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State Street (STT)

Participants
Ilene Fiszel Bieler Global Head, Investor Relations
Ron O'Hanley Chief Executive Officer
Eric Aboaf Chief Financial Officer
Betsy Graseck Morgan Stanley
Brennan Hawken UBS
Ken Usdin Jefferies
Glenn Schorr Evercore ISI
Alex Blostein Goldman Sachs
Brian Bedell Deutsche Bank
Steven Chubak Wolfe Research
Gerard Cassidy RBC
Jim Mitchell Seaport Research
Mike Mayo Wells Fargo Securities
Rob Wildhack Autonomous Research
Vivek Juneja JPMorgan
Call transcript
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Operator

Good morning. And welcome to State Street Corporation’s Second Quarter 2021 Earnings Conference Call and Webcast. Today’s discussion is being broadcasted 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. be part rebroadcast authorization without Street not whole distribution from may Corporation. in or the call recorded or for in State This expressed written the call authorized be of only website. this The housed broadcast on State Street will

Bieler, Now, Investor Head Relations I’d of Street. Global Ilene State like introduce to Fiszel at

Ilene Fiszel Bieler

earnings for second thank will of presentation, Then our Eric Investor slide our us. CFO, call quarter will today, for morning and the happy Afterwards, joining O'Hanley, take first. Good our to you our we speak our through take XXXX you all available questions. in is On CEO, Ron investors.statestreet.com. which be website, Aboaf, will download section Relations

to questions limit the re-queue. please During and two Q&A, yourself then

you basis include presented the GAAP from measures the slide that presentation. measures today’s Before most excludes started, that GAAP. to non-GAAP are comparable our available we or get presentation on Reconciliations results remind I more a to adjusts directly to would one or these items appendix regulatory of will or in like

discussion SEC today’s risk statements. in as differ statements and our Actual those XX-K. from variety results to addition, in presentation our the forward-looking a materially referenced our important factors in due factors, will those filings, of such including may In today contain Form factors

today Our change. we forward-looking update disclaim speak if only our views and them statements as any even obligation to

it turn me over to Ron. let Now,

Ron O'Hanley

at outsourced multiyear I delivered released the markets billion fourth we fees total targets strategic quarterly financial pleased exceeded the strong impact growth, results, our provider. highest our actions business We Thank you, to are quarter we medium-term years, propelled strong to achieving quarter in Ilene, time as meaningful and an equity and level towards and revenue strengthen that both relationship the by our of our with continue of three particularly as execute consecutive of company’s effectiveness. servicing history. second morning, everyone. the good fee which in enterprise management for to this the servicing making a $X.X demonstrate solutions morning, pivot sales first results, with of fee am we Earlier on the progress

to continue operational as product through delivering capabilities, service as well our through client and State unique enhanced We Street differentiate quality.

to shortly. evidenced Alpha another quarter continues as pipeline will by and I -- of discuss another Our mandates, deliver strong servicing which client strong

continue business and we innovate the in Additionally, creation. enduring and value invest our drive to franchise shareholder across to growth

to Street the long industry’s For our a quarter, example, the we State a announced both one drive just on as and business product and a continuing offerings addressing is of industry. evolving has formation digital shift second Digital that innovation in in State to This Street division example finance, focused within the new of is model. history as

This State Street is to offering. that client back continue both We also our develop capability also front with clients, resonating shortly. I will existing has attractive well opportunities, to discuss Alpha, as unique created as an which contributing growth and retention and to proposition value new

the call handing I to in take through quarter our over you before the Turning second detail. quarter to who three, slide Eric, review highlights will will more

XX% ex quarter interest level Second of NII rates rate interest was with billion -- moderation it on period, of excluding or $X.X from expenses on revenues exceeded record higher total continued fee year results. increasing to notably year-over-year was as of NII quarterly fee impact highest lower were quarterly more by respectively, the performance XX% year-over-year, first the well notable increased per better into our earnings the X Relative QX when Q and X% ago was items. since quarterly fee year-over-year, XXXX. software which by than time, Despite impact finance EPS XXXX well driven and processing the securities controlled. more offset $X.XX ongoing was market solid Even fees, and growth, headwinds. share than management strong and total our The servicing reached for $X.XX partially notables the volatility revenue, revenue as FX XX%

While up year-over-year, second to notable ago quarter X.X productivity almost currency improvements were and were continued to our items X% total as they relative percentage expenses results. the year down point period, excluding translation, yield

of to half We and remain years, culture the have a discipline two ability core a confident costs of in XXXX. over operating and the effectively over created we last manage expense remainder our

to the revenue reached return strong performance, margin which quarter, our equity continued XX% fee on Our notable with year-over-year, coupled improvement excluding Further in a second nearly pretax was excluding XXX-basis-point delivered discipline, cost record business quarter. $XX.X XX.X% supported trillion market higher to AUC/A onboarding. items levels XX.X% new a the period end, quarter second end increased notable and at equity or items. by in

General. the helping new with into Alpha is and the client servicing Alpha for investors. relationships, including with We two existing expand example General client Invesco total an the trillion demonstrates deepen asset how Legal most New win increased $X.X the & wins the entered to Alpha an quarter After strategy is Invesco taking world’s quarter, the us in to Legal we Well Alpha number is helping relationships the sophisticated April. wins close, quarter, to second reported with XX. the mandate announced in of forge also Alpha & clients large also Alpha of new mandate how second

to relationships existing to mandates. Our us retention drive clients, that existing Alpha those also while experience to-date rates these services us relationships allowing as additional stronger add we and gives deepen and for broaden will confidence products

Alpha clients new we manner. and in differentiated reach deliver and signing back office services that to Additionally, a clients us demonstrating enabling front, that Alpha Street, is middle State to are new are

revenue We also new create the across help clients costs drive to relationships regions. growth segments and of

low ETFs, good In continuing low with market $XXX and analytics benefiting quarter from cash North Middle coupled products leverage into First relationship markets demonstrate we $X.X share the increased to than extensive products ETF, our and share to regional the our to for to second recurring strengths force asset commodity with local region. data and $XX strong a products, pleased in investors institutional flows with annual services office alliance performing, is billion of our and ETFs both Bank. with franchise. strong announced management good management enabling Dhabi full provide institutional, XX% and Dhabi offering week will this to in earlier sector East with growth. create At suite propelling seamlessly XXX cost business across and our strategic to world. suite security the Bank’s funds, Africa in Street’s to Abu new middle capabilities regional of performance, access a example, The investors and that also sales our trillion million, AUM year-over-year of records and around will an Clients strategy. service as realignment, more the quarter. second solutions, First expertise increased we strong will continue extensive increased It revenue enjoy management front, have remain For network. management Advisors we alliance State direct fees of CRD, well enterprise $XXX and which addition full to integrates custody expanding back continued the how reach while Global businesses, ESG with as institutional our Alpha cost Abu and the revenue and to as And the lead million

share of our over performance inclusive common second strong pace. Federal yet the to by and stress of this to set framework annual Reserve. the new with returned capital our the capital SCB I balance million pleased quarter, another The of us Turnings under we our $XXX sheet capital, additional flexibility limits am test. provides with year’s with repurchases to million manage $XXX shareholders during consistent

towards examples, dividend of and Directors repurchase our yesterday to of billion we of As a increase $X common very of our the to business share during share progress quarter per we a through XX% is demonstrating To quarter a meaningful Board financial our had medium-term we authorized approved quarter that building conclude, $X.XX quarter, common program and strong third momentum XXXX. up have third announced targets. the has fourth of XXXX

we us Eric the while future. targets, costs prioritize our way detail. through me fee growth, controlling we look and organization that, our As I to revenue you those improvement for work ahead And the in vision transforming help let performing strategic to by support to more the continuing are in higher over and achieve with it quarter to a building turn take

Eric Aboaf

previously morning, I of of positive while you of good driven solid excluding by review quarter slide, growth. begin notable legacy sale results everyone. majority will or On Ron, reported you, drive a EPS four. slide in impacts controlling my announced was $X.XX a delivered to the We results $X.XX, panel and revenue margin on our the which $X.XX items, fee earnings see Thank pretax continue as expenses. business. left and expansion of a growth We of strong stake we can second

of weaker right impact the results to year-on-year translation column. excluding a the currency year our As show the period, we relative to dollar result the ago in continue of

We on bottom items also the show the results excluding notable of slide.

