BLK 10-K & 10-Q changes, risk factors and insider trading

a decrease in the value of seed or co-investment capital.capital, strategic minority investments or joint ventures.

Changes in interest or foreign exchange rates and/or divergentglobal betamarkets may causeimpact BlackRock’s AUM andAUM, base fees toas fluctuatewell and introduce volatility to the Company’sas net income and operating cash flows.

The investment management industry is highly competitive, and BlackRock competes based on a number ofseveral factors including: investment performance, liquidity, its technology and portfolio construction offerings, the level of fees charged, the quality and breadth of services and products provided, name recognition and reputation, and its ability to develop new investment strategies and products to meet the changing needs of investors. In addition, over the past several years, the asset management industry has continued to evolve as investors increasingly seek out firms that have the capacity to deliver broad multi-asset investment capabilities and technological expertise, including in a manner that is responsive to ever more localized needs. This evolution, together with the introduction of new technologies, as well as regulatory changes, continues to alter the competitive landscape for investment managers, which may lead to additional fee compression or require BlackRock to invest more to modify or adapt its product offerings to attract and retain customers and remain competitive with the products, services and geographic diversity offered by other financial institutions, technology companies, advisory or asset management firms. Increased competition on the basis of any of these factors, including competition leading to fee reductions on existing or new business, may cause the Company’s AUM, revenue and earnings to decline.

The sophisticated risk analytics, portfolio management, trade execution and investment operations that BlackRock provides via its technology platform to support investment advisory and Aladdin clients are important elements of BlackRock’s competitive success. Aladdin’s competitive position is based in part on its ability to combine risk analytics with portfolio management, trading and operations tools on a single platform. Increased competition from risk analytics and investment management technology providers, including from competitors with increasingly sophisticated and comprehensive product offerings, or a shift in client demand toward standalone or internally developed solutions, whether due to price competition, perceived client market share, platform offerings or flexibility, or market-based or regulatory factors, may weaken Aladdin’s competitive position and may cause the Company’s revenue and earnings to decline. In addition, to the extent that Aladdin competitors are able to innovate more effectively than BlackRock or leverage delivery models that provide clients faster time to market, lower costs or the ability to more seamlessly combine or bundle with other service offerings, BlackRock may lose existing clients or fail to capture future market share, which may impede its productivity and growth. Moreover, although BlackRock takes steps to safeguard against infringements of its intellectual property (“IP”), there can be no assurance that the Company will be able to effectively protect and enforce its IP rights in Aladdin.

BlackRock’s financial performance depends, in part, on its ability to react to changes in the asset management industry, respond to evolving client demands and technological advances, and develop, market and manage new investment products and services. The development and introduction of new products and services, including the creation of increasingly customizable products, products related to digital assets and tokenized assets and products blending public and private market allocations, requires continued innovative effort on the part offrom BlackRock and may require significant time and resources as well as ongoing support and investment. Substantial risk and uncertainties are associated with the introduction of new products and services, including the implementation of new and appropriate operational controls and procedures, shifting client and market preferences, the introduction of competing products or services, constraints on BlackRock’s ability to manage growth within client mandates, compliance with regulatory and disclosure requirements and IP-related lawsuits or claims, which may not be fully evident or identified prior to the introduction of any such product or service. A growing number of BlackRock’s products and services also depend on data provided by third parties as analytical inputs and are subject to additional risks, including with respect to data quality, cost, availability and provider relationships. Data sets for certain developing analytics, such as those in the sustainability space, continue to evolve and difficulties approximating gaps in the data, sourcing data from reliable sources, or validating the data could adversely impact the accuracy and effectiveness of such analytics. New and developing asset classes, including digital assets, are also subject to heightened risks such as their potential misuse by illicit actors. There can be no assurance that BlackRock will be able to innovate effectively in order to develop new products or services that address the needs of its clients on the timeline they require. Any failure to successfully develop and support new products and services, or effectively manage associated operational risks, could have an adverse impact on BlackRock’s growth, harm BlackRock’s reputation and expose the Company to additional costs, which may cause its AUM, revenue and earnings to decline.

BlackRock provides borrower default indemnification to certain of its securities lending clients. In the event of a borrower default, BlackRock may use the collateral provided by the defaulting borrower to repurchase securities out on loan to such borrower in order to replace them in a client’s account. Borrower default indemnification is limited to the shortfall that occurs in the event the collateral available at the time of the borrower’s default is insufficient to repurchase those securities out on loan. BlackRock requires all borrowers to mark to market their posted collateral daily to levels in excess of the value of the securities out on loan which mitigates the likelihood of the indemnity being triggered. Where the collateral is in the form of cash, the borrower default indemnification BlackRock provides does not guarantee, assume or otherwise insure the investment performance or return of any cash collateral vehicle into which that cash collateral is invested. The amount of securities on loan as of December 31, 20242025 and subject to this type of indemnification was approximately $305$353 billion. In the Company’s capacity as lending agent, cash and securities totaling approximately $324$375 billion was held as collateral for indemnified securities on loan at December 31, 2024.2025. Significant borrower defaults occurring simultaneously with rapid declines in the value of collateral and/or increases in the value of the securities loaned may create collateral shortfalls, which could result in material liabilities under these indemnities and may cause the Company’s revenue and earnings to decline.

Geopolitical unrest and other events outside of BlackRock’s control could adversely affect the global economy orand specific international, regional and domestic markets, which may cause BlackRock’s AUM, revenue and earnings to decline.

Geopolitical risks, including those arising from trade tension and/ortensions, the imposition of trade tariffs, terrorist activity or acts of civil or international hostility, could have an adverse impact on BlackRock. For instance, the Ukraine-Russia and Middle Eastregional conflicts have and may continue to result in geopolitical instability and adversely affect the global economy, supply chains, specific markets and operations. Strategic competitioncompetition, including between the US and ChinaChina, and resulting tensions and heightened levels of political polarization have also contributed to uncertainty in the geopolitical and regulatory landscapes. Similarly, other events outside of BlackRock’s control, including the impact of natural disasters, climate-related events, pandemics or health crises may arise from time to time and be accompanied by governmental actions that may increase international tension or impact the US or global economy in ways that are uncertain. Any such events and responses, including regulatory developments,developments or retaliatory actions, may cause significant volatility and declines in the global markets, disproportionate impacts to certain industries or sectors, disruptions to commerce (including to economic activity, travel and supply chains), loss of life and property damage, and may adversely affect the global economy or capital markets, as well as the Company’s products, operations, clients,clients and client sentiments, vendors and employees, which may cause BlackRock’s AUM, revenue and earnings to decline. BlackRock’s exposure to geopolitical risks may be heightened to the extent such risks arise in countries in which BlackRock currently operates or seeks to expand its presence.

BlackRock’s business and those of its clients could be impacted by climate-related risks. Climate-related risks may impact BlackRock through changes in the physical climate or from the process of transitioning to a low-carbon economy. Climate-related physical risks arisemay frominclude the directacute impacts ofsuch aas changingmore extreme weather and climate events, or chronic impacts representing longer-term shifts in the short-climate such as temperature increases and long-term.sea Suchlevel risksrises. This may include the risks of extreme weather events and changesresult in temperature,impairment which may damageof infrastructure and facilities, including BlackRock’s physical assets, as well as disrupt connectivity or supply chains. Climate-related transition risks arise from exposure toas the transitioneconomy tomoves from a reliance on carbon-based energy towards a low-carbon economy through policy, regulatory, technology and market changes. For instance, divergent existing and future climate regulations or guidance, as well as differing perspectives of client and other stakeholders regarding climate impacts, have affected and may continue to affect BlackRock’s business activities and reputation, increase scrutiny and complicate compliance requirements.

a decrease in the valuations of seed and co-investment capital.capital, strategic minority investments or joint ventures.

A portionPart of BlackRock’s revenue is derived from performance fees on investment advisory assignments. Performance fees represented $1.2$1.4 billion, or 6%, of total revenue for the year ended December 31, 2024.2025. Generally, the Company is entitled to a performance fee only if the agreement under which it is managing the assets provides for one and if returns on the related portfolio exceed agreed-upon periodic or cumulative return targets. If these targets are not exceeded, a performance fee for that period will not be earned and, if targets are based on cumulative returns, the Company may not earn performance fees in future periods. The volatility of the Company’s future revenue and earnings may also be affected due to private markets becoming an increasing component of the overall composition of the Company’s performance fee generating assets, including from the Company’s acquisition of GIP (the “GIP Acquisition”) and its proposed acquisition of HPS (the “HPS Acquisition”). In particular, the Company expects that as it manages morevarious longer-horizon private markets products,strategies, its performance fees will generallymay be recognized over substantially longer multi-year periods than those associated with more liquid products.

