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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown! I'm Alex, and joining me as always is my co-host Jordan. Today we're diving into Cigna Group's Q1 2026 earnings call - and wow, there's a lot to unpack here, including some major leadership changes and strategic pivots.

But before we jump in, I need to share an important disclaimer: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Thanks Alex. And speaking of major changes, this earnings call was pretty historic - it was CEO David Cordani's final quarterly call after 17 years leading the company. But the numbers certainly gave him a strong send-off.

ALEX: Absolutely! So let's start with the headline numbers. Cigna reported Q1 revenue of $68.5 billion and adjusted EPS of $7.79. That EPS represents 16% year-over-year growth, which is pretty impressive. And based on this strong performance, they raised their full-year 2026 EPS guidance to at least $30.35.

JORDAN: What's interesting is that both of their main segments - Evernorth and Cigna Healthcare - performed above internal expectations. Evernorth earnings were slightly ahead, while Cigna Healthcare really exceeded expectations with 18% earnings growth year-over-year. The medical care ratio came in at 79.8%, which was better than their guidance of slightly below 81%.

ALEX: Now Jordan, there were some significant strategic announcements that I think investors need to pay attention to. Can you walk us through those?

JORDAN: Sure thing. Cigna made two big portfolio moves. First, they're planning to exit the individual exchange business at the end of 2026. This isn't a huge surprise - it's been a small and shrinking business for them. CEO-elect Brian Evanko said they couldn't see a clear path to scale it meaningfully within Cigna's overall size.

The second move is potentially bigger - they announced a strategic review for eviCore, which handles prior authorization services for multiple health plans. This seems to be driven by the industry's progress on standardizing and automating prior authorization processes.

ALEX: And these moves really fit into their broader strategy of portfolio shaping, right? They're focusing resources on their three core growth platforms.

JORDAN: Exactly. Evanko outlined those three platforms clearly: Specialty and Care Services, which represents about 35% of company income and is growing 8-12% annually; Pharmacy Benefit Services at about 25% of income; and Cigna Healthcare at 40% of income. They're essentially doubling down on what's working and shedding what isn't.

ALEX: Let's talk about that specialty business because it really shone this quarter. Specialty and Care Services earnings grew 20% to $1.1 billion. What's driving that?

JORDAN: Three main factors. First, solid specialty volume growth across the board. Second - and this is interesting - continued adoption of biosimilars and specialty generics. These deliver savings to patients while actually improving margins for Cigna. Third, they're getting contributions from their investment in Shields Health Solutions, which they made late last year.

David Cordani specifically highlighted how they're using AI to improve biosimilar conversions. For drugs like Humira and Stelara, they're offering $0 out-of-pocket costs to patients while using AI to identify personalized conversion strategies. It's a win-win - lower costs, higher patient satisfaction, and better margins.

ALEX: That ties into something Brian Evanko emphasized about the future - this focus on AI and data analytics. He's clearly putting his stamp on the company's direction.

JORDAN: Right. When he takes over a

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**Beta Finch Podcast Script**

**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we dive into the latest corporate results to help you understand what's moving the markets. I'm Alex, and I'm joined by my co-host Jordan. Today we're breaking down Cigna Group's fourth quarter 2025 earnings call - and folks, there's a lot to unpack here.

Before we dive in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Absolutely, Alex. And wow, what a call this was! Cigna just delivered some impressive numbers while simultaneously announcing a massive $7 billion settlement with the FTC. It's like they cleared two major hurdles in one earnings cycle.

**ALEX:** Right? So let's start with the headline numbers. Cigna reported full-year adjusted revenue of $275 billion - that's 11% growth year-over-year. Adjusted earnings per share came in at $29.84, up 9%. For 2026, they're guiding to at least $30.25 per share. Jordan, those are some solid numbers in what CEO David Cordani called a "pivotal year."

**JORDAN:** They really are, Alex. And what caught my attention is how they're managing this transformation while maintaining growth. The company is essentially reinventing their pharmacy benefits model - moving to what they call a "rebate-free" system - while still hitting their financial targets. That takes some serious execution capability.

**ALEX:** Let's talk about that FTC settlement because it's huge. $7 billion in out-of-pocket cost relief over ten years for 100 million customers. Cordani was pretty emphatic that this positions them well for their new pharmacy model they announced back in 2025. It sounds like they saw this regulatory wave coming and built their strategy around it.

