10-QPeriod: Q2 FY2020

Blackstone Inc. Quarterly Report for Q2 Ended Jun 30, 2020

Filed August 7, 2020For Securities:BX

Summary

Blackstone Inc. (BX) reported its second quarter 2020 results, showing a significant increase in total revenues to $2.5 billion, primarily driven by a substantial rebound in unrealized investment income, which more than offset the impact of COVID-19 on certain segments. Despite a challenging economic environment, Management and Advisory Fees saw a healthy increase of 15% year-over-year, demonstrating the resilience of Blackstone's fee-generating business model. However, total expenses also rose due to higher compensation related to performance allocations, reflecting the improved investment performance in the quarter. For the six-month period, revenues were negatively impacted by significant unrealized investment losses, leading to a net loss attributable to The Blackstone Group Inc. of $(498.2) million. This was largely due to widespread unrealized depreciation across the portfolio stemming from the COVID-19 pandemic. Management's discussion highlights the ongoing impact of the pandemic on various sectors, particularly real estate, and acknowledges the uncertainty surrounding the pace of economic recovery. The company maintained a strong liquidity position with $2.0 billion in cash and cash equivalents and $2.2 billion in corporate treasury investments as of June 30, 2020.

Financial Highlights

37 data points
Beta

Revenue

$2.52B

Net Income

$568.27M

22.6% Net Margin

EPS (Diluted)

$0.81

Total Assets

$28.84B

Cash & Equivalents

$1.98B

Free Cash Flow

$478.29M

Financial Statements
Beta
Revenue$2.52B
Operating Expenses$1.17B
Interest Expense$39.28M
Net Income$568.27M
EPS (Basic)$0.81
EPS (Diluted)$0.81
Shares Outstanding (Basic)698.53M
Shares Outstanding (Diluted)1.20B

Key Highlights

  • 1Total revenues for Q2 2020 surged to $2.5 billion, a 69% increase year-over-year, driven by a significant rebound in unrealized investment income.
  • 2Management and Advisory Fees increased by 15% year-over-year to $970 million for Q2 2020 and by 15% for the six-month period to $1.9 billion, indicating the stability of recurring fee streams.
  • 3Net Income Attributable to The Blackstone Group Inc. for Q2 2020 was $568.3 million, a significant increase from $305.8 million in Q2 2019. However, for the six-month period, there was a net loss of $(498.2) million compared to a net income of $787.1 million in the prior year period.
  • 4Total Expenses increased by 36% year-over-year to $1.2 billion in Q2 2020, primarily due to a 51% increase in Compensation and Benefits, driven by performance allocation compensation reflecting improved investment income.
  • 5Assets Under Management (AUM) increased to $564.3 billion as of June 30, 2020, up from $538.0 billion at the end of 2019, with Fee-Earning Assets Under Management reaching $435.8 billion.
  • 6Blackstone ended the period with a strong liquidity position, holding $2.0 billion in cash and cash equivalents and $2.2 billion in corporate treasury investments.
  • 7The company repurchased approximately 2.0 million shares of Class A common stock during Q2 2020 for $114.9 million, with $412.8 million remaining under its share repurchase program as of June 30, 2020.

Frequently Asked Questions

Blackstone's total revenues increased significantly to $2.5 billion in Q2 2020 from $1.5 billion in Q2 2019. This growth was primarily driven by a substantial increase in unrealized investment income, which rose by $910 million, alongside a 15% increase in Management and Advisory Fees.

For the first six months of 2020, Blackstone reported a net loss attributable to The Blackstone Group Inc. of $(498.2) million, a significant decrease from a net income of $787.1 million in the same period of 2019. This was largely due to a $4.4 billion decrease in unrealized investment income, reflecting the broad market depreciation caused by the COVID-19 pandemic across its investment portfolios.

Blackstone acknowledged the severe disruption caused by the COVID-19 pandemic to global economies and financial markets. While the company maintained a strong liquidity position and saw revenue growth in its fee-generating businesses in Q2, it noted that the pandemic has adversely impacted and is expected to continue to impact the performance of its segments, particularly Real Estate and Private Equity, due to declines in unrealized valuations. The outlook remains subject to uncertainty regarding the pace and nature of economic recovery.

As of June 30, 2020, Blackstone reported strong liquidity with $2.0 billion in cash and cash equivalents and an additional $2.2 billion in corporate treasury investments. The company also has access to a $1.6 billion committed revolving credit facility and maintained no outstanding borrowings under it at the end of the quarter.