10-QPeriod: Q1 FY2023

Blackstone Inc. Quarterly Report for Q1 Ended Mar 31, 2023

Filed May 5, 2023For Securities:BX

Summary

Blackstone Inc. reported a significant decrease in net income for the first quarter of 2023 compared to the same period in 2022, primarily driven by a substantial drop in investment income due to unrealized losses, contrasting with unrealized gains in the prior year. Total revenues saw a sharp decline, largely influenced by the volatility in investment income, particularly within the Real Estate and Private Equity segments. Despite the challenging market conditions, the company demonstrated resilience in its fee-related earnings, which saw an increase, driven by growth in management and advisory fees, particularly in the Real Estate and Private Equity segments. Fee-earning assets under management (AUM) and total AUM both experienced growth year-over-year, signaling continued investor confidence and capital deployment, albeit with some sector-specific headwinds in Real Estate. The company maintained a strong liquidity position with substantial cash and cash equivalents.

Financial Highlights

40 data points
Beta

Revenue

$1.38B

Net Income

$85.81M

6.2% Net Margin

EPS (Diluted)

$0.11

Total Assets

$41.09B

Cash & Equivalents

$2.83B

Free Cash Flow

$283.17M

Financial Statements
Beta
Revenue$1.38B
Operating Expenses$1.19B
Interest Expense$104.44M
Net Income$85.81M
EPS (Basic)$0.12
EPS (Diluted)$0.11
Shares Outstanding (Basic)746.06M
Shares Outstanding (Diluted)746.64M

Key Highlights

  • 1Net income attributable to Blackstone Inc. decreased significantly by 93% to $85.8 million in Q1 2023 from $1.2 billion in Q1 2022, primarily due to a sharp decline in investment income.
  • 2Total revenues fell by 73% to $1.4 billion in Q1 2023 from $5.1 billion in Q1 2022, largely driven by a $3.9 billion decrease in investment income (loss).
  • 3Fee Related Earnings increased by 21% in the Private Equity segment to $226.7 million and by 22% in the Credit & Insurance segment to $223.4 million, demonstrating growth in recurring revenue streams.
  • 4Fee-earning assets under management (AUM) increased by 2% to $732.0 billion as of March 31, 2023, compared to $718.4 billion as of December 31, 2022.
  • 5Total Assets Under Management (AUM) grew by 2% to $991.3 billion as of March 31, 2023, compared to $974.7 billion as of December 31, 2022.
  • 6The company repurchased 1.0 million shares of common stock for $90.1 million during the quarter, with $1.0 billion remaining under its authorized repurchase program.
  • 7Despite a challenging market, Blackstone's Real Estate segment saw robust inflows, particularly from BREIT, including a significant $4.5 billion subscription from the Regents of the University of California.

Frequently Asked Questions

The primary driver for the significant decrease in net income was a substantial drop in investment income, which declined by $3.9 billion. This was mainly due to a shift from unrealized appreciation in the prior year's quarter to unrealized depreciation in the current quarter across various segments, particularly Real Estate and Private Equity.

Blackstone demonstrated strong performance in fee-related earnings across several segments. Fee Related Earnings increased by 21% in Private Equity and 22% in Credit & Insurance, indicating robust growth in recurring revenue streams. However, Fee Related Earnings in Real Estate decreased by 25% and in Hedge Fund Solutions by 14%, reflecting specific market challenges and fund performance.

Blackstone's total Assets Under Management (AUM) grew to $991.3 billion as of March 31, 2023, an increase of 2% from the end of the previous year. Fee-earning AUM also saw a 2% increase, reaching $732.0 billion, reflecting continued capital deployment and investor interest despite a challenging economic environment.

Blackstone maintains a strong liquidity position with $2.8 billion in Cash and Cash Equivalents as of March 31, 2023. The company utilizes multiple sources for liquidity, including operating cash flows, senior note issuances, and a $4.135 billion revolving credit facility, of which none was drawn as of the reporting date. The company also repurchased $90.1 million of its common stock during the quarter, with $1.0 billion remaining under its buyback program.