STT US S&P 500Russell 1000 Earnings call
State Street Corporation (STT) · Q2 2026 results and valuation
Share price: $174.17 · 2026-11-11
State Street Corporation provides financial services, including investment servicing, markets and financing solutions, and investment management to institutional investors. The company serves clients such as asset managers, insurance companies, and central banks across more than 100 geographic markets worldwide. Source: 10-K annual report (2026-02-19)
Results Q2 2026 vs Q1 2026 · previous quarter · published 16 Jul 2026 and 17 Apr 2026
Net income up 41.9% on the previous quarter. Management sounded very upbeat, though noticeably less so answering analysts.
1 · Numbers
+41.9%
Net income vs Q1 2026
Outlook given
Net income 1.08B vs 764.0M
Revenue +6.6%
Against the same quarter last year (Q2 2025) it is +56.4%, so it is not just seasonal.
2 · How management spoke
Very upbeat
Among the most upbeat of all company calls
Answers to analysts: typical, but clearly less so than the script.
Last call it was different: script and answers matched.
3 · What stood out
State Street Corporation raised its fee revenue growth outlook from 7% to 9% to 12% to 13% due to organic growth and healthy client activity.
Valuation
Is State Street Corporation undervalued?
Reverse DCF on net income from the last full fiscal year (no meaningful free cash flow: a bank, insurer or a year of negative cash flow) (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 4.7% growth a year (3-year revenue growth), the model's fair value is $158.68 a share — the stock trades 10% above it. Today's price assumes 6.0% growth a year.
Current price
$174.17
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+6.0% for 10 yrs
Fair value / share
$158.68
Buy below
$119.01
Price vs fair value
Overvalued 10%
Price vs buy-below price
Overvalued 46%
Management expects
Revenue +12.5% · from the Q2 2026 report: “STT raised its fee revenue growth outlook from 7% to 9% to 12% to 13% due to organic growth across servicing and management fees and healthy client activity.”
A guidance figure for revenue, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
STT raised its fee revenue growth outlook from 7% to 9% to 12% to 13% due to organic growth across servicing and management fees and healthy client activity.
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Figure
Total revenue reached a record $4 billion, up 17% year over year, driven by a 16% increase in fee revenue and an 18% increase in net interest income.
Source quote
“Total revenue increased 17% year over year to a record $4 billion Fee revenue of $3.2 billion increased 16% year over year, reflecting strong performance across investment services investment management, and markets while net interest income of $860 million increased 18% driven by a 17 basis point increase in net interest margin to 113 basis points.”
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Figure
Record servicing, management, and FX trading revenues, combined with record NII, drove total quarterly revenue up 17% year over year to an all-time high.
Source quote
“Including record servicing, management, and FX trading revenues, together with record NII. Driving total quarterly revenue up 17% year over year to an all time high.”
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Guidance
The company expects 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.
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Guidance
STT continues to target a total payout ratio of approximately 80% to align with its stated priorities.
4 more
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Guidance
The company projects its outlook for both the first half of the year and the overall 2026 period to be around 32%.
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Figure
Assets under management reached a record $6.3 trillion, up 23% year over year, due to higher period end market levels and positive net flows.
Source quote
“Assets under management ended the quarter at a record $6.3 trillion up 23% year over year. Supported by higher period end market levels and positive net flows.”
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Figure
Excluding notable items, pretax margin expanded by approximately 300 basis points and return on tangible common equity increased to approximately 20% over the past two years.
Source quote
“Excluding notable items, and over the past 2 years, through the end of 25, pretax margin expanded by approximately 300 basis points and return on tangible common equity increased to approximately 20%.”
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Figure
Investment management is expected to provide approximately 200 basis points of enterprise margin expansion over the medium term to support organic growth and operating leverage.
Source quote
“Taken together, these opportunities support our confidence in delivering sustained organic growth, operating leverage, and approximately 200 basis points of enterprise margin expansion from investment management over the medium term.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q2 2026. Ring: Q1 2026.
Management sounded noticeably less positive answering analysts than in its prepared script — one of the biggest drops of any company call. Scripts are polished in advance; a drop under questioning often marks the topics analysts pressed on, so the answers deserve a closer read than the script.
Sentences that drove the tone
“Our key growth priorities include extending our ETF servicing leadership broadening our reach across key international markets, expanding adoption of our differentiated alpha front to back capabilities, and capturing growth...”
“The momentum we have built in recent years has fundamentally repositioned State Street to deliver sustained growth continued margin expansion, and stronger returns over the medium term.”
“These results drove another quarter of improved profitability, with pretax margin expanding 470 basis points year over year to 34% and ROTCE increasing over 6 percentage points to approximately 26%.”
