[Management View]
BNY Mellon reported a record-setting quarter with total revenue surpassing $5 billion for the first time. Management emphasized the company's ongoing transformation towards a platforms-oriented business, highlighting strategic investments in digital assets and the adoption of its internal AI tool, Eliza. The company maintained conservative guidance on fee growth due to market uncertainty but upgraded its net interest income (NII) outlook to high single-digit percentage gains.

[Outlook]
BNY Mellon expects full-year 2025 NII to rise by a high single-digit percent year over year. Expenses excluding notable items are expected to increase by about 3% for the full year, with the full-year tax rate anticipated in the 22%-23% range. The company plans to return approximately 100% of 2025 earnings through buybacks and dividends.

[Financial Performance]
- Earnings per Share (EPS): $1.93, up 27% YoY; $1.94 excluding notable items, up 28% YoY.
- Total Revenue: $5 billion, up 9% YoY.
- Pre-tax Margin: 37%.
- Return on Tangible Common Equity (ROTCE): 28%.
- Fee Revenue: Up 7% YoY.
- Net Interest Income (NII): $1.2 billion, up 17% YoY.
- Assets Under Custody and Administration (AUCA): $55.8 trillion, up 13% YoY.
- Assets Under Management (AUM): $2.1 trillion, up 3% YoY.

[Q&A Highlights]
Question 1: How are you thinking about capital deployment relative to where the stock's trading today, and what is the priority outside of funding the business?
Answer: The primary focus is on generating value over the medium and long term through organic growth. M&A is considered a powerful tool but has a very high bar, especially for larger transactions. The company is open to sensible inorganic opportunities that align with strategic priorities.

Question 2: Is it safe for investors to assume that BNY Mellon is becoming a high twenties low C institution, which should support a different multiple?
Answer: There is no ceiling on ROTCE targets. The company is on a journey and making important steps forward. As a more platforms-oriented company, BNY Mellon aims to drive fee growth and maintain high ambition for its medium-term targets.

Question 3: Are fees better than your original expectations, and is that informing the slight increase in the overall cost guide?
Answer: The firm focuses on overall positive operating leverage, with revenue up 9% and expenses up 4%. The strength in fees underscores the effectiveness of the commercial model. The company expects strong momentum to continue despite seasonal variations.

Question 4: What investments are being made to improve the investment management business, and what is high on the to-do list?
Answer: The appointment of Jose as the leader of the investment management business is a significant investment. The focus is on cross-selling within the firm and bringing leadership and product development to drive better performance.

Question 5: How does AI contribute to the forward look, and is it more about revenues or expenses?
Answer: AI is viewed as both a top-line and expense story. It unlocks capacity within the company, allowing employees to focus on higher-value tasks. The benefits of AI are expected to accelerate in the coming years.

Question 6: How do you balance the trade-off between high returns and reinvesting for better growth?
Answer: The company takes a decade view of its transformation, investing heavily for the future while maintaining financial discipline. The focus is on generating alpha through diversified platforms and continuous innovation.

Question 7: What are the new revenue opportunities in the digital assets and tokenized environment, and what are the risks?
Answer: BNY Mellon sees more opportunities than risks in digital assets. The company is well-positioned to provide traditional banking services, on-ramps, and off-ramps between traditional and on-chain worlds, and more activity on-chain. Stablecoins are a significant focus area.

Question 8: How does the platforms operating model inform M&A decisions, and is it possible to integrate large-scale M&A into this model?
Answer: The platforms operating model allows for higher quality integrations, making it easier to add new capabilities without significant additional expenses. The model supports both revenue growth and cost efficiency.

[Sentiment Analysis]
Analysts were generally positive, appreciating the strong financial performance and strategic direction. Management maintained a confident and forward-looking tone, emphasizing the company's transformation and growth potential.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | YoY Change |
|-------------------------------|---------------|---------------|------------|
| EPS | $1.93 | $1.52 | +27% |
| Total Revenue | $5 billion | $4.59 billion | +9% |
| Pre-tax Margin | 37% | 34% | +3% |
| ROTCE | 28% | 22% | +6% |
| Fee Revenue | $3.5 billion | $3.27 billion | +7% |
| Net Interest Income (NII) | $1.2 billion | $1.03 billion | +17% |
| AUCA | $55.8 trillion| $49.38 trillion| +13% |
| AUM | $2.1 trillion | $2.04 trillion| +3% |

[Risks and Concerns]
- Market dependency: Fee revenue growth is subject to market conditions.
- Seasonal variations: Q3 is expected to be a seasonally slower quarter.
- M&A execution: High bar for larger transactions, requiring strong strategic alignment and execution capability.

[Final Takeaway]
BNY Mellon delivered a record-setting quarter, driven by strategic investments in digital assets and a strong focus on organic growth. The company's transformation towards a platforms-oriented business is yielding positive results, with significant potential for future growth. Management remains confident in its ability to generate value, maintain high returns, and navigate market uncertainties. The outlook for the remainder of the year is positive, with expectations of continued revenue growth and disciplined expense management.