Why did GAAP net income jump so much compared with last year?

The increase was mainly due to accounting for unrealized fund appreciation. GAAP Performance Allocations were $1.1 billion this quarter, compared with a $112 million loss a year earlier, and Principal Investments swung to $540 million of income from a $383 million loss. These figures reflect unrealized gains on carried interest and investments, not cash received, so investors often focus on Distributable Earnings and Fee Related Earnings for a clearer view of recurring cash earnings.

Is the $0.83 quarterly dividend sustainable?

The $0.83 dividend equals about 84% of 1Q'24 DE per share ($0.98), in line with Blackstone's stated policy of paying approximately 85% of DE attributable to common shareholders. Dividends over the LTM totaled $3.36 per share, against LTM DE of $3.96 per share. Because DE is closely tied to realization timing, investors should monitor realizations, which fell sharply in the quarter, along with future exit activity.

What is driving growth in Fee Related Earnings?

Fee Related Earnings rose 12% to $1.16 billion in segment terms. The main drivers were Fee Related Performance Revenues, which nearly doubled to $296 million, and management fee growth of 3% at the total segment level, led by Credit & Insurance (up 14% in management fees). Fee Related Compensation and other operating expenses also increased, partly offsetting these gains. Fee-earning AUM growth of 7% year-over-year supports this recurring revenue base.

How much capital is available for future investment, and how is it being deployed?

Blackstone reports total dry powder of $191.2 billion, or nearly $200 billion as described in management's remarks. During the quarter it deployed $24.5 billion, with Credit & Insurance ($12.0 billion) and Private Equity ($7.3 billion) leading. Management cited a strengthening transaction environment and attractive investment opportunities, and it has signaled that Credit and private wealth are seeing accelerating momentum, with inflows of $34.0 billion in the quarter.

BX 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed April 18, 2024. Cited figures are marked; the original filing is the authoritative source.

Blackstone (BX) reported first-quarter 2024 results that were strong on a GAAP basis but more mixed on a recurring-earnings basis.

GAAP Net Income was $1.6 billion^a for the quarter (vs. $211 million in 1Q'23), and GAAP Net Income Attributable to Blackstone Inc. was $847 million, or $1.11 diluted EPS. The swing was driven by Performance Allocations of $1.1 billion and Principal Investments of $540 million, both reflecting strong fund appreciation rather than cash realizations. Management highlighted accelerating momentum in private credit and private wealth, along with a strengthening transaction environment.

The underlying cash-earnings metrics were steadier. Fee Related Earnings rose 12% year-over-year to $1.2 billion^b ($0.95/share), and Distributable Earnings were $1.3 billion ($0.98/share), up 1% from 1Q'23. Realizations fell sharply, to $15.0 billion in the quarter from a much larger LTM base, and Net Realized Performance Revenues dropped 25% year-over-year at the Total Segment level.

Over the last twelve months, DE declined 15% to $5.1 billion^c ($3.96/share), which reflects the lower realized performance revenues of the prior year's exits. Assets under management reached a record $1,061.3 billion, up 7% year-over-year, with $34.0 billion of inflows in the quarter and $142.2 billion over the LTM. Net Accrued Performance Revenues rose to $6.1 billion ($5.00/share), up about 4% from the prior quarter, and the company retains roughly $191 billion of dry powder.

The board declared a quarterly dividend of $0.83^d per share, payable May 6, 2024, to holders of record on April 29, 2024. That is about 84% of 1Q DE per share, consistent with the company's roughly 85% payout policy. This filing is an Item 2.02 disclosure, and the press release is furnished rather than filed.

02—Key points

Key Highlights

GAAP Net Income Attributable to Blackstone Inc. was $847 million ($1.11 diluted EPS) for 1Q'24, versus $86 million ($0.11) in 1Q'23, driven by a $1.1 billion swing in Performance Allocations and $540 million of Principal Investment revenue.
Fee Related Earnings grew 12% year-over-year to $1.16 billion in segment terms, or $0.95 per share, supported by higher Fee Related Performance Revenues (up 99% to $296 million) and 6% growth in management fees.
Distributable Earnings were $1.27 billion ($0.98 per share), up 1% year-over-year, but LTM DE fell 15% to $5.1 billion ($3.96 per share) as realized performance revenues dropped from prior-year exit activity.
Total AUM reached a record $1,061.3 billion (up 7% year-over-year), with $34.0 billion of quarterly inflows and $142.2 billion over the LTM; Fee-Earning AUM was $781.4 billion.
Net Accrued Performance Revenues rose to $6.1 billion ($5.00 per share), up 4% quarter-over-quarter, driven by appreciation across strategies including Corporate Private Equity (+3.4%), Private Credit (+4.1%), and Infrastructure (+4.8%).
Realizations were $15.0 billion in the quarter, down sharply from the prior-year period, while deployment was $24.5 billion; the company holds $191.2 billion of total dry powder.
Declared a quarterly dividend of $0.83 per share (payable May 6, 2024; record date April 29, 2024), with $4.7 billion returned to shareholders over the LTM through dividends and buybacks; the balance sheet shows $17.3 billion of cash and net investments ($14.21/share) and A+/A+ ratings.

03—Questions

Frequently Asked Questions

Why did GAAP net income jump so much compared with last year?
The increase was mainly due to accounting for unrealized fund appreciation. GAAP Performance Allocations were $1.1 billion this quarter, compared with a $112 million loss a year earlier, and Principal Investments swung to $540 million of income from a $383 million loss. These figures reflect unrealized gains on carried interest and investments, not cash received, so investors often focus on Distributable Earnings and Fee Related Earnings for a clearer view of recurring cash earnings.
Is the $0.83 quarterly dividend sustainable?
The $0.83 dividend equals about 84% of 1Q'24 DE per share ($0.98), in line with Blackstone's stated policy of paying approximately 85% of DE attributable to common shareholders. Dividends over the LTM totaled $3.36 per share, against LTM DE of $3.96 per share. Because DE is closely tied to realization timing, investors should monitor realizations, which fell sharply in the quarter, along with future exit activity.
What is driving growth in Fee Related Earnings?
Fee Related Earnings rose 12% to $1.16 billion in segment terms. The main drivers were Fee Related Performance Revenues, which nearly doubled to $296 million, and management fee growth of 3% at the total segment level, led by Credit & Insurance (up 14% in management fees). Fee Related Compensation and other operating expenses also increased, partly offsetting these gains. Fee-earning AUM growth of 7% year-over-year supports this recurring revenue base.
How much capital is available for future investment, and how is it being deployed?
Blackstone reports total dry powder of $191.2 billion, or nearly $200 billion as described in management's remarks. During the quarter it deployed $24.5 billion, with Credit & Insurance ($12.0 billion) and Private Equity ($7.3 billion) leading. Management cited a strengthening transaction environment and attractive investment opportunities, and it has signaled that Credit and private wealth are seeing accelerating momentum, with inflows of $34.0 billion in the quarter.

04—Continue

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