term financial flexibility.

What this estimate hides is the potential for market volatility to impact the value of their long-term investment portfolio, which is the ultimate source of their liquidity. Still, the reinsurance transaction, which closed in July 2025, freed up over $2 billion of capital and significantly reduced mortality exposure, strengthening the balance sheet and future dividend capacity. For more on the strategic direction driving these decisions, you can review the Mission Statement, Vision, & Core Values of Equitable Holdings, Inc. (EQH).

The primary liquidity concern is not the low current ratio, but the reliance on subsidiary dividends, though the regulatory capital buffer (NAIC RBC ratio over 500% pro-forma) provides a strong cushion. The clear action for you is to monitor the execution of the planned $1.7 billion in dividends to the holding company in the second half of 2025.

Valuation Analysis

You're looking at Equitable Holdings, Inc. (EQH) and wondering if the market has it right. The short answer is: the stock appears undervalued based on analyst targets, but its fundamental ratios are mixed, signaling a complex picture driven by recent one-time events. The current closing price of approximately $43.80 as of November 20, 2025, sits near the low end of its 52-week range of $41.39 to $56.61, suggesting a potential near-term opportunity if you believe in the long-term earnings recovery.

Here's the quick math on the core valuation multiples. The trailing Price-to-Earnings (P/E) ratio is a negative -15.93, which is a red flag on the surface. This negative value is directly tied to the net loss of $1.3 billion reported in the third quarter of 2025, largely due to a one-time impact from a life reinsurance transaction. However, the forward P/E, which uses estimated future earnings, is a much more palatable 5.72, indicating analysts expect a sharp rebound in profitability. That's a defintely important distinction to make.

The Price-to-Book (P/B) ratio is currently 6.47, which is quite high for a financial services company, suggesting the market values Equitable Holdings' assets significantly above their accounting book value. This is often a sign of strong intangible assets, like the value of their wealth management franchise, but you must factor in the high P/B when assessing risk. Conversely, the Enterprise Value-to-EBITDA (EV/EBITDA) ratio is a low 3.98, which is typically seen as attractive, implying a relatively cheap valuation when considering the company's total value (equity plus debt) against its core operating cash flow.

Looking at shareholder returns, Equitable Holdings offers an annual dividend of $1.08 per share, translating to a dividend yield of about 2.5%. The critical point here is the payout ratio, which is a negative -39.13% due to the reported net loss. This negative ratio means the dividend is not currently covered by net income, but the company's commitment to deploying $1.5 billion in capital for shareholder value, including buybacks, suggests management is confident in their future cash flow and long-term earnings power.

Wall Street's professional view leans positive. The analyst consensus is a Moderate Buy, with a strong majority of firms recommending a 'Buy' or 'Strong Buy' rating. The average 12-month price target is $64.18, which implies an upside of roughly 46% from the current share price. This significant gap between the current price and the target price is the clearest indicator that the market, in the analysts' view, is over-discounting the recent negative news. You can review the company's strategic goals that underpin this confidence here: Mission Statement, Vision, & Core Values of Equitable Holdings, Inc. (EQH).

The clear action is to dig into the quality of the expected 2026 earnings, which analysts forecast at $7.18 per share, to see if they justify the $64.18 target. That's where the real value decision lies.

Risk Factors

You're looking at Equitable Holdings, Inc. (EQH) and seeing a strategic pivot, but every major shift comes with its own set of risks. The direct takeaway here is that while management has aggressively mitigated the biggest legacy risk-mortality exposure-the company is now highly sensitive to market volatility and faces stiff competition in its core growth engines, Retirement and Wealth Management.

To be fair, the financial picture in 2025 is mixed. For example, the third quarter of 2025 saw a steep GAAP net loss of $1.31 billion, largely due to a one-time impact from the life reinsurance transaction and elevated mortality costs, which definitely spooked some investors. Still, the underlying non-GAAP operating earnings often show resilience, like the adjusted $1.41 per share in Q2 2025, which beat analyst forecasts. Here's the quick math: you have to look past the headline losses and focus on the core operational headwinds.

Operational and Financial Headwinds

The most pressing internal risks stem from the company's business mix and capital structure. The move to fee-based revenue is smart, but it exposes Equitable Holdings to market-driven fluctuations more directly. Also, the legacy business still presents challenges.

• Mortality and Claims: Despite the reinsurance deal, the Protection Solutions segment has seen elevated net mortality claims. Before the mitigation, this was a significant drag.
• Revenue Misses: The company reported a Q2 2025 revenue of $2.36 billion, a significant miss compared to the analyst forecast of $3.23 billion, suggesting execution or market issues in revenue generation.
• Debt Load: The balance sheet carries a high debt-to-equity ratio of 11.87 as of the third quarter of 2025, which is a big number that increases financial risk, especially in a rising interest rate environment.

External and Strategic Risks

The external landscape for Equitable Holdings is defined by intense competition and the ever-present threat of regulatory change. The financial services industry is not known for being a quiet place.

