With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

America's Most Innovative Companies

AI is a major force shaping this year’s list—but it’s far from the only story.

World's Most Admired Companies

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

The 300 companies on this year’s list brought in over $12.6 trillion in revenue for the latest 12 months, with the median revenue figure at $22 billion.

Leaders in all industries rely more than ever on Big Tech—and appreciate the giants that deliver, at scale, without drama.

Industries included in the sector are banks, insurance, and real estate companies.

Fortune Sector Leaders: Financials

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The 26th edition of the list shows how much esteem Big Tech giants command among other business leaders.

The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

Just as it dominates our economy, Big Tech now dominates Fortune’s annual ranking of corporate reputation.

Fortune collaborated with the Diligent Institute to rank the most innovative boards of directors among S&P 500.

Modern Board 2022-State Street

State Street scored high on board expertise, board size, and its CEO succession plan.   
 
State Street’s board includes six former CEOs and two active CEOs—including its own, Ronald O’Hanley; and William Meaney, the president and CEO of Iron Mountain. DonnaLee DeMaio, former president and CEO of MetLife Bank, is also a board member. 
 
As one of the “Big Three” asset managers along with BlackRock and Vanguard, State Street (which has $3.9 trillion in assets under management) has been using its position to advocate for stronger diversity and sustainability measures across corporate America. <a href="https://www.gibsondunn.com/blackrock-vanguard-and-state-street-update-corporate-governance-and-esg-policies-and-priorities-for-2022/">In 2022</a>, all of the Big Three have raised the bar for the companies in which they hold stakes, advocating for disclosures from “carbon intensive” sectors and increased scrutiny over climate-based proposals; they have also said they may vote against or withhold votes from companies that do not have at least one woman on the board or that fail to disclose demographic data. State Street has specifically said it might vote against an independent board director if a company fails to provide sufficient disclosure or progress on such issues.

Fortune Modern Board 25

This year’s Fortune 500 marks the 68th running of the list.

After a year in which humanity leaned more heavily than ever on tech giants, see which companies topped Fortune's ranking of corporate reputation.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-252-State Street

Founded in 1792, the banking company is one of the oldest operating banks in the U.S. as well as one of the largest custodian banks worldwide.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-244-State-Street-Corp

The financial holding company provides investment servicing and asset management worldwide and is headquartered in Boston.

Here are the World's Most Admired Companies for 2019 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 65th running of the list.

Here are the World's Most Admired Companies for 2018 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 64th running of the list.

Here are the World's Most Admired Companies for 2017 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 63rd running of the list.

Here are the World's Most Admired Companies for 2016 as ranked in their industries. See who made the list.

This year's Fortune 500 marks the 62nd running of the list.

Business insiders have spoken: Asked which companies they most admire, more than 4,100 executives, directors, and analysts chose these top 50 All-Stars.

This year's Fortune 500 marks the 61st running of the list. Wal-Mart claims the top spot again. See who made the list.

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Sector

Industry

Current All-Star Rank

Previous All-Star Rank

Industry Rank

Previous Industry Rank

Overall Score

Innovation

People Management

Use of Corporate Assets

Social Responsibility

Quality of Management

Financial Soundness

Long-Term Investment Value

Quality of Products/Services

Global Competitiveness

Strongest Dimension

Years on list

Previous rank

State

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

One of the oldest financial institutions in the U.S., Boston-based State Street offers a diverse array of products across its asset management and banking divisions. The company helped pioneer exchange-traded products, including launching the first ETF in 1993, and counts as one of the Big Three index fund managers alongside Vanguard and BlackRock. State Street also serves as one of the top asset custodians in the U.S., including expanding into crypto assets such as Bitcoin. State Street continues to launch new investment vehicles. In 2025 the company partnered with private equity giant Apollo to create a private credit ETF available to retail investors. State Street is the second-oldest continuously operating bank in the U.S., with its predecessor receiving a charter from Massachusetts Gov. John Hancock in 1792.

