AB 10-K & 10-Q changes, risk factors and insider trading

•Market Factors: Our AUM remain sensitive to global financial market volatility, such as the inflationary pressures and interest rate increases in 2022 and 2023, followed by interest rate decreases and renewed inflationary concerns in 2024.2024, and the imposition of trade tariffs in 2025. Continued global economic uncertainty may lead to market volatility, potentially reducing our revenues and net income. Interconnected global economies mean that instability in one region can impact others. Political, social, or economic instability, wars (e.g., Ukraine and the Middle East), terrorism, health crises (e.g., COVID-19), natural disasters, and other unforeseen events can significantly affect financial markets and our AUM, revenues, and net income. Market volatility and reduced margin financing availability can limit liquidity, making it difficult to sell certain securities at their true value. While liquidity was stable in 2024,2025, future deterioration could adversely affect our AUM, revenues, and net income.

•Geographic and Geopolitical Factors: Our clients and our AUM are geographically diverse as approximately 27%25% of our clients’clients domicileare isdomiciled outside the US (primarily Europe, Asia, and the Americas) and approximately 38%37% of our AUM by Investment Services are non-US. Local or regional events including political, social, or economic instability, wars (e.g., Ukraine and the Middle East), challenges to currently recognized international borders (such as those made by China toward Taiwan), terrorism, health crises (e.g., COVID-19), natural disasters, and other unforeseen events can significantly affect our clients’ demand for our services, local and regional financial markets, and our AUM, revenues, and net income. Specifically, our clients and the investment funds we manage in mainland China, Taiwan, and Hong Kong, as well as any of our investment services with a regional investment focus in this geographic area, may be significantly impacted by a China/Taiwan conflict. The disputed status of Taiwan and the possibility of military conflict with China is a significant geopolitical risk that could materially impact our business in Taiwan.

As part of our business strategy, we consider strategic transactions (such as our insurance sidecar transactiontransactions with Ruby Reinsurance Company and Fortitude Carlyle Asia Reinsurance, Ltd), including acquisitions (e.g., CarVal Investors in 2022), dispositions, mergers, consolidations, and joint ventures (e.g., our partnership with SocGen). These transactions may involve significant risks and challenges, including:

As guarantor for certain guarantees and credit lines of our subsidiaries, we face significant financial risks if any subsidiary experiences financial distress or defaults. In such cases, we may need to fulfill these commitments, which could affect our liquidity and financial condition. For unconsolidated affiliates, these risks may be heightened due to lack of control over those entities' operations.

Increased competition could reduce the demand for our products and services, adversely affecting on our financial condition, results of operations and business prospects. For more information regarding competitive factors, see “Competition” in Item 1.

OurThe processrelocation of relocating our headquarters may present issues that were not be executed as we haveinitially envisioned.

Ensuring the continuity and effectiveness of our information and cyber security infrastructure, policies, procedures, and capabilities is crucial to protect our systems and data. Although we have a robust cybersecurity infrastructure and incident preparedness strategy that we test frequently, we may not always be able to prevent or properly respond to a cyber incident. Despite our protective measures, including advanced security technology, our systems may still be vulnerable to unauthorized access, supply chain attacks, computer viruses, and other security threats, such as cybercriminal attacks (e.g., phishing and ransomware). These threats could significantly harm our operations, reduce our ability to service our clients and could damage our reputation. The impacts of which could lead to litigation, regulatory scrutiny, and cause us to incur significant remediation costs. For more details see "Cybersecurity" in Item 1C.

Our financial condition depends on cash flow from operations, which is influenced by capital market performance, our ability to maintain and grow AUM, and other factors beyond our control. Adverse market conditions, profitability, perceived creditworthiness, and changes in government regulations, including tax and interest rates, may limit our ability to issue debt or borrow on reasonable terms. Our access to credit also depends on our firm's credit ratings.

Global regulators have increased oversight of financial services, impacting our business with new and proposed regulations, especially in investment management. Compliance has also become more expensive and time-consuming. For example, regulatory focus on ESG practices remains significant. The SEC continues to scrutinize ESG investment labeling to prevent misleading claims. Privacy regulations such as the General Data Protection Regulation ("GDPR") in Europe have strengthened privacy rules for organizations handling personal data, granting individuals more rights and control over the use of their personal data, and greatly increasing penalties for noncompliance. In many other jurisdictions in which our subsidiaries operate, there is ongoing change to update and strengthen privacy regulations in a manner similar to GDPR,GDPR. suchThe asEuropean Commission's (the "EU") action plan and the CaliforniaEU ConsumerSustainable PrivacyFinance ActDisclosure Regulation also impose increased restrictions, disclosure obligations, and Californiacompliance Privacycosts, Rightswith Act,potential andreputational India’s Digital Personal Data Protection Act.risks.