AUC/A year-on-year quarter-on-quarter net the year-on-year to year-on-year quarter-on-quarter by net will Turning Advisors, increases quarter-on-quarter with year-on-year period also trillion. $X.X period and new growth, to were end driven flows. primarily by increased higher and levels, Both to our At were record. AUM and you XX% business trillion, market business driven Global growth higher inflows. a and end increases five, coupled record slide X% and end volume levels a The see $XX.X largely market client period XX% X% both increased quarter-on-quarter

you strong slide of can see another quarter business to six, Turning momentum.

-- Ron and including from points smoothly a as average installed increase normal result elevated fees client quarter Second offset prior $XXX client past the second AUC/A end, over last boarded net $X.X onboarded -- up of increased X assets yet absence We across business quarter. servicing quarter on year but $X.X to the client April quarters, trillion mentioned. both and growth be of mandate AUC/A flows, focused billion client business reflects large only approximately trillion remain at partially just quarter was this reigniting totaled of John regions. as new percentage on by positive announced substantially translation, to wins headwinds Alpha levels, substantial currency activity. segments pricing just market we won amounted The higher that primarily the in worth that also XX% recent client which and year-on-year. year-on-year,

by intense coverage This clients. to overall extend XXX quarter, region, in growth strong EMEA now which top approximately of our have our we the efforts, aided

we wins this continue year. you client phases pricing We growth headwinds, exceeded occurring will attrition that normal At at in in in annually to will coming and won we mix. this and to and clearly product remind we AUC/A and associated revenue to be and be over in I order with estimate expect converted the occur yet time, time least installed current period in installations XXXX $X.X that need by overtime trillion XX-month the beginning have deals majority offset to benefits that typical AUC/A mark will vary typically XXXX. fee and but the the XX-month

in pleased said June, our pipeline momentum. we are As we our with and

to seven. Turning slide

by Second X-percentage-point fees $XX $XXX impact asset strong management market institutional X% investment money fee XX% ETF the translation flows. from this currency margin well market about quarter. million, only were quarter-on-quarter run client pretax million a record a from waivers These from partially equity inclusive management rate reached XX%. average benefited reallocation, quarter year-on-year as idiosyncratic and fee impact management offset as up levels year-on-year Both up the quarter-on-quarter reported resulting were and approaching in of benefits previously performance higher the and

our money on per waivers estimated we While fees previously million quarter. management fee be that $XX approximately could market

the billion. the the improvement total cash of which about $XX Advisors they amounting As now had meeting, took than a quarter of in for $XX previously June third that expected. per the -- is will recent across end we be record $XX a the million institutional, million to lower amount ETFs solid the flows Global for year, following and with result quarter, expect about FOMC rates short we to rest

of and to in ETF this on which franchises, actions the We are slide. you right as a have deliver bottom see taken institutional of momentum can our driving long-term number the growth

let strong we remain which to index pleased invite FX FX rebalances we in lower volumes more eight, experienced to important as other moderation Relative revenue down volatility revenue volumes, compared higher market fell client quarter lines slide from client that volumes. the of services, quarter last more strong the FX volatility. quarter-on-quarter first detail. declining levels to XX% COVID Within than in the XX% XXXX, and Turning second year-on-year year, in revenue offset pre-pandemic trading to fee in was client market a environment the FX quarter. to continue above are discuss generate me second

XX% Our securities as a strong clients balances mainly finance agency higher fees XX% growth, with as rebounded. business and custody increasing revenue of quarter-on-quarter, year-on-year recorded enhance and result leverage

to second mark-to-market quarter largely processing were due and of adjustments. the software positive Finally, absence XX% year-on-year, prior fees year down

and increased XX% as higher Software CRD result quarter-on-quarter, processing a revenues. fees mainly of

provide I’d revenues standalone episodic increase durable D Moving to Alpha our like and some the year-on-year, annualized We revenue recurring higher were continue more fee to primarily services resulting reflecting The to and slide grow delivered in CR and up CRD million. revenues. renewals nine, and to performance. nicely standalone updates further XX% strong an results in quarter, client on SaaS professional in $XXX

are announcing business with three-year quarter anniversary very we performed. This a has pleased and the CRD the acquisition how marks since

We benefit to and Street’s of integrated part in offering. State thanks and the our winning are to clients Alpha reputation, brand

right On clients. resonate well show the from second with two continues quarter, we Alpha inception Street now have since mandates. five of of mandates the the that mandates Notably, to quarter the second live. Alpha some bottom quarter, as the we are We the through new proposition slide value highlights State client during Alpha second reported

years middle Although, up the we the payoff longer the wallet for rates given which expand length length, attractive XX somewhat the usually size that and to generate revenue scope, contract Alpha to as to be can growth Alpha and office. span take in and period outweighs are implementation the further front implement services to increase able share deals longer

expansion investment Turning to balance lower and quarter, by by repo sponsored quarter and year-on-year, yields of XX% as lower slide portfolio the mainly activity. impacts yields higher end to of driven offset member declined impact XX, was second the were the partially flat our first of Relative and NII investment expansion offset investment These sheet the result products. further portfolio rate of has balances. NII rates effects short however, a portfolio environment, by lending interest were

quarter X% side On increased the average the Total continued second the during $XX reflecting of of quarter. in the Federal the our monetary the second right or average billion Reserve’s by growth the impact sheet we an slide, of show quarter-on-quarter, of deposits expansionary balance policy. increase

recent environment, $X of a OCI to in to risk current ago, we about the our tactically quarter-on-quarter months downdraft continue we added mindful the portfolio rate few in While remain billion rates. investment before

private We by clients. to increased X% loan balances our also by average approximately by managers utilization higher quarter-on-quarter over capital call $XX and driven asset equity billion,

have We the also uptake initiatives that and deposit flight in number this reduce recent saw a quarter. we of during reverse to

