Shares in BlackRock jumped more than 4% after the world’s largest asset manager reported fourth quarter (Q4) profit that surged past Wall Street estimates, driven by a market rally that boosted fee income and lifted assets under management (AUM) to a record US$14 trillion.
The company also announced a 10% hike in its quarterly dividend to $5.73 per share and raised its share buyback authorisation, authorising the repurchase of an additional seven million shares.
Key Highlights:
- Earnings per share: $13.16, beating analyst expectations of $12.21.
- Revenue: Rose 23% to $7 billion, exceeding estimates of $6.69 billion.
- Net Inflows: $342 billion in Q4; record full-year inflows of $698 billion.
- Assets Under Management: Record $14.04 trillion, up 22% year-over-year.
United States stocks rallied last year on enthusiasm around artificial intelligence, easing interest rates, and steady economic growth, prompting investors to pour money back into lower-cost index strategies.
As inflation eased and the job market cooled, the Federal Reserve turned more dovish, driving strong inflows into BlackRock's fixed-income products.
Equity product inflow was $126.05 billion, down slightly from a year ago, while fixed-income products saw inflows of $83.77 billion in the quarter.
Long-term net inflows totalled about $267.8 billion, led by continued strength in its exchange-traded funds (ETF) business, the firm's engine of organic growth.
“BlackRock enters 2026 with accelerating momentum across our entire platform, coming off the strongest year and quarter of net inflows in our history," CEO Larry Fink said in a statement.
Private market expansion
Asset managers have been working to diversify revenue by expanding into higher fee-paying businesses rather than low-cost index products.
BlackRock has been leaning more heavily into private markets, real estate and infrastructure, with a particular focus on AI-linked assets such as data centres and power infrastructure.
The AI push is designed to tap larger, longer-term pools of capital and build more stable, higher-margin revenue streams beyond traditional public markets.
Its private markets business drew inflows of $12.7 billion in the quarter.
BlackRock is targeting $400 billion of cumulative fundraising in private markets by 2030.
As part of this effort, it unveiled plans to include private assets in its retirement plans.
The company's performance fees rose 67% to $754 million in the reported period, reflecting higher revenue from private markets.
Financial metrics
Excluding some one-time charges, net profit jumped to $2.18 billion ($13.16 per share) for the three months ended December 31, up from $1.87 billion ($11.93 per share) a year earlier.
Total revenue — most of which is earned as a percentage of AUM — rose to $7 billion from $5.68 billion a year ago.
Total expenses climbed to $5.35 billion from $3.6 billion last year, largely due to higher compensation and transaction-related costs.
The investment firm's shares rose just 4.4% in 2025, trailing the benchmark S&P 500 index.
BlackRock (NYSE: BLK) shares ended yesterday’s trading 6.6% higher to $1,156.65, with a market capitalisation of $179.46 billion.
