State Street delivered a solid start to 2025 with meaningful growth in fee-based businesses, margin expansion, and a disciplined expense posture. In Q1 2025, total revenue stood at $3.284 billion, up 4.65% year over year on an overall basis, with fee revenue increasing 6% YoY and operating leverage contributing to a pre-tax margin of 30% on a basis excluding seasonal items. Diluted EPS rose to $2.04 (GAAP $2.07), up about 21% YoY excluding notable items, reflecting stronger fee-driven growth and scalable cost discipline. Management highlighted robust AUCA and AUM growth (AUCA +6% YoY; AUM +9% YoY) and a pipeline of new servicing fee revenue wins, supported by a strategy to prioritize back-office, faster-to-revenue mandates that underpin the 350–400 million target for servicing fee wins this year.
The quarter showcased continued momentum across the investment management franchise, with management fees up 10% YoY and a resilient, well-capitalized balance sheet. Notable operating trends included stronger FX trading and securities finance revenues (FX +9% YoY; securities finance +19% YoY) and a ramp in software and processing fees (+9% YoY), underpinned by Charles River and expanding annual recurring revenue (ARR ~ $373 million, up ~15%). While net interest income was relatively flat at $714 million, this reflected higher yields offset by deposit mix and rate dynamics, consistent with a strategy of maintaining liquidity strength and prudent balance sheet management. Looking ahead, the firm reaffirmed its full-year outlook: mid-single-digit fee revenue growth (3–5%), NII roughly flat with a low-single-digit bias, and expense growth of about 2–3%, supported by ~$500 million of productivity savings and a plan to deliver positive fee and total operating leverage. The company also reiterated its intention to return roughly 80% of earnings to shareholders. The combination of Alpha-enabled sales momentum, low-cost ETF leadership, geographic diversification, and a disciplined capital framework positions State Street to navigate ongoing macro uncertainty while pursuing longer-term market share gains, particularly in back-office and data-enabled services.