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Index
Part I
FINANCIAL INFORMATION
Item 1.    Financial Statements
ALLIANCEBERNSTEIN L.P.
AND SUBSIDIARIES
Condensed Consolidated Statements of Financial Condition
(in thousands, except unit amounts)
(unaudited)
 September 30,
2025		December 31,
2024
ASSETS
Cash and cash equivalents$740,903 $832,044 
Cash and securities segregated, at fair value (cost: $421,674 and $495,391)
425,012 500,046 
Receivables, net:  
Brokers and dealers31,118 33,772 
Brokerage clients1,493,662 1,432,372 
AB funds fees388,085 467,351 
Other fees140,174 159,336 
Investments:  
Equity method254,378 286,721 
Other282,226 248,483 
Assets of consolidated company-sponsored investment funds:
   Cash and cash equivalents 12,065 1,989 
   Investments 353,643 140,792 
   Other assets 29,943 14,801 
Furniture, equipment and leasehold improvements, net248,256 248,673 
Goodwill3,598,591 3,598,591 
Intangible assets, net181,379 215,054 
Deferred sales commissions, net169,317 182,707 
Right-of-use assets455,546 449,877 
Other assets259,768 259,318 
Total assets$9,064,066 $9,071,927 
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 September 30,
2025		December 31,
2024
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND CAPITAL
Liabilities:  
Payables:  
Brokers and dealers$188,795 $162,570 
Brokerage clients1,739,904 1,933,843 
AB mutual funds1,688 830 
Contingent consideration liability8,562 9,385 
Accounts payable and accrued expenses432,753 426,675 
Lease liabilities518,540 512,615 
Liabilities of consolidated company-sponsored investment funds34,045 1,716 
Accrued compensation and benefits774,244 391,161 
Debt465,000 710,000 
Total liabilities4,163,531 4,148,795 
Commitments and contingencies (See Note 12)
Redeemable non-controlling interest of consolidated entities 159,673 48,489 
Capital:  
General Partner48,009 49,519 
Limited partners: 292,218,395 and 292,107,907 units issued and outstanding
4,849,614 4,999,616 
Receivables from affiliates212 (2,893)
AB Holding Units held for long-term incentive compensation plans(100,651)(62,366)
Accumulated other comprehensive (loss)(57,823)(110,581)
Partners’ capital attributable to AB Unitholders4,739,361 4,873,295 
Non-redeemable non-controlling interests in consolidated entities1,501 1,348 
Total capital4,740,862 4,874,643 
Total liabilities, non-controlling interest and capital$9,064,066 $9,071,927 
 

See Accompanying Notes to Condensed Consolidated Financial Statements.
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ALLIANCEBERNSTEIN L.P.
AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(in thousands, except per unit amounts)
(unaudited)
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
Revenues:
Investment advisory and services fees$874,450 $842,386 $2,573,540 $2,444,118 
Bernstein research services— — — 96,222 
Distribution revenues210,424 189,216 607,811 527,811 
Dividend and interest income35,944 38,940 106,431 127,441 
   Investment (losses)(2,721)(3,512)(31,084)(15,398)
Other revenues34,253 39,673 98,345 104,133 
Total revenues1,152,350 1,106,703 3,355,043 3,284,327 
Less: Broker-dealer related interest expense15,203 21,214 48,382 66,744 
Net revenues1,137,147 1,085,489 3,306,661 3,217,583 
Expenses:    
Employee compensation and benefits450,793 424,893 1,310,878 1,300,989 
Promotion and servicing:  
Distribution-related payments208,435 192,230 606,615 545,120 
Amortization of deferred sales commissions20,872 15,005 62,183 40,152 
Trade execution, marketing, T&E and other36,907 38,312 114,239 134,243 
General and administrative118,203 155,808 414,156 439,450 
Contingent payment arrangements43 (125,947)149 (120,831)
Interest on borrowings7,167 8,456 22,768 37,139 
Amortization of intangible assets11,250 11,451 33,733 34,754 
Total expenses853,670 720,208 2,564,721 2,411,016 
Operating income283,477 365,281 741,940 806,567 
Gain on divestiture— — — 134,555 
Non-operating income— — — 134,555 
Pre-tax income283,477 365,281 741,940 941,122 
Income taxes17,085 14,255 46,566 50,389 
Net income266,392 351,026 695,374 890,733 
Net income of consolidated entities attributable to non-controlling interests7,129 5,054 4,845 17,262 
Net income attributable to AB Unitholders$259,263 $345,972 $690,529 $873,471 
Net income per AB Unit$0.88 $1.20 $2.34 $3.02 

See Accompanying Notes to Condensed Consolidated Financial Statements.
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ALLIANCEBERNSTEIN L.P.
AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
(in thousands)
(unaudited)
 
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
Net income$266,392 $351,026 $695,374 $890,733 
Other comprehensive income (loss):  
Foreign currency translation adjustment, before reclassification and tax(7,297)18,677 29,730 6,789 
Less: reclassification adjustment for (losses) included in net income upon liquidation— — — (10,197)
Foreign currency translation adjustments, before tax(7,297)18,677 29,730 16,986 
Income tax (expense) (149)(163)(334)(108)
Foreign currency translation adjustments, net of tax(7,446)18,514 29,396 16,878 
Changes in employee benefit related items:  
Amortization of prior service cost— 6 611 18 
Recognized actuarial gain — 105 — 664 
Less: reclassification adjustment for (losses) included in net income upon retirement plan liquidation— — (22,898)— 
Changes in employee benefit related items— 111 23,509 682 
Income tax (expense)— (1)(147)(8)
Employee benefit related items, net of tax— 110 23,362 674 
Other comprehensive (loss) income(7,446)18,624 52,758 17,552 
Less: Comprehensive income in consolidated entities attributable to non-controlling interests7,129 5,054 4,845 17,262 
Comprehensive income attributable to AB Unitholders$251,817 $364,596 $743,287 $891,023 

See Accompanying Notes to Condensed Consolidated Financial Statements.

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ALLIANCEBERNSTEIN L.P.
AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Partners' Capital
(in thousands)
(unaudited)
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
General Partner’s Capital
Balance, beginning of period$47,832 $45,880 $49,519 $45,388 
Net income2,594 3,460 6,906 8,735 
Cash distributions to General Partner(2,479)(2,285)(8,471)(7,101)
Long-term incentive compensation plans activity9 27 (13)83 
Issuance (retirement) of AB Units, net53 (437)68 (460)
Issuance of AB Units in connection with EQH Amended Exchange Agreement8,202 — 8,202 — 
(Retirement) of AB Units in connection with EQH Amended Exchange Agreement(8,202)— (8,202)— 
Balance, end of period48,009 46,645 48,009 46,645 
Limited Partners' Capital
Balance, beginning of period4,831,485 4,639,147 4,999,616 4,590,619 
Net income256,669 342,512 683,623 864,736 
Cash distributions to Unitholders(244,681)(226,031)(837,724)(702,324)
Long-term incentive compensation plans activity851 2,759 (1,327)8,256 
Issuance (retirement) of AB Units, net5,290 (43,414)5,426 (46,314)
Issuance of AB Units in connection with EQH Amended Exchange Agreement811,986 — 811,986 — 
(Retirement) of AB Units in connection with EQH Amended Exchange Agreement(811,986)— (811,986)— 
Balance, end of period4,849,614 4,714,973 4,849,614 4,714,973 
Receivables from Affiliates
Balance, beginning of period(2,421)(3,822)(2,893)(4,490)
Long-term incentive compensation awards expense344 291 1,017 797 
Capital contributions from AB Holding2,289 39 2,088 201 
Balance, end of period212 (3,492)212 (3,492)
AB Holding Units held for Long-term Incentive Compensation Plans
Balance, beginning of period(94,436)(92,612)(62,366)(76,363)
Purchases of AB Holding Units for long-term compensation plans, net(3,594)(39,342)(47,240)(73,131)
(Retirement) issuance of AB Units, net(5,387)43,751 (5,040)47,378 
Long-term incentive compensation awards expense3,797 6,266 13,934 26,645 
Re-valuation of AB Holding Units held in rabbi trust(1,031)(2,976)61 (9,442)
Balance, end of period(100,651)(84,913)(100,651)(84,913)
Accumulated Other Comprehensive (Loss)
Balance, beginning of period(50,377)(107,436)(110,581)(106,364)
Foreign currency translation adjustment, net of tax(7,446)18,514 29,396 16,878 
Changes in employee benefit related items, net of tax— 110 23,362 674 
Balance, end of period(57,823)(88,812)(57,823)(88,812)
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Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Total Partners' Capital attributable to AB Unitholders4,739,361 4,584,401 4,739,361 4,584,401 
Non-redeemable Non-controlling Interests in Consolidated Entities   
Balance, beginning of period1,635 3,540 1,348 4,572 
Net income 169 195 702 1,763 
Distributions to non-controlling interests, net(318)(1)(592)(2,696)
Contributions from non-controlling interest 15 (1)43 94 
Balance, end of period1,501 3,733 1,501 3,733 
Total Capital$4,740,862 $4,588,134 $4,740,862 $4,588,134 
See Accompanying Notes to Condensed Consolidated Financial Statements.
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ALLIANCEBERNSTEIN L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
Nine Months Ended September 30,
20252024
Cash flows from operating activities:
Net income$695,374 $890,733 
Adjustments to reconcile net income to net cash provided by operating activities:  
Amortization of deferred sales commissions62,183 40,152 
Non-cash long-term incentive compensation expense14,951 27,442 
Depreciation and other amortization65,009 69,673 
Unrealized (gains) on investments(16,147)(13,901)
Remeasurement of contingent payment arrangement— (128,505)
Equity in losses of equity method investments32,343 35,443 
Unrealized (gains) on investments of consolidated company-sponsored investment funds(4,598)(20,900)
(Gain) on divestiture— (134,555)
Non-cash lease expense53,053 90,913 
Retirement plan loss17,733 — 
Other, net5,119 16,963 
Changes in assets and liabilities:  
Decrease in securities, segregated75,034 320,911 
Decrease (increase) in receivables46,160 (61,177)
(Increase) decrease in investments(16,928)18,880 
(Increase) in deferred sales commissions(48,793)(110,642)
Decrease in other assets2,880 26,187 
(Increase) decrease in other assets of consolidated company-sponsored investment funds(15,142)20,564 
(Increase) decrease in investments of consolidated company-sponsored investment funds(208,253)151,045 
Increase (decrease) in other liabilities of consolidated company-sponsored investment funds32,329 (7,604)
(Decrease) in payables(172,690)(504,165)
(Decrease) increase in accounts payable and accrued expenses(1,268)79,860 
Increase in accrued compensation and benefits379,409 394,899 
Cash payments to relieve operating lease liabilities(49,702)(62,165)
Net cash provided by operating activities948,056 1,140,051 
Cash flows from investing activities:  
Purchases of furniture, equipment and leasehold improvements(27,849)(99,930)
Divestiture of business (includes $304.0 million in cash proceeds in 2024)
— (40,196)
Capital contribution to equity method investments— (39,401)
Debt repayment from equity method investments— 86,200 
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Nine Months Ended September 30,
20252024
Net cash (used in) investing activities(27,849)(93,327)
Cash flows from financing activities:  
(Repayment of) debt, net(245,000)(654,316)
(Decrease) in overdrafts payable— (2)
Distributions to General Partner and Unitholders(846,195)(709,424)
Terminations (redemptions) of non-controlling interest in consolidated company-sponsored investment funds, net106,340 (99,465)
Capital contributions from (to) AB Holding807 (902)
Purchases of AB Holding Units for long-term incentive compensation plan awards, net(47,240)(73,131)
Other, net(4,267)(7,011)
Net cash (used in) financing activities (1,035,555)(1,544,251)
Effect of exchange rate changes on cash and cash equivalents34,283 7,916 
Net (decrease) in cash and cash equivalents(81,065)(489,611)
Cash and cash equivalents as of beginning of the period834,033 1,160,889 
Cash and cash equivalents as of end of the period$752,968 $671,278 
Non-cash financing activities:
Retirement of AB Units in connection with EQH Amended Exchange Agreement$(820,188)$— 
Issuance of AB Units in connection with EQH Amended Exchange Agreement$820,188 $— 

See Accompanying Notes to Condensed Consolidated Financial Statements.
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ALLIANCEBERNSTEIN L.P.
AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
September 30, 2025
(unaudited)

The words “we” and “our” refer collectively to AllianceBernstein L.P. and its subsidiaries (“AB”), or to their officers and employees. Similarly, the word “company” refers to AB. These statements should be read in conjunction with AB’s audited consolidated financial statements included in AB’s Form 10-K for the year ended December 31, 2024.

1. Business Description, Organization and Basis of Presentation

Business Description

We provide diversified investment management and related services globally to a broad range of clients. Our principal services include:

•    Institutional Services – servicing our institutional clients, including private and public pension plans, foundations and endowments, insurance companies, central banks and governments worldwide, and affiliates such as Equitable Holdings, Inc. ("EQH") and its subsidiaries, by means of separately-managed accounts, sub-advisory relationships, structured products, collective investment trusts, mutual funds, hedge funds and other investment vehicles.

•    Retail Services – servicing our retail clients, primarily by means of retail mutual funds sponsored by AB or an affiliated company, sub-advisory relationships with mutual funds sponsored by third parties, separately-managed account programs sponsored by financial intermediaries worldwide and other investment vehicles.

•    Private Wealth Management – servicing our private clients, including high-net-worth individuals and families, trusts and estates, charitable foundations, partnerships, private and family corporations, and other entities, by means of separately-managed accounts, hedge funds, mutual funds and other investment vehicles.

We also provide distribution, shareholder servicing, transfer agency services and administrative services to the mutual funds we sponsor.

Our high-quality, in-depth research is the foundation of our asset management and private wealth management businesses. Our research disciplines include economic, fundamental equity, fixed income and quantitative research. In addition, we have expertise in multi-asset strategies, wealth management, environmental, social and corporate governance ("ESG"), and alternative investments.
 
We provide a broad range of investment services with expertise in:

•Actively managed equity strategies, across global and regional universes, as well as capitalization ranges, concentration ranges and investment strategies, including value, growth and core equities;

•Actively managed traditional and unconstrained fixed income strategies, including taxable and tax-exempt strategies;

•Actively managed alternative investments, including fundamental and systematically-driven hedge funds, fund of hedge funds and direct assets (e.g., direct lending, real estate and private equity);

•Multi-asset solutions and services, including dynamic asset allocation, customized target-date funds and target-risk funds; and

•Passively managed equity and fixed income strategies, including index, ESG index and enhanced index strategies.

Organization

AllianceBernstein Corporation (an indirect wholly-owned subsidiary of EQH, “General Partner”) is the general partner of both AllianceBernstein Holding L.P. (“AB Holding”) and AB. AllianceBernstein Corporation owns 100,000 general partnership units in AB Holding and a 1.0% general partnership interest in AB.

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As of September 30, 2025, the ownership structure of AB, including limited partnership units outstanding as well as the general partner's 1.0% interest, was as follows:

EQH and its subsidiaries68.5 %
AB Holding30.8 
Unaffiliated holders0.7 
 100.0 %

EQH Exchange

On July 10, 2025, AB entered into an amended and restated Exchange Agreement (the “Amended Exchange Agreement”) with EQH to increase the AB Units that remain available for exchange from 4,788,806 AB Units to 19,682,946 AB Units. At the time the Amended Exchange Agreement was entered into, AB issued and exchanged 19,682,946 AB Units for an equal number of AB Holding Units held by EQH. The acquired AB Holding Units from the exchange were retired, along with an equal number of AB Units. Following the exchange, the Amended Exchange Agreement was terminated.

After giving effect to such exchange and related retirements, including both the general partnership and limited partnership interest in AB Holding and AB, EQH has an approximate 68.5% economic interest in AB as of September 30, 2025.

Basis of Presentation

The interim condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the interim results, have been made. The preparation of the condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the interim reporting periods. Actual results could differ from those estimates. The condensed consolidated statement of financial condition as of December 31, 2024 was derived from audited financial statements. Certain disclosures included in the annual financial statements have been condensed or omitted from these financial statements as they are not required for interim financial statements under principles generally accepted in the United States of America ("GAAP") and the rules of the SEC.

Principles of Consolidation

The condensed consolidated financial statements include AB and its majority-owned and/or controlled subsidiaries, and the consolidated entities that are considered to be variable interest entities (“VIEs”) and/or voting interest entities (“VOEs”) in which AB has a controlling financial interest. Non-controlling interests on the condensed consolidated statements of financial condition include the portion of consolidated company-sponsored investment funds in which we do not have direct equity ownership. All significant inter-company transactions and balances among the consolidated entities have been eliminated.

Subsequent Events

We have evaluated subsequent events through the date that these financial statements were filed with the SEC and did not identify any subsequent events that would require disclosure in these financial statements.

