BlackRock Inc Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Michael Cyprys - Morgan Stanley - Analyst : With the number of acquisitions closed over the last year now under your belt, I was hoping you could talk about the progress that you're making here, bringing HPS, in particular in GIP together with BlackRock, how the conversation is progressing in particular with insurance clients, to what extent you're seeing new mandate wins or expanded relationships there? And then can you just update us on the traction in the wealth and retirement channels as it relates to private market and multiliquid strategies and talk about some of the steps you're looking to take over the next 12 months.

Question: Craig Siegenthaler - Bofa Merrill Lynch Asset Holdings Inc - Analyst : So I actually want to continue with that retirement commentary to Mike's question. So our question is on the potential migration of private into Target and the US 41k channel. We did see the great gray win news in late June. That was a positive sign. But I think BlackRock may be getting ready to launch its own target date fund with private allocation. So I was hoping you could update us on your strategy time line. And also, what are you willing to see from the Department of Labor, the SEC or Congress before you launch your own target date fund with private allocations?

Question: Alexander Blostein - Goldman Sachs Group Inc - Analyst : I wanted to ask you guys around profitability. You've made a number of acquisitions, obviously, now they're kind of coming into the run rate. As you think about the adjusted operating margin for the back half, curious to get your thoughts. But also as you pointed out at the Investor Day, the 45% plus adjusted operating margin, obviously, is quite healthy. So maybe help us sort of think through the cadence and scaling of the business as these two acquisitions kind of come into the full run rate and you continue to grow some of your faster-growing growing areas of the business.

Question: Benjamin Budish - Barclays Services Corp - Analyst : Maybe just a follow-up on the private markets strategy. So you announced the acquisition of, a smaller tuck-in, but just curious, how are you thinking about inorganic opportunities? Is this sort of an acquisition that had been on your radar -- is it something that's sort of that you had been seeking or came across how does it kind of fit in? And should this be indicative of maybe future M&A? Or do you feel pretty good about the assets that you have today as they are?

Question: Bill Katz - Cowen and Company LLC - Analyst : So maybe switching gears a little bit. Just thinking through from here. In a world of consolidating the recent transactions and being more prudent going forward. How do you think about capital returns? It seems like you're going to be generating a ton of free cash flow over the next several years. Just trying to think through the interplay between dividend and buyback and maybe the total payout ratio?

Question: Brian Bedell - Deutsche Bank AG - Analyst : Just if I can maybe switch gears a little bit to iShares in Europe and fixed income in particular. If you can just talk about how you're continuing to see -- you're continuing to see strong organic growth in the fixed income, iShares franchise. Maybe if you can talk about where you see yourselves on the long-term development of substitution of fixed income securities for iShares ETP? And then especially in Europe, I think you talked about this at Investor Day. You see pretty strong growth potential as Europe sort of democratizes their retail investor base. How do you see that progressing here coming into the second half? And you see that more just on the equity side or the alternative iShares or also on the fixed income iShares side. Unidentified Company Representative So thanks for the question. More growth, more people using iShares ETFs along the active side of the world, alongside of active using the wrapper for hedging purposes, just more and more and more use cases that we're seeing, and it is really caught on in Europe now as a primary wrapper end market to be involved in. So we continue to show industry-leading results. We have the number one share of global ETF flows year-to-date as the iShares and ETF become the vehicle choice, and we're the industry leader and probably have the most diversified offering of anyone. That diversification is reflected in our organic revenue, which is nearly 3 times the next largest issuer and inflows where 38 iShares products had over $1 billion of net inflows this quarter. So that diversification is working for us. We're seeing outsized strength from our highest conviction growth areas like fixed income, active now digital assets and European listed ETFs. And Martin mentioned before, bond ETFs led the way at $44 billion, followed by digital assets, $14 billion, active ETFs, $1.1 billion and precision and other at $1.8 billion. Europe, as you highlighted, saw $29 billion of net inflows. So we will continue to evolve our ETF business and increase access to all kinds of markets more efficiently, more transparently and conveniently. So this is a business that we continue to capture the flag globally and also help our clients expand the use of that product to areas that we didn't think of that we're responding with solutions to our clients with this wrapper. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 15, 2025 / 11:30AM, BLK.N - Q2 2025 BlackRock Inc Earnings Call

Question: Patrick Davitt - Bernstein Autonomous LLP - Analyst : You touched on this briefly, but stable coin is obviously top of mind for many investors on the back of Circle's IPO, and you're imagining that money has been a strong boost to those flows for you. So through that lens, could you speak to how you see what looks like a fairly significant emerging opportunity for asset is to manage these reserves, is there a pipeline of other potential mandates like the Circle 1? And then finally, within that, maybe some color on why these platforms can't or don't want to just invest the treasuries directly versus using your money funds or other people's money funds?