AllianceBernstein (AB) Q3 2024 earnings summary

Executive summary

• Achieved third consecutive quarter of organic AUM growth, reaching $806 billion, driven by strong retail and fixed income inflows, and continued expansion in private markets AUM, which reached $68 billion with over $1 billion in alternative net fundings.

• Adjusted operating margin rose to 31.3%, up 330 basis points year-over-year, with further expansion expected from NYC office relocation and other margin initiatives.

• Fee rate stabilized at 39.9 basis points, with base management fees growing in line with AUM.

• Maintained 100% distribution ratio of adjusted earnings, supported by a tax-advantaged partnership structure.

• Completed deconsolidation of Bernstein Research Services following a joint venture with Societe Generale.

Financial highlights

• End of period AUM was $805.9 billion, up from $669.0 billion a year ago and $769.5 billion last quarter.

• Adjusted earnings per unit for Q3 2024 was $0.77, up 19% year-over-year; GAAP diluted net income per unit was $1.12, up 124%.

• Net revenues (GAAP) were $1.09 billion, up 5% year-over-year; adjusted net revenues were $845 million, flat year-over-year.

• Adjusted operating income was $264 million, up 12% year-over-year; GAAP operating income was $365 million, up 108%.

• Cash distribution per unit increased 18.5% to $0.77, payable November 21, 2024.

Outlook and guidance

• Baseline adjusted operating margin forecasted at 33% for 2025, with further upside potential from favorable markets.

• FY24 performance fee guidance tightened to $145–$155 million, with private markets expected to contribute over two-thirds.

• Targeting $90–$100 billion in private markets AUM by 2027, aiming for 20%+ of asset management revenues.

• Full-year 2024 G&A expenses expected to decline mid- to high single digits year over year.

• Effective tax rate guidance for 2024 lowered to 5–6% due to a one-time reduction in CarVal contingent consideration liability.