2026 04 14 Earnings BLK Q1 Fy2026

Summary

BlackRock Q1 2026 was one of the strongest starts in company history: $130B net inflows, 8% organic base fee growth (7th consecutive quarter ≥5%), and 10% LTM organic base fee growth ($744B LTM net new assets). The load-bearing causal claim: clients are consolidating portfolios with fewer, scaled, whole-portfolio managers — BLK wins this shift because it spans public markets, private markets (HPS+GIP now fully integrated), and technology (Aladdin+Preqin). DOL proposed rule (private markets in 401(k) target date funds) is the next major catalyst for the LifePath franchise. Directly relevant to db-to-dc-passive-flows-blk-aum-resilience.

Transcript

Martin S. Small (Chief Financial Officer): Thanks, Chris. Good morning, everyone. It is my pleasure to present results for the first quarter of 2026. Before I turn it over to Larry, I will review our financial performance and business results.

It has been a standout start to the year for BlackRock. Our first-quarter revenue, operating income, and earnings per share grew double digits. We expanded margins by over 100 basis points and we delivered 8% organic base fee growth. That is our seventh consecutive quarter at or above 5%, bringing the last twelve months' organic base fee growth to 10%.

What is driving that performance is deep engagement with clients. We are providing advice, insights, and access across the whole portfolio, allowing clients to efficiently implement both long-term strategic asset allocation moves and tactical exposures to navigate near-term themes in markets. These higher-velocity markets bring clients closer to our firm. BlackRock is winning mindshare and wallet share reflected in $130 billion of net inflows in the first quarter. Organic growth is durable and broad-based. It is consistent across product, region, and client type.

2026 unfolded in a more volatile market environment. Markets showed heightened sensitivity to incremental economic data, with volatility rising across rates, equities, and currencies. There is real, impactful geopolitical uncertainty. There is both excitement and anxiety about how artificial intelligence will impact day-to-day lives and business models. As capital reallocates and assumptions are challenged, markets can feel unsettled even when underlying fundamentals are sound. That dynamic is evident today.

While headlines and sentiment remain uneven, BlackRock's performance tells a very different story. Our fundamentals are strong. Organic base fee growth remains well above target, and margin expansion continues to reflect the operating leverage built into our model.

Turning to our financial results, first-quarter revenue of $6.7 billion increased 27% year-over-year, driven by organic growth, the impact of higher markets on average AUM, the acquisitions of HPS and Preqin, and higher technology services and subscription revenue.

Operating income of $2.7 billion was up 31%, and earnings per share of $12.53 was 11% higher versus a year ago. EPS also reflected lower nonoperating income, a higher effective tax rate, and higher share count in the current quarter linked to the closing of the HPS transaction on July 1, 2025.

First-quarter base fee and securities lending revenue of $5.4 billion was up 24% year-over-year. On an equivalent day-count basis, our annualized effective fee rate was 0.2 basis point higher compared to the fourth quarter. Our fee rate benefited from outperformance of international equity markets relative to the U.S., along with client demand for international iShares exposures, and our structural growers in systematic equities, private markets, Aperio, and active ETFs.

Performance fees of $272 million increased from a year ago, reflecting higher revenue from alternatives, which includes $121 million of performance fees from HPS. Quarterly technology services and subscription revenue was up 22% compared to a year ago.

Total expense increased 24% year-over-year, reflecting higher compensation, sales, asset and account expense, and G&A. Employee compensation and benefit expense was up 27%, reflecting higher incentive compensation linked to higher operating income and performance fees, and higher headcount associated with the onboarding of HPS and Preqin employees.

Our first-quarter as-adjusted operating margin of 44.5% was up 130 basis points from a year ago. Excluding the impact of all performance fees and related compensation, our adjusted operating margin for the first quarter would have been 45.6%, up 180 basis points year-over-year.

We repurchased $450 million worth of shares in the first quarter. At present, based on our capital spending plans for the year, and subject to market and other conditions, we still anticipate repurchasing at least $450 million of shares per quarter for the balance of the year.

In the first quarter, BlackRock generated total net inflows of $130 billion, led by strength across ETFs, active, and private markets. Record first-quarter ETF net inflows of $132 billion were led by index bond ETFs with $41 billion of net inflows. Retail net inflows of $15 billion reflected continued strength in our systematic liquid alternatives, active fixed income, and evergreen private markets offerings. Institutional active net inflows were $24 billion, driven by our LifePath target date franchise, private markets, and systematic strategies.