XX, year-on-year, weaker slide dollar. the increased excluding expenses quarter items to X% by Turning driven notable second mainly

basis on XQ down expenses the point down Compared more productivity Excluding onboarding currency of revenue translation, notable were location pre-pandemic flat savings systems the impact impact total reduce services began currency the seasonal percentage first was deferred to as down for excluding usual timing was from quarter expenses offset as primarily offset we quarter, market subcustody communications continued costs XXXX, professional headcount, absence expenses expenses quarter. related item costs. were notable to items our related medical line compensation higher primarily some higher driven of the X% by up expenses fees. by high to balances client employee efforts for technology lower our levels. Relative compensation reflecting other was investment benefit claims X.X translation, year-on-year, and footprint investments And and the estate. driven processing higher in by costs nearly revenue XX%, and reported and and costs a Occupancy and XX%, the normalize due to as targeted primarily and to data XX%, optimization benefits. Transaction up of which Information benefits and costs. were in and than items were impacted first than

ability quarter, pleased notables expenses to are revenue effectively second year-on-year we we fee total ex strong expense our while down as driving continued in and currency total growth. discipline, managed with overall, So, have demonstrate the

right show of capital XX, the highlights. slide the slide, to on we Moving our

We a minimum, year are resulting new performance provides SCB with of our well below including calculated this floor. dividends a capital stress preliminary The ways, opportunities, investment to in under our X.X% base pleased buybacks. deploy SCB with us at capital framework CCAR buffer additional with that the in number a flexibility different and

quarter a For Board the third authorized increase share example, $X.XX $X per common XXXX. yesterday dividends our quarter year-end XX% billion and to through we announced our up third program common a share of has from XXXX a of repurchase to to

also has the G-SIB Street Tier additional are year we surcharge Reserve leverage retain XXXX, show Federal State CETX of slide, its that one to our addition, the the until we pleased and In of ratios. of To X%. evolution with January left the X, provided current X

As operating you in requirements. the excess capital the navigate of to can see, we strong environment levels continue with

of we ratio by to RWAs target above to XX upper The CETX balance improvement also basis XX% and growth. had driven end, solid As our improved the manage XX.X% capital we despite our and as expected appreciation quarter-on-quarter range. of points was standardized quarter CETX sits down sheet XX% by end

in leverage X easing as XX average continues. above regulatory basis to but as of X.X%, ratio client balances minimum, points quarter-on-quarter a remains Fed’s primarily declined the Our Tier by result the well further the quantitative increase

Tier in while range deposits lower we offer quarters, X model. a liquidity continue think number ratio And them alternatives. and the our of this can of limit of We business consciously end client we appropriate operate our as the Xs to range reduce leverage that and for a for

and in quarter almost despite solid COVID. exceeded fee with growth year-on-year driving demonstrates model. performance within business first Total and operating double-digit was year billion scale quarterly headwind our results during services up in X% the summary, in our last XX, momentum topline from are our revenue slide we had for to the and Turning the management $X.X the servicing second time, we FX year-on-year strong of fees, the trading on

remain productivity a program. Our controlled for result expenses as well

we As were and a notwithstanding close to result, environment. ROE margin medium-term rate to pretax drive able our low targets, the

assumes to a end on rates our our thinking there remainder I’d broadly update our economic the the curve. outlook. of year deepening for Next, that and quarter regarding and modest the yield rate view is forward outlook At like aligns rate curve level, provide the to and you short macro some the third low remain current current

We be equity to the assuming global as as of normalization are rest also end markets well for flat year, market will relatively of quarter activity. continuing the FX

the In of XXXX, expected up be quarter each full is guidance year range means fee to up be revenue terms to fee with X% of the previously provided. to year-over-year, and expect the end year-over-year. to X% X% of be servicing we fees full we upper likely than better year This third overall management to X%

in now the improved million of the NII, per curve, quarterly a market recent rest $XXX quarter the NII modestly expect million of flattening for $XXX rates end Regarding seen have of and yield we year. range to despite short we an increase the

Assuming rates continues premium do attenuate. deteriorate not amortization and to

we ability to our in to remain core manage operating Turning costs. confident expenses, effectively

year-over-year. to And the Ron. XX%. will we tax that, On percentage fee point flattish, ex that rate back and of range XQ a in will of third XQ with include quarter to XX% the items expense point year-over-year XQ. me middle of We be guides for minus hand expect let plus the currency XXXX These taxes, full translation notable our that be in year call X.X expenses or approximately expect

Ron O'Hanley

for the And now we you, open with can Thank that, Eric. Operator, call questions.

Operator

Stanley. comes the Graseck [Operator Betsy Instructions] you. with Thank from Morgan line of first question Your

Betsy Graseck

Hi. Good Thanks very morning. much.

Ron O'Hanley

Betsy. Hi,

Betsy Graseck

talking else effort talking raise? so this what’s throughout the to were the guide little on? wanted you I pipelines drivers? went something that leads driving off sales give by Could just You fee start I the got that that’s a have going you through. Is up? realized major Thanks. -- is a to the that bit that mean, just you fee quickly guide sense about call, there you or happening just a reinvigorated us start about to as I the

Ron O'Hanley

why seeing years start wouldn’t is you bear mean, Betsy, Yeah. comment. I the are -- lot now and describe Eric will don’t starting so I coming fruit. quickly. work of mean, here and of months what a to together I it that’s I product of it’s and as

and we done. that So not were

do. We together been the coming really think of to But about to you starting impact it have work I are have have -- to that things desired the told is past impact the the some that have in we and more we here. that up

Betsy Graseck

into maybe like looking invest that just could and refresh then And you pockets in too, about are to where what by geography, thinking how if would would Thanks. asset you you Okay. growth, the management lean you be and helpful? are business that’s to

Ron O'Hanley

I But are they to business the relationships think lean the well business. the cash -- I areas like that ETF core the three ETF to client come has established set. having of Yeah. institutional the the and the it, institutional to institutional elements first, but limited will mean, world, is The a business, are business. business we around franchises. the both strong we product into very business, and business back And

that it we capabilities. we in distribution some -- is, product lot way about what channel and time take of enhancing those our how leverage relationships spent a do and thinking So through

a U.S. to On the developing been products as side, outside long on in the deepening well presence have our there, as ETF path the that we geographies

that You a EMEA. in particularly lot seen from payoff of have

It of grow it’s a liquidity will institutionally as to for nicely, has the many advantages include core is of do just We well set. It an continue -- ESG, product liquidity to And to it. important continues as of designed product to our to continuing growth lot us Areas that. investors. an set. which was very emphasize

servicing works to And that both in those we have as and obviously, clients of environments with rate don’t emphasizing rates. a as asset continue we then But have is, business interest what that that of the function present So interest there. different management clients, will cash it’s it’s us. very existing business cash asset relationships we either a have well to and sophisticated

Betsy Graseck

Thanks, Ron. Eric. Thanks,

Operator

comes question with next the UBS. line from Your of Hawken Brennan

Ron O'Hanley

Brennan. Hi,

Brennan Hawken

hey. morning. Hi, for the -- Eric. are How you, Good Thanks Ron?

Is So range given updated here greater upper than at we above to things fee challenging, full for seem embedded balance the that strong how be I in full you. point. were also more what outlook the than and to a Eric, looks you it on assumptions going possible the are think you for narrow how year another just follow-up that of How second revenue size good then outlook? are end year, given the sign? something and this are doesn’t noticed, XQ it? that the should specific outlook. sheet And thinking said, to we about the updated about quarter Thank how which your in NII it

Eric Aboaf

it’s Brennan, Sure. Eric.

describe me this it Let way.

