Q1 2026 Earnings Call Transcript

Good morning, everyone. I am Chris Meade, the General Counsel of BlackRock, Inc. Before we begin, I would like to remind you that during the course of this call, we may make a number of forward-looking statements. We call your attention to the fact that BlackRock, Inc.’s actual results may, of course, differ from these statements.

As you know, BlackRock, Inc. has filed reports with the SEC which list some of the factors that may cause the results of BlackRock, Inc. to differ materially from what we say today. BlackRock, Inc. assumes no duty and does not undertake to update any forward-looking statements. With that, I will turn it over to Martin.

Thanks, Chris. Good morning, everyone. It is my pleasure to present results for the first quarter of 2026. Before I turn it over to Larry, I will review our financial performance and business results. Our earnings release discloses both GAAP and as-adjusted results.

A reconciliation between GAAP and our as-adjusted results has been included in the table attached to today’s press release. I will be focusing primarily on our as-adjusted results. It has been a standout start to the year for BlackRock, Inc. Our first-quarter revenue, operating income, and earnings per share grew double digits.

We expanded margins by over 100 basis points and we delivered 8% organic base fee growth. That is our seventh consecutive quarter at or above 5%, bringing the last twelve months’ organic base fee growth to 10%. What is driving that performance is deep engagement with clients. We are providing advice, insights, and access across the whole portfolio, allowing clients to efficiently implement both long-term strategic asset allocation moves and tactical exposures to navigate near-term themes in markets.

These higher-velocity markets bring clients closer to our firm. BlackRock, Inc. is winning mindshare and wallet share reflected in $130 billion of net inflows in the first quarter. Organic growth is durable and broad-based. It is consistent across product, region, and client type.

Firms we brought together deliberately are now compounding in our results and with our clients. You see it across the BlackRock, Inc. portfolio. Aperio flows are accelerating, as advisers bring tax-aware direct indexing into the core of accounts. iShares is leading the industry across active and index. Infrastructure fundraising and deployment are ahead of plan. 2026 unfolded in a more volatile market environment.

Markets showed heightened sensitivity to incremental economic data, with volatility rising across rates, equities, and currencies. There is real, impactful geopolitical uncertainty. There is both excitement and anxiety about how artificial intelligence will impact day-to-day lives and business models. As capital reallocates and assumptions are challenged, markets can feel unsettled even when underlying fundamentals are sound.

That dynamic is evident today. While headlines and sentiment remain uneven, BlackRock, Inc.’s performance tells a very different story. Our fundamentals are strong. Organic base fee growth remains well above target, and margin expansion continues to reflect the operating leverage built into our model.

Momentum across our business continues to accelerate. That momentum is rooted in clients wanting to partner with scaled, trusted platforms, and they are consolidating more of their portfolios with BlackRock, Inc. Turning to our financial results, first-quarter revenue of $6.7 billion increased 27% year-over-year, driven by organic growth, the impact of higher markets on average AUM, the acquisitions of HPS and Preqin, and higher technology services and subscription revenue. Operating income of $2.7 billion was up 31%, and earnings per share of $12.53 was 11% higher versus a year ago.

EPS also reflected lower nonoperating income, a higher effective tax rate, and higher share count in the current quarter linked to the closing of the HPS transaction on July 1, 2025. Nonoperating results for the quarter included $66 million of net investment gains, driven primarily by equity method earnings and noncash valuation gains on our minority investments. Our as-adjusted tax rate for the first quarter was approximately 23%. This reflected $57 million of discrete tax benefits related to stock-based compensation awards that vest in the first quarter of each year. We continue to estimate that 25% is a reasonable projected tax run rate for the remainder of 2026. The actual effective tax rate may differ because of nonrecurring or discrete items, or potential changes in tax legislation.

First-quarter base fee and securities lending revenue of $5.4 billion was up 24% year-over-year, driven by the positive impact of market beta on average AUM, organic base fee growth, and approximately $230 million in base fees from HPS. On an equivalent day-count basis, our annualized effective fee rate was 0.2 basis point higher compared to the fourth quarter. Our fee rate benefited from outperformance of international equity markets relative to the U.S., along with client demand for international iShares exposures, and our structural growers in systematic equities, private markets, Aperio, and active ETFs.

Performance fees of $272 million increased from a year ago, reflecting higher revenue from alternatives, which includes $121 million of performance fees from HPS. Quarterly technology services and subscription revenue was up 22% compared to a year ago. Growth reflects sustained demand for our full range of Aladdin technology offerings, and a full-quarter impact of the Preqin transaction which closed on March 3, 2025. Preqin added approximately $65 million to first-quarter revenue. Annual contract value, or ACV, increased [inaudible] year-over-year.

