State Street reported Q4 2024 revenue of $3.40 billion and net income of $783 million, translating to basic EPS of $2.44. The quarter reflected a sharp year-over-year revenue decline (YoY revenue down ~31.4%), but a strong year-over-year improvement in earnings per share (EPS up ~336%) driven by a more favorable mix, higher noninterest income, and operations leverage in the fee-based businesses. Net income margin stood at approximately 23.0% for the period, with a pre-tax margin near 28.2% and an effective tax rate around 18.4%. Operating cash flow was negative at about $(7.43) billion driven largely by working capital movements and investing activity, with free cash flow of approximately $(7.68) billion. Despite a negative cash flow from operations in the quarter, State Street maintained a robust liquidity position with cash and cash equivalents of about $116.1 billion and total cash+short-term investments of roughly $134.6 billion, supported by a total asset base of $353.2 billion and net debt that remains negative by about $(79.3) billion, underscoring substantial liquidity versus leverage.
Management emphasized a deliberate shift toward fee-based growth, led by Alpha and the back-office/core servicing ecosystem, and a continued expansion of SSGA’s product suite and distribution advantages. The company reiterated a 2025 organic growth target for servicing fees in the mid-single-digit range (3%–5% net), implying roughly 5%–7% gross growth with FX headwinds and a 1% drag from previously disclosed client impacts. Management also highlighted ongoing private markets lending strength as a key driver of loan growth in 2025, supported by a high-quality, credit-focused book anchored to private-market clients. Importantly, the company signaled a long-run growth framework of 5%–7% gross organic growth in fee-based businesses with 3%–5% net growth, assuming a favorable but gradual rate environment and continued execution of their sales force transformation. The outlook reflects a balance between deposit-franchise expansion, rate sensitivity in non-US currencies, and a constructive trajectory for Alpha-enabled client wins and SSGA-driven assets under custody/management. Investors should monitor NII sensitivity to non-US rate cuts, deposit betas by currency, private markets liquidity, Alpha project adoption, and AI-enabled productivity gains as potential accelerators of efficiency and client service quality.