Q2 2026

Q1 2026

Q4 2025

Q3 2025

Q2 2025

Q1 2025

State Street (STT): Company Profile, Stock Price, News, Rankings

legacy

State Street

state street

Good morning, and welcome to State Street Corporation's first quarter 2026 earnings conference call and webcast. Today's call will be hosted by Elizabeth Lynn, Head of Investor Relations at State Street.

We ask that you please hold all questions until the completion of the formal remarks, at which time you'll be given instructions for the question and answer session. Today's discussion is being broadcast live on State Street's website at investors.statestreet.com. This conference call is also being recorded for replay.

State Street's conference call is copyrighted and all rights are reserved. This call may not be recorded for rebroadcast or distribution in whole or in part without the expressed written authorization from State Street Corporation. The only authorized broadcast of this call will be housed on the State Street website. Now I'd like to hand the call over to Elizabeth Lynn.

Good morning, and thank you all for joining us. On our call today, our CEO, Ron O'Hanley, will speak first, then John Woods, our CFO, will take you through our first quarter 2026 earnings presentation, which is available for download in the investor relations section of our website, investors.statestreet.com.

Afterward, we'll be happy to take questions. Before we get started, I'd like to remind you that today's presentation will include results presented on a basis that excludes or adjusts one or more items from GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP or regulatory measure are available in the earnings release addendum. In addition, today's call will contain forward-looking statements.

Actual results may differ materially from those statements due to a variety of important factors, such as those referenced in our discussion today and in our SEC filings, including the risk factor section in our Form 10-K. Our forward-looking statements speak only as of today, and we disclaim any obligation to update them, even if our views change. With that, let me turn it over to Ron.

Thank you, Liz. Good morning, everyone, and thank you for joining us. I'll begin with a few broader observations before John walks you through our financial results in more detail. Reflecting on the first quarter operating environment for a moment, several factors shaped investor sentiment in Q1, including the Iran war, divided views on the long-term impacts of artificial intelligence, and rising concerns on credit quality in certain parts of the financial system.

Against this geopolitical and macroeconomic backdrop, we remain firmly focused on serving as an essential long-term partner to our clients and helping to deliver better outcomes for the world's investors and the people they serve.

We continue to execute effectively on our strategy, supported by our distinctive capabilities, deep operational strengths, and a conservatively positioned balance sheet. That strategic positioning allowed us to deliver strong growth underpinned by continued financial and strategic progress during the first quarter.

Our results in the first quarter also underscore the inherent strength and diversification of our business model, which allows us to successfully navigate times of uncertainty and heightened market volatility as we saw in Q1, with both FX trading and NII contributing meaningfully to our year-over-year financial performance.

The scale, capabilities, and leading market positions of our core businesses, working together as One State Street, provide balance across varying market environments, reinforce the value of our platform for clients, and accrete value for our shareholders. Slide 2 of our investor presentation outlines our first quarter highlights, excluding notable items, which John will address shortly.

We had a strong start to 2026, with broad-based positive year-over-year revenue performance across the franchise. Reported earnings per share increased 22%, while excluding notable items, EPS grew a very strong 39% year-over-year, supported by record quarterly fee revenue, NII, and total revenue.

Importantly, substantial positive operating leverage in the first quarter drove another quarter of year-over-year pre-tax margin expansion. Quarter after quarter, the proof points continue to demonstrate that our strategy is delivering consistent, durable improvements in financial performance, with Q1 marking our ninth consecutive quarter of year-over-year positive operating leverage excluding notable items.

Stepping back from the quarter for a moment, I want to highlight some of the many growth opportunities we are realizing and see ahead at State Street. Through disciplined business investments and focused execution against a clear set of strategic priorities, we believe we are well positioned to continue to accelerate growth and deliver substantial and sustainable returns for our shareholders.