We remain committed to low- to mid-teens ACV growth over the long term. Total expense increased 24% year-over-year, reflecting higher compensation, sales, asset and account expense, and G&A. Employee compensation and benefit expense was up 27%, reflecting higher incentive compensation linked to higher operating income and performance fees, and higher headcount associated with the onboarding of HPS and Preqin employees. Sales, asset, and account expense increased 25% compared to a year ago, primarily driven by higher distribution and servicing costs, and direct fund expense.

G&A expense increased 14%, primarily driven by the impact of the HPS and Preqin acquisitions. Excluding the impact of the HPS and Preqin acquisitions, G&A would have increased a mid-single-digit percentage from a year ago. Our first-quarter as-adjusted operating margin of 44.5% was up 130 basis points from a year ago, reflecting the positive impact of markets on revenue and strong organic base fee growth. We continue to deliver higher margin expansion on recurring fee-related earnings.

Excluding the impact of all performance fees and related compensation, our adjusted operating margin for the first quarter would have been 45.6%, up 180 basis points year-over-year. We repurchased $450 million worth of shares in the first quarter. At present, based on our capital spending plans for the year, and subject to market and other conditions, we still anticipate repurchasing at least $450 million of shares per quarter for the balance of the year, consistent with our January guidance. In the first quarter, BlackRock, Inc. generated total net inflows of $130 billion, led by strength across ETFs, active, and private markets.

Record first-quarter ETF net inflows of $132 billion were led by index bond ETFs with $41 billion of net inflows. Precision exposures, core equity, and active ETFs added $39 billion, [inaudible], and $19 billion, respectively. Client demand for international diversification presents meaningful upside for BlackRock, Inc., particularly in areas like emerging markets and precision single-country allocations. This demand for premium exposures that are specific to iShares resulted in double-digit organic base fee growth for ETFs in the quarter.

Retail net inflows of $15 billion reflected continued strength in our systematic liquid alternatives, active fixed income, and evergreen private markets offerings. Subscriptions for HPS’ flagship non-traded BDC continue, with approximately $150 million of subscriptions for the April window. Demand for Aperio and Spider Rock is also accelerating as financial advisers turn to these platforms for customized and tax-aware strategies. Aperio generated a record $13 billion of net inflows and Spider Rock added over $1 billion in the quarter.

Aperio’s AUM has more than tripled and Spider Rock’s AUM has more than doubled in the five and two years, respectively, since their closings. Institutional active net inflows were $24 billion, driven by our LifePath target date franchise, private markets, and systematic strategies. These inflows were partially offset by a few client-specific active fixed income redemptions. Institutional index net outflows of $35 billion were concentrated in low-fee index equities.

In private markets, we continue to see strong momentum supported by investment performance, differentiated deal flow, and the breadth of our client relationships. We saw an aggregate $9 billion of net inflows led by private credit and infrastructure and primarily driven by deployment activity. Finally, BlackRock, Inc.’s cash management platform saw $6 billion of net outflows in the first quarter. Cash management results reflected seasonal redemptions from U.S. government funds, partially offset by growth in customized cash mandates.

BlackRock, Inc. is at its best helping clients navigate intense periods of transformation across industries, markets, and geopolitics. Capital is moving. Wealth management platforms, institutions, and consultants are evaluating their providers of asset management services. Our whole-portfolio model has a proven track record of capturing momentum and gaining share in these environments.

BlackRock, Inc. is simultaneously a leading public markets manager, a scaled private markets platform, and a global technology company. That is not something that can be replicated overnight. Our clients know it. Our results prove it.

We generated 8% organic base fee growth in the quarter and 10% over the last twelve months. At the same time, we grew revenue and operating income double digits and expanded margins by over 100 basis points. When clients are making big decisions about their portfolios, they are choosing BlackRock, Inc. because we can meet them across public markets, private markets, and technology all on one platform. We have the investment expertise, the technology, the global reach, and the track record.

And we have nearly 25,000 colleagues—One BlackRock—working together to deliver excellence for our clients and growth for our shareholders. With that, I will turn it over to Larry.

Thank you, Martin. Good morning, everyone, and thank you for joining the call. This was one of the strongest starts to a year in BlackRock, Inc.’s history. Clients awarded us with $130 billion of net inflows in the first quarter.

That drove 8% organic base fee growth, representing our highest first quarter in the last five years. Technology services ACV grew 14%. Our margins expanded by over 100 basis points to 44.5%, and our firm’s effective fee rate moved upward. Over the last twelve months, clients entrusted BlackRock, Inc. with $744 billion in net new assets, powering 10% organic base fee growth.

Our results reflect a global business with accelerating momentum, deep client engagement worldwide, and a platform built to compound through cycles. But our position reflects something larger than one quarter or even one year of results. The conversations I am having with clients around the world confirm what our results already show. Our business is becoming more global and more connected.