I performance good our businesses. are a think very number across seeing of we

that markets up In I both. of equity and addition think to some X%. Equity quarter-on-quarter a of the are it’s you globally markets tailwinds combination get from

revenues. management gives fee we But another fees. are business business addition, for that on in quarter, new seeing new what strength I I So us in and is net step and relatively businesses. said, servicing we were net up Last neutral servicing think,

And row on here had with and couple as franchise, well. we fees, inflows. quarter we are side. sec fee on guide. quarters management tailwind They very annualized lending we our CRD you servicing that new booking higher a in performance a front with come been another quarter good that nice saw, a have positive This In create nicely the of net we have revenues a so and good are had across then comfortable positive are solidly have

year and primarily includes the quarter was to maybe year try information guide, bumps gave the directly. Remember X.X% from answer up you COVID I recall, if FX to to The ourselves year-over-year. question taken last full ago. think I lapping a from quarter you just third then fee X% that

for to around fee So growth. guide had can count you has now our been X% total X% think And I growth. X.X% on

to the that the up given going we over from for range today. about to know top point that another of go what end So we time are range being

Brennan Hawken

sheet fair. That’s NII? size piece balance Great. Okay. the And of the

Eric Aboaf

ins And in the this deposits put The on and take us rate. some easing. to what has you advantage the you and outs puts seen of sheet the Yeah. additional balance the and have we of to have takes in on work, always us floor increase is quantitative of repo IOER do Fed and have tried seen environment

been the also size balance constructive. ability that frees back because need leverage up to as of into do that’s We balance sheet capital. we capacity to return So manage our the sheet, the ratio then feeds that compress and

will We do I compressing And and of NII. an serious don’t uptick think that balance of about had rates, roughly we so, in have range that effect and way the for kind to comfortably some are first provided, in chip new return, on to us. also we bit, Remember starting is much that. line April a right will of worth be pretty have are was that so more those the I -- away path but the at deposits. up of not at an to while But lot. when an May which is think will incremental in June. sit the it we of with quarter NII, deposits, space and you that a little deposit these which freeing low important see we a capital for priority manage

Brennan Hawken

Great. clarification, Thanks Eric. for providing that

Charles for are the support the results just success you. fees that’s today? the does that of those is the -- Alpha that optimistic? fee oncoming? competition How so is which modeling, just prepared think building dynamics not look also we the those When What nice uptick here. but starting won from about or we here? intense think in rates that is that you think like? businesses have those your -- that the are out that fee fee -- think mandates should mentioned in those Thank remarks and rates to funded in should River, saw Does you when your too How about vary. had You help we are Are working we still you about

Eric Aboaf

Sure, Eric It’s Brennan. again.

its deals. to fee real get, think whether deals size the it’s come different What there’s accounting not deals cutting a I of at here. the or tend to you Alpha really classic rates. range It’s tend

And saw and is we rate. of lighter will denominator terms so, fee some larger, this a larger they assets deals the in because quarter of little come it’s

other our quarter, fee in set a were wins that the On hand, we of above had well rate. first traditional

incremental And we so We as and and combinations our add basis, of control we of as basis doing be disciplined. use margins. it way and have an at making that do healthy to on revenues, are kind always number costs what is on profitability a it you a we a always sure

so bounce we the are think the first for line quarter and our rates these half versus fee the in implement bodes rate well into in I one rate some around pleased company and of is for the actually that year And the But with fee well quite overall we as leg wins of will for with wins. new next. fee

Brennan Hawken

color. for Thanks Great. that

Eric Aboaf

Sure.

Operator

Your the with Ken next comes Jefferies. of from line question Usdin

Ken Usdin

Eric Ron. Good and morning, Thanks.

more of other we whether are of this land kind payout? there’s new Are uses of billion room some and for your return Thanks. number also be a to you potentially do the little thinking on more depending ratio you on terms potentially factors? just how a bit you that should capital how you number how total would vis-à-vis land return, about, -- How SCB, wanted ask on on capital under Just and in those balance $X your be targets. sheet aiming the

Eric Aboaf

to capital of return from always time They how facts it’s But me our circumstances any the the Ken, it and in give we and kind think at place. about you let envelope Eric. on we are individual what about to to and to they always knowing the what’s give flexibility. individually the the quarters. like -- does that manage that do possible would always there’s have us standpoint But some SCB

So let me it the following do in way.

of things an start our you One is, ratio put what we the and XX.X%. is we with CETX saw

to you target XX% compare do thing to what’s The first the XX%. is range that can

or that how return say, $XXX and down and midpoint can to You do ratio we look, capacity. $XXX is, the that of step range float million of first provides that million capital

piece. one So that’s

the those after of do what in form return. do quarter, to give will how quarter you and earnings, capital we earnings next those Secondly, with have we you shareholders of guys go through projections earnings, back say, earnings. earnings And the

the buybacks. So, as be the one earnings And often then of of is balance that part returned can dividend. the

often So that’s we an intention that’s have. -- a

So you earnings those view. we because add a And quarters, of and then cover three you between quarters, next, quarters, six the gave finally that dividends quarters, buybacks six difference the for that lending can quarter kind four quarters, assets two bank in you have does, keep intensity balance but at mind risk bit, by grow the sheet always the thing one X%. grows is might a oriented that balance sheet weighted the our five to not same

retain that’s just always to typically So -- you need bit of capital fund that. maybe retention year to a X%, on there’s there’s capital of always against necessary billion a kind a $XXX of million $XXX RWA to in hold

dividend think, the can to you those support net the that I it’s which it’s pencils modest go the of need you good billion down range. -- for growth, buybacks retention pieces, then amount So some and out the up literally down. underlying what the It’s if of to through goes into $X -- earnings floating

Ken Usdin

Thanks Got it. for call. that

Second would premium your you am NII that range, mentioned on and question continue guide the attenuate. to just

wondering and against was keep this are the Thanks. can much kind of would that some factors kind working other in the help understand attenuation us how you Just you to zone? us if versus of it where of it expect quarter

Eric Aboaf

And thinking next, the direction bit can be we actually is, given the range. amortization got happening opposite quarter upcoming so from work where and $XX in just you $XX portfolio, can you bounce premium on $XX Yeah. as what’s in But of are the a the then million range, the grind investment are have it’s kind will Premium individual million to but amortization the bouncy in which around. it quarter bonds with is one to the in million forth.

and with But bounce it of of just and headwind careful roll-off one the of next yields premium $X the starting get be we matched minus are can around the thing to to amortization plus word is use better That’s to so good on And leveling kind are portfolios, starting bonds. roll-ons. from that’s to to kind What you floating the off a quarter going this easily roll-offs other want roll-on of. to a have we way. is, nice through, rates million of the net of get just

printed you we portfolio X.XX%. without X.XX%, investment net that saw so the on And yield

took could pretty front rates. bit, are range this from in We the the of close up though, that’s time to what because We in see of are just of the that the the upper for remarks. being, and yield we -- bottom end my improvement prepared that that comfort end as gives us range you a that

Ken Usdin

Understood.

Okay. Thanks, Eric.

Eric Aboaf

Sure.

Operator

with question comes the next line Glenn of Your Schorr ISI. from Evercore

Glenn Schorr

Hello there.