BlackRock employs various quantitative models to support its investment processes, including those related to risk assessment, portfolio management, trading and hedging activities and product valuations. Any errors or limitations in the underlying models, model inputs or assumptions, including those from third-party sources, as well as any failure of BlackRock’s governance, approval, testing, validation and monitoring standards in respect of such models, model inputs or assumptions, the failure to timely update such models, model inputs or assumptions or errors in how such models are used, could have adverse effects on BlackRock’s business and reputation. These risks may be heightened by the rapid growth and complexity of new models, evolving data sets and standards, and market volatility.

BlackRock’s infrastructure, including its technological capacity, data centers and office space, is vital to the competitiveness of its business. Moreover, a significant portion of BlackRock’s critical business operations is concentrated in a limited number of geographic areas, including SanAtlanta, Francisco,Belgrade, Budapest, Edinburgh, Gurgaon, London, Mumbai, New York, London, Edinburgh, Budapest, Atlanta, Gurgaon, MumbaiYork and Belgrade.San Francisco. The failure to maintain an infrastructure commensurate with the size and scope of BlackRock’s business, or the occurrence of a business outage or event outside BlackRock’s control, including a major earthquake, hurricane, fire, terrorist act, pandemic, health crisis or other catastrophic event, or the actions of individuals or groups seeking to disrupt BlackRock’s operations in any location at which BlackRock maintains a major presence, could materially impact operations, result in business disruption or impede the Company's growth.

BlackRock is dependent on the effectiveness of the information and cybersecurity policies, procedures and capabilities it maintains to protect its computer and telecommunications systems and the data that resides on or is transmitted through them, including data provided by third parties that is significant to portions of BlackRock's business and products. An information security incident or disruption, such as a cyber-attack including social engineering, deepfakes, phishing scams, business email compromise, malware, denial-of-service or ransomware attacks, or failures to control access to sensitive systems, could materially interrupt business operations or cause disclosure or modification of sensitive or confidential client or competitive information. Moreover, developments in BlackRock’s use of process automation and artificial intelligence (“AI”), as well as the use of remote access by employees and mobile and cloud technologies, heightensheighten these and other operational risks, as certain aspects of the security of such technologies may be complex, unpredictable or beyond BlackRock’s control. BlackRock’s growing exposure to the public Internet, as well as reliance on mobile or cloud technology or any failure by mobile technology and cloud service providers to adequately safeguard their systems and prevent cyber-attacks, could disrupt BlackRock’s operations and result in misappropriation, corruption or loss of personal, confidential or proprietary information or third-party data. In addition, there is a risk that encryption and other protective measures may be circumvented, particularly to the extent that new computing technologies including quantum computing increase the speed and computing power available.

The financial services industry has been the subject of cyber-attacks involving the dissemination, theft and destruction of corporate information or other assets, as a result of failure to follow procedures by employees or contractors or as a result of actions by third parties, including nation state actors, terrorist organizations, cyber criminals and hacktivists. BlackRock has been and continues to be the target of cyber-attacks, as well as the co-opting of its brand,brand and fraudulent impersonations of the Company and members of management. It continues to monitor and develop its systems to protect its technology infrastructure and data from misappropriation or corruption, as the failure to do so could disrupt BlackRock’s operations and cause financial losses. Advances in technology, including generative AI, and use of such technology by malicious actors heightensheighten these risks. Although BlackRock has implemented policies and controls, and takes protective measures involving significant expense, to help prevent and address potential data breaches, inadvertent disclosures, increasingly sophisticated cyber-attacks and cyber-related fraud, there can be no assurance that any of these measures proves fully effective. In addition, given the evolving nature of cyber threat actors and the increasing sophistication of cyber-attack methodology, a successful cyber-attack may persist for an extended period of time before being detected, and it may take a considerable amount of time for an investigation to be completed and the severity and potential impact to be known. Moreover, due to the complexity and interconnectedness of BlackRock’s systems, the process of upgrading or patching the Company’s protective measures could itself create a risk of security issues or system disruptions for the Company, as well as for clients who rely upon, or have exposure to, BlackRock’s systems.

BlackRock must maintain effective infrastructure, including a robust and secure technological framework, in order to maximize the benefit of the Aladdin platform. In so doing, it relies in part on certain third-party service providers, including for cloud hosting and technologies supporting cloud-based operations. For example, Aladdin’s data architecture depends on third-party providers of technology solutions, including the ability of such parties to scale and perform in response to Aladdin’s growth. In addition, the analytical capabilities of Aladdin depend on the ability of a number of third parties to provide data and other information as inputs into Aladdin’s analytical calculations. Although BlackRock has implemented internal controls and procedures and maintains a robust vendor management program designed to perform diligence and monitor third parties that support the Aladdin platform, there can be no assurance that these measures will prove effective. Any failure by third parties to maintain infrastructure that is commensurate with Aladdin’s size and growth, or provide the data or information required to support its varying capabilities, could compromise Aladdin’s resilience, result in operational difficulties, cause reputational harm and adversely impact BlackRock’s ability to provide services to its investment advisory and Aladdin clients.

Continuing enhancements to Aladdin’s capabilities, as well as the expansion of the Aladdin platform into new markets and geographies, have led to significant growth in Aladdin’s processing scale, which may expose BlackRock to reputational harm, increased regulatory scrutiny and heightened operational, data management, cyber- and information-securityinformation security risks.

The operation of BlackRock’s Aladdin platform routinely involves updating existing capabilities, configuration change management, developing, testing and rolling out new functionalities and expanding coverage into new markets and geographies, including in connection with inorganic transactions or to address client or regulatory requirements. These updates and expansion initiatives, which have led to significant growth in Aladdin’s processing scale, frequently occur on accelerated time framestimeframes and may expose BlackRock to additional cyber- and information-securityinformation security risks, as well as increased execution, operational and data management risks. If BlackRock is unable to manage the pace of, or provide the operational resiliency and stability for, the expansion of Aladdin and associated growth of its processing scale, BlackRock may experience client attrition, reduced business, increased costs, reputational harm or regulatory fines and/or sanctions, which may cause BlackRock’s AUM, revenue and earnings to decline.

In addition, the highly regulated business activities of many Aladdin clients may expose BlackRock to heightened regulatory scrutiny. For example, the changing political and regulatory environment in certain jurisdictions in which Aladdin clients are based has required BlackRock to open new data centers in those jurisdictions in order to host client data in the client’s home location. Operating new data centers in foreign jurisdictions may expose BlackRock to increased operational complexity, as well as additional regulatory risks associated with the compliance requirements of such jurisdictions. In addition, there has been increased regulatory scrutiny globally on technology and information providers, which may impact Aladdin and certain functionalities and tools.

BlackRock uses machine learning and AI in its business and expects to continue to expand its AI capabilities, including through generative AI. AI methodstechnologies are complex and rapidly evolving, and the introduction of AI into new or existing processes may result in new or enhanced governmental or regulatory scrutiny, IP or other litigation, data protection, confidentiality or information security risks, social or ethical concerns, competitive harm or other complications. For example, the use of datasets to develop and test AI models, the content generated by AI systems, or the application of AI systems may be found to be insufficient, biased or harmful, or lead to adverse business decisions or operating errors. AI technologies, including generative AI, may create content that appears correct but is factually inaccurate or flawed. In addition, IP ownership and license rights, including copyright, surrounding AI technologies are still being developed and have not been fully addressed by US courts or federal, state or non-US laws or regulation. Furthermore, regulatory scrutiny of AI technologies and controls continues to evolve globally with new and forthcoming laws and regulations. The volume and reliance on data and algorithms may make AI, and BlackRock, more susceptible to cybersecurity threats, including the compromise of underlying models, training data or other IP. Efforts around use of these technologies require additional investment in operational controls and procedures, development and implementation of appropriate protections and safeguards for handling the use of data with AI, including with respect to data leakage, fraud prevention and regulatory compliance costs. AI technologies may also disrupt the competitive landscape for investment management and technology services, including in commercial and operational areas such as data aggregation and quantitative models. Any failure to successfully integrate AI technologies, respond to client or market demands, accurately communicate AI initiatives, comply with AI-related regulations, identify or address any legal or regulatory issues associated with AI or effectively manage the related risks could harm BlackRock’s growth and reputation, adversely impact product offerings, client interactions or business initiatives, and expose the Company to legal and regulatory liabilities and additional costs, including regulatory fines or sanctions, which may cause its AUM, revenue and earnings to decline.