Our brand is strengthening in every region in which we operate. I have seen it deepen even in the last few weeks in my trips to Mexico and Europe, and my conversations with colleagues and clients in the Middle East. I want to recognize the resilience and partnership from our employees, our clients, and our board members in the Middle East. We will continue to do everything we can to support them.

In a world where capital is moving and provider relationships are being reevaluated, BlackRock, Inc. is a trusted destination. A major part of my role has always been spending time with clients. My 2026 schedule has already been filled with rich dialogue with CEOs, sovereign wealth funds, pension funds, insurance CIOs, wealth managers, and governments. In these conversations, I hear a consistent theme.

The world feels different—not just uncertain, but different. The world is reorganizing around self-reliance. AI is reshaping how we live and how we work. Private markets are a large and growing part of the capital markets.

Clients are turning to BlackRock, Inc. to help them understand what this means for their portfolios and for their beneficiaries. We are engaged with clients across every channel, geography, and asset class. Many of these conversations would not have been possible five years ago because the platform we now have built did not exist. We built it by bridging public and private markets, by expanding iShares into new regions and asset classes, by unlocking personal SMAs through Aperio, and by making active a true scale business through systematic alpha.

BlackRock, Inc. is playing a role that goes beyond asset management. We are partnering with governments and clients to help more people grow with their economies and with their countries. Through iShares and our local platforms, we are helping turn citizens into investors in their local economies in India, Mexico, Japan, Europe, and beyond. Much of our work is focused on making retirement investing more accessible.

Strong retirement systems depend on deep, functioning capital markets, and deep capital markets are built in part by the savings of people planning for retirement. BlackRock, Inc.’s role in retirement is resonating in every conversation I have with governmental leaders. Retirement is foundational to BlackRock, Inc. Our platform spans defined benefit and defined contribution and brings together public and private markets, active and index, and technology at a global scale.

That combination differentiates us in the U.S. as plan sponsors consider the role of private markets in 401(k)s, but it is also shaping how we partner with clients in regions like the Middle East and India to build more durable retirement systems and local capital markets. We are invested ahead of our clients’ needs and secular forces driving growth in capital markets. We are more confident than ever in our model, and the breadth of our pipeline has never been greater. BlackRock, Inc.’s diversified platform is an advantage.

We develop whole-portfolio solutions at scale. We are deepening client relationships and enabling more durable growth. It provides resilience and it gives us upside capture when market conditions shift. When clients rotate towards international exposures—as they did this quarter—BlackRock, Inc. benefits. iShares is a differentiator in that it indexes virtually every slice of global equities and bond markets, from broad benchmarks to emerging markets to single-country precision exposures.

Demand for these premium exposures drove record iShares first-quarter net inflows of $132 billion, with net base fees double what they were compared to this time last year. Our active ETF platform has grown four times in the last two years to more than $110 billion in AUM. Net inflows of $19 billion led the industry. We said that we believe that active ETFs can be a $500 million or greater revenue generator by 2030, and we are already more than halfway there.

Strong client engagement drove $3 billion of active equity net inflows. For BlackRock, Inc., active equity is a growth area. Our systematic equity offerings remain one of the leading investment performance engines. We are working on a number of other systematic equity assignments with clients around the world.

Clients want to harness AI, decades of proprietary data, and BlackRock, Inc.’s track record of turning quantitative rigor into long-term investment performance. In retail active fixed income, we raised $2 billion, led by our top-performing unconstrained Strategic Income Opportunities Fund. We are firmly in the era of whole portfolios. Clients want advice.

They need allocation and implementation across public and private markets together, at scale. A decade ago, fiduciaries’ best practice often meant diversifying across a number of managers. As portfolios and governance have grown more complex, our clients are increasingly choosing to work with fewer strategic partners—many times, just one. We see that shift reflected in the industry.

Outsourced CIO assets have more than doubled over the last five years. This movement towards whole portfolios is playing directly to our strengths. Clients are choosing BlackRock, Inc. because we build together asset management and technology across public and private markets seamlessly in one integrated platform. The whole-portfolio construct has resonated for years in our institutional channel, where we have been entrusted with approximately $300 billion in large-scale outsourcing mandates over the last three years.

In wealth, we are also opening new avenues of growth as demand for public/private, tax-aware investing reshapes how investors build their portfolios. BlackRock, Inc.’s wealth platform spans over $1 trillion in AUM, with global distribution across tens of thousands of financial advisers. It delivers seamlessly integrated public and private market solutions, model portfolios, and practice management capabilities. That is significant value as wealth management firms rethink their product shelves and look to do more with fewer partners.

