ALLIANCEBERNSTEIN HOLDING LP

Executive Overview(1)

Our total Assets Under Management ("AUM") as of December 31, 2024 were $792.2 billion, up $67.0 billion, or 9.2%, during 2024. The increase was primarily driven by market appreciation of $68.5 billion, partially offset by net outflows of $2.2 billion (reflecting Institutional net outflows of $16.5 billion, offset by Retail net inflows of $13.4 billion and Private Wealth Management net inflows of $0.9 billion).

Institutional AUM increased $4.3 billion, or 1.3%, to $321.4 billion during 2024, primarily due to market appreciation of $20.7 billion, partially offset by net outflows of $16.5 billion. Gross sales increased $1.2 billion, from $11.8 billion in 2023 to $13.0 billion in 2024. Redemptions and terminations increased $2.3 billion, from $12.6 billion in 2023 to $14.9 billion in 2024.

Retail AUM increased $47.5 billion, or 16.6%, to $334.3 billion during 2024, primarily due to market appreciation of $34.2 billion and net inflows of $13.4 billion. Gross sales increased $28.8 billion, from $71.1 billion in 2023 to $99.9 billion in 2024. Redemptions and terminations increased $13.6 billion, from $58.1 billion in 2023 to $71.7 billion in 2024.

Private Wealth Management AUM increased $15.2 billion, or 12.6%, to $136.5 billion during 2024, primarily due to market appreciation of $13.6 billion and net inflows of $0.9 billion. Gross sales increased $2.2 billion, from $18.6 billion in 2023 to $20.8 billion in 2024. Redemptions and terminations increased $2.4 billion, from $17.5 billion in 2023 to $19.9 billion in 2024.

Bernstein Research Services ("BRS") revenue decreased $289.9 million, or 75.1%, during 2024. The decrease was due to the deconsolidation of the BRS business and contribution of the business to the joint ventures, effective April 1, 2024. For further discussion, see Note 24 Divestitures to our consolidated financial statements in Item 8.

Our 2024 net revenues of $4.5 billion increased $319.8 million, or 7.7%, compared to net revenues of $4.2 billion in the prior year. The increase was primarily due to higher investment advisory base fees of $340.6 million, higher distribution revenues of $140.4 million, higher performance-based fees of $126.1 million and higher other revenues of $41.6 million primarily due certain reimbursements for services provided to the joint ventures, partially offset by lower Bernstein Research Services revenue of $289.9 million due to the deconsolidation of the BRS business, investment losses as compared to gains in the prior year of $27.7 million and lower net dividend and interest income of $11.1 million.

Our operating expenses of $3.4 billion increased $13.4 million, or 0.4%, compared to operating expenses of $3.3 billion in the prior year. The increase was primarily due to higher promotion and servicing expense of $119.7 million, higher employee compensation and benefits expense of $32.6 million and higher general and administrative expenses of $17.6 million, partially offset by higher gain on contingent payment arrangements of $144.7 million and lower interest on borrowings of $10.9 million. The change in contingent payment arrangements was primarily due to the recognition of a 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.

Our operating income increased $306.4 million, or 37.5%, to $1.1 billion from $817.7 million in 2023 and our operating margin increased to 24.7% in 2024 from 19.1% in 2023.