STATE STREET CORP (STT) Q3 2025 Earnings Summary

Executive Summary

Solid beat and strong quality of earnings: EPS $2.78 vs S&P Global consensus $2.65* and revenue $3.55B vs $3.47B*, driven by broad-based fee growth (+8% YoY) and expense discipline; pre-tax margin expanded to 31.1% (+270 bps YoY) .
Fee engine firing on all cylinders: management fees set a quarterly record ($612M, +16% YoY), servicing fees rose 7% YoY, and Markets businesses (FX +11% YoY; Securities finance +19% YoY) remained robust despite lower volatility vs 2Q .
Guidance raised: FY25 total fee revenue growth lifted to 8.5–9% (from at/above 5–7%); FY25 NII “down slightly” vs 2024 maintained; FY25 expense growth guided to ~4.5% (from upper end of 3–4%); Q4 setup: fees flat to slightly down QoQ, NII up, expenses up slightly .
Structural momentum: record AUC/A $51.7T and AUM $5.4T with strong ETF and gold flows; backlog supports continued organic fee growth (servicing revenue wins $47M; $401M to be installed) .
Capital return accelerated: $637M in 3Q (repurchases $400M; dividends $237M); common dividend per share raised 11% to $0.84; CET1 (Std) improved QoQ to 11.3% .

What Went Well and What Went Wrong

What Went Well
- Broad fee strength and operating leverage: total revenue +9% YoY (fees +8% YoY), expenses +5% YoY with positive operating leverage (+332 bps), pre-tax margin 31.1% .
- Record AUM and record management fee revenue: AUM $5.4T; management fees $612M (+16% YoY) on market levels and inflows; ETF suite gained share; gold ETFs reached ~$145B AUM (marketing agent) .
- Strategic advances: Apex Fintech Solutions partnership to enable a digital wealth custody/clearing solution; management emphasized “bridge between traditional and digital finance” and forthcoming digital asset platform. Quote: “We are strategically positioning State Street to be the bridge between traditional and digital finance … forthcoming launch of our digital asset platform” – CEO Ron O’Hanley .
What Went Wrong
- NII softness: NII down 1% YoY and 2% QoQ, pressured by lower short-end rates and deposit mix (partly offset by securities repricing/loans); NIM steady QoQ at 0.96% but below year-ago 1.07% .
- FX and front office sequential normalization: FX trading services -3% QoQ on lower client volumes/volatility vs elevated 2Q; front office software & data -1% QoQ (ex-notables -13%) due to lower on-prem renewals .
- Macro-driven provisioning: modest $9M provision tied to macro and leveraged/CRE exposure; allowance increased to $201M .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025	S&P Global Consensus (Q3’25)*
Total Revenue ($B)	3.259	3.448	3.545	3.465*
Diluted EPS ($)	2.26	2.17	2.78	2.65* (14 est)
Pre-tax Margin (%)	28.4	25.8	31.1	—
Total Fee Revenue ($B)	2.616	2.719	2.829	—
Net Interest Income ($B)	0.723	0.729	0.715	—

Beat/miss vs estimates: EPS +$0.13 and revenue +$0.08B vs S&P Global consensus*.

Segment/Line of Business

Metric ($M)	Q3 2024	Q2 2025	Q3 2025
Investment Servicing – Total Revenue	2,662	2,844	2,861
Investment Management – Total Revenue	597	625	684
Total Company – Total Revenue	3,259	3,448	3,545
Investment Servicing – Pre-tax Margin (%)	28.0	28.8	30.0
Investment Management – Pre-tax Margin (%)	30.2	33.3	35.7

Key Fee Components

Fee Component ($M)	Q3 2024	Q2 2025	Q3 2025
Servicing Fees	1,266	1,304	1,357
Management Fees	527	562	612
FX Trading Services	374	431	416
Securities Finance	116	126	138
Front Office Software & Data	146	169	167

KPIs and Balance Sheet

KPI	Q3 2024	Q2 2025	Q3 2025
AUC/A ($T)	46.8	49.0	51.7
AUM ($T)	4.73	5.12	5.45
Net Interest Margin (FTE, %)	1.07	0.96	0.96
CET1 (Standardized, %)	11.6	10.7	11.3
Capital Returned ($M)	—	517	637
Dividend/Share ($)	—	0.76	0.84
Servicing Fee Wins ($M, quarterly)	—	145	47
Servicing Fee Revenue to be Installed ($M, period-end)	—	444	401
AUC/A to be Installed ($T, period-end)	—	4.0	3.6

