BlackRock shares BLK rose in premarket trading on Wednesday after the world’s largest asset manager reported third-quarter earnings and revenue above Wall Street expectations, supported by strong investment inflows and higher asset valuations.
The company reported $205 billion in total net inflows during the quarter, while assets under management (AUM) climbed to $15.49 trillion, up from $13.46 trillion a year earlier.
Adjusted earnings per share increased 38% year over year to $15.93, while revenue rose 19% to $7.75 billion.
BlackRock shares gained 3% in premarket trading following the results.
The stock had fallen 0.4% heading into Wednesday, underperforming the broader market amid concerns about investor activity and the outlook for financial markets.
BlackRock earnings beat Wall Street expectations
BlackRock’s adjusted earnings of $15.93 per share exceeded analyst estimates of approximately $14.32, according to data from FactSet.
Revenue of $7.75 billion also topped expectations of roughly $7.42 billion.
The increase in revenue reflected stronger market performance, organic base fee growth, higher performance fees and increased technology services and subscription revenue, according to the company.
Investment advisory, administration fees and securities lending revenue reached $6.04 billion, compared with $5.05 billion in the same period last year.
Technology services and subscription revenue rose to $588 million from $515 million a year earlier.
Adjusted operating margin increased to 47.8%, up from 44.6% in the year-earlier quarter.
Chairman and Chief Executive Officer Larry Fink said in a statement that market fundamentals remained strong, supported by higher margins and earnings momentum driven by new technology.
The results come as BlackRock seeks to expand beyond its core exchange-traded fund business into private markets and technology.
The company has outlined plans to generate more than $35 billion in revenue by the end of the decade, with over 30% expected to come from private markets and technology.
Assets Under Management reach $15.49 trillion
BlackRock’s assets under management rose approximately 15% year over year to $15.49 trillion, compared with $15.34 trillion at the end of the second quarter.
The latest figure was slightly below one analyst consensus estimate of $15.52 trillion.
Inflows into the company’s iShares exchange-traded funds accounted for approximately $135 billion, reflecting demand across product categories and global markets.
Net flows into debt products reached $78.2 billion during the quarter, indicating continued investor demand despite the recent sell-off in US Treasuries.
Long-term net inflows totalled $175 billion, below Visible Alpha consensus estimate of $177 billion and down from $199 billion in the previous quarter.
Total net inflows, however, increased to $205 billion from $192 billion in the second quarter.
BlackRock also reported $15.31 billion in net flows into private markets during the quarter.
Private credit redemptions ease
BlackRock has expanded its private credit business in recent years, seeking to diversify revenue beyond its core ETF operations.
The sector has faced increased scrutiny over exposure to software companies that could be disrupted by artificial intelligence and concerns about the transparency of private asset valuations.
Those concerns contributed to increased redemption requests from investors in recent quarters.
However, several large private credit managers reported slower redemption activity in the third quarter.
At BlackRock, redemption requests for the HPS Corporate Lending Fund fell to approximately 11.5% of shares in the latest quarter, down from 13.3% in the second quarter.
The easing in redemption requests offers a sign of reduced withdrawal pressure, although concerns over private credit valuations and AI-related disruption remain relevant for the sector.
BlackRock said it was entering the seasonally strong fourth quarter with momentum across its whole-portfolio offerings, private markets, retirement products and international platforms.
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