2. Significant Accounting Policies

Recently Adopted Accounting Pronouncements

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In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This amendment is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold and certain information about income taxes paid. This revised guidance is effective for financial statements issued for fiscal years beginning after December 15, 2024. The adoption of this standard did not have a material impact on our financial condition or results of operations.

Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This amendment is expected to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This information is not generally presented in the financial statements today. The amendments in this update do not change or remove current expense disclosure requirements. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied either prospectively to financial statements issued for reporting periods after the effective date of this update or retrospectively to any or all periods presented in the financial statements. We are currently evaluating the impacts of the new standard.
Goodwill
Our acquisitions are accounted for under the acquisition method of accounting, where the cost of the acquisition is allocated on the basis of the estimated fair value of the assets acquired and the liabilities assumed. The excess of the purchase price over the fair value of identifiable assets acquired, net of liabilities assumed, results in the recognition of goodwill.
As of September 30, 2025, we had goodwill of $3.6 billion on the consolidated statement of financial condition, which included $2.6 billion as a result of the Sanford C. Bernstein Inc. (“Bernstein”) acquisition in 2000, $666.1 million as a result of the CarVal Investors L.P. ("CarVal") acquisition in 2022 and $291.9 million in regard to various smaller acquisitions.
Goodwill is tested annually, as of September 30, for impairment utilizing the market approach where the fair value of the reporting unit is based on its unadjusted market valuation (AB Units outstanding multiplied by AB Holding's Unit price) and adjusted market valuations assuming a control premium (when applicable). A goodwill impairment would be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The goodwill impairment test does not include a determination by management of whether a decline in fair value is temporary and it is important that management's determination of fair value reflect the impact of changing market conditions, including the severity and anticipated duration of any such changes.
As a part of our goodwill impairment evaluation, management uses the price of a publicly traded AB Holding Unit as a reasonable starting point for valuing an AB Unit because each represents the same fractional interest in our underlying business. Throughout the year, the carrying value of goodwill is also reviewed for impairment if certain events or changes in circumstances occur and trigger whether an interim impairment test may be required. Such changes in circumstances may include, but are not limited to, significant transactions including acquisitions or divestitures; a sustained decrease in the price of an AB Holding Unit or declines in AB’s market capitalization that would suggest that the fair value of the reporting unit is less than the carrying amount; significant and unanticipated declines in AB’s assets under management or revenues; and/or lower than expected earnings per unit. Any of these changes in circumstances could suggest the possibility that goodwill is impaired, but none of these events or circumstances by itself would indicate that it is more likely than not that goodwill is impaired. Instead, they are merely recognized as triggering events for the consideration of impairment and must be viewed in combination with any mitigating or positive factors. A holistic evaluation of all events since the most recent quantitative impairment test must be done to determine whether it is more likely than not that the reporting unit is impaired. As of September 30, 2025, the impairment test indicated that goodwill was not impaired.



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3. Revenue Recognition

Revenues for the three and nine months ended September 30, 2025 and 2024 consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(in thousands)
Subject to contracts with customers:
    Investment advisory and services fees
        Base fees$852,478 $813,623 $2,475,663 $2,341,879 
        Performance-based fees21,972 28,763 97,877 102,239 
    Bernstein research services (1)
— — — 96,222 
    Distribution revenues
        All-in-management fees90,754 87,396 266,124 247,500 
        12b-1 fees16,008 17,128 47,508 50,302 
        Other distribution fees103,662 84,692 294,179 230,009 
    Other revenues
        Shareholder servicing fees21,176 22,624 59,096 66,643 
JV related revenues (2)
9,242 13,522 27,589 26,499 
        Other2,932 3,473 10,044 10,930 
1,118,224 1,071,221 3,278,080 3,172,223 
Not subject to contracts with customers:
    Dividend and interest income, net of broker-dealer related interest expense20,741 17,726 58,049 60,697 
    Investment (losses) (2,721)(3,512)(31,084)(15,398)
    Other revenues903 54 1,616 61 
18,923 14,268 28,581 45,360 
Total net revenues$1,137,147 $1,085,489 $3,306,661 $3,217,583 
(1) Effective April 1, 2024, AB deconsolidated the Bernstein Research Services business.
(2) We maintain certain service level agreements and recognize revenues associated with these transactions in connection with our investment in the JVs.


4.    Long-term Incentive Compensation Plans

AB has several unfunded, non-qualified long-term incentive compensation plans, under which we grant awards of restricted units representing assignments of beneficial ownership of limited partnership interests in AB Holding (“AB Holding Units”) to employees, generally in the fourth quarter, and to members of the Board of Directors of the General Partner, who are not employed by our company or by any of our affiliates (“Eligible Directors”).

AB Holding Units are maintained in a consolidated rabbi trust either by purchasing AB Holding Units on the open market or by purchasing newly-issued AB Holding Units from AB Holding until delivering them or retiring them. In accordance with the Amended and Restated Agreement of Limited Partnership of AB (“AB Partnership Agreement”), when AB purchases newly-issued AB Holding Units from AB Holding, AB Holding is required to use the proceeds it receives from AB to purchase the equivalent number of newly-issued AB Units, thus increasing its percentage ownership interest in AB. AB Holding Units held in the consolidated rabbi trust are corporate assets in the name of the trust and are available to the general creditors of AB.

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Repurchases of AB Holding Units for the three and nine months ended September 30, 2025 and 2024 consisted of the following:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(in millions)
Total amount of AB Holding Units Purchased (1)
0.1 1.1 1.3 2.1 
Total Cash Paid for AB Holding Units Purchased (1)
$4.1 $38.6 $47.8 $71.7 
Open Market Purchases of AB Holding Units Purchased (1)
0.1 1.1 1.1 1.8 
Total Cash Paid for Open Market Purchases of AB Holding Units (1)
$3.9 $38.6 $42.3 $60.1 
(1)    Purchased on a trade date basis. The difference between open-market purchases and total amount of units purchased reflects the retention of AB Holding Units from employees to fulfill statutory tax withholding requirements at the time of delivery of long-term incentive compensation awards.

Purchases of AB Holding Units reflected on the condensed consolidated statements of cash flows are net of AB Holding Unit purchases by employees as part of a distribution reinvestment election.

Each quarter, we consider whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended ("Exchange Act"). A plan of this type allows a company to repurchase its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or because it possesses material non-public information. Each broker we select has the authority under the terms and limitations specified in the plan to repurchase AB Holding Units on our behalf. Repurchases are subject to regulations promulgated by the SEC as well as certain price, market volume and timing constraints specified in the plan. The plan adopted during the third quarter of 2025 expired at the close of business on October 22, 2025. We may adopt additional plans in the future to engage in open-market purchases of AB Holding Units for anticipated obligations under our incentive compensation award program and for other corporate purposes.

During the first nine months of 2025 and 2024, we awarded to employees and Eligible Directors 1.6 million and 1.2 million restricted AB Holding Unit awards, respectively. We use AB Holding Units repurchased during the applicable period and newly-issued AB Holding Units for these awards.


5.     Net Income per Unit

Net income per Unit is derived by reducing net income for the 1.0% general partnership interest and dividing the remaining 99.0% by the weighted average number of limited partnership units outstanding for each period. Diluted net income per Unit is equivalent to net income per Unit, as there are no outstanding instruments that have a dilutive effect.
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
(in thousands, except per unit amounts)
Net income attributable to AB Unitholders$259,263 $345,972 $690,529 $873,471 
Weighted average limited partnership Units outstanding 292,116 286,196 292,122 286,752 
Net income per AB Unit$0.88 $1.20 $2.34 $3.02 

6. Cash Distributions

AB is required to distribute all of its Available Cash Flow, as defined in the AB Partnership Agreement, to its Unitholders and to the General Partner. Available Cash Flow can be summarized as the cash flow received by AB from operations minus such amounts as the General Partner determines, in its sole discretion, should be retained by AB for use in its business, or plus such amounts as the General Partner determines, in its sole discretion, should be released from previously retained cash flow.
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Typically, Available Cash Flow has been the adjusted net income per Unit for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. In future periods, management anticipates that Available Cash Flow will be based on adjusted net income per Unit, unless management determines, with the concurrence of the Board of Directors, that one or more adjustments that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation.

On October 23, 2025, the General Partner declared a distribution of $0.94 per AB Unit, representing a distribution of Available Cash Flow for the three months ended September 30, 2025. The General Partner, as a result of its 1.0% general partnership interest, is entitled to receive 1.0% of each distribution. The distribution is payable on November 20, 2025 to holders of record on November 3, 2025.

7.     Cash and Securities Segregated Under Federal Regulations and Other Requirements

As of September 30, 2025 and December 31, 2024, $424.1 million and $499.2 million, respectively, of U.S. Treasury Bills were segregated in a special reserve bank custody account for the exclusive benefit of our brokerage customers under Rule 15c3-3 of the Exchange Act.

8.     Investments

Investments consist of:
 September 30,
2025		December 31,
2024
 (in thousands)
Equity securities:
    Long-term incentive compensation-related$30,787 $31,934 
    Seed capital 187,988 169,502 
    Other164 388 
Investments in limited partnership hedge funds:  
Long-term incentive compensation-related20,070 10,831 
Seed capital24,667 18,397 
Equity method investments:
  Joint ventures251,055 286,721 
  Other equity method investments3,323 — 
Time deposits6,562 6,100 
Other 11,988 11,331 
Total investments$536,604 $535,204 

Total investments related to long-term incentive compensation obligations of $50.9 million and $42.8 million as of September 30, 2025 and December 31, 2024, respectively, consist of company-sponsored mutual funds and hedge funds. For long-term incentive compensation awards granted before 2009, we typically made investments in company-sponsored mutual funds and hedge funds that were notionally elected by plan participants and maintained them (and continue to maintain them) in a consolidated rabbi trust or separate custodial account. The rabbi trust and custodial account enable us to hold such investments separate from our other assets for the purpose of settling our obligations to participants. The investments held in the rabbi trust and custodial account remain available to the general creditors of AB.

The underlying investments of hedge funds in which we invest include long and short positions in equity securities, fixed income securities (including various agency and non-agency asset-based securities), currencies, commodities and derivatives (including various swaps and forward contracts). These investments are valued at quoted market prices or, where quoted market prices are not available, are fair valued based on the pricing policies and procedures of the underlying funds.

We allocate seed capital to our investment teams to help develop new products and services for our clients. A portion of our seed capital trading investments are equity and fixed income products, primarily in the form of separately-managed account portfolios, U.S. mutual funds, Luxembourg funds, Japanese investment trust management funds or Delaware
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business trusts. We also may allocate seed capital to investments in private equity funds. Regarding our seed capital investments, the amounts above reflect those funds in which we are not the primary beneficiary of a VIE or hold a controlling financial interest in a VOE. See Note 14, Consolidated Company-Sponsored Investment Funds, for a description of the seed capital investments that we consolidate. As of September 30, 2025 and December 31, 2024, our total seed capital investments were $414.3 million and $294.7 million, respectively. Seed capital investments in unconsolidated company-sponsored investment funds are valued using published net asset values or non-published net asset values if they are not listed on an active exchange but have net asset values that are comparable to funds with published net asset values and have no redemption restrictions.

Equity method investments on the condensed consolidated statement of financial condition, including our investment in two joint ventures and a reinsurance sidecar, are accounted for under the equity method of accounting. AB owns a 66.7% majority interest in a North American JV ("NA JV") and a 49.0% interest in a joint venture outside of North America (and together the "JVs"). AB owns a 20.9% investment in Ruby RE, a reinsurance sidecar.

The portion of unrealized gains (losses) related to equity securities, as defined by ASC 321-10, held as of September 30, 2025 and 2024 were as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
 (in thousands)
Net gains recognized during the period$11,928 $8,321 $22,336 $20,365 
Less: net gains recognized during the period on equity securities sold during the period— 318 5,767 6,345 
Unrealized gains recognized during the period on equity securities held$11,928 $8,003 $16,569 $14,020 

9.     Derivative Instruments

See Note 14, Consolidated Company-Sponsored Investment Funds, for disclosure of derivative instruments held by our consolidated company-sponsored investment funds.

We enter various futures, forwards, options and swaps to economically hedge certain seed capital investments. Also, we have currency forwards that help us to economically hedge certain balance sheet exposures. In addition, our options desk trades long and short exchange-traded equity options. We do not hold any derivatives designated in a formal hedge relationship under ASC 815-10, Derivatives and Hedging.

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The notional value and fair value as of September 30, 2025 and December 31, 2024 for derivative instruments (excluding derivative instruments relating to our options desk trading activities discussed below) not designated as hedging instruments were as follows:
 Fair Value
 Notional ValueDerivative AssetsDerivative Liabilities
 (in thousands)
September 30, 2025:
Exchange-traded futures$193,619 $75 $1,568 
Currency forwards83,410 5,060 5,082 
Interest rate swaps7,540 83 72 
Credit default swaps375,539 744 9,870 
Total return swaps187,081 2,864 585 
Option swaps50,048 5,188 435 
Total derivatives$897,237 $14,014 $17,612 
December 31, 2024:
Exchange-traded futures$157,787 $2,835 $33 
Currency forwards27,368 4,881 4,656 
Interest rate swaps17,667 367 14 
Credit default swaps199,720 4,172 9,099 
Total return swaps216,468 663 1,087 
Option swaps50,459 8,023 55 
Total derivatives$669,469 $20,941 $14,944 

As of September 30, 2025 and December 31, 2024, the derivative assets and liabilities are included in both receivables and payables to brokers and dealers on our condensed consolidated statements of financial condition.

The gains and losses for derivative instruments for the three and nine months ended September 30, 2025 and 2024 recognized in investment gains (losses) in the condensed consolidated statements of income were as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
 (in thousands)
Exchange-traded futures$(3,782)$(5,443)$(7,415)$(7,893)
Currency forwards809 (460)(4,966)(105)
Interest rate swaps9 (1,298)(301)(873)
Credit default swaps(1,445)(920)(3,932)(1,840)
Total return swaps168 (5,295)(9,209)(9,233)
Option swaps(638)(1,869)(2,906)(1,921)
Net (losses) on derivative instruments$(4,879)$(15,285)$(28,729)$(21,865)

We may be exposed to credit-related losses in the event of non-performance by counterparties to derivative financial instruments. We minimize our counterparty exposure through a credit review and approval process. In addition, we have executed various collateral arrangements with counterparties to the over-the-counter derivative transactions that require both pledging and accepting collateral in the form of cash. As of September 30, 2025 and December 31, 2024, we held $8.2 million and $10.4 million, respectively, of cash collateral payable to trade counterparties. This obligation to return cash is reported in payables to brokers and dealers in our condensed consolidated statements of financial condition.

Although notional amount typically is utilized as the measure of volume in the derivatives market, it is not used as a measure of credit risk. Generally, the current credit exposure of our derivative contracts is limited to the net positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received. A derivative with positive value (a derivative asset) indicates existence of credit risk because the counterparty would owe us if the contract were closed. Alternatively, a derivative contract with negative
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value (a derivative liability) indicates we would owe money to the counterparty if the contract were closed. Generally, if there is more than one derivative transaction with a single counterparty, a master netting arrangement exists with respect to derivative transactions with that counterparty to provide for aggregate net settlement.

Our standardized contracts for over-the-counter derivative transactions, known as ISDA master agreements, provide for collateralization. As of September 30, 2025 and December 31, 2024, we delivered $11.0 million and $5.2 million, respectively, of cash collateral into brokerage accounts. We report this cash collateral in cash and cash equivalents in our condensed consolidated statement of financial condition.

10.     Offsetting Assets and Liabilities

See Note 14, Consolidated Company-Sponsored Investment Funds, for disclosure of offsetting assets and liabilities of our consolidated company-sponsored investment funds.

Offsetting of assets as of September 30, 2025 and December 31, 2024 was as follows:
 
 Gross Amounts of Recognized AssetsGross Amounts Offset in the Statement of Financial ConditionNet Amounts of Assets Presented in the Statement of Financial ConditionFinancial
Instruments Collateral		Cash Collateral
Received		Net
Amount
 (in thousands)
September 30, 2025:
Securities borrowed$12,767 $— $12,767 $(12,767)$— $— 
Derivatives$14,014 $— $14,014 $— $(8,152)$5,862 
December 31, 2024:      
Securities borrowed$1,144 $— $1,144 $(1,044)$— $100 
Derivatives$20,941 $— $20,941 $— $(10,357)$10,584 
Offsetting of liabilities as of September 30, 2025 and December 31, 2024 was as follows:
 Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the Statement of Financial ConditionNet Amounts of Liabilities Presented in the Statement of Financial ConditionFinancial
Instruments Collateral		Cash Collateral
Pledged		Net Amount
 (in thousands)
September 30, 2025:
Derivatives$17,612 $— $17,612 $— $(11,039)$6,573 
December 31, 2024:      
Derivatives$14,944 $— $14,944 $— $(5,188)$9,756 

Cash collateral, whether pledged or received on derivative instruments, is not considered material and, accordingly, is not disclosed by counterparty.
11.     Fair Value

See Note 14, Consolidated Company-Sponsored Investment Funds, for disclosure of fair value of our consolidated company-sponsored investment funds.

