BlackRock Inc Earnings - Q4 2025 Analysis & Highlights
BlackRock's Q4 2025 earnings call highlighted strong financial performance, record inflows, and strategic growth initiatives across public and private markets, technology, and international expansion.
Key Financial Results
Full year revenue was $24 billion, up 19% year-over-year.
Full year operating income was $9.6 billion, up 18%.
Full year earnings per share (EPS) was $48.09, an increase of 10%.
Fourth quarter revenue was $7 billion, 23% higher year-over-year.
Fourth quarter operating income was $2.8 billion, up 22%.
Fourth quarter earnings per share (EPS) was $13.16, an increase of 10% versus a year ago.
Fourth quarter base fees and securities lending revenue was $5.3 billion, up 19% year-over-year.
Fourth quarter performance fees were $754 million, increasing from a year ago.
Full year technology services and subscription revenue increased 24% year-over-year.
Fourth quarter as adjusted operating margin was 45%, down 50 basis points year-over-year.
Full year as adjusted operating margin was 44.1%, a decrease of 40 basis points from a year ago.
Excluding performance fees and related compensation, the adjusted operating margin for the fourth quarter would have been 45.5%, up 30 basis points year-over-year.
Full year margin excluding performance fees would have been 44.9%, 60 basis points higher relative to 2024.
Business Segment Results
iShares led the industry with $527 billion in net inflows in 2025, representing 12% organic asset and 13% organic base fee growth.
iShares' net inflows were $181 billion in the fourth quarter.
Full year retail net inflows were $107 billion, driven by the onboarding of an $80 billion SMA assignment from Citi Wealth.
Aperio had its fifth consecutive record year of net inflows with $15 billion.
Active fixed income added $3 billion in 2025.
Alternatives generated $12 billion in 2025.
BlackRock's institutional active franchise generated $54 billion in net inflows in 2025.
Institutional index net outflows of $119 billion were mainly due to redemptions from low-fee index equity strategies.
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.
Technology ACV increased 31% year-over-year, including Preqin, and 16% organically.
Preqin added approximately $65 million in the fourth quarter and $213 million for the full year.
JioBlackRock raised $2 billion upon launch and manages 12 funds for nearly 400 institutions and over 1 million Indian retail investors.
Europe ETF net inflows of $136 billion were approximately 50% higher than 2024.
Systematic equity franchise raised over $50 billion in 2025.
Active ETFs drove more than $50 billion in net inflows in 2025.
Capital Allocation
BlackRock's Board of Directors approved a 10% increase to the first quarter 2026 dividend per share.
The board also authorized the repurchase of an additional 7 million shares under the share repurchase program.
BlackRock is targeting the purchase of $1.8 billion worth of shares during 2026.
A record $5 billion was returned to shareholders in 2025 through dividends and share repurchases.
Share repurchases were $500 million for the fourth quarter and $1.6 billion for the full year.
Industry Trends and Dynamics
The asset management model is evolving to seamlessly integrate public and private markets and interoperates between traditional and decentralized financial ecosystems.
There is a growing trend of clients seeking whole portfolio strategies.
The fee yields on new asset flows are 6 to 7 times higher than in 2023.
The industry is seeing demand for structural growers like private markets, systematic, models, OCIO, ETFs, and SMAs.
There is a significant opportunity to deliver better outcomes for clients in private market allocations.
The current cash flow and inflation-protected return profile of infrastructure makes it an attractive sector for clients.
Income-oriented strategies are a critical component of clients' portfolios.
More investors are looking at how to use AI for investments.
The capital markets in Asia are growing faster than in the US.
There is a trend of wealth entering the capital markets out of the banking system in Japan due to NISA and retirement accounts.
The transmission of capital markets growth in India is just beginning, with a potential for a self-directed retirement platform.
Many markets are developing their own capital markets.
The penetration of private credit in the insurance market is much smaller compared to the corporate credit market.
