BlackRock’s 2025 Q4 Earnings Call: Private Credit Stability, Money Market Yields, and Target Date Fund Timelines Clash with Past Guidance

Date of Call: Jan 15, 2026

Financials Results

• Revenue: Full year $24B, up 19% YOY; Q4 $7B, up 23% YOY
• EPS: Full year $48.09, up 10% YOY; Q4 $13.16, up 10% YOY
• Operating Margin: Full year 44.1%, down 40 bps YOY; Q4 45%, down 50 bps YOY

Guidance:

• Target 6-7%+ organic base fee growth consistently.
• Expect double-digit organic base fee growth in supportive market environments.
• Target 45% or higher adjusted operating margin profile.
• G&A expected mid-single-digit % increase in 2026 after annualizing HPS/Preqin impact.
• Headcount expected broadly flat in 2026.
• Target $1.8B in share repurchases for 2026.
• Expect steeper yield curve, driving bond income opportunities.
• Plan to launch first LifePath target date fund with private markets later in 2026.
• Aim to grow private markets to wealth series to at least $60B AUM by 2030.

Business Commentary:

Record Financial Performance:

• BlackRock reported revenue of $24 billion for the full year 2025, up 19% year over year, and operating income of $9.6 billion, up 18%.
• The growth was driven by strong net new asset inflows, organic base fee growth, and acquisitions.

Organic Base Fee Growth:

• The company achieved 9% organic base fee growth for the full year 2025, with 12% growth in the fourth quarter.
• This growth was broad-based across various segments, including systematic franchise, private markets, ETFs, and digital assets.

Technology and ACV Expansion:

• BlackRock reported 16% technology ACV growth in the fourth quarter of 2025.
• This expansion was driven by successful onboarding of new clients and the closing of the Preqin transaction.

Private Markets and Wealth Strategies:

• The private markets platform delivered $40 billion of full-year net inflows in 2025.
• Growth was driven by strong fundraising activity and investments in infrastructure, private credit, and alts to wealth.

Increased Shareholder Returns:

• BlackRock announced a 10% increase in the 2026 dividend per share and plans to repurchase $1.8 billion worth of shares in 2026.
• These actions were driven by the company's accelerating growth trajectory and successful platform performance in 2025.

Sentiment Analysis:

Overall Tone: Positive

• "We’re closing out one of the strongest years in our history." "We enter 2026 with accelerating momentum." "We delivered 6% or higher organic base fee growth in each quarter of 2025." "We finished the year with two consecutive quarters of double-digit organic base fee growth." "We’re more confident than ever in our model."

Q&A:

• Question from Craig Siegenthaler (Bank of America): As we look ahead to 2026, can you flesh out what you’re all seeing and thinking on the net flow pipeline? And... with the Fed cutting, do you see flows reversing in this business?
  Response: Organic base fee growth momentum is strong, with pipeline diversified across private markets, systematic, and digital assets. Expect money market yields to fall with rate cuts, but overall cash holdings will remain elevated as global capital markets grow.

• Question from Michael Cyprys (Morgan Stanley): How are you looking to accelerate growth and expand contribution from Asia over the next couple of years?
  Response: Asia capital markets are growing faster than U.S., with opportunities in Japan, Hong Kong, India (via Jio BlackRock), and Saudi Arabia. Growth in these markets is early stage and beneficial for BlackRock's platform.

• Question from Mike Brown (UBS): Can you talk about how your differentiated offering... differentiates here? Maybe unpack your comments about how the demand for the channel is shaping up here in 2026.
  Response: BlackRock is the largest insurance general account manager ($700B AUM) and combines public fixed income, private credit, Aladdin, and middle office services as a full-service partner. Over 20 conversations ongoing to migrate ~$70B into private high-grade portfolios, with deployments expected in 2H 2026.

• Question from Alex Blostein (Goldman Sachs): How should we think about [45% operating margin] progressing over the course of 2026, assuming kind of normal markets?
  Response: Target 45% or higher adjusted operating margin. Margin on recurring fee-related earnings is expanding, driven by FRE growth in private markets and scaled strategies. G&A expected mid-single-digit % increase in 2026.

• Question from Ken Worthington (JPMorgan): How should we view the evolution of Preqin and BlackRock’s initiatives around private market data...?
  Response: Integration of Preqin is going well. Plans include expanding distribution, building data/models for private markets, enriching data, and leveraging Aladdin/iShares to create investable private market indices over the next few years.

• Question from Dan Fannon (Jefferies): ...disclose what the HPS flows were in the quarter and then more broadly how you’re thinking about the outlook for growth given the headlines...?
  Response: HPS had $7B private credit net inflows in Q4. Credit conditions are stable with defaults in historical ranges; expected normalized defaults. Strong gross subscriptions in HLEND, and over 80% of investors plan to maintain/increase private credit allocations.