**JORDAN:** Exactly. And here's what's fascinating - they're saying this settlement actually aligns perfectly with their new business model. Instead of fighting the regulatory tide, they're riding it. The new model eliminates rebates, increases transparency, and supposedly keeps similar margin profiles. During the Q&A, analyst Lisa Gill pressed them on this, and Cordani was confident that the margin profile will remain similar even with this massive shift.

**ALEX:** That's a bold claim. They're basically saying they can completely transform how they do business while maintaining profitability. The specialty pharmacy business seems to be a big driver here - 14% revenue growth and they mentioned 13% growth in specialty scripts.

**JORDAN:** The specialty business is really their growth engine. It's gone from about 25% of the company three years ago to 35% now. Brian Evanko, the COO, highlighted that this is a $400 billion addressable market growing at high single digits. They're particularly bullish on biosimilars - expecting over $100 billion in savings from biosimilar adoption by 2030.

**ALEX:** Speaking of Evanko, he also mentioned some interesting tech innovations. They're rolling out AI-powered digital tools, including a provider matching tool and real-time cost tracking. Plus they launched something called "Clarity" - a new healthcare offering with transparent pricing that they claim can save clients up to 10% in medical costs.

**JORDAN:** The Clarity product is intriguing because it represents this broader shift toward transparency that seems to be driving everything Cigna is doing right now. No referrals needed, simple co-pay structure, single digital platform. It feels like they're trying to simplify healthcare, which honestly, is desperately needed.

**ALEX:** Now, let's talk about some challenges. The medical care ratio guidance for 2026 is 83.7% to 84.7%, which analyst Kevin

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown, bringing you the numbers and the narrative behind the headlines. I'm Alex.

JORDAN: And I'm Jordan. Today we're digging into Chubb Limited's Q2 2026 results.

ALEX: Before we get into it — this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Good disclaimer to lead with, especially for a name like Chubb where there's a lot of moving parts. Let's set the scene.

ALEX: Big quarter for the property and casualty giant. Core operating earnings came in at $2.8 billion, or $7.26 per share — that's up 14.6% on the earnings side and 18.2% on EPS year-over-year.

JORDAN: And tangible book value per share, which CEO Evan Greenberg calls their most important measure of shareholder wealth creation, was up 17.1% year-over-year. That's a real headline number for an insurer.

ALEX: Underwriting was the star. P&C underwriting income was over $1.9 billion, up almost 19%, with a combined ratio of 83.8%. Strip out catastrophes and look at the current accident year, and it's 82.2%.

JORDAN: For listeners who don't live in insurance-speak, combined ratio under 100 means they're making underwriting profit before you even count investment income. Anything in the low 80s is genuinely excellent.

ALEX: Investment income was also a record — $1.88 billion, up more than 11%. Their invested asset base is now $175 billion, up from $161 billion a year ago. New money is going in at a 5.5% yield, well above their current 5.1% book yield.

JORDAN: That reinvestment spread is a nice tailwind — every maturing bond gets replaced with something yielding more, so investment income keeps compounding almost on autopilot.

ALEX: Now here's where it gets interesting. Growth wasn't uniform across the business, and Greenberg was pretty blunt about why.

JORDAN: Right, global P&C premiums were up 3% — but strip out large account and E&S property, which they're intentionally shrinking, and it's actually 6.3%. He specifically called out that pricing in casualty lines is starting to lag loss cost inflation, which he pegged at 6 to 7% for primary casualty and 9.5 to 12% for excess casualty.

ALEX: And he didn't hold back on competitors either — talked about newer players and MGAs writing business on terms that experienced underwriters walked away from decades ago.

JORDAN: That's classic late-cycle soft market behavior. He also flagged London wholesale actively writing U.S. casualty again, which he said is "a movie we've seen before" — that's not a compliment.

ALEX: Meanwhile, the parts of the business firing on all cylinders: international retail grew almost 12%, Latin America 15.6%, Asia 12%. North America middle market and small commercial grew almost 9%. And their high net worth personal lines business — the one differentiated, non-commodity business — grew 6% with 90% retention.

JORDAN: That diversification story is really the thesis of the whole call. When a reporter pushed on why Chubb sounds so much more cautious than some peers, Greenberg's answer was essentially: I can't speak for anyone else, I call it as I see it, and the results speak for themselves.

ALEX: There was also a fun exchange about reinsurance — an analyst asked if Chubb might buy a reinsurer to build scale there, and Greenberg's answer was just, quote, "it makes zero sense." Pretty definitive.

