BlackRock Inc Earnings - Q4 2025 Analysis & Highlights
BlackRock reported record financial performance in Q4 2025 and full year 2025, driven by exceptional organic base fee growth, record net inflows, and successful integration of recent acquisitions, with management expressing confidence in continued momentum across public and private markets, technology platforms, and emerging growth initiatives including private markets-to-wealth and retirement solutions.
Key Financial Results
Full year 2025 revenue of $24 billion increased 19% year-over-year, with operating income of $9.6 billion up 18% and earnings per share of $48.09 increasing 10%.
Fourth quarter revenue of $7 billion was 23% higher year-over-year, driven by acquisitions of HPS and Preqin, organic base fee growth, and positive market movements on average AUM.
Fourth quarter operating income of $2.8 billion was up 22%, while earnings per share of $13.16 increased 10% versus a year ago.
Full year total net inflows of $698 billion reflected positive flows and organic base fee growth across all asset classes and active and index strategies.
Fourth quarter net inflows of $342 billion demonstrated strong momentum into year-end.
iShares led the industry with a new flows record of $527 billion in 2025, representing 12% organic asset and 13% organic base fee growth.
Full year organic base fee growth of 9% represents $1.5 billion of net new base fees, with the company entering 2026 with base fees approaching $21 billion, 13% higher than 2025.
Fourth quarter organic base fee growth of 12% and 16% technology ACV growth, both 4 points higher than last year.
Full year as adjusted operating margin of 44.1% decreased 40 basis points from a year ago, with fourth quarter as adjusted operating margin of 45% down 50 basis points year-over-year.
Excluding performance fees and related compensation, adjusted operating margin for the fourth quarter would have been 45.5%, up 30 basis points year-over-year, and full year margin would have been 44.9%, 60 basis points higher relative to 2024.
Fourth quarter base fees and securities lending revenue of $5.3 billion was up 19% year-over-year, driven by positive market beta impact on average AUM, organic base fee growth, and approximately $230 million in base fees from HPS.
Fourth quarter performance fees of $754 million increased from a year ago, reflecting higher revenue from alternatives and including $158 million from HPS.
Full quarter and full year technology services and subscription revenue each increased 24% year-over-year, with Preqin adding approximately $65 million and $213 million of revenue in the fourth quarter and full year, respectively.
Annual contract value (ACV) increased 31% year-over-year, including the impact of Preqin, with 16% organic ACV growth.
Total expense increased 19% in 2025, primarily driven by higher compensation, sales, asset and account expense, and G&A expense.
Full year employee compensation and benefit expense was up 20%, primarily reflecting higher incentive compensation associated with performance fees and higher operating income.
Full year G&A expense was up 15%, primarily due to M&A transactions and higher technology investment spend.
As adjusted tax rate for the fourth quarter was approximately 20% and benefited from discrete items, with 25% estimated as a reasonable projected tax run rate for 2026.
Business Segment Results
iShares net inflows of $181 billion in the fourth quarter demonstrated strong momentum into year-end, supported by seasonal portfolio reallocations.
Full year retail net inflows of $107 billion were led by the onboarding of the $80 billion SMA assignment from Citi Wealth during the fourth quarter.
Aperio had its fifth consecutive record year of net inflows with $15 billion, active fixed income added $3 billion, and alternatives generated $12 billion in 2025.
BlackRock's institutional active franchise generated net inflows of $54 billion in 2025, reflecting the onboarding of multiple outsourcing mandates, the above-target close of GIP V, and deployment in private credit.
Institutional index net outflows of $119 billion were mainly driven by redemptions from low fee index equity strategies.
BlackRock's scaled private markets platform delivered $40 billion of full year net inflows, led by private credit and infrastructure.
BlackRock cash management saw $74 billion of net inflows in the fourth quarter and $131 billion in 2025, driven by US government, international prime, and Circle reserve funds.
Full year active fixed income franchise generated over $45 billion of net inflows led by Rick Rieder.
Active ETFs drove more than $50 billion in net inflows in 2025, nearly tripling their assets in the last year.
