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GS

GOLDMAN SACHS GROUP INC (GS)·Q2 2025 Earnings Summary

Executive Summary

  • GS delivered net revenues of $14.58B, diluted EPS of $10.91, and annualized ROE of 12.8% in Q2 2025; revenues were +15% YoY and -3% QoQ, while EPS rose +27% YoY but fell -23% QoQ .
  • Results beat S&P Global consensus: revenue $14.58B vs $13.58B estimate (+7%), EPS $10.91 vs $9.66 estimate (+13%); prior quarter also beat, signaling estimate revisions upward are likely*.
  • Global Banking & Markets drove outperformance with record Equities net revenues ($4.30B, +36% YoY) and strong Advisory ($1.17B, +71% YoY); FICC financing reached a record $1.04B .
  • The Board raised the quarterly dividend 33% to $4.00 per share starting Q3 2025 and repurchased $3.0B of common stock, underscoring capital return and confidence in more durable revenues .
  • Backlog rose for a fifth consecutive quarter, with advisory strength; management highlighted AI-driven efficiency initiatives (GS AI assistant, agentic developers) as medium-term productivity catalysts .

What Went Well and What Went Wrong

What Went Well

  • Record Equities performance and strong Advisory: “Equities net revenues were a record $4.3 billion… Advisory revenues of $1.2 billion rose 71% versus a year ago” .
  • Financing resilience and wallet share gains: “Total financing revenues… reached a new record… now comprising over one-third of overall fixed and equities revenues… top three with 125 of the top 150 clients globally” .
  • AI and productivity: “Rolled out our natural language GS AI assistant to the entire firm… piloting Devin… which will significantly enhance velocity, transform our capabilities, and drive efficiency” .

What Went Wrong

  • Credit costs: Provision for credit losses rose to $384M (+36% QoQ), driven by credit card net charge-offs and portfolio growth .
  • Asset & Wealth Management investment marks: Equity investments posted a slight loss, and Debt investments declined sharply YoY amid reduced balances and hedge losses; AWM net revenues were -3% YoY .
  • CET1 and SLR ticked down QoQ (Standardized CET1 14.5% vs 14.8% prior; SLR 5.3% vs 5.5%), reflecting higher RWAs and balance sheet assets .

Financial Results

Headline Comparisons (oldest → newest)

MetricQ2 2024Q1 2025Q2 2025
Total Net Revenues ($B)$12.73 $15.06 $14.58
Net Earnings ($B)$3.04 $4.74 $3.72
Diluted EPS ($)$8.62 $14.12 $10.91
Operating Expenses ($B)$8.53 $9.13 $9.24
Net Interest Income ($B)$1.99 $2.90 $3.10
Provision for Credit Losses ($MM)$282 $287 $384

Actual vs S&P Global Consensus (EPS/Revenue)

MetricQ2 2024Q1 2025Q2 2025
EPS Consensus Mean ($)8.42*12.26*9.66*
Actual Diluted EPS ($)8.62 14.12 10.91
Revenue Consensus Mean ($B)12.37*14.71*13.58*
Actual Revenue ($B)12.45 15.06 14.58
  • Q2 2025 beats: EPS +13% vs consensus, Revenue +7% vs consensus. Q1 2025 also beat both. Values with asterisk retrieved from S&P Global*.

Segment Net Revenues ($MM)

Segment / LineQ2 2024Q1 2025Q2 2025
Global Banking & Markets – Investment banking fees$1,733 $1,914 $2,191
Advisory$688 $792 $1,174
Equity underwriting$423 $370 $428
Debt underwriting$622 $752 $589
FICC intermediation$2,330 $3,390 $2,423
FICC financing$850 $1,014 $1,044
Equities intermediation$1,786 $2,547 $2,595
Equities financing$1,383 $1,645 $1,706
Other$102 $197 $161
Global Banking & Markets – Total$8,184 $10,707 $10,120
Asset & Wealth Mgmt – Mgmt & other fees$2,536 $2,703 $2,805
Incentive fees$46 $129 $102
Private banking & lending$707 $725 $789
Equity investments$292 $(5) $(1)
Debt investments$297 $127 $83
Asset & Wealth Mgmt – Total$3,878 $3,679 $3,778
Platform Solutions – Consumer platforms$599 $611 $623
Transaction banking & other$70 $65 $62
Platform Solutions – Total$669 $676 $685
Total Net Revenues$12,731 $15,062 $14,583

KPIs and Balance Sheet

KPIQ1 2025Q2 2025
Book Value per Common Share ($)$344.20 $349.74
CET1 Ratio (Standardized)14.8% 14.5%
Supplementary Leverage Ratio5.5% 5.3%
Global Core Liquid Assets (avg, $B)$441 $462
AUS Ending Balance ($T)$3.173 $3.293
Long-term AUS net inflows ($B)$29 $17
Total AUS net inflows ($B)$24 $5
Dividend per common share (declared)$3.00 $4.00 (effective Q3)
Common share repurchases$4.36B $3.00B
Headcount (period-end)46,600 45,900

