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BlackRock, Inc. (BLK)·Q2 2025 Earnings Summary

Executive Summary

  • BLK delivered Q2 2025 diluted EPS of $10.19 GAAP and $12.05 as adjusted; EPS beat consensus ($10.81*) on non-operating gains and strong base fee growth, while total revenue of $5.42B was slightly below consensus ($5.45B*) . EPS beat vs estimates; revenue was a small miss. Values retrieved from S&P Global.*
  • Total net inflows were $68B despite a single institutional client’s $52B lower-fee index partial redemption; iShares ETFs had a record first half and Q2 ETF net inflows of $85B .
  • GAAP operating margin fell to 31.9% (from 37.5% YoY) on acquisition-related costs and higher G&A; as-adjusted margin was 43.3% (down 80 bps YoY), with management reiterating a path to 45%+ over the cycle .
  • Technology services revenue rose 26% YoY to $499M; ACV grew 32% including Preqin and 16% organically; digital assets momentum remained strong (IBIT crossed $75B at quarter-end and >$80B post-quarter) .
  • HPS closed July 1; management guided ~$450M incremental revenue in Q3 (incl. ~$225M mgmt fees), base fee run-rate entering Q3 ~5% higher ex-HPS; share repurchases of at least $375M per quarter continue .

What Went Well and What Went Wrong

  • What Went Well
    • Above-target organic base fee growth (6% Q2 and 1H) with record AUM of $12.5T; “These are just the early days in our next phase of even stronger growth” — CEO .
    • ETFs leadership: Q2 ETF net inflows of $85B with fixed income $44B; Europe contributed $29B; active ETFs and digital asset ETPs added $11B and $14B, respectively .
    • Technology scale: $499M tech/subscription revenue (+$104M YoY), ACV +32% including Preqin (+16% organically); Preqin added ~$60M to Q2 revenue .
  • What Went Wrong
    • Institutional index outflows ($48B) driven by one $52B redemption; GAAP operating margin compressed to 31.9% on acquisition-related/contingent consideration, amortization, and restructuring .
    • Performance fees fell to $94M (down $70M YoY) on private markets and liquid alternatives; catch-up base fees were $36M lower vs Q1, modestly pressuring fee rate .
    • Effective tax rate rose to 26.9% (vs 24.2% YoY; Q1 was 14.1% with discrete benefits), dampening GAAP EPS leverage .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Total Revenue ($USD Millions)$5,677 $5,276 $5,423
Diluted EPS (GAAP) ($)$10.63 $9.64 $10.19
Diluted EPS (As Adjusted) ($)$11.93 $11.30 $12.05
Operating Margin (GAAP)36.6% 32.2% 31.9%
Operating Margin (As Adjusted)45.5% 43.2% 43.3%
Net Income (GAAP) ($USD Millions)$1,670 $1,510 $1,593
Net Income (As Adjusted) ($USD Millions)$1,874 $1,770 $1,883
End of Period AUM ($USD Millions)$11,551,251 $11,583,928 $12,527,590
Total Net Flows ($USD Millions)$281,416 $84,171 $67,737

YoY and vs Estimates (Q2 focus)

MetricQ2 2024Q2 2025 ActualConsensus Estimate*Surprise
Total Revenue ($USD Millions)$4,805 $5,423 $5,445.6*-$22.6M (miss)
Diluted EPS (As Adjusted) ($)$10.36 $12.05 $10.81*+$1.24 (beat)

Values retrieved from S&P Global.*

Segment revenue breakdown (Q2 2025)

CategoryQ2 2025 ($USD Millions)
Equity – Active$507
Equity – ETFs$1,401
Equity – Non-ETF Index$313
Fixed Income – Active$487
Fixed Income – ETFs$366
Fixed Income – Non-ETF Index$— (included in subtotal; see rows)
Active Multi-Asset$312
Alternatives – Private Markets$499
Alternatives – Liquid Alternatives$157
Digital assets, commodities & multi-asset ETFs$108
Cash Management$304
Total Investment Advisory, Admin & Securities Lending$4,454
Performance Fees$94
Technology Services & Subscription$499
Distribution Fees$320
Advisory & Other$56
Total Revenue$5,423

KPIs and flow mix (Q2 2025)

KPIQ2 2025
ETF Net Inflows ($USD Billions)$85
Retail Net Inflows ($USD Billions)$2
Institutional Active Net Inflows ($USD Billions)$7
Institutional Index Net Flows ($USD Billions)-$48
Cash Management Net Inflows ($USD Billions)$22
Tech ACV Growth (YoY)+32% incl. Preqin; +16% organically
Effective Tax Rate (GAAP)26.9%
Share Repurchases ($USD Millions)$375