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Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The three broad levels of fair value hierarchy are as follows:

•    Level 1 – Quoted prices in active markets are available for identical assets or liabilities as of the reported date.

•    Level 2 – Quoted prices in markets that are not active or other pricing inputs that are either directly or indirectly observable as of the reported date.

•    Level 3 – Prices or valuation techniques that are both significant to the fair value measurement and unobservable as of the reported date. These financial instruments do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.
Assets and Liabilities Measured at Fair Value on a Recurring Basis

Valuation of our financial instruments by pricing observability levels as of September 30, 2025 and December 31, 2024 was as follows (in thousands):
 Level 1Level 2Level 3
NAV Expedient(1)
Total
September 30, 2025:
Money markets$159,958 $— $— $— $159,958 
Securities segregated (U.S. Treasury Bills)— 424,119 — — 424,119 
Derivatives 75 13,939 — — 14,014 
Equity securities172,654 43,885 124 2,276 218,939 
Other investments9,194 — — — 9,194 
Total assets measured at fair value$341,881 $481,943 $124 $2,276 $826,224 
Derivatives$1,569 $16,043 $— $— $17,612 
Contingent payment arrangements— — 8,562 — 8,562 
Total liabilities measured at fair value$1,569 $16,043 $8,562 $— $26,174 
December 31, 2024:
Money markets$146,781 $— $— $— $146,781 
Securities segregated (U.S. Treasury Bills)— 499,245 — — 499,245 
Derivatives 2,835 18,106 — — 20,941 
Equity securities193,766 5,921 121 2,016 201,824 
Other investments8,593 — — — 8,593 
Total assets measured at fair value$351,975 $523,272 $121 $2,016 $877,384 
Derivatives$33 $14,911 $— $— $14,944 
Contingent payment arrangements— — 9,385 — 9,385 
Total liabilities measured at fair value$33 $14,911 $9,385 $— $24,329 

(1) Investments measured at fair value using NAV (or its equivalent) as a practical expedient.

Other investments included in Level 1 of the fair value hierarchy include our investment in a mutual fund measured at fair value.
We provide below a description of the fair value methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy:

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•    Money markets: We invest excess cash in various money market funds that are valued based on quoted prices in active markets; these are included in Level 1 of the valuation hierarchy.

•    Treasury Bills: We hold U.S. Treasury Bills, which are primarily segregated in a special reserve bank custody account as required by Rule 15c3-3 of the Exchange Act. These securities are valued based on quoted yields in secondary markets and are included in Level 2 of the valuation hierarchy.

•    Equity securities: Our equity securities consist principally of company-sponsored mutual funds with NAVs and various separately-managed portfolios consisting primarily of equity and fixed income mutual funds with quoted prices in active markets, which are included in Level 1 of the valuation hierarchy. In addition, some securities are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.

•    Derivatives: We hold exchange-traded futures with counterparties that are included in Level 1 of the valuation hierarchy. In addition, we also hold currency forward contracts, interest rate swaps, credit default swaps, option swaps and total return swaps with counterparties that are valued based on observable inputs from recognized pricing vendors, which are included in Level 2 of the valuation hierarchy.

•    Contingent payment arrangements: Contingent payment arrangements relate to contingent payment liabilities associated with various acquisitions. At each reporting date, we estimate the fair values of the contingent consideration expected to be paid based upon probability-weighted AUM and revenue projections, using unobservable market data inputs, which are included in Level 3 of the valuation hierarchy.
During the nine months ended September 30, 2025 there were no transfers between Level 2 and Level 3 securities.
The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as equity securities, is as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
 (in thousands)
Balance as of beginning of period$121 $116 $121 $118 
Unrealized gains (losses), net3 22 3 20 
Balance as of end of period$124 $138 $124 $138 

Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the condensed consolidated statements of income.
Our acquisitions may include contingent consideration arrangements as part of the purchase price. The change in carrying value associated with Level 3 financial instruments carried at fair value, classified as contingent payment arrangements, is as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
 (in thousands)
Balance as of beginning of period$8,520 $255,166 $9,385 $252,690 
Accretion42 2,558 148 7,674 
Change in estimate — (128,505)— (128,505)
Payments— — (971)(2,640)
Balance as of end of period$8,562 $129,219 $8,562 $129,219 

During the third quarter of 2024, we remeasured the contingent liability associated with our acquisition of AB Carval in 2022 and recorded a gain reflected within contingent payment arrangements in the condensed consolidated statements of income of $128.5 million. The fair value of the contingent consideration was remeasured using forecasted future cash flows
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using the Real Options valuation methodology. The most significant assumptions used to remeasure the liability were expected revenue growth rates and discount rates.

As of September 30, 2025, the expected revenue growth rates ranged from 2.0% to 13.3%, with a weighted average of 6.8%, calculated using cumulative revenues and range of revenue growth rates and a discount rate of 1.9%. As of September 30, 2024, including the CarVal contingent remeasurement, the expected revenue growth rates ranged from (2.2)% to 29.3%, with a weighted average of 8.6%, calculated using cumulative revenues and a range of revenue growth rates. The discount rates ranged from 1.9% to 10.4%, with a weighted average of 5.1%, calculated using total contingent liabilities and range of discount rates.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

We did not have any material assets or liabilities that were measured at fair value for impairment on a nonrecurring basis during the nine months ended September 30, 2025 or during the year ended December 31, 2024.


12.     Commitments and Contingencies

Legal Proceedings

For significant litigation matters, we assess the likelihood of a negative outcome. If a negative outcome is probable and the loss can be reasonably estimated, we record an estimated loss. If a negative outcome is reasonably possible and we can estimate the potential loss or range of loss, or if a negative outcome is probable and we can estimate the potential loss or range of loss beyond any amounts already accrued, we disclose this information. However, predicting outcomes or estimating losses is often challenging due to litigation uncertainties, especially in early stages or complex cases. In such instances, we disclose our inability to predict the outcome or estimate losses.

AB may face regulatory inquiries, administrative proceedings, and litigation, some alleging significant damages. While it is possible we could incur losses from these matters, we cannot currently estimate such losses or their range. Management, after consulting with legal counsel, believes that the outcome of any individual or combined matters will not materially affect our operations, financial condition, or liquidity. However, due to inherent uncertainties, future developments could potentially have a material adverse effect on our results, financial condition, or liquidity in future reporting periods.

Guarantees

In 2024, AB and Societe General ("SocGen") completed a transaction forming two joint ventures, one outside of North America and one within North America ("NA JV"). In connection with the transaction, Bernstein Institutional Services LLC (“BIS”), the U.S. broker-dealer subsidiary of the NA JV, entered into a credit facility agreement with SocGen, as lender, providing for up to $60.0 million of working capital. As a condition of the credit facility and until SocGen’s ownership exceeds 50% of NA JV, AB will provide a limited guarantee under which AB will guarantee up to its percentage ownership, currently 66.7%, of any unpaid obligations of BIS. As of September 30, 2025, there were no unpaid obligations under this facility requiring a guarantee by AB. Effective February 28, 2025, the agreement was amended and the original maturity date of April 1, 2025 was extended to March 31, 2026. The current commitment under the facility has also been reduced from $60.0 million to $30.0 million. There were no other material amendments to the credit facility.

In addition, AB will indemnify SocGen Canada ("SG Canada") for certain obligations and liabilities in relation to Sanford C. Bernstein Canada ("SCB Canada") until such time as SocGen exceeds 50% ownership of NA JV (the “Canadian Regulatory Guarantee”). Under the terms of the Canadian Regulatory Guarantee, SG Canada must guarantee the customer liabilities of SCB Canada to the full extent of its regulatory capital which fluctuates based upon business activity. AB has agreed to indemnify SG Canada for 66.7% of any amounts paid by SG Canada under the Canadian Regulatory Guarantee. As of September 30, 2025, there were no unpaid obligations requiring a guarantee by AB.

Commitments

During the fourth quarter of 2024, we entered into a non-exclusive partnership with Reinsurance Group of America, Incorporated (“RGA”) under which we committed to invest $100.0 million in a reinsurance sidecar vehicle sponsored by RGA and focused on the U.S. asset-intensive reinsurance market. AB intends to manage private alternative assets for RGA’s general account as part of a separate transaction. As of September 30, 2025, we have funded $0.1 million of this commitment.
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During the third quarter of 2025, we entered into a non-exclusive partnership with Carlyle Investment Management L.L.C. (the "Asset Management Sponsor") and Fortitude International Ltd. (the "Insurance Sponsor/and or their respective affiliates"), and together (the "Sponsors") under which we committed to invest $100.0 million in a reinsurance sidecar vehicle Carlyle FCA Re, L.P. (the "FCA Re Sidecar'"). The FCA Re Sidecar is focused on reinsuring Asian liabilities. AB intends to manage private alternative assets for the Insurance Sponsor as part of a separate transaction. As of September 30, 2025, we have not funded any of this commitment.

Joint Ventures

Effective April 1, 2024, AB and SocGen formed a global joint venture with two joint venture holding companies, one outside of North America and one within North America ("NA JV", and together the "JVs"). AB owns a 66.7% majority interest in the NA JV while SocGen owns a 51% majority interest in the joint venture outside of North America.

At the close of the transaction, SocGen paid AB $304.0 million in cash which included $102.6 million of prepaid consideration for an option, exercisable by AB during the five years following the close of the transaction, that would result in SocGen having a 51% ownership of the NA JV (the "AB option"). AB's option may only be exercised upon receipt of appropriate regulatory approvals. Under the terms of the transaction and assuming AB exercises its option as noted above, SocGen would increase its ownership to a majority interest of the NA JV, without further consideration payable.

During the third quarter of 2025, appropriate regulatory approval for SocGen to increase its ownership to 51% was received and AB has issued formal notice of its intent to exercise the AB Option. AB will deliver the additional equity once the remaining AB option conditions have been fulfilled by the parties, at a future date, expected within the first half of 2026. Upon delivery of the additional equity, SG will own a majority interest in the NA JV. Until such time the equity is delivered, AB will maintain a 66.7% interest in the NA JV and a 49% interest in the JV outside of North America.


13.     Leases

We lease office space, furniture and office equipment under various operating and financing leases. Our current leases have initial lease terms of one year to 20 years, some of which include options to extend the leases for up to five years, and some of which include options to terminate the leases within one year.
Leases included in the condensed consolidated statement of financial condition as of September 30, 2025 and December 31, 2024 were as follows:
ClassificationSeptember 30, 2025December 31, 2024
(in thousands)
Operating Leases
Operating lease right-of-use assetsRight-of-use assets$447,915 $441,662 
Operating lease liabilitiesLease liabilities510,558 504,171 
Finance Leases
Property and equipment, grossRight-of-use assets21,222 19,548 
Amortization of right-of-use assetsRight-of-use assets(13,591)(11,333)
Property and equipment, net7,631 8,215 
Finance lease liabilities Lease liabilities7,982 8,444 
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The components of lease expense included in the condensed consolidated statement of income as of September 30, 2025 and September 30, 2024 were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
Classification2025202420252024
(in thousands)
Operating lease costGeneral and administrative$16,673 $32,154 $48,911 $87,674 
Financing lease cost:
Amortization of right-of-use assetsGeneral and administrative1,230 1,141 3,871 3,240 
Interest on lease liabilitiesInterest expense90 85 298 245 
Total finance lease cost1,320 1,226 4,169 3,485 
Variable lease cost (1)
General and administrative3,738 12,563 9,515 32,453 
Sublease incomeGeneral and administrative(716)(7,938)(1,981)(24,407)
Net lease cost$21,015 $38,005 $60,614 $99,205 
(1) Variable lease expense includes operating expenses, real estate taxes and employee parking.
The sub-lease income represents all revenues received from sub-tenants. It is primarily fixed base rental payments combined with variable reimbursements such as operating expenses, real estate taxes and employee parking. Sub-tenant income related to base rent is recorded on a straight-line basis. 
Maturities of lease liabilities were as follows:
Operating LeasesFinancing LeasesTotal
Year ending December 31,(in thousands)
2025 (excluding the nine months ended September 30, 2025)
$12,918 $1,212 $14,130 
202664,484 4,120 68,604 
202763,240 2,075 65,315 
202856,054 753 56,807 
202952,309 228 52,537 
Thereafter460,129 — 460,129 
Total lease payments709,134 8,388 717,522 
Less interest(198,576)(406)
Present value of lease liabilities$510,558 $7,982 
Lease term and discount rate:
Weighted average remaining lease term (years):
Operating leases13.50
Finance leases2.18
Weighted average discount rate:
Operating leases4.51 %
Finance leases4.39 %
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Supplemental non-cash activity related to leases was as follows:
Nine Months Ended September 30,
20252024
(in thousands)
Right-of-use assets obtained in exchange for lease obligations(1):
Operating leases29,984 214,349 
Finance leases1,661 — 
(1) Represents non-cash activity and, accordingly, is not reflected in the condensed consolidated statement of cash flows.
14. Consolidated Company-Sponsored Investment Funds

We regularly provide seed capital to new company-sponsored investment funds. As such, we may consolidate or de-consolidate a variety of company-sponsored investment funds each quarter. Due to the similarity of risks related to our involvement with each company-sponsored investment fund, disclosures required under the VIE model are aggregated, such as disclosures regarding the carrying amount and classification of assets.
We are not required to provide financial support to company-sponsored investment funds, and only the assets of such funds are available to settle each fund's own liabilities. Our exposure to loss regarding consolidated company-sponsored investment funds is limited to our investment in, and our management fee earned from, such funds. Equity and debt holders of such funds have no recourse to AB’s assets or to the general credit of AB.
The balances of consolidated VIEs and VOEs included in our condensed consolidated statements of financial condition were as follows:
September 30, 2025December 31, 2024
(in thousands)
VIEsVOEsTotalVIEsVOEsTotal
Cash and cash equivalents$12,027 $38 $12,065 $1,671 $318 $1,989 
Investments320,922 32,721 353,643 82,027 58,765 140,792 
Other assets29,235 708 29,943 1,317 13,484 14,801 
Total assets$362,184 $33,467 $395,651 $85,015 $72,567 $157,582 
Liabilities$33,488 $557 $34,045 $345 $1,371 $1,716 
Redeemable non-controlling interest152,494 7,179 159,673 31,670 16,819 48,489 
Partners' capital attributable to AB Unitholders176,202 25,731 201,933 53,000 54,377 107,377 
Total liabilities, redeemable non-controlling interest and partners' capital$362,184 $33,467 $395,651 $85,015 $72,567 $157,582 
During the nine-month period ended September 30, 2025, we deconsolidated four funds in which we had a seed investment of approximately $53.9 million as of December 31, 2024, due to no longer having a controlling financial interest.

Changes in the redeemable non-controlling interest balance during the nine-month period ended September 30, 2025 are as follows (in thousands):
Redeemable non-controlling interest as of December 31, 2024
$48,489 
Deconsolidated funds(12,857)
Changes in third-party seed investments in consolidated funds124,041 
Redeemable non-controlling interest as of September 30, 2025
$159,673 

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Fair Value
Cash and cash equivalents include cash on hand, demand deposits, overnight commercial paper and highly liquid investments with original maturities of three months or less. Due to the short-term nature of these instruments, the recorded value has been determined to approximate fair value.

Valuation of consolidated company-sponsored investment funds' financial instruments by pricing observability levels as of September 30, 2025 and December 31, 2024 was as follows (in thousands):
 Level 1Level 2Level 3Total
September 30, 2025:
  Investments - VIEs$35,276 $253,736 $31,910 $320,922 
  Investments - VOEs6,269 26,452 — 32,721 
  Derivatives - VIEs1,183 18,728 — 19,911 
  Derivatives - VOEs39 — — 39 
Total assets measured at fair value$42,767 $298,916 $31,910 $373,593 
Derivatives - VIEs$1,127 $18,559 $— $19,686 
Total liabilities measured at fair value$1,127 $18,559 $— $19,686 
December 31, 2024:
  Investments - VIEs$15,240 $66,787 $— $82,027 
  Investments - VOEs249 58,516 — 58,765 
  Derivatives - VIEs48 53 — 101 
  Derivatives - VOEs— 11,483 — 11,483 
Total assets measured at fair value$15,537 $136,839 $— $152,376 
Derivatives - VIEs$72 $13 $— $85 
Total liabilities measured at fair value$72 $13 $— $85 

See Note 11 for a description of the fair value methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy.

The change in carrying value associated with Level 3 financial instruments carried at fair value within consolidated company-sponsored investment funds was as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
 (in thousands)
Balance as of beginning of period$— $— $— $— 
Newly consolidated funds:
Consumer loan securities27,347 — 27,347 — 
Aviation securities4,563 — 4,563 — 
Transfers in— 73 — 73 
Unrealized gains, net— 20 — 20 
Balance as of end of period$31,910 $93 $31,910 $93 
Transfers into and out of all levels of the fair value hierarchy are reflected at end-of-period fair values. Realized and unrealized gains and losses on Level 3 financial instruments are recorded in investment gains and losses in the condensed consolidated statements of income.