The competition in the Retirement and Wealth Management segments-the company's core focus-is fierce. Market-driven outflows in the Asset Management segment, totaling $4.8 billion in Q2 2025, highlight the challenge of retaining assets when market performance or competitor offerings are more compelling. Plus, the company's variable annuities are highly sensitive to equity market fluctuations, requiring continuous, sophisticated hedging (risk management) strategies.

One emerging risk is the regulatory and counterparty exposure tied to the increasing use of offshore reinsurance. While these transactions free up capital, they introduce a new layer of complexity and potential risk that investors need to defintely track. Any shift in state or federal legislation affecting insurance capital requirements or tax reform could also alter the economics of their products quickly.

Mitigation and Actionable Insights

The good news is that management is not sitting still; they are taking clear, concrete actions to de-risk the company and focus capital. The most significant mitigation strategy in 2025 was the Individual Life reinsurance transaction with RGA Reinsurance Company, which closed on July 31, 2025.

This deal generated over $2 billion of value and reduced the company's exposure to future mortality claims by 75%. This is a massive de-risking move. They are also maintaining a disciplined capital management program, evidenced by the target of $1.6 billion to $1.7 billion in organic cash generation for 2025, and returning capital to shareholders-like the $757 million returned in Q3 2025, which included $676 million in share repurchases. That's a strong signal of management's conviction.

The strategic shift is also visible in new product launches, such as the Structured Capital Strategies® Premier, a registered index-linked annuity designed to compete in the high-growth annuity market and counter margin pressure from legacy products. This is how they plan to grow their way out of the legacy drag.

For a deeper dive into the valuation and strategic frameworks, you can read more here: Breaking Down Equitable Holdings, Inc. (EQH) Financial Health: Key Insights for Investors.

Your next step should be to monitor the Q4 2025 earnings call for an update on the organic cash generation forecast and any new regulatory commentary impacting the offshore reinsurance structures.

Growth Opportunities

You're looking for a clear path forward for Equitable Holdings, Inc. (EQH), and the takeaway is simple: the company is aggressively shedding risk to double down on its higher-margin, fee-based businesses. This strategic pivot, centered on Retirement and Wealth Management, is what will drive the next phase of growth, despite some near-term earnings volatility.

The biggest move in 2025 was the reinsurance of 75% of the in-force individual life insurance block with RGA Reinsurance Company, which closed in July. This transaction created over $2 billion of value and reduced exposure to mortality risk by 75%. That capital is now being freed up for redeployment into core growth engines, plus a planned incremental share repurchase of $500 million, which is above their 60-70% payout ratio target. It's a classic financial engineering move: clean up the balance sheet to fuel the future.

The future growth drivers are clear and concentrated in three areas: Retirement, Asset Management, and Wealth Management. Equitable Holdings, Inc. is aiming for continued double-digit growth in its spread and fee-based income for 2025. This is defintely a focus on quality over volume in the legacy business.

• Retirement: Strong net inflows of $1.9 billion in Q2 2025, supported by products like the BlackRock LifePath Paycheck solution, which is tapping into the vast 401(k) market.
• Product Innovation: The launch of Structured Capital Strategies® Premier, a new registered index-linked annuity (RILA), is designed to capture greater market upside while offering downside protection, strengthening margins against competitive pressure.
• Wealth Management: Management forecasts this segment's earnings to continue growing at a double-digit rate, bolstered by the agreement to acquire Stifel Independent Advisors, which brings over 110 advisors and $9 billion of assets to the platform.

Here's the quick math on the financial outlook for the full 2025 fiscal year. Analysts project total revenue to reach approximately $15.03 billion, with earnings per share (EPS) estimated at $4.55. What this estimate hides is the expected acceleration in EPS growth in the second half of 2025, following the capital release from the reinsurance deal. Cash generation to the holding company is expected to land between $1.6 billion and $1.7 billion for 2025, keeping the company on track for its 2027 target of $2 billion.

Equitable Holdings, Inc.'s competitive advantage rests on its integrated business model, combining the insurance and asset management capabilities of Equitable, AllianceBernstein (AB), and Equitable Advisors. The company increased its ownership in AB to approximately 69% in April 2025, capturing more of the synergies between the two entities. Plus, a strong capital position-with pro forma holding company cash of approximately $1.1 billion, well above the $0.5 billion minimum target-gives them financial flexibility to execute on growth.

To be fair, the company did report a Q2 2025 non-GAAP operating EPS of $1.10 (or $1.41 excluding notable items), which was below expectations due to elevated mortality in the Individual Life block. But that's exactly why the strategic shift away from that volatile business is so important. For more on the long-term vision, you can review the Mission Statement, Vision, & Core Values of Equitable Holdings, Inc. (EQH).

For investors, the key is monitoring the redeployment of that $2 billion in capital and the net flows in the Wealth and Asset Management segments. If those inflows remain robust, the market will likely reward the stock with a higher valuation multiple, reflecting its lower-risk, higher-growth profile.