Systematic equity franchise raised over $50 billion in 2025, even as the active equity industry saw another year of outflows.
iShares' AUM was about $300 billion when acquired in 2009 and today stands at $5.5 trillion, with iShares' revenues more than quadrupling to over $8 billion.
Europe ETF net inflows of $136 billion was approximately 50% higher than 2024.
JioBlackRock raised $2 billion upon launch, 6 times the previous industry record, and now manages 12 funds spanning cash, index, systematic equities on behalf of nearly 400 institutions and already more than 1 million Indian retail investors.
Both in Asia and in LatAm, double-digit organic base fee growth was achieved in 2025.
Growth in Asia was led by active wealth strategies and $30 billion of ETF net inflows across locally listed and global ETF range.
Private credit net inflows of $7 billion in the quarter, primarily due to deployment activity.
$25 billion deployed in 2025 across private markets led by private credit and infrastructure.
HLEND raised about $1 billion a quarter with strong gross subscriptions of $1.1 billion in the fourth quarter.
Redemptions in HLEND were 4.1% in Q4, which was higher than recent quarters, but in line with the broader industry.
Capital Allocation
Record $5 billion payout to shareholders in 2025 through a combination of dividends and share repurchases.
$500 million and $1.6 billion of share repurchases for fourth quarter and full year, respectively.
10% increase to first quarter 2026 dividend per share, representing a 13% increase in the dollar amount of dividends expected to be paid.
Board authorized the repurchase of an additional 7 million shares under the share repurchase program.
Targeting the purchase of $1.8 billion worth of shares during 2026, based on capital spending plans for the year and subject to market and other conditions.
10% compounded annual growth rate in dividend over the last 10 years and over 15% annual return on repurchases.
Industry Trends and Dynamics
Clients awarded BlackRock with nearly $700 billion in new assets in 2025, with nearly $2.5 trillion of net inflows over the last five years.
Fee yields on new asset flows this year are 6 to 7 times higher than they were in 2023 and are at a premium to overall fee rate.
Nearly 150 products across ETF and mutual fund ranges had over $1 billion in flows.
Asia capital markets grew faster than the US capital markets, with more IPOs in Asia, especially in Hong Kong.
Historical changes in Japan are occurring because of NISA accounts and retirement accounts, with more wealth entering capital markets out of the banking system.
Default rates in the broader leveraged loan market are averaging slightly below the long-term average of 3%, with economic slowdowns seeing default rates rise to 4% to 5%, and the all-time peak in the GFC hitting 15% on an issuer-weighted basis.
Non-accruals in the universe of BDC loans are inside the historical average, with PIC as a percentage of total interest income in line with historical norms and recovery rates in line with historical norms.
Over 80% of investors plan to maintain or increase their allocations to private credit in the next 12 months.
Defaults and losses in non-IG direct lending to corporates have been abnormally low for years following low rates.
Competitive Landscape
BlackRock is the largest insurance company general account manager in the industry with $700 billion in assets and more than 450 insurance relationships.
HPS manages over $60 billion of credit assets for over 125 insurance companies.
BlackRock is the largest general account manager for insurers with $700 billion in AUM.
BlackRock is the largest user of Aladdin, which allows the company to stay attuned to changes in the marketplace and adapt Aladdin for clients.
iShares remains the market leader in ETFs in terms of organic assets and base fee growth, countries served, and in product lineup.
BlackRock provides over 1,700 ETFs today, more than 6 times the next largest issuer.
BlackRock manages $3 trillion on behalf of insurance, wealth and OCIO clients.
BlackRock manages over $4.5 trillion in assets across both public fixed income, cash, and private credit.
BlackRock has the largest wholesaling team in the industry covering every corner of the United States marketplace and very strong relationships in private banks in Europe.
BlackRock's more than $1 trillion of wealth platform spans end clients' whole portfolios from models and SMAs to ETFs and private markets.
Insurance company asset management is a highly customized effort working with clients every day, not a mandate that is give me a benchmark and I'll beat it.
BlackRock's competitive advantage includes the ability to blend turnkey full-service capabilities for insurance companies, integrating public fixed income, private credit, Aladdin, accounting, and middle office services.
