State Street (STT) Goldman Sachs 2024 U.S. Financial Services Conference summary

2024 performance highlights

• Achieved over 100 basis points of positive total operating leverage and 18% ROTCE through Q3, with expectations for a strong year-end finish.

• Improved service quality and efficiency through investments in the operating model and technology transformation begun in the early 2020s.

• Core investment servicing business generated $330 million in new business revenues over the trailing 12 months, with a Q4 target of $350-$400 million.

• Global Advisors saw record flows, including $100 billion in Q3, and continued share expansion in money market funds and ETFs, especially in EMEA.

• Launched 80 new products, including ETF-as-a-Service, and expanded Charles River platform into wealth, now representing nearly 25% of its revenues.

Strategic priorities and outlook for 2025

• Will build on current strategy, emphasizing ETF growth, wealth expansion, and addressing increasing client complexity with more outsourcing solutions.

• Private markets and software are targeted as billion-dollar businesses within four to five years, with private markets already halfway there.

• Focus remains on standardization, simplification, and scale in the operating model to drive efficiency and growth.

• Headwinds from mutual fund to ETF shift are offset by leadership in ETF servicing and innovation.

Servicing business and growth drivers

• Organic growth in servicing business expected at 2-3% from new sales targets, with additional upside from market growth and higher-margin areas.

• Private markets transitioning from insourced to outsourced models, creating significant growth opportunities due to increasing operational complexity.

• Software revenues, led by Charles River, now account for 6% of total revenues and are expected to reach $1 billion in four to five years.