State Street (STT) investor relations material

Operating environment and financial performance

• Equity markets have performed better than expected, with year-to-date gains of 6–7% providing a tailwind compared to earlier flat projections.

• Rate expectations shifted from anticipated cuts to hikes, impacting both U.S. and European exposures.

• Volatility moderated after a first-quarter spike, but recent jobs data caused a resurgence.

• Second-quarter revenues are up in the low-teens percentage year-over-year, driven by organic growth in servicing and management fees.

• Operating leverage for the quarter is expected to exceed 400 basis points.

Strategic priorities and business initiatives

• Focus areas include alternative asset servicing, wealth services, and digital assets, each contributing to growth and innovation.

• Alternative servicing now represents 15–20% of servicing fees and is growing faster than traditional segments.

• Partnerships with firms like Apollo and Bridgewater aim to democratize access to private assets.

• Wealth services are anchored by the Apex partnership and CRD Wealth platform, with 30% of AUM in the wealth space.

• Digital Asset Platform launched, starting with tokenized money funds, with plans for tokenized ETFs and deposits.

Technology transformation and AI adoption

• Migration to a tech- and AI-enabled product platform operating model is underway, aiming to rewire business processes.

• AI is used for code modernization, code generation, and risk management, with standardized research agents deployed company-wide.

• Customized AI agents are planned for 2026–2027, embedded in end-to-end processes.

• Productivity gains have delivered $2 billion over four to five years, with deeper transformation planned to support strategic investment.