BlackRock Q3 2025: Acquisition-Fueled Growth and the Bottom Line

BlackRock, the world's largest asset manager, recently released its third-quarter financial results for 2025. Digging into the numbers reveals a company in the midst of a significant transformation, fueled by a series of major acquisitions that are reshaping its revenue streams and expense profile. Let's break down the key takeaways from their latest 10-Q filing.

Acquisitions Power Strong Revenue Growth

At first glance, BlackRock's top line is impressive. The company reported total revenue of $6.5 billion for the third quarter of 2025, a substantial 25% increase from the $5.2 billion generated in the same period last year.

Much of this surge can be attributed to its recent shopping spree. Base fees—the core revenue from investment advisory and administration—climbed by $1.0 billion year-over-year. The filing specifies that this growth was driven by market gains, organic growth, and significant contributions from newly acquired businesses, including approximately $225 million in fees from the HPS Transaction and $215 million from the GIP Transaction.

The acquisitions also bolstered other revenue lines:

• Technology Services: Revenue grew to $515 million, up from $403 million, partly thanks to the acquisition of private markets data provider Preqin.
• Performance Fees: These more volatile fees, which are based on investment performance, jumped to $516 million from $388 million, largely due to strong results in private markets, another area expanded through the HPS deal.

To see how these revenue streams flow through the company's expenses to the bottom line, the following diagram illustrates BlackRock's quarterly financial performance.

The Two Sides of Profitability: GAAP vs. As Adjusted

While revenue soared, the official GAAP (Generally Accepted Accounting Principles) numbers tell a more complicated story about profitability. GAAP operating income actually dipped slightly to just under $2.0 billion for the quarter, and the operating margin contracted sharply to 30.0% from 38.6% a year ago.

What gives? The answer lies in the costs associated with the very acquisitions that are driving growth. The filing highlights significant increases in expenses like:

• Employee Compensation & Benefits: Jumped to $2.4 billion from $1.6 billion, partly due to acquisition-related compensation and retention awards.
• Amortization of Intangible Assets: Surged to $253 million from just $89 million in the prior-year quarter, a direct accounting consequence of acquiring businesses with valuable contracts and customer relationships.

This is why BlackRock, like many companies, also presents "as adjusted" figures. By excluding these large, often non-cash, acquisition-related costs, the as-adjusted numbers aim to provide a clearer view of the underlying operational health of the business. On this basis, the picture looks quite different:

• As Adjusted Operating Income: Grew to $2.6 billion.
• As Adjusted Operating Margin: Stood at a much healthier 44.6%.

This divergence between GAAP and adjusted figures is crucial. It shows a core business that remains highly profitable while simultaneously absorbing the significant, but temporary, financial impact of its strategic expansion.

AUM Continues to Climb

Of course, no BlackRock update is complete without looking at Assets Under Management (AUM). The firm's AUM reached a staggering $13.5 trillion at the end of the quarter, up from $11.5 trillion a year earlier. This growth was powered by strong market performance and $205 billion in total net inflows for the quarter, indicating continued strong demand from clients for its products, especially in ETFs which saw $153 billion of net inflows.

Final Thoughts

BlackRock's Q3 2025 report showcases a pivotal moment for the company. The aggressive acquisition strategy is clearly paying off in terms of top-line growth and strategic positioning in lucrative areas like private credit and infrastructure. However, this growth comes at a cost, which is evident in the pressure on GAAP earnings. The key for investors will be to monitor how successfully BlackRock integrates these massive new businesses and whether the promised long-term synergies materialize to justify the near-term costs.