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
As-adjusted tax rateFY 2025~25% run-rate (post Q1) ~25% projected run-rate reiterated Maintained
Base fee run rate entryQ3 2025N/A~5% higher than Q2 base fees (ex-HPS) New
HPS revenue contributionQ3 2025Pending close~$450M revenue incl. ~$225M mgmt fees New (post-close)
Share repurchases2025≥$375M per quarter ≥$375M per quarter reiterated Maintained
Operating margin (as adjusted) targetMulti-year45%+ target Clear path to 45%+ reiterated Maintained
Core G&A growth2025Mid- to high single-digit % ex-HPS Low-teens % including HPS/Preqin/GIP; ex-HPS mid-high single-digit Raised (incl. acquisitions)
Dividend per shareNext payment$5.21 declared (Q1/Q2 cadence) $5.21 payable Sep 23, 2025 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
AI/data centers & infrastructureAnnounced large ports deal; AIP partnership with Microsoft/NVIDIA/xAI/MGX; targeting $30B equity and >$100B financing potential GIP 5 closed at $25.2B; AI infrastructure partnership added sovereigns; pipeline robust Accelerating
ETFs growth (Europe & fixed income)Record Q4/Q1 ETF flows; Europe >40% share; fixed income ETF strength $85B Q2 ETF inflows; $44B bond ETFs; $29B Europe; strong active & digital asset ETPs Strong momentum
Digital assets/tokenizationTokenized liquidity fund crossed $2B in Q1; IBIT adoption Tokenized fund $3B; IBIT >$75B AUM at Q2 end; >$80B post-quarter Rapid growth
Private markets expansionPreqin acquisition; HPS pending; strong infra/private credit fundraising HPS closed; PFS formation; infra/private credit fundraising roadmap; ElmTree tuck-in Scaling
Retirement solutions (DC private markets)Glidepath tech; target date with privates planned; dialogue on litigation reform Great Gray target date glidepath announced; proprietary LifePath with privates planned for 2026 Advancing
Macro/tariffs/fee rateTariffs uncertainty; catch-up fees buoyed Q1 fee rate; entry to Q2 ~1% lower Effective fee rate dipped 0.4 bps QoQ; catch-up fees $36M lower; entry to Q3 ~5% higher ex-HPS Mixed near-term; stronger entry to Q3

Management Commentary

  • CEO (Laurence D. Fink): “We generated 6% organic base fee growth for the second quarter... propelled another consecutive quarter of above-target organic base fee growth and record AUM of $12.5 trillion... These are just the early days in our next phase of even stronger growth.”
  • CFO (Martin Small): “We expect HPS to add approximately $450 million of revenue, including $225 million in management fees, in the third quarter of 2025... we entered the third quarter with an estimated base fee run rate approximately 5% higher than our total base fees for the second quarter.”
  • CEO on ETFs and digital assets: “Our active ETFs delivered $11 billion of net inflows, and our digital asset products continue to set new records. IBIT at quarter-end crossed over $75 billion... as of this morning, it crossed over $80 billion.”
  • CEO on strategy: “We’re building on our foundational platform to redefine the whole portfolio again by bringing together public and private markets across both asset management and technology.”

Q&A Highlights

  • Integration progress and client traction: Robust insurer, wealth, and retirement demand; infra pipeline (malaysian airports, ports transaction) and private credit opportunities with HPS .
  • Retirement with privates: Great Gray glidepath announced; proprietary LifePath with privates targeted for 2026; momentum contingent on litigation/advice reform .
  • Margin outlook: Short-term margin diluted by lower performance fees and consolidation costs; reiteration of 45%+ long-term target; controllable expenses aligned with organic growth post integrations .
  • Fundraising roadmap: Multi-strategy pipeline across infra equity/debt, direct lending, secondaries; $400B gross fundraising targeted 2025–2030, ramping in later years .
  • Capital returns: Dividend payout ratio 40–50% maintained; at least $375M buybacks per quarter; dividend growth targeted high-single to low-double-digit aligned to strategy .
  • ETFs Europe and fixed income: Continued leadership and adoption with 38 products >$1B inflows; Europe five to six years behind U.S. creates runway .
  • Stablecoins: BlackRock managing reserves (e.g., Circle); emphasis that stablecoins should be backed by short-term government bonds; pipeline broadening with central banks .

Estimates Context

  • Q2 2025 EPS beat: Actual $12.05 vs consensus $10.81*; Q2 2025 revenue slight miss: Actual $5.423B vs $5.446B* . Values retrieved from S&P Global.*
  • FY 2025/2026 consensus: EPS $47.84* / $54.09*; Revenue $23.96B* / $27.60B*. Values retrieved from S&P Global.*
  • EBITDA context: Q2 2025 actual $2.073B* vs consensus $2.340B*; indicates beat on EPS driven more by non-operating gains/tax rate and base fees than EBITDA. Values retrieved from S&P Global.*
MetricQ2 2024Q1 2025Q2 2025FY 2025FY 2026
Primary EPS Consensus Mean*$9.96*$10.13*$10.81*$47.84*$54.09*
Revenue Consensus Mean* ($USD)$4.776B*$5.312B*$5.446B*$23.964B*$27.599B*
EBITDA Consensus Mean* ($USD)$2.022B*$2.205B*$2.340B*$9.568B*$12.219B*

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • EPS beat with revenue near-consensus: As-adjusted EPS $12.05 beat on non-operating gains and strong base fee growth; revenue modest miss likely not thesis-changing given fee run-rate guidance into Q3 .
  • Organic engines intact: ETFs (especially fixed income), private markets fundraising, and technology ACV underpin durable growth above the 5% organic base fee target .
  • Temporary margin dilution: GAAP margin compression from acquisition-related costs and lower performance fees should normalize; management reiterates 45%+ as-adjusted margin target .
  • Flow volatility manageable: Index outflows tied to single large client; excluding the activity, net inflows were ~$116B, showing underlying demand remains robust .
  • Near-term catalysts: HPS revenue accretion (~$450M in Q3; fee rate +0.6 bps), base fee run-rate entering Q3 ~5% higher ex-HPS; continued buybacks ($375M/qtr) and $5.21 dividend support capital returns .
  • Medium-term thesis: Integrated public/private platform (PFS), retirement glidepaths with privates, European ETF adoption, and tokenization/digital assets create multiple growth vectors .
  • Watch items: Effective tax rate at ~25% (higher vs Q1), performance fees variability, and the pace of acquisition integration cost synergies into 2026 .

Notes on non-GAAP: As-adjusted results exclude acquisition-related costs, contingent consideration fair value adjustments, amortization of intangibles, restructuring, and hedge impacts on deferred compensation; reconciliations provided in the 8-K .