Good morning. Welcome to Morgan Stanley's Third Quarter 2025 Earnings Call. On behalf of Morgan Stanley, I will begin the call with the following information and disclaimers. This call is being recorded. During today's presentation, we will refer to our earnings release and supplement, copies of which are available at morganstanley.com. Today's presentation may include forward-looking statements that are subject to risks and uncertainties that may cause actual results to differ materially. Morgan Stanley does not undertake to update the forward-looking statements in this discussion. Please refer to our notices regarding forward-looking statements and non-GAAP measures that appear in the earnings release. This presentation may not be duplicated or reproduced without our consent. I will now turn the call over to chairman and chief executive officer Ted Pick.

Thank you. Good morning, and thank you for joining us. In the third quarter, Morgan Stanley generated record top and bottom line performance with revenues of $18.2 billion and EPS of $2.80. Robust returns on tangible of 23.5% reflect the operating leverage of the integrated firm. The capital markets flywheel is taking hold as the administration seeks to execute its three-pronged strategy to reshape the economy, with Fed rate cuts likely to continue into next year. Across public and private markets, institutional and retail clients are engaged, seeking trusted advice and global access from investment bankers, financial advisers, and market specialists. From 2024, a top priority for the team has continued to be the reaffirmation of Morgan Stanley's strategy to raise, manage, and allocate capital. Over time, we aim to execute on a higher plane when favorable capital markets environments permit. Our business model is activity-based. We cannot control the broader economic and market backdrop; however, the heart of the Morgan Stanley investment thesis remains our commitment to delivering earnings and returns durability alongside continued dividend growth through periods of uncertainty. This focus on maintaining earnings durability and driving earnings growth is governed by execution and rigor inside the lanes of the priorities outlined in our annual strategy deck. The readout of sequential EPS results during this period underscores ownership of earnings growth and durability against different economic backdrops. Morgan Stanley is well positioned in each of our businesses and is demonstrating consistent execution. Total client assets across wealth and investment management are up $1.3 trillion over the last year, now reaching $8.9 trillion. In Wealth, our scale and client reach continue to drive performance. Reported margins were a full 30%. We added $81 billion of net new assets and $42 billion in fee-based flows in the quarter. Investment Management continues to scale capabilities, with sustained leadership from Parametric. Across all three regions, our institutional securities business delivered outstanding results. Our equities business affirmed its number one position with a standout quarter. A rebound in the investment banking environment reopened the door to strategic M&A and renewed financing activity. The equity underwriting result was also industry-leading this quarter, which speaks to the power of our integrated investment bank. Regarding the bank regulatory capital framework, regulators are moving toward a more balanced approach, executing on their prudential oversight responsibilities and leveling the competitive playing field, where the largest best-capitalized financial institutions can once again act as a primary engine to drive sustainable economic growth. Morgan Stanley specifically appreciates the Fed's recent reconsideration of our CCAR results and we look forward to ongoing dialogue and transparency. Our excess CET1 capital stands at over 300 basis points. Periods of economic and geopolitical uncertainty were to be expected. As we transition from the post-pandemic period, we now could call the continuation of history. This period will see the push and pull of industrial policy, national identity, and technological innovation being front and center for our clients and stakeholders. Morgan Stanley will continue to capture opportunities throughout cycles, staying close to our clients as they raise, manage, and allocate capital. We're actively investing in the integrated firm, across wealth and investment management, institutional securities, our bank, and infrastructure units. We are deploying capital and expanding capabilities through the wealth funnel and enhancing the global distribution of our asset management offerings. As macro uncertainty and enormous opportunity uncomfortably coexist, our 2025 year-to-date results demonstrate both the capability and capacity to deliver earnings durability and generate operating leverage against shifting economic and geopolitical backdrops. Morgan Stanley's strategy remains consistent and our durable earnings and capital strength are clear. The quarter's performance across wealth and investment management, alongside the strength across institutional securities in all three regions underscores the proposition of the integrated firm. We are focused on generating strong returns for our shareholders and have real degrees of flexibility to pursue growth opportunities across our core businesses. We are committed to advancing through $10 trillion in total client assets and on to the next phase of Morgan Stanley's growth trajectory. As the firm celebrates its ninetieth anniversary, we remain focused on executing first-class business in a first-class way. Sharon will now take us through the quarter in greater detail.

