BlackRock Q4 Earnings Call Highlights

BlackRock (NYSE:BLK) executives used the firm’s fourth-quarter 2025 earnings call to highlight what Chief Financial Officer Martin Small described as “one of the strongest years in our history,” pointing to record net inflows, accelerating organic base fee growth, and continued expansion in technology services as the company enters 2026 with a fully integrated platform that now includes GIP, Preqin, and HPS.

Financial performance and capital return

Small said clients awarded BlackRock nearly $700 billion in net new assets in 2025, alongside 9% organic base fee growth and 16% technology annual contract value (ACV) expansion. For the full year, BlackRock reported as-adjusted revenue of $24 billion, up 19% year over year, operating income of $9.6 billion, up 18%, and earnings per share of $48.09, up 10%.

In the fourth quarter, revenue was $7 billion, up 23% year over year, which Small attributed to the acquisitions of HPS and Preqin, organic base fee growth, and the impact of market moves on average assets under management (AUM). Fourth-quarter operating income was $2.8 billion, up 22%, while EPS rose 10% to $13.16. Small noted that quarterly EPS also reflected a lower tax rate, lower non-operating income, and a higher share count tied to the close of the HPS transaction on July 1.

Non-operating results included $106 million of net investment losses, primarily from a non-cash mark-to-market loss related to BlackRock’s minority investment in Circle. Small said the company contributed a portion of its Circle stake to an existing donor-advised fund in mid-December, and that it still holds roughly 1.1 million shares of Circle common stock that will continue to be marked through investment income. The as-adjusted tax rate was about 20% in the quarter due to discrete items, and Small said the company currently estimates 25% as a “reasonable projected tax run rate” for 2026.

BlackRock also emphasized shareholder returns. Small said the board approved a 10% increase to the first-quarter 2026 dividend per share and authorized repurchase of an additional 7 million shares. The company is targeting $1.8 billion of share repurchases during 2026, subject to market and other conditions.

Base fees, technology growth, and margins

Fourth-quarter base fees and securities lending revenue totaled $5.3 billion, up 19% year over year, driven by market beta on average AUM, organic base fee growth, and approximately $230 million in base fees from HPS. Performance fees were $754 million in the quarter, up from a year ago, and included $158 million from HPS.

Technology services and subscription revenue grew 24% year over year in both the quarter and full year, reflecting client onboarding, expansions with existing clients, and the Preqin transaction. Small said Preqin added approximately $65 million of revenue in the fourth quarter and $213 million for the full year. ACV increased 31% year over year, including Preqin, and grew 16% organically.

Expense growth was also discussed. Total expense rose 19% in 2025, driven primarily by higher compensation, sales and account expense, and G&A. Employee compensation and benefits increased 20% for the year, reflecting higher incentive compensation associated with performance fees and higher operating income, as well as the onboarding of employees from GIP, Preqin, and HPS. G&A increased 15% due largely to M&A transactions and higher technology investment spend.

Fourth-quarter as-adjusted operating margin was 45%, down 50 basis points year over year, and the full-year margin was 44.1%, down 40 basis points. Small said both periods reflected the impact of performance fees and related compensation. Excluding performance fees and related compensation, he said the fourth-quarter adjusted margin would have been 45.5%, up 30 basis points year over year, and the full-year margin would have been 44.9%, up 60 basis points versus 2024.

On the Q&A portion of the call, management reiterated its margin framework. Small said BlackRock continues to target a “45% or greater adjusted operating margin profile,” while describing upward momentum in margins on recurring fee-related earnings. He also said that after annualizing the impact of HPS and Preqin, management expects a mid-single-digit percentage increase in G&A and expects headcount to be “broadly flat” in 2026.

Record flows led by iShares and diversified channels

Small reported total net inflows of $698 billion in 2025, with iShares setting a record at $527 billion. He said iShares’ flows represented 12% organic asset growth and 13% organic base fee growth, with diversified demand across core equity and premium categories such as fixed income, active, and digital assets exchange-traded products (ETPs). Fourth-quarter iShares net inflows were $181 billion.

Retail net inflows were $107 billion, which Small said was led by the onboarding of an $80 billion separately managed account (SMA) assignment from Citi Wealth in the fourth quarter. He also noted record inflows at Aperio, net inflows in active fixed income, and $12 billion of alternatives inflows during 2025.

