BlackRock Inc Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
BlackRock's Q3 2025 earnings call highlighted record AUM and strong organic base fee growth, driven by ETFs, private markets, and technology. Management emphasized the diversification of growth, successful integration of acquisitions like HPS and GIP, and a focus on digital assets and tokenization. They also discussed the outlook for private credit, retirement solutions, and the importance of regulatory clarity in digital assets.
Key Financial Results
Third quarter revenue was $6.5 billion, up 25% year-over-year.
Operating income increased 23% year-over-year to $2.6 billion.
Earnings per share increased 1% to $11.55.
Net inflows of $205 billion in the third quarter, reflecting 10% annualized organic base fee growth.
Ended the third quarter with a record $13.5 trillion in AUM.
Generated $640 billion of net new assets over the last 12 months, powering 8% organic base fee growth.
Base fee and securities lending revenue of $5 billion, an increase of 25% year-over-year.
Performance fees of $516 million, up 33% from a year ago.
Technology services and subscription revenue increased 28% compared to last year.
Adjusted operating margin of 44.6%, down 120 basis points year-over-year, but excluding performance fees, the adjusted operating margin would have been 46.3%, up 110 basis points year-over-year.
Business Segment Results
iShares ETFs generated $153 billion of net inflows.
Core equity and indexed fixed income led iShares with $53 billion and $41 billion of net inflows, respectively.
Digital assets ETPs raised another $17 billion.
Active ETFs gathered $21 billion of net inflows.
Institutional active franchise saw $22 billion of net inflows.
Institutional index net outflows were $14 billion, inclusive of a single client transfer.
Retail net inflows of $10 billion were led by demand for active fixed income, liquid alternatives, and Aperio.
Private market strategies saw $13 billion of net inflows.
Cash management platform crossed $1 trillion in AUM, with $34 billion of net inflows in the quarter.
Capital Allocation
Repurchased $375 million worth of shares in the third quarter.
Anticipate repurchasing at least another $375 million worth of shares in the fourth quarter.
Invest first in the business to scale strategic growth initiatives or drive operational efficiency.
Return cash to shareholders through a combination of dividends and share repurchases.
Industry Trends and Dynamics
Convergence of public and private markets is increasing.
Investors are seeking deeper, more dynamic partnerships across public and private asset classes.
Growth of cloud computing and AI are propelling capital demand for data centers.
Tokenization is seen as a way to bridge the gap between traditional capital markets and the digital asset space.
ETF market in Europe is at an inflection point.
Indian market remains largely untapped and is a country of savers, rather than investors.
Defined contribution plans should have access to growth-oriented private market strategies.
Competitive Landscape
BlackRock differentiates itself through a fully integrated platform, not a collection of boutiques.
The company aims to provide clients access to all of BlackRock in a comprehensive, consistent way.
BlackRock is positioned to be a preferred capital partner with insurers, while maintaining a balance sheet-light approach.
BlackRock, with GIP, is well-positioned to expand its leadership in the data center space.
BlackRock is a foundational player in the digital asset ecosystem.
Macroeconomic Environment
Tariff announcements in April shocked global markets.
US economy has been propelled by its leading market infrastructure.
The US needs to accelerate regulatory clarity and investments in digital assets innovation.
Discussion around the potential impact of lower rates and tighter spreads on private credit.
Growth Opportunities and Strategies
Building capabilities that clients will need in the future.
Expanding capabilities across private markets, digital assets, data, and technology.
Focus on high conviction growth themes like ETFs, private markets, tech and data, and digital assets.
Integrating acquired firms to create a seamless client experience with one platform and shared goals.
Exploring how AI can play a bigger role in making markets more accessible and efficient.
Plans to tokenize long-term investment products like iShares.
Enabling individuals in India to more easily invest in their local economies through JioBlackRock.
Leading with innovation for retirement with LifePath Paycheck and access to private market strategies in 401(k)s.
Helping clients better manage private markets investments with eFront alongside Preqin performance and investment data.
Financial Guidance and Outlook
Continue to estimate that 25% is a reasonable projected tax run rate for the fourth quarter of 2025.
Expect a low-teens percentage increase in 2025 core G&A expense, driven by the onboarding of GIP, Preqin, and HPS.
The fourth quarter is traditionally the strongest for organic growth.
Expect to power organic base fee growth more consistently at 6%, 7%, or higher.
When markets are supportive, organic base fee growth can tilt even higher.
Continue to expect a low-teens percentage increase in 2025 core G&A expense.