The success of BlackRock’s inorganic strategy also depends in large part on its ability to integrate the workforce, operations, strategies, technologies and other components of a target business following the completion of an acquisition. BlackRock may be required to commit significant management time, as well as create new, or grow existing, operational and support functions, to facilitate the integration of acquired businesses, manage combined future growth and maintain a cohesive corporate culture. There can be no assurance that BlackRock will be able to successfully integrate acquired businesses, retain associated talent, scale support functions, effectively manage growth or realize other intended benefits of its inorganic strategy in the timeframe BlackRock expects, or at all. Moreover, the challenges associated with BlackRock’s inorganic strategy may be heightened when inorganic transactions are in new geographic locations, involve new markets, products, business lines or early stageearly-stage investments or are delivered via technology and systems that differ from those employed by BlackRock or that overlap with existing BlackRock businesses. In addition, in the case of minority investments and joint ventures, including BlackRock’s joint venture to provide investment solutions in India, BlackRock may be subject to risks due to reputational harm, liability or loss resulting from, or relating to operating systems, compliance processes, risk management controls, and employees that are outside of BlackRock’s control, risks related to the jurisdictions or markets in which such investees or joint ventures operate and risks related to theits joint venture partners and investees. Any failure to identify and mitigate the risks associated with acquisitions, joint ventures or minority investments through due diligence, governance or oversight rights, indemnification provisions and/or operational expertise,investments, or to manage the integration of acquisitions effectively, could also result in losses or impairments related to such transactions and have an adverse effect on BlackRock’s reputation or cause its AUM, revenue and earnings to decline, which may harm the Company’s competitive position in the investment management industry.

BlackRock is subject to risks associated with its recent and proposed acquisitions, including completion of proposed acquisitions in the anticipated timeframes or at all, and any failure to realize anticipated benefits of such acquisitions.

In October 2024, BlackRock completed the GIP Acquisition. BlackRock also previously announced (1) its proposed acquisition of Preqin (the “Preqin Acquisition”) which is currently expected to close in the first quarter of 2025, subject to customary closing conditions and (2) the HPS Acquisition (together with the Preqin Acquisition, the “Proposed Acquisitions”) which is currently expected to close in mid-2025, subject to regulatory approvals and customary closing conditions. BlackRock is subject to risks and uncertainties associated with theits Proposedrecent Acquisitions,acquisitions, including the riskGIP thatand aHPS condition to closing may not be satisfied or waived, the possibility of failure to obtain any outstanding necessary regulatory approvals, which may be outside the control of BlackRock or the acquired company, or the possibility that a Proposed Acquisition does not close in the anticipated timeframe or at all.Acquisitions. BlackRock may not be able to realize the anticipated benefits of GIPthese Acquisition or the Proposed Acquisitions,acquisitions, including synergies, value creation or other benefits of such acquisition,benefits, fully or at all, or on the timeline BlackRock expects. At times, the resources of BlackRock and the acquired companies or the attention of certain members of their management may be focused on completion and integration of the acquisition and diverted from day-to-day business operations, which may disrupt ongoing business. In addition, the process of integrating each acquired company may have an adverse impact on the Company, including from risks related to significant transaction and integration costs, unknown liabilities, employee turnover, divergence of management attention, litigation and/or regulatory actions related to the acquisition or if the acquired business does not perform as expected, which may cause BlackRock’s AUM, revenue and earnings to decline.

BlackRock's alternatives products include investments in early-stage companies, private equity portfolio companiescompanies, private credit and real assets, such as real estate, infrastructure and energy assets, which expose BlackRock and its funds and accounts to new or increased risks and liabilities, as well as reputational harm.

BlackRock’s alternatives products include investments in early-stage companies, private equity portfolio companiescompanies, private credit and real assets, including real estate, infrastructure and energy assets, which expose BlackRock and its funds and accounts to increased risks and liabilities that are inherent in the ownership and management of such investments and portfolio companies. These include:

risks related to the potential illiquidity, valuationilliquidity and dispositioninability to dispose of such investments within an anticipated timeframe;

exposure to stringent and complex non-US, federal, state and local laws, ordinances and regulations, including those related to financial crime, permits, approvals, government contracting, conservation, exploration and production, tenancy, occupational health and safety, foreign investment and environmental protection;

the financial resources of tenants or loan counterparties; and

The above risks may expose BlackRock’s funds and accounts to additional expenses and liabilities, including costs associated with delays or remediation, and increased legal or regulatory costs, all of which could impact the returns earned by BlackRock’s clients. These risks could also result in direct liability for BlackRock by exposing BlackRock to losses, regulatory sanctions or litigation, including claims for compensatory or punitive damages. Similarly, market conditions may change during the course of developments or projects in which BlackRock invests and those changes may make such developments or projects less attractive than at the time they were commenced and potentially harm the investment returns of BlackRock’s clients. These risks may be heightened as the Company expands its alternative products, including through the GIP Acquisition.and HPS Acquisitions. The occurrence of any such events may expose BlackRock to reputational harm, divert management’s attention away from BlackRock’s other business activities or cause its AUM, revenue and earnings to decline.

As a result of BlackRock’s extensive international operations, investments and clients, the Company faces associated operational, regulatory, reputational, political and foreign exchange rate risks, many of which are outside of the Company’s control. Operating outside the US may also expose BlackRock to increased compliance risks, as well as higher costs to comply with US and non-US anti-corruption, anti-money laundering and sanctions laws and regulations. Similarly, certain jurisdictions in which BlackRock operates may not have comparable levels of protection for corporate assets, such as IP, and client information and records, to the US. As a result, there may also be heightened information security or privacy risks in those jurisdictions. Any theft or unauthorized use of data, technology or IP may negatively impact BlackRock’s business operations and reputation. In addition, changes to the political or regulatory environment in a jurisdiction in which BlackRock operates, including increased restrictions or scrutiny, may adversely impact BlackRock’s business or operating activities. The failure of the Company’s systems of internal control to mitigate such risks, or of its operating infrastructure to support its global activities, could result in operational failuresfailures, regulatory fines, sanctions and regulatoryclient finesdissatisfaction and/or sanctionsattrition, and impede the Company's growth, which may cause the Company’s AUM, revenue and earnings to decline.

BlackRock seeks to foster a positive workplace culture, has adopted a comprehensive risk management framework and continues to enhance various controls, procedures, policies and systems to monitor and manage risks. Notwithstanding these measures, BlackRock cannot ensure that its workplace culture or such controls, procedures, policies and systems will successfully identify and manage internal and external risks, and BlackRock employees have in the past engaged in improper conduct. In addition, BlackRock is subject to the risk that its employees, contractors or other third parties may in the future deliberately or recklessly seek to circumvent established controls to commit fraud, pay or solicit bribes or otherwise act in ways that are inconsistent with the Company’s controls, policies, procedures, workplace culture or principles. This risk may be heightened as BlackRock expands into new markets, increases the breadth of its business offerings and integrates acquisitions, all of which introduce additional complexity to its risk management program. The changing nature of the office environment, such as return to office arrangements and remote and alternative work models,Employees could cause employees to become disconnected with corporate culture and policies, which may increase operational issues. Persistent attempts to circumvent policies and controls or repeated incidents involving fraud, conflicts of interests or transgressions of policies and controls could have an adverse effect on BlackRock’s reputation, cause adverse publicity, and result in litigation, regulatory inquiries, fines and/or sanctions, which may cause the Company’s AUM, revenue and earnings to decline.

