10-QPeriod: Q3 FY2023

Blackstone Inc. Quarterly Report for Q3 Ended Sep 30, 2023

Filed November 3, 2023For Securities:BX

Summary

Blackstone Inc. reported its third-quarter 2023 financial results, showcasing a significant increase in total revenues to $2.54 billion, up from $1.06 billion in the prior year's quarter. This growth was primarily driven by a substantial recovery in investment income, which swung from a net loss of $922.2 million in Q3 2022 to a gain of $554.1 million in Q3 2023, largely due to improved unrealized investment performance across its segments, particularly in Private Equity and Credit & Insurance. Despite a notable increase in total expenses, primarily driven by higher compensation and benefits related to improved investment performance, Blackstone managed to achieve strong net income attributable to Blackstone Inc. of $552.0 million, a significant improvement from $2.3 million in the prior year's quarter. The company also reported solid growth in both Fee-Earning Assets Under Management (FEAUM) and Total Assets Under Management (AUM), ending the quarter with $734.5 billion and $1,007.4 billion, respectively. This growth reflects the firm's ability to attract capital across its diverse business segments, even amidst challenging market conditions characterized by rising interest rates and economic uncertainty.

Financial Highlights

40 data points
Beta

Revenue

$2.54B

Net Income

$551.99M

21.7% Net Margin

EPS (Diluted)

$0.73

Total Assets

$41.66B

Cash & Equivalents

$2.97B

Free Cash Flow

$1.02B

Financial Statements
Beta
Revenue$2.54B
Operating Expenses$1.37B
Interest Expense$110.60M
Net Income$551.99M
EPS (Basic)$0.73
EPS (Diluted)$0.73
Shares Outstanding (Basic)757.96M
Shares Outstanding (Diluted)758.05M

Key Highlights

  • 1Total Revenues surged to $2.54 billion in Q3 2023, a 140% increase from $1.06 billion in Q3 2022, driven by a strong rebound in investment income.
  • 2Investment Income (Loss) improved significantly, turning from a loss of $922.2 million in Q3 2022 to a gain of $554.1 million in Q3 2023, primarily due to better unrealized investment performance.
  • 3Net Income Attributable to Blackstone Inc. rose to $552.0 million in Q3 2023, a substantial increase from $2.3 million in Q3 2022.
  • 4Fee-Earning Assets Under Management (FEAUM) increased by 3% year-over-year to $734.5 billion as of September 30, 2023.
  • 5Total Assets Under Management (AUM) grew by 1% year-over-year to $1,007.4 billion as of September 30, 2023.
  • 6Management and Advisory Fees, Net increased by 8% year-over-year to $5.02 billion for the nine months ended September 30, 2023.
  • 7The company repurchased approximately 1.3 million shares of common stock for $134.3 million during the third quarter of 2023, with $797.6 million remaining under its share repurchase program.

Frequently Asked Questions

The primary driver of Blackstone's revenue growth in the third quarter of 2023 was the significant recovery in investment income. This income category swung from a substantial loss in the prior year's quarter to a significant gain, largely due to improved unrealized investment performance across the firm's Private Equity and Credit & Insurance segments.

Blackstone demonstrated solid growth in its Assets Under Management (AUM) during the third quarter of 2023. Fee-Earning Assets Under Management (FEAUM) increased by 3% year-over-year to $734.5 billion, and Total Assets Under Management (AUM) grew by 1% year-over-year to $1,007.4 billion as of September 30, 2023, indicating continued capital inflows and asset appreciation across its various strategies.

Blackstone noted that while certain areas of its real estate portfolio, such as U.S. multifamily and hotels, are experiencing moderating growth, and the office sector remains challenged, traditional U.S. office space represents a small portion of their global real estate exposure. The firm acknowledged that rising interest rates and a constrained financing market have impacted valuations and realizations. However, Blackstone believes these challenging conditions may benefit long-term real estate values by limiting new supply and anticipates that realizations will re-accelerate as markets stabilize.

Blackstone's board of directors has authorized a share repurchase program of up to $2.0 billion. In the third quarter of 2023, the company repurchased approximately $134.3 million worth of common stock. Blackstone's intention is to pay quarterly dividends representing approximately 85% of its share of Distributable Earnings, subject to adjustments based on business needs, investments, legal requirements, and future cash requirements.