Event: 2026Q2 earnings call on July 15, 2026
Preview date: July 14, 2026, after market close
BlackRock enters 2Q with strong operating momentum but a demanding fundamental bar. The core debate is no longer whether the company can grow—it delivered 8% organic base-fee growth, $130 billion of quarterly net inflows, and a 44.5% adjusted operating margin in 1Q. The question for this print is whether it can sustain that momentum as investors scrutinize three issues:
My read is constructive on the operating setup, helped by a much better broad-market environment in 2Q than BlackRock experienced in late 1Q. But the stock’s relative setup is more nuanced: BLK was essentially flat in 2Q through June 30 while the S&P 500 rose 14.8% and the Nasdaq-100 rose 27.6%, before BLK recovered 6.6% from June 30 through July 14. A clean beat therefore likely requires more than market beta—it will require evidence that BlackRock is retaining share and converting its expanded private-markets and technology platform into durable fee growth.
In 1Q26, BlackRock generated $130 billion of total net inflows and $136 billion of long-term net inflows. iShares ETFs supplied $132 billion, including particularly strong fixed-income ETF, precision-exposure, core-equity, and active-ETF demand.
That makes ETF flows the most important near-term KPI again in 2Q:
What would be positive: another quarter of very large ETF inflows, continued active-ETF momentum, and a mix that supports fee-rate stability or expansion.
What would concern investors: a return of material low-fee institutional-index redemptions, weaker fixed-income ETF demand, or strong total flows that are concentrated in lower-fee beta exposures.
BlackRock exited 1Q with $13.9 trillion of AUM, down modestly sequentially despite strong flows because market depreciation and FX more than offset subscriptions. The company’s revenue is driven primarily by average, rather than ending, AUM—so the favorable 2Q market backdrop should improve the base-fee revenue setup even if quarter-end AUM is affected by late-period volatility.
The key nuance is that BlackRock’s AUM is globally diversified:
The market backdrop should support sequential base-fee growth, but investors should avoid extrapolating directly from U.S. equity indices to reported AUM. BlackRock’s product mix, global exposures, fixed income, alternatives, and FX effects all matter.
The HPS acquisition is becoming central to the BLK thesis. In 1Q, HPS contributed approximately:
Private-credit AUM stood at $147 billion at the end of 1Q, with $6.6 billion of quarterly net inflows. Management highlighted a multibillion-dollar insurance pipeline, continuing institutional demand, and attractive new-investment spreads.
For 2Q, investors should concentrate on:
The favorable case is that market uncertainty and wider lending spreads enhance BlackRock’s ability to win institutional private-credit mandates. The risk case is that wealth-channel flows slow, realizations remain pressured, or heightened credit concerns create more caution around deployment and valuation.
Technology services and subscription revenue grew 22% year over year in 1Q to $530 million, aided by the full-quarter contribution from Preqin. Annual contract value grew 14%, and management reiterated a long-term goal of low- to mid-teens ACV growth.
This segment matters because it:
Key 2Q question: Can ACV growth stay in or near the low-teens despite a more uncertain macro environment? A sustained strong result would validate the Preqin acquisition thesis and improve confidence in BlackRock’s recurring-revenue mix.
1Q26 adjusted EPS was $12.53, up 11% year over year. However, several items make GAAP EPS less useful as a measure of underlying progress:
The contingent-consideration line can produce large GAAP volatility. Investors should therefore focus on:
BlackRock’s adjusted tax rate was 23.2% in 1Q, aided by a discrete stock-compensation tax benefit. Management indicated that approximately 25% is a reasonable tax-rate run rate for the rest of 2026.
That means 2Q adjusted EPS may face a modest sequential tax headwind even if operating results improve. Investors should distinguish a tax-driven EPS variance from a change in the operating trajectory.
1Q performance fees were $272 million, down sharply from $754 million in 4Q25, reflecting the seasonality and episodic nature of alternative-asset performance fees. They were still well above the prior-year level, aided by HPS.
For 2Q, a strong result in performance fees would help reported earnings, but it should not be treated as the same quality of upside as recurring base-fee or technology revenue. The cleaner signal is recurring fee growth and margin performance excluding performance-fee volatility.
BlackRock posted a 44.5% adjusted operating margin in 1Q, up 130 basis points year over year. Management has targeted an adjusted margin of 45% or higher over time and believes recurring-fee margins can move higher as private markets, ETFs, systematic strategies, and technology scale.
The setup for 2Q is favorable if market beta and flows lift revenue faster than costs. However, investors should watch for:
Best outcome: revenue growth and mix more than offset normal expense growth, holding adjusted margin around the mid-40% range.
Bearish outcome: expense growth absorbs the market-related revenue benefit, suggesting operating leverage is less durable than investors expect.
BlackRock repurchased $450 million of shares in 1Q and indicated an expectation to repurchase at least that amount quarterly for the balance of 2026, subject to conditions. The quarterly dividend was increased 10% to $5.73 per share.
The HPS transaction changes the per-share framework:
The key question is not simply whether BlackRock buys back stock, but whether organic earnings growth and repurchases more than offset the dilution embedded in its private-markets expansion strategy.
| Metric | Why it matters | Constructive outcome |
|---|---|---|
| Total / long-term net flows | Best indicator of client demand and share gains | Sustained large positive flows with broad product participation |
| ETF flows and mix | Largest immediate earnings and AUM driver | Strong fixed income, active, international, and precision exposure flows |
| Organic base-fee growth | Core measure of durable growth | Maintains a clearly above-target mid-single-digit to high-single-digit rate |
| Private-credit and infrastructure activity | Tests the HPS/GIP strategic rationale | Positive fundraising, deployment, and institutional pipeline commentary |
| Technology ACV growth | Tests Aladdin/Preqin recurring-revenue trajectory | Low-teens or better growth, with durable pipeline commentary |
| Adjusted operating margin | Measures operating leverage | Around the mid-40% range despite investment and compensation costs |
| Adjusted tax rate | Important for EPS comparability | Near the company’s ~25% normalized framework |
| Capital return | Helps per-share compounding | At least the indicated $450M quarterly repurchase pace |
Bull case: BlackRock reports another quarter of strong ETF and private-market flows, market beta lifts average AUM and base fees, Aladdin/Preqin sustains low-teens ACV growth, and margin remains near 45%. That combination would reinforce the view that BlackRock has become a structurally broader compounder spanning ETFs, private markets, wealth solutions, and technology.
Bear case: The headline result is supported by market appreciation or volatile performance fees, while flow mix deteriorates, institutional index outflows persist, private-credit fundraising softens, and expenses limit operating leverage. In that case, investors may question whether the post-acquisition earnings profile is as durable as the strategic narrative suggests.
Most important takeaway: For this report, prioritize organic base-fee growth, fee-bearing flow mix, private-market execution, and adjusted margin over GAAP EPS. Those four indicators will provide the clearest read on whether BlackRock is converting its scale and acquisitions into higher-quality, durable per-share growth.
Sources reviewed: BlackRock 1Q26 earnings release, 1Q26 earnings-call transcript, 1Q26 Form 10-Q, recent BLK news and filings, and BLK/SPY/QQQ price history through July 14, 2026.