BlackRock ended the third quarter with about $15.5 trillion in assets under management and took in $205 billion of net new money during it, the company said in its earnings release on Wednesday. Over twelve months the net inflow was $869 billion. Revenue rose 19 per cent to $7.75 billion, from $6.51 billion. It reported on the same morning as Morgan Stanley, whose wealth and investment management businesses reported $10.5 trillion of client assets.
Diluted earnings were $10.57 a share on a GAAP basis, up 25 per cent, and $15.93 as adjusted, up 38 per cent from $11.55. The difference is $5.36 a share, by this publication's arithmetic, and it is the first thing a reader should look at.
Two EPS numbers
Most of the gap is one line. BlackRock booked a $564 million non-cash charge for the change in fair value of contingent consideration, against $93 million a year earlier. The release says it relates mainly to its GIP and HPS Investment Partners acquisitions, and that the figure moves with BlackRock's own share price at the end of the period. The charge is largely not deductible for tax, which is one reason the GAAP effective tax rate rose to 29.4 per cent from 25.2 per cent.
The reconciliation in the release adds back $1.0 billion of expenses in all to reach adjusted operating income of $3.33 billion: the $564 million, $276 million of amortisation of intangible assets, $130 million of other acquisition-related costs and $32 million tied to deferred cash compensation plans. GAAP operating income was $2.33 billion, up 19 per cent, on a 30.0 per cent margin. The adjusted figure rose 27 per cent, and the adjusted margin was 47.8 per cent, against 44.6 per cent a year earlier. The release says adjusted EPS also benefited from higher non-operating income.
Where the money came from
Long-term net inflows were $175 billion, and cash management added $31 billion. iShares ETFs took $135 billion of the long-term total. By asset class, fixed income drew $78.2 billion, equities $52.4 billion and private markets $15.3 billion. Institutional index mandates lost $27 billion, while institutional active took in $44 billion.
"Our track record of strong investment performance drove $66 billion of active net inflows, led by our fixed income and systematic franchises," chief executive Larry Fink said in the release.
Organic base fee growth was 11 per cent annualised in the quarter and 10 per cent over twelve months. That is the number that counts for earnings quality, because inflows into low-fee index ETFs add assets faster than they add revenue. ETFs were 41 per cent of assets but 46 per cent of base fees and securities lending revenue; non-ETF index products were 28 per cent of assets and 6 per cent of those fees.
Revenue and fees
Base fees rose 19 per cent from a year earlier and 5 per cent from the second quarter, according to the earnings supplement. Together with securities lending they came to $6.0 billion. Performance fees were $630 million, up 22 per cent on the year and 107 per cent on the second quarter. The release says the year-on-year rise came largely from a single hedge fund whose annual performance period ends in the third quarter, so that line is lumpy by design. Because base fees grew at the same 19 per cent as total revenue, the headline growth does not depend on it.
Technology services and subscription revenue rose 14 per cent to $588 million, and annual contract value grew 12 per cent. BlackRock repurchased $550 million of shares in the quarter.
What to watch
Fink said BlackRock is "entering our seasonally strongest fourth quarter with accelerating momentum." The next signals are the fourth-quarter flow number in January, whether performance fees fall back once the hedge fund's annual fee has passed, and the contingent consideration line, which will keep moving GAAP earnings for as long as the earn-outs track the share price. A quarter in which assets grow 15 per cent and revenue 19 per cent is unusually clean. It is also the kind that markets tend to price in advance.
All figures, including assets, flows by product and client type, revenue lines, operating income and margins, the reconciliation of GAAP to as-adjusted results, the buyback and the Larry Fink quotations, are from BlackRock's third-quarter 2026 earnings release, filed with the SEC as Exhibit 99.1 to a Form 8-K on 14 October 2026. Year-on-year and sequential growth rates for base fees and performance fees are from the earnings supplement filed as Exhibit 99.2 the same day. The gap between GAAP and adjusted EPS and the sum of the operating income adjustments are this publication's arithmetic. The analysis is our own.
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