In private markets, we continue to see strong momentum supported by investment performance, differentiated deal flow, and the breadth of our client relationships. We saw an aggregate $9 billion of net inflows led by private credit and infrastructure and primarily driven by deployment activity.

BlackRock is at its best helping clients navigate intense periods of transformation across industries, markets, and geopolitics. Capital is moving. Wealth management platforms, institutions, and consultants are evaluating their providers of asset management services. Our whole-portfolio model has a proven track record of capturing momentum and gaining share in these environments. BlackRock is simultaneously a leading public markets manager, a scaled private markets platform, and a global technology company. That is not something that can be replicated overnight.

Laurence D. Fink (Chairman and Chief Executive Officer): Thank you, Martin. Good morning, everyone, and thank you for joining the call. This was one of the strongest starts to a year in BlackRock's history. Clients awarded us with $130 billion of net inflows in the first quarter. That drove 8% organic base fee growth, representing our highest first quarter in the last five years. Technology services ACV grew 14%. Our margins expanded by over 100 basis points to 44.5%, and our firm's effective fee rate moved upward. Over the last twelve months, clients entrusted BlackRock with $744 billion in net new assets, powering 10% organic base fee growth.

Our results reflect a global business with accelerating momentum, deep client engagement worldwide, and a platform built to compound through cycles. I want to recognize the resilience and partnership from our employees, our clients, and our board members in the Middle East. We will continue to do everything we can to support them.

In a world where capital is moving and provider relationships are being reevaluated, BlackRock is a trusted destination. In these conversations, I hear a consistent theme. The world feels different—not just uncertain, but different. The world is reorganizing around self-reliance. AI is reshaping how we live and how we work. Private markets are a large and growing part of the capital markets. Clients are turning to BlackRock to help them understand what this means for their portfolios and for their beneficiaries.

The whole-portfolio construct has resonated for years in our institutional channel, where we have been entrusted with approximately $300 billion in large-scale outsourcing mandates over the last three years. In wealth, we are also opening new avenues of growth as demand for public/private, tax-aware investing reshapes how investors build their portfolios. BlackRock's wealth platform spans over $1 trillion in AUM, with global distribution across tens of thousands of financial advisers.

The combinations of GIP and HPS with BlackRock are surpassing the highest expectations we underwrote. GIP V closed above its $25 billion target and is already majority committed. Joining HPS' origination and structuring expertise with BlackRock's relationship network has supercharged our combined origination capabilities. These businesses are not just integrating; they are accelerating.

Demand for private credit is structural. Private credit serves an important role in the financing ecosystem. Banks, governments, and public capital markets cannot fully address the world's growth and investment capital needs. Periods of market dislocation are when private credit investment opportunities are most compelling.

BlackRock is at the forefront of innovation and advocacy in retirement. The Department of Labor's proposed rule is a major development towards a framework to include private assets in target date funds. BlackRock will be at the forefront of this opportunity. We have a $600 billion LifePath target date franchise, where we saw $15 billion of net inflows in the quarter. Our LifePath Dynamic range is well positioned to eventually include private markets exposure alongside public equities and fixed income.

Martin S. Small (Q&A — on margins): We continue to target a 45% or greater adjusted operating margin, with our margin on recurring fee-related earnings running higher. Looking forward, we have run BlackRock at margins north of 45% before—close to 47% back in 2021. Now we have added engines of infrastructure and alternative credit with our colleagues from GIP and HPS. Both franchises were north of 50% FRE margins when they joined BlackRock. Over time, we see the margin on recurring fee-related earnings trending upwards toward best-in-class private markets names—north of 50%.

Martin S. Small (Q&A — on DOL rule): We are energized by the activity we have seen from policymakers, consultants, and plan sponsors. I have been doing this for 20+ years. We have seen more advancements on private markets in 401(k)s in the last 12 months than in the prior 20 years. The notice of proposed rulemaking the Department released is better than we expected. Preqin data for benchmarking private markets is a huge opportunity. We are going to be launching LifePath with privates—all to build a track record so plan sponsors can get more comfortable with these structures as the DOL rule hopefully takes hold towards the back half of the year and we get really running in 2027.

Martin S. Small (Q&A — on IQQ filing): We filed a registration statement with the SEC on the NASDAQ 100 Index ETF, the IQQ. BlackRock has a long-standing and continuously growing partnership with NASDAQ. We are already the largest manager of NASDAQ 100 ETFs outside the United States. We manage $25 billion across ETFs listed in Europe, Canada, and Hong Kong. IQQ is similarly trying to facilitate access for U.S. investors with an iShares quality option in one of the most widely tracked indexes.