STT · Q2 2026 Earnings

Bullish

State Street Corporation

Reported July 16, 2026

30-second summary

State Street printed Q2 FY2026 revenue of $4.05B (+17.4% YoY, +6.6% QoQ), beating consensus of $3.91B by 3.5%, and GAAP EPS of $3.65 vs. consensus $3.34 (+9.3% beat), with management fees +28.7%, FX +25.7%, securities finance re-accelerating to +19%, and NIM (FTE) at 1.13%. H1 fee revenue is running well above the prior 7–9% FY2026 fee growth range set on the Q1 call, but no Q2 guidance restatement is available in the supplied materials, so whether management reaffirmed, raised, or refreshed those ranges is not verifiable here. The tell is what isn't in the release: no Q3 forward color, no re-anchoring of the pre-tax margin or operating leverage targets that were withdrawn in Q1, and no quantification of AI's dollar impact — the July medium-term update flagged last quarter has not landed in this print.

Headline numbers

EPS

Q2 FY2026

$3.65

+9.3% vs est.

Revenue

Q2 FY2026

$4.05B

+17.4% YoY

+3.5% vs est.

Operating margin

Q2 FY2026

34.3%

Key financials

Q2 FY2026

Metric	Q2 FY2026	Q2 FY2025	YoY	Q1 FY2026	QoQ
Revenue	$4.05B	$3.45B	+17.4%	$3.80B	+6.6%
EPS	$3.65	$2.17	+68.2%	$2.49	+46.6%
Operating margin	34.3%	—	—	—	—

Guidance

Company delivered strong Q2 FY2026 beats on revenue and EPS while reaffirming full-year guidance across all metrics, reflecting confidence in improved 2026 outlook for fee revenue and NII growth.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q2 FY2026	—	$4.048 billion	+3.5% above estimate	Beat
EPS	Q2 FY2026	—	$3.65	+9.3% above estimate	Beat

Reaffirmed unchanged this quarter: Fee Revenue YoY Growth (7% to 9%), Net Interest Income YoY Growth (8% to 10%), Expenses Growth (5% to 6%), Effective Tax Rate (approximately 22%), Total Payout Ratio (roughly 80%)

Segment performance

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Servicing fees	$1.468B	—	+12.6%
Management fees	$0.772B	—	+28.7%
Foreign exchange trading services	$0.494B	—	+25.7%
Securities finance	$0.15B	—	+19.0%
Software services	$0.166B	—	-1.8%

Capital & returns

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Return on average tangible common equity	25.5%	—	—
Common equity tier 1 ratio	10.8%	—	—
Tier 1 capital ratio	13.2%	—	—
Total capital ratio	14.5%	—	—

Other KPIs

Q2 FY2026

Segment	Q2 FY2026	Q2 FY2025	YoY
Assets Under Custody and/or Administration	$57.858 trillion	$49.0 trillion	—
Assets Under Management	$6.278 trillion	$5.117 trillion	—
Net interest margin (fully taxable-equivalent basis)	1.13%	—	—
Average securities on loan	$478.343 billion	—	—

Management tone

No transcript was available for this quarter; tone analysis is skipped. The press-release addendum is a historical financial supplement — it neither restates nor refreshes any FY2026 guidance range, and the still-absent pre-tax margin and operating leverage targets from Q1 point to July (or Q3 FY2026) as the intended re-anchoring moment. Tone-shift analysis resumes when STT transcript materials become available.

Answers to last quarter's watch list

July medium-term update — pre-tax margin and operating leverage targets. Not restored in this print. Pre-tax margin at 34.3% and the implied H1 pre-tax margin comfortably above the withdrawn ~30% target suggest management has room to re-anchor higher, but they didn't do it here. Either the medium-term update was communicated on the Q2 call (transcript unavailable to this brief) or it remains deferred.

Not resolved

NII trajectory off 1.16% NIM and the 8–10% guide. NIM (FTE) came in at 1.13% — down 3bps QoQ but well above the 1.10% watch threshold and 17bps above Q2 FY2025's 0.96%. The prior 8–10% NII guide remains supportable on this print, though Q2 call restatement is not verifiable from this source. Status: Resolved positively on the data.

AI quantification. No dollar or percentage impact of AI disclosed in the press-release exhibit.

Not resolved

Securities finance — structural floor or further deterioration. Securities finance grew +19% YoY in Q2 FY2026, up from +1.8% in Q1 FY2026, with average securities on loan expanding to $478B from $431B in Q1 FY2026 (+$47B QoQ) and from $387B in Q2 FY2025 (+23.7% YoY). This is a decisive answer — the Q1 print was the trough, not the trend.

Resolved positively

Digital asset commercial milestones. The press-release exhibit available to this brief does not name specific Galaxy on-chain sweep fund launches or tokenized client mandates. Whether management provided milestone detail on the call is not verifiable from this source.

Continue monitoring

What to watch into next quarter

Fee guide restatement. H1 fee revenue is running at ~16% YoY against the prior 7–9% FY guide. Q3 FY2026 (or the July update) either brings a mid-year raise to double-digits or an unexplained H2 deceleration begins to show — watch specifically whether servicing fees hold above +10% and management fees stay above +20%.

Pre-tax margin and operating leverage re-anchoring. Management withdrew both targets in Q1 and deferred to July; neither is restored in this print. Q3 FY2026 (or a separate July disclosure not captured here) needs to re-anchor above the implied prior path or the withdrawal starts reading as permanent optionality on AI spend rather than a temporary reset.

Software services trajectory. After a modest positive contribution in Q1 FY2026, this line printed -1.8% YoY in Q2 — the first negative fee-book line in the transition-complete framing. Watch Q3 for whether this is renewal timing (one-time) or the on-prem drag from FY2025 has re-emerged. A second negative quarter breaks the "past the inflection point" thesis.

NIM against 1.13%. NIM stepped down 3bps QoQ. Watch whether Q3 holds above 1.10% — a break below puts the prior 8–10% NII guide at risk in H2.

Expense pacing against prior 5–6% guide. Pre-tax margin at 34.3% suggests H1 expense discipline is holding. Watch the H1 expense growth rate against the prior 5–6% FY range — running below 5% at midyear implies either the range is conservative or AI reinvestment steps up in H2.

Sources

State Street Q2 FY2026 earnings release, SEC Form 8-K Exhibit 99.2 (https://www.sec.gov/Archives/edgar/data/93751/000009375126000387/exhibit992-2q26earningsrel.htm)
State Street Q1 FY2026 Tapebrief (prior-quarter guidance baseline and watch list)
State Street Q4 FY2025 and Q3 FY2025 Tapebriefs (multi-quarter guidance trajectory)

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