BlackRock (BLK) Q2 FY26 earnings call: guidance and Q&A

Update on Aperio's performance, particularly the long/short tax-aware side, and its future growth potential.

Martin Small highlighted Aperio's mission to build optimized after-tax portfolios, a structural growth theme. Aperio had $7 billion in Q2 net inflows (half long-only, half long/short), surpassing 2025's record flows. AUM is up 4x to nearly $200 billion. Long/short strategies are seen as the next growth category in tax-aware investing, complementing private markets.

“Our clients don't pay for education, home security and well-being with asset class level returns, they pay for it with after-tax dollars. I think our industry could generally do a better job at optimizing portfolios with what clients keep after taxes.”

asked by Craig Siegenthaler · answered by Martin Small

What steps BlackRock plans for tokenization over the next 12 months, key milestones, and vision.

Martin Small stated the digital asset operating environment is constructive, with a client-led strategy focused on scaled, regulated access. BlackRock aims for a $500 million revenue business by 2030. Key actions include bridging traditional and DeFi (IBIT, ETHA, BUIDL), becoming a stablecoin reserve manager (managing $60 billion for Circle), and tokenizing long-term investment products. Recent SEC filings for tokenized money market funds on Ethereum were highlighted as a way to bring cash management to digital asset clients.

“Tokenized assets are the spear tip into an entirely new distribution channel, accessing an entire new class of investor. It's a pure organic growth opportunity for BlackRock.”

asked by Michael Cyprys · answered by Martin Small

Update on progress converting liquid to illiquid fixed income for insurance clients, and the expected private markets insurance-related AUM.

Laurence Fink noted $10 billion in high-grade and infra debt mandates closed for insurance companies in 2026, with strong acceleration expected. The integration of HPS and GIP is creating joint origination, especially in infrastructure debt. He mentioned the $800 billion of existing insurance assets and the potential for significant fee lift by converting 5-10% to private markets.

“If we can convert 5% or 10% of those assets, it has a tremendous lift to our average net fees, and it helps us complete that type of relationship that we have with the insurance industry.”

asked by Alex Blostein · answered by Laurence Fink

Drivers of Q2 margin expansion, sustainability, and potential for further expansion over the next 12-18 months, balancing with investments.

Martin Small reiterated the target of 45%+ adjusted operating margin, with recurring FRE margins running higher. Drivers include structural growth categories (private markets, ETFs, digital assets), which are less market-sensitive. The Q2 margin of 45.9% (46.5% ex-performance fees) is not a ceiling, as BlackRock has achieved 47% in 2021 without current private markets scale. Two levers for expansion are driving FRE margins towards 50%+ and higher fee rates on flows with strong organic growth.

“I don't see this quarter's margin as a ceiling. We've run BlackRock at margins close to 47% back in 2021, and that was at a time when we didn't have the large-scale private markets franchises.”

asked by Mike Brown · answered by Martin Small

Risk of broader trend of increased platform fees (like Merrill Lynch, Schwab) and if BlackRock's scale can mitigate this.

Martin Small stated BlackRock's relationships with distributors are differentiated and do not include "tolls" for index ETFs. BlackRock has not been approached by major U.S. distributors for such fees. He emphasized BlackRock's value proposition beyond product (advice, technology, thought leadership) and that iShares makes wealth management platforms more attractive, creating a win-win.

“Our index ETF distribution philosophy and practice does not include tolls. We've not been approached by any major U.S. distributors and we're not in any active negotiations about tolls on index ETFs.”

asked by Patrick Davitt · answered by Martin Small

More color on Q2 private market flows, specifically credit deployment, infrastructure fundraising, and the PE outsourcing deal, and implications for future quarters.

Martin Small detailed $15 billion in Q2 private market inflows, with $6 billion from private credit deployment due to widened spreads and attractive opportunities. Infrastructure saw a mix of fundraising (middle market, emerging market, infra debt SMAs) and deployment, with significant acquisitions announced. A $3 billion partial outsourcing mandate in private equity solutions from Latin America was also noted as a key opportunity.

“The first half of the year in our infrastructure platform has been one of the busiest on records.”

asked by Ben Budish · answered by Martin Small

Color on business trends, synergy progress, demand for transparency in private markets, and AI's role.

Martin Small highlighted strong Aladdin performance (13% revenue, 15% ACV growth), driven by clients consolidating tech spend. Preqin's combination with Aladdin/eFront is delivering value, especially with regulatory changes (DOL safe harbor) demanding more data for private assets. Laurence Fink emphasized the priority of delivering a seamless analytical platform for public and private markets, leveraging Preqin for this goal. AI is being used to build new capabilities for comprehensive data and workflow solutions.

“Technology is the main engine for investment performance. It's the main engine for operating leverage. It's the engine for great client experiences and clients are investing more in technology.”

asked by Alex Bond · answered by Martin Small