AllianceBernstein (AB) Q2 2024 earnings summary

Executive summary

• Achieved sustained organic growth in Q2 2024, with firmwide net inflows of $900 million and active net inflows of $1.3 billion, led by strong performance in taxable and tax-exempt fixed income, and market share gains in U.S. retail, Japan equities, and APAC ex-Japan fixed income.

• Private markets AUM grew to $64 billion, up 5% year-over-year, with significant fundings from private credit and real estate equity; Equitable completed its initial $10 billion commitment.

• Majority of equity and fixed income AUM outperformed benchmarks over 1-, 3-, and 5-year periods, with investment performance improving in equities and remaining robust in fixed income.

• Net income per unit rose to $0.99 GAAP (up 87% year-over-year) and $0.71 adjusted (up 16%), with a cash distribution of $0.71 per unit, up 16% year-over-year.

• Private wealth business recorded its strongest alternative raise ever, and investment advisory fees grew 13% year-over-year.

Financial highlights

• Q2 2024 GAAP net revenues were $1.03 billion, up 2% year-over-year, but down 7% sequentially due to Bernstein Research Services deconsolidation.

• Adjusted operating income was $254 million, up 15% year-over-year; adjusted operating margin reached 30.8%, up 380 basis points.

• GAAP operating income was $199 million, up 6% year-over-year, with a margin of 19.0%.

• Firm-wide assets under management (AUM) ended at $770 billion, up 11% year-over-year and 1% sequentially.

• Net income attributable to AB unitholders was $310 million, up 76% year-over-year.

Outlook and guidance

• Expect continued strong demand for fixed income as the Fed approaches rate cuts, with significant cash on the sidelines likely to move into bonds.

• Full-year 2024 performance fees projected to be slightly above 2023 levels.

• G&A expenses for 2024 expected to decline mid- to high-single digits year-over-year; margin improvement from relocation strategy to begin in Q4 2024, one quarter earlier than planned.

• Effective tax rate guidance for 2024 lowered to 6%-7%.

• Management continues to invest in global diversification, product innovation, and margin expansion initiatives.