In addition, BlackRock pays certain of its employees in deferred compensation that is tied to the Company’s share price or through incentive fees and carried interest related to certain investment funds. As such, decreases in BlackRock’s share price or poor performance of the investment funds related to the incentive fees and carried interest could impair the retention value of such deferred compensation. There can be no assurance that the Company will continue to be successful in its efforts to recruit and retain employees and effectively manage executive succession. If BlackRock is unable to offer competitive compensation or otherwise attract, develop and retain talented individuals, or if it fails to effectively manage executive succession, the Company’s ability to compete effectively and retain its existing clients may be materiallyimpacted, impacted.which may cause the Company’s AUM, revenue and earnings to decline.

BlackRock’s investment management activities expose the products and accounts it manages for its clients to many different industries and counterparties, including distributors, brokers and dealers, commercial and investment banks, clearing organizations, mutual and hedge funds, and other institutional clients. TransactionsSuch relationships from time to time form the basis of claims against BlackRock, including claims that such relationships violate antitrust or competition laws. In addition, transactions with counterparties expose BlackRock’s clients to credit risk in the event the applicable counterparty defaults. Although BlackRock regularly assesses risks posed by its counterparties, such counterparties may be subject to sudden swings in the financial and credit markets that may impair their ability to perform or they may fail to meet their obligations. Counterparties may also experience lapses in their internal controls or risk management systems or expose BlackRock and/or its clients to losses resulting from employee malfeasance, negligence or human error. In addition, the concentration of certain financial institutions that BlackRock uses to facilitate securities and derivatives transactions for its clients, including clearing organizations, exchangesexchanges, custodians and central agents, increases the risk that a technical or operational issue at, or default by, one such institution could introduce operational issues or delays impacting multiple BlackRock clients. Any such operational issue, impairment or failure could negatively impact the performance of products that BlackRock manages for its clients, which may lead to client attrition and, in turn,and cause BlackRock’s AUM, revenue and earnings to decline.

BlackRock depends on a number of key third-party providers for various fund administration, accounting, custody, market and environmental, social and governance (“ESG”) data, market indices, insurance, technology and AI, cloud hosting and transfer agent roles and other distribution and operational needs. Further, BlackRock relies upon a relatively concentrated group of third-party index providers to deliver services that are integral to its clients’ investment decisions. The index provider industry is characterized by large vendors and the use of long-term contracts remains the market standard. This industry structure may limit BlackRock’s ability to renegotiate its index provider contracts on favorable terms or at all. While BlackRock performs focused diligence on its vendors in an effort to ensure they operate in accordance with expectations and required obligations, to the extent any significant deficiencies are uncovered, there may be few, or no, alternative vendors available. In addition, BlackRock’s operations and processes rely on commercially available data provided by third parties as well as providers of services, including technology services, and operating errors, process delays and failures or failures to comply with data usage requirements with respect to these service providers may adversely impact BlackRock. Data providers commonly disclaim the accuracy and completeness of data and BlackRock does not have the ability to validate or verify the accuracy and completeness of commercially sourced datasets. Moreover, in situations where BlackRock has limited access to alternative vendors, or where the nature of BlackRock’s arrangement with a vendor requires a longlong-term term-commitment,commitment, BlackRock may be dependent on such vendor for continuous operational reliability and may incur additional costs if such vendor introduces required upgrades to its services.

BlackRock relies on a number of third parties to provide distribution, portfolio administration and servicing for certain BlackRock investment management products and services through their various distribution channels. BlackRock’s ability to maintain strong relationships with its distributors may impact the Company’s future performance, and its relationships with distributors are subject to periodic renegotiation that may result in increased distribution costs and/or reductions in the amount of BlackRock products and services being marketed or distributed. Moreover, newchanges to fiduciary regulations could lead to significant shifts in distributors' business models and more limited product offerings, potentially resulting in reduced distribution and/or marketing of certain of the Company’s products and services and fee compression. If BlackRock is unable to distribute its products and services successfully or if it is unable to replace or renew existing distribution arrangements, BlackRock’s AUM, revenue and earnings may decline. In addition, improper activities, as well as inadequate anti-money laundering and sanctions diligence conducted by third-party distributors, could create reputational and regulatory harm to BlackRock.

BlackRock has a number of key strategic partnerships, including with Microsoft. For instance, the Aladdin infrastructure and environment for BlackRock and its external Aladdin clients are hosted on Microsoft Azure.Azure and Amazon Web Services. BlackRock has also migrated certain systems that support its corporate functions to cloud-based platforms. The benefits of cloud-based platforms are significant and BlackRock has adopted a robust risk-based approach to its migration strategies. However, these partnerships also introduce new risks, including: (1) risks associated with relying on third-parties for aspects of infrastructure reliability and stability; (2) software and information security risks arising from the use of cloud technology; (3) operational and execution risks; and (4) risks related to increased regulatory oversight and new compliance obligations, which risks may be further exacerbated as BlackRock and the Aladdin platform continue to grow. A prolonged global failure of cloud services could also impact BlackRock’s other systems. Failures by BlackRock to manage these risks, and/or risks associated with future technology partnerships, may result in escalating costs, financial loss, client dissatisfaction or attrition, regulatory fines and/or sanctions, reputational harm or legal liability, which, in turn, may cause BlackRock’s AUM, revenue and earnings to decline.

Disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded fundproduct (“ETFETP”) platform may adversely affect the prices at which ETFsETPs trade, particularly during periods of market volatility.

BlackRock is the largest provider of ETFsETPs globally. Shares of ETFsETPs trade on stock exchanges at prices at, above or below the ETF’sETP’s most recent net asset value (“NAV”). The NAV of an ETFETP is calculated at least once daily, generally at the end of each business day, and fluctuates with changes in the market value of the ETF’sETP’s holdings. The trading price of the ETF’sETP’s shares fluctuates continuously throughout trading hours. The creation/redemption feature and arbitrage mechanism of an ETFETP are designed to make it more likely that the ETF’sETP’s shares normally will trade at prices close to the NAV. Notwithstanding these features, exchange prices have in the past deviated measurably from the NAV of certain ETFsETPs and may under certain circumstances do so in the future. ETFETP market prices are subject to numerous potential risks, including trading halts invoked by a stock exchange, and the inability or unwillingness of market makers, authorized participants, settlement systems or other market participants to perform functions necessary for an ETF’sETP’s arbitrage mechanism to function effectively. These risks may be heightened as a result of significant market volatility, the growth of the ETFETP industry combined with increased market activity, as well as the complexity associated with certain products or asset classes, such as digital and tokenized assets. Moreover, if market events lead to incidents where ETFsETPs trade at prices that deviate meaningfully from an ETF’sETP’s NAV, or trading halts are invoked by the relevant stock exchange or market, investors may lose confidence in ETFETP products and redeem their holdings, which may cause BlackRock’s AUM, revenue and earnings to decline.

In addition, many of BlackRock’s legal entities are subject to laws and regulations aimed at preventing corruption, money laundering, inappropriate employment practices, illegal payments and engaging in business activities with certain individuals, countries or groups, including but not limited to the US Foreign Corrupt Practices Act, the USA PATRIOT Act, the Bank Secrecy Act, the EU Anti-Money Laundering Directives, the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017, the UK Bribery Act, sanctions imposed by the US Treasury’s Office of Foreign Assets Control, the United Nations and the EU and its member states, as well as those imposed by other countries in which BlackRock operates, such as His Majesty’s Treasury’s (“HMT”) Office of Financial Sanctions Implementation. The Iran Threat Reduction and Syrian Human Rights Act of 2012 expanded the scope of US sanctions against Iran and requires public companies to disclose in their periodic reports certain Iran-related activities, including legally permissible business activities by affiliates. Disclosure of such activities, as well as any consequences imposed by the US government on the Company or its affiliates as a result of these activities, could harm BlackRock’s reputation or business.

BlackRock is also subject to certain risk retention rules and regulation, as well as regulatory capital requirements, which require the Company to maintain capital to support certain of its businesses. Furthermore, many jurisdictions in which BlackRock operates have laws and regulations relating to data privacy, cybersecurity and protection of personal information,information. includingFor theexample, GDPR and UK GDPR, whichGDPR impose stringent data protection rules for individuals within the European Economic Area (“EEA”) and UK, respectively, and for personal data exported outside the EEA and UK. In the US, BlackRock is required to comply with the CCPA and the CPRA, which impose extensive obligations regarding consumer rights, transparency, data use limitations, and breach notification for personal information of California residents. Several other US states have enacted, or are in the process of enacting, privacy laws with comparable requirements. Data protection regimes have also been implemented in other jurisdictions, including Saudi Arabia and Dubai, and the modernization of privacy regimes across Asia Pacific jurisdictions has introduced new and expanded compliance requirements.

