3 Things Investors Should Know About BlackRock’s Q4 2024 Earnings

TradingKey - It’s been a massive two years or so for the US stock market as both 2023 and 2024 saw the S&P 500 Index post gains in excess of 20%.

Besides the obvious winners, like Big Tech stocks, one of the sectors that has done extremely well in the rally has been financials. And that’s not been confined to the banks, either.

One of the biggest winners has been one of the world’s largest asset management firms, BlackRock Inc (NYSE: BLK). Its shares are up over 42% in the past two years. The company reported its latest Q4 2024 earnings on Wednesday (15 January) before the market opened in the US.

Here are three things investors should know about BlackRock’s latest financial results.

1. AUM hits record high of US$11.5 trillion

For any large asset manager, the amount of money they manage is a key barometer of how much appeal they hold with investors. 

This amount – known as “assets under management” or AUM – hit a record high of US$11.55 trillion during the quarter for BlackRock. That figure was up from US$10 trillion in the year-ago period.

Client assets were turbocharged by a fourth-quarter rally in the US following Donald Trump’s presidential election victory. Net inflows in the fourth quarter alone amounted to US$281 billion and this contributed to a full-year 2024 record of US$641 billion in net inflows. 

The firm’s launch of its massive Bitcoin ETF – the iShares Bitcoin Trust ETF (NASDAQ: IBIT) that is now the world’s largest Bitcoin ETF by AUM – also contributed to the general trend of investors putting money into BlackRock products.

In 2024, BlackRock had also expanded more into the private markets space by splurging around US$25 billion on two acquisitions – buying infrastructure fund Global Infrastructure Partners and private credit firm HPS Investment Partners. BlackRock’s pending deal to acquire private markets data provider – Preqin – should also strengthen its position in the private markets space.

With these two additions, BlackRock is likely to see its share of both AUM and base fees in “Alternatives” grow in the years ahead.

BlackRock’s AUM and base fees by client type, style, product type, and region, Q4 2024

Source: BlackRock’s Q4 2024 earnings presentation

1. Operating income rises 21% for 2024

For Q4 2024, BlackRock’s net income rose to US$1.67 billion, from US$1.38 billion in Q4 2023. Meanwhile, the firm’s full-year 2024 diluted earnings per share (EPS) saw a 15% increase year-on-year and reflects the lower nonoperating income and a higher effective tax rate during the year.

For the full-year 2024, BlackRock also reported an impressive 21% year-on-year increase in operating income to US$7.57 billion. From the Q4 2024 perspective, BlackRock’s operating income growth was even better as it posted operating income of US$2.08 billion, up 31% year-on-year from the fourth quarter of 2023. 

1. US$4.7 billion returned to shareholders in 2024

Finally, BlackRock – despite its strong growth in AUM – is also returning capital to shareholders via share buybacks and increased dividends.

BlackRock stated that it returned US$4.7 billion to shareholders in 2024, including US$1.6 billion in share repurchases. While its weighted-average diluted shares have recently spiked to 157 million shares – as of the end of Q4 2024 – versus the 149.6 million in Q3 2024, that was mainly down to the impact of a 6.9 million share issuance as part of the deal for Global Infrastructure Partners.

On the dividend front, investors will be pleased to know that BlackRock currently pays a dividend per share (DPS) of US$5.10 and is due to hike its dividend at some point in the next few months. At the moment, BlackRock shares are yielding 2%.

Solid quarter for asset management giant

It was another solid quarter for BlackRock in terms of both AUM growth, net inflows, and profitability. The market recognised that bullishness as BlackRock shares ended the day up 5.1%.

Over the past year, BlackRock shares have risen by 28% versus the 24.8% return from the S&P 500 Index over the same period.