• Question from Ben Budish (Barclays): What’s the latest you’re hearing from advisors? ...and then I think in the prepared remarks, you talked about model portfolios using private markets.
  Response: Strong momentum in private markets fundraising. Launching H-series vehicles for private wealth/retail channels in 2026, targeting $60B AUM by 2030. Near-term launches include real assets, European direct lending, and triple-net lease strategies.

Contradiction Point 1

Growth Outlook for Private Credit

Contradiction on the stability and growth trajectory of private credit conditions and demand.

Could you provide the HPS flows for the quarter and discuss your growth outlook in light of recent private credit trends? - Dan Fannon (Jefferies)

2025Q4: Private credit conditions are stable... expect a return to normal default cycles... Over 80% of investors... plan to maintain or increase private credit allocations. - Martin S. Small(CFO)

What credit trends are the HPS team observing in their direct lending portfolios in Q3, and what growth implications arise from lower rates and tighter spreads? - Alexander Blostein (Goldman Sachs)

2025Q3: There is strong credit quality and a positive environment, with declining default rates... Deployment to nontraded BDCs remains steady. - Martin S. Small(CFO)

Contradiction Point 2

Market Outlook for Money Market Funds

Contradiction on the future income potential and fund flows for money market funds.

As we look ahead to 2026, what is the outlook for net flows, and how might Fed rate cuts impact money market business liquidity? - Craig Siegenthaler (Bank of America)

2025Q4: The era of easy money fund income is fading. Rate cuts will cause yields to fall. - Martin Small(CFO)

What credit trends is the HPS team observing in their Q3 direct lending portfolios, and what growth implications arise from lower rates and tighter spreads? - Alexander Blostein (Goldman Sachs)

2025Q3: There is strong credit quality and a positive environment, with declining default rates even in syndicated loan markets... Deployment to nontraded BDCs remains steady. - Martin S. Small(CFO)

Contradiction Point 3

Asia Growth Strategy and Specificity

In 2025Q4, the strategy is framed as broad and foundational, while in 2025Q2, it's tied to concrete examples and client engagement.

How do you plan to accelerate growth and expand Asia's contribution over the next couple of years, and which factors would be most impactful for the overall firm? - Michael Cyprys (Morgan Stanley)

2025Q4: Growth in global capital markets is a foundational opportunity for BlackRock. The firm is building its platform in each country and benefiting from these early-stage developments. - Larry D. Fink(CEO)

How is the integration of HPS and GIP with BlackRock progressing, particularly with insurance clients, and to what extent are you seeing new mandate wins or expanded relationships? Additionally, can you update us on traction in wealth and retirement channels regarding private market and multiliquid strategies, and outline key steps planned over the next 12 months? - Michael J. Cyprys (Morgan Stanley)

2025Q2: Client feedback post-acquisitions has been extremely strong, especially with insurance and wealth management companies globally." "Opportunities in public-private financing and infrastructure are expected to grow dramatically due to rising deficits. - Larry D. Fink(CEO)

Contradiction Point 4

Expected Launch and Regulatory Status of Target Date Funds with Private Allocations

The regulatory requirement for a proprietary target date fund launch appears to have shifted from being a prerequisite to being an ongoing effort.

What are the latest updates from advisors on GIP, any challenges, and the expected timing for private market model portfolios? - Ben Budish (Barclays)

2025Q4: The integrated platform (GIP, HPS, Preqin) is a key driver." "A proprietary LifePath with privates target date fund is expected to launch in 2026. - Laurence Douglas Fink(CEO)

What is your strategy timeline for launching a target date fund with private allocations, and what regulatory changes from the DOL, SEC, or Congress would you require? - Craig William Siegenthaler (Bank of America)

2025Q2: To tangibly add private markets exposure to defined contribution (DC) plans in the U.S., litigation or advice reform is likely needed." "A proprietary LifePath with privates target date fund is expected to launch in 2026. - Martin S. Small(CFO), Laurence Douglas Fink(CEO)

Contradiction Point 5

Timeline for Launching Private Markets in Retail Target Date Funds

Contradiction on the specific timeline for a major product launch in the U.S. retirement market.

What updates have advisors provided on GIP challenges and the expected timing for model portfolios using private markets? - Ben Budish (Barclays)

2025Q4: [Launching an H-series of vehicles for private wealth and retail channels in 2026]... Specific strategies will be rolled out through 2026... - Larry D. Fink(CEO)

What is BlackRock's progress on incorporating private markets into retail target date funds, and is the company awaiting Department of Labor guidance? - Craig Siegenthaler (Bank of America)

2025Q1: [Plan to launch a target date offering with private markets]... in mid-2025 via a major U.S. trust company. - Martin Small(CFO)