The alternative data business is evolving, with several managers launching private market partnerships and indices.
The need for a comprehensive risk management platform for private markets is imperative.
The structural pipeline for private credit fundraising and deployment is intact, with over 80% of investors planning to maintain or increase allocations.
Competitive Landscape
BlackRock is a scale operator in public and private markets, investments, and technology.
BlackRock is the largest general account manager for insurers with $700 billion in AUM.
With HPS, BlackRock is now one of the largest asset-based finance and high-grade managers.
BlackRock has the largest wholesaling team in the industry covering the US marketplace.
BlackRock is a leader in retirement and a first mover in developing new solutions.
BlackRock is well-positioned to capture flows with strong performance and differentiated strategies across various fixed income products.
BlackRock's systematic equity franchise is a bright spot in the active equity industry.
iShares remains the market leader in ETFs in terms of organic assets and base fee growth, countries served, and product lineup.
iShares provides over 1,700 ETFs, more than 6 times the next largest issuer.
BlackRock is a foundational provider in traditional financial markets and the evolving decentralized financial ecosystem.
BlackRock's experience is that insurance companies want a full-service partner.
Macroeconomic Environment
The year 2026 is shaping up to be the year of a steeper yield curve.
The era of easy 2a-7 fund income looks to be fading.
Bond returns are expected to be driven more by income rather than rate moves or spread compression.
Rate cuts are expected to cause money market yields to fall.
The best opportunities for investors to lock in bond yields are in intermediate-term bonds.
The overall scale of the capital markets and its global growth will lead to elevated cash holdings.
Tokenization could lead to above-trend holdings in cash.
Default rates in the broader leveraged loan market are slightly below the long-term average of 3%.
Direct lending defaults are rising but remain within historical ranges.
An economic slowdown could see default rates rise to 4% to 5%.
The all-time peak in the GFC hit 15% on an issuer-weighted basis.
Smaller borrowers, particularly those financed at high valuations and capital structures that did not contemplate a 3% to 4% neutral rate, are expected to be more challenged.
Growth Opportunities and Strategies
BlackRock is building leading franchises in newer high-growth markets such as private markets to insurance, private markets to wealth, digital assets, and active ETFs.
These new franchises are projected to be $500 million revenue generators in the next five years.
BlackRock is pioneering an asset management model that seamlessly brings together public and private markets, interoperates between traditional and decentralized financial ecosystems, and is powered by technology and data.
BlackRock is targeting $400 billion in gross private markets fundraising through 2030.
The company is focused on expanding access to private markets in wealth management.
BlackRock plans to widen its product range through an H Series family of funds, including HLEND, junior capital, real assets, triple net lease, multi-strat credit, and secondaries and co-investment strategies.
BlackRock expects to launch its first LifePath target date fund with private markets later this year.
The company is engaged in conversations and opportunities to build Pillar 2 and Pillar 3 retirement systems in places like Saudi Arabia.
BlackRock is working on building investable indices for private markets.
The company is focused on delivering better outcomes for insurance clients by migrating 10% of their existing public fixed income assets into private high-grade.
BlackRock is pursuing strategic partnerships and minority investments to increase the pool of insurance assets managed.
The company is targeting $60 billion of AUM in private markets to wealth series of products by 2030.
A real asset strategy is coming to market in the US, European direct lending to European private wealth clients, and triple net lease and other strategies in the US later this year.
Financial Guidance and Outlook
BlackRock expects a mid-single-digit percentage increase in G&A after annualizing for the impact of HPS and Preqin.
BlackRock's headcount is expected to be broadly flat in 2026.
The projected tax run rate for 2026 is estimated to be 25%.
BlackRock is targeting the purchase of $1.8 billion worth of shares during 2026.
The company is targeting 45% or greater adjusted operating margin.
The margin on recurring fee-related earnings is expected to run higher, potentially north of 50%.
Controllable expenses are expected to be within organic base fee growth in future years, implying mid-single-digit percentage growth.
