Rise in AUM & Fee Revenues Likely to Aid BlackRock's Q2 Earnings

BlackRock BLK is slated to report second-quarter 2025 results on July 15, before the opening bell. Its quarterly revenues and earnings are expected to have improved year over year.

BLK’s first-quarter 2025 earnings surpassed the Zacks Consensus Estimate. The results benefited from a rise in revenues. AUM witnessed robust growth and touched a record high of $11.58 trillion, driven by net inflows and favorable forex impact, partially offset by market depreciation.

BlackRock has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 7.53%.

BlackRock Price and EPS Surprise

BlackRock price-eps-surprise | BlackRock Quote

Before we take a look at what our quantitative model predicts for the to-be-reported quarter, let us check the factors that are likely to have impacted BlackRock’s performance.

Major Factors to Note & Q2 Estimates for BLK

AUM: BlackRock is a dominant player in the exchange-traded fund (ETF) market, given its continued investments in the U.S. iShare core ETFs (offering more than 1,400 ETFs globally). Also, the approval and listing of spot Bitcoin and ether ETFs is likely to have contributed to AUM growth.

In line with its organic growth strategy, BlackRock continues to boost its AUM through diversified offerings and a strong revenue mix. Also, the listing of bitcoin exchange-traded products (ETPs) is likely to have positively impacted the AUM. Although uncertainty about the Federal Reserve’s monetary policy made investors cautious, a 90-day pause implemented by President Trump, a strong labor market and moderated inflation brought some optimism. This is likely to have aided AUM given decent market returns.

Nonetheless, a rising yield curve is likely to have resulted in higher inflows to fixed-income products. Moreover, Preqin's acquisition is likely to have enhanced private markets data and analytics capabilities, further strengthening BLK’s alternatives platform.

The Zacks Consensus Estimate for total AUM is pegged at $11.68 trillion, indicating a year-over-year jump of 9.7%. Our estimate for AUM is $11.66 trillion.

Revenue Components: BlackRock is expected to have recorded decent growth in its investment advisory, administration fees and securities-lending revenues on improving inflows, new offerings and market appreciation. The consensus estimate for the metric is $4.36 billion, implying a 12.6% year-over-year rise. Our estimate for the same is pegged at $4.29 billion.

The Zacks Consensus Estimate for investment advisory performance fees is pegged at $156.6 million, indicating a decline of 4.5%. Our estimate for the same is $273.2 million.

The consensus estimate for distribution fees of $323.3 million indicates a rise of 1.7%. We project the metric to be $324.5 million. The consensus estimate for technology services revenues is pegged at $493.7 million, implying a 25% year-over-year rise. We project the metric to increase to $421 million.

The Zacks Consensus Estimate for advisory and other revenues is pegged at $59.4 million, which indicates a year-over-year rise of 12.2%. We project the metric to be $62.5 million.

Expenses: BlackRock’s expenses have been elevated over the past few years. Overall costs are expected to have increased in the second quarter, given that the company has been continuing its restructuring initiatives to modify the size and shape of its workforce and improve operating efficiency. Also, its inorganic expansion efforts are likely to have resulted in an increase in expenses.

Our estimate for total expenses is pegged at $3.33 billion, suggesting a year-over-year rise of 10.7%.

What Our Model Unveils for BlackRock

According to our quantitative model, the chances of BlackRock beating the Zacks Consensus Estimate for earnings this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Earnings ESP: The Earnings ESP for BlackRock is +1.28%.

Zacks Rank: The company currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for second-quarter earnings of $10.77 per share has been revised marginally upward over the past seven days. The figure indicates an increase of 4% from the year-ago quarter’s reported number. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

The consensus estimate for sales is pegged at $5.38 billion, which indicates a rise of 12%.

Other Finance Stocks Worth a Look

Here are other finance stocks, which per our model, have the right combination of elements to post an earnings beat in their upcoming releases:

M&T Bank Corporation MTB is scheduled to release quarterly earnings on July 16. The company has a Zacks Rank of 3 and an Earnings ESP of +0.12% at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Over the past seven days, the Zacks Consensus Estimate for MTB’s quarterly earnings has remained unchanged at $4.03 per share.

The Earnings ESP for The Bank of New York Mellon Corporation BK is +1.03% and it carries a Zacks Rank of 2 at present. The company is slated to report quarterly results on July 15.

Quarterly earnings estimates for BK have been revised marginally upward to $1.74 per share over the past week.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research