Our fund management company (“FMC”) operations in China are subject to a number of regulatory risks, created by an opaque political systemsystem, evolving regulatory environment and complex data security and data transfer regulations. Foreign governments like China could retaliate against businesses like ours for decisions made by the US government in areas like sanctions and tariffs. China's cybersecurity laws and regulations can be complex and may require companies to store data locally. Restrictions on transfers of certain types of onshore entity business information also may limit our ability to aggregate, report, and monitor such data on our global platform. These factors may increase compliance risk and costs, including the possibility that a breach of local regulation could result in penalties, fines and the revocation of our FMC license.

Legislative proposals, if enacted,enacted when proposed, could materially affect us, but their outcomes are unpredictable. AB management is monitoring potential impacts of new legislation. AB's non-U.S. subsidiaries are subject to local taxes. Increased operations abroad or changes in foreign tax laws or rates could raise AB's effective tax rate.

Our total Assets Under Management ("AUM") as of December 31, 20242025 were $792.2$866.9 billion, up $67.0$74.7 billion, or 9.2%,9.4%, during 2024.2025. The increase was primarily driven by market appreciation of $68.5$86.0 billion, partially offset by net outflows of $2.2$11.3 billion (reflecting Institutional net outflows of $16.5$4.6 billion and Retail net outflows of $9.1 billion, offset by Retail net inflows of $13.4 billion and Private Wealth Management net inflows of $0.9$2.4 billion).

Institutional AUM increased $4.3$32.8 billion, or 1.3%,10.2%, to $321.4$354.2 billion during 2024,2025, primarily due to market appreciation of $20.7$37.0 billion, partially offset by net outflows of $16.5$4.6 billion. Gross sales increased $1.2$13.7 billion, from $11.8 billion in 2023 to $13.0 billion in 2024.2024 to $26.7 billion in 2025. Redemptions and terminations increaseddecreased $2.3 billion, from $14.9 billion in 2024 to $12.6 billion in 2023 to $14.9 billion in 2024.2025.

Retail AUM increased $47.5$22.1 billion, or 16.6%,6.6%, to $334.3$356.4 billion during 2024,2025, primarily due to market appreciation of $34.2$31.3 billionbillion, andpartially offset by net inflowsoutflows of $13.4$9.1 billion. Gross sales increaseddecreased $28.8$9.7 billion, from $71.1 billion in 2023 to $99.9 billion in 2024.2024 to $90.2 billion in 2025. Redemptions and terminations increased $13.6$15.8 billion, from $58.1 billion in 2023 to $71.7 billion in 2024.2024 to $87.5 billion in 2025.

Bernstein Research Services ("BRS") revenue decreased $289.9$96.2 million, or 75.1%,100.0%, during 2024.2025. The decrease was due to the deconsolidation of the BRS business and contribution of the business to the joint ventures, effectiveon April 1, 2024. For further discussion, see Note 24 Divestitures to our consolidated financial statements in Item 8.

Our 20242025 net revenues of $4.5 billion increased $319.8$55.5 million, or 7.7%,1.2%, 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$175.1 million,million and higher distribution revenues of $140.4$91.8 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$96.2 million due to the deconsolidation of the BRS business, lower performance-based fees of $85.7 million, higher investment losses as compared to gains in the prior year of $27.7$17.4 million and lower netother dividend and interest incomerevenues of $11.1$8.6 million.

Our operating expenses of $3.4$3.5 billion increased $13.4$129.1 million, or 0.4%,3.9%, compared to operating expenses of $3.3$3.4 billion in the prior year. The increase was primarily due to the recognition of a gain on contingent payment arrangements of $121.0 million in the prior year and higher promotion and servicing expense of $119.7$76.8 million, higherpartially offset by lower general and administrative expenses of $42.2 million, lower 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$11.3 million and lower interest on borrowings of $10.9$15.2 million. The change in contingent payment arrangements was primarily due to the recognition of a gain of $128.5 million in 2024 related to a fair value remeasurement of the contingent payment liability associated with our acquisition of AB CarVal in 2022.

Our operating income increaseddecreased $306.4$73.6 million, or 37.5%,6.5%, to $1.1 billion fromcompared $817.7to million in 20232024 and our operating margin increaseddecreased to 23.0% in 2025 from 24.7% in 2024 from 19.1% in 2023.2024.

(1) Percentage change figures are calculated using assets under management rounded to the nearest million, while financial statement amounts are rounded to the nearest hundred thousand.