We are seeing demand across our wealth offering. That includes a record quarter in Aperio and Spider Rock, outsourcing mandates, and net inflows into liquid active and private market strategies, including net inflows into our LTIP 2.0 funds in Europe and our flagship non-traded credit BDC. The combinations of GIP and HPS with BlackRock, Inc. are surpassing the highest expectations we underwrote. GIP V closed above its $25 billion target and is already majority committed through recently announced deals like TCR, AES, and Aligned.

Joining HPS’ origination and structuring expertise with BlackRock, Inc.’s relationship network has supercharged our combined origination capabilities. That has allowed us to be more selective while still actively deploying capital at scale. These businesses are not just integrating; they are accelerating. There has been a lot of attention on private credit, but the headlines do not reflect what clients are telling us, what our portfolio data shows, or where we see the market going.

Demand is structural. Private credit serves an important role in the financing ecosystem. Banks, governments, and public capital markets cannot fully address the world’s growth and investment capital needs. That is not changing.

Much of the focus has been on wealth vehicles like BDCs, interval funds, and tender funds. These funds make up around $550 billion in AUM—or about 25%—of the $2.2 trillion private credit industry. Institutional demand is actually accelerating. Institutions are increasing allocations to private credit as wider spreads are enhancing return potential and defaults—while normalizing—are still within historical standards.

Private credit has historically offered asset-level yields approximately 150 basis points higher than comparable weighted traditional fixed income. New activity levels have been somewhat lower in the first quarter, which is seasonal and reflects market uncertainty. But new, regular-way direct lending is being quoted 25 to 50 basis points wider than where the market was in the fourth quarter, with select opportunities over 100 basis points wider. Periods of market dislocation are when private credit investment opportunities are most compelling.

BlackRock, Inc.’s Private Financing Solutions platform benefits from a balanced and diverse client base across investor types and geographies. We have particularly strong representation among insurance companies and pensions as well as sovereign wealth funds and private market relationships. About 85% of Private Financing Solutions’ investor base is institutional-focused, leading to greater capital durability across market cycles. This enables us to remain active investors across markets, which should ultimately lead to better long-term risk-adjusted returns.

Over the last five to seven years, relatively benign credit markets have lifted all boats. As the overall market environment becomes more complex, we expect to see much more dispersion in performance among private credit managers. That is an environment we like to compete in. We believe that HPS’ strong underwriting discipline and proactive risk management will compare favorably and ultimately will result in differentiated returns and share gains.

Private credit has scaled rapidly, and the risk management infrastructure supporting it has not kept pace. That is a meaningful opportunity for Aladdin. We already have a comprehensive public-private workflow and data offering through Aladdin, eFront, and Preqin. We are positioning BlackRock, Inc. and Aladdin to be the language of private credit portfolios for transparency and risk analytics.

We believe that the combination of Preqin and eFront data represents the broadest universal available in the markets. Aladdin’s value as an enterprise-wide operating system is only amplified in a world with more need for real-time, verified data on one single platform. We have visibility on strong future fundraising and deployment across multiple dimensions of our private credit platform. Institutional client demand for private credit continues to grow, particularly with insurance companies.

This quarter, we signed a multibillion-dollar rotation into high-grade private credit from an existing insurance client. This will drive revenue growth as it is deployed over future quarters. We have a multibillion-dollar notified insurance pipeline for a similar mandate. Fundraising in HPS’ junior capital strategy is tracking well, and we saw approximately $150 million in HLEND April subscriptions.

BlackRock, Inc. is at the forefront of innovation and advocacy in retirement. That includes reimagining how people save and spend across longer lives and working with plan sponsors and policymakers to deliver better retirement outcomes. The Department of Labor’s proposed rule is a major development towards a framework to include private assets in target date funds. BlackRock, Inc. will be at the forefront of this opportunity.

We have a $600 billion LifePath target date franchise, where we saw $15 billion of net inflows in the quarter. That included $4 billion into LifePath Dynamic, our active solution. Our LifePath Dynamic range is well positioned to eventually include private markets exposure alongside public equities and fixed income. As private assets potentially enter the defined contribution market, plan sponsors need to partner with a target date provider with a long-term track record, private market scale, and technology and data to satisfy their fiduciary oversight.

BlackRock, Inc. delivers on every one of those points. We have our leading DCIO business, a top-five alternatives platform, and a public and private technology and data platform. The DOL’s proposed rule is clear that fiduciary standards will demand rigorous data and performance benchmarking for private assets. It reinforces what we have been saying all along: plan fiduciaries will need institutional-grade data and performance benchmarks to make defensible allocation decisions.

