BlackRock, Inc. Q4 FY2025 earnings call

• 2025 was one of the strongest years in BlackRock's history, with clients awarding nearly $700 billion in net new assets, 9% organic base fee growth, and 16% technology ACV expansion.
• The whole portfolio strategy was winning mind and wallet share, with nearly 150 products across ETF and mutual fund ranges having over $1 billion in flows.
• Entered 2026 with a base fees run rate approximately 35% higher than in 2024 and 50% higher than in 2023. Delivered 6% or higher organic base fee growth in each quarter of 2025, including 12% in the fourth quarter.
• The combined strength of BlackRock, GIP, HPS, and Preqin as one firm, with opportunities in private markets to wealth, retirement plans, infrastructure strategies, and more.
• iShares is the world's #1 ETF franchise, with $527 billion in net inflows in 2025, and strong growth in international markets like Europe, India, and Latin America.
• Aladdin technology powers the platform, enabling end-to-end integration across public and private markets.

BlackRock had a strong financial performance in the fourth quarter and full year of 2025. Full year revenue was $24 billion, up 19% year-over-year. Operating income was $9.6 billion, up 18%, and earnings per share was $48.09, increasing 10%. Fourth quarter revenue was $7 billion, 23% higher year-over-year, with operating income of $2.8 billion, up 22%, and earnings per share of $13.16, up 10%. Clients awarded nearly $700 billion in net new assets in 2025, with 9% organic base fee growth and 16% technology ACV expansion. iShares led the industry with $527 billion in net inflows in 2025. The scaled private markets platform delivered $40 billion of full year net inflows, led by private credit and infrastructure. BlackRock Cash Management saw $131 billion in net inflows in 2025. In terms of revenue contribution, base fees and securities lending revenue in the fourth quarter were $5.3 billion, up 19% year-over-year; performance fees were $754 million; technology services and subscription revenue increased 24% year-over-year.

• Estimates that the as-adjusted tax rate for 2026 is a reasonable projected 25%, though actual effective tax rate may differ due to nonrecurring items or tax legislation changes.
• Expect mid-single-digit percentage increase in G&A after annualizing the impact of HPS and Preqin. BlackRock's headcount is expected to be broadly flat in 2026.
• Board approved a 10% increase in the first quarter 2026 dividend per share and authorized repurchase of an additional 7 million shares, targeting $1.8 billion worth of share repurchases in 2026.
• Target to raise $400 billion in gross private markets fundraising by 2030.
• Confident in organic base fee growth ambitions and margin expansion on recurring fee-related earnings, aiming for adjusted operating margin of 45% or higher.

• Actual results may differ from forward-looking statements due to nonrecurring or discrete items, potential changes in tax legislation, etc.
• Private credit market may face challenges such as default risks for smaller companies with high valuations and capital structures not accounting for neutral rates.
• Market volatility can impact asset values and performance.
• Integration risks associated with acquisitions like GIP, Preqin, and HPS.

Q: How to flush out the net flow pipeline for 2026 and thoughts on money market business reversing flows?

A: Martin Small said organic base fee growth continues to outperform, with momentum from structural growth strategies. For money market, expects rate cuts to cause yields to fall, and investors to move to intermediate-term bonds. Laurence Fink added that as global capital markets grow, cash will grow alongside, and tokenization may lead to above-trend cash holdings.

Q: Priorities across Asia footprint and acceleration of growth?

A: Laurence Fink said Asia capital markets are growing faster, with opportunities in Japan, India, Saudi Arabia, etc., including retirement platform development in India and conversations in Saudi Arabia for retirement systems.

Q: Competition in insurance channel and BlackRock's differentiated offering?

A: Martin Small said BlackRock is the largest insurance company general account manager with $700 billion in assets. Focus on migrating public fixed income to private high grade, expanding mandates, and strategic partnerships. Competitive advantage lies in full-service capabilities integrating public and private fixed income, Aladdin, and middle office services.

Q: Thoughts on margins progressing in 2026 and G&A specifics?

A: Martin Small said targeting adjusted operating margin of 45% or higher, with margin on fee-related earnings expected to move north of 50% over time. G&A expected to have mid-single-digit percentage increase after annualizing HPS and Preqin impact, with alignment of organic revenue growth and controllable expenses.

Q: Evolution of Preqin and private market data initiatives?

A: Martin Small said integrating Preqin involves expanding distribution, building data and models for private markets, enriching data, and leveraging engines to build private market indices. Laurence Fink added the need for comprehensive risk management platform with Aladdin for private markets in defined contribution plans.

Q: Outlook for private credit in 2026 and beyond?

A: Martin Small said private credit deployment trends strong, with stable credit conditions though some small company credit challenges. Default rates returning to normal, and HPS teams focused on larger companies. Preqin survey data shows structural pipeline for private credit fundraising intact.

Q: Wealth channel outlook and private market product details?

A: Martin Small said private wealth and retail channels have HLEND, semi-liquid strategies, and multi-alternative solutions. Planning to bring H Series of vehicles to market in 2026 for private wealth clients, aiming to grow private markets to wealth products to $60 billion in AUM by 2030.