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Derivative Instruments
As of September 30, 2025 and December 31, 2024, the VIEs held $0.2 million (net) and zero, respectively, of futures, forwards and swaps within their portfolios. For the three and nine months ended September 30, 2025, we recognized $0.1 million of gains and $0.3 million of losses, respectively, on these derivatives. For the three and nine months ended September 30, 2024, we recognized $0.7 million of gains and $0.2 million of losses, respectively, on these derivatives. These gains and losses are recognized in investment gains (losses) in the condensed consolidated statements of income.
As of September 30, 2025 and December 31, 2024, the VIEs held no cash collateral payable to trade counterparties. This obligation to return cash is reported in the liabilities of consolidated company-sponsored investment funds in our condensed consolidated statements of financial condition.
As of September 30, 2025 and December 31, 2024, the VIEs delivered $0.4 million and $0.3 million, respectively, of cash collateral into brokerage accounts. The VIEs report this cash collateral in the consolidated company-sponsored investment funds cash and cash equivalents in our condensed consolidated statements of financial condition.
As of September 30, 2025 and December 31, 2024, the VOEs held $39 thousand and $11.5 million futures, forwards, options or swaps within their portfolios. For the three and nine months ended September 30, 2025 and September 30, 2024, we recognized no gains or losses on these derivatives. These gains and losses are recognized in investment gains (losses) in the condensed statements of income.
As of September 30, 2025 and December 31, 2024, the VOEs held no cash collateral payable to trade counterparties.
As of September 30, 2025 and December 31, 2024, the VOEs delivered no cash collateral in brokerage accounts.
Offsetting Assets and Liabilities
Offsetting of derivative assets of consolidated company-sponsored investment funds as of September 30, 2025 and December 31, 2024 was as follows:
 
 Gross Amounts of Recognized AssetsGross Amounts Offset in the Statement of Financial ConditionNet Amounts of Assets Presented in the Statement of Financial ConditionFinancial
Instruments Collateral		Cash Collateral
Received		Net
Amount
 (in thousands)
September 30, 2025:
Derivatives - VIEs$19,911 $— $19,911 $— $(13)$19,898 
Derivatives - VOEs$39 $— $39 $— $— $39 
December 31, 2024:     
Derivatives - VIEs$101 $— $101 $— $(2)$99 
Derivatives - VOEs11,483 — 11,483 — — 11,483 

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Offsetting of derivative liabilities of consolidated company-sponsored investment funds as of September 30, 2025 and December 31, 2024 was as follows:
 Gross Amounts of Recognized LiabilitiesGross Amounts Offset in the Statement of Financial ConditionNet Amounts of Liabilities Presented in the Statement of Financial ConditionFinancial
Instruments Collateral		Cash Collateral
Pledged		Net Amount
 (in thousands)
September 30, 2025:
Derivatives - VIEs$19,686 $— $19,686 $— $(404)$19,282 
December 31, 2024:     
Derivatives - VIEs$85 $— $85 $— $(85)$— 

Cash collateral, whether pledged or received on derivative instruments, is not considered material and, accordingly, is not disclosed by counterparty.
Non-Consolidated VIEs
As of September 30, 2025, the net assets of company-sponsored investment products that are non-consolidated VIEs are approximately $47.5 billion. Our maximum risk of loss is our investment of $37.5 million in these VIEs and our advisory fee receivables from these VIEs is $90.7 million. As of December 31, 2024, the net assets of company-sponsored investment products that are non-consolidated VIEs was approximately $46.9 billion. Our maximum risk of loss is our investment of $17.3 million in these VIEs and our advisory fees receivable from these VIEs was $115.2 million.
15.     Units Outstanding

Changes in AB Units outstanding during the nine-month period ended September 30, 2025 were as follows:
 
Outstanding as of December 31, 2024292,107,907 
Units issued (1)
20,979,780 
Units retired (1) (2)
(20,869,292)
Outstanding as of September 30, 2025292,218,395 
(1) Includes 19,682,946 issued and retired AB Units in connection with the Amended Exchange Agreement entered into with EQH on July 10, 2025.
(2) During the nine months ended September 30, 2025, we purchased 35,380 AB Units in private transactions and retired them.

16.     Debt

Credit Facility
AB has an $800.0 million committed, unsecured senior revolving credit facility (the “Credit Facility”) with a group of commercial banks and other lenders. The Credit Facility was amended and restated as of August 5, 2025, extending the maturity date to August 5, 2030 and removing Sanford C. Bernstein & Co., LLC ("SCB LLC") as a co-borrower. There were no other significant changes included in the amendment. The Credit Facility provides for possible increases in the principal amount by up to an aggregate incremental amount of $200.0 million; any such increase is subject to the consent of the affected lenders. The Credit Facility is available for AB business purposes, including the support of AB’s commercial paper program. Management may draw on the Credit Facility from time to time.

The Credit Facility contains affirmative, negative and financial covenants, which are customary for facilities of this type, including restrictions on dispositions of assets, restrictions on liens, a minimum interest coverage ratio and a maximum leverage ratio. As of September 30, 2025, we were in compliance with these covenants. The Credit Facility also includes customary events of default (with customary grace periods, as applicable), including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or lender’s commitments may be terminated. Also, under such provisions, upon the occurrence of certain insolvency- or bankruptcy-related events of
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default, all amounts payable under the Credit Facility would automatically become immediately due and payable, and the lender’s commitments automatically would terminate.

Amounts under the Credit Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility. Voluntary prepayments and commitment reductions requested by us are permitted at any time without a fee (other than customary breakage costs relating to the prepayment of any drawn loans) upon proper notice and subject to a minimum dollar requirement. Borrowings under the Credit Facility bear interest at a rate per annum, which will be, at our option, a rate equal to an applicable margin, which is subject to adjustment based on the credit ratings of AB, plus one of the following indices: a term Secured Overnight Financial Rate; a Prime rate; or the Federal Funds rate.

As of September 30, 2025 and December 31, 2024, we had no amounts outstanding under the Credit Facility. Furthermore, during the first nine months of 2025 and the full year 2024, we did not draw upon the Credit Facility.

EQH Facility
AB also has a $900.0 million committed, unsecured senior credit facility (“EQH Facility”) with EQH. The EQH Facility matures on August 31, 2029 and is available for AB's general business purposes. Borrowings under the EQH Facility generally bear interest at a rate per annum based on prevailing overnight commercial paper rates.

The EQH Facility contains affirmative, negative and financial covenants which are substantially similar to those in AB’s committed bank facilities. As of September 30, 2025, we were in compliance with these covenants. The EQH Facility also includes customary events of default substantially similar to those in AB’s committed bank facilities, including provisions under which, upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lender’s commitment may be terminated.

Amounts under the EQH Facility may be borrowed, repaid and re-borrowed by us from time to time until the maturity of the facility. AB or EQH may reduce or terminate the commitment at any time without penalty upon proper notice. EQH also may terminate the facility immediately upon a change of control of our general partner.

As of September 30, 2025 and December 31, 2024, AB had $465.0 million and $710.0 million outstanding under the EQH Facility, with interest rates of approximately 4.0% and 4.3%, respectively. Average daily borrowings on the EQH Facility for the first nine months of 2025 and the full year 2024 were $411.7 million and $494.2 million, respectively, with weighted average interest rates of approximately 4.3% and 5.2%, respectively.

EQH Uncommitted Facility
In addition to the EQH Facility, AB has a $300.0 million uncommitted, unsecured senior credit facility (“EQH Uncommitted Facility”) with EQH. The EQH Uncommitted Facility matures on August 31, 2029 and is available for AB's general business purposes. Borrowings under the EQH Uncommitted Facility generally bear interest at a rate per annum based on prevailing overnight commercial paper rates. The EQH Uncommitted Facility contains affirmative, negative and financial covenants which are substantially similar to those in the EQH Facility. As of September 30, 2025, we were in compliance with these covenants. As of September 30, 2025 and December 31, 2024 we had no amounts outstanding on the EQH Uncommitted Facility. During the first nine months of 2025 and full year 2024, we did not draw upon the EQH Uncommitted Facility.

Commercial Paper
As of both September 30, 2025 and December 31, 2024 we had no commercial paper outstanding. The commercial paper is short term in nature, and as such, recorded value is estimated to approximate fair value (and considered a Level 2 security in the fair value hierarchy). Average daily borrowings of commercial paper during the first nine months of 2025 and full year 2024 were $212.7 million and $268.2 million, respectively, with weighted average interest rates of approximately 4.5% and 5.4%, respectively.

SCB Lines of Credit
SCB LLC has three uncommitted lines of credit with three financial institutions. Two of these lines of credit permit us to borrow up to an aggregate of approximately $150.0 million, with AB named as an additional borrower, while the other line has no stated limit. AB has agreed to guarantee the obligations on SCB LLC under these lines of credit. As of September 30, 2025 and December 31, 2024, SCB LLC had no outstanding balance on these lines of credit. Average daily borrowings on these lines of credit during the first nine months of 2025 and full year 2024 were $0.5 million and $0.6 million, respectively, with weighted average interest rates of approximately 7.4% and 8.5%, respectively.

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17. Business Segment Information

Management has assessed the requirements of ASC 280, Segment Reporting, and determined that, because we utilize a consolidated approach to assess performance and allocate resources, we have only one operating segment. We provide diversified investment management, research and related services globally to a broad range of clients through our three distribution channels: Institutions, Retail and Private Wealth Management.

The Chief Operating Decision Maker ("CODM") is the Chief Executive Officer of AB. The CODM evaluates the reported measure of segment profit or loss in assessing segment performance and deciding how to allocate resources. Significant segment expenses are part of the CODM review and are critically important to understand the level of profitability and overall performance of the company. This assessment will determine the way in which the CODM allocates resources to our respective business operations.

Measurement of Segment Profit or Loss and How the CODM Uses the Reported Measure

The CODM regularly receives financial information and management reports that are prepared on a consolidated basis. When assessing profitability, allocating resources and evaluating the underlying performance of our business, the CODM uses condensed consolidated net income as reported on the condensed consolidated statements of income. In applying the requirements under ASC 280, the company has identified significant segment expenses and other segment items related to our one operating segment. The significant expenses considered by the CODM in evaluating the performance of our business are consistent with the financial information included on the company's condensed consolidated statements of income. The measurement of assets as evaluated by the CODM is reported as "Total assets" on the condensed consolidated statements of financial condition. As an additional measure of segment profit or loss, the CODM considers certain adjustments to condensed consolidated net income. While management uses these additional adjusted metrics in assessing and allocating resources to the business, management recognizes that US GAAP principles are the basis of our performance. The accounting policies of our one operating segment are described in Note 2, Significant Accounting Policies.

Enterprise-wide disclosures as of and for the three and nine months ended September 30, 2025 and 2024 were as follows:

Services
Net revenues derived from our investment management, research and related services for the three and nine months ended September 30, 2025 and 2024 were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(in thousands)
Institutions(1)
$161,090 $167,376 $496,113 $483,428 
Retail(1)
631,769 593,323 1,834,917 1,696,171 
Private Wealth Management(1)
313,191 293,527 909,416 858,973 
Bernstein Research Services (2)
— — — 96,222 
Other46,300 52,477 114,597 149,532 
Total revenues1,152,350 1,106,703 3,355,043 3,284,326 
Less: Broker-dealer related Interest expense15,203 21,214 48,382 66,743 
Net revenues$1,137,147 $1,085,489 $3,306,661 $3,217,583 
(1) Institutions, Retail and Private Wealth management revenues by channel include investment advisory base fees, performance-based fees, distribution revenues and shareholder servicing fees by channel.
(2) Effective April 1, 2024, AB deconsolidated the Bernstein Research Services business.
Our AllianceBernstein U.S. Growth Stock, an open-end fund incorporated in Japan, generated approximately 8% of our investment advisory and service fees for the three and nine months ended September 30, 2025 and 13% and 12% of our net revenues for the three and nine months ended September 30, 2025, respectively. U.S. Growth Stock generated approximately 7% of our investment advisory and service fees or the three and nine months ended September 30, 2024 and 11% and 10% of our net revenues for the three and nine months ended September 30, 2024, respectively.

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Geographic Information
Net revenues related to our U.S. and international operations, for the three and nine months ended September 30, 2025 and 2024, were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
(in thousands)
Net revenues:
United States$662,818 $635,390 $1,929,406 $1,922,898 
International:
          Luxembourg268,907 264,543 788,140 770,414 
          Japan152,549 129,926 434,553 352,317 
Other International 52,873 55,630 154,562 171,954 
     Total International474,329 450,099 1,377,255 1,294,685 
Total $1,137,147 $1,085,489 $3,306,661 $3,217,583 
Long-lived assets related to our U.S. and international operations, as of September 30, 2025 and December 31, 2024, were as follows:
September 30, 2025December 31, 2024
(in thousands)
Long-lived assets:
United States$4,142,891 $4,187,885 
International54,652 57,140 
Total$4,197,543 $4,245,025 

Major Customers

No single customer or individual client accounted for more than 10% of our total revenues for the three and nine months ended September 30, 2025 and 2024.

18. Qualified Employee Benefit Plans

We maintained a qualified, noncontributory, defined benefit retirement plan (the “Retirement Plan”) covering current and former employees who were employed by AB in the United States prior to October 2, 2000. During 2024, the Compensation Committee of the AB Board of Directors approved the termination of the Retirement Plan, effective May 22, 2024. We began the process of settling benefits with vested participants and all lump sum disbursements elected by plan participants were distributed in December 2024 in the amount of $35.0 million. The remaining retirement plan participants who did not elect a lump sum disbursement elected to roll over their benefit to a group annuity contract from a qualified insurance company to administer all future payments. During the nine months ended September 30, 2025, we settled all future obligations under the Retirement Plan and transferred the remaining benefit obligations to a qualified third party insurance provider under a group annuity contract. The total annuity premium transferred was $59.4 million.

Following the transfer related to the annuity purchase, the plans funded status was in a deficit and the company funded an additional $1.7 million to cover all remaining obligations. As a result of the settlement we recognized an initial non-cash settlement charge of approximately $20.8 million related to Retirement Plan losses and the reclassification from accumulated other comprehensive loss to general and administrative expenses in the condensed consolidated statements of income. During the nine months ended September 30, 2025, we recognized an adjustment of $3.1 million due to further reconciliation and true up activities. The final settlement charge, net of true up amounts, was $17.7 million for the nine months ended September 30, 2025.
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Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview
Our total assets under management (“AUM”) as of September 30, 2025 were $860.1 billion, up $31.0 billion, or 3.7%, compared to June 30, 2025, and up $54.2 billion, or 6.7%, compared to September 30, 2024. During the third quarter of 2025 AUM increased due to market appreciation of $33.3 billion, offset by net outflows of $2.3 billion (Institutional net outflows of $1.8 billion and Retail net outflows of $1.7 billion were offset by Private Wealth net inflows of $1.2 billion).

Institutional AUM increased $11.4 billion, or 3.4%, to $351.4 billion during the third quarter of 2025, due to market appreciation of $13.2 billion, offset by net outflows of $1.8 billion. Gross sales increased sequentially from $3.7 billion during the second quarter of 2025 to $14.0 billion during the third quarter of 2025. Redemptions and terminations decreased sequentially from $3.7 billion to $2.8 billion.     

Retail AUM increased $11.5 billion, or 3.3%, to $356.2 billion during the third quarter of 2025, due to market appreciation of $13.2 billion, offset by net outflows of $1.7 billion. Gross sales increased sequentially from $19.4 billion during the second quarter of 2025 to $22.6 billion during the third quarter of 2025. Redemptions and terminations decreased sequentially from $21.8 billion to $20.4 billion.

Private Wealth AUM increased $8.1 billion, or 5.6%, to $152.5 billion during the third quarter of 2025, due to market appreciation of $6.9 billion and net inflows of $1.2 billion. Gross sales increased sequentially from $4.8 billion during the second quarter of 2025 to $5.8 billion during the third quarter of 2025. Redemptions and terminations decreased sequentially from $5.2 billion to $4.6 billion.

Net revenues of $1.1 billion for the third quarter of 2025 increased $51.7 million, or 4.8%, compared to the third quarter of 2024. The increase was primarily due to higher investment advisory base fees of $38.9 million, higher distribution revenues of $21.2 million and higher net dividend and interest revenues of $3.0 million, partially offset by lower performance-based fees of $6.8 million and lower other revenues of $5.4 million.