We are drawing on deep, broad-based, technology-driven innovation and delivering digital platforms, compelling AI tools and agentics, and client solutions. Together, these capabilities help our clients succeed in a constantly evolving market while strategically pivoting State Street to faster-growing segments of the industry.

In digital, we are focused on building the market infrastructure clients need to bridge seamlessly between traditional and digital finance. Following the recent launch of our digital asset platform, we are executing against a clear and comprehensive product roadmap that includes tokenization of assets, funds and cash for institutional investors.

These capabilities are designed to drive greater efficiency, enhance liquidity, and support new avenues of growth for markets, our clients, and for State Street. We are well advanced with clients to support their launch of tokenized fund strategies this year.

Furthermore, State Street is deeply engaged in a number of digital asset-related industry initiatives, including DTCC's tokenization efforts, as well as Finality's work to create an ecosystem of central bank-connected blockchain-based payment systems.

These initiatives are key to the development of digital markets and consistent with our track record as a critical market infrastructure provider and standard setter. Across alternatives, including private markets and hedge funds, we continue to see compelling long-term growth potential as the segment matures, with clients leveraging State Street to bring innovative solutions to markets.

Our leadership positions across both investment servicing and investment management position us well to capture opportunities as we broaden access and simplify operations for clients and our clients' clients.

In wealth services, we are investing in leveraging Charles River's capabilities alongside our strategic partnership with Apex Fintech Solutions to build a differentiated, fully digital, and globally scalable wealth custody and clearing solution. This positions us to serve wealth advisors and self-directed wealth platforms and unlock a new avenue for growth that leverages our strength across investment servicing and investment management.

Finally, at State Street Investment Management, our strong track record of innovation, differentiated solutions, and scaled franchises in areas such as ETFs, cash, and retirement, to name just a few, create multiple avenues for growth.

An illustration of our progress is the way we provide barbelled investment exposure at scale to serve distinct client needs. At one end, SPLG, our low-cost U.S. S&P 500 ETF, is gaining strong traction in retail and wealth channels.

It ranked as the number one asset-gathering ETF globally in the first quarter, with $27 billion of inflows in that fund alone. At the other end, SPY continues to anchor institutional usage as the market's liquidity benchmark, with nearly $4 trillion of notional value traded in the quarter, representing roughly 17% of total U.S.-listed ETF volume.

Together, this underscores the strength, breadth, and flexibility of our platform across client segments and our abilities to successfully extend from our leading position in SPY to other high-growth ETF segments.

Our scaled franchises within investment management also create a competitive advantage and will enable us to capitalize on several important global trends, including the shift from savings to investment, the move globally towards funded retirement systems, the expansion of digital assets, and the continued democratization of investing.

For example, in digital, we are preparing to launch the State Street Galaxy Onchain Liquidity Sweep Fund, a tokenized private liquidity fund designed to support 24/7 on-chain liquidity for institutional investors. Together, these strategic initiatives underscore the broad range of opportunities ahead as we focus on driving near- and long-term growth, enhancing client capabilities, and strengthening our platform.

At the same time, the next phase of our operating model transformation will strengthen our ability to deliver sustainable growth and long-term shareholder value. We are scaling AI-enabled capabilities, embedding more agile ways of working across the organization, and continuing to modernize our technology with a continued emphasis on operational excellence, consistent execution of our strategy, and delivering for our clients.

We are strengthening and improving our core end-to-end capabilities and technology through the deployment of our agentic platform and AI foundry to scale and accelerate AI in high-leverage areas, while also advancing capabilities in areas such as State Street Alpha and Charles River Development.

These actions position us to operate more effectively, partner more deeply with clients, and help drive the next phase of industry evolution. To conclude, we are pleased with our strong start to 2026, while recognizing that our potential is even greater.

We see broad-based strength across the franchise, and our first quarter results reinforce that our strategy is translating into consistent and durable improvements in financial performance. At the same time, we continue to transform across the platform and accelerate the deployment of AI agents, which holds significant opportunity for State Street and our clients, given the investment operational and technology intensity of what we do.