Ron O'Hanley

Glenn. Hi,

Glenn Schorr

So there. it’s good -- hello,

good So and range listen good back fees, commentary the carefully, to it’s growth, I see control about XX% and and expenses. NII good continue I not to markets, waivers better if organic hear too the fee to margin

now? the now, -- sounds because direction moving right is to the margin XX%-ish for it is So everything here question like in right is stay the

Eric Aboaf

Glenn, I think -- it’s Eric.

a I think here to definitive stay pretty term. is

time is what make over intention we a see doesn’t the our year, doesn’t and in I while think have. solid it progression isn’t margin you quarter one a -- that can

I think progress. can you see

I quarters. think can see progress over you

progress see years. can over You

lot years there market we have seen tailwind did ago, would I expenses have up would time this when the equity think than a taken you creep was quarter. more and they a

need think But would I performance. the quarters a I so at the said in and result. it We deliver focus And we are this are the our of discipline to pleased has we taken and do bring. some But Ron -- and think years you we right to I again of remarks, I pushing his to get point, the as with direction this keep this consistently we to to it direction margin kind again. right seeing that’s that’s but think results, in like and and -- think, intensity good

Ron O'Hanley

a out a very time Glenn, add at a those you would part as medium-term margin when there is, our was I Yeah. is of laid We targets know, too targets. what different picture. NII

longer would what management much we we So than built said going it’s were part but it’s into have deliver. liked, compensation. of to It’s very taking we

intensity you as tomorrow I think now. you as to have it expect seen much around So should that up

Glenn Schorr

that. appreciate I

I region? Abu on mandate? eventually on one First relationship. outsourcing Is Dhabi, of to want expand global I just understand, this out custody wonder there the what follow-up, a replacing hope could quick broader you Just you if in the is expect or

Ron O'Hanley

Yeah.

So, But for about of we I talked presence a our number mean, have the Middle there there. augment have our intensified efforts to have steps in we we a mean, the I while. taken past East. been in

the for got we have First have in -- One, we We got don’t where our become where of base. client region that have full become they licenses doing in their licenses of Saudi or regions Abu subcustodian now things. Two, we as global custodian Arabia. Dhabi Think local in two parts custody.

in subcustodians our other network. replace So

Glenn Schorr

on How based quickly fees? happen that can subcustodian

Ron O'Hanley

I will mean, mean need I obviously, will like it couple it’s quickly years. there’s to starting things contracts move and we not of now. a pretty and months start, quarters, But that. that happen over

Glenn Schorr

it. Excellent. appreciate Thank you I for all that.

Operator

line Blostein comes of question with Goldman Sachs. the Alex next from Your

Alex Blostein

What’s a uninstalled client guess, million, And can color comes we backlog, on couple million a to episodic mention benefit, the helpful. $XX quarter everybody I be the if Friday. to guys timeframe And just hoping $XX debt typical those on I then, one, how would contributed I of in new on CRD. are morning the of it Eric, service types Good revenue when installations? an to and types I any embedded numeric missed Hi. guys it, CRD provide update million? the get could was around that you much get sorry, questions bookings, specifically? that did $XX question, the with the you guess,

Eric Aboaf

Eric. it’s Alex, Sure.

performance this the it both terms real whole. momentum, the and contributes think, obviously, me of the wins, of because are Let touch pleased quarter’s broader we I those, State in backlog, each how Street to on with the CRD

high. take $XX through five-quarter a the for quarter the new to Just million was bookings,

expand win. Some of continue within and win, middle as the ascribe to office, the $XX which Invesco office that, that have I you the think, was office, you front to office, would can piece back million, relationship we of easily front that

we installations some of months, backlog, come tend part the On $XX months. total many The period, a with to get in which the other for What paid million, classic you cases come longer, of it the it’s just software contracts, installations takes some finally, -- the a million. high, of uninstalled and as months, and are XX installations. fees until do cases, like revenues. The then, you size coincidently mix over the the XX six the And remind you XX sense, services I of a $XX that in were cases, I another revenues months, longer go-live of hit get is a you as and in smaller reimbursed ago, onboarding. what short In given classic about asked just complexity those implementations. on-premise of think, will high year those professional to that the prepare

of three-year-old was five-year-old contracts, re-upping that the classic Some renew of of stuff. installations kind that contracts, and from that

in items of I most probably $XX the to there range. million episodic some think are $XX in the million

five start with. you maybe that but take for what’s just line, over quarters, enough that that quarters encourage a to will that’s you to in nine thing an typical sense on-premise So and quarters, kind of guys give I of average better

Alex Blostein

Yeah. little out That XXXX Tier work just loaded bit night? leverage, around we think time. of buyback through makes quick the of a you the $X guys to end sheet inform that does target over billion that and capital a room guys last your manage evenly sounds little -- authorized like you follow-up Ken’s as How Should through here, pace the you got back-end or of bit that more a dynamics? the just sense. end guys just spread from And balance follow-up below low on then earlier. the your are question The those it of deposits a there’s to that out X fact

Eric Aboaf

and a X we number I’d tell are in fair factors. is comfortable have because a risk. right way of That’s you on different Yeah. the leverage, this question, Tier we operating balance Xs to got

If in think the the and place we of have an Fed They safest held central banks. about deposits. got influx the at the world, you it, are

bit that the bumping or that exercised of even not end at are down lower we particularly And so range. from a

can I have place. we execute living. actions That’s plans. So we And over time those got what have we for that’s and a as fine long we in as mentioned, as do do plans have we that

Some little May June. those of heavier deposits in and came a in

discussions away this week, of of set, discussions, literally to got for so and have there example, around ongoing chip for a and week, at are commitments for have We ways happening, a that that client happened those are that. of ongoing billion us last of example, mix $XX

of in relatively and don’t terms it’s In point of while we have we that on ratios way, smoothly, we what’s interest going those would shareholders would confidence exactly our And on given an and and in think to capital we efforts the loading and relatively buybacks and think, else always circumstances levels have facts in being like, deposit of higher back do We again any plenty our buyback necessarily, rather way, them strength consistent have management deliver on time. patterning, at dependent all equal. the in our capacity I a appreciate. a

Alex Blostein

Awesome. Thanks much. very

Operator

with line Brian Bank. comes Your Bedell Deutsche next from of question the

Brian Bedell

capital balance the -- for $X the billion term buyback, obviously, if second conjunction million the balance more of come the is $XXX if know your sheet -- six size in over the I one spike in managing quarterly quarter, for up and embedded you sheet, what’s if given $XXX are that. back how side. size And did to morning, in then of that’s the terms balance that I that I next expectation time, mentioned, just keeping quarters moderate? you the folks. Good the with to don’t Hi. guide, it it missed to in your want sheet million to for longer

is could contrasts comments to excess that about to continue plan sheet? within some basis grow you that and your the on to how trying a with balance expectation give the on reduce whether around us if maybe the sheet balance deposits buyback So thoughts the year-over-year

Eric Aboaf

Eric. sheet two. and Brian, both content distinguish we sheet think those a risk there weighted factors total balance balance it’s get the on the couple of Sure. at I in There are then a asset that as

tackle your Let me questions just in order.

ton deposit fully underlying account rates days On the earn billion range range. has so the slowed takes in of to up, $XXX for quarter gratifying. reason and the deposit have doesn’t front-end the these the that’s quarters, couple a that in per million into million of $XXX management $XX factored to as next efforts. some NII range little incremental of our which that Remember, And a up us ticked bit been was that

our business amount or assets, of clients modestly. to support sheet balance we in we business of need the because sheet contain. the those expand by to the we what contain we growth, terms weighted That’s risk the healthy right, need as growth in to to size terms leverage In sec balance the or lending Under of surface, there’s in assets, in FX call of have size, always it, right? lending some them,

Now business. balance a capital-light we our are sheet on

RWA RWAs What They have the leverage when to growth they and level. primarily don’t that a we leverage not of there’s amount, couple RWAs, our -- adding points X%-ish the really of sheet, can sheet -- that that’s know, at growing a are which balance range. growing leverage balance may separable range a plus/minus with grow, of year, And X got not have and but The you Tier those is a what billion a that I from kind year. $XXX driven in deposits of be you typically. on We grow it’s so XX% are are the sheet. connects balance with kind

Brian Bedell

start to the said, material? expect relationship, Ron, that about That’s Dhabi Should pretty as State is Street Abu and you AUC/A clear. any or related then you maybe think for we And to it back that to impact and just fees less it. quickly. asset Got moving Okay. servicing to just

Ron O'Hanley

-- expectations I our I mean, our would Brian, Yeah. would -- say would AUC/A. that drive it clear

the And modest our contain us amount maybe the costs. beginning. penetration a also the importantly, to I manage and relationships in it think help further It be will most will there, it our region. medium-term, over given to subcustody continue at help will the

a most be So, the terrific important probably it. partner. reason I They doing to just are that’s mean,

Brian Bedell

Okay.