JORDAN: Short and blunt — that's very on-brand for him this call. Another notable moment: someone asked about rising AI and token costs eating into the tech efficiency gains insurers have been promising. Greenberg said Chubb tracks its token costs in hard dollars and called them "a fraction, a minor fraction" relative to the efficien

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown. I'm Alex, and I'm here with my co-host Jordan to dive into Chubb's Q1 2026 earnings results. Before we get started, I want to remind our listeners that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks Alex. And wow, what a quarter for Chubb! The insurance giant just reported some pretty impressive numbers that really showcase why they're considered one of the industry leaders.

**ALEX:** Absolutely. Let's start with the headline numbers, Jordan. Chubb delivered core operating earnings of $2.7 billion, or $6.82 per share - both up substantially from the prior year's first quarter. But there's an important caveat here, right?

**JORDAN:** Exactly. Last year's Q1 was impacted by those devastating California wildfires. When you adjust for catastrophe losses and compare apples to apples, core operating income was still up a solid 10.7% and earnings per share grew 13.5%. But here's the real kicker - tangible book value per share jumped 21.5%. That's the kind of wealth creation that gets investors excited.

**ALEX:** Those are strong numbers across the board. What about the top line growth?

**JORDAN:** Total company net premiums grew 10.7% to over $14 billion. The breakdown is interesting - P&C premiums grew 7.2% while their Life business absolutely exploded with over 33% growth. Both segments benefited from favorable foreign exchange movements, but even accounting for that, these are solid growth figures.

**ALEX:** Now Jordan, one thing that really caught my attention was CEO Evan Greenberg's commentary about the external environment. He opened the call talking about the war in the Middle East and its potential impacts. This isn't typical earnings call fare.

**JORDAN:** You're right, Alex. Greenberg was quite candid about the macro headwinds - mentioning how the conflict could lead to higher inflation, supply chain disruptions, and slower economic growth. But here's what I found reassuring: he explicitly said he likes Chubb's position during times of stress, citing their balance sheet strength, earning power, and liquidity. It shows management is thinking proactively about risk management.

**ALEX:** Speaking of risk management, there was a lot of discussion about pricing dynamics in the property market. This seemed to be a major theme throughout the call.

**JORDAN:** This was probably the most concerning part of the entire earnings report, Alex. Greenberg didn't mince words - he called the pace of property pricing declines in certain markets "dumb." We're talking about market rates declining 25% in the quarter and heading toward 30%. Meanwhile, loss costs are still running at 4-5%. The math just doesn't work.

**ALEX:** And Chubb's response was pretty decisive, wasn't it?

**JORDAN:** Absolutely. They purposefully shrank their large account property exposure, both in the admitted and excess & surplus markets. Greenberg mentioned they walked away from business where market pricing was down 30-40% from what they were willing to accept. They also bought additional reinsurance to reduce their exposure. It's a classic example of underwriting discipline over premium growth.

**ALEX:** Let's talk about some of the bright spots. Their investment portfolio performance was quite strong.

**JORDAN:** Yes, their invested assets now stand at $170 billion, up from $152 billion a year ago. Their fixed income portfolio yield hit 5.1%, with new money rates averaging 5.5%. Adjusted net investment income of $1.8 billion was up more than 10%. For an insurance company, having that investment income engine firing on all cylinders is crucial.

**ALEX:** T

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**ALEX**: Welcome to Beta Finch, your AI-powered earnings breakdown where we decode the markets one quarter at a time. I'm Alex, and I'm here with my co-host Jordan. Today we're diving into Chubb's absolutely stellar Q4 2025 results.

But before we get started, I need to share an important note: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

Jordan, Chubb just delivered what CEO Evan Greenberg called "another record year" - and the numbers definitely back that up.

**JORDAN**: Absolutely, Alex. These results are genuinely impressive across the board. Let's start with the headline numbers - Chubb posted core operating income of nearly $3 billion for Q4, or $7.52 per share. That's up 22% and 25% respectively. For the full year, they hit just under $10 billion in operating income, or $24.79 per share.

**ALEX**: That's massive growth. And what caught my eye is how broad-based this performance was. They had record results from all three major income sources - P&C underwriting, investment income, and life insurance.