Operating expenses for the third quarter of 2025 increased $133.5 million, or 18.5%, to $853.7 million from $720.2 million in the third quarter of 2024. The increase was primarily due to a prior period gain of $128.5 million related to a fair value remeasurement of the contingent payment liability associated with our acquisition of AB CarVal in 2022, higher employee compensation and benefits expense of $25.9 million and higher promotion and servicing expense of $20.7 million, partially offset by lower general and administrative ("G&A") expense of $37.6 million and lower interest on borrowings of $1.3 million.

Operating income decreased $81.8 million, or 22.4%, to $283.5 million from $365.3 million in the third quarter of 2024 and our operating margin decreased to 24.3% in the third quarter of 2025 from 33.2% in the third quarter of 2024.

Market Environment

U.S. Equities
U.S. equity markets delivered strong returns in the third quarter of 2025, benefitting from resilient consumer spending, benign inflation readings and strong GDP growth. Earnings momentum also supported the equity rally, with consensus estimates indicating a year-over-year earnings growth of approximately 7–8% for the S&P 500 in the third quarter of 2025. The S&P 500 returned 8.1% during the current quarter, reaching record highs. Market breadth improved notably, with small-cap stocks outperforming large-caps, driving 12.4% returns for the Russell 2000 in the current quarter. The rally was led by the information technology and communication services sectors while sectors like energy and utilities lagged, constrained by volatile commodity prices and margin pressure. While AI-levered companies continued to drive outsized gains, the strength in small- and mid-cap segments lent confidence in broader participation.

Global and Non-U.S. Equities
Eurozone equities maintained their positive momentum as economic data stabilized and fiscal policy remained supportive with the MSCI European Economic and Monetary Union index returning 4.3% (gross, Euro terms) during the third quarter of 2025. U.K. equities also recorded strong gains, with the MSCI U.K. returning 7.8% (gross U.K. terms) as a weaker British pound aided companies with international operations. Japanese equities saw strong performance, with the TOPIX Index returning 11.4%, supported by improving corporate earnings outlook and yen weakness that boosted exporters. Emerging market equities had a strong quarter with the MSCI Emerging Markets index generating 11.0% returns (gross, USD terms), driven by a strong rally in Chinese equities following additional fiscal stimulus, liquidity injections, and trade talk progression between the U.S. and China.

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Global Bonds
Government bonds showed mixed performance in the third quarter of 2025, with U.S. Treasury yields decreasing, while U.K., German, and Japanese yields increased. In the U.S., the Federal Reserve ("the Fed") implemented a well-anticipated 25 basis point policy rate cut in September, its first cut of the year, citing signs of a slowing labor market and softer job data. The Fed's updated forecasts from the September Summary of Economic Projections indicated a more dovish outlook, with expectations of slightly lower GDP growth and inflation trending towards target. In contrast, eurozone and Japanese sovereign bonds fell, driven by political turmoil and increased fiscal spending.

Credit markets performed well, with investment-grade corporates tightening spreads, while high-yield bonds and emerging-market debt saw strong returns driven by improved risk sentiment. Globally, sovereign and corporate bonds benefited from the decline in yields, although inflation and fiscal worries in certain regions limited overall returns. In the U.S., core bonds advanced, with the Bloomberg U.S. Aggregate Bond Index returning 2.0% over the third quarter.

Relationship with EQH and its Subsidiaries

EQH (our parent company) and its subsidiaries are our largest client. EQH is collaborating with AB in order to improve the risk-adjusted yield for the General Accounts of EQH's insurance subsidiaries by investing additional assets at AB, including the utilization of AB's higher-fee, longer-duration alternative offerings. During the second quarter of 2023, Equitable Financial Life Insurance Company, a subsidiary of EQH ("Equitable Financial"), committed to an additional $10 billion in permanent capital to build out AB's private illiquid offerings, including private alternatives and private placements, deployment of which is approximately 70% complete. The initial $10 billion commitment from 2021 has been fully deployed. We expect this anticipated capital from EQH's insurance subsidiaries will continue to accelerate both organic and inorganic growth in our private alternatives business, allowing us to continue to deliver for our clients, employees, unitholders and other stakeholders. For example, included in the initial $10 billion commitment by EQH is $750 million in capital deployed through AB CarVal.

Permanent capital means investment capital of indefinite duration, for which commitments may be withdrawn under certain conditions. Such conditions primarily include potential regulatory restrictions, lacking sufficient liquidity to fund the capital commitments to AB and AB's inability to identify attractive investment opportunities which align with the investment strategy. Although EQH’s insurance subsidiaries have indicated their intention over time to provide this investment capital to AB, they have no binding commitment to do so. While the withdrawal of their commitment could potentially slow down our introduction of certain products, the impact to our overall operations would not be material.

Assets Under Management

Assets under management by distribution channel are as follows:
 As of September 30,
 20252024$ Change% Change
 (in billions)
Institutions$351.4 $335.2 $16.2 4.8 %
Retail356.2 334.5 21.7 6.5 
Private Wealth152.5 136.2 16.3 11.9 
Total$860.1 $805.9 $54.2 6.7 %

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Assets under management by investment service are as follows:
 As of September 30,
 20252024$ Change% Change
 (in billions)
Equity
Actively Managed$281.3 $271.3 $10.0 3.7 %
Passively Managed(1)
77.3 68.9 8.4 12.2 
Total Equity358.6 340.2 18.4 5.4 
Fixed Income   
Actively Managed   
Taxable214.3 216.2 (1.9)(0.9)
Tax–exempt85.8 71.2 14.6 20.5 
 300.1 287.4 12.7 4.4 
Passively Managed(1)
10.1 11.4 (1.3)(11.8)
Total Fixed Income310.2 298.8 11.4 3.8 
Alternatives/Multi-Asset Solutions(2)
 Actively Managed177.9 155.9 22.0 14.1 
Passively Managed(1)
13.4 11.0 2.4 21.8 
Total Alternatives/Multi-Asset Solutions191.3 166.9 24.4 14.6 
Total$860.1 $805.9 $54.2 6.7 %
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services.

















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Changes in assets under management for the three-month, nine-month and twelve-month periods ended September 30, 2025 are as follows:

 Distribution Channel
 InstitutionsRetailPrivate
Wealth		Total
 (in billions)
Balance as of June 30, 2025$340.0 $344.7 $144.4 $829.1 
Long-term flows:    
Sales/new accounts14.0 22.6 5.8 42.4 
Redemptions/terminations(2.8)(20.4)(4.6)(27.8)
Cash flow/unreinvested dividends(13.0)(3.9)— (16.9)
Net long-term (outflows) inflows(1.8)(1.7)1.2 (2.3)
Market appreciation13.2 13.2 6.9 33.3 
Net change11.4 11.5 8.1 31.0 
Balance as of September 30, 2025$351.4 $356.2 $152.5 $860.1 
Balance as of December 31, 2024$321.4 $334.3 $136.5 $792.2 
Long-term flows:    
Sales/new accounts22.2 67.7 16.5 106.4 
Redemptions/terminations(9.0)(64.5)(14.8)(88.3)
Cash flow/unreinvested dividends(15.9)(8.8)— (24.7)
Net long-term (outflows) inflows(2.7)(5.6)1.7 (6.6)
Transfers0.5 (0.1)(0.4)— 
Market appreciation32.2 27.6 14.7 74.5 
Net change30.0 21.9 16.0 67.9 
Balance as of September 30, 2025$351.4 $356.2 $152.5 $860.1 
Balance as of September 30, 2024$335.2 $334.5 $136.2 $805.9 
Long-term flows:
Sales/new accounts24.3 94.1 21.6 140.0 
Redemptions/terminations(12.9)(85.0)(19.6)(117.5)
Cash flow/unreinvested dividends(20.2)(13.7)— (33.9)
Net long-term (outflows) inflows(8.8)(4.6)2.0 (11.4)
Adjustments(1)
— — 0.7 0.7 
Transfers0.5 (0.1)(0.4)— 
Market appreciation24.5 26.4 14.0 64.9 
Net change16.2 21.7 16.3 54.2 
Balance as of September 30, 2025$351.4 $356.2 $152.5 $860.1 
(1)This adjustment is due to a change in fee policy related to certain fixed income assets effective October 1, 2024.



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 Investment Service
 Equity
Actively
Managed
Equity
Passively
Managed(1)
Fixed
Income
Actively
Managed -
Taxable		Fixed
Income
Actively
Managed -
Tax-
Exempt
Fixed
Income
Passively
Managed(1)
Alternatives/ Multi-Asset Solutions(2)
Total
 (in billions)
Balance as of June 30, 2025$273.4 $70.8 $214.5 $79.5 $10.2 $180.7 $829.1 
Long-term flows:       
Sales/new accounts10.9 2.8 15.4 7.6 — 5.7 42.4 
Redemptions/terminations(14.1)(0.1)(8.9)(3.5)(0.1)(1.1)(27.8)
Cash flow/unreinvested dividends(3.2)(1.5)(10.7)— (0.1)(1.4)(16.9)
Net long-term (outflows) inflows(6.4)1.2 (4.2)4.1 (0.2)3.2 (2.3)
Transfers0.5 (0.5)— — — — — 
Market appreciation13.8 5.8 4.0 2.2 0.1 7.4 33.3 
Net change7.9 6.5 (0.2)6.3 (0.1)10.6 31.0 
Balance as of September 30, 2025$281.3 $77.3 $214.3 $85.8 $10.1 $191.3 $860.1 
Balance as of December 31, 2024$263.4 $68.3 $209.3 $76.2 $10.3 $164.7 $792.2 
Long-term flows:       
Sales/new accounts32.4 3.8 37.2 19.3 0.2 13.5 106.4 
Redemptions/terminations(40.2)(2.1)(30.5)(11.6)(0.2)(3.7)(88.3)
Cash flow/unreinvested dividends(7.1)(2.3)(13.8)— (0.8)(0.7)(24.7)
Net long-term (outflows) inflows(14.9)(0.6)(7.1)7.7 (0.8)9.1 (6.6)
Transfers0.5 (0.5)— — — — — 
Market appreciation32.3 10.1 12.1 1.9 0.6 17.5 74.5 
Net change17.9 9.0 5.0 9.6 (0.2)26.6 67.9 
Balance as of September 30, 2025$281.3 $77.3 $214.3 $85.8 $10.1 $191.3 $860.1 
Balance as of September 30, 2024$271.3 $68.9 $216.2 $71.2 $11.4 $166.9 $805.9 
Long-term flows:   
Sales/new accounts44.2 4.0 47.5 27.8 0.2 16.3 140.0 
Redemptions/terminations(54.1)(2.3)(40.8)(14.8)(0.6)(4.9)(117.5)
Cash flow/unreinvested dividends(12.3)(3.7)(14.5)0.2 (1.1)(2.5)(33.9)
Net long-term (outflows) inflows(22.2)(2.0)(7.8)13.2 (1.5)8.9 (11.4)
Adjustments (3)
— — 0.2 0.5 — — 0.7 
Transfers0.5 (0.5)— — — — — 
Market appreciation31.7 10.9 5.7 0.9 0.2 15.5 64.9 
Net change10.0 8.4 (1.9)14.6 (1.3)24.4 54.2 
Balance as of September 30, 2025$281.3 $77.3 $214.3 $85.8 $10.1 $191.3 $860.1 
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services
(3)This adjustment is due to a change in fee policy related to certain fixed income assets effective October 1, 2024.
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Net long-term inflows (outflows) for actively managed investment services as compared to passively managed investment services for the three-month, nine-month and twelve-month periods ended September 30, 2025 are as follows:
 Periods Ended September 30, 2025
 Three-monthsNine-monthsTwelve-months
 (in billions)
Actively Managed
  Equity$(6.4)$(14.9)$(22.2)
 Fixed Income
(0.1)0.6 5.4 
Alternatives/Multi-Asset Solutions3.1 8.7 8.3 
Total Actively Managed(3.4)(5.6)(8.5)
Passively Managed   
  Equity1.2 (0.6)(2.0)
 Fixed Income
(0.2)(0.8)(1.5)
Alternatives/Multi-Asset Solutions0.1 0.4 0.6 
Total Passively Managed1.1 (1.0)(2.9)
Total net long-term (outflows)$(2.3)$(6.6)$(11.4)

Average assets under management by distribution channel and investment service are as follows:

 Three Months Ended September 30,Nine Months Ended September 30,
 20252024$ Change% Change20252024$ Change% Change
 (in billions)(in billions)
Distribution Channel:
Institutions$343.5 $328.4 $15.1 4.6 %$332.7 $321.8 $10.9 3.4 %
Retail349.5 324.4 25.1 7.7 339.2 309.3 29.9 9.7 
Private Wealth147.8 133.1 14.7 11.1 141.9 128.2 13.7 10.7 
Total$840.8 $785.9 $54.9 7.0 %$813.8 $759.3 $54.5 7.2 %
Investment Service:
Equity Actively Managed$276.1 $267.2 $8.9 3.3 %$266.3 $259.6 $6.7 2.6 %
Equity Passively Managed(1)
74.3 67.3 7.0 10.4 70.6 65.0 5.6 8.5 
Fixed Income Actively Managed – Taxable212.8 212.3 0.5 0.2 211.2 211.0 0.2 0.1 
Fixed Income Actively Managed – Tax-exempt82.2 68.6 13.6 19.8 79.6 65.3 14.3 21.9 
Fixed Income Passively Managed(1)
10.1 11.3 (1.2)(10.7)10.2 11.2 (1.0)(9.0)
Alternatives/Multi-Asset Solutions(2)
185.3 159.2 26.1 16.4 175.9 147.2 28.7 19.5 
Total$840.8 $785.9 $54.9 7.0 %$813.8 $759.3 $54.5 7.2 %
(1)Includes index and enhanced index services.
(2)Includes certain multi-asset solutions and services not included in equity or fixed income services.

Our Institutional channel third quarter average AUM of $343.5 billion increased $15.1 billion, or 4.6%, compared to the third quarter of 2024, while Institutional channel third quarter ending AUM increased $16.2 billion, or 4.8%, to $351.4 billion from September 30, 2024. The $16.2 billion increase in AUM resulted primarily from market appreciation of $24.5 billion, partially offset by net outflows of $8.8 billion.
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Our Retail channel third quarter average AUM of $349.5 billion increased $25.1 billion, or 7.7%, compared to the third quarter of 2024, while Retail channel third quarter ending AUM increased $21.7 billion, or 6.5%, to $356.2 billion from September 30, 2024. The $21.7 billion increase resulted primarily from market appreciation of $26.4 billion, partially offset by net outflows of $4.6 billion.

Our Private Wealth channel third quarter average AUM of $147.8 billion increased $14.7 billion, or 11.1%, compared to the third quarter of 2024, while Private Wealth channel third quarter ending AUM increased $16.3 billion, or 11.9%, to $152.5 billion from September 30, 2024. The $16.3 billion increase resulted primarily from market appreciation of $14.0 billion and net inflows of $2.0 billion.