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. In mid-2021, Equitable Financial Life Insurance Company, a subsidiary of EQH ("Equitable Financial"), agreed to provide an initial $10 billion in permanent capital to build out AB's private illiquid offerings, including private alternatives and private placements. Deployment of the initial $10 billion in permanent capital is now complete. In addition, during the second quarter of 2023, EQH committed to provide an additional $10 billion in permanent capital, deployment of which is approximately 20%substantially complete. 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.

EffectiveOn April 1, 2024, AB and Societe Generale ("SocGen") completed their previously announced transaction to formformed a global joint venture with two joint venture holding companies, one outside of North America (the "ROW JV") and one within North America ("NA JV", and together the "JVs"). As of December 31, 2025, AB ownsowned a majority interest in the NA JV while SocGen ownsowned a majority interest in theROW joint venture outside of North America.JV. AB has deconsolidated the BRS business and retained the Bernstein Private Wealth Management business within its existing U.S. broker dealer Sanford C. Bernstein & Co., LLC. For further discussion, see Note 24 Divestitures to our consolidated financial statements in Item 8.

AB Holding's partnership gross income is derived from its interest in AB. AB Holding’s income taxes, which reflect a 3.5% federal tax on its partnership gross income from the active conduct of a trade or business, are computed by multiplying certain AB qualifying revenues by AB Holding’s ownership interest in AB, multiplied by the 3.5% tax rate. Certain AB qualifying revenues are primarily U.S. investment advisory fees, research payments and brokerage commissions.fees. AB Holding’s effective tax rate was 9.9%, 8.4% in 2024,and 11.9% in 20232025, 2024 and 10.3%2023, in 2022.respectively. The decreaseincrease in AB Holdings effective tax rate in 2025 is primarily driven by one-time items in the prior year not subject to the gross revenue tax. See Note 6 to AB Holding’s financial statements in Item 8 for a further description.

We provide the non-GAAP measures "adjusted net income" and "adjusted diluted net income per unitUnit" because our quarterly distribution per unit is typically our adjusted diluted 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 margin, and they may not be comparable to non-GAAP measures presented by other companies. Management uses both GAAP and non-GAAP measures in evaluating the company’s financial performance. The non-GAAP measures alone may pose limitations because they do not include all of AB’s revenues and expenses. Further, adjusted diluted net income per AB Holding Unit is not a liquidity measure and should not be used in place of cash flow measures. See “Management Operating Metrics” in this Item 7.

The impact of these adjustments on AB Holding’s net income and diluted net income per AB Holding Unit are as follows:

During the year ended December 31, 2025, net cash provided by operating activities was $352.4 million, compared to $340.5 million during the corresponding 2024 period. The increase primarily resulted from higher cash distributions received from AB of $8.8 million. During the year ended December 31, 2024, net cash provided by operating activities was $340.5 million, compared to $294.0 million during the corresponding 2023 period. The increase primarily resulted from higher cash distributions received from AB of $47.7 million. During the year ended December 31, 2023, net cash provided by operating activities was $294.0 million, compared to $362.6 million during the corresponding 2022 period. The decrease primarily resulted from lower cash distributions received from AB of $64.6 million.

During the year ended December 31, 2025, net cash used in financing activities was $352.4 million, compared to $340.5 million during the corresponding 2024 period. The increase was primarily due to higher cash distributions to Unitholders of $11.2 million. During the year ended December 31, 2024, net cash used in financing activities was $340.5 million, compared to $294.0 million during the corresponding 2023 period. The increase was primarily due to higher cash distributions to Unitholders of $45.1 million and lower capital contributions from AB of $1.4 million. During the year ended December 31, 2023, net cash used in financing activities was $294.0 million, compared to $360.8 million during the corresponding 2022 period. The decrease was primarily due to lower cash distributions to Unitholders of $64.9 million and higher capital contributions from AB of $2.2 million.

AB Holding is required to distribute all of its Available Cash Flow, as defined in the AB Holding Partnership Agreement, to its Unitholders (including the General Partner). Available Cash Flow typically is the adjusted diluted net income per unitUnit for the quarter multiplied by the number of units outstanding at the end of the quarter. Management anticipates that Available Cash Flow will continue to be based on adjusted diluted net income per unit,Unit. unlessIf management determines, with the concurrence of the Board of Directors, that one or morecertain adjustments made to adjusted net income should not be made with respect to the Available Cash Flow calculation.are necessary or unnecessary, such adjustments will be made in future periods. See Note 2 to AB Holding’s financial statements in Item 8 for a description of Available Cash Flow.