**JORDAN**: Right, and their P&C combined ratio hit a record low of 81.2% for the quarter and 85.7% for the full year. That's exceptional underwriting performance, especially when you consider they still had $2.9 billion in catastrophe losses for the year - largely from those California wildfires in Q1.

**ALEX**: Let's talk about growth, because the premium numbers tell a really interesting geographic story. Total company premiums grew over 6.5% for the year, but when you dig into the international business, that's where things get exciting.

**JORDAN**: Exactly. Their international P&C business, which they call "overseas general," was up 10.8% in Q4. But here's what's really compelling - their consumer lines in that international segment grew 18.7%. Latin America was particularly strong at 14.7% growth, and Asia grew 13%.

**ALEX**: And Greenberg gave some great color on this during the Q&A. He talked about their partnerships with major banks - Banco de Chile in Chile, Nubank in Brazil for digital distribution, Banco Guayaquil in Ecuador. It sounds like they're building these local distribution networks that are really paying off.

**JORDAN**: What I found interesting is how he characterized these markets. He called them "developing and mature market regions" and emphasized that while there's volatility, the long-term trend line is up, especially for Asia. He also made the point that it's "hard yards" to build these local franchises - you can't just parachute in with a couple of underwriters.

**ALEX**: Speaking of hard work paying off, let's talk about their digital transformation initiative. This was fascinating - they're targeting 150 basis points of combined ratio improvement over the next 3-4 years through digital transformation.

**JORDAN**: And Greenberg was pretty specific about this. He said most of it comes from the expense side - both operating expenses and cost of claims. They're focused on nine to ten discrete transformation projects across North America, UK, Europe, and their larger Asian and Latin American markets. It's covering technology, data, AI, and analytics.

**ALEX**: The other big story here is their investment income. They hit a record $1.8 billion in adjusted net investment income for Q4, up 7.3%. Their fixed income portfolio yield is now 5.1%, and they're getting new money at rates slightly above that.

**JORDAN**: That investment performance is crucial because their invested assets now stand at $169 billion, up from $151 billion a year ago. And they're planning to increase their private investment allocation from 12% to 15% over the medium te

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Welcome to Beta Finch, your AI-powered earnings breakdown of the companies moving the markets. Let's get into Caterpillar's second quarter.

ALEX: Hey everyone, welcome back to Beta Finch! I'm Alex, joined as always by Jordan, and today we're digging into Caterpillar's Q2 2026 results — and folks, this is a big one. But before we dive in, quick reminder: this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: And it's a good quarter to have that disclaimer front and center, Alex, because the numbers here are eye-popping. Caterpillar just posted $20.5 billion in sales and revenues — up 24% year-over-year. That's the first time in company history they've cracked $20 billion in a single quarter.

ALEX: A genuine milestone. And it wasn't just the top line — adjusted profit per share came in at $8.17, up 73% from last year. CEO Joe Creed called it out as a record, and honestly, the whole print beat expectations across the board.

JORDAN: What really stands out to me is the backlog. It grew sequentially by $9 billion to $72 billion total — that's up 92% versus a year ago. And all three primary segments — Construction Industries, Resource Industries, and Power & Energy — contributed to that growth. This isn't a one-segment story.

ALEX: Right, and that Power & Energy segment is the one everyone's buzzing about because of the AI and data center angle. Sales to users in power generation grew 72% — driven by demand for large gen sets and turbines going into data centers.

JORDAN: It's wild — they're literally restarting a discontinued product line for this. They stopped making their 10-megawatt medium-speed gas reciprocating engine back in 2022, and now they're bringing back about 1.5 gigawatts of capacity because customers are asking for more units. Shipments start in Q4.

ALEX: And on the call, an analyst pushed Creed on whether that demand has real staying power out to 2028, 2029, 2030 — given how much AI capex speculation is out there. Creed's answer was pretty direct: "No one is slowing down at the moment. In fact, if we can get more units out, they're asking us to give them more units." They're already taking orders into 2029 and 2030.

JORDAN: And it's not just data centers propping this up — that's the part I found reassuring. Oil and gas backlog is nearly double what it was a year ago, mostly gas compression demand. So even if the AI narrative cools at some point, there's a broader base under this Power & Energy growth story.

ALEX: Let's talk Construction Industries too, because that segment had its own headline moment — sales up 35% to $8.3 billion, sixth straight quarter of sales-to-users growth. A lot of that was rental fleet loading, including this new "Major Projects" joint venture with dealers — basically a national rental fleet aimed at massive infrastructure and data center builds.

