How strong was Blackstone's 3Q'24 earnings performance?

GAAP results were very strong, with net income attributable to Blackstone Inc. of $781 million ($1.02 diluted EPS) versus $552 million ($0.73) in 3Q'23. However, much of the GAAP increase came from volatile Performance Allocations, so investors often focus on Distributable Earnings ($1.01 per share, up 6%) and Fee Related Earnings ($0.96 per share, up 5%), which reflect more recurring profits.

What drove the large increase in Performance Allocations?

Strong fund appreciation across strategies, including Corporate Private Equity (+6.2% in the quarter, +15.2% LTM), Infrastructure (+5.5%), Tactical Opportunities (+4.3%) and Private Credit (+3.6% gross). These unrealized gains raise accrued carried interest, which is recognized as revenue when marked, though it is not cash until realized.

Is the dividend safe and how much is Blackstone returning to shareholders?

The $0.86 quarterly dividend is 8% higher than the prior-year quarter and is covered by Distributable Earnings of $1.01 per share, with a retained portion of $0.15 per share. Blackstone also expects to return about $1.2 billion for the quarter through dividends and buybacks, and $5.0 billion over the last twelve months. Investors should note that LTM dividends of $3.45 per share exceed the $2.51 YTD actual dividend figure, which reflects the timing of quarterly payments.

What are the main risks or weak spots in the quarter?

Real Estate remains a weak spot, with Opportunistic funds declining 2.1% and Core+ funds declining 3.8% over the last twelve months, and Real Estate Fee Related Earnings fell 8% in the quarter. Fee Related Compensation rose and Other Operating Expenses increased 21%, pressuring margins. Performance Compensation also rose sharply in the quarter, which weighed on Distributable Earnings growth. Results are preliminary, and Strategic Partners appreciation is reported on a three-month lag.

What does the balance sheet and liquidity position look like?

Blackstone reported $8.9 billion of total cash, corporate treasury and other investments, and $18.7 billion of cash and net investments ($15.33 per share) at September 30, 2024. Outstanding debt at par was $10.8 billion, and the company has a $4.3 billion revolving credit facility maturing in December 2028, with A+ ratings from S&P and Fitch.

BX 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed October 17, 2024. Cited figures are marked; the original filing is the authoritative source.

Blackstone (BX) reported third-quarter 2024 results on October 17, 2024, with broad-based acceleration across the business.

GAAP Net Income was $1.6 billion^a for the quarter ($781 million attributable to Blackstone Inc.) versus $920.7 million ($552 million attributable) a year earlier, and GAAP diluted EPS rose to $1.02 from $0.73. Total revenues increased to $3.66 billion from $2.54 billion, driven largely by Performance Allocations of $1.57 billion, up from $390 million, reflecting strong fund appreciation. Management cited $54 billion invested or committed in the quarter, the highest in over two years, and $40.5 billion of inflows.

On the non-GAAP measures that management emphasizes, Fee Related Earnings rose 5% to $1.18 billion^b ($0.96 per share), and Distributable Earnings grew 6% to $1.28 billion ($1.01 per share). Total Segment Distributable Earnings were $1.40 billion, up 1%. Net Accrued Performance Revenues climbed 13% quarter-over-quarter to $7.0 billion ($5.72 per share), a key driver of future earnings.

Total AUM reached $1.108 trillion^c, up 10% year-over-year, and Fee-Earning AUM reached $820.5 billion, up 12%. Perpetual Capital AUM was $434.7 billion. Dry powder stood at $171.6 billion.

Capital return remains a focus. The board declared a quarterly dividend of $0.86^d per share, payable November 4, 2024 to holders of record on October 28, 2024, up from $0.80 a year earlier. Blackstone repurchased 1.0 million shares in the quarter, and management expects about $1.2 billion to be returned to shareholders for the quarter.

Investors should note that certain segment comparisons were pressured by higher Performance Compensation and Other Operating Expenses, and that Real Estate Fee Related Earnings declined, partly reflecting weaker Core+ and Opportunistic returns over the trailing twelve months. All figures are preliminary and unaudited.

02—Key points

Key Highlights

GAAP Net Income attributable to Blackstone Inc. was $781 million in 3Q'24, up from $552 million in 3Q'23 (about 41%). Diluted EPS was $1.02 versus $0.73.
Performance Allocations surged to $1.57 billion from $390 million year-over-year, reflecting broad fund appreciation; total revenues rose 44% to $3.66 billion.
Distributable Earnings were $1.28 billion ($1.01 per share), up 6%; Fee Related Earnings were $1.18 billion ($0.96 per share), up 5%.
Net Accrued Performance Revenues rose 13% quarter-over-quarter to $7.0 billion ($5.72 per share), providing substantial future earnings potential.
Capital deployment hit $34.0 billion in the quarter (plus $20.1 billion committed but undeployed), and inflows were $40.5 billion; LTM inflows reached $166.7 billion.
Total AUM rose 10% to $1.108 trillion and Fee-Earning AUM rose 12% to $820.5 billion; Perpetual Capital AUM reached $434.7 billion.
Quarterly dividend of $0.86 per share (up from $0.80), payable November 4, 2024; LTM dividends total $3.45 per share, with $1.2 billion expected to be returned to shareholders for the quarter including buybacks.

03—Questions

Frequently Asked Questions

How strong was Blackstone's 3Q'24 earnings performance?
GAAP results were very strong, with net income attributable to Blackstone Inc. of $781 million ($1.02 diluted EPS) versus $552 million ($0.73) in 3Q'23. However, much of the GAAP increase came from volatile Performance Allocations, so investors often focus on Distributable Earnings ($1.01 per share, up 6%) and Fee Related Earnings ($0.96 per share, up 5%), which reflect more recurring profits.
What drove the large increase in Performance Allocations?
Strong fund appreciation across strategies, including Corporate Private Equity (+6.2% in the quarter, +15.2% LTM), Infrastructure (+5.5%), Tactical Opportunities (+4.3%) and Private Credit (+3.6% gross). These unrealized gains raise accrued carried interest, which is recognized as revenue when marked, though it is not cash until realized.
Is the dividend safe and how much is Blackstone returning to shareholders?
The $0.86 quarterly dividend is 8% higher than the prior-year quarter and is covered by Distributable Earnings of $1.01 per share, with a retained portion of $0.15 per share. Blackstone also expects to return about $1.2 billion for the quarter through dividends and buybacks, and $5.0 billion over the last twelve months. Investors should note that LTM dividends of $3.45 per share exceed the $2.51 YTD actual dividend figure, which reflects the timing of quarterly payments.
What are the main risks or weak spots in the quarter?
Real Estate remains a weak spot, with Opportunistic funds declining 2.1% and Core+ funds declining 3.8% over the last twelve months, and Real Estate Fee Related Earnings fell 8% in the quarter. Fee Related Compensation rose and Other Operating Expenses increased 21%, pressuring margins. Performance Compensation also rose sharply in the quarter, which weighed on Distributable Earnings growth. Results are preliminary, and Strategic Partners appreciation is reported on a three-month lag.
What does the balance sheet and liquidity position look like?
Blackstone reported $8.9 billion of total cash, corporate treasury and other investments, and $18.7 billion of cash and net investments ($15.33 per share) at September 30, 2024. Outstanding debt at par was $10.8 billion, and the company has a $4.3 billion revolving credit facility maturing in December 2028, with A+ ratings from S&P and Fitch.

04—Continue

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