That is exactly what Preqin provides, and our leadership in target date, private markets investing, and data clearly differentiates BlackRock, Inc. with all our plan sponsors. This has been one of our strongest starts in BlackRock, Inc.’s history. It is not that we are benefiting from a favorable moment; we are benefiting from a durable platform—one that has been built over decades and is equipped for this type of environment, an environment where capital is moving and fundamentals are being reevaluated. The pipeline ahead of us is among the broadest I have seen at BlackRock, Inc.

Momentum is accelerating. We are energized by the opportunities ahead. Most importantly, I would like to thank all of our BlackRock, Inc. colleagues for the work they do each day to deliver for our clients and our shareholders. With that, Operator, let us open it up for questions.

We will now open the call for questions. To ask a question, please press star, then the number one on your telephone keypad. If you do ask a question, please take your phone off its speaker setting and use your handset to avoid any potential feedback. Please limit yourself to one question.

If you have a follow-up, please re-enter the queue. We will pause for just a moment to compile the Q&A roster. Your first question comes from Michael Cyprys of Morgan Stanley.

Good morning. I wanted to ask about the wealth channel penetration. I was hoping you could update us on the progress penetrating U.S. and international wealth channels, particularly for alternative products. What milestones should we be tracking over the next 12 to 24 months? And what impact might we see from the uptick in redemptions across evergreen private credit products? Martin?

Thanks, Mike. We are proud to manage more than $1 trillion of assets for wealth managers across the BlackRock, Inc. platform. It really covers every corner of a client portfolio—from models, separately managed accounts, ETFs, to private markets. We are also a technology provider.

Our Aladdin technology sits on the desk of financial advisers, bringing institutional-quality portfolio construction right to their desktops. We have the largest client-facing team in the industry covering every corner of the U.S. marketplace—from full-service brokerage and wirehouses to independent broker-dealers and RIAs. We also have very strong relationships with private banks across the U.S., Europe, and Asia. We have a diversified product business, strong track records, and great distribution.

You really see that come through in the first quarter: retail net inflows of $15 billion, driven by a record $13 billion into Aperio, $3 billion into liquid alternative strategies, as well as demand for Strategic Income Opportunities, active fixed income, and our evergreen private markets. That is nine consecutive quarters of retail net inflows, so this continues to be a durable, strong growth channel for us. Two areas are worth highlighting. First, growth in this channel is being driven by demand for whole-portfolio services and the move from brokerage to advisory, which has led to growth of ETFs and SMAs—two places where BlackRock, Inc. is an industry leader.

It has also put a big focus on after-tax investing. For a long time, the language of the industry was pre-tax or asset-class-level returns. The fact is our clients pay for college, health care, and mortgages with after-tax dollars. Putting after-tax portfolio construction at the heart of what we do at BlackRock, Inc. for taxable investors around the world was core to the rationale for the Aperio acquisition, and it is really driving growth.

Aperio net inflows were record levels for a fifth straight year in 2025, and we set a new quarterly record in the first quarter with $13 billion. Spider Rock added a quarterly record of $1 billion of flows with options overlays on top of SMAs. Within that $13 billion of direct indexing flows, about $9 billion was long-only traditional direct indexing, and $4 billion was in long-short strategies that can create additional tax-loss harvesting opportunities. We continue to believe long-short direct indexing with options overlays is going to be a great growth area, and we aim to double or triple that business in the near term.

Second, model portfolios. In the wealth management segment, model portfolios are the same as OCIO in the institutional segment. They bring professional management, scale, convenience, and customization. ETF-based models are a huge part of an adviser’s growing practice.

Roughly 40%+ of our iShares flows—particularly in the U.S.—come from model portfolios. We are expanding those solutions to include private markets within the convenience of a model portfolio. On evergreen, evergreen wealth strategies are a big part of retail access vehicles for wealth management platforms. Even with some moderation of private credit BDC flows, overall evergreen flows are pretty stable and steady.

You see that in the industry data—interval funds, tender funds, private equity, real estate, secondaries, infrastructure, and so on. We think there is a great opportunity to continue to expand our evergreen lineup. We have our HLEND flagship, and we are on track to bring an “H” series of vehicles to market for private wealth over the course of 2026. You can find registration statements on the SEC’s EDGAR website for real assets (HREAL) and net lease strategies with HLEND (HNET). We launched HLEND E in Europe and are bringing a new GIP core infrastructure fund to market in Europe as well, which we think will be a great jumping-off point for private wealth.

We have many ways to grow in wealth, and we remain very optimistic about our opportunities in ETFs, SMAs, liquid alts, private markets, as well as Aladdin, Aladdin Wealth, and models. We look forward to keeping you updated on our progress.

Your next question comes from Craig Siegenthaler with Bank of America.

Good morning, Larry. Hope everyone is doing well. Two weeks ago, we received a proposal from the Department of Labor to help support DC plan sponsors’ decisions to select private assets in the $14 trillion 401(k) channel. Given your size with your target date franchise, what are your initial thoughts on the proposal?