Full figures
USD · SEC EDGAR XBRL (10-Q, period end 2026-06-30)
| Metric | Q2 2026period end 2026-06-30 | Q1 2026period end 2026-03-31 | Change | Q2 2025 | YoY |
|---|---|---|---|---|---|
| Revenue | 4.05B | 3.80B | +6.6% | 3.45B | +17.4% |
| Operating income | 1.39B | 969.0M | +43.3% | 889.0M | +56.2% |
| Net income | 1.08B | 764.0M | +41.9% | 693.0M | +56.4% |
| EPS | 3.65 | 2.49 | +46.6% | 2.17 | +68.2% |
| P/E today 13.5 | 15.0 | 12.8 | +2.2 | 11.9 | +3.1 |
Topics
Most discussed now
- With a clear path to sustained organic revenue growth, and positive operating leverage, State Street believes it is well positioned to...
- It is disproportionately being driven by this operating model transformation, which is pretty tangible.
- New I am not sure you can fully unpack how much is separately driven by the agentic aspects versus there are...
- Together, these initiatives reinforce State Street's confidence in its ability to deliver sustained growth expand margins and returns and…
- Driven by disciplined execution deep client engagement and continued momentum across State Street's businesses.
Faded since Q1 2026
- Dropped On private markets servicing, elevated redemption requests can have a marginal impact, but it is limited.
- Dropped You will see careful examination of semi-liquid vehicles and expectations for retail and affluent investors, but that is a relatively...
- Dropped It is within the middle office and is an insource versus outsource decision by the client.
- Dropped State Street is not seeing one of them developing into a true scaled player to compete in its pocket of the...
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Other events · SEC 8-K
- Results of operations; Director or officer change; Regulation FD disclosure · SEC 8-K
- Director or officer change · SEC 8-K
State Street Corporation announced that Mostapha Tahiri became President of State Street Alpha and Ann Fogarty was appointed Enterprise Chief Operating Officer with a target incentive compensation of $5,650,000.
- Other events · SEC 8-K
On August 12, 2026, State Street Corporation issued and sold 500,000 depositary shares representing a 1/100th ownership interest in its Series L Preferred Stock.
- Change to shareholder rights; Articles or bylaws amended; Other events · SEC 8-K
State Street Corporation amended its Articles of Organization and entered into an underwriting agreement to issue 500,000 depositary shares of Preferred Stock at $1,000 per share, with expected net proceeds of approximately $495.7 million.
- Other events · SEC 8-K
- Results of operations; Regulation FD disclosure · SEC 8-K
State Street Corporation issued its second-quarter 2026 results of operations and a related slide presentation on July 16, 2026.
- Shareholder vote results · SEC 8-K · routine
Balance sheet & ownership
From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-19.
Cash & runway
Cash & equivalents
$4.29B
2026-06-30
Implied runway
—
operating cash flow positive over the TTM window
Dilution
weighted-average basic shares, per quarter. Change: -3.5% YoY, -0.8% QoQ.
| Quarter | Shares |
|---|---|
| Q3 2024 | 297.4M |
| Q1 2025 | 288.6M |
| Q2 2025 | 286.3M |
| Q3 2025 | 283.4M |
| Q1 2026 | 278.4M |
| Q2 2026 | 276.1M |
Shares outstanding: 274.7M (2026-07-28)
Insider transactions
Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 69 filings; 50 filings parsed.
Sold by insiders
127.6K shares
$19.1M · 15 transactions
Bought by insiders
2.5K shares
$312.5K · 1 transactions
Net direction
net selling
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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by year end
deliver a tokenized fund servicing capability
Source quote
“In 2Q, we announced our intention to deliver a tokenized fund servicing capability by year end subject to regulatory approval.”
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later this year
expected to launch as tokenized money market funds
Source quote
“Following a competitive process, a leading European asset manager selected State Street to serve to serve as tokenized money market funds expected to launch later this year.”
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beginning in the third quarter
increase to our quarterly common stock dividend of 10%. To $0.92 per share
Source quote
“Following the release of those results, we announced an increase to our quarterly common stock dividend of 10%. To $0.92 per share beginning in the third quarter.”
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beginning in the third quarter
10% increase in our quarterly common dividend per share
Source quote
“As Ron noted, we announced a 10% increase in our quarterly common dividend per share beginning in the third quarter, reflecting the strength and resiliency of our business.”
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2026
deliver roughly 500 basis points of positive operating leverage in 2026 implying a pretax margin of approximately 32%
Source quote
“Based on our current outlook, we expect to deliver roughly 500 basis points of positive operating leverage in 2026 implying a pretax margin of approximately 32%.”