BLK

BlackRock is a dominant, fee-based franchise: $14.0 trillion of AUM at year-end 2025, ~24,900 employees across 30+ countries, and an ETF/iShares platform with structural scale advantages. FY2025 revenue jumped +18.7% to $24.2B, extending a clear acceleration (from $17.9B in FY2022/2023 to $20.4B in FY2024). But the top line is the wrong place to look this year — the growth is largely bought, not earned: the MD&A leans heavily on the GIP, Preqin and HPS Transactions, and the fingerprints show up below the revenue line. Net income fell -12.8% to $5.55B, operating income -7.0%, and diluted EPS -15.9% to $35.31, while depreciation & amortization more than doubled (+112.9% to $1.13B) — consistent with a wave of acquired-intangible amortization and integration drag. Operating cash flow dropped -20.8% to $3.93B and cash on hand fell -10.1%. So this was a build-out year where earnings quality went backwards even as the franchise got bigger.

The balance sheet remains sound for the model: $55.9B equity (+17.7%, inflated by stock issued for deals), long-term debt only $12.8B, and a 1.94x liabilities/equity ratio that is unremarkable for a securities firm. The more telling number is ROE at 9.9% — modest for BlackRock and a direct consequence of a larger equity/goodwill base earning declining profits. Net margin compressed to 22.9% and operating margin to 29.1%.