Equitable Q2 EPS Drops 23%: Mixed Performance, Transformational Reinsurance Deal

Equitable's Q2 EPS dropped 23% YoY, while headline revenue declined by nearly one-third. However, non-GAAP EPS exceeded analyst expectations at $1.41. A transformative life reinsurance deal with RGA was completed, freeing up over $2 billion in capital for redeployment. The Asset Management segment posted higher assets under management, but faced sharp client outflows of $4.8 billion during the period.

Equitable Holdings, Inc. (NYSE: EQH) reported its second-quarter 2025 earnings, revealing a significant drop in earnings per share (EPS) and revenue, but an encouraging performance in non-GAAP EPS. The company's EPS fell by 23% year-over-year (YoY) to $1.41, which still managed to exceed analyst expectations of $1.35 per share [1].

Revenue declined by nearly one-third, dropping to $27.5 billion from $39.9 billion in the same period last year. Despite this decrease, the company's non-GAAP EPS was $1.41, which was above the expected $1.35 per share [1]. This positive non-GAAP EPS indicates that Equitable's operational efficiency and cost management strategies are paying off.

The most notable development during the quarter was the completion of a transformative life reinsurance deal with Reinsurance Group of America, Inc. (RGA) [2]. This deal involved the reinsurance of a diversified block of life insurance products worth $32 billion, freeing up over $2 billion in capital for redeployment. This transaction is expected to meaningfully contribute to adjusted operating EPS and expand RGA's partnership with Equitable across various areas such as underwriting, product development, distribution, and investment management.

However, the Asset Management segment faced significant client outflows, totaling $4.8 billion during the period. This segment posted higher assets under management but was negatively impacted by the client outflows, which could potentially affect future growth prospects.

Equitable's mixed performance in the second quarter of 2025 highlights the company's ability to navigate challenging market conditions and capitalize on strategic partnerships. The completion of the reinsurance deal with RGA and the positive non-GAAP EPS indicate a strong focus on operational efficiency and cost management. Despite the revenue decline and client outflows, the company's financial performance suggests a resilient and adaptable approach to managing risks and optimizing capital.

References:
[1] https://www.ainvest.com/news/expeditors-q2-eps-1-34-yoy-growth-36-2508/
[2] https://www.rgare.com/our-company/media/press-releases/press-releases-detail/2025/07/31/rga-closes--32-billion-reinsurance-transaction-with-equitable-holdings