Thank you, and good morning. The firm delivered exceptional results in the third quarter, underscoring the power of our global integrated firm and the scale of $8.9 trillion in total client assets. Performance was very strong across the businesses and regions, driving record revenues and an EPS of $2.80 with an ROTCE of 23.5%. The year-to-date efficiency ratio is 69%. The firm continues to demonstrate operating leverage while maintaining focus on long-term investments. Our investments in workplace, E Trade, and our investment banking franchise are yielding results. Our early AI use cases, some live and some in pilot, are showing progress. These include the DevGen AI tool, which enhances developer efficiency by modernizing code, Terrible, an interactive tool that quickly analyzes and summarizes data, and LeadIQ, our AI-powered lead distribution platform, focusing on matching workplace and self-directed relationships and facilitating engagement with our financial advisers. Together, these use cases are laying the foundation to drive productivity across the firm. Now, to the businesses. Institutional securities revenues were a standout at $8.5 billion, driving powerful operating leverage. While The Americas led the year-over-year growth, clients were active around the world. We are continuing to see attractive returns from steadily investing across the integrated investment bank. Themes around emerging technologies and renewed investor appetite in Asia contributed to the results. Investment banking activity has meaningfully improved after several years of muted volume. Capital markets reopened and supported underwriting issuance across both debt and equity products. Specifically, market receptivity for IPOs encouraged both sponsor and founder-led companies to come to market. This combined with strong credit metrics set the stage for renewed strategic activity. Investment banking revenues increased to $2.1 billion, marking one of the strongest quarters in recent years. The year-over-year improvement was driven by broad-based strength, with underwriting results up over 50%. Advisory revenues increased year over year to $684 million, driven by higher completed activity. Equity underwriting revenues increased 80% year over year to $652 million, driven by IPO activity and further supported by strength across equity products and sectors. Activity picked up materially in September, stemming from record-breaking post-Labor Day issuance in The Americas. Fixed income underwriting revenues were $772 million, driven by higher non-investment grade and investment grade loan issuance. As the M&A market shows signs of recovery, event-related lending commitments showed supportive results, as clients took advantage of refinancing opportunities. Secular themes and pent-up demand have supported an increase in activity across the integrated investment bank. Clients are increasingly turning to Morgan Stanley to navigate complexity, monetize opportunities, and deploy capital decisively. In the quarter, robust pipelines translated into announcements, with credit markets resilient and conducive to activity. We continue to selectively hire bankers and product specialists as the integrated firm culture creates opportunities to deepen the coverage footprint. Our leading equities franchise generated $4.1 billion in revenue, propelled by broad-based performance across products and regions. Prime brokerage revenues drove results, as average client balances and financing revenues reached new records. Cash results were strong, reflecting active client engagement and an increase in global market volumes compared to the prior year. Derivative results were up year over year, driven by higher activity and regional strength in EMEA. Fixed income revenues were $2.2 billion, showcasing consistency driven by strong client engagement across credit and commodities, partially offset by lower results in foreign exchange. Macro results increased year over year; performance was driven by strength in securitized products, benefiting from robust securitization activity and historical growth in durable lending balances. Macro revenue declined versus the prior year as volatility decreased in foreign exchange markets across developed currencies, leading to reduced client activity and trading opportunities. Results in commodities finished the quarter with strength, increasing year over year as driven by our North American power and gas business, which included structured transactions during the period. In the quarter, ISG provisions were modest at $1 million as a sequential improvement in the macroeconomic forecast was offset by portfolio growth and individual assessments. Net charge-offs totaled $46 million, primarily driven by commercial real estate loans, which had largely been provisioned for in prior quarters. Turning to wealth management, our franchise is growing with sustained momentum, reinforcing our industry-leading position. A record $7 trillion in total client assets, record revenues of over $8 billion, and continued operating leverage drove margins to 30%. Another quarter of strong net new