In July, we will provide a detailed update on our strategic growth and transformation initiatives and how these position us to drive stronger performance over the medium term. We are encouraged by our progress, mindful of the environment, and confident in our ability to continue delivering as we move through the year. With that, I'll turn it over to John to walk you through the first quarter in more detail.

Thank you, Ron, and good morning, everyone. We had an excellent start to 2026 with broad-based year-over-year growth across the franchise, driving record quarterly revenues and over 600 basis points of positive operating leverage in the quarter, excluding notable items.

These results reflect disciplined execution alongside ongoing investment across our portfolio of strategic growth areas. Now, let me dive into the details of the quarter, excluding notable items, starting on slide three. In the first quarter, total revenue increased 16% year-over-year to a record $3.8 billion.

Fee revenue of $3 billion increased 15% year-over-year, driven by strong performance across investment management, investment services, and markets. Net interest income of $835 million increased 17% year-over-year, primarily reflecting continued net interest margin expansion.

Expenses of $2.7 billion increased 9% year-over-year, driven by higher revenue, strategic investments, and the impact of currency translation, which was a headwind to expenses but a benefit to revenues. Taken together, this performance drove a significant improvement in profitability with 400 basis points of pre-tax margin expansion and a roughly four percentage point increase in ROTCE to 20%.

Before moving on, let me briefly touch on notable items recognized in the quarter. Notable items totaled $130 million pre-tax in the first quarter, or $0.35 per share after tax, reflecting repositioning charges and the re-scoping of a middle office client contract.

Turning to slide four, servicing fees in the quarter increased 11% year-over-year to $1.4 billion, reflecting higher average market levels, the benefit of currency translation, and continued organic growth supported by net client asset activity, flows, and new business.

AUCA ended the quarter at a record $54.5 trillion, up 17% year-over-year, primarily reflecting higher period and market levels, positive client flows, and net new business. First quarter servicing fee sales were $56 million. These were well-distributed across regions and aligned with our strategic focus areas, particularly back office services and alternatives clients. .

Looking ahead, we continue to target $350 million-$400 million of sales in 2026. The pipeline remains healthy, with broad geographic and customer segment representation, including APAC, EMEA, emerging markets, and alternatives.

Additionally, we reported one new Alpha mandate win during the quarter, highlighting continued client engagement with our integrated front-to-back platform. Moving now to slide five. Management fees increased 23% year-over-year to $724 million in the first quarter, driven by higher average market levels and net inflows.

Assets under management increased 20% year-over-year to $5.6 trillion, reflecting higher period and market levels and continued client inflows. Net inflows totaled $49 billion for the quarter, led by strength across index strategies and solutions, including ETFs in fixed income, as well as our cash franchise.

Within ETFs, net inflows were $25 billion, driven by strong flows and market share gains in our U.S. low-cost suite. As Ron noted, SPLG, our low-cost S&P 500 ETF, was the largest asset-gathering ETF globally during the quarter.

We also continued to advance product innovation and strategic partnerships, launching 57 new products and solutions during the quarter that are creating new avenues for growth. As a signpost of that progress, our State Street Bridgewater All Weather ETF surpassed $1 billion in assets under management during the quarter.

We were also pleased to see our investment-grade public and private credit ETF, developed in partnership with Apollo Global Management, reached a new high watermark during Q1 with AUM of over $800 million. Turning to slide 6. Markets remains one of the key pillars of our One State Street strategy.

It plays a key role in linking our investment services and investment management platforms, strengthening the connectivity across the firm, and enabling more cohesive client-led solutions.

FX trading revenue increased 29% year-over-year to $435 million in the first quarter, reflecting a strong 25% increase in client trading volumes, which reached a new record level as we supported clients amid a dynamic market environment. Securities finance revenue increased 2% year-over-year, supported by growth in client lending balances. Moving on to slide 7.

