EQT AB earnings call: Galderma gain and AI push

EQT AB ((SE:EQT)) has held its Q1 earnings call. Read on for the main highlights of the call.

EQT AB’s latest earnings call struck a decidedly upbeat tone despite choppy markets and pressure on software valuations. Management leaned on landmark realizations, record wealth inflows and a swelling war chest to argue that recent mark‑to‑market noise is temporary, while the firm’s strategy around AI infrastructure, Asia and private wealth sets up what they described as a structurally stronger earnings profile.

Record Galderma Monetization

EQT completed its final sell‑down of Galderma, capped by a roughly $6bn sponsor‑backed block trade that fully exited the investment. In total the deal has returned about $26bn to investors and generated around $20bn of capital gains, which the firm highlighted as the largest single‑fund capital gain seen in the industry and a reference point for its value‑creation model.

BPEA Fund IX Hard Cap Close and Scale Gain

The flagship Asia vehicle BPEA Fund IX closed at USD 15.6bn, of which about USD 14.9bn is fee‑generating, hitting its hard cap and marking a near 40% increase versus its predecessor. EQT stressed the breadth of its LP base, noting more than 75 new investors and that over 45 investors from other EQT strategies contributed roughly a quarter of total commitments, underlining strong cross‑sell momentum.

Strong Evergreen Net Inflows

EQT’s evergreen private wealth vehicles delivered a record quarter with net inflows of EUR 1.0bn, a sharp jump from around EUR 200m in the final quarter of 2024. Management emphasized that redemptions stayed very low at below 0.5% in the period, arguing this demonstrates resilience of the platform even amid negative headlines around parts of the private credit market.

Launch of AI Infrastructure Strategy and EdgeConneX Seed

The firm launched a dedicated AI Infrastructure strategy seeded with EdgeConneX, which operates more than 90 data centers and holds a portfolio spanning roughly 29 million miles of fiber plus significant energy assets. EQT said the combined digital and energy platform carries an enterprise value north of $100bn and positions the group at the intersection of data, power and AI‑driven demand growth.

Fundraising and Fund Activation Momentum

EQT reported that fundraising for its next flagship private equity fund, EQT XI, is on track for a strong initial close around midyear, while Infrastructure VI is around 75–80% invested. Infra VII is expected to be activated around year‑end, and management signaled an unusually busy cycle ahead, forecasting that more than 10 closed‑ended funds will be in market during 2026 with many campaigns carrying into 2027.

Robust Dry Powder Positioning

Across its platforms EQT said it now holds more than EUR 40bn of dry powder, a figure that excludes the upcoming EQT XI vehicle. The firm argued this liquidity provides ample capacity to lean into potential market dislocations and to support both new deals and follow‑on investments in existing portfolio companies as valuations reset.

Software Portfolio Operational Outperformance

Despite valuation pressure, EQT underscored that its software holdings are delivering robust fundamentals with average net sales growth in the low‑to‑mid teens and operating profit expansion of 20–30%. The group completed four software exits at a weighted average gross MOIC around 5x and highlighted IFS in particular, citing a gross MOIC above 7x and expectations for annual recurring revenue growth above 20% alongside up to EUR 100m in annual AI‑driven cost savings.

Fund and Exit Activity

Beyond Galderma, Q1 exits included the sale of Azelis, both from EQT VIII, reflecting continued realization from mature vintages. Post‑quarter, Infrastructure funds IV and V sold minority stakes in EdgeConneX into the new AI Infrastructure vehicle and Infra V sold a minority stake in Nordic Ferry, and the firm maintained guidance for a diversified exit pipeline targeting roughly 30 events in 2026 in line with 2025 levels.

Coller Capital Combination Progress

EQT said its planned combination with secondaries specialist Coller Capital is progressing on schedule with closing expected around mid‑to‑late third quarter. Coller has already seen momentum with launches of new private credit and private equity secondaries funds and more than $400m of net inflows in the first quarter, and the combined group is targeting a doubling of fee‑paying assets under management within four years.

Carry and Capital Returns

Management highlighted four key funds currently in carry mode with around EUR 600m of remaining carry to be recognized over multiple years, including an expected EUR 500m of cash carry from EQT VIII with a substantial portion anticipated in the first half of 2026. For shareholders, the firm noted it has returned roughly EUR 800m over the past 12 months through a mix of dividends and share buybacks, framing this as evidence of a maturing cash‑generation profile.

Market Volatility and Valuation Pressure

The firm acknowledged that significant market volatility in the first quarter weighed on valuations, with listed software holdings experiencing notable share price declines. Management said some private capital funds showed lower marks as public multiples fell, but characterized these as mark‑to‑market adjustments rather than signs of weakening portfolio performance, pointing to continued earnings growth at underlying companies.

Software Multiples Contraction

Private software valuations were marked down further as peer‑group multiples in public markets compressed, and this also held back valuations in flagship fund EQT X, where software exposure is under 30%. Executives emphasized that these write‑downs occurred even as portfolio software businesses grew revenue and profits, arguing that any eventual rebound in market multiples could create upside leverage to current marks.

Timing of Fee Revenue Recognition

With BPEA IX and other new vehicles ramping, EQT flagged that 2026 will be a heavy fundraising year yet much of the associated management fee revenue will only be recognized from 2027 onwards. This creates a timing gap where costs for building platforms are incurred earlier, while fee‑related revenue growth and margin benefits from the enlarged base are pushed into later years.

Private Credit and Evergreen Headwinds

Negative headlines around parts of the private credit market have created what EQT described as a dislocation, spilling over into sentiment around evergreen products that mix credit and equity. While the firm still delivered record evergreen inflows, management believes the private credit backdrop likely capped how much capital could have been raised in the quarter, underscoring that even strong franchises are not fully insulated from sector‑wide volatility.

Modest Cost and Hiring Pressure

EQT added about 10 employees in the quarter and guided to mid‑single‑digit operating expense growth as it continues investing into AI capabilities, Asian expansion, U.S. build‑out and private wealth distribution. The company cautioned that these initiatives may lift near‑term costs before efficiency gains from technology and scale appear, but reiterated its commitment to maintaining a 55% fee‑related EBITDA margin over the cycle.

Forward‑Looking Guidance and Outlook

Looking ahead, EQT reiterated its aim to keep annual exit volumes broadly in line with 2025, targeting around 30 exit events while pushing ahead with a full fundraising slate led by EQT XI, Infra VII and the new AI Infrastructure strategy. With evergreen inflows at a record EUR 1.0bn, dry powder above EUR 40bn, Coller on track to close and roughly EUR 600m of carry still to be recognized, management framed the medium‑term as one of continued deployment, scaled management‑fee growth from 2027 and disciplined cost control.

EQT’s call painted a picture of a firm balancing short‑term valuation headwinds with landmark realizations, record inflows and a growing pipeline in AI and secondaries. For investors, the message was that while near‑term earnings can be bumpy due to market marks and fee‑timing, the combination of strong fundraising, sizeable dry powder and a deep exit slate leaves the platform well positioned for long‑term value creation.