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, digital assets, and international expansion.
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 increased 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.
Quarterly operating income of $2.8 billion was up 22%, while earnings per share of $13.16 increased 10% versus a year ago.
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.
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.
Business Segment Results
iShares led the industry with a new flows record of $527 billion in 2025, representing 12% organic asset and 13% organic base fee growth, with net inflows of $181 billion in the fourth quarter.
iShares' AUM was about $300 billion when acquired in 2009 and today stands at $5.5 trillion, with revenues more than quadrupling to over $8 billion.
Net retail inflows of $107 billion were led by the onboarding of the $80 billion SMA assignment from Citi Wealth during the fourth quarter, with Aperio achieving its fifth consecutive record year of net inflows with $15 billion, active fixed income adding $3 billion, and alternatives generating $12 billion in 2025.
Institutional active franchise generated net inflows of $54 billion in 2025, reflecting onboarding of multiple outsourcing mandates, 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.
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.
Active ETFs drove more than $50 billion in net inflows in 2025, nearly tripling their assets in the last year, with DYNF as the highest inflowing active ETF in the industry with $14 billion of net inflows.
Systematic equity franchise raised over $50 billion in 2025, even as the active equity industry saw another year of outflows.
Full year active fixed income franchise generated over $45 billion of net inflows.
iShares' bond ETFs had $52 billion in Q4 and $175 billion for the year, representing 18% organic growth.
Capital Allocation
BlackRock returned a record $5 billion to shareholders through a combination of dividends and share repurchases in 2025, including $500 million and $1.6 billion of share repurchases for fourth quarter and full year, respectively.
BlackRock's Board of Directors approved a 10% increase to the first quarter 2026 dividend per share, representing a 13% increase in the dollar amount of dividends expected to be paid.
The board 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, based on capital spending plans for the year and subject to market and other conditions.
The 10% increase to the 2026 dividend per share and increase in planned share repurchases to $1.8 billion are driven by accelerating growth trajectory and platform success in 2025, representing the highest dividend increase since 2021.
Operating Performance and Margins
Fourth quarter as adjusted operating margin of 45% was down 50 basis points year-over-year, while full year as adjusted operating margin of 44.1% decreased 40 basis points from a year ago.
Excluding the impact of all performance fees and related compensation, adjusted operating margin for the fourth quarter would have been 45.5%, up 30 basis points year-over-year, with full year margin of 44.9%, 60 basis points higher relative to 2024.
Full year employee compensation and benefit expense was up 20%, primarily reflecting higher incentive compensation associated with performance fees as well as higher operating income.
Full year G&A expense was up 15%, primarily due to M&A transactions and higher technology investment spend.
Total expense increased 19% in 2025, primarily driven by higher compensation, sales, asset and account expense, and G&A expense.
Organic Growth Metrics
Clients awarded BlackRock with nearly $700 billion in new assets in 2025, including $342 billion in the fourth quarter.
9% organic base fee growth for full year 2025 represents $1.5 billion of net new base fees.
BlackRock delivered 6% or higher organic base fee growth in each quarter of 2025, finishing the year with two consecutive quarters of double-digit organic base fee growth, including 12% in the fourth quarter.
BlackRock enters 2026 with base fees approaching $21 billion, 13% higher than 2025.
Base fees run rate entering 2026 is approximately 35% higher than base fees in 2024, and approximately 50% higher than 2023.
Fee yields on new asset flows in 2025 are 6 to 7 times higher than they were in 2023 and are at a premium to overall fee rate.
Industry Trends and Dynamics
Nearly 150 products across ETF and mutual fund ranges had over $1 billion in flows.
Growth is broad based across systematic franchise, private markets, ETFs, digital assets, cash, and outsourcing, spanning capabilities that BlackRock has had for decades and others built or acquired in the last two years.
Client demand is strong from structural growers like private markets, systematic models, OCIO, ETFs, and SMAs, with these capabilities providing positive leverage to average fee rates.
iShares' net inflows were diversified across core equity and premium categories like fixed income, active, and digital assets/ETPs.
Europe ETF net inflows of $136 billion was approximately 50% higher than 2024, with more individuals coming to iShares through digitally enabled offerings and monthly savings plans.
Both Asia and LatAm saw double-digit organic base fee growth in 2025, with Asia growth led by active wealth strategies and $30 billion of ETF net inflows.
JioBlackRock joint venture raised $2 billion upon launch, 6 times the previous industry record, and now manages 12 funds on behalf of nearly 400 institutions and more than 1 million Indian retail investors.
Over $4.5 trillion in assets managed across public fixed income, cash, and private credit, enabling integrated fixed income solutions for clients.
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, and with HPS, is now also one of the largest asset-based finance and high-grade managers.
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.
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 is a leader in public markets, a leader in private markets, and a leader in technology and data.
Insurance company asset management is a highly customized effort, and BlackRock's ability to blend turnkey full-service capabilities is a key competitive advantage.
Macroeconomic Environment and Market Conditions
BlackRock's platform demonstrated resilience and growth, even when markets were in turmoil back in April, and captured steep upside when they rallied.
2025 was another proof point that BlackRock is a share gainer when there's money in motion.
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 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, 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.
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 and recovery rates in line with historical norms.
Global 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 the capital markets out of the banking system.
Growth Opportunities and Strategies
BlackRock is building leading franchises in newer high-growth markets across private markets to insurance, private markets to wealth, digital assets, and active ETFs, with potential to be $500 million revenue generators in the next five years.
BlackRock is pioneering an asset management model of the future 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 in about 20 late-stage conversations to help insurers build more dynamic and diversified portfolios across public and private markets.
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, with model portfolios expected to 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 is planning 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 retirement savers through private markets, with leading DCIO business, $600 billion LifePath franchise, top five alternative platforms, and Preqin.
Preqin can be the central provider of standardized benchmarking and performance data to validate plan sponsor choices.
BlackRock started innovating LifePath Paycheck in 2018 and it's been the fastest-growing lifetime income target date strategy in the defined contribution market.
BlackRock's vision is to design 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 continues to attract significant capital.
AIP has raised over $12.5 billion from partnership founders and clients, with initial target to mobilize and deploy $30 billion of equity capital, with 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.
Income-oriented strategies are a critical component of clients' portfolios, with BlackRock well-positioned to capture flows with strong performance and differentiated strategies.
BlackRock is leveraging active ETFs to provide access to portfolio managers' insights, along with the benefits of the ETF wrapper.
BlackRock's systematic investments have been using data and AI for 20 years, with IP that delivers alpha to clients and helps portfolio managers across BlackRock invest better.
BlackRock is optimistic about systematic platform's continued double-digit organic base fee growth potential and its position as a bright spot in the active equity industry.
iShares is delivering growth through core channels and newer premium initiatives like active ETFs, digital assets, and international markets.
Aladdin technology powers and unites all of BlackRock's platform and work, enabling clients to more