Software services revenue increased 7% year-over-year in the first quarter, driven primarily by higher professional services and software and data revenues, reflecting continued SaaS go-lives and platform adoption across our client base. Software business momentum is also reflected in our annual recurring revenue, which increased 12% year-over-year, and our revenue backlog, which increased 11%.

Turning now to slide 8. First quarter net interest income of $835 million increased 17% year-over-year, primarily reflecting a 16 basis point expansion in net interest margin to 116 basis points and average interest-earning asset growth of 1%.

The year-over-year increase in NIM reflected improvements in funding mix, continued benefits from investment portfolio repricing, and runoff from terminated hedges, partially offset by lower average market rates. Growth in interest-earning assets was driven primarily by higher client deposits, partially offset by a reduction in short-term wholesale funding.

Turning to slide nine. Expenses were up 9% year-over-year in the first quarter, excluding notable items. Currency translation accounted for approximately two percentage points of the increase.

Of the remaining seven percentage points, approximately five percentage points reflected higher revenue-related costs, with a remaining balance of two percentage points driven by continued strategic investments and run-the-bank expenses net of productivity savings.

Moving now to capital and liquidity on slide 10. Our capital levels remain strong, enabling disciplined capital deployment aligned with our strategic priorities. At quarter end, our standardized CET1 ratio was 10.6%, down approximately 100 basis points from the prior quarter.

The decrease primarily reflects higher risk-weighted assets associated with a normalization of RWA in our markets business from episodically low levels in the prior quarter, along with the impact of U.S. dollar appreciation in March and, to a lesser extent, equity market appreciation on the final day of the quarter.

Turning to capital return. In the first quarter, we repurchased $400 million in common shares and declared $233 million in common stock dividends, resulting in total capital return of $633 million, equivalent to a payout ratio of 90%.

Before moving on, I call your attention to a new slide 13 in the appendix on our NDFI loan portfolio. This lending remains disciplined and client-focused, primarily supporting investment services clients. In addition, this is a highly collateralized and diversified portfolio that has performed resiliently across cycles and continues to support durable client relationships.

Let's turn to our full-year outlook, which as a reminder, excludes notable items. We continue to assume that global equity markets are flat this year on a point-to-point basis from the end of 2025, while remaining mindful of the potential for variability in the operating environment.

Against this backdrop, we now expect fee revenue growth in the 7%-9% range, an increase from our previous outlook of 4%-6%, reflecting a stronger than expected Q1, along with continued organic growth and solid momentum across the franchise. Turning to net interest income.

Following our strong first quarter performance, we now expect NII growth in the 8%-10% range, representing an improvement from our previous outlook for low double-digit growth. We currently expect expenses to increase by 5%-6%, up from our prior 3%-4% outlook, primarily reflecting higher revenue-related costs.

Finally, we continue to expect an effective tax rate of approximately 22% for the full year and a total payout ratio of roughly 80%, subject to board approval and other factors. With that operator, we can now open the call for questions.

At this time, we will open the floor for questions. If you would like to ask a question, please press star five on your telephone keypad. You may remove yourself at any time by pressing star five again.

Please note you'll be allowed one question and one related follow-up question. Again, that's star five to ask a question. We'll pause for just a moment. Our first question will come from Glenn Schorr with Evercore. Your line is open. Please go ahead.

Hi. Thanks very much. First one is, I'm happy about the, obviously, the pickup in NII, and I think the NIM expansion during the quarter was great. I find it interesting that average interest earning assets were only up 1%. I'm just interested if you could talk to the whole tug-of-war dynamic of better NIM, but not a ton of earning asset growth, and does any of that change within your updated guidance? Thank you.

Yeah. Thanks for the question, Glenn. I would say that we're very pleased to see our net interest margin progress, and as mentioned, much of that is coming on the funding mix side of the balance sheet.

As we see growth in the deposit levels, which surged in the first quarter, we are continuing the plans from the last couple of quarters of reducing our short-term wholesale funding. That's higher cost, and we just find that to be an appropriate rotation to higher quality funding on the funding mix side.

