BlackRock delivered impressive third-quarter results that exceeded analyst expectations, with adjusted earnings per share rising 38% to $15.98. The world's largest asset manager added $205.5 billion in client assets during the quarter, bringing total assets under management to a record $15.5 trillion. According to reports from BlackRock, shares rose approximately 5% to around $1,116 following the earnings announcement. The company generated $7.75 billion in revenue, representing 19% year-over-year growth, while operating income reached $3.3 billion, up 27% year-over-year. Operating margin expanded to 47.8%, an increase of 320 basis points year-over-year, demonstrating the company's ability to convert growth into bottom-line performance.
Performance fees, which BlackRock charges when funds beat set targets, reached $630 million, approximately $200 million above analyst estimates. As reported by BlackRock, these fees more than doubled from $305 million in the second quarter, with most of the increase coming from hedge-fund-style products called liquid alternatives. The company attributed this surge largely to one hedge fund that measures its results annually, with the measurement period closing in the third quarter. These fees made up nearly half of BlackRock's $668 million revenue increase from the second quarter. The hedge fund responsible for the quarter's fee surge will not reach its next annual measurement date until the third quarter of 2027.
BlackRock's digital asset funds experienced a significant recovery in the third quarter, with crypto assets surging 63% to $79.6 billion as investors returned to the market. According to BlackRock's third-quarter earnings report, the company's digital asset products attracted $7.9 billion in inflows during the quarter, more than making up for the roughly $2.2 billion in outflows during the first half of 2026. Rising crypto prices accounted for $22.9 billion of the $30.8 billion increase in digital assets under management, while investors contributed another $7.9 billion. However, even after this rebound, BlackRock's digital asset holdings remain 23% below year-ago levels, with the company earning $39 million in quarterly fees and securities lending revenue from its digital asset products.
BlackRock's growth momentum was broad-based across multiple client segments and asset classes. Clients entrusted the firm with nearly $870 billion of net inflows over the last 12 months, driving 10% organic base fee growth. According to BlackRock, this growth was not concentrated in one product or region, but rather across client channels, asset classes, and geographies. ETFs generated $135 billion of net inflows in the third quarter alone, while the company achieved 11% organic base fee growth, marking its ninth consecutive quarter at or above 5%. The diversified nature of inflows demonstrates the strength of BlackRock's integrated platform and its ability to serve clients across public, private, and technology markets.
BlackRock continued its strategic investment in technology and platform capabilities during the quarter, with Aladdin-related annual contract value increasing 12%. The company's technology services and subscription revenue grew 14%, driven by demand for its investment management platform Aladdin and other BlackRock products. BlackRock chair and CEO Laurence Fink noted that the results reflect the scale of the company, with 12% technology annual contract value growth and net inflows across every asset class, client type, region, and across active and index strategies. The company's capital management strategy remains consistent, with $550 million in share repurchases completed in the third quarter, and management anticipating at least $550 million in share repurchases in the fourth quarter.