Macroeconomic Environment
2026 is shaping up to be the year of a steeper yield curve, with the era of easy 2a-7 fund income looking to be fading.
Bond returns are going to be driven more by income rather than rate moves or spread compression.
Rate cuts are going to cause money market yields to fall, with some of the best opportunities for investors to be locking in bond yields in intermediate-term bonds.
There is a generational opportunity to earn high-quality, steady income in the front middle of the yield curve using the full toolkit of fixed income, credit, securitized, government bonds, munis, active, and index.
Global capital markets grow, cash is going to grow alongside of it, with base holdings of cash elevated as long as global capital markets continue to grow.
If tokenization becomes more real and the opportunity to have a tokenized money market fund alongside tokenizing other assets, BlackRock believes there will be probably above-trend holdings in cash.
As capital markets grows and more of people's wallets are in capital markets, the role of the money market fund just grows.
Growth Opportunities and Strategies
BlackRock is building leading franchises in newer high-growth markets across the industry, including private markets to insurance, private markets to wealth, digital assets, and active ETFs.
These new franchises can all be $500 million revenue generators in the next five years.
BlackRock is pioneering what it believes is the asset management model of the future, one that seamlessly brings together public and private markets, interoperates between traditional and decentralized financial ecosystems, and is powered by technology and data with Aladdin, eFront, and Preqin.
BlackRock houses the world's number one ETF franchise, a top five alternatives platform with more than $675 billion in client assets, $0.5 trillion in target date AUM, leading advisory services, and a tech and data SaaS franchise with nearly $2 billion in revenue.
BlackRock is targeting $400 billion in gross private markets fund raising through 2030, powered by origination, strong investment performance, and the depth of client relationships.
BlackRock's valuable position as a trusted, long-term partner to corporates and sovereigns provides unique visibility and insight into capital markets and client activity enabling differentiated deal flows, tailored solutions, and long-term value creation.
BlackRock is focused on expanding access to private markets in wealth, bringing together strong investment performance track records with BlackRock's scaled global distribution model.
BlackRock is expanding and diversifying distribution of HPS non-traded BDC to US wirehouses and RIAs, and believes model portfolios will be another unlock.
BlackRock is planning to widen product range through an H Series family of funds led by the flagship HLEND alongside junior capital, real assets, triple net lease, multi-strat credit, and secondaries and co-investment strategies.
BlackRock plans to bring all the building blocks to serve wealth investors through coordinated multi-alts portfolios.
BlackRock expects to launch its first LifePath target date fund with private markets later this year.
BlackRock has championed early childhood savings accounts and the policies that make them possible, and is encouraged by and supportive of the launch of these accounts in the United States.
BlackRock will be at the forefront of bringing additional returns and diversification to investors through private markets with its leading DCIO business, $600 billion LifePath franchise, top five alternative platforms, and Preqin.
BlackRock expects plan sponsors will need standardized benchmarking and performance data to validate their plan choices, and Preqin can be the central provider.
BlackRock started innovating LifePath Paycheck in 2018 and it has been the fastest-growing lifetime income target date strategy in the defined contribution market.
BlackRock believes LifePath Paycheck will be the default retirement investment strategy.
Guaranteed income and private markets are not two separate conversations, with BlackRock able to bring it all together.
BlackRock's vision is not just for incremental additions of private markets, but the design of an optimal target date solution combining public markets, private markets, and guaranteed income like LifePath Paycheck.
GIP V closed above its $25 billion target in July, and BlackRock's AI partnership, which was not part of the deal model, continues to attract significant capital.
AIP has raised over $12.5 billion from partnership founders and clients, with an initial target to mobilize and deploy $30 billion of equity capital, with a potential of reaching $100 billion, including debt.
BlackRock is seeing excellent progress across the range of infrastructure strategies, including mid-cap and emerging markets infra equity, and investment-grade, high-yield and credit-sensitive infra debt.
The current cash flow and inflation-protected return profile of infrastructure makes it an attractive sector for clients, especially