BlackRock may also be adversely affected by a failure to comply with existing laws and regulations or by changes in the interpretation or enforcement of such laws and regulations, including those discussed above. Challenges associated with interpreting regulations issued in numerous countries in a globally consistent manner may add to such risks if regulators in different jurisdictions have inconsistent views or provide only limited regulatory guidance. In particular, violation of applicable laws or regulations could result in fines and/or sanctions, temporary or permanent prohibition of certain activities, reputational harm and related client terminations, suspensions of employees or revocation of their licenses, suspension or termination of investment adviser, broker-dealer or other registrations, or suspension or termination of BTC’s bank charter or other sanctions, which could have a material adverse effect on BlackRock’s reputation or business and may cause the Company’s AUM, revenue and earnings to decline. For a more extensive discussion of the laws, regulations and regulators to which BlackRock is subject and regulated by, see Item 1, Business –- Regulation.

Policymaking workstreams focused on the financial services sector led by global standard setters, such as the Financial Stability Board (“FSB”) and International Organization of Securities Commissions (“IOSCO”), may lead to or inform new regulations in multiple jurisdictions in which BlackRock operates. Such workstreams have focused on areas such as money market funds (“MMFs”), open-ended funds (“OEFs”) and sustainability regulations. BlackRock is, and may become, subject to increasing regulation in these areas, see Item 1, Business –- Regulation, including:

Macroprudential Policies for Asset Managers: Concerns about liquidity and leverage risks in the asset management industry and wider market-based finance sector have prompted a broad review of existing regulations globally, including an assessment of the adequacy of certain structural market components in mitigating risks, by the FSB, IOSCO, the US Securities and Exchange Commission (the “SEC”) and the Financial Stability Oversight Council (“FSOC”). In November 2022, the SEC proposed amendments to rules governing OEF liquidity risk management. The EU launched a consultation on macroprudential policies in 2024, including enhanced requirements for liquidity management tools, which may lead to increased oversight or new restrictionsrequirements onfor the management of OEFs. The UK proposed introducing liquidity facilities to certain asset owners, which could result in regulatory burdens on asset managers. If any of these regulatory or policy actions result in broad application of macroprudential tools to OEFs or require changes to structural features of certain OEFs, it could limit BlackRock’s ability to offer products to certain clients and/or result in clients altering their investment strategies or allocations in a manner that is adverse to BlackRock.

Global MMF Reforms: Following the market events of March 2020, US, UK and EU authorities initiated a review of existing regulatory frameworks with the aim of improving the resilience of MMFs in market downturns. The UK released a consultation in December 2023 indicating their intent to change regulatory requirements for MMFs domiciled in the UK and non-UK MMFs sold into the UK, including material increases in required liquidity levels. The EU is considering similar and further changes to the regulations of EU-domiciled MMFs and non-EU MMFs sold into the EU. In the US, the SEC adopted changes to Rule 2a-7, the primary rule under the Investment Company Act of 1940 governing MMFs, including changes to required liquidity levels and requiring mandatory liquidity fees under certain circumstances. TheNew UKregulations released a consultation in December 2023 indicating their intent to change regulatory requirements for MMFs domiciled in the UK, including material increases in required liquidity levels. The EU consultation on macroprudential policies mentioned above may also result inor changes to theexisting regulations of EU-domiciled MMFs. Depending onin the terms of the final UK and EU reforms,may certainadversely ofimpact BlackRock’s MMF products could be adversely impacted.MMFs.

In recent years, a number of regulatory reforms have been proposed or fully or partially implemented in the US, and the level of regulatory scrutiny to which BlackRock is subject has increased. BlackRock, as well as its clients, vendors and distributors, have expended resources and altered certain of their business or operating activities to prepare for, address and meet the requirements that such regulatory reforms impose. New or proposed changes to laws, regulations, policies, initiatives and other government actions may be difficult to anticipate, which provides additional uncertainty and may heighten the Company’s risks related to such actions. While BlackRock is, and may become, subject to numerous reform initiatives in the US, see Item 1, Business –- Regulation, key regulatory reforms that may impact the Company include:

BlackRock has previously disclosed risk factors in its Securities and Exchange Commission (“SEC”) reports. These risk factors and those identified elsewhere in this report, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management (“AUM”); (3) the relative and absolute investment performance of BlackRock’s investment products; (4) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; (6) the impact of recent or future acquisitions or divestitures, including the planned acquisitions of Global Infrastructure Management, LLC (“GIP” or the “GIP Transaction”), Preqin Holding Limited (“Preqin” or the “Preqin Transaction”) and HPS Investment Partners (“HPS” or the “HPS Transaction”) and Preqin Holdings Limited (“Preqin” or the “Preqin Transaction”), and the acquisition of Global Infrastructure Management, LLC (“GIP” or the ”GIP Transaction” and together with the HPSGIP Transaction and the Preqin Transaction, the “Transactions”); (7) BlackRock’s ability to integrate acquired businesses successfully, including the Transactions; (8) risks related to the HPS Transaction and the Preqin Transaction, including delays in the expected closing date of the HPS Transaction or the Preqin Transaction, the possibility that either or both of the HPS Transaction or the Preqin Transaction do not close, including, but not limited to, due to the failure to satisfy the closing conditions; the possibility that expected synergies and value creation from the HPS Transaction or the Preqin Transaction will not be realized, or will not be realized within the expected time period; and the risk of impacts to business and operational relationships related to disruptions from the HPS Transaction or the Preqin Transaction; (9) the unfavorable resolution of legal proceedings; (109) the extent and timing of any share repurchases; (1110) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (1211) the failure to effectively manage the development and use of artificial intelligence; (1312) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (1413) the impact of legislative and regulatory actions and reforms, regulatory, supervisory or enforcement actions of government agencies and governmental scrutiny relating to BlackRock; (1514) changes in law and policy and uncertainty pending any such changes; (1615) any failure to effectively manage conflicts of interest; (1716) damage to BlackRock’s reputation; (1817) increasing focus from stakeholders regarding environmental and socialsocial-related matters; (1918) geopolitical unrest, terrorist activities, civil or international hostilities, and other events outside BlackRock’s control, including wars, global trade tensions, tariffs, natural disasters and health crises, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (2019) climate-related risks to BlackRock’s business, products, operations and clients; (2120) the ability to attract, train and retain highly qualified professionals; (2221) fluctuations in the carrying value of BlackRock’s economic investments; (2322) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products, which could affect the value proposition to clients and, generally, the tax position of BlackRock; (2423) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (2524) the failure by key third-party providers to fulfill their obligations to BlackRock; (2625) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (2726) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded fundsproducts (“ETFsETPs”) platform; (2827) the impact of BlackRock electing to provide support to its products from time to time and any potential liabilities related to securities lending or other indemnification obligations; and (2928) the impact of problems, instability or failure of other financial institutions or the failure or negative performance of products offered by other financial institutions.

BlackRock’s strategy continues to be guided by the Company's clients' needs and focus on the long-term, which the Company believes better enables it to deliver durable returns for shareholders and create value for all of its stakeholders. BlackRock’s highly diversified multi-product platform was created to meet client needs in all market environments and provide clients with choice in how they seek to achieve their unique financial goals. BlackRock is positioned to provide alpha-seeking active, private markets, indexindex, and cash management investment strategies across asset classes and geographies. In addition, BlackRock leverages its world-class risk management, analyticsanalytics, and technology capabilities, including the Aladdin platform, on behalf of clients. BlackRock serves a diverse mix of institutional and retail clients across the globe, as well as investors in ETFs, maintaining differentiated client relationships and a fiduciary focus. The diversity of BlackRock’s platform facilitates the generation of organic growth in various market environments, and as client preferences evolve. BlackRock’s long-term strategy remains to keep alpha at the heart of BlackRock; drive growth in ETFs, private markets, and technology; be the global leader in sustainable investing; and lead as a whole portfolio advisor.