Also, any thoughts on whether you could launch a new series of target date strategies or use your existing strategies and just have a private allocation?

Let me have Martin start with that, then I will finish it up. Let me just say one thing importantly. Every country we are talking to is refocusing on how they can expand their capital markets through retirement. More and more countries are focusing on becoming more self-reliant—whether in the form of technology or energy—and there is more conversation about being more self-reliant on their own fundraising needs.

To do that is to move money from bank accounts into investable assets. Retirement is a conversation in every country. Let me turn it to Martin specifically with the DOL question.

Thanks, Larry, and thanks, Craig. We are energized by the activity we have seen from policymakers, consultants, and plan sponsors. I have been doing this for 20+ years. We have seen more advancements on private markets in 401(k)s in the last 12 months than in the prior 20 years.

I applaud the Department of Labor leadership for huge engagement with the industry, trade associations, consultants, plan sponsors, and companies. They have really sweated the details. The notice of proposed rulemaking the Department released is better than we expected and really paves the way for healthy engagement in this comment period about opportunities to make this even more compelling for plan fiduciaries and, most importantly, to deliver diversified professionally managed portfolios that bring together public and private markets for long-dated retirement portfolios. More than half the assets we manage at BlackRock, Inc. are related to retirement.

As Larry mentioned, we are the number one DCIO firm with over $600 billion in target date funds, and we are a top-five private markets manager. We see a great opportunity to deliver for clients. The DOL’s notice emphasizes ERISA and a process-based review of six factors: performance, fees and expenses, liquidity, valuation, benchmarking, and complexity. Larry has been very clear about the value of data—especially Preqin data—on benchmarking and how plan sponsors and consultants can make good, fiduciary, process-based decisions under ERISA by leveraging institutional-grade data.

We think that is a huge opportunity to do good while we do well—for plan sponsors and participants. We also think delivering performance, value for money, liquidity, and sound valuation within a target date fund is the best way to do this for DC plans. Inflows into 401(k)s almost all come through QDIA—target date funds, balanced funds, and managed accounts that look like those. As and when the new DOL rule takes hold, we believe a broader range of target date funds will benefit from the diversification of private markets in a professionally managed vehicle with fiduciary-sound decision-making.

We have product coming to market with our partners this year—we are going to be launching LifePath with privates—all to build a track record so plan sponsors can get more comfortable with these structures as the DOL rule hopefully takes hold towards the back half of the year and we get really running in 2027.

I would add a macro view. If we are going to really excel as a country—and across all countries—the need for more citizens to grow with their country by utilizing savings and translating that into investing, and having a complete range of investable products—whether passive or active, public or private—is very important. These are the types of conversations we are having across the spectrum of countries. There is a huge awakening of understanding the power of retirement and those flows through the capital markets.

This is not just a U.S. phenomenon; it is being discussed in all corners of the world.

Your next question comes from Alex Blostein of Goldman Sachs.

Good morning. You mentioned in your prepared remarks that in prior periods of dislocation, BlackRock, Inc. tends to gain share. We have seen it in multiple cycles when there is more money in motion. Does that happen again this time around?

If so, could you add more specificity in terms of which products or asset classes BlackRock, Inc. is best positioned to gain share in if we do see more money in motion on the back of all this, and the implications for the firm’s organic base fee growth over the next 12 to 18 months?

We have said it in different snippets, but I do believe our positioning in retirement, our positioning in infrastructure and privates, and our positioning in iShares—and the breadth and global footprint we have—are creating more and more opportunities. The speed at which we are deploying capital in GIP V in infrastructure speaks to that. More countries have a greater need to build out their infrastructure, especially with the AI revolution. More countries are getting back to self-reliance, including finding different sources of power and reducing dependence on energy imports.

The need for building out solar, which I talked about in my Chairman’s letter a few weeks ago, is one example. It is our positioning across ETFs, the scale and granularity of our ETFs—unmatched by any other ETF provider—and the entire footprint that allows us to have these conversations globally. In the U.S., as Martin discussed, the role of Aperio in terms of tax-advantaged portfolios—especially as the threat of higher taxes and other issues rise—is strengthening the platform that BlackRock, Inc. systematically built over the last 20 years. If you think about the platform we built across public and private markets, and overlay investment technology, it has given us a unique ability to have conversations in all corners of the world.

I cannot underscore enough the conversations we are having related to the growth and role of capital markets. I have had conversations even this week about the need for Europe to have a Capital Markets Union. We are having conversations across Japan and the Middle East and other regions. I was in Mexico last week talking about that role and opportunity.