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly dividend per common shareQ3 2025 onward$3.00$4.00Raised
Full-year effective tax rateFY 2025~21% (Q1 guide) ~22% (updated) Raised
Share repurchase authorizationMulti-yearN/AUp to $40BInitiated/Confirmed
SCB requirement (Standardized CET1 min)Effective Oct 1, 202513.6% current CET1 requirement10.9% expected minimumLower requirement (regulatory)
AWM incentive feesMedium-termTarget ~$1B annuallyRamp more materially in 2026–2027Timing clarified

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Investment banking/M&A backlogBacklog rising; optimism for 2025 pickup Backlog up fifth straight quarter; advisory strength Improving
Equities and financingRecord 2024; financing CAGR; record Q1 Record Equities and financing again; >1/3 of FICC+Equities revenues Strong and expanding
AI/technology3-year efficiency plan, automation Firmwide GS AI assistant; Devin pilots for software Accelerating adoption
Tariffs/macro policyConstructive but uncertain; regulatory recalibration Acknowledges tariff/trade uncertainty; risk discipline emphasized Cautiously watchful
Capital & dividendsCET1 cushion; record buybacks; dividend growth 10.9% min CET1 expected; dividend to $4; 50–100bps buffer typical Greater flexibility
Alternatives/AWM$72B 2024 fundraising; target margins $18B gross fundraising; AWM marks muted; target $1B fees medium-term Solid fundraising; harvesting slow
Tokenization/digital assetsNot detailedMonitoring regulatory developments; potential opportunities in funding/market structure Early-stage exploration

Management Commentary

  • CEO: “We delivered a strong performance… net revenues of $14.6 billion, EPS of $10.91, and an ROE of 12.8%… our backlog rose for a fifth consecutive quarter, driven by advisory.”
  • CEO on AI: “Rolled out our natural language GS AI assistant… piloting Devin… which will significantly enhance velocity… and drive efficiency.”
  • CFO: “Equities net revenues were a record $4.3 billion… record equities financing… record fixed financing revenues of $1 billion.”
  • Capital return: “Our board also approved a 33% increase in our quarterly dividend to $4 per share… and authorized a multi-year share repurchase program of up to $40 billion.”
  • Press release highlight: Dividend increase, $3.96B capital returned (repurchases $3.0B; dividends $957MM) in Q2 .

Q&A Highlights

  • Capital buffers and deployment: GS plans a 50–100bps buffer over minimum CET1; excess capital directed first to client franchise, then buybacks/dividend .
  • AWM historical principal investments: Reduced ~10% in quarter to ~$8B; committed to aggressively shrinking; harvesting environment still challenging .
  • Dividend sizing: Aim is sustainable, steadily rising dividend; 2025’s 33% raise reflects durable revenue mix, not a recurring step-up .
  • M&A outlook: Announced M&A up 30% YoY and 15% above 5-year average; dialogue significantly increased; backlog notably higher vs YE 2024 .
  • Tokenization: Watching legislative/regulatory developments; potential opportunities around funding and digitization benefits .
  • Trading vs IB cycles: Markets business is broad/diverse; robust IB activity remains constructive for markets .

Estimates Context

  • Q2 2025 beats: Revenue actual $14.58B vs $13.58B consensus; Diluted EPS actual $10.91 vs $9.66 consensus — both positive surprises likely to spur upward estimate revisions*.
  • Prior quarter also beat (Q1 2025 revenue $15.06B vs $14.71B; EPS $14.12 vs $12.26*), reinforcing momentum.*
    Values with asterisk retrieved from S&P Global*

Key Takeaways for Investors

  • GS delivered a clean beat on both EPS and revenue; strength was broad-based with record Equities and robust Advisory — narrative supports positive estimate revisions and constructive sentiment for capital markets-linked revenues .
  • Dividend increased to $4 and buybacks continued ($3B); combined with expected CET1 minimum reduction to 10.9% (effective Oct 1), capital return is a medium-term tailwind .
  • Financing businesses (FICC and Equities) are now over one-third of total markets revenues and provide ballast through cycles; watch continued growth and risk discipline .
  • Credit costs rose on credit cards; monitor Platform Solutions credit performance and consumer NCOs for near-term EPS volatility .
  • AWM marks were soft; incentive fees ramp more likely in 2026–2027; near-term harvesting muted — focus on fee growth, AUS inflows, and alternatives fundraising cadence .
  • Backlog increased for the fifth straight quarter, with advisory strength and CEO confidence improving; IB fee trajectory is favorable contingent on macro/regulatory clarity .
  • AI initiatives (GS AI assistant, agentic devs) indicate credible productivity upside and operating leverage over time; medium-term efficiency gains can support margins even as GS invests in growth .