Ron O'Hanley

The have and there have, now are but -- have got can And we often we when is others subcustodians with. challenge are that other have we that with subcustodian this in them, not competing you in times like thinking, you we too, you them instances. and a that certain have competing case the be

Brian Bedell

Right. Right. That makes sense.

Okay. Thank you.

Operator

comes next Steven the from with Research. of Wolfe Your Chubak question line

Steven Chubak

Hi. Good morning.

Ron O'Hanley

Good morning.

Steven Chubak

more guess, off, securities specifically, to question I LCR. growth. wanted on maybe start the a related, I So to Eric, with sorry, And

deploy is give ratio you You versus some noted. ratio The had bit little strong if sense growth, I given just related LCR growth, liquidity of was yields to XXX% a philosophically, the minimum. growth here? and impact a you at poor can deposit running running LCR securities tight hoping deposit incrementally how us QE managing are just And treatment even XXX% from QE, book does how to higher it at your just constraints? as ability you is grow the

Eric Aboaf

XXX%. pertinent company, remind the anomalies. Sure. And best way in of and all-in what’s a bank Steve, a the at the LCR is calculation you it’s Eric. bank bank. I The actually LCR. to as is holding has between some can institution, is us the I bank most corp LCR The LCR describe the will it

IR holdco gets of transferability, put of good bank, the happens odd that as share factored flush the flush haircut with more and fine. have you to am additional because calculation happy extremely thing, happens we is which it’s the room. plenty the the corp in our it’s at how in which you for is and denominator, is this the is numerator team what the scenarios is the become actually begin you actually of if deposits So just down of deposits, very configured, got touch What that, in bank quite I some LCR at And that to up. and a because flush goes with LCR result probably fine. But algebra reduce we it’s And is are to comfortably. when from through have, to elevated we down. I the rules quite with corporate think operating it’s the What’s this we flow at are mathematically how starts are to happens corporate LCR the best so XXX% to ironic just LCR that, you, where are that what work the were floats they is the with and

Steven Chubak

expenses. for Thanks on follow-up color, And that the Eric. just is had I

job… done have great a You

Eric Aboaf

Yeah.

Steven Chubak

algorithm clearly but higher concern give hoping guide us what some year, large there investors, XQ accelerating peers thinking you be of given expenses was to step some into banks through might you pace … context on reinforces is expense to look with the on trend, expense amongst other investments of whether for heading are full talking many year up the in need I able the the raising a up next what might might look even about year? to growing talk might like investments. XQ, growth And like similar guiding ultimately. just keep this

Eric Aboaf

now. Steve, focus Sure. several Expense a let me been for has a start. years in row

for that the have we is costs AUM basis year, point is ex-notables X% that we obviously, it about revenue are and minus be as related We what this nominally costs down costs a a and come data adjusted currency basis expenses have an be X.X% and this said often a year, in have gotten wrestle nominal that around custody or by are for year, expenses AUC/A currency, we there adjusted through or biggest mentioned, based. that’s or And on last flattish, on down, and with based, a on through, point, some And notables, year to down range would that basis thing X.X and full market that. plus AUC/A obviously we expect range. particular, basis,

range with And stuck we and are are have what -- we are so there that have through today. and range sticking have with what know our a stuck working and those given we why we we

call, time, have our I And think hallmark in systematically we at good back, of our take right? step to percentage cost, looking save of not X I that the points of we -- through a X of year when off are millions on dollars the point to doing. that save not that, points $X productivity a and revenue, that a base you is hundreds set bit, business. got is expense -- have or productivity little that that, if but the And doing programs portion the That’s programs. January what It’s amount in the underlying be of of a we a points then X should cost place of billion, at show of I percentage or but are scale are but beginning of of we that base of a a approach is you reinvesting same we the that’s X the portion actually do what we think amounts. all business. typically We to significant of

expanding And sales sometimes and we invest by forces. coverage

Sometimes, we reinvest by expanding feature and functionality. product

happy invest it. as have do cost marginal that of we side it we clients, usually comes right? Sometimes We the and other some have with we revenues on to we because that onboard have are to

so programmatic that. And to we we And can do approach that reinvest. sufficiently our is so continue save will to

down been we equity upwards, more are to obviously, pretty do factor to for year, and think and and in through. have and tick and tell feature how focused a have to have out, we to be expect can approach. to as broad out, a balance periods going How through. balances you has revenue continue adjusted those we on sense XXXX down, that the time plays XXXX, But year are that work early next of notables to as factor and market of to currency working upcoming we you need we it translation. little that’s was that But, least that so talk than a It’s about even we this. given that’s cost related keep little again, maybe and I well, in year. to at how out we down a it expenses this But Now, something this is that in

Steven Chubak

color, my Thanks Eric. so for great taking That’s much questions.

Eric Aboaf

Sure.

Operator

the of Cassidy comes from next with Your RBC. Gerard question line

Gerard Cassidy

Good Eric. morning, Good morning, Ron.

Ron O'Hanley

Gerard. Hi,

Eric Aboaf

Hi.

Gerard Cassidy

to I -- Eric, transcript, am you can it. on call trying said the obtain and the think I get think, you I

I this So have question. ask I apologize to

new positively. said think business contributed I this you on that call the quarter wins

was said you last versus it quarter think earnings neutral. maybe I

to First it neutral? of if the number it that But be you two versus last changing the was could quarters what all, positive dynamics earnings? this quarter was between second, quarter enabled a clarify was

Eric Aboaf

Gerard, -- and memory just let have good it’s got the summary, I you and Eric. me think The specifics. the add

fees year-on-year from As on in remarks came part the of servicing clear positive net new business. part basis my I was servicing that a fees, of right? prepared increase on

wins that last would as And installed new in net business were we amount modest So, pleased the was more that of -- not as we And than business and contrast, you what is of usual couple wins would part it it’s attrition correctly, are quarters, we I positive think we said, you new like of that, quarter, is I and to get. be to neutral, We said, last positive. rate. I to and seeing important it have be. be accelerated for over like our win the remember

seen business quickly place but in have AUC/As, bouncy, it’s bit of cases. a in us see installed You some put an little You right? that in

do continue share sell of just XXX. as the but and the we those get clients, won can And wins some on custody is, XX kinds had to expand it’s so installed you remember, of have So next the quickly XXX top come about, those through. intention we and how with here focus when wallet the not and some have with and have next of talked

the we June with presented it we it’s mean is consistent we will And pleased so process, see of is or take that it’s of been root way. are I and regard. will a conferences in a at doesn’t to some starting building one effects which every of to coverage intense think, That starting back that quite more, I the more results some the been of are, in the think what a we building say, some building, been I of happen of -- this this quarter, more see quarter in momentum but has the

Gerard Cassidy

on that area, success of for XX, customers, I you over are guess, within what percentage of now the just your Then good. of percentage follow-up having, product Eric, question pool is obviously, top customers. second, and that your winning Alpha their you your the some some new Very convince example? the What referenced, have found you when them would And interested talk think customers about you what in really product? customers to do Alpha the you the are are to Alpha, of to be eligible in -- challenges it’s taking interest on best in it?