We are involved in these conversations at the government level and at the institutional level, and our platform also speaks to the wealth platforms worldwide. Martin?

Larry captures the client perspective well. Alex, I would note that March 2026 was the worst month for broad markets since September 2022. In September 2022, broad stocks were down 10% and broad bonds were down 4% to 5%. In March 2026, stocks were down 7% to 10% and broad bonds traded down 2% to 3%. BlackRock, Inc. is getting better through market environments at taking share and delivering more sustained organic growth.

We think we can confidently and consistently deliver 6% to 7% growth from our structural growth segments, with higher outcomes when markets are especially supportive or when clients rotate into higher-fee segments in any quarter. There are two broad vectors for this growth. First, structural growers—the all-weather growth products and services like ETFs, private markets, models, tax-aware strategies like Aperio and Spider Rock, and systematic. These are areas where we take disproportionate share as those structural trends advance.

Second, whole-portfolio relationships. Clients want to consolidate business with fewer providers and are looking for more from the platforms they do business with. Share gains are a source of organic growth for scale players like BlackRock, Inc. If you look at industry flows for the last several years, the top five asset managers are 80%+ of flows.

Yet this is still an extraordinarily fragmented business by assets and revenue. That ability to consolidate share is another avenue of sustained organic growth. My sense of today’s markets, across some of the private credit tumult, is that this is an opportunity for BlackRock, Inc. to take share—particularly in private markets across wealth platforms—where clients want more whole-portfolio relationships to put public and private markets together and manage practices through cycles. We think some of this shakeout in credit is good for our organic base fee growth profile, alongside the structural growers we are already confident in.

Your next question comes from Mike Brown of UBS.

Good morning. A macro question: The Middle East conflict presents some geopolitical and macro challenges that could shift capital priorities. Are you seeing any change in sovereign wealth behavior as they think about allocations? Any read on Asia given added pressure to their economies from higher energy prices?

Thank you.

Specifically in the Middle East, we have not seen changes in behavior. This week I am meeting two finance ministers from the Middle East. In some of the co-investments we have done in the last few months, the Middle East has participated quite largely. We have an announcement forthcoming in the next week or so related to a retirement win we have in the Middle East.

We see very little behavior change. Our dialogues are more constant, talking about how they should play this and what they should do. At this moment, we have not seen withdrawals from sovereign funds to the treasuries of these countries. If anything, money is continuing to flow into their sovereign funds; their investment behavior has not changed.

Obviously, things could change if there is prolonged uncertainty and violence in the region. We are working closely with our friends and employees affected by this conflict. Over the course of last year, we built out our offices in almost every country in the Middle East with the idea that we see huge opportunities, and we are continuing to build those offices. There is stress at the moment related to the conflict, but we see no behavior changes at all.

If anything, they are articulating more opportunities, not fewer. Related to places where higher energy cost is a tax: in some places, increases in energy costs are being absorbed by governments—happening in parts of Europe and Asia. That implies deficits likely rising and a need to build out infrastructure, and a need for more public-private partnerships—more realistic opportunities. I would argue this presents bigger and better opportunities across the board.

That said, we do not have any insight as to how and when the conflict will end. We are in constant dialogue with our partners and friends in the Middle East. We probably have had more client calls and calls with leadership and governments than ever before. We are making sure we stay in front of our clients and remain a trusted partner.

The evidence speaks loudly that we are one of their key trusted partners.

Your next question comes from Brian Bedell of Deutsche Bank.

Good morning. A two-parter around organic base fee growth and scaling that. Beta has always been your best incremental margin opportunity. As you grow organic base fee growth faster, do you see a better ability to scale that over time?

Are you seeing more demand from outside the U.S.? You mentioned an incremental shift towards non-U.S.—do you see that continuing? And could you comment on the nice mix in the base fee rate? What are you seeing as the exit base fee rate for the quarter?

I do not think I heard that.

Thanks, Brian. We continue to deliver industry-leading margins over the cycle. As I laid out at our 2025 Investor Day, we continue to target a 45% or greater adjusted operating margin, with our margin on recurring fee-related earnings running higher. We expanded both operating and recurring FRE margins by over 100 basis points in the quarter.

We did that in an environment where AUM actually finished on a spot basis lower than average. Our operating margin for the quarter was 44.5%, while the margin excluding performance fees and related comp was 45.6%. Looking forward, we have run BlackRock, Inc. at margins north of 45% before—close to 47% back in 2021. We did that at a time when we did not have a large-scale private markets franchise. Now we have added engines of infrastructure and alternative credit with our colleagues from GIP and HPS.