JORDAN: Margins there were strong too — 23.3%, up 320 basis points. Resource Industries also chipped in with 20% sales growth, helped by mining demand for copper and gold, plus they closed the Skycatch acquisition in July — that's AI-powered spatial data tech for mining operations.

ALEX: Now, we can't ignore tariffs — they came up a lot on this call. CFO Kyle Epley said the company got a $392 million benefit from IEEPA tariff recoveries this quarter, and actual tariff costs came in lower than expected, around $400 million versus the $700 million they'd guided to in April. For the full year, they now expect about $2.2 billion in tariff costs, the low end of their prior range.

JORDAN: That's a meaningful swing, and it's part of why margins beat — adjusted operating profit margin hit 21.9%, up 430 basis points year-over

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we cut through the noise to bring you the insights that matter. I'm Alex, and joining me as always is Jordan. Today we're diving into Caterpillar's absolutely explosive Q1 2026 earnings call - and folks, this was a doozy.

But before we dig in, I need to share an important note: This podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

**JORDAN:** Thanks Alex, and wow - you're right about this being explosive. I've been covering industrial earnings for years and this Caterpillar quarter was genuinely remarkable. Let me just hit you with some numbers right off the bat - revenue jumped 22% to $17.4 billion, adjusted earnings per share shot up 30% to $5.54, and here's the kicker - their backlog grew to a record $63 billion. That's a 79% increase year-over-year.

**ALEX:** Those are staggering numbers, Jordan. But what really caught my attention was the announcement during the call. Caterpillar is essentially doubling down on their data center bet. They're expanding their large reciprocating engine capacity from 2x their 2024 levels to nearly 3x. That's massive.

**JORDAN:** Absolutely massive, Alex. And CEO Joe Creed was pretty candid about what's driving this - it's the AI revolution. He mentioned that since they first announced capacity expansion plans back in January 2024, their large reciprocating engine backlog has grown by more than 3.5x. Customers aren't just ordering for this year - some orders are going well into 2028.

**ALEX:** What I found fascinating was how this isn't just about backup power anymore. Creed mentioned they're seeing increasing demand for prime power applications - basically data centers that want their own dedicated power generation rather than just backup systems. That's a game changer because prime power means much higher service revenue downstream.

**JORDAN:** Exactly, and that service revenue story is crucial. When you sell backup generators, you get the initial sale and some maintenance. But prime power? That's ongoing fuel, parts, service contracts - it's the gift that keeps on giving. Creed even mentioned this was their sixth agreement for at least 1 gigawatt of equipment for prime power applications.

**ALEX:** Let's talk numbers for investors. They raised their full-year guidance to low double-digit growth - that's up from their previous outlook. And they're projecting free cash flow will be higher than last year's $9.5 billion. But there's a cloud here - tariffs.

**JORDAN:** The tariff situation is really interesting, Alex. They absorbed about $600 million in tariff costs in Q1 alone, which was actually better than their $800 million estimate. But for the full year, they're still looking at $2.2 to $2.4 billion in tariff impacts. CFO Andrew Bonfield, who's retiring after this call, was pretty matter-of-fact about it - they're working on mitigation strategies but it's definitely a headwind.

**ALEX:** Speaking of Bonfield, this was his final earnings call after what sounds like an incredible run as CFO. Kyle Epley is taking over, and he seemed well-prepared during his portion of the call. Any concerns about the transition?

**JORDAN:** Not really - Epley has been with the company for over 20 years and worked closely with Bonfield. What I liked was his detailed breakdown of the Q2 outlook. He's expecting continued strong growth across all segments, with Power and Energy leading the charge. He also provided really granular details on tariff impacts by segment, which shows he's got a handle on the complexities.

**ALEX:** The segment performance was pretty interesting too.

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown where we dig into the numbers that matter. I'm Alex.

JORDAN: And I'm Jordan. Today we're talking about Caterpillar's Q4 2025 results, and wow - this was a record-breaking quarter in more ways than one.

ALEX: Before we dive in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

JORDAN: Absolutely. Now Alex, when you say record-breaking, you're not kidding. Let's start with the headline numbers - what jumped out at you?

ALEX: The sheer scale of these results is impressive. Caterpillar posted record quarterly sales of $19.1 billion - that's up 18% year-over-year. But here's what's really eye-catching: their backlog hit a record $51 billion. That's up 71% from last year, Jordan. We're talking about $21 billion in new backlog growth.