assets and robust fee-based flows illustrate the power of the funnel and the scale of our client base, spanning over 20 million relationships. Assets that originated from workplace continue to migrate into our advisor-led channel due to the consistent investments we've made into our differentiated platform. We are not standing still. In the third quarter, we continued to invest, deepening our competitive moats in areas like our expanded collaboration with Carta in private markets and in digital assets through announced partnerships with Zero Hash. We continue to innovate, reinforcing our leadership in the industry and enhancing our ability to service our clients with unique capabilities. Moving to our business metrics, record revenues were $8.2 billion. The business continues to demonstrate operating leverage, with the reported margin expanding to 30.3%. DCP negatively impacted the margin by approximately 100 basis points this quarter. Asset management revenues were a record $4.8 billion, with fee-based flows exceptionally strong, exceeding $40 billion for the second consecutive quarter. Transactional revenues totaled $1.3 billion and, excluding the impact of DCP, were up 22% year over year. Throughout the quarter, retail clients were engaged across products, with self-directed activity particularly strong. We launched Power E Trade Pro, reflecting our investments to enhance our platform. These investments have helped support E*TRADE's transactional revenue, which is highly accretive to our margin. Bank lending balances rose $5 billion sequentially to $174 billion, reflecting our multiyear investments to meet the full portfolio needs of our growing client base. In the quarter, we deepened our client penetration with lending solutions, inclusive of securities-based lending and mortgages. Sequentially, total end-period deposits grew to $398 billion and net interest income increased to $2 billion. The growth in NII was driven by the impact of our market environment and cumulative loan growth. Heading into the fourth quarter, we expect to see a modest sequential gain in NII. Of course, the rate environment, trajectory of loan growth, and deposit mix will all come into play. Finally, in the third quarter, we delivered net new assets of $81 billion, a testament to the depth and breadth of our diversified platform. All three channels contributed to our asset growth. The reopening of the IPO market also supported results, further evidence that our workplace channel serves as a powerful asset acquisition tool. This quarter, the business demonstrated exactly what it is built to do. With over 20 million relationships and $7 trillion in total client assets, our scale and connectivity set us apart, positioning us to deliver. Turning to investment management, the business continues to perform well. We are seeing momentum for secular demand in our highly sought-after Parametric Solutions and expanding our global reach in fixed income. Our investments have supported our growth to a record $1.8 trillion in total AUM and further position the business for the opportunities ahead. Long-term net inflows were $16.5 billion in the quarter, with over half these inflows driven by Parametric and further supported by ongoing strength in fixed income. Parametric inflows were inclusive of a large partnership with a third party investment adviser seeking greater tax efficiency for its clients. Liquidity and overlay services had inflows of $24.8 billion, driven by demand for our liquidity strategies. Revenues of $1.7 billion increased 13% compared to the prior year, driven by higher asset management and related fees on the back of higher average AUM. Performance-based income and other revenues totaled $117 million, supported by gains in infrastructure, private equity, and real estate. Turning to the balance sheet, total spot assets grew to $1.4 trillion. Standardized RWAs increased sequentially to $536 billion as we actively supported clients. Exposures rose intra-quarter, with greater levels of activity and reduced to quarter-end as we syndicated risk. Our standardized CET1 ratio stands at 15.2%. We opportunistically bought back $1.1 billion of common stock in the quarter. Our quarterly tax rate was 23%, excluding $50 million of net discrete tax benefits. We continue to expect our fourth quarter tax rate will be approximately 24%. The firm is operating with momentum across all segments. We enter the fourth quarter from a position of strength, with a combined $8.9 trillion in total client assets, an engaged client base, healthy pipelines, and global reach. We remain focused on continuing to invest in our business as we look ahead. With that, we will now open the line up to questions. To get in the queue, you may press star and the number 1 on your touch tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press star and the number 2 on your touch tone telephone. You're allowed to ask one question and one follow-up, and then we'll move to the next person in the queue. Please stand by while we compile the Q&A roster. We'll take our first question from Dan Fannon with Jefferies.