BlackRock's framework for long-term shareholder value creation is predicated on generating differentiated organic growth, leveraging scale to increase operating margins over time, and returning capital to shareholders on a consistent basis. BlackRock's diversified platform, in terms of style, product, clientclient, and geography, enables it to generate more stable cash flows through market cycles, positioning BlackRock to invest for the long-term by striking an appropriate balance between investing for future growth and prudent discretionary expense management.

BlackRock has invested to serve the full breadth of client needs. Clients increasingly want to build portfolios that are seamlessly integrated across public and private markets, and that are underpinned by data, risk managementmanagement, and technology. The Company is differentiated in being able to deliver across public and private markets, equity and debt, and in the way that best serves each client – from broad-based ETFs to customized whole portfolio solutions. The Company also offers its Aladdin technology to support integrated public-private portfolios.

20242025 was a milestone year of organic client activity and inorganicintegration programmaticof actionsacquisitions grounded in client needs, investment capability expansion, technology and scale. Clients entrustedawarded BlackRock with a record $641$698 billion of net inflows in 2024,2025, leddriving by9% twoorganic consecutivebase recordfee flowsgrowth. quartersTechnology inservices theand secondsubscription halfannual ofcontract thevalue year.("ACV") grew 16% organically, reflecting both new and expanded client relationships. The Company’s closing of the GIP transaction and planned acquisitions of HPS and Preqin Transactions are expected to expand and enhance private markets investment and data capabilities.

BlackRock expects 20252026 to be a dynamic investing environment. Mega forces like artificial intelligence ("AI"), financial technology innovation, and an ongoing evolution in debt financing are transforming economies and their long-term growth trajectories. Capital markets will play a key role in these transformations. Private markets assets are an increasingly vital part of capital markets, and blending both public and private markets will be critical in fully capturing growth opportunities.

BlackRock is well-positioned to capitalize on structural growth opportunities against a backdrop of economic and capital markets evolution. The Company has made coordinated investments to build the premier long-term capital partner and technology provider across public and private markets. The 2024 acquisition of GIP,GIP and the planned2025 acquisitions of Preqin and HPS,HPS each positionbetter positioned BlackRock’s platform ahead of evolving client needs and structural industry trends.

BlackRock has built a broad private markets platform with $212$323 billion of AUM across infrastructure, private credit, real estate, private equity and multi-alternatives. As of December 31, 2024,2025, BlackRock had approximately $45$91 billion of committed capital to deploy for institutional clients in a variety of private markets strategies, and remains confident in its ability to accelerate growth as a leader in private markets. BlackRock also manages $76$101 billion in liquid alternatives, as well as $90$105 billion in liquid credit strategies, included within fixed income AUM. With the close of the GIP transaction, and the planned acquisition of HPS, BlackRock’s alternatives platform is expected to representtotals approximately $600$676 billion in client assetsassets, making it a top five alternatives provider.

In addition to private markets, BlackRock is executing on a strong opportunity set across multiple growth channels. These include ETFs, whole portfolio solutions like outsourced mandates and models, systematic active strategies, fixed income, and technology.

The ETF industry has been growing rapidly, driven by structural tailwinds including the use of ETFs as active tools, the migration from commission-based to fee-based wealth management, growth in model portfolios, expansion of digital wealth platforms, and the modernization of the bond market. BlackRock’s ETF growth strategy is centered on increasing scale and pursuing global growth themes in client and product segments,channels, including Core,Core Strategic, which includesEquity, Fixed Income, Factors,Digital SustainableAssets, and Thematic ETFs,Active, and Precision Exposures.ETFs. BlackRock views ETFs as a technology that facilitates investing, and ETFs have become core to asset management. The Company believes that ETFs will continue to be a structural growth area as clients turn to ETFs as the preferred vehicle for investing strategies of all types. BlackRock has been a leader in expanding the market for ETFs by making them more accessible and by delivering new asset classes like bonds or cryptocurrencydigital assets and investment strategies like active. Approximately a quarter of 20242025 ETF net inflows of $390$527 billion were into products launched in the last five years. Active ETFs delivered $22$54 billion in net inflows in 2024,2025, whileand BlackRock’s BitcoinUS exchange-tradedequity productfactor (“ETP”)rotation active ETF was the largesthighest grossing active ETF launch in history,the growingindustry. toBlackRock overfixed $50income ETFs generated a record $159 billion of AUMnet inflows, and the Company had both the highest net inflowing active and index fixed income ETFs in lessthe than a year.industry. BlackRock will continue to innovate at the product and portfolio level and accelerate distribution capabilities to deliver differentiated investment solutions.

BlackRock continues to invest in technology services offerings, which enhance the ability to manage portfolios and risk, effectively serve clients and operate efficiently. Market volatility, growing cost pressures, and complexity in optimizing whole portfolios underscore the need for enterprise operating and risk management technology, and should continue to drive demand for holistic and flexible technology solutions. BlackRock continues to evolve and enable clients to further simplify their operating infrastructure with Aladdin. Clients increasingly want to tailor how they use Aladdin to meet their specific needs, and BlackRock is providing them with choice and flexibility. Through the integration of Aladdin and eFront, clients are able to better manage and analyze risk across their whole portfolio spanning public and private markets. BlackRock is empowering clients with data and opening Aladdin by creating connectivity with ecosystem providers and third-party technology solutions, which include asset servicers, cloud providers, digital asset platforms, trading systemssystems, and others. This connectivity helps clients work in their Aladdin environments with a more customized and seamless end-to-end experience. Investments in Aladdin AI copilots, enhancements in openness supporting ecosystem partnerships, and advancing whole portfolio solutions including private markets and digital assets are expected to further augment the value of using Aladdin. BlackRock’s planned acquisition of Preqin isfurther expected to expandexpanded capabilities beyond private markets investment management and technology to data.

Central banks globally have taken actions to reduce or maintain interest rates, after a rapid rate hiking regime in 2022 and much of 2023, in an effort to moderate inflation. BlackRock’s business is directly and indirectly affected by changes in global interest rates. Changes in global interest rates may similarly cause BlackRock’s AUM to fluctuate and introduce volatility to the Company’s investment advisory and administration fees (collectively "base fees,fees"), net incomeincome, and operating cash flows. BlackRock’s business may also be impacted by governmental changes, as well as potential regulations, foreign and trade policiespolicies, and fiscal spending that may arise as a result of such changes. See Part I, Item 1A, Risk Factors herein for information on the possible future effects of changes in global interest rates and governmental changes on the Company's results.

BlackRock manages $2.9$3.3 trillion in fixed income assets, nearlyapproximately two-thirdshalf of which are owned by institutions for strategic or liability-matching purposes. BlackRock believes it is well positioned for a stabilizing rate environment due to the breadth, diversification and investment performance of its fixed income platform which encompasses active, ETFsETFs, and non-ETF index fixed income products,products. The Company expects fixed income returns in 2026 may again be driven primarily by income, rather than price appreciation. BlackRock believes it is well positioned to capture flows with strong performance and adifferentiated rangestrategies ofacross strategies, including unconstrained,municipals, high yield, total returnreturn, and short-duration.unconstrained strategies.

BlackRock believes its strategy aligns with expected future client demand and structural growth opportunities in areas including private markets, such as infrastructure and private credit; ETFs; whole portfolio solutions including outsourcing and models; and integrated public-private markets enterprise technology through Aladdin, eFronteFront, and Preqin upon the transaction’s closing.Preqin.

BlackRock enters 20252026 with strong momentum across its franchise, including its newly enhanced private markets platform.franchise. The Company is positioned ahead of market opportunities that it believes will drive outsized growth for BlackRock in the years to come.

Total BlackRock stockholders’ equity,equity divided by total shares of common stock outstanding at December 31 of the respective year-end.

