State Street Corporation

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 Lin, 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.statestreets.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 Lind.

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 two 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. For 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 Financial 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. And 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 barbell investment exposure at scale to serve distinct client needs. At one end, SPYM, 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 on-chain 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.