01—Abstract
Summary
Summary of the 10-Q filed November 1, 2024. Cited figures are marked; the original filing is the authoritative source.
Blackstone's Q3 2024 10-Q shows a strong quarter driven by large unrealized investment gains.
Total revenues rose 44% year over year to $3.66 billiona for the three months ended September 30, 2024, and net income attributable to Blackstone Inc. increased 41% to $780.8 million ($1.02 per diluted share versus $0.73). The jump is mostly unrealized performance allocations ($1.15 billion versus a $63 million loss a year earlier), which carry offsetting unrealized compensation expense, so the headline GAAP figures overstate the recurring earnings base. The company's own non-GAAP measures tell a steadier story.
Fee Related Earnings rose 4.6% to $1.18 billionb and Distributable Earnings reached $1.28 billion. Segment Distributable Earnings were $1.40 billion, up 1.2%. Fee-Earning Assets Under Management reached $820.5 billion, and Total Assets Under Management reached $1.11 trillion, with perpetual capital at $434.7 billion.
Credit & Insurance was the standout segment, with Segment Distributable Earnings up 26%c for the quarter. Real Estate and Private Equity earnings were flat to down, and Real Estate's Fee Related Performance Revenues fell 43%. Balance sheet and capital return items were stable.
Cash and equivalents were $2.35 billiond against $10.75 billion of loans payable, and the company repurchased $473.5 million of stock year to date under a $2.0 billion authorization, with $1.9 billion remaining. Management expects a quarterly dividend of about 85% of Distributable Earnings. Risks include a Kentucky Retirement System litigation matter with ongoing motions and appeals, an SEC inquiry on electronic communications retention where an accrual has been recorded, and a $7.1 billion hypothetical clawback exposure that management considers remote.
02—Key points
Key Highlights
- Total revenues were $3.66B in Q3 2024, up 44% year over year, driven primarily by $1.15B of unrealized performance allocations versus a $63M loss in Q3 2023.
- Net income attributable to Blackstone Inc. was $780.8M ($1.02 diluted EPS) versus $552.0M ($0.73) a year earlier, up 41%.
- Fee Related Earnings rose 4.6% to $1.18B and Distributable Earnings reached $1.28B, a more recurring view of profitability than GAAP net income.
- Fee-Earning AUM reached $820.5B (up from $762.6B at year-end 2023) and Total AUM reached $1.11T, with Perpetual Capital at $434.7B.
- Credit & Insurance segment Distributable Earnings grew 26% in Q3, while Real Estate Segment Distributable Earnings declined 3% on lower Fee Related Performance Revenues.
- Repurchased $473.5M of common stock in the first nine months of 2024, with $1.9B remaining under the $2.0B program authorized July 16, 2024.
- Ongoing risk items include Kentucky Retirement System litigation, an SEC electronic communications inquiry with an accrual recorded, and $7.1B of hypothetical carry clawback exposure that management deems remote.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2024filed November 1, 2024Financial Statements
Q3 FY2024 against Q3 FY2023
| Line item | Q3 FY2024Q3 FY2023 | Change |
|---|---|---|
| Revenue | $3.66B$2.54B | +44.1% |
| Operating Expenses | $1.90B$1.37B | +37.9% |
| Interest Expense | $111.34M$110.60M | +0.7% |
| Net Income | $780.84M$551.99M | +41.5% |
| EPS (Basic) | $1.02$0.73 | +39.7% |
| EPS (Diluted) | $1.02$0.73 | +39.7% |
| Shares Outstanding (Basic) | 768.23M757.96M | +1.4% |
| Shares Outstanding (Diluted) | 768.28M758.05M | +1.4% |
05—Questions
Frequently Asked Questions
Why did GAAP net income jump so much in Q3 2024?
The main driver was $1.15 billion of unrealized performance allocations, reflecting higher valuations of carry fund investments (for example, Corporate Private Equity and GP Stakes funds appreciated 6.2% and 12.6% in the quarter). These unrealized gains are offset in part by $465 million of unrealized performance allocations compensation, and they are not yet realized cash. Investors often look at Distributable Earnings or Fee Related Earnings for a view that excludes unrealized activity.
What are Blackstone's recurring earnings in this quarter?
Fee Related Earnings were $1.18 billion for Q3 2024 (up 4.6%), and Distributable Earnings were $1.28 billion. Segment Distributable Earnings were $1.40 billion, up about 1% year over year. These measures exclude unrealized investment activity and are non-GAAP metrics reconciled to GAAP results in the filing.
How is Blackstone's balance sheet and liquidity position?
At September 30, 2024, cash and cash equivalents were $2.35 billion, and loans payable totaled $10.75 billion, mostly senior notes issued by Blackstone Holdings Finance Co. The company has a $4.325 billion unsecured revolving credit facility, which was undrawn at quarter-end. Total equity was $18.6 billion, and the company had $5.4 billion of investment commitments outstanding.
What are the key legal and regulatory risks disclosed?
The most notable matter is the Kentucky Retirement System litigation (Mayberry, Taylor and Attorney General actions), where motions to dismiss are pending and appeals continue; management believes the suits are without merit. The company also disclosed an SEC inquiry about retention of electronic business communications, for which an accrual was recorded in the first nine months of 2024. Potential carry clawback exposure would be $7.1 billion if all carry fund investments were worthless, which management views as remote.
06—Continue