Ron O'Hanley

head operation The stack are to it’s about big deputy almost the to it, XXX% conversations are Typically, current have the And costly Chief here. it Ron. from These now institutions of that not quarter, been whole got I And our it’s this. Hey, end would obstacles have the trigger I Starting operations I COO, the triggers Officer. of has mean, the driven programs. XX matters we the of second are agenda. experience underway. oftentimes, a and them really technology, the Investment Operating or under an It’s point in CEO’s don’t more Why hire suppose like some CIO us. there’s and excessively typically through several-fold, with Chief the take that clients that at a ineffective theory, least aging right? Gerard. change lot are decided we meaning going of kind belt, forward say, -- point Officer always The on come It’s that? eligible.

tend it, things happen. that when So of when kind there’s on to focus that’s these

trends and management the some the how the technology, data buoyant aging what’s industry. and industry given of challenges mean, data. I around real asset terms now on in trends management just effectively of going of is you Now, the underlying use in the some do with

the have CEOs. most of You issues on agenda these are

be the interoperability. not How we which very different, way going plays a So it’s is where out instances it conversation model the there’s built will few it’s is, why on. it meaning

where, -- fact, with we extent had have will systems We other the need as Aladdin. wins we in to different interoperating we office such front are to,

across kind very have large clients, clients. make a we of are these this tried work lots their long build we And to that stacks so recognizing want to variety histories, software sophisticated in broad this of and of

Gerard Cassidy

good. Very

Have of and customers guys a customer? found in referenced a earlier, as running them share success once onboarded get traditional up you you on are the wallet Alpha yet having that of share the quick just follow-up with you better that you Eric. the wallet Just than and expanding

Eric Aboaf

we connect Yeah. it’s much the as the only, to not had do But we and that exactly office, expand in back office That’s we in and you relationship of value finding River. if for the activity and to or you office Gerard, the to we going what can office example, are begin begin it’s example, trading custody, consolidate more seeing, to add because result some down chain, that, the do middle up Charles we some front are to for are of cases back many directly the the have, activity natural the office. to, with middle trading Eric. the is because say, the -- into that plug,

supplemented as become benefit partnerships service so expanded true So These stickier opposed wallet, that’s relationships. underlying these the the of arrangement. even by is share become to a

Gerard Cassidy

you. Thank Great.

Operator

the Mitchell from line comes question of Seaport next Jim Your Research. with

Jim Mitchell

you that in of you morning. into noted this quarters and the want was Ron, best management five years. one to lean Good Hey. the flow business quarter institutional asset

more in add? improved on capabilities, products acquisition, guess, you, distribution you that look when or talk one, the areas some what need describe are to Is sales does I growth? effort what side on would can adding to about detail organic I secondly, guess, that? Thanks. drive and an doing that So you to and And help you the be just

Ron O'Hanley

what better. over we have sales done is the of it and very -- couple we relationship of a course force good taken management and a mean, years, I Yeah. made now

be most which to of of things. products, about by we at their one we not the in allocation, those they seat benefit passive a tend are the of manager, instances our table definition think We if if kinds a in where the have the you as gives largest, asset because of client, core largest

out those our and conversations wallet. building those some systematically increase their very products providing to here. ESG been has and have been share and provide it’s to tailwind upgrading have of an real So capability

history in long have it. a We got

We there. a both shape in and of and able lot conversations have those we allocation strong it a asset to reputation have been got have

one it’s terms if about we In tend -- you I -- products, of it, to of dominate mean, the barbell. it’s end think

of be look would the So across rest you the out anything as barbell, almost eligible.

and Our have. ourselves the already bespoke a capabilities focus how them very is on of are in now organic But about we building client we do multi-asset from it think way and through terms thinking we about conceptually -- thinking of for product those there’s and have sales opportunity. We institutional that. distinctive large or to is capabilities management that our strength some that, clients an are products creating we

inorganic, to those clients look now there’s that to comes engineer, organic something So for the they In are are if certainly along do mean, and able I hard plenty we sense it. our -- at terms shareholders, been seeing of right? that been of our for that results. makes will have But you we in

Jim Mitchell

That’s All helpful. Thanks. right. Great.

Operator

Your Securities. of Mayo line next with Wells question Mike from Fargo the comes

Mike Mayo

now XX,XXX you XXXX late employees, have you had XX,XXX In around Hi. employees.

was wondering, played is, in big So it you of, for are expectations headcount. to what’s didn’t last cloud, more Street picture how decade forward? do of just It the like technology cloud, now. decade. much almost putting better seems your your later, great revenues without cloud, role that a tech question private public into how I State backbone are you the it’s much remain the To And going the in going expect implemented first terms cloud, and go after adding on you state are what has what

So kind that again, and tying of an update back on that, to headcount?

Ron O'Hanley

here. its Yeah. Mike, Ron

you it employee it’s we important base, of just utilize In technology. service that over higher it’s you now. would has I’d and and long an find I That arms And cost automation, it. point, automation too. the in a has you period. services, of terms getting just make job where of to that not that couple the are leverage and tasks not the mean quite the elusive moving for and automating line same be mix the productivity And others which those, as judgment. taking are points service this that out and lot those this assembly service actually time more listen, a has there. are lower arms. many changed suspect of is point also automobile productivity is with your firm, around constitute need it’s envision, of of we is to locations, not we is composition lot been so it mechanical what’s and continuing job are changed and things many, that you But lots A you of I such raising our a about getting are tends leverage It a an thing I remaining the the value-added think taking

that. getting better better are and instituting We at

have down a have we and lot long a this on of Again, much productivity. context, the good time, about Mike, other also, in spending are for newer. We time ones talked measuring manufacturers, we service had companies it’s this

a got covered have productivity metrics. for that’s percentage our company by significant now We

and the and group a a some and effect, group, Hawthorne difference it’s from situated sometimes, that they just pretty -- that drive learn is -- to saying, we same and this are hey, can that between that You now doing similarly are starting and there’s the measure what that thing, right? there’s old productivity. you of And

an the team. a making technology have. we team On the progress. of It’s that outstanding side, It’s I stand by lot

is at and goes and continuing It’s of stuff lead lead our is the at we in it’s for making. in This that up it just it’s around be as see know, the cyber of to cost quarters in to I to and starting done approaching capabilities years the it and future. the of And last with resilience. up be they that progress. are have about will we the did showing now up to a in new we payoff the are making in investment good think technology, But the things and want Again, G-SIB, As we the and deal need are the for and result, you some up an but numbers. things that not the we lot there. -- pure quarter, you is many industry, to part issue more that new up. and investment that’s very particularly payoff we as A ongoing

Mike Mayo

interesting, assembly line. that found the just auto the you with And -- I very gave analogy

the end? yet, know a want follow-ups, value-added how question, headcount automate maybe of you automate services So to don’t ahead, you two please? when or parts at on much one the don’t And you maybe that those leaving can answer that again, going business, you but the

