BlackRock's Mixed Bag: A Buying Chance?

Mixed Results in Q2 Earnings

• Revenue: Up 12.9% year-over-year to $5.42 billion (below expectations of $5.46 billion)
• Earnings per share: $12.05 (beat expectations of $10.82)
• Assets under management (AUM): New high of $12.53 trillion (exceeded estimate of $12.15 trillion)

Market Reaction and CEO Insights

Despite strong fundamentals, shares dropped 5% post-earnings. CEO Larry Fink highlighted:

• Strong fee revenue growth driven by rising asset prices.
• $17 billion acquisition of HPS (completed July 1) to boost private credit market presence.

Key Financial Highlights

• Organic base fee growth: 6% (4th straight quarter of 5%+ growth)
• Adjusted operating margin: 43.3% (slightly lower than last year but better than expected)
• AUM growth: 18% year-over-year to $12.5 trillion
• Net outflows: $48 billion due to institutional redemptions
• iShares ETF inflows: Record high in the first half of 2025

Technology and Acquisitions

• Tech & subscription revenue: Up 26%, with Preqin contributing $60 million
• Preqin acquisition: $3.2 billion deal to enhance alternative assets data
• Annual contract value (ACV): Up 32% year-over-year (16% organically)

Outlook and Future Growth

• Acquisitions expected to boost sales and earnings
• Operating margin rebound anticipated post-integration
• Long-term investment opportunity despite short-term dip