BlackRock beats Wall Street expectations with 25% jump in Q3 revenue to $6.51 billion

Larry Fink’s BlackRock reported third-quarter earnings for the period ending September 30, with a $6.51 billion revenue figure, up 25% year-over-year, driven largely by $205 billion in total net inflows.

The largest asset manager on earth said the growth came from massive inflows into iShares ETFs, driven mostly by crypto’s monster rally, plus steady cash management and private market activity.

This performance beat Wall Street forecasts, with adjusted earnings per share coming in at $11.55, compared to the $11.19 consensus estimate from seven analysts at Zacks Investment Research.

The firm’s organic base fee growth hit 10% annualized, powered by rising demand across systematic active equity, outsourced mandates, and private markets.

Over the past twelve months, organic base fee growth was 8%. Technology subscriptions and new fee revenues tied to the HPS and GIP transactions also played a part. But not all metrics improved. Operating income on a GAAP basis fell 3% to $1.96 billion, and GAAP diluted EPS dropped 23% to $8.43, because of non-cash acquisition-related charges.

Adjusted operating income rose 23% to $2.62 billion, and adjusted net income reached $1.91 billion, which was up 11% from last year. The adjusted diluted EPS was up just 1%, with lower nonoperating income and a 10% jump in diluted shares weighing on the bottom line.

ETFs pull in $153 billion while institutional index flows decline again

Assets under management climbed 17%, rising from $11.47 trillion to $13.46 trillion over the past year. The average AUM for the quarter hit $12.96 trillion, also up 17%.

Out of the $205 billion total inflows, $153 billion came from ETFs, $21 billion from active strategies, and $34 billion from cash management. Institutional index strategies lost another $14 billion, continuing their downward trend after dropping $108 billion a year ago.

Retail clients added $10 billion, split between $4 billion from the U.S. and $6 billion internationally. Institutional active strategies brought in $22 billion, while institutional index strategies lost $14 billion.Net crypto inflows totaled $17 billion, while core equity strategies added $53 billion, and fixed income added $41 billion.

There was another $21 billion from strategies labeled “precision and other.”

Regionally, the Americas led with $110 billion, EMEA added $64 billion, and APAC lost $3 billion. Year-to-date flows stood at $357 billion, with $171 billion in long-term flows for Q3 alone. For comparison, long-term flows last year were $300 billion.

BlackRock closes HPS deal and ramps up share repurchases

On July 1, BlackRock finalized its acquisition of HPS Investment Partners, pulling in $165 billion in client assets and $118 billion in fee-paying assets. The quarter also included $375 million in share repurchases. The share count jumped from 149.6 million to 165.2 million, up 10%.

By product type, equities made up 55% of inflows and 48% of revenue, with $7.46 trillion in AUM and $2.4 billion in fees. Fixed income had $3.17 trillion in assets and brought in $998 million in fees.

Multi-asset strategies totaled $1.16 trillion, earning $353 million. Private markets posted $653 million, and liquid alternatives added $178 million. Together, alternatives contributed 17% of total fees.

Crypto products held $104 billion in assets, with $61 million in revenue. Currency and commodity strategies held $137 billion, contributing $77 million in fees. Long-term strategies overall brought in $4.73 billion in revenue, accounting for 93% of flows. Cash management strategies added $318 million, making up the remaining 7%, with $1.0 trillion in assets.

Total revenue for the quarter hit $5.05 billion across all business lines. Operating margin on a GAAP basis slipped to 30% from 38.6% last year, while the adjusted operating margin was 44.6%, just under last year’s 45.8%.

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