GAAP. Operating income of $7.6$7.0 billion increaseddecreased $1.3$529 billionmillion and operating margin of 37.1%29.1% increaseddecreased 200800 bps from 2023.2024. Increases in operatingOperating income and operating margin reflected higher base fees,revenue, driven by theorganic base fee growth, positive impact of markets on average AUM, organic base fee growth and fees onrelated AUM acquired into the HPS and GIP Transaction,Transactions, as well as higher performance fees and technology services revenue,and partiallysubscription offsetrevenue. Decreases in GAAP operating income and operating margin were driven by highernoncash employeeacquisition-related expenses and the noncash Charitable Contribution. Operating income and operating margin for 2025 also included the impact of a $39 million restructuring charge, comprised of severance and compensation and benefits expense, sales, asset and account expense, and general and administration expense. Expenseexpense for 2024accelerated wasvesting impactedof bypreviously the GIP Transaction, including nonrecurring retention-relatedgranted deferred compensation expense, acquisition-related costs and amortization of intangible assets acquiredawards, in connection with an initiative to modify the GIPCompany's Transaction.organization to fit more closely with strategic priorities. In addition, expense for 2024 included a $50 million noncash impairment charge related to certain indefinite-lived open-end management contracts. Expense for 2023 included a restructuring charge of $61 million in connection with initiatives to reorganize specific platforms, primarily Aladdin and private markets, to stay ahead of client needs.

Earnings per diluted common share increaseddecreased $5.50,$6.70, or 15%,16%, from 2023, primarily2024, reflecting higherlower operating income, partially offsetdriven by higher noncash acquisition-related costs, lower nonoperating results, a higher effective tax raterate, and lowera nonoperatinghigher income.diluted share count in the current year.

As Adjusted. Operating income of $8.1$9.6 billion increased $1.5 billionbillion, andwhile operating margin of 44.5%44.1% increaseddecreased 28040 bps from 2023.2024. The acquisition-related expenses, restructuring charge, Charitable Contribution and related discrete tax benefit, and noncash impairment charge previously described have been excluded from as adjusted results. Earnings per diluted common share increased $5.84,$4.48, or 15%,10%, from 2023,2024, reflecting higher operating income,income and a lower effective tax rate, partially offset by lower nonoperating results and a higher effectivediluted share count in the current year. Income tax rate and lower nonoperating income. The acquisition related expenses and the noncash impairment charge of $50 million described above have been excluded fromexpense, as adjusted results for 2024. In addition, income tax expenseadjusted, for 2024 excluded the $137 million of benefit and the $14 million net noncashdiscrete tax expensebenefit described above. The pre-tax restructuring charge of $61 million described above has been excluded from as adjusted results for 2023.

AmountAmounts included within general and administration expense.

(2) Nonoperating income (expense), less net income (loss) attributable to NCI,NCI - CIPs, as adjusted:

Acquisition-related costs. Acquisition-related costs include adjustments related to amortization and noncash impairment of intangible assets, change in fair value of contingent consideration (primarily associated with noncash contingent consideration) incurred in connection with certain acquisitions and other acquisition-related costs, including professional services expense and compensation costs for nonrecurring retention-related deferred compensation,compensation and contingentgeneral considerationand fairadministration valueexpense adjustmentsprimarily incurredrelated into connectionprofessional with certain acquisitions.services. Management believes excluding the impact of these expenses when calculating operating income, as adjusted, provides a helpful indication of the Company’s financial performance over time, thereby providing helpful information for both management and investors while also increasing comparability with other companies.

Restructuring charge. In the fourthsecond quarter of 2023,2025, the Company recorded a restructuring charge, comprised of severance and compensation expense for accelerated vesting of previously granted deferred compensation awards, in connection with initiativesan initiative to reorganizemodify specificthe platforms,Company's primarilyorganization Aladdinto andfit privatemore markets.closely with strategic priorities. Management believes excluding the impact of thesethis restructuring chargescharge when calculating operating income, as adjusted, is useful to assess the Company’s financial performance and ongoing operations, and enhances comparability among periods presented.

(2) Nonoperating income (expense), less net income (loss) attributable to NCI,NCI - CIPs, as adjusted: Management believes nonoperating income (expense), less net income (loss) attributable to NCI,NCI - CIPs, as adjusted, is an effective measure for reviewing BlackRock’s nonoperating contribution to its results and provides comparability of this information among reporting periods. Nonoperating income (expense), less net income (loss) attributable to NCI,NCI - CIPs, as adjusted, excludes the gain (loss) on the economic hedge of certain deferred cash compensation plans. As the gain (loss) on investments and derivatives used to hedge these compensation plans over time substantially offsets the compensation expense related to the market valuation changes on these deferred cash compensation plans, which is included in operating income, GAAP basis, management believes excluding the gain (loss) on the economic hedge of the deferred cash compensation plans when calculating nonoperating income (expense), less net income (loss) attributable to NCI,NCI - CIPs, as adjusted, provides a useful measure for both management and investors of BlackRock’s nonoperating results that impact book value.

Per(3) share amounts reflect netNet income attributable to BlackRock, Inc., as adjusted, divided by diluted weighted-average common shares outstanding.adjusted:

(4) Annual Contract Value ("ACV"): Management believes ACV is an effective metric for reviewing BlackRock’s technology services’services and subscription's ongoing contribution to its operating results and provides comparability of this information among reporting periods while also providing a useful supplemental metric for both management and investors of BlackRock’s growth in technology services and subscription revenue over time, as it is linked to the net new business in technology and subscription services. ACV represents forward-looking, annualized estimated value of the recurring subscription fees under client contracts, assuming all client contracts that come up for renewal are renewed, unless we have received a notice of termination, even though such notice may not be effective until a later date. ACV also includes the annualized estimated value of new sales, for existing and new clients, when we execute client contracts, even though the recurring fees may not be effective until a later date and excludes nonrecurring fees such as implementation and consulting fees.

BlackRock has previously disclosed risk factors in its Securities and Exchange Commission reports. These risk factors and those identified elsewhere in this report, among others, could cause actual results to differ materially from forward-looking statements or historical performance and include: (1) the introduction, withdrawal, success and timing of business initiatives and strategies; (2) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for products or services or in the value of assets under management (“AUM”); (3) the relative and absolute investment performance of BlackRock’s investment products; (4) BlackRock’s ability to develop new products and services that address client preferences; (5) the impact of increased competition; (6) the impact of recent or future acquisitions or divestitures, including the acquisitions of Global Infrastructure Management, LLC (“GIP” or the “GIP Transaction”), Preqin Holding Limited (“Preqin” or the “Preqin Transaction”) and HPS Investment Partners (“HPS” or the “HPS Transaction” and together with the GIP Transaction and the Preqin Transaction, the “Transactions”); (7) BlackRock’s ability to integrate acquired businesses successfully, including the Transactions; (8) the unfavorable resolution of legal proceedings; (9) the extent and timing of any share repurchases; (10) the impact, extent and timing of technological changes and the adequacy of intellectual property, data, information and cybersecurity protection; (11) the failure to effectively manage the development and use of artificial intelligence; (12) attempts to circumvent BlackRock’s operational control environment or the potential for human error in connection with BlackRock’s operational systems; (13) the impact of legislative and regulatory actions and reforms, supervisory or enforcement actions of government agencies and governmental scrutiny relating to BlackRock; (14) changes in law and policy and uncertainty pending any such changes; (15) any failure to effectively manage conflicts of interest; (16) damage to BlackRock’s reputation; (17) increasing focus from stakeholders regarding environmentalenvironmental- and social-related matters; (18) geopolitical unrest, terrorist activities, civil or international hostilities, and other events outside BlackRock’s control, including wars, global trade tensions, tariffs, natural disasters and health crises, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (19) climate-related risks to BlackRock’s business, products, operations and clients; (20) the ability to attract, train and retain highly qualified professionals; (21) fluctuations in the carrying value of BlackRock’s economic investments; (22) the impact of changes to tax legislation, including income, payroll and transaction taxes, and taxation on products, which could affect the value proposition to clients and, generally, the tax position of BlackRock; (23) BlackRock’s success in negotiating distribution arrangements and maintaining distribution channels for its products; (24) the failure by key third-party providers to fulfill their obligations to BlackRock; (25) operational, technological and regulatory risks associated with BlackRock’s major technology partnerships; (26) any disruption to the operations of third parties whose functions are integral to BlackRock’s exchange-traded products (“ETPs”) platform; (27) the impact of BlackRock electing to provide support to its products from time to time and any potential liabilities related to securities lending or other indemnification obligations; and (28) the impact of problems, instability or failure of other financial institutions or the failure or negative performance of products offered by other financial institutions.