Please go ahead. Good morning, Dan.

Ted, I was hoping you could just talk about the environment. You've been quite bullish all year. Obviously, a great quarter. Can you talk about the sustainability of these trends, maybe the backlog in investment banking, the diversity, and how that compares to maybe prior periods?

The question is the right setup. Whether we are entering a golden age in investment banking remains to be seen, but it has been several years of chatter around green shoots, and now the flywheel is taking hold. It's happening across industry groups, across regions, and against a generally more favorable regulatory backdrop. It's happening at a time of deglobalization and reglobalization, depending on where you are and how you're looking at it. Obviously, the need to harness the cost of endogenous AI sets up for a very interesting environment for strategics competing for product with sponsors in each region and major industry. We've been spending considerable time and capital building our investment banking core, and the fruits of that are seen in both equity and debt underwriting numbers and an advisory number that continues to pick up. To what you're alluding to, Dan, the pipeline looks very good across all three regions, so we are optimistic. Now, of course, the world is an uncertain place, and there could be pauses depending on how geopolitics feel. But generally speaking, the investment banking product category over the next couple of years should trend generally up.

Great. Thank you. That's helpful. And then Sharon, I was hoping you could expand upon your comments regarding the NNA growth within the wealth channel. You talked about workplace and the IPO market being a contributor. If there's a way to contextualize that a bit more and also just talk about the other channels in terms of the momentum there as well. Thank you.

Absolutely, Dan. Thank you for the question. All channels are strong. Self-directed: we've been increasing our marketing and business development, and you see that. Our advisory is also strong. We're bringing in both new and existing clients, attracting assets held away. But we're also seeing new clients. As it relates to workplace, that's probably the most exciting part. I think we're just scratching the surface of what we've seen in workplace. It's bringing in assets, not just in NNA, but also directly into fee-based flows. With IPOs coming to market, we are seeing people bringing their assets to Morgan Stanley, depositing into self-directed accounts, and also moving money directly into the advisor-led channels. That has been a large part of the story. Historically, we've mentioned a $300 billion number regarding workplace migration, and we’ve seen about $60 billion of migration per year. We're now three quarters into it, and we're exceeding those numbers for the full year. Workplace has been a contributor to net new assets, fee-based flows, and channel migration.

Hey, Ted. I had a question on the pretax margin hitting 30%. I know you kind of removed all the pluses and the signs when you took over as CEO, but it's coming up a lot more frequently in conversations with investors. When we look beyond one, do you think you've achieved a point where the 30% pretax margin is sustainable? I'm not questioning your guidance, but I wonder about the outlook regarding productivity improvements. Is there a risk that the 30% number is drifting higher or moving lower in the medium-term?

Thanks for your question. It's incredibly important that we continue to understand that the investment dollars go into that wealth business to broaden and deepen the funnel flywheel that Sharon just described. Whether it is putting more dollars into the pro product in E*TRADE, where we're also focused on increasing deposits, investing in adjacent digital asset products, or deepening relationships at corporate workplaces, or ultimately investing in our financial advisers, we will continue to allocate investment dollars into the system. Whether that allows us to achieve a number higher than 30 over time remains to be seen. Right now, it's important for everyone to note that we reported a number in a reasonably friendly environment that was 30.3%. However, that is an output, not an input. The ongoing investment dollar allocation is intended to drive PBT growth and what is exciting about what the wealth team has done is to drive revenues and overall growth in each piece of the funnel.

