BlackRock, Inc.
CEO : Mr. Laurence Douglas Fink
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2024 Q3 | 24.7% YoY | 43.1% | 2.5% | 2025-01-15 |
Laurence D. Fink says,
Strong Financial Performance and Growth Metrics
- BlackRock reported nearly $11.6 trillion in assets under management (AUM).
- Record revenues exceeded $20 billion, marking a 14% increase from the previous year.
- Operating income saw a significant growth of 23%, with industry margins rising by 280 basis points to 44.5%.
- Client net inflows reached a record $641 billion for 2024, including $281 billion in the fourth quarter alone.
- Organic base fee growth was reported at 7%, with technology services ACV growing by 12%.
Strategic Acquisitions and Market Position
- 2024 was marked by significant acquisitions, notably GIP, HPS, and Preqin.
- These acquisitions are anticipated to enhance revenue growth, profitability, and margin expansion.
- BlackRock’s acquisition strategy reflects a focus on integrating public and private markets.
- Growth driven by acquisitions does not yet fully reflect the integration of the new assets.
Investment and Technology Focus
- BlackRock aims to further integrate public and private markets, leveraging technology such as Aladdin and eFront.
- Aladdin’s user base expanded to 130,000 users, seeing a 12% growth in annual contract value for technology services.
- Recent Aladdin sales involved multiple products, demonstrating its whole portfolio view capability.
Leadership and Talent Development
- BlackRock is actively investing in leadership development, promoting ‘horizontal leadership’ across roles.
- Significant leadership changes include Mark Wiedman’s transition and new roles for senior leaders.
- Robust leadership team expected to drive the next phase of growth for BlackRock.
Market Outlook and Future Strategies
- BlackRock is poised to capitalize on structural growth opportunities in both public and private markets.
- Recent acquisitions and joint ventures, such as Jio BlackRock in India, position BlackRock for long-term AUM growth.
- Innovations in ETFs, including the Bitcoin ETP, have resulted in substantial asset inflows.
- 2025 presents a dynamic investing environment with opportunities in AI, debt financing, and low-carbon transitions.
Martin S. Small says,
Financial Performance Overview
- BlackRock achieved record net inflows of $641 billion in 2024, reflecting robust organic growth across various sectors.
- Total revenue for the year amounted to $20.4 billion, marking a year-over-year increase of 14%.
- Operating income rose by 23% to $8.1 billion, and earnings per share increased by 15% to $43.61.
- Fourth-quarter revenue was $5.7 billion, up 23% year-over-year, driven by higher market levels and performance fees.
- Net investment losses in the fourth quarter were $7 million, linked to changes in co-investment valuations.
Assets Under Management and Fee Growth
- Assets under management (AUM) reached a new high of nearly $11.6 trillion.
- The annualized effective fee rate increased by 0.7 basis points in the fourth quarter.
- Organic base fee growth was 7% annualized in Q4, the highest in three years, supporting a full-year organic base fee growth of 4%.
- Base fees and securities lending revenue in Q4 reached $4.4 billion, a 23% increase year-over-year.
- Integration of higher-fee rate private market assets was a significant contributor to fee rate growth.
Strategic Acquisitions and Growth Initiatives
- The acquisition of GIP closed in October, adding $230 million to base fees in Q4 and contributing to AUM growth.
- Planned acquisitions of Preqin and HPS are expected to close in Q1 and mid-2025, respectively, adding approximately 2,300 new employees.
- Private markets and technology are projected to constitute over 20% of BlackRock’s revenue, with GIP, HPS, and Preqin driving growth.
- Record ETF net inflows of $390 billion in 2024 reflect a strategic focus on digital assets and broadening investment exposures.
Expense Management and Capital Strategy
- Total expenses increased by 9% in 2024, driven by incentive compensation, G&A, and technology investments.
- Full-year employee compensation rose by 11% due to higher performance fees and operating income.
- Capital management strategy returned over $4.7 billion to shareholders through dividends and share repurchases in 2024.
- Planned share repurchases for 2025 are targeted at $1.5 billion, subject to market conditions.
Outlook for 2025
- Entering 2025 from a strong position with expectations of continued growth driven by structural growth businesses and strategic acquisitions.
- Projected tax run rate for 2025 is approximately 25%, subject to discrete items or tax legislation changes.
- Significant focus on realizing $5 billion from older GIP fund vintages in Q1 2025 through successful exits.
- Expected enhancements in private market disclosures starting Q1 2025 to provide greater transparency.
| Key Performance Indicator | 2024 Value | Year-over-Year Growth |
|---|---|---|
| Net Inflows | $641 billion | Record high |
| Total Revenue | $20.4 billion | 14% |
| Operating Income | $8.1 billion | 23% |
| Earnings Per Share (EPS) | $43.61 | 15% |
BlackRock’s strategic initiatives and strong financial performance in 2024 have positioned it firmly for continued growth in 2025, bolstered by its acquisitions and innovative solutions that meet client demand in high-growth areas.
Q & A sessions,
Organic Base Fee Growth and Market Performance
- Q4 saw a 7% organic base fee growth, an increase from 5% in Q3, contributing to a 4% full-year growth.
- ETF growth significantly contributed to the Q4 performance, including notable additions in digital and active ETFs with over $20 billion in new assets.
- Growth in GIP added about 0.5 percentage points to the overall 7% growth, indicating potential future support from infrastructure and private markets.
- Expectations for 2025 remain positive, with structural growth drivers like ETFs, Aladdin, and fixed-income positioned to capture market upside.
Retirement Solutions and Product Innovation
- BlackRock manages over $0.5 trillion in LifePath and target date funds, reinforcing their leading role as a DCIO provider.
- Innovations include a new target date structure with guaranteed income options, expanding the potential for better retirement outcomes.
- Continuous efforts are being made to integrate private markets into target date structures, pending regulatory reforms in the U.S.
Acquisitions and Global Expansion
- The anticipated HPS acquisition, expected to close in Q2, aims to leverage HPS’s $20 billion wealth channel relationships for growth.
- Expansion into private credit markets is a strategic focus, supported by analytic advancements through partnerships like Preqin and eFront.
- BlackRock is targeting significant growth in wealth channels globally, inspired by positive feedback on its client relationship approach.
Financial Performance and Guidance
| Metric | 2024 Improvement |
|---|---|
| Operating Income Growth | 20%+ |
| Margin Improvement | Close to 3 percentage points, 390 bps in Q4 |
- BlackRock achieved a $3 trillion increase in AUM while headcount only grew 7%, showing operational efficiency.
- Guidance for 2025 projects mid-to-high single-digit growth, excluding any contributions from HPS.
Capital Management and Market Strategy
- In 2024, $4.7 billion was returned to shareholders through dividends and buybacks, reflecting BlackRock’s attractive income compounder status.
- Investment focus on organic growth with a disciplined capital management strategy aimed at flexible cost bases and fixed-cost scaling through technology investments.
- Expectations for fixed-income and private credit to gain prominence, especially in context of a steepening yield curve.
No bad stock 