BlackRock, Inc. (together, with its subsidiaries, unless the context otherwise indicates, “BlackRock” or the “Company”) is a leading publicly traded investment management firm with $13.9$15.3 trillion of AUM at MarchJune 31,30, 2026. With approximately 25,40026,200 employees in more than 30 countries, BlackRock provides a broad range of investment management and technology and subscription services to institutional and retail clients in more than 100 countries across the globe.

As of MarchJune 31,30, 2026, there were 155.4155.0 million shares of common stock and 7.6 million Subco Units outstanding.

Total BlackRock stockholders’ equity divided by total shares of common stock outstanding at MarchJune 3130 of the respective period-end.

Three Months Ended MarchJune 31,30, 2026 Compared with Three Months Ended MarchJune 31,30, 2025

GAAP. Operating income of $2.8$2.5 billion increased $1.1$730 billionmillion and operating margin of 42.0%34.7% increased 980280 bps from the three months ended MarchJune 31,30, 2025. Increases in operating income and operating margin were driven by higher revenue, reflecting organic base fee growth, the positive impact of markets, andorganic base fee growth, fees related to the HPS Transaction.Transaction, GAAPhigher operatingperformance incomefees, and operatinghigher margintechnology wereservices alsoand impactedsubscription revenue, partially offset by higher expense, including the impact of the HPS Transaction primarily related to noncash acquisition-related itemscosts, as well as higher sales, asset and account expense. In addition, during the second quarter of 2025, BlackRock recorded a $39 million restructuring charge, comprised of severance and compensation expense for accelerated vesting of previously granted deferred compensation awards, in connection with an initiative to modify the HPSCompany's andorganization GIPto Transactions.fit more closely with strategic priorities.

Nonoperating income (expense), less net ofincome (loss) attributable to NCI - CIPs decreased $38$226 million from the three months ended MarchJune 31,30, 2025, driven primarily by lowera dividend$330 incomemillion noncash pre-tax gain in the second quarter of 2025 related to Circle Internet Group, Inc. ("Circle"), partially offset by higher equity method earnings and netnoncash interestgains incomeon (expense).revaluation of investments.

Earnings per diluted common share increased $4.42,$2.00, or 46%,20%, from the three months ended MarchJune 31,30, 2025, reflecting higher operating income,income impactedand bya noncashlower acquisition-relatedeffective items,tax rate, partially offset by lower nonoperating income, a higher effective tax rate,income and a higher diluted share count in connection with the HPS Transaction.

As Adjusted. Operating income of $2.7$2.9 billion increased $637$817 million and operating margin of 44.5%45.9% increased 130260 bps from the three months ended MarchJune 31,30, 2025. The noncash acquisition-related itemsexpenses and restructuring charge described above have been excluded from as adjusted results. Earnings per diluted common share increased $1.23,$1.86, or 11%,15%, from the three months ended MarchJune 31,30, 2025, primarily reflecting higher operating income, partially offset by lower nonoperating income, a higher effective tax rate,income and a higher diluted share count in connection with the currentHPS quarter.Transaction.

Revenue used for calculating operating margin, as adjusted, is reduced to exclude all of the Company’s distribution fees, which are recorded as a separate line item on the condensed consolidated statements of income, as well as a portion of investment advisory fees received that is used to pay distribution and servicing costs. For certain products, based on distinct arrangements, distribution fees are collected by the Company and then passed-throughpassed through to third-party client intermediaries. For other products, investment advisory fees are collected by the Company and a portion is passed-throughpassed through to third-party client intermediaries. However, in both structures, the third-party client intermediary similarly owns the relationship with the retail client and is responsible for distributing the product and servicing the client. The amount of distribution and investment advisory fees fluctuates each period primarily based on a predetermined percentage of the value of AUM during the period. These fees also vary based on the type of investment product sold and the geographic location where it is sold. In addition, the Company may waive fees on certain products that could result in the reduction of payments to the third-party intermediaries.

For each period presented, the non-GAAP adjustments were tax effected at the respective blended rates applicable to the adjustments. In addition, theThe non-GAAP adjustmentadjustments in 2025 and 2026 related to the change in fair value of contingent consideration isare primarily not deductible for income tax purposes.

In addition, beginning in the third quarter of 2025, in connection with the HPS Transaction, the Company updated its definition of net income attributable to BlackRock, Inc., as adjusted, and diluted earnings per common share, as adjusted, to assume all outstanding Subco Units issued as part of the consideration for the HPS Transaction have been exchanged in accordance with thetheir terms on a one-for-one basis into common stock of BlackRock, as Subco Units will beare exchangeable at the option of the holder when exchange rights begin.holder. Accordingly, the noncontrolling interest allocatedrelated to these Subco Units has been included as part of net income attributable to BlackRock, Inc., as adjusted. Management believes that these updated non-GAAP measures are useful indicators of BlackRock’s profitability and enhance comparability among periods presented, and therefore are useful to investors.

Per share amounts reflect net income attributable to BlackRock, Inc., as adjusted, divided by diluted weighted-average common shares andincluding Subco Units outstanding.Units.

Component Changes in AUM for the Three Months Ended MarchJune 31,30, 2026

The following table presents the component changes in AUM by product type for the three months ended MarchJune 31,30, 2026.

The following table presents the component changes in AUM by client type and product type for the three months ended MarchJune 31,30, 2026.

The following table presents the component changes in AUM by investment style and product type for the three months ended MarchJune 31,30, 2026.

The following table presents the component changes in AUM by private markets product type for the three months ended MarchJune 31,30, 2026.

AUM decreasedincreased $147$1.5 billiontrillion to $15.3 trillion at June 30, 2026 from $13.9 trillion at March 31, 2026 from $14.0 trillion at December 31, 2025,2026, driven by net market depreciationappreciation and the negative impact of foreign exchange movements, partially offset by net inflows.

Long-term net inflows of $136$199 billion were comprised of $132$178 billion, $19 billion and $15$2 billion from ETFsETFs, retail clients and retailinstitutional clients, respectively, partially offset by net outflows of $11 billion from institutional clients.respectively. Net flows in long-term products are described below.

ETFs net inflows of $132$178 billion were led by core equity and fixedindex incomebond ETFs net inflows of $88$85 billion and $45$61 billion, respectively. Active ETFs contributed $19$20 billion of net inflows.

Retail net inflows of $15$19 billion were driven by net inflows into equity products, largely reflecting net inflows in Aperio, and continued strength in the Company's systematic liquid alternatives, active fixed income products and privatecontinued marketsdemand offerings.for Aperio and BlackRock's liquid alternatives funds.

Institutional active net inflows of $24$44 billion were driven by BlackRock'sstrength LifePath® target date franchise,in private markets, andfixed income, systematic equity strategies, partiallyas offsetwell byas severaloutsourcing client-specificand fixedtarget-date income redemptions.offerings.

Cash management net outflows of $6$7 billion were driven by seasonal net outflowsredemptions from US government money market funds.

Net market depreciationappreciation of $216$1.3 billiontrillion was primarily driven by global equity market depreciation.appreciation.

AUM decreased $50$18 billion due to the impact of foreign exchange movements, primarily due to the strengthening of the US dollar, largely against the BritishJapanese pound, the euroyen and the Japanese yen.euro.

Component Changes in AUM for the TwelveSix Months Ended MarchJune 31,30, 2026

The following table presents the component changes in AUM by product type for the twelvesix months ended MarchJune 31,30, 2026.

The following table presents the component changes in AUM by client type and product type for the twelvesix months ended MarchJune 31,30, 2026.

The following table presents the component changes in AUM by investment style and product type for the twelve months ended MarchJune 31,30, 2026.

The following table presents the component changes in AUM by private markets product type for the twelve months ended MarchJune 31,30, 2026.

AUM increased $2.3$2.8 trillion to $13.9$15.3 trillion at MarchJune 31,30, 2026 from $11.6$12.5 trillion at MarchJune 31,30, 2025, driven by net market appreciation, net inflows,inflows and AUM added from the HPS and ElmTree TransactionsTransactions, andpartially offset by the positivenegative impact of foreign exchange movements.

Long-term net inflows of $620$773 billion were comprised of net inflows of $551$644 billion, $126 billion and $109$4 billion from ETFsETFs, retail clients and retailinstitutional clients, respectively, partially offset by net outflows of $40 billion from institutional clients.respectively. Net flows in long-term products are described below.