Ron O'Hanley

mean done. I asset a there’s do that value. a that. mean next but goes than the asked, checking mean, know we which question of the And and that NAV -- goes question have have can of I you we far don’t of about more I into part go? a reconciliation lot we you know are the lot striking into to and yet, of and Yeah. how asking net lot we we there’s think then the a can first is that that there’s a that

talked starts are done you in end as flurry that lot the X:XX. do soon you human checking begins at that we what putting fact, are forums, where about by end such that, and of NAV trading to that the hopefully X:XX final day is intervention. is this into -- AI right, doing have at as of starting really We But as not need again it’s make at a we calculation that the other are be in

Mike, question and Did So, people? was what headcount? a your question or miss I on

Mike Mayo

Yeah.

technology to connection. trying between make are connection was no. flat. am maybe headcount, the I and But Again, I that and -- your headcounts Just forcing

Your revenues look are going higher. they like

You intense, and you given expect installation, up initiatives coverage the those to talked about process, start again backlogs, backlog? do headcount going

Ron O'Hanley

of this just And which in us see as what that been from is deal we more level system. the compensation most sophisticated about headcount demanding. What to kind and challenge the same clients breaking a occurred and a is that money. getting did. think should some the revenue I our lot relationship the scale past of in that is of really scale went us our They out tend expect of past, highest to pay you is related effect with the costs up of has at

easing have to better to of much are continue us those you their that. about getting those scale in operations relationships out But So justified. expect we demands do gotten should and

Mike Mayo

Got you. Thank it.

Operator

Research. next Rob Wildhack with of question the line from Your comes Autonomous

Rob Wildhack

guys. morning, Good

Ron O'Hanley

Hi, Rob.

Rob Wildhack

some trajectory the sustainable? a you question on if growth am on and the comment nice guys another drivers professional you highlighting we software enabled that of pieces. quarter results. I is that you the CRD, wondering think of Do Just could of quarter’s saw job this did the services XX% this

Eric Aboaf

That Eric. it’s is sustainable. certainly Rob,

because roll functionality still It basis. think then like they few different double have actually of the I services closer for more is clients, also is combination think to and if standardized actually the because their upgrades the with not in offering. And number market out XX%. growing in revenue are past, cases, -- -- I professional in a where new have last you some in cloud back have in to that But happening of releases is what’s nicely we has we clients that rest a get and would a seen the to have the and digits, on-premise and the time it’s you connect on One you for do of the, quarters, installations offering, example, the realizing SaaS earnings enabled of up can conversion estate, their regular feature up. described SaaS, new go value from things. is the software two we the cloud over to what take you is got to

I double-digit Charles enabled bit set a teens They will -- typically. the going future those of mid revenues to the -- the franchise component in just -- the that a the services a professional -- around that’s that’s I little are be with in services. software areas. So River, is in that’s bounce in of But that’s professional think real of and think,

Ron O'Hanley

that offering. we into not that investment add have one fact, the investments enhancing, are was, it’s CRD what to would much key Rob, the have overhauling is, in we put the cloud of I or of

that It -- desires We where Azure clients. combination the particularly, on more But offering needs. which there’s to as Microsoft installed And is noted, in platform. is giving terms very flexible as we SaaS unique on that gives -- have basically Eric that that River It’s have data States, data is migrated particular you whole and us location, being ability robust Charles to Azure in located the more bought outside United should a -- clients when the basically of get more it’s a of for it. be had than flexibility a now standardization.

Rob Wildhack

think maybe the see that profitability it. starting what about Got want that profitability margin and ask Do in then forward? did about in CRD. are I or the you think to And business scale relatedly, you of longer going term profile you business to of signs do

Eric Aboaf

Yeah. Eric. it’s Rob,

point. We are that getting to

digits would years the was to lift three in of have part deal -- low needed two-year, I the what our the from average on we into year what the topline was That digits said. we think and was revenue River of bought reinvest Charles as modeling, thought double first platform. we revenue said. ago part deal in announced We we or single we

And earnings have really so have, think take year the point growth got momentum did to we starting where to can should advantage where get can this deliver it functionality to and in and it we now up last and and that we of time I But the reinvest it’s XXXX -- XXXX, of business. over need this where take seen the year. we are the scale

Ron O'Hanley

been categorize to there’s going we was, in business. enhance established categories. matter, its -- the to you do investments and River okay, core other two offering any Rob, have would Charles for One which are for here I’d River what buyer, expected historic Charles is two us the that in broad probably,

of back. second the has been And The integral front Charles Eric connectivity, the there’s and an about been is a River that flatten not kind making that. middle about also -- part of the that’s a of we there quite to been that’s are Alpha to -- related you Street other and earlier and State that should lot and if investment implemented. of a it’s I come to been has there’s then been out, And connectivity category development and platform start like decline. that of of the out of the -- that’s parts talking River popped lot mean think of whole investment to we that, connectivity the of of bit some at enabling completed that, Charles think kind nothing and peak was that

Rob Wildhack

Got it. Thank guys. you,

Operator

the And with your next question comes JPMorgan. Vivek Juneja of from line

Vivek Juneja

of both questions Eric. Ron and Hi. couple for you, of A

Firstly, markets? the stand active about mentioned in have products has where equity talked a in you wide strong your stuck there? you the know how mind what’s you to and your the want for that about but you Do in? Is -- Ron, last you it’s so given the despite moved that you management thinking a asset something wider comment still window? quarters. be your that exit got I given does stand or side, It really small, four been hasn’t

Ron O'Hanley

vehicle help sun. Yeah. with. ETFs much is portfolios. active that. we to not space, to propel yet think also equity active provide move be will enduring part is, a portfolios believe play a in It the active will the But tends which our seen and It’s part different Vivek, the construct in of small value actually and will in right, do that We should to play a that day

management the products is can channel we one the this broad a So that nature active the one of relationships people view of equity. set accommodate again, and the of nature including -- as institutional relationship given

Vivek Juneja

make that on sort of would that to really And material or... a need acquisition impact an

Ron O'Hanley

close focused we be would organic where -- is a which this and take speculation. extent focus at full of our came along and that’s products to look will because Again, inorganic, about in would the our certainly terms at the shareholders, our agenda point made that for to it for something sense I pretty are just clients that’s we hate it. all Again, to be. speculate

Vivek Juneja

office, someone should the trillion fee I an what services, -- from mean, client can the think -- the with large a are win give given separate about sounds how completely are that that may, and that of of $X if What incremental is perspective existing win big, therefore, you that Alpha, is is that, a us big they incremental revenue meaningful like existing you given front client, they And a question, kind Invesco, client? office and how we already. is? did but some I the huge middle add already

Ron O'Hanley

the client. It certainly -- of only not them. Yeah. are we servicer we is large a But

I So about think services there few would buckets. the a in

back transitioned before over the announced some actually back we office, even additional which Firstly, -- win office.

office, of Secondly, as River, core will is Charles And the terms platform then, noted. for them. be middle front which thirdly, office operating in you

relationship is So because trying technology with we us it’s And really partnering to and a across help longstanding the terms future. clients the do platform us their extendable with with in in functionality in helping stack, Board. features of the also Alpha what have be to again, are us terms to of into develop this that developing, them They operation achieve them. them new they other and partnered have will

Vivek Juneja

And little time to office I probably longer normally guess get installs as would come does? the a it middle bit

Ron O'Hanley

Right. Right.

Vivek Juneja

Thank Okay. you, both.

Ron O'Hanley

Thanks.

Operator

turn questions Ron over call There other I closing the this at are remarks. no will to time. now for back

Ron O'Hanley

Thank the thanks all of call on joining for you and you, Operator, us. to

Operator

call. conference today’s concludes This you. Thank

now may You disconnect.