Got it. And regarding the AI discussion, there's considerable conversation around whether there's an AI bubble, reflecting on where we might be in the cycle. How do you handicap that risk within both investment banking and in how your wealth clients are thinking about things?

When we think about our use of AI, we see numerous applications that extend beyond just efficiency. It's also about enhancing productivity, both on the expense and revenue sides. I noted three different examples in my opening comments, which were purposeful because they all represent different ways to leverage AI from a firm-wide perspective. One application allows coders to work faster and more efficiently by reviewing and rewriting code. Another is LeadIQ, which enhances revenue by giving more time to advisers to produce better results. Finally, Parable offers firms analytical capabilities to summarize financial data. This technology is extremely powerful, and I think we are just beginning to scratch the surface of what it can do.

I wanted to follow up on wealth management and your outlook for the business. Given your leverage to private markets and technology sectors through your partnership with Carta, I'd expect you to benefit from the wealth creation around the AI CapEx cycle. How do you see that influencing your outlook for organic growth in the 5-7% range over time?

In private markets, we are the largest provider in the alternative space for wealth management, given our overall aggregate size. It's about $250 billion of client assets. However, I think it's important to note this is an education process, and we don't expect immediate gains. We see the opportunity for growth but understand that the process will take some time as we attempt to educate clients and adjust their portfolios.

Regarding equities, there's been impressive growth. Can you remind us of what's driving these share gains, and where do you see further opportunities moving forward?

Equities is an incredible business. We've significantly invested in our platform, our people, and our global reach. This speaks to what's driving durable share gains for ISG. Our equities business is consistent, and we've done a lot of investing across our global regions. We've observed share gains fueled by increases in prime brokerage balances, and we continuously explore technologies that enable our clients to be more efficient. Furthermore, our global strength is evident; we talk a lot about competitive advantages built over time, and we have been committing resources to expand across Asia and other regions.

Ted, I wanted to drill into the Carta relationship. You've mentioned the recent expansion in your remarks. Can you provide insight into your past experiences with Carta and expectations for this new, larger relationship?

It's great to hear from you, Brennan. The relationship with Carta is multifaceted. Initially, it was a referral model, with companies moving from private to public being referred to Morgan Stanley. This has proven effective, and we've seen conversions due to this relationship. Now, we are focused on providing services not just to top-level individuals but through their entire journeys, enhancing our advice-based services. This helps us deepen relationships with private companies and founders.

Sharon, I'm intrigued by your comments on the parametric inflows associated with the large partnerships. Can you differentiate your growth strategy going forward for penetrating Europe and possibly identify a significant white label opportunity you're beginning to uncover?

What you're observing is part of our wealth channel growth based on years of education. Since acquiring Parametric, we have worked to integrate it into our system, focusing on the benefits of tax harvesting and ensuring our advisers understand the product. Our strategy for growth includes enhancing retail distribution, and partnerships with third-party managers seeking to streamline their portfolios have been particularly encouraging.

Glenn, that's a pivotal question. Given the current favorable framework suggesting we may be looking at an 80 basis point refund, we should note our progression from 15 to 15.2. This, despite a dividend payout, came about because we accreted more capital. The blend of investment overview suggests a comfortable buffer of 250 to 300 basis points as we move forward.

I understand your discussions of sustainability regarding institutional securities. I'm curious if you believe it remains possible for institutional securities profitability to maintain performance alongside excellence in investment banking, as they both benefit from market conditions. How do you view this dynamic?

You have touched on an important aspect of our business. As you mentioned, we have healthy market conditions, but understanding the underlying economic cycle is critical. There is pent-up demand to address from previous years and we need to maintain discipline in ensuring optimal operational frameworks for our banks to sustain profitability. It's about the right execution with the right partners while staying cautiously optimistic in the current economic environment.

Ladies and gentlemen, this concludes today's conference call. Thank you everyone for participating. You may now disconnect. Have a great day.