JORDAN: That backlog number is staggering. And it's not just one segment driving this - they saw strength across Construction Industries, Resource Industries, and especially Power and Energy. The Power and Energy segment alone grew 23% in the quarter to $9.4 billion in sales.

ALEX: Right, and CEO Joe Creed was pretty excited about this. He mentioned they had "unprecedented order strength across all business segments." What's interesting is that only about 62% of that $51 billion backlog is expected to deliver in the next twelve months. That's lower than their historical average, which tells us they're booking orders well into 2027 and beyond.

JORDAN: That's a double-edged sword, isn't it? On one hand, it provides incredible revenue visibility. On the other hand, it locks them into deliveries at prices set today, while their costs - especially tariff costs - keep climbing. Speaking of tariffs, that was a major theme throughout this call.

ALEX: Oh absolutely. Tariffs were the elephant in the room. They faced $1.7 billion in net incremental tariff costs in 2025, and they're projecting that to jump to $2.6 billion in 2026. CFO Andrew Bonfield was pretty direct about this - he said margins will remain "near the bottom of the target range" because of these tariff headwinds.

JORDAN: And yet, they still managed to deliver a 17.2% adjusted operating profit margin for the full year, which was within their target range. That's solid execution under pressure. But let's talk about what's really driving this growth - the data center boom. This is where things get fascinating.

ALEX: Yes! The AI and cloud computing infrastructure build-out is creating massive demand for Caterpillar's power generation equipment. They announced a huge order yesterday - 2 gigawatts of power generation equipment for something called the Monarch Compute Campus. Joe Creed said this is one of their largest single orders ever for complete power solutions.

JORDAN: And get this - they've now booked four separate orders of at least one gigawatt each for data center prime power applications. Creed mentioned they're seeing customers shift from backup power to prime power, where Caterpillar equipment runs continuously to power these data centers. That's huge for their services business down the road.

ALEX: Exactly. Because when you're running equipment 24/7, you need a lot more maintenance and service. Their services revenue hit $24 billion in 2025, and they're targeting $30 billion by 2030. The data center boom could be a major driver of that growth.

JORDAN: Now, let's talk about the segments. Power and Energy was clearly the star, but Construction Industries also had a strong quarter with 15% sales growth. What's interesting is that Creed attributed some of this to returning to "normal seasonal

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ALEX: Welcome to Beta Finch, your AI-powered earnings breakdown. Today we're digging into Blackstone's second quarter 2026 results — and Jordan, this one's basically a masterclass in "how do you play the AI boom without buying a chip stock."

JORDAN: Right, and before we get into it — this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

ALEX: Solid reminder. So let's start with the headline numbers. Blackstone posted GAAP net income of $2.4 billion, and distributable earnings of $2 billion, or $1.52 a share — that's up 26% year-over-year. Fee-related earnings grew 22%, and total inflows hit almost $70 billion for the quarter, pushing assets under management to a record $1.35 trillion.

JORDAN: And that growth rate isn't a fluke — it basically matches what they delivered in Q1. What's striking is the driver behind it. CEO Steve Schwarzman was pretty blunt: this is an AI infrastructure story. Data centers, energy and power, and direct stakes in frontier AI companies like Anthropic, OpenAI, and SpaceX.

ALEX: They didn't just talk about it either — they announced four new AI-related ventures just in this quarter. A neocloud partnership with Google using TPU chips, up to $5 billion initially. A joint venture with Anthropic to help enterprises actually adopt AI. A $35 billion financing platform with Broadcom for AI compute — which they're calling the largest private credit investment in history. And then they launched BXDC, a data center REIT that pulled in $2 billion, the biggest blind-pool REIT IPO ever.

JORDAN: That data center platform is now worth $185 billion including stuff under construction — up from $130 billion at the start of the year. President Jon Gray said they expect to lease three times more capacity this year than any prior year. And here's the number that really got me: they think the market for stabilized data center ownership alone could eventually grow to $1 trillion.

ALEX: Which explains why nine of their ten biggest markups in the quarter were AI-related holdings. Their infrastructure platform was up 7.2% for the quarter and 29% over the last twelve months — a lot of that from QTS, their U.S. data center business.