Absolute investment composite returns, gross of fees, and relative performance as of September 30, 2025 compared to benchmarks for certain representative Institutional equity and fixed income services are as follows:
 1-Year
3-Year(1)
5-Year(1)
Income (fixed income)
Absolute return5.6 %8.7 %2.7 %
Relative return (vs. Bloomberg Barclays U.S. Aggregate Index)2.7 3.8 3.1 
High Income (fixed income)
Absolute return8.2 12.6 6.4 
Relative return (vs. Bloomberg Barclays Global High Yield Index - Hedged)(0.4)(0.2)0.7 
Global Plus - Hedged (fixed income)
Absolute return3.3 5.6 0.8 
Relative return (vs. Bloomberg Barclays Global Aggregate Index - Hedged)0.3 0.4 0.4 
Intermediate Municipal Bonds (fixed income)
Absolute return2.8 4.9 2.0 
Relative return (vs. Lipper Short/Int. Blended Muni Fund Avg)0.3 0.7 0.7 
U.S. Core Plus (fixed income)
Absolute return4.1 6.1 0.4 
Relative return (vs. Bloomberg Barclays U.S. Aggregate Index)1.3 1.1 0.9 
Emerging Market Debt (fixed income)
Absolute return8.4 13.4 2.9 
Relative return (vs. JPM EMBI Global/JPM EMBI)0.7 2.1 0.7 
Sustainable Global Thematic
Absolute return3.5 15.2 7.5 
Relative return (vs. MSCI ACWI Index)(13.8)(7.9)(6.1)
International Strategic Core Equity
Absolute return17.0 22.2 11.1 
Relative return (vs. MSCI EAFE Index)2.0 0.5 (0.1)
U.S. Small & Mid Cap Value
Absolute return2.5 13.6 15.1 
Relative return (vs. Russell 2500 Value Index)(6.5)(1.8)0.1 
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 1-Year
3-Year(1)
5-Year(1)
U.S. Large Cap Value
Absolute return11.2 20.1 17.3 
Relative return (vs. Russell 1000 Value Index)1.8 3.2 3.4 
U.S. Small Cap Growth
Absolute return3.8 15.2 5.0 
Relative return (vs. Russell 2000 Growth Index)(9.7)(1.5)(3.4)
U.S. Large Cap Growth
Absolute return16.7 26.4 14.6 
Relative return (vs. Russell 1000 Growth Index)(8.8)(5.2)(2.9)
U.S. Small & Mid Cap Growth
Absolute return5.1 15.2 5.4 
Relative return (vs. Russell 2500 Growth Index)(7.5)(0.8)(2.3)
Concentrated U.S. Growth
Absolute return7.0 16.8 10.7 
Relative return (vs. S&P 500 Index)(10.6)(8.1)(5.8)
Select U.S. Equity
Absolute return19.3 24.6 17.8 
Relative return (vs. S&P 500 Index)1.7 (0.4)1.3 
Strategic Equities
Absolute return14.8 23.5 16.0 
Relative return (vs. Russell 3000 Index)(2.6)(0.6)0.3 
Global Core Equity
Absolute return9.4 19.9 11.0 
Relative return (vs. MSCI ACWI Index)(7.9)(3.2)(2.6)
U.S. Strategic Core Equity
Absolute return13.6 22.1 15.1 
Relative return (vs. S&P 500 Index)(4.0)(2.8)(1.4)
Select U.S. Equity Long/Short
Absolute return12.1 14.8 11.6 
Relative return (vs. S&P 500 Index)(5.5)(10.1)(4.9)
Global Strategic Core Equity
Absolute return12.8 20.6 13.3 
Relative return (vs. S&P 500 Index)(4.4)(3.1)(1.1)

(1)Reflects annualized returns.
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Consolidated Results of Operations
 Three Months Ended September 30,Nine Months Ended September 30,
 20252024$ Change% Change20252024$ Change% Change
 (in thousands, except per unit amounts)
Net revenues$1,137,147 $1,085,489 $51,658 4.8 %$3,306,661 $3,217,583 $89,078 2.8 %
Expenses853,670 720,208 133,462 18.5 2,564,721 2,411,016 153,705 6.4 
Operating income283,477 365,281 (81,804)(22.4)741,940 806,567 (64,627)(8.0)
Non-operating income— — — — — 134,555 (134,555)n/m
Pre-tax income283,477 365,281 (81,804)(22.4)741,940 941,122 (199,182)(21.2)
Income taxes17,085 14,255 2,830 19.9 46,566 50,389 (3,823)(7.6)
Net income266,392 351,026 (84,634)(24.1)695,374 890,733 (195,359)(21.9)
Net income of consolidated entities attributable to non-controlling interests7,129 5,054 2,075 41.1 4,845 17,262 (12,417)(71.9)
Net income attributable to AB Unitholders$259,263 $345,972 $(86,709)(25.1)$690,529 $873,471 $(182,942)(20.9)
Net income per AB Unit$0.88 $1.20 $(0.32)(26.7)$2.34 $3.02 $(0.68)(22.5)
Distributions declared per AB Unit$0.94 $0.85 $0.09 10.6 %$2.66 $2.45 $0.21 8.6 %
Operating margin (1)
24.3 %33.2 % 22.3 %24.5 % 
(1)Operating income excluding net income (loss) attributable to non-controlling interests as a percentage of net revenues.


Net income attributable to AB Unitholders for the three months ended September 30, 2025 decreased $86.7 million, or 25.1%, from the three months ended September 30, 2024. The decrease is primarily due to (in millions):
Lower prior period gain on adjustment of contingent payment arrangements $(126.0)
Higher employee compensation and benefits expense(25.9)
Higher promotion and servicing expense(20.7)
Lower performance-based fees(6.8)
Lower other revenue(5.4)
Higher base advisory fees38.9 
Lower general and administrative expense37.6
Higher distribution revenues21.2
Higher net dividend and interest revenue3.0 
Other(2.6)
 $(86.7)
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Net income attributable to AB Unitholders for the nine months ended September 30, 2025 decreased $182.9 million, or 20.9%, from the nine months ended September 30, 2024. The decrease is primarily due to (in millions):
Lower gain on divestiture$(134.6)
Lower prior period gain on adjustment of contingent payment arrangement (121.0)
Lower Bernstein Research Services revenue(96.2)
Higher promotion and servicing expense(63.5)
Higher investment losses(15.7)
Higher employee compensation and benefits expense(9.9)
Lower other revenues(5.8)
Higher base advisory fees133.8 
Higher distribution revenues80.0
Lower general and administrative expense25.3 
Lower interest on borrowings14.4 
Lower net income of consolidated entities attributable to non-controlling interest12.4 
Other(2.1)
 $(182.9)

Units Outstanding; Unit Repurchases

Each quarter, we consider whether to implement a plan to repurchase AB Holding Units pursuant to Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended (“Exchange Act”). A plan of this type allows a company to repurchase its shares at times when it otherwise might be prevented from doing so because of self-imposed trading blackout periods or because it possesses material non-public information. Each broker we select has the authority to repurchase AB Holding Units on our behalf in accordance with the terms and limitations specified in the plan. Repurchases are subject to regulations promulgated by the SEC, as well as certain price, market volume and timing constraints specified in the plan. The plan adopted during the third quarter of 2025 expired at the close of business on October 22, 2025. We may adopt additional plans in the future to engage in open-market purchases of AB Holding Units for anticipated obligations under our incentive compensation award program and for other corporate purposes.

Cash Distributions

We are required to distribute all of our Available Cash Flow, as defined in the AB Partnership Agreement, to our Unitholders and the General Partner. Available Cash Flow typically is the adjusted net income per Unit for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. In future periods, management anticipates that Available Cash Flow will continue to be based on adjusted net income per unit, unless management determines, with concurrence of the Board of Directors, that one or more adjustments that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation. See Note 6 to our condensed consolidated financial statements contained in Item 1 for a description of Available Cash Flow.

Management Operating Metrics

We are providing the non-GAAP measures “adjusted net revenues,” “adjusted operating income” and “adjusted operating margin” because they are additional operating metrics management uses in evaluating and comparing period-to-period operating performance. Management uses these additional metrics in evaluating performance because they present a clearer picture of our operating performance and allow management to see long-term trends without the distortion primarily caused by long-term incentive compensation-related mark-to-market adjustments, acquisition-related expenses, interest expense and other adjustment items. Similarly, we believe that these management operating metrics help investors better understand the underlying trends in our results and, accordingly, provide a valuable perspective for investors.

We provide the non-GAAP measures "adjusted net income" and "adjusted net income per unit" because our quarterly distribution per unit is typically our adjusted net income per unit (which is derived from adjusted net income).

These non-GAAP measures are provided in addition to, and not as substitutes for, net revenues, operating income and operating
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margin, and they may not be comparable to non-GAAP measures presented by other companies. Management uses both accounting principles generally accepted in the United States of America ("US GAAP") and non-GAAP measures in evaluating our financial performance. The non-GAAP measures alone may pose limitations because they do not include all of our revenues and expenses.

 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
 (in thousands, except per unit amounts)
Net revenues, US GAAP basis$1,137,147 $1,085,489 $3,306,661 $3,217,583 
Adjustments:    
Distribution-related adjustments:
Distribution revenues(210,424)(189,216)(607,811)(527,811)
Investment advisory services fees(18,876)(18,017)(60,969)(57,457)
Pass-through adjustments:
Investment advisory services fees(13,970)(12,256)(40,385)(39,256)
Other revenues(15,433)(20,987)(46,471)(50,197)
Impact of consolidated company-sponsored investment funds(7,059)(5,182)(4,679)(16,848)
Incentive compensation-related items(2,404)(2,286)(11,369)(6,353)
Equity method investments:
  Equity loss on JVs16,162 7,550 35,606 35,443 
  (Gain) on other equity method investments(471)— (3,263)— 
Adjusted net revenues$884,672 $845,095 $2,567,320 $2,555,104 
Operating income, US GAAP basis$283,477 $365,281 $741,940 $806,567 
Adjustments:    
Real estate— (206)— (618)
Incentive compensation-related items1,214 742 2,756 2,590 
EQH award compensation344 291 1,017 797 
Retirement plan settlement (gain) loss(2,442)— 17,733 — 
Acquisition-related expenses (income)12,545 (112,906)38,571 (78,890)
Equity method investments:
  Equity loss on JVs16,162 7,550 35,606 35,443 
  (Gain) on other equity method investments(471)— (3,263)— 
AB Funds reimbursement (income) expense(8,500)— 5,796 — 
Total of non-GAAP adjustments before interest on borrowings18,852 (104,529)98,216 (40,678)
Interest on borrowings7,167 8,456 22,768 37,139 
Sub-total of non-GAAP adjustments26,019 (96,073)120,984 (3,539)
Less: Net income of consolidated entities attributable to non-controlling interests7,129 5,054 4,845 17,262 
Adjusted operating income$302,367 $264,154 $858,079 $785,766 
Non-Operating income, US GAAP basis$— $— $— $134,555 
Less: Interest on borrowings7,167 8,456 22,768 37,139 
Less: Gain on divestiture— — — 134,555 
Adjusted non-operating (expense)$(7,167)$(8,456)$(22,768)$(37,139)
Adjusted pre-tax income$295,200 $255,698 $835,311 $748,627 
Less: Adjusted income taxes17,802 9,972 52,458 40,052 
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 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
Adjusted net income $277,398 $245,726 $782,853 $708,575 
Net income per AB Unit, GAAP basis$0.88 $1.20 $2.34 $3.02 
Impact of non-GAAP adjustments0.06 (0.35)0.31 (0.57)
Adjusted net income per AB Unit$0.94 $0.85 $2.65 $2.45 
Operating margin, GAAP basis24.3 %33.2 %22.3 %24.5 %
Impact of non-GAAP adjustments9.9 (1.9)11.1 6.3 
Adjusted operating margin34.2 %31.3 %33.4 %30.8 %

Adjusted operating income for the three months ended September 30, 2025 increased $38.2 million, or 14.5%, from the three months ended September 30, 2024, primarily due to higher investment advisory base fees of $35.6 million, lower general and administrative ("G&A") expense of $23.8 million and higher investment gains compared to losses in the prior year of $8.2 million, partially offset by higher employee compensation and benefits expense of $24.6 million and lower performance-based fees of $5.9 million.

Adjusted operating income for the nine months ended September 30, 2025 increased $72.3 million, or 9.2%, from the nine months ended September 30, 2024, primarily due to higher investment advisory base fees of $123.7 million, lower G&A expense of $48.3 million and lower promotion and servicing expense of $14.8 million, partially offset by lower BRS revenues of $96.2 million due to the BRS deconsolidation, lower net dividend and interest revenue of $5.7 million, lower performance-based fees of $4.9 million and higher employee compensation and benefits expense of $3.2 million.

Adjusted Net Revenues

Net Revenue, as adjusted, is reduced to exclude all of the company's distribution revenues, which are recorded as a separate line item on the consolidated statement of income, as well as a portion of investment advisory services fees received that is used to pay distribution and servicing costs. For certain products, based on the distinct arrangements, certain distribution fees are collected by us and passed through to third-party client intermediaries, while for certain other products, we collect investment advisory services fees and a portion is passed through to third-party client intermediaries. In both arrangements, the third-party client intermediary owns the relationship with the client and is responsible for performing services and distributing the product to the client on our behalf. We believe offsetting distribution revenues and certain investment advisory services fees is useful for our investors and other users of our financial statements because such presentation appropriately reflects the nature of these costs as pass-through payments to third parties that perform functions on behalf of our sponsored mutual funds and/or shareholders of these funds. Distribution-related adjustments fluctuate each period based on the type of investment products sold, as well as the average AUM over the period. Also, we adjust distribution revenues for the amortization of deferred sales commissions as these costs, over time, will offset such revenues.
We adjust investment advisory and services fees and other revenues for pass through costs, primarily related to our transfer agent and shareholder servicing fees. Also, we adjust for certain investment advisory and services fees passed through to our investment advisors. These fees do not affect operating income, as such, we exclude these fees from adjusted net revenues. We also adjust for certain pass through costs associated with the transition of services to the JVs entered into with Societe Generale ("SocGen"). These amounts are expensed by us and passed to the JVs for reimbursement. These fees do not affect operating income, as such, we exclude these fees from adjusted net revenues
We adjust for the revenue impact of consolidating company-sponsored investment funds by eliminating the consolidated company-sponsored investment funds' revenues and including AB's fees from such consolidated company-sponsored investment funds and AB's investment gains and losses on its investments in such consolidated company-sponsored investment funds that were eliminated in consolidation.
Adjusted net revenues exclude investment gains and losses and dividends and interest on employee long-term incentive compensation-related investments. Also, we adjust for certain acquisition-related pass-through performance-based fees and performance related compensation.
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We also adjust net revenues to exclude our portion of the equity income or loss associated with our equity method investments, including our investment in the JVs and reinsurance sidecars, as we don't consider this activity part of our core business operations and these investments generate non-cash volatility which distort core earnings performance. Effective April 1, 2024 following the close of the transaction with SocGen, we record all income or loss associated with the JVs as an equity method investment income (loss). As we no longer consider this activity part of our core business operations and our intent is to fully divest from both joint ventures, we consider these amounts temporary, and as such, we exclude these amounts from our adjusted net revenues.
Adjusted Operating Income

Adjusted operating income represents operating income on a US GAAP basis excluding (1) real estate charges (credits), (2) the impact on net revenues and compensation expense of the investment gains and losses (as well as the dividends and interest) associated with employee long-term incentive compensation-related investments, (3) the equity compensation paid by EQH to certain AB executives, (4) retirement plan settlement (gain) loss, (5) acquisition-related expenses (income), (6) income (loss) related to our equity method investments, (7) AB Funds reimbursement (income) expense, (8) interest on borrowings and (9) the impact of consolidated company-sponsored investment funds.
Real estate charges (credits) incurred during the fourth quarter of 2019 through the fourth quarter of 2020, while excluded in the period in which the charges (credits) were recorded, were included ratably over the remaining applicable lease term.
Prior to 2009, a significant portion of employee compensation was in the form of long-term incentive compensation awards that were notionally invested in AB investment services and generally vested over a period of four years. AB economically hedged the exposure to market movements by purchasing and holding these investments on its balance sheet. All such investments had vested as of year-end 2012 and the investments have been delivered to the participants, except for those investments with respect to which the participant elected a long-term deferral. Fluctuation in the value of these investments, which also impacts compensation expense, is recorded within investment gains and losses on the income statement. Management believes it is useful to reflect the offset achieved from economically hedging the market exposure of these investments in the calculation of adjusted operating income and adjusted operating margin. The non-GAAP measures exclude gains and losses and dividends and interest on employee long-term incentive compensation-related investments included in revenues and compensation expense.
The board of directors of EQH granted to Seth Bernstein, our CEO, equity awards in connection with EQH's IPO. Additionally, equity awards have been granted to Mr. Bernstein and other AB executives for their membership on the EQH Management Committee. These individuals may receive additional equity or cash compensation from EQH in the future related to their service on the Management Committee. Any awards granted to these individuals by EQH are recorded as compensation expense in AB’s consolidated statement of income. The compensation expense associated with these awards has been excluded from our non-GAAP measures because they are non-cash and are based upon EQH's, and not AB's, financial performance.
The (gains) losses associated with the termination of our defined benefit retirement plan are non-cash, short term in nature and not considered a part of our core operating results when comparing financial results from period to period.
Acquisition-related expenses (income) have been excluded because they are not considered part of our core operating results when comparing financial results from period to period and to industry peers. Acquisition-related expenses (income) include professional fees, the recording of changes in estimates to, and accretion expense related to, our contingent payment arrangements associated with our acquisitions, certain compensation-related expenses and amortization of intangible assets for contracts acquired. During the three months ended September 30, 2024 we recognized a gain of $128.5 million in contingent payment arrangements in the condensed consolidated statement of income related to a fair value remeasurement of the contingent payment liability associated with our acquisition of AB Carval in 2022. The fair value remeasurement was due to updated assumptions of future performance associated with the liability.
We also adjust operating income to exclude our portion of the equity income or loss associated with our equity method investments, including our investment in the JVs and reinsurance sidecar, as we don't consider this activity part of our core business operations and these investments generate non-cash volatility which distort core earnings performance. Effective April 1, 2024 following the close of the transaction with SocGen, we record all income or loss associated with the JVs as an equity method investment (income) loss. As we no longer consider this activity part of our core business operations and our intent is to fully divest from both joint ventures, we consider these amounts temporary, and as such, we exclude these amounts from our adjusted operating income.
During the first quarter of 2025, we identified an error in the billing practices of a third-party service provider, who had overbilled certain AB mutual funds for omnibus account services, sub-accounting services, and related transfer agency expenses in prior years. In the second quarter, at the request of the mutual fund Board, AB agreed to reimburse the affected funds for the entirety of the overpayment plus interest. During the third quarter, we resolved this matter with the service provider and recovered a portion of the overbilled amounts. We have adjusted operating income to exclude these amounts. We
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believe adjusting for these costs is useful for our investors and other users of our financial statements as such presentation appropriately reflects the non-core nature of this expenditure.
We adjust operating income to exclude interest on borrowings in order to align with our industry peer group.
We adjust for the operating income impact of consolidating certain company-sponsored investment funds by eliminating the consolidated company-sponsored funds' revenues and expenses and including AB's revenues and expenses that were eliminated in consolidation. We also exclude the limited partner interests we do not own.