Both franchises were north of 50% FRE margins when they joined BlackRock, Inc. Over time, we see two things. One, the margin on recurring fee-related earnings can trend upwards toward the trajectory of best-in-class private markets names—north of 50%—driven by the acquired businesses and highly scaled franchises in ETFs, digital assets, and systematic equities. Two, with constructive markets, a higher fee rate on flows—which we have been driving—and strong organic growth, we can pull the fully burdened operating margin of the company up as well.

We have run the company at 47%, so I do not see 45% or 46% as a ceiling. As you mentioned, we had 8% annualized organic base fee growth in the quarter and 10% over the last twelve months—that is seven consecutive quarters over 5%. The fee rate was up 0.2 basis point sequentially, driven by strong market performance in our higher-fee public markets book, particularly EM and international equities, along with client demand for international iShares exposures and structural growers like systematic equities, private markets, Aperio, and active ETFs. Global equity markets improved in April.

We always disclose the revenue-weighted index in the supplement, but the BlackRock, Inc. equity index is up about 5% in the first two weeks of April. At March, our base fee entry rate was approximately 2% lower than first-quarter base fees, but that has basically been recovered with April market performance.

Next question comes from Dan Fannon of Jefferies.

Thanks. Good morning. Could you expand upon some of the trends at HPS and private credit broadly, distinguishing between institutional conversation and activity versus what you are seeing in retail? Also, could you comment on deployment in this type of market?

HLEND is one of the best-performing non-traded BDCs in the market. It has logged a 10.4% annualized total return since inception. It is one of the only funds among major peers with positive performance in 2026, with $840 million of Q1 subscriptions including the DRIP, and approximately $150 million for the April window. We continue to see good engagement with the HLEND base and across wealth clients for evergreen structures, and we believe we can grow there through time.

I would offer that BlackRock, Inc. is in a different place than other firms on these questions. Our 2030 strategy is to drive organic base fee growth at 5%+ through a broad public and private markets platform, and our track record shows we can more consistently generate 6% to 8%. We are not reliant on any one engine or product. We may or may not go through a period of elevated redemptions relative to historical levels and more muted subscriptions in wealth channels for private credit funds—we do not know for certain.

We see long-term demand for institutional-grade private credit as intact. HLEND flows and fee rates are generally accretive to our 2030 plan whether they are at 25%, 50%, or 75% of historical levels. We are broadening the evergreen lineup as mentioned—with real assets, net lease strategies, and Europe—so we think we have great opportunities to grow in wealth. The business is generally about 10% retail private markets at BlackRock, Inc., so call it 85% to 90% institutional.

There, we have seen strong demand. If anything, with some of the retail pullback, we have seen stronger institutional fundraising and deployment. Some of the spreads we see today in direct lending and asset-based finance are among the most attractive on this market pullback. We are generally very constructive on institutional fundraising in and around private credit strategies.

Your next question comes from Brennan Hawken of BMO Capital Markets.

Good morning. Thank you for taking my question. Curious to hear your plans—you filed for the IQQ. Curious to hear your plans around that and the NASDAQ complex, and whether you are considering a fee holiday to help your product gain scale.

Looking at the S&P complex, it is much larger. If we see a chance for competing products to get launched there, do you think it would expand the pie versus cannibalize?

Martin?

Thanks, Brennan. We filed a registration statement with the SEC on the NASDAQ 100 Index ETF, the IQQ. Due to regulatory filing restrictions, we are not able to provide a lot of detail beyond what is in the filing. What I will say is that BlackRock, Inc. has a long-standing and continuously growing partnership with NASDAQ.

We are already the largest manager of NASDAQ 100 ETFs outside the United States. We manage $25 billion across ETFs listed in Europe, Canada, and Hong Kong. In the U.S., we also have the NASDAQ Top 30 and Next 70 Index ETFs, as well as the NASDAQ Premium Income ETFs. IQQ is similarly trying to facilitate access for U.S. investors with an iShares quality option in one of the most widely tracked indexes.

We are differentiated at BlackRock, Inc. with two distinct global ETF ranges—the U.S. and Europe. These scaled platforms enable us to port proven growth franchises and distribution approaches across geographies, which is a meaningful differentiator. We believe we can continue to grow access to these exposures with high-quality iShares institutional-grade management, and we look forward to keeping you updated on our progress once we get through the registration period.

Ladies and gentlemen, we have reached the allotted time for questions. Mr. Fink, do you have any closing remarks?

Thank you, Operator. Thank you all for joining us this morning and for your continued interest in BlackRock, Inc. We opened 2026 with one of our best starts to the year on record. We are aligning our platform alongside long-term client needs and structural growth drivers, and it is showing up in a meaningful way in our results.

The strength of the firm—our breadth, our scale, our connectivity—positions us well to continue delivering value for our clients and differentiating long-term growth for our shareholders. Thank you, and have a good quarter.

This concludes today’s teleconference. You may now disconnect.