Note: Consensus values marked with * are from S&P Global and include number of estimates where provided.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Fee Revenue Growth	FY 2025	At or slightly above 5–7%	8.5%–9%	Raised
Net Interest Income	FY 2025	Down slightly vs 2024	Down slightly vs 2024	Maintained
Expense Growth	FY 2025	Upper end of 3%–4%	~4.5%	Raised (to fund growth, revenue-related costs)
Total Payout Ratio	FY 2025	~80%	~80%	Maintained
Q4 Fee Revenue	Q4 2025	—	Flat to down slightly QoQ	Directional
Q4 NII	Q4 2025	—	Increase QoQ	Directional
Q4 Expenses	Q4 2025	—	Up slightly QoQ	Directional
Dividend/Share	From Q3 2025	$0.76	$0.84 (+11%)	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1’25, Q2’25)	Current Period (Q3’25)	Trend
AI/Tech & Front Office (CRD)	ARR +15% YoY; investing in platform, resilience (Q1)	Ongoing investments incl. AI tools; front office ARR ~+$13% YoY to ~$402M; backlog +45% YoY	Accelerating build/ARR
Wealth Services	Limited disclosure in Q1/Q2; focus on product/partnerships (ETFs, alt credit)	Apex Fintech partnership to deliver global digital wealth custody/clearing	New, strategic expansion
Alpha Installations/Backlog	To-be-installed revenue $356M (Q1)	$444M (Q2)	$401M; ~half slated by YE; mix skewed to back office/privates
Markets (FX/SecFin)	FX +9% YoY (Q1); record volumes in Q2; FX +28% YoY; SecFin +17% YoY (Q2)	FX +11% YoY (−3% QoQ); SecFin +19% YoY (+10% QoQ). Expect Q4 vol tailwind	Strong; supportive macro
NII/Deposits	Flat YoY in Q1; −1% YoY in Q2; NIM drifted lower	−1% YoY and −2% QoQ; Q4 NII seen up on reinvestment and hedge tailwinds; deposit mix stabilizing	Stabilizing, tailwinds ahead
Capital Return	$320M (Q1)	$517M (Q2) and dividend increase announced	$637M (Q3) with $400M buybacks; CET1 up QoQ to 11.3%

Management Commentary

CEO framing: “We delivered our seventh consecutive quarter of positive total operating leverage, excluding notable items… delivered 9% year-over-year total revenue growth… record Management fee revenue, launching 39 new products,” and “partnership with Apex Fintech Solutions” to advance Wealth Services .
Strategy and innovation: “Strategically positioning State Street to be the bridge between traditional and digital finance… forthcoming launch of our digital asset platform” .
CFO on operating leverage and mix: “Fee revenue growth was broad-based… expenses increased ~5%… delivering fee and total operating leverage… pre-tax margin expanded ~270 bps to 31%” .
CFO on NII outlook: “Reinvestment of securities cash flows at higher yields and the drag from terminated hedges runs down in Q4… tailwinds for NIM/NII into 2026” .
CFO on installations: “$400M backlog at 9/30; as much as half installed by year-end; significant remainder by end of 2026; mix attractive (back office, privates)” .

Q&A Highlights

NII and balance sheet: Management expects Q4 NII/NIM to rise on reinvestment and hedge tailwinds; deposits stabilizing with improved mix; sees further optimization opportunities into 2026 .
Fee pipeline and Alpha: Backlog ~$400M with faster, repeatable installations; pivoting toward back-office and private markets where profitability is higher; target $350–$400M FY wins remains on track .
Markets outlook: Expect higher 4Q volatility to support FX/Markets; integrated model leverages Investment Servicing flows and SSGA lending .
Expense flexibility: Management can recalibrate investment pace if macro weakens while maintaining strategic priorities; productivity programs (~$500M target for 2025) and AI adoption to sustain leverage .
Capital and M&A: Maintain ~80% payout; pursue bolt-ons to accelerate strategy (e.g., Apex) under high hurdle standards; confident in organic growth path .
Loan book composition: NBFI exposures centered in subscription finance and AAA CLOs with low losses historically; CRE book small and shrinking; no noted deterioration .
CRD/Front office competition: Continued momentum and open-architecture Alpha model; building wealth front-end opportunity; not seeing broad outflows in fixed income OMS .

Estimates Context

EPS: Actual $2.78 vs S&P Global consensus $2.65* (14 estimates) → beat by $0.13*.
Revenue: Actual $3.545B vs S&P Global consensus $3.465B* (11 estimates) → beat by ~$80M*.
Implication: Street likely to lift fee revenue, margin, and EPS estimates for FY25/26 given raised fee guide, robust mix, and Q4 NII tailwinds .
Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

Momentum broadening: Record management fees/AUM, rising servicing fees, and resilient Markets set a constructive baseline into 4Q; Q4 NII uptick adds second engine to EPS .
Mix quality improving: Higher-margin back-office/private market wins and elevated ETF/gold flows enhance durability of fee growth and margins .
Positive operating leverage durability: Expense growth raised to support demand and tech, but productivity/AI programs are offsetting, keeping leverage positive .
Capital strength and returns: CET1 up to 11.3% and payout near 80% with repurchases accelerating; dividend step-up to $0.84 provides yield support .
4Q setup: Expect slight fee normalization (other fee) but NII rise; elevated October volatility likely aids FX; net positive skew to run-rate earnings .
Medium-term: Balance sheet optimization and reinvestment, CRD SaaS conversion, Wealth Services (Apex) and digital assets platform create additional monetization vectors into 2026 .

Citations:

3Q25 8-K press release and addendum:
3Q25 earnings call transcript:
2Q25 8-K press release and addendum:
1Q25 8-K press release and addendum:

Note on estimates: Items marked with * are from S&P Global (no document citations).