Adjusted Net Income per AB Unit

As previously discussed, our quarterly distribution is typically our adjusted net income per Unit (which is derived from adjusted net income) for the quarter multiplied by the number of general and limited partnership interests outstanding at the end of the quarter. Adjusted net income is derived from adjusted operating income less interest expense and adjusted income taxes. Adjusted income taxes, used in calculating adjusted net income, are calculated using the GAAP effective tax rate adjusted for non-GAAP income tax adjustments.

Adjusted Operating Margin

Adjusted operating margin allows us to monitor our financial performance and efficiency from period to period without the volatility noted above in our discussion of adjusted operating income and to compare our performance to industry peers on a basis that better reflects our performance in our core business. Adjusted operating margin is derived by dividing adjusted operating income by adjusted net revenues.

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Net Revenues

The components of net revenues are as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 20252024$ Change% Change20252024$ Change% Change
 (in thousands)(in thousands)
Investment advisory and services fees:
Institutions:
Base fees$156,982 $160,146 $(3,164)(2.0)%$459,387 $464,324 $(4,937)(1.1)%
Performance-based fees(2)
3,979 7,080 (3,101)(43.8)36,330 18,830 17,500 92.9 
 160,961 167,226 (6,265)(3.7)495,717 483,154 12,563 2.6 
Retail:       
Base fees409,391 388,165 21,226 5.51,185,563 1,102,211 83,352 7.6 
Performance-based fees(2)
(632)345 (977)n/m7,377 16,668 (9,291)(55.7)
 408,759 388,510 20,249 5.21,192,940 1,118,879 74,061 6.6 
Private Wealth:       
Base fees286,105 265,312 20,793 7.8830,713 775,344 55,369 7.1 
Performance-based fees18,625 21,338 (2,713)(12.7)54,170 66,741 (12,571)(18.8)
 304,730 286,650 18,080 6.3884,883 842,085 42,798 5.1 
Total:       
Base fees852,478 813,623 38,855 4.82,475,663 2,341,879 133,784 5.7 
Performance-based fees21,972 28,763 (6,791)(23.6)97,877 102,239 (4,362)(4.3)
 874,450 842,386 32,064 3.82,573,540 2,444,118 129,422 5.3 
Bernstein Research Services (1)
— — — —— 96,222 (96,222)n/m
Distribution revenues210,424 189,216 21,208 11.2607,811 527,811 80,000 15.2 
Dividend and interest income35,944 38,940 (2,996)(7.7)106,431 127,441 (21,010)(16.5)
Investment (losses)(2,721)(3,512)791 (22.5)(31,084)(15,398)(15,686)101.9 
Other revenues34,253 39,673 (5,420)(13.7)98,345 104,133 (5,788)(5.6)
Total revenues1,152,350 1,106,703 45,647 4.13,355,043 3,284,327 70,716 2.2 
Less: broker-dealer related interest expense15,203 21,214 (6,011)(28.3)48,382 66,744 (18,362)(27.5)
Net revenues$1,137,147 $1,085,489 $51,658 4.8%$3,306,661 $3,217,583 $89,078 2.8 %
(1) Effective April 1, 2024, AB deconsolidated the Bernstein Research Services business.
(2) Approximately $0.8 million of performance-based fee revenue was reclassified from Retail performance-based fee revenue into Institutional performance-based fee revenue during the three months ended September 30, 2025.
Investment Advisory and Services Fees

Investment advisory and services fees are the largest component of our revenues. These fees generally are calculated as a percentage of the value of AUM as of a specified date, or as a percentage of the value of average AUM for the applicable billing period, and vary with the type of investment service, the size of account and the total amount of assets we manage for a particular client. Accordingly, fee income generally increases or decreases as AUM increase or decrease and is affected by market appreciation or depreciation, the addition of new client accounts or client contributions of additional assets to existing accounts, withdrawals of assets from and termination of client accounts, purchases and redemptions of mutual fund shares,
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shifts of assets between accounts or products with different fee structures, and acquisitions. Our average basis points realized (investment advisory and services fees divided by average AUM) generally approximate 30 to 105 basis points for actively managed equity services, 10 to 65 basis points for actively-managed fixed income services and 1 to 50 basis points for passively managed services. Average basis points realized for other services could range from 3 basis points for certain Institutional third party managed services to over 190 basis points for certain Retail and Private Wealth Management alternative services. These ranges include all-inclusive fee arrangements (covering investment management, trade execution and other services) for our Private Wealth Management clients.

We calculate AUM using established market-based valuation methods and fair valuation (non-observable market) methods. Market-based valuation methods include: last sale/settle prices from an exchange for actively-traded listed equities, options and futures; evaluated bid prices from recognized pricing vendors for fixed income, asset-backed or mortgage-backed issues; mid prices from recognized pricing vendors and brokers for credit default swaps; and quoted bids or spreads from pricing vendors and brokers for other derivative products. Fair valuation methods include: discounted cash flow models or any other methodology that is validated and approved by our Valuation Committee and sub-committee (the "Valuation Committee") (see paragraph immediately below for more information regarding our Valuation Committee). Fair valuation methods are used only where AUM cannot be valued using market-based valuation methods, such as in the case of private equity or illiquid securities.

The Valuation Committee, consists of senior officers and employees, which oversees a consistent framework of pricing and valuation of all investments held in client and AB portfolios. The Valuation Committee has adopted a Statement of Pricing Policies describing principles and policies that apply to pricing and valuing investments held in these portfolios. We also have a Pricing Group, which is overseen by the Valuation Committee and is responsible for managing the pricing process for all investments.
 
We sometimes charge our clients performance-based fees. In these situations, we charge a base advisory fee and are eligible to earn an additional performance-based fee or incentive allocation that is calculated as either a percentage of absolute investment results or a percentage of investment results in excess of a stated benchmark over a specified period of time. Some performance-based fees include a high-watermark provision, which generally provides that if a client account underperforms relative to its performance target (whether absolute or relative to a specified benchmark), it must gain back such underperformance before we can collect future performance-based fees. Therefore, if we fail to achieve our performance target for a particular period, we will not earn a performance-based fee for that period and, for accounts with a high-watermark provision, our ability to earn future performance-based fees will be impaired. We are eligible to earn performance-based fees on 7.5%, 7.3% and 0.4% of the assets we manage for private wealth clients, institutional clients and retail clients, respectively (in total, 4.5% of our AUM).

For the three months ended September 30, 2025, our investment advisory and services fees increased by $32.1 million, or 3.8%, from the three months ended September 30, 2024, due to a $38.9 million, or 4.8%, increase in base fees, offset by a $6.8 million, or 23.6%, decrease in performance-based fees. The increase in base fees is primarily due to a 7.0% increase in average AUM. Performance-based fees decreased primarily due to lower performance fees earned on our Private Credit and Global Opportunistic Credit.

For the nine months ended September 30, 2025, our investment advisory and services fees increased by $129.4 million, or 5.3%, from the nine months ended September 30, 2024, due to a $133.8 million, or 5.7%, increase in base fees, offset by a $4.4 million, or 4.3%, decrease in performance-based fees. The increase in base fees is primarily due to a 7.2% increase in average AUM. Performance-based fees decreased primarily due to lower performance fees earned on our U.S. Select Equity Long/Short, Private Credit, Global Opportunistic Credit and Emerging Markets Value, partially offset by higher performance fees earned on our International Small Cap.

Institutional base fees for the three months ended September 30, 2025 decreased by $3.2 million, or 2.0%, from the three months ended September 30, 2024, primarily due to a decrease in portfolio fee rate, partially offset by a 4.6% increase in average AUM. Retail base fees for the three months ended September 30, 2025 increased $21.2 million, or 5.5%, from the three months ended September 30, 2024, primarily due to a 7.7% increase in average AUM, partially offset by a decrease in portfolio fee rate. Private Wealth base fees for the three months ended September 30, 2025 increased $20.8 million, or 7.8%, from the three months ended September 30, 2024, primarily due to a 11.1% increase in average AUM, partially offset by a decrease in portfolio fee rate.

Institutional base fees for the nine months ended September 30, 2025 decreased by $4.9 million, or 1.1%, from the nine months ended September 30, 2024, primarily due to a decrease in portfolio fee rate, partially offset by a 3.4% increase in average AUM. Retail base fees for the nine months ended September 30, 2025 increased $83.4 million, or 7.6%, from the nine months ended September 30, 2024, primarily due to a 9.7% increase in average AUM, partially offset by a decrease in portfolio fee
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rate. Private Wealth base fees for the nine months ended September 30, 2025 increased $55.4 million, or 7.1%, from the nine months ended September 30, 2024, primarily due to a 10.7% increase in average AUM, partially offset by a decrease in portfolio fee rate.

Bernstein Research Services

Bernstein Research Services revenue decreased $96.2 million, or 100%, compared to the nine months ended September 30, 2024 due to the deconsolidation of the BRS business effective April 1, 2024.

Distribution Revenues

Two of our subsidiaries act as distributors and/or placement agents of company-sponsored mutual funds and receive distribution services fees from certain of those funds as full or partial reimbursement of the distribution expenses they incur. Period-over-period fluctuations of distribution revenues typically are in line with fluctuations of the corresponding average AUM of these mutual funds.

Distribution revenues for the three months ended September 30, 2025 increased $21.2 million, or 11.2%, compared to the three months ended September 30, 2024, primarily due to the corresponding average AUM of these mutual funds increasing 10.2%. Distribution revenues for the nine months ended September 30, 2025 increased $80.0 million, or 15.2%, compared to the nine months ended September 30, 2024, primarily due to the corresponding average AUM of these mutual funds increasing 11.4% and a shift in product mix to mutual funds that have higher distribution rates.

Dividend and Interest Income and Broker-Dealer Related Interest Expense

Dividend and interest income consists primarily of investment income and interest earned on customer margin balances and U.S. Treasury Bills as well as dividend and interest income in our consolidated company-sponsored investment funds. Broker-dealer related interest expense principally reflects interest accrued on cash balances in customers’ brokerage accounts.

For the three months ended September 30, 2025, dividend and interest income decreased $3.0 million, or 7.7%, compared to the three months ended September 30, 2024, primarily due to lower interest earned on customer margin accounts and U.S. Treasury Bills. Broker-dealer related interest expense for the three months ended September 30, 2025 decreased $6.0 million, or 28.3%, compared to the three months ended September 30, 2024, primarily due to lower interest paid on cash balances in customers' brokerage accounts, as a result of lower balances and lower interest rates.

For the nine months ended September 30, 2025, dividend and interest income decreased $21.0 million, or 16.5%, compared to the nine months ended September 30, 2024, primarily due to lower interest earned on customer margin accounts and U.S. Treasury Bills. Broker-dealer related interest expense for the nine months ended September 30, 2025 decreased $18.4 million, or 27.5%, compared to the nine months ended September 30, 2024, primarily due to lower interest paid on cash balances in customers' brokerage accounts, as a result of lower balances and lower interest rates.

Investment Gains (Losses)

Investment gains (losses) consist primarily of realized and unrealized investment gains or losses on: (i) employee long-term incentive compensation-related investments, (ii) U.S. Treasury Bills, (iii) seed capital investments, (iv) derivatives and (v) investments in our consolidated company-sponsored investment funds. Investment gains (losses) also include equity in earnings of proprietary investments in limited partnership hedge funds that we sponsor and manage and equity gains (losses) related to our equity method investments.

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Investment gains (losses) are as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2025202420252024
 (in thousands)
Long-term incentive compensation-related investments:
Realized gains (losses)$43 $(14)$1,031 $7,110 
Unrealized gains (losses)1,917 1,649 2,584 (2,417)
Investments held by consolidated company-sponsored investment funds:
  Realized gains (losses)1,092 1,035 2,551 (641)
  Unrealized gains4,433 9,373 4,598 20,900 
Seed capital and other investments:
Realized (losses) gains:
Seed capital and other(42)332 4,736 19 
Derivatives(11,144)(11,003)(23,090)(25,442)
Unrealized gains (losses):
Seed capital and other10,011 6,355 13,985 16,299 
Derivatives6,383 (4,225)(5,174)3,787 
Brokerage-related investments:
Realized gains (losses)112 25 162 (279)
Unrealized gains (losses)165 511 (124)709 
Equity method investments:
(Loss) on JVs(16,162)(7,550)(35,606)(35,443)
Gain on other equity method investments471 — 3,263 — 
 $(2,721)$(3,512)$(31,084)$(15,398)

Other Revenues

Other revenues consist of fees earned for transfer agency services provided to company-sponsored mutual funds, fees earned for administration and recordkeeping services provided to company-sponsored mutual funds and the General Accounts of EQH and its subsidiaries, and other miscellaneous revenues. Other revenues for the three months ended September 30, 2025 decreased $5.4 million, or 13.7%, compared to the three months ended September 30, 2024, primarily due to a decrease in certain reimbursements for services provided to the JVs and lower shareholder servicing fees. Other revenues for the nine months ended September 30, 2025 decreased $5.8 million, or 5.6%, compared to the nine months ended September 30, 2024, primarily due to lower shareholder servicing fees, partially offset by higher reimbursements for services provided to the JVs.

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Expenses

The components of expenses are as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 20252024$ Change% Change20252024$ Change% Change
 (in thousands)(in thousands)
Employee compensation and benefits$450,793 $424,893 $25,900 6.1 %$1,310,878 $1,300,989 $9,889 0.8 %
Promotion and servicing:    
Distribution-related payments208,435 192,230 16,205 8.4 606,615 545,120 61,495 11.3 
Amortization of deferred sales commissions20,872 15,005 5,867 39.1 62,183 40,152 22,031 54.9 
Trade execution, marketing, T&E and other36,907 38,312 (1,405)(3.7)114,239 134,243 (20,004)(14.9)
 266,214 245,547 20,667 8.4 783,037 719,515 63,522 8.8 
General and administrative118,203 155,808 (37,605)(24.1)414,156 439,450 (25,294)(5.8)
Contingent payment arrangements43 (125,947)125,990 n/m149 (120,831)120,980 n/m
Interest on borrowings7,167 8,456 (1,289)(15.2)22,768 37,139 (14,371)(38.7)
Amortization of intangible assets11,250 11,451 (201)(1.8)33,733 34,754 (1,021)(2.9)
Total$853,670 $720,208 $133,462 18.5 %$2,564,721 $2,411,016 $153,705 6.4 %

Employee Compensation and Benefits

Employee compensation and benefits expense consists of base compensation (including salaries and severance), annual short-term incentive compensation awards (cash bonuses), annual long-term incentive compensation awards, commissions, fringe benefits and other employment costs (including recruitment, training, temporary help and meals).

Compensation expense as a percentage of net revenues was 39.6% and 39.1% for the three months ended September 30, 2025 and 2024, respectively. Compensation expense as a percentage of net revenues was 39.6% and 40.4% for the nine months ended September 30, 2025 and 2024, respectively. Compensation expense generally is determined on a discretionary basis and is primarily a function of our firm’s current-year financial performance. The amounts of incentive compensation we award are designed to motivate, reward and retain top talent while aligning our executives' interests with the interests of our Unitholders. Senior management, with the approval of the Compensation and Workplace Practices Committee of the Board of Directors of AllianceBernstein Corporation (“Compensation Committee”), periodically confirms that the appropriate metric to consider in determining the amount of incentive compensation is the ratio of adjusted employee compensation and benefits expense to adjusted net revenues. Adjusted net revenues used in the adjusted compensation ratio are the same as the adjusted annual net revenues presented as a non-GAAP measure (discussed earlier in this Item 2). Adjusted employee compensation and benefits expense is total employee compensation and benefits expense minus other employment costs such as recruitment, training, temporary help and meals (which was 1.1% of adjusted net revenues for both the three and nine months ended September 30, 2025 and 1.0% of adjusted net revenues for both the three and nine months ended September 30, 2024), and excludes the impact of mark-to-market vesting expense, as well as dividends and interest expense, associated with employee incentive compensation-related investments and the amortization expense associated with the awards issued by EQH to some of our firm's executive officers relating to their roles as members of the EQH Management Committee. Senior management, with the approval of the Compensation Committee, has established as an objective that adjusted employee compensation and benefits expense, excluding the impact of performance-based fees, generally should not exceed 50.0% of our adjusted net revenues in any year, except in unexpected or unusual circumstances. Our ratio of adjusted compensation expense as a percentage of adjusted net revenues was 48.5% for the three and nine months ended September 30, 2025. Our ratio of adjusted compensation
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expense as a percentage of adjusted net revenues was 48.0% for the three months ended September 30, 2024 and 48.7% for the nine months ended September 30, 2024.

