Blackstone Inc.

Blackstone reported GAAP net income of $2.4 billion. Distributable earnings were $2.0 billion, or $1.52 per common share, up 26% year over year, and fee-related earnings were $1.8 billion, or $1.43 per share, up 22% year over year. Fee revenues were $3.0 billion, up 22%; transaction and advisory fees were a record $321 million, up 52% sequentially; fee-related performance revenues were $793 million, up 68% year over year. Net realizations were $414 million, up 27% year over year, and accrued performance revenue on the balance sheet reached $7.5 billion, or $6 per share, the highest level in 4 years. On the investment side, infrastructure AUM grew 40% year over year to $90 billion, BXMA AUM rose 21% to a record $109 billion, insurance AUM was $290 billion, up 15% year over year, private wealth AUM was $324 billion, up 16% year over year, and BREIT NAV was $57 billion, up 7% year over year. For guidance, management expects similar year over year base management fee growth in Q3 as in Q2, a sequential deceleration in net realizations in Q3 followed by a robust Q4 and into 2027, and double-digit base management fee growth in 2027.

Stephen Schwarzman said Blackstone’s second quarter showed “outstanding” results, with AI-related investments driving performance across data centers, energy, and frontier AI companies. He argued the firm has become one of the largest private capital providers in the AI ecosystem and emphasized that Blackstone is creating new platforms to participate in the buildout, including an AI cloud provider with Google, a company with Anthropic, a financing platform with Broadcom, and BXDC, the data center REIT. His tone was highly optimistic, while also acknowledging the risks of AI exuberance and the broader societal implications that need monitoring.

Michael Chae said the quarter reflected broad earnings expansion, with total revenues, fee revenues, FRE, net realizations, and distributable earnings each growing more than 20% year over year. He pointed to the record $321 million in transaction and advisory fees, $793 million in fee-related performance revenues, and $7.5 billion in net accrued performance revenue, describing the latter as the firm’s ‘store of value’ at a 4-year high. On outlook, he said base management fees should grow at a similar year-over-year rate in Q3, move to double-digit growth in 2027, and benefit from drawdowns, perpetual strategy growth, credit dry powder of $84 billion, and stabilization in real estate fee trends; he also reiterated confidence in operating leverage and margins over time.

Analysts focused on the path to double-digit base management fee growth, and Chae said the building blocks include full-year benefit from private equity drawdowns, seasoning of perpetual strategies, continued growth in credit and insurance, $84 billion of credit dry powder, and stabilization in real estate fees. Questions on BCRED redemptions and the wealth channel drew a response that redemption pressure has eased materially as the level of market ‘noise’ has come down, with management saying the product remains healthy and that new launches with Wellington and Vanguard should broaden access over time. Management also said AI compute scarcity supports data center and energy asset values, and that the firm sees structural upside in realizations as IPO markets reopen and BXMA crystallizations approach year-end.