During 2024,2025, our RetailInstitutional channel average AUM of $315.3$337.6 billion increased $53.3$14.7 billion, or 20.4%,4.5%, compared to 2023,2024, primarilywhile due to thisending AUM increasingincreased $47.5$32.8 billion, or 16.6%,10.2%, to $334.3$354.2 billion from December 31, 2023.2024. The $47.5$32.8 billion increase in AUM resulted primarily from market appreciation of $34.2 billion and net inflows of $13.4 billion. During 2023, our Retail channel average AUM of $262.0 billion decreased $5.8$37.0 billion, orpartially 2.1%,offset compared to 2022, while ending AUM increased $43.9 billion, or 18.1%, to $286.8 billion from December 31, 2022. The $43.9 billion increase in AUM resulted primarily from market appreciation of $40.3 billion andby net outflows of $3.7$4.6 billion.

During 2024,2025, our Private Wealth ManagementRetail channel average AUM of $130.3$343.5 billion increased $16.6$28.2 billion, or 14.6%,8.9%, compared to 2023,2024, primarily due to this AUM increasing $15.2$22.1 billion, or 12.6%,6.6%, to $136.5$356.4 billion from December 31, 2023.2024. The $15.2$22.1 billion increase in AUM resulted from market appreciation of $13.6 billion, net inflows of $0.9 billion and an adjustment of $0.7 billion. During 2023, our Private Wealth Management channel average AUM of $113.7 billion increased $3.4 billion, or 3.0%, compared to 2022, primarily due to this AUM increasing $15.1 billion, or 14.1%, to $121.3 billion from December 31, 2022. The $15.1 billion increase in AUM resulted from market appreciation of $14.0$31.3 billion, andpartially offset by net inflowsoutflows of $1.1$9.1 billion.

Net income attributable to AB Unitholders for the year ended December 31, 20242025 increaseddecreased $408.6$190.8 million from the year ended December 31, 2023.2024. The increasedecrease primarily is due to (in millions):

(2)On April 1, 2024, AB and SocGen, a leading European bank, completed their transaction to form a jointly owned equity research provider and cash equity trading partner for institutional investors. AB has deconsolidated the BRS business and contributed the business to the JVs. For further discussion, see Note 24 Divestiture to our consolidated financial statements contained in Item 8.

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. We did not adopt aThe plan adopted during the fourth quarter expired at the close of 2024.business on December 26, 2025. We may adopt additional plans in the future to engage in open-market purchases of AB Holding Units to help fundfor anticipated obligations under our incentive compensation award program and for other corporate purposes.

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 diluted net income per unitUnit for the quarter multiplied by the number of general and limited partnership interests at the end of the quarter. In future periods, managementManagement anticipates that Available Cash Flow will continue to be based on adjusted diluted net income per unit,Unit. unlessIf management determines, with the concurrence of the Board of Directors, that one or morecertain adjustments that are made for adjusted net income should not be made with respect to the Available Cash Flow calculation.are necessary or unnecessary, such adjustments will be made in future periods. See Note 2 to our consolidated financial statements contained in Item 8 for a description of Available Cash Flow.

We are providing the non-GAAP measures “adjusted net revenues,” “adjusted operating incomeincome,” and “adjusted operating margin” and "adjusted net income per AB Unit" 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 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 performance-basedinvestment 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 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.

During the firstsecond quarter of 2026, there have been no material changes to the risk factors from those appearing in AB Holding's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

AB Holding's net income for the three and six months ended MarchJune 31,30, 2026 increased $11.2$1.5 million and $12.7 million, respectively, compared to the threecorresponding monthsperiods ended March 31,in 2025, primarily due to higher net income attributable to AB Unitholders, partially offset by lower weighted average equity ownership interest in AB.

AB Holding’s partnership gross income is derived from its interest in AB. AB Holding’s income taxes, which reflect a 3.5% federal tax on its partnership gross income from the active conduct of a trade or business, are computed by multiplying AB qualifying revenues by AB Holding’s ownership interest in AB, multiplied by the 3.5% tax rate. AB qualifying revenues are primarily U.S. investment advisory fees. AB Holding's effective tax rate was 7.6%10.4% during the three months ended MarchJune 31,30, 20262026, andcompared 10.5%to 10.9% during the three months ended MarchJune 31,30, 2025. AB Holding's effective tax rate was 8.9% during the six months ended June 30, 2026, compared to 10.7% during the six months ended June 30, 2025. See Note 7 to the condensed financial statements in Item 1 for the calculation of income tax expense.

During the threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities was $88.5$165.4 million, compared to $115.3$203.9 million during the corresponding 2025 period. The decrease primarily resulted from lower cash distributions received from AB of $30.1$43.2 million.

During the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities was $88.5$165.4 million, compared to $115.3$203.9 million during the corresponding 2025 period. The decrease was primarily due to lower cash distributions to Unitholders of $27.4$38.3 million.