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DATE
Wednesday, July 16, 2025 at 9:30 a.m. ET
CALL PARTICIPANTS
Chairman and Chief Executive Officer — David Solomon
Chief Financial Officer — Dennis Coleman
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RISKS
Asset and Wealth Management results for equity investments included “modest net losses in our private portfolio driven by markdowns in relation to certain real estate positions.” with management cautioning that, “Given the more challenging harvesting environment, we expect results in the second half of 2025 to be more muted relative to our medium-term run rate expectations.”
Provision for credit losses of $384 million was driven primarily by charge-offs in the credit card portfolio, reflecting ongoing credit risk in consumer exposures.
TAKEAWAYS
Net Revenues: Net revenues of $14.6 billion for Q2 2025, reflecting performance across all major business segments.
Earnings Per Share (EPS): Earnings per share of $10.91 for Q2 2025, after a $0.33 reduction from selected items disclosed by management.
Return on Equity (ROE): 12.8% for the quarter; 14.8% for the first half of the year, confirming multi-period profitability.
Global Banking & Markets Revenue: $10.1 billion in revenues for Global Banking & Markets in Q2 2025, with an ROE for the first half of nearly 18%.
Advisory Revenues: Advisory revenues of $1.2 billion for Q2 2025, up 71% year over year, driven by strength in the Americas and EMEA regions.
Equity Underwriting Revenues: Equity underwriting revenues of $428 million for Q2 2025, flat year over year;Debt Underwriting: Debt underwriting revenues of $589 million for Q2 2025, down 5% amid lower leveraged finance activity.
Backlog Trends: Advisory backlog rose for a fifth consecutive quarter through Q2 2025 and is notably higher than 2024 year-end levels, supporting forward revenue visibility.
Markets Performance: Equities net revenues reached a record $4.3 billion in Q2 2025, with equities intermediation revenues up 45% year over year and equities financing revenues up 23% year over year
Financing Revenues: Total financing revenues were $2.8 billion for Q2 2025, up 23% year over year, setting a new record for a sixth consecutive quarter and now accounting for over one-third of fixed and equities revenues.
Asset and Wealth Management (AWM) Revenues: Asset and Wealth Management revenues of $3.8 billion for Q2 2025, supported by management and other fees up 11% to $2.8 billion.
AUM and Inflows: Assets under supervision reached $3.3 trillion for Q2 2025, boosted by $115 billion in market appreciation and $17 billion in long-term net inflows, marking the thirtieth consecutive quarter of fee-based net inflows.
Alternative Assets: Alternatives under supervision totaled $355 billion at the end of Q2 2025; $18 billion of third-party alternative fundraising achieved.
Dividend: The board approved a 33% increase in the quarterly dividend to $4 per share, effective beginning in Q3 2025.
Capital Return: $4 billion returned to shareholders in Q2 2025, split between $957 million in dividends and $3 billion in repurchases.
Common Equity Tier 1 (CET1) Ratio: 14.5% at quarter end, exceeding the anticipated 10.9% CET1 regulatory requirement as of October 1, 2025; management plans to operate with a 50–100 basis point buffer above regulatory minimums.
Cost Metrics: Quarterly operating expenses were $9.2 billion for Q2 2025, with a 33% compensation ratio year to date (net of provisions) for the first half of 2025, including ~$140 million in severance; Non-compensation expenses increased 6% year over year to $4.6 billion, due to higher transaction-based costs.
AI and Technology Initiatives: Rollout of the GS AI assistant to the entire firm and piloting of Cognition Labs’ Devan agentic AI to accelerate software development, with management citing AI as “a big opportunity to automate processes, create efficiency and productivity,”
SUMMARY
Goldman Sachs (GS -1.07%) reported GAAP net revenues of $14.6 billion for Q2 2025 and delivered earnings per share of $10.91 for Q2 2025, supported by multi-year highs in multiple business lines. Strong momentum in investment banking was demonstrated by $1.2 billion in advisory revenues for Q2 2025, a 71% year-over-year increase in advisory revenues, and a persistent rise in the advisory backlog for the fifth consecutive quarter. Equities revenues set new records in Q2 2025, while Asset and Wealth Management reached a milestone with $3.3 trillion in supervised assets and sustained positive net inflows. The board announced a 33% increase in the quarterly dividend to $4 per share, beginning in Q3 2025. Management emphasized ongoing investments in AI and technology to advance operational efficiency and drive growth.
Solomon highlighted the company’s significant improvement in our expected stress capital buffer to 3.4% as a result of this year’s CCAR stress test. linking stress test results to enhanced capital flexibility and the board’s decision to raise the dividend.
Management stated they now rank in the top three with 125 of the top 150 clients globally, up from 77 in 2019 attributing market share gains to organizational and coverage model changes.
Capital deployment will prioritize client franchise growth and business investments, with buybacks and dividends as secondary use, contingent on further regulatory clarity.
AWM management and other fees reached $2.8 billion for Q2 2025, with incentive fees targeted to reach $1 billion annually over the medium term, ramping up more materially in 2026 and 2027 as deployment and harvesting progress.
Leadership reaffirmed their strategy to reduce on-balance-sheet alternative investments, maintaining a focus on asset-light models despite evolving regulatory capital treatment.
Management expects further opportunities for growth in alternatives, wealth management, and solutions businesses, stating, “solutions, which will fuel growth and more durable revenues across our platform.”
This was mainly due to credit card exposures, signaling continued sensitivity to consumer credit cycles.