Interest earning assets will be less of the story. 1Q was driven almost entirely by net interest margin. I think that's a similar story for our guide for 2026. That range that you articulated, or that we talked about earlier is almost entirely driven by net interest margin as well. Interest earning assets are really going to be something we keep an eye on, but not really what's going to drive the net interest income in 2026.

My apologies. Our next question will come from Alexander Blostein from Goldman Sachs. Your line is now open. Please go ahead.

Hi. Good morning. Thank you for the question. I was hoping we could spend a minute on the goals you guys are trying to achieve from this next chapter of State Street's transformation. I know you alluded to the fact that you'll provide a lot more detail in July, but since you kind of cracked that door open, I was hoping you can give us the kind of overarching goals you're trying to achieve.

Is that faster revenue growth? Is it better profitability or both? I believe your last kind of official medium-term pre-tax margin target is somewhere in the low 30s%. Is the goal to effectively get that into a higher range over time or any other way you can give us some high level framework would be helpful.

Yeah, I'll start off here. I think, as you may have heard me comment on this in prior sessions. I think that we had a goal to get to 30% pre-tax margin, which we've delivered on at the end of 2025. Again, here in early 2026, you're seeing us meet that threshold. The guide that we delivered today actually would, if you play that through, implies in the neighborhood of 31% pre-tax margin.

We think we're moving the platform forward from a profitability standpoint. I think the second big driver will be growth, right? What you'll probably hear from us in July is an updated view about what we think this platform can deliver over the medium term from a profitability standpoint. We feel like there are extremely attractive opportunities to grow profitability metrics, pre-tax margin, and other metrics.

We also believe that we have very unique opportunities to grow this platform overall from a revenue standpoint. I think you'll see some commentary on both of those things. I think the building blocks of all of that will be the increasing business execution discipline that is emblematic of what you're seeing in organic growth across our fee line items.

We'll talk about that in terms of what that can deliver for us. I think the other two big categories I'd highlight is we also have a distinctive portfolio of strategic initiatives that would provide some unique, outsized ability to derive benefits into the platform over the medium term. Then lastly, transformation. Within transformation, there are several pillars of that we'll talk through.

We'll talk through our ongoing operating model transformation, kind of embedding agile ways of working across the entire enterprise and really solidifying a product platform approach to delivering our services to our clients.

A second pillar will be the ongoing modernization of our technology infrastructure, which we're excited about. Lastly, all things AI, where we've continued to make investments and make progress. We'll wrap all of those building blocks together in what we believe they will contribute over the medium term in our commentary that you'll hear from us about in July.

That sounds great. Looking forward to that. For my follow-up, I wanted to ask you guys a question around ETFs, both in terms of the growth and expense perspective. Obviously, there's been an increased focus on distribution platform fees that may come online towards the end of the year.

Schwab obviously the one discussing that. Any early thoughts on the implications that might have on both sort of ETF growth for State Street and the incremental expenses that you might be willing to incur on the back of that, if you were to say, on the Schwab platform?

Yeah. Alex, it's Ron. We're very familiar with what some of the platforms are doing. Most of these platforms are close partners. In terms of our long-term strategy and our long-term performance, we're not concerned about this.

If you've been following what we've done in ETFs, we have continued to broaden that platform, moving from where we started as an institutional provider to not only maintaining that institutional leadership, but growing both in terms of client segments in the low-cost wealth channel, but also in channels outside the U.S. You'll see pockets of the kinds of things that you're talking about, but we don't see it as any kind of a substantial risk or headwind to our overall ETF business.

Thank you. Our next question will come from Ken Usdin with Autonomous Research. Your line is now open. Please go ahead.

Hi. Thanks. Good morning. This quarter, you obviously showed the ability to put up meaningful operating leverage and also have a higher cost growth rate to even deliver that. I'm just wondering, were you able to pull forward some spending, or was it mostly revenue-related costs?