JORDAN: Let's talk fundraising too, because it's not just AI juicing performance — it's juicing flows. Insurance AUM hit $290 billion, up 15%, including a new $10 billion partnership with Nippon Life. Private wealth AUM grew 16% to $324 billion, with their BXPE product delivering a 20% net annualized return since inception. And their multi-asset business, BXMA, just had its best single fundraising month ever in July.

ALEX: Not everything was rosy, though. Their credit vehicle BCRED saw net outflows of $1.2 billion, redemption requests exceeded their 5% limit. Jon Gray addressed that directly on the call — he basically said the panic headlines about private credit didn't come true, and now that the "noise" has died down, redemptions are already easing into Q3.

JORDAN: That was actually one of the more interesting Q&A moments. An analyst asked him almost point blank whether this looks like the BREIT redemption saga all over again, and Gray's answer was essentially: yes, we've seen this movie before, and it worked out — investors panicked, the disaster didn't materialize, and flows recovered. He's betting BCRED follows the same arc.

ALEX: There was also a great exchange about capital allocation. Given the stock's pulled back from its highs, one analyst asked if Blackstone might lean harder into buybacks. CFO Michael Chae's answer was pretty measured — no dramatic shift, they're sticking with their policy of returning basically all cash earnings via dividend plus a steady buyback, no opportu

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**BETA FINCH PODCAST SCRIPT - BLACKSTONE Q1 2026 EARNINGS**

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**ALEX:** Welcome to Beta Finch, your AI-powered earnings breakdown where we cut through the noise to bring you the key insights from corporate America's quarterly reports. I'm Alex, and I'm joined by my co-host Jordan. Today we're diving into Blackstone's first quarter 2026 results, and wow, what a quarter this was.

Before we jump in, I need to mention that this podcast is AI-generated content for educational and entertainment purposes only. Nothing we discuss should be considered investment advice. Always do your own research and consult a qualified financial advisor before making any investment decisions.

Jordan, Blackstone just posted some absolutely massive numbers here - we're talking about $13 billion in GAAP net income for the quarter. That's not a typo, right?

**JORDAN:** No typo, Alex! That's a record-breaking number, and it really shows the power of Blackstone's diversified platform. But let me break this down for our listeners because there's a lot to unpack here. Distributable earnings - which is really the metric investors focus on - came in at $1.8 billion, or $1.36 per share. That's up 25% year-over-year, which is impressive given the volatile market backdrop.

**ALEX:** And speaking of that backdrop, CEO Steve Schwarzman really painted a picture of just how crazy this environment has been. Since 2020, they've navigated five major market-moving events around the same time of year - COVID, Ukraine invasion, regional banking crisis, tariff announcements in 2025, and now this conflict in Iran that triggered the largest quarterly oil price increase in over 35 years.

**JORDAN:** That's a great point, Alex. What struck me was Schwarzman's emphasis on patience being key during these events. He said when the world normalizes, risk appetite returns and investors refocus on fundamentals. But here's what's really interesting - despite all this chaos, Blackstone's flagship strategies reported positive appreciation while major equity and credit indices were declining.

**ALEX:** The AI angle is absolutely fascinating here. Schwarzman mentioned he personally got involved in AI back in 2015, way before it became trendy. Now they're claiming to be the largest investor in AI-related infrastructure globally. Jordan, walk us through their AI positioning because it's massive.

**JORDAN:** It really is staggering, Alex. They have over $150 billion in data centers globally, including facilities under construction, with another $160 billion in prospective pipeline development. Two weeks ago, they even filed to launch a new public company to acquire stabilized data centers. They've also become one of the largest investors in modernizing the U.S. electric grid, and they own the longest cross-country network of natural gas pipelines in the U.S.

**ALEX:** What I found interesting was their investment in the actual AI companies themselves - they mentioned stakes in Anthropic and OpenAI through their wealth platform. So they're basically betting on the entire AI ecosystem from infrastructure to the technology itself.

**JORDAN:** Exactly. And this positioning really paid off in their infrastructure business, which grew 41% year-over-year to $84 billion. Their BIP strategy has generated 19% net returns annually since inception - nearly double their original target of 10-12%. That's the kind of performance that attracts institutional money.

**ALEX:** Now let's talk about the elephant in the room - private credit. There's been a lot of negative press about this sector, and it definitely impacted their wealth channel flows. Jordan, what's the real story here?

**JORDAN:** This was probably the most interesting part of the call, Alex. Schwarzman was pretty fired up about what he called "external assertions" ranging from systemic risk concerns to predictions of signifi

This episode includes AI-generated content.