Institutional active net inflows totaled $54 billion in 2025, reflecting multiple outsourcing mandates, the above-target close of GIP V, and deployment in private credit. Institutional index saw net outflows of $119 billion, which Small attributed mainly to redemptions from low-fee index equity strategies.

In private markets, Small said the platform delivered $40 billion of net inflows for the year, led by private credit and infrastructure. BlackRock also reiterated its fundraising ambition, targeting $400 billion in gross private markets fundraising through 2030. BlackRock Cash Management saw $74 billion of net inflows in the fourth quarter and $131 billion in 2025, driven by U.S. government, international prime, and Circle reserve funds.

Strategic priorities: private markets, wealth, insurance, and retirement

Chief Executive Officer Larry Fink said BlackRock entered 2026 with “accelerating momentum” and highlighted the company’s record quarterly and annual net inflows, including $342 billion in the fourth quarter. He said the firm’s pipeline has broadened across public and private markets, technology and data, and client channels.

Fink and Small repeatedly emphasized the “whole portfolio” approach and pointed to structural growth areas, including private markets to insurance, private markets to wealth, digital assets, and active ETFs. Small said BlackRock believes these initiatives can each be “$500 million revenue generators in the next five years.”

In insurance, Small said BlackRock manages $700 billion in AUM as the largest general account manager for insurers, across more than 450 relationships. He added that HPS manages more than $60 billion of credit assets for more than 125 insurance companies. Management said it is engaged in roughly 20 late-stage conversations to help insurers build more diversified portfolios across public and private markets, and Small said the company hopes to see deployments “pull through the second half of 2026.”

In retirement, Fink said the company expects to launch its first LifePath target-date fund with private markets “later this year,” and argued that plan sponsors will need standardized benchmarking and performance data—a role he said Preqin can support.

Key Q&A themes: cash, Asia, Preqin, and private credit conditions

Asked about the net flow pipeline and the outlook for money market funds in a Fed-cutting environment, Small said BlackRock expects money market yields to fall and sees opportunities for investors to “lock in bond yields” in intermediate-term bonds. Fink added that cash levels may remain elevated as global capital markets grow and suggested tokenization could contribute to continued cash usage, including through tokenized money market funds.

On Asia, Fink highlighted faster capital markets growth in the region, cited changes in Japan driven by NISA accounts, and reiterated confidence in the Jio BlackRock partnership in India, which he said is positioned to benefit from what he characterized as the early stages of capital markets growth there.

On Preqin, Small said integration has been “terrific” and laid out priorities that include expanding distribution of data, building models and benchmarking tools for private markets, scaling the “data factory,” and pursuing the longer-term opportunity to help build private market indexing. He said BlackRock is working on investable indices that it hopes to bring to market “in the next few years.”

On private credit, Small said BlackRock saw $7 billion of private credit net inflows in the fourth quarter, driven primarily by deployment activity. He said the company generally sees stable credit conditions across the main HPS strategies and characterized some negative headlines as highlighting “isolated stress points.” Small added that default rates are rising but remain within historical ranges, and said HPS has focused on lending to larger companies, noting the weighted average EBITDA in the HLEND portfolio is about $250 million. He also cited $1.1 billion of gross subscriptions into HLEND in the fourth quarter and said redemptions were 4.1%, which he described as higher than recent quarters but in line with the broader industry.

In closing remarks, Fink said the company’s 2025 results “validate the power” of BlackRock’s integrated platform and that the firm enters 2026 with “differentiated momentum” and opportunities to deliver for clients and shareholders.

About BlackRock (NYSE:BLK)

BlackRock, Inc is a global investment management firm that provides a broad range of products and services to institutional, intermediary and individual investors. Its core activities include portfolio management across active and index strategies, exchange-traded funds (ETFs) under the iShares brand, fixed income, equity and multi-asset solutions, as well as alternatives such as private equity, real estate and infrastructure. The firm also offers cash management and liquidity solutions and retirement-focused products designed for defined contribution and defined benefit investors.

In addition to traditional investment management, BlackRock is known for its technology and risk management capabilities, most prominently its Aladdin platform, which combines portfolio management, trading and risk analytics and is used both internally and licensed to external clients.