As you look forward to the new 5%-6% cost guidance, I'm just wondering how you're balancing the expected efficiencies that you're getting, and then how much FX translation you're still including in the full year guide after the hurt that it was in the first quarter. Thanks a lot.

Yeah. Maybe just a couple of comments about that. I think what you saw in the first quarter, there was about 2% or so impact from a currency perspective. When you take that 9%, you're really starting with 7% ex-currency. That 7% is predominantly revenue related.

Five percentage points of that would be revenue related, which leaves you a net 2%. Within that 2%, we've got run the bank costs and our strategic investments. Those are in the neighborhood of, if you break that out, call it 6% of spend, running the bank and really finding ways to invest in exciting initiatives that we're feeling good about.

We fund a lot of that through productivity. That's the net 4% of productivity that we delivered in the first quarter. We're going to continue to monitor our productivity trajectory, and the same storyline holds with the 5%-6%, the incremental growth.

That you're seeing majority of that is revenue related, and then there'll be other costs that we'll consider continuing to fund strategic investments and kind of partially offset by productivity. I think the storyline for 1Q holds for the full year as well when you apply it to the 5%-6% range.

Okay. Thanks, John. As a follow-up, just with the strong NII and then the strong FX trading, can you just help us understand, do you expect that to run rate or do you expect a natural just kind of coming off a little bit given the types of volatility and the environment that we saw in the first quarter? Thanks, John.

Yeah. Sure thing. I'd say I'll start with FX. We've had a strong quarter in FX trading. I think two things have to come together to basically deliver on something like that. First, you have to have the franchise in place, to be able to take advantage of these opportunities when they arise and be there for your clients.

The first quarter was one of those times. I'd say that the investments in client acquisition, product extensions, and geographic expansion in the markets business has served us well in 1Q.

You put that and you combine that with some elevated volatility, I would call it good volatility, where liquidity is still good. There's a lot of turnover given volatility. Those combine together to deliver our first quarter. Very strategic and opportunistic and feel good about that.

I would say that those conditions for the rest of the year, when you think about our fee guide of 7%-9%, those conditions we think moderate gradually throughout the year, and that's built into the 7%-9%. We're not depending upon those highly favorable conditions in the first quarter being maintained for the rest of the year in order to deliver the 7%-9%.

That's how I would just kind of articulate the FX trading side of things. When it comes to net interest income, the original guide was up low single digits, so now it's in an 8%-10% range. We're seeing some very solid tailwinds there. We originally had a view that maybe our net interest margin would be somewhere in the 100-110 basis point range.

I think you could look for 2026, you could see a net interest margin in the 110-115 basis points range, which comes off slightly from the first quarter, where we're at 116. That'll give you a sense of the trajectory. I think net interest margin is the main driver in the story of this. With funding mix being one of the larger tailwinds, as I mentioned a little earlier.

Overall deposits will be up, basically helping that funding mix. I think we said before, maybe $250 billion of deposits. Probably going to be in the range of $250 billion-$260 billion as we play out the rest of the year.

We'll look to maybe pay down some higher cost debt with that and continue to optimize the funding mix to drive that net interest margin. All of those building blocks are incorporated into the NII guide of 8%-10%.

Ken, it's Ron. I just wanted to underscore a point that John made on FX, which is that we've been talking to you for years now about the investments we've made in terms of expanding client volumes to really make sure that we were serving as much of our investment servicing clients as possible.

We've done that through a variety of ways. Some of it has been expanding geographic capabilities. Most of it has actually been expanding the ways in which we can meet our clients technologically and how they can trade with us.

We did that at a time when there wasn't a lot of volatility in the market, preparing for the moment when volatility and normal volatility would return. For us, what we're seeing the benefits of are those past and ongoing investments into really meeting our clients where they are in as many ways as they want to trade with us.

State Street (STT) Q1 2026 Earnings Call Transcript

Company Participants