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%. Claim your free seat in an exclusive crypto trading community - limited to 1,000 members.