For the three months ended September 30, 2025, employee compensation and benefits expense increased $25.9 million, or 6.1%, compared to the three months ended September 30, 2024, primarily due to higher base compensation of $7.7 million, higher commissions of $6.1 million, higher fringe benefits of $5.5 million and higher incentive compensation of $5.4 million. For the nine months ended September 30, 2025, employee compensation and benefits expense increased $9.9 million, or 0.8%, compared to the nine months ended September 30, 2024, primarily due to higher commissions of $24.9 million, partially offset by lower base compensation of $15.6 million

Promotion and Servicing

Promotion and servicing expenses include distribution-related payments to financial intermediaries for distribution of AB mutual funds and amortization of deferred sales commissions paid to financial intermediaries for the sale of back-end load shares of AB mutual funds. Also included in this expense category are costs related to trade execution and clearance, travel and entertainment, advertising and promotional materials.

Promotion and servicing expenses increased $20.7 million, or 8.4%, during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to higher distribution-related payments of $16.2 million and higher amortization of deferred sales commissions of $5.9 million.

Promotion and servicing expenses increased $63.5 million, or 8.8%, during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily due to higher distribution-related payments of $61.5 million and higher amortization of deferred sales commissions of $22.0 million, partially offset by lower trade execution and clearance expense of $16.2 million due to the BRS deconsolidation.

General and Administrative

General and administrative expenses include portfolio services expenses, technology expenses, professional fees and office-related expenses (occupancy, communications and similar expenses). General and administrative expenses as a percentage of net revenues were 10.4% and 14.4% for the three months ended September 30, 2025 and 2024, respectively. General and administrative expenses as a percentage of net revenues were 12.5% and 13.7% for the nine months ended September 30, 2025 and 2024, respectively.

General and administrative expenses decreased $37.6 million, or 24.1%, during the three months ended September 30, 2025 compared to the corresponding period in 2024, primarily due to lower office-related expenses of $23.4 million principally driven by our early exit from our previous New York office location in 2024, a partial recovery of $8.5 million from a third-party service provider related to the recognition of the AB Funds reimbursement expense recognized in the second quarter of 2025, lower professional fees of $5.1 million and a final settlement of the pension obligation of $2.4 million, partially offset by higher portfolio services and related expenses of $3.3 million.

General and administrative expenses decreased $25.3 million, or 5.8%, during the nine months ended September 30, 2025 compared to the corresponding period in 2024, primarily due to lower office-related expenses of $58.0 million primarily driven by our early exit from our previous New York office location in 2024, lower professional fees of $10.9 million, lower other taxes of $4.4 million, partially offset by a one time gain in the prior year period related to the recognition of a $20.8 million government incentive grant received in connection with the relocation of our headquarters to Nashville, Tennessee, a retirement plan settlement loss of $17.7 million in the current year, a $5.8 million AB Funds reimbursement expense (net of $8.5 million recovered in the third quarter of 2025) related to a disputed billing practice of a third-party service provider and higher portfolio services and related expense of $4.5 million.

Contingent Payment Arrangements

Contingent payment arrangements reflect changes in estimates of contingent payment liabilities associated with acquisitions in current and previous periods, as well as accretion expense of these liabilities. There were no changes in our estimates during the nine months ended September 30, 2025. During the three months ended September 30, 2024 we recognized a gain of $128.5 million in contingent payment arrangements in the condensed consolidated statement of income related to a fair value remeasurement of the contingent payment liability associated with our acquisition of AB CarVal in 2022. The fair value remeasurement was due to updated assumptions of future performance associated with the liability.

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During the three months ended September 30, 2025 and 2024, we recognized zero and $2.6 million in accretion expense related to our contingent considerations payable. During the nine months ended September 30, 2025 and 2024, we recognized $0.1 million and $7.7 million in accretion expense related to our contingent considerations payable.

We made payments of approximately $1.0 million and $2.6 million, associated with our contingent consideration during the nine months ended September 30, 2025 and September 30, 2024, respectively, related to various smaller acquisitions.

Interest on Borrowings

Interest on borrowings reflects interest expense related to our debt and credit facilities. See Note 16 to AB's condensed consolidated financial statements contained in Item 1, for disclosures relating to our debt and credit facilities. For the three months ended September 30, 2025 interest on borrowings decreased $1.3 million, or 15.2%, compared to the three months ended September 30, 2024. The decrease was primarily due to lower weighted average interest rates. For the nine months ended September 30, 2025 interest on borrowings decreased $14.4 million, or 38.7%, compared to the nine months ended September 30, 2024. The decrease was primarily due to lower weighted average interest rates and lower weighted average borrowings.

Amortization of Intangible Assets

Amortization of intangible assets reflects our amortization of costs assigned to acquired investment management contracts with a finite life. These assets are recognized at fair value and generally are amortized on a straight-line basis over their estimated useful life. Amortization of intangible assets decreased $0.2 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Amortization of intangible assets decreased $1.0 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Income Taxes

AB, a private limited partnership, is not subject to federal or state corporate income taxes. However, AB is subject to a 4.0% New York City unincorporated business tax (“UBT”). Our domestic corporate subsidiaries are subject to federal, state and local income taxes and generally are included in the filing of a consolidated federal income tax return. Separate state and local income tax returns also are filed. Foreign corporate subsidiaries generally are subject to taxes in the jurisdictions where they are located.

Income tax expense for the three months ended September 30, 2025 increased $2.8 million, or 19.9%, compared to the three months ended September 30, 2024 as a result of an increase in foreign income in jurisdictions that carry a higher tax rate. Income tax expense for the nine months ended September 30, 2025 decreased $3.8 million, or 7.6%, compared to the nine months ended September 30, 2024 as a result of a decrease in foreign income in jurisdictions that carry a higher tax rate. There were no material changes to uncertain tax positions (FIN 48 reserves) or valuation allowances against deferred tax assets for the three and nine months ended September 30, 2025.

Net Income (Loss) of Consolidated Entities Attributable to Non-Controlling Interests

Net income (loss) of consolidated entities attributable to non-controlling interests primarily consists of limited partner interests owned by other investors in our consolidated company-sponsored investment funds. For the three months ended September 30, 2025, we had $7.1 million of net income of consolidated entities attributable to non-controlling interests compared to net income of $5.1 million for the three months ended September 30, 2024. The increase is driven by higher net income of consolidated entities attributable to non-controlling interests. For the nine months ended September 30, 2025, we had $4.8 million of net income of consolidated entities attributable to non-controlling interests compared to net income of $17.3 million for the nine months ended September 30, 2024. The decrease is driven by lower net income of consolidated entities attributable to non-controlling interests. Period-to-period fluctuations result primarily from the number of consolidated company-sponsored investment funds and their respective market performance.

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CAPITAL RESOURCES AND LIQUIDITY

Cash flows from operating activities primarily include the receipt of investment advisory and services fees and other revenues offset by the payment of operating expenses incurred in the normal course of business. Our cash flows from operating activities have historically been positive and sufficient in supporting our operations. We do not anticipate this to change in the foreseeable future. Cash flows from investing activities generally consist of small capital expenditures and, when applicable, business acquisitions. Cash flows from financing activities primarily consist of issuance and repayment of debt and the repurchase of AB Holding Units for our long-term deferred compensation plans. We are required to distribute all of our Available Cash Flow to our Unitholders and the General Partner.

During the first nine months of 2025, net cash provided by operating activities was $948.1 million compared to net cash provided of $1.1 billion during the corresponding 2024 period. The decrease is primarily due to the net activity of our consolidated company-sponsored investment funds of $355.1 million, a decrease in accounts payable and accrued liabilities of $81.1 million and an increase in other investments of $35.8 million, partially offset by a decrease in fees receivable of $136.1 million, a decrease in deferred sales commissions of $61.8 million and a decrease in broker-dealer related net assets of $56.8 million.

During the first nine months of 2025, net cash used in investing activities was $27.8 million, compared to net cash used of $93.3 million during the corresponding 2024 period. The change is due to a decrease in debt repayment received from equity method investments of $86.2 million, lower purchases of furniture, equipment and leasehold improvements of $72.1 million, a decrease in cash used related to the divestiture of the BRS business of $40.2 million and a decrease in capital contributions to equity method investments of $39.4 million.

During the first nine months of 2025, net cash used in financing activities was $1.0 billion, compared to net cash used of $1.5 billion during the corresponding 2024 period. The change is primarily due to lower repayments of debt of $409.3 million and capital contributions from consolidated funds in the current year compared to cash distributions in the prior year (net impact of $205.8 million), partially offset by higher cash distributions to Unitholders of $136.8 million.

During the second quarter of 2025, EQH announced the final results of its cash tender offer and purchased a total of 19,682,946 AB Holding Units. During the third quarter, AB entered into an amended and restated Exchange Agreement (the “Amended Exchange Agreement”) with EQH to increase the AB Units that remain available for exchange from 4,788,806 AB Units to 19,682,946 AB Units. At the time the Amended Exchange agreement was entered into, AB issued and exchanged 19,682,946 AB Units for AB Holding Units held by EQH. The acquired AB Holding Units from the exchange were retired, along with an equal number of AB Units.

As of September 30, 2025, AB had $740.9 million of cash and cash equivalents (excluding cash and cash equivalents of consolidated company-sponsored investment funds), all of which is available for liquidity but consists primarily of cash on deposit for our broker-dealers related to various customer clearing activities, and cash held by foreign subsidiaries of $499.3 million.

See Note 16 to AB’s condensed consolidated financial statements contained in Item 1, for disclosures relating to our debt and credit facilities. We use our debt and credit facilities to seed certain new investment products which may expose us to market risk, credit risk and material gains and losses. To reduce our exposure, we enter into various futures, forwards, options and swaps primarily to economically hedge certain of our seed money investments. While in most cases broad market risks are hedged and are effective in reducing our exposure, our hedges are imperfect and we may remain exposed to some market risk and credit-related losses in the event of non-performance by counterparties on these derivative instruments.

Our financial condition and access to public and private debt markets should provide adequate liquidity for our general business needs. Management believes that cash flow from operations and the issuance of debt and AB Units or AB Holding Units will provide us with the resources we need to meet our financial obligations. See “Cautions Regarding Forward-Looking Statements” for a discussion of credit markets and our ability to renew our credit facilities at expiration.

COMMITMENTS AND CONTINGENCIES

AB’s capital commitments, which consist primarily of operating leases for office space, generally are funded from future operating cash flows. See Note 13 for discussion of lease commitments.

See Note 12 for discussion of commitments and contingencies.

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CRITICAL ACCOUNTING ESTIMATES

The preparation of the condensed consolidated financial statements and notes to condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses.

There have been no updates to our critical accounting estimates during the third quarter of 2025, other than as noted below, from those disclosed in “Management’s Discussion and Analysis of Financial Condition” in our Form 10-K for the year ended December 31, 2024.

Goodwill
Our acquisitions are accounted for under the acquisition method of accounting, where the cost of the acquisition is allocated on the basis of the estimated fair value of the assets acquired and the liabilities assumed. The excess of the purchase price over the fair value of identifiable assets acquired, net of liabilities assumed, results in the recognition of goodwill.

As of September 30, 2025, we had goodwill of $3.6 billion on the consolidated statement of financial condition which included $2.6 billion as a result of the Sanford C. Bernstein Inc. (“Bernstein”) acquisition in 2000, $666.1 million as a result of the CarVal Investors L.P. ("CarVal") acquisition in 2022 and $291.9 million in regard to various smaller acquisitions.

We have determined that AB has only one reporting segment and reporting unit. We test our goodwill annually, as of September 30, for impairment or if certain events or changes in circumstances occur and trigger an interim impairment test. The carrying value of goodwill is also reviewed if facts and circumstances occur that suggest possible impairment, such as, but not limited to significant transactions including acquisitions or divestitures and significant declines in AUM, revenues, earnings or the price of an AB Holding Unit. Any of these changes in circumstances could suggest the possibility that goodwill is impaired, but none of these events or circumstances by itself would indicate that it is more likely than not that goodwill is impaired. Instead, they are merely recognized as triggering events for the consideration of impairment and must be viewed in combination with any mitigating or positive factors. A holistic evaluation of all events since the most recent quantitative impairment test must be done to determine whether it is more likely than not that the reporting unit is impaired.

For our annual impairment test, we utilize the market approach where the fair value of the reporting unit is based on its unadjusted market valuation (AB Units outstanding multiplied by AB Holding's Unit price) and earnings multiples. A goodwill impairment would be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The goodwill impairment test does not include a determination by management of whether a decline in fair value is temporary and it is important that management's determination of fair value reflect the impact of changing market conditions, including the severity and anticipated duration of any such changes. The price of a publicly traded AB Holding Unit serves as a reasonable starting point for valuing an AB Unit because each represents the same fractional interest in our underlying business. Our market approach analysis also includes comparable industry earnings multiples applied to our earnings forecast and assumes a control premium (when applicable).


ACCOUNTING PRONOUNCEMENTS

See Note 2 to AB’s condensed consolidated financial statements contained in Item 1.

CAUTIONS REGARDING FORWARD-LOOKING STATEMENTS

Certain statements provided by management in this report and in the portion of AB’s Form 10-Q attached hereto as are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. The most significant of these factors include, but are not limited to, the following: the performance of financial markets, the investment performance of sponsored investment products and separately managed accounts, general economic conditions, the impact of tariffs and potential disruptions in international trade on financial markets, product and account performance, asset levels and economic conditions, industry trends, future acquisitions, integration of acquired companies, competitive conditions and government regulations, including changes in tax regulations and rates and the manner in which the earnings of publicly-traded partnerships are taxed. We caution readers to carefully consider such factors. Further, these forward-looking statements speak only as of the date on which such statements are made; we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements. For further information regarding these forward-looking statements and the factors that could cause actual results to differ, see “Risk Factors” in Part I, Item 1A of our Form 10-K for the year ended December 31, 2024
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Index
and Part II, Item 1A in this Form 10-Q. Any or all of the forward-looking statements that we make in our Form 10-K, this Form 10-Q, other documents we file with or furnish to the SEC, and any other public statements we issue, may turn out to be wrong. It is important to remember that other factors besides those listed in “Risk Factors” and those listed below could also adversely impact our revenues, financial condition, results of operations and business prospects.

The forward-looking statements referred to in the preceding paragraph, most of which directly affect AB but also affect AB Holding because AB Holding’s principal source of income and cash flow is attributable to its investment in AB, include statements regarding:

•Our belief that the cash flow AB Holding realizes from its investment in AB will provide AB Holding with the resources it needs to meet its financial obligations: AB Holding’s cash flow is dependent on the quarterly cash distributions it receives from AB. Accordingly, AB Holding’s ability to meet its financial obligations is dependent on AB’s cash flow from its operations, which is subject to the performance of the capital markets and other factors beyond our control.

•Our financial condition and ability to access the public and private capital markets providing adequate liquidity for our general business needs: Our financial condition is dependent on our cash flow from operations, which is subject to the performance of the capital markets, our ability to maintain and grow client assets under management and other factors beyond our control. Our ability to access public and private capital markets on reasonable terms may be limited by adverse market conditions, our firm’s credit ratings, our profitability and changes in government regulations, including tax rates and interest rates.

•The outcome of litigation: Litigation is inherently unpredictable, and excessive damage awards do occur. Though we have stated that we do not expect any pending legal proceedings to have a material adverse effect on our results of operations, financial condition or liquidity, any settlement or judgment with respect to a legal proceeding could be significant and could have such an effect.

•The possibility that we will engage in open market purchases of AB Holding Units for anticipated obligations under our incentive compensation award program: The number of AB Holding Units AB may decide to buy in future periods, if any, for incentive compensation awards depends on various factors, some of which are beyond our control, including the fluctuation in the price of an AB Holding Unit (NYSE: AB) and the availability of cash to make these purchases.

•Our determination that adjusted employee compensation expense, excluding the impact of performance-based fees, generally should not exceed 50% of our adjusted net revenues on an annual basis: Aggregate employee compensation reflects employee performance and competitive compensation levels.  Fluctuations in our revenues and/or changes in competitive compensation levels could result in adjusted employee compensation expense exceeding 50% of our adjusted net revenues.

Item 3.     Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes in AB’s market risk during the third quarter of 2025 from the information provided under “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A of AB's Form 10-K for the year ended December 31, 2024.
Item 4.     Controls and Procedures

Disclosure Controls and Procedures

Each of AB Holding and AB maintains a system of disclosure controls and procedures that is designed to ensure that information required to be disclosed in our reports under the Exchange Act is (i) recorded, processed, summarized and reported in a timely manner, and (ii) accumulated and communicated to management, including the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO"), to permit timely decisions regarding our disclosure.

As of the end of the period covered by this report, management carried out an evaluation, under the supervision and with the participation of the CEO and the CFO, of the effectiveness of the design and operation of the disclosure controls and procedures. Based on this evaluation, the CEO and the CFO concluded that the disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during the third quarter of 2025 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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