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01/11 11:06
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call summary and Q&A indicate strong financial performance, successful partnerships, and optimistic guidance. Management expressed excitement about new ventures, particularly in Asia and private credit, and highlighted margin expansion and cost savings. Despite some unclear responses, the overall sentiment is positive, with strategic plans and partnerships likely to boost stock price by 2% to 8%.
Firm-wide assets under management (AUM) $860 billion, a new milestone, with a year-over-year increase driven by diversified investment expertise and deep distribution capabilities.
Bernstein Private Wealth AUM $153 billion, a record high, bolstered by relationships within the ultra-high net worth client segment.
Institutional asset management AUM $351 billion, catering to long-duration capital pools, including private markets and insurance general account assets.
Retail platform AUM $356 billion, serving markets like Asia Pacific and U.S. high net worth, with growth in SMAs, active ETFs, and model portfolios.
Net revenues $885 million in Q3 2025, a 5% increase year-over-year, driven by growth in asset management fees.
Adjusted earnings per unit (EPU) $0.86, representing a 12% increase compared to the prior year, reflecting strong financial performance and expense discipline.
Operating income $303 million, up 15% year-over-year, reflecting strong margin expansion of 290 basis points.
Adjusted operating margin 34.2% in Q3 2025, a 209 basis point increase from the prior year, driven by favorable market conditions and operational efficiency.
Total adjusted operating expenses $582 million, roughly flat compared to the prior year, with a 6% increase in compensation and benefits expenses.
Private markets AUM Nearly $80 billion, representing a 17% year-over-year growth, focused on credit-oriented strategies.
Tax-exempt fixed income and private alternatives: Achieved $4 billion in tax-exempt inflows and $3 billion in private markets net inflows, reflecting strong demand and improved market conditions.
Thematic investments: Security of the Future and disruptors ETF (ticker FWD) attracted strong inflows and delivered relative outperformance.
Lifetime Income Strategy (LIS): Manages $13.5 billion in total assets, with $5 billion guaranteed by insurance companies. Recent U.S. Department of Labor advisory opinion validated the program, reducing regulatory uncertainty.
Asia Pacific and U.S. high net worth markets: Retail platform serves these markets with growing solutions like SMAs, active ETFs, and model portfolios.
Insurance asset management in Asia Pacific: Gaining traction as a partner of choice for insurers, supported by a new partnership with Fortitude and investment in FCA Re.
Operational efficiency: Lowered non-compensation expense projection to $600-$610 million for 2025, reflecting disciplined expense management.
Adjusted operating margin: Increased to 34.2% in Q3 2025, driven by favorable market conditions and operational efficiency.
Private markets expansion: Expanded private markets platform to $80 billion in assets, targeting $90-$100 billion by 2027. Focused on credit-oriented strategies and strategic partnerships.
Retirement solutions: Secured $4 billion in custom target date mandates and expanded lifetime income solutions, including private assets in target date funds.
Market Volatility: The company faces challenges due to fluctuating yields and rates volatility, particularly in fixed income markets. This has impacted short-term performance and client flows.
Equity Market Dynamics: Limited exposure to high-momentum, unprofitable, and heavily shorted equity names has negatively affected relative performance in equity markets.
Regulatory Uncertainty: Although the Department of Labor advisory opinion reduced regulatory uncertainty for lifetime income solutions, ongoing compliance and litigation risks remain a concern for plan sponsors.
Fee Pressure: The firm is experiencing industry-wide fee rate pressures, particularly in retail services and lower-fee categories like SMAs and ETFs.
Client Outflows: Active equities saw $6 billion in outflows, driven by growth-oriented redemptions, and taxable net outflows of $4 billion were noted, although some were episodic.
Operational Costs: While operational efficiency has improved, compensation and benefits expenses have increased, and there is a need for continued expense discipline.
Strategic Execution Risks: The company is heavily reliant on its partnership with Equitable and other strategic alliances, which could pose risks if these relationships face challenges or fail to deliver expected outcomes.
Economic Uncertainty: Global economic conditions, including inflation and labor market dynamics, continue to pose risks to investment performance and client sentiment.
Private Markets Scaling: While private markets are growing, the company faces challenges in scaling these capabilities and meeting its ambitious AUM targets by 2027.
Fixed Income Outlook: The company maintains a positive outlook on fixed income, expecting to capture the next reallocation wave as bonds regain their diversification value, credit fundamentals remain robust, and monetary policy clarity increases.
Private Markets Growth: The company aims to achieve $90 billion to $100 billion in private markets assets under management by 2027, driven by organic growth, strategic partnerships, and new solutions in private credit and other private market segments.
Custom Target Date Funds: The company expects to implement nearly $4 billion in custom target date solutions for two large U.S. insurance companies in the first half of 2026. Additionally, a custom retirement solution for a large U.K. DC Master Trust is expected to grow significantly over time.
Lifetime Income Solutions: The company anticipates growth in its lifetime income solutions platform, supported by a recent U.S. Department of Labor advisory opinion that reduces regulatory uncertainty and encourages plan sponsors to adopt these solutions.
Private Wealth Expansion: The company plans to continue gaining market share in the ultra-high net worth channel, leveraging strong adviser productivity and cross-asset client allocations.
Performance Fee Guidance: The company has raised its full-year performance fee guidance to $130 million to $155 million, reflecting strong private market performance and potential upside from public market strategies.
Non-Compensation Expense Guidance: The company has revised its full-year non-compensation expense projection to $600 million to $610 million, down from the previous range of $600 million to $620 million, due to expense discipline and operational efficiency.
Distributions to unitholders: Distributions grew uniformly with EPU as we distribute 100% of our adjusted earnings to unitholders.
The earnings call summary and Q&A indicate strong financial performance, successful partnerships, and optimistic guidance. Management expressed excitement about new ventures, particularly in Asia and private credit, and highlighted margin expansion and cost savings. Despite some unclear responses, the overall sentiment is positive, with strategic plans and partnerships likely to boost stock price by 2% to 8%.
The earnings call summary indicates strong financial performance with a 20% YoY increase in fee-eligible assets and a 10% rise in earnings per unit. The Q&A section reveals positive developments, like the partnership with Pacific Life, and a focus on scalable M&A opportunities. Despite some uncertainties in guidance, the company's robust AUM growth, strategic partnerships, and optimistic outlook for flagship strategies suggest a positive stock price movement over the next two weeks.
The earnings call highlights strong financial performance, with EPS beating expectations, increased performance fees, and improved margins. Despite a slight decline in net revenues, operating expenses decreased significantly. The Q&A section reveals confidence in long-term prospects, with no significant risks highlighted. The market cap suggests moderate price movement, leading to a positive prediction of 2% to 8%.
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