The firm achieved a 22% pre-tax margin and approximately 9% ROE in AWM for the first half of 2025, with higher profit potential if excluding the impact of legacy principal investments.
Firm-wide net interest income reached $3.1 billion in Q2 2025, driven by increased interest-earning assets and loan growth to $217 billion, mainly from higher other collateralized lending.
INDUSTRY GLOSSARY
CCAR: Comprehensive Capital Analysis and Review, the Federal Reserve’s regulatory framework for assessing, quantifying, and managing the capital adequacy of large bank holding companies during periods of economic stress.
SCB: Stress Capital Buffer, a regulatory capital add-on calculated through stress tests, reflecting the quantity of loss-absorbing capital a bank must maintain.
CET1 Ratio: Common Equity Tier 1 Capital Ratio, a key regulatory capital measure comparing a bank’s core equity capital to its total risk-weighted assets.
RWA Dense: Refers to business strategies or assets that require larger amounts of risk-weighted assets, thus demanding greater regulatory capital.
Principal Investments: Proprietary positions held directly by the firm, often in private equity or real estate, as opposed to investments made on behalf of clients.
ESLR: Enhanced Supplementary Leverage Ratio, an additional regulatory capital requirement for globally systemically important banks (G-SIBs).
G-SIB: Global Systemically Important Bank, designated by regulators for systemic risk oversight and subject to higher regulatory standards.
AWM: Asset and Wealth Management, the division managing client assets and delivering wealth solutions within Goldman Sachs.
Full Conference Call Transcript
David Solomon: Thank you, operator, and good morning, everyone. Thank you all for joining us. We delivered a strong performance in the second quarter generating net revenues of $14.6 billion, earnings per share of $10.91, and an ROE of 12.8%, resulting in an ROE of 14.8% for the first half of the year. Amid shifting market dynamics, we remained relentlessly focused on serving our clients with excellence. These results are a testament to our best-in-class talent, culture of collaboration, and differentiated business across investment banking, financing, risk intermediation, and asset wealth management. Our global client franchise has never been stronger, and I’m proud of how we’ve helped our clients navigate periods of heightened uncertainty.
In investment banking, clients continue to turn to our number one M&A franchise for their most consequential transactions. The deal-making environment has been remarkably resilient. While activity was slower in the first half of the quarter, announced M&A volumes for the year to date are 30% higher year over year and 15% greater than the comparable five-year average. A narrowed range of outcomes on trade and the overall economy has helped CEO confidence and increased their willingness to transact. We’ve seen a pickup in momentum with both strategic and sponsor clients, as exemplified by Energy’s $12 billion portfolio and Salesforce’s $8 billion acquisition of Informatica. Capital markets activity has also accelerated.
During the quarter, we priced eleven IPOs for clients around the globe, including Circle, Chime, eToro, and HTB Financial Services, which have performed well on the secondary market. While uncertainty could persist in some pockets, particularly in industries highly sensitive to trade policy, we are optimistic about the overall investment banking outlook and we are incredibly well-positioned to assist clients in executing on their strategic ambitions. Our client engagement continues to be elevated, and we’re seeing it in our backlog, which rose for a fifth consecutive quarter driven by advisory. Importantly, our advisory backlog was up significantly versus 2024 year-end levels.
We’ve also remained active across our leading second equities businesses, which yet again produced very strong results in the quarter as policy uncertainty drove clients to reposition portfolios across asset classes. Our strong performance goes beyond the support of opportunity set. We are also benefiting from successful multi-year execution across our strategic priorities of driving growth in financing and prudently maximizing wallet share, which has clearly added further balance to our performance. This quarter, both our financing businesses hit revenue records as we continue to deploy resources to grow fixed financing and bolster our leading position in equities financing.
At the same time, we remain laser-focused on wallet share, and we now rank in the top three with 125 of the top 150 clients globally, up from 77 in 2019. Importantly, these hard-won share gains contributed to the demonstrated resilience of these diversified businesses. In asset and wealth management, we continue to have momentum in alternatives. We raised $18 billion this quarter, driven by demand for flagship funds across strategies, including secondary, hybrid capital, and growth equity. Wealth management client assets rose to a record $1.7 trillion. We’re making solid progress on increasing lending to our ultra-high-net-worth clients, with loan balances of $42 billion.
All in, our assets under supervision rose to a new record of $3.3 trillion, representing our thirtieth consecutive quarter of long-term fee-based net inflows. There are very few firms with this track record, and it is evident that clients continue to turn to us for our investment performance, quality of our advice, and the breadth of our offering. From here, we see further opportunities across alternatives, wealth management, and solutions, which will fuel growth and more durable revenues across our platform. As we continue to invest in further strengthening and growing our franchise, I am encouraged by the widespread progress being made in AI, which is quickly developing into an economic force that will permeate every industry.estion. You know, we are growing our asset wealth management franchise, and there might be opportunities to accelerate that growth in the scale of what we’re doing there. That’s where our focus would be. But I, you know, I don’t have anything to add more specifically at this point, Mike. But, obviously, we’re looking for opportunities to continue to scale and grow. The positioning of that asset management platform. It’s a $3.3 trillion platform. It’s very broad and diverse in what it does. But there’s certainly opportunities to accelerate our scaling in certain places. We’ll consider those things.
Katie: Thank you. We’ll take our next question from Steven Chubak with Wolfe Research.
Steven Chubak: Hi. Good morning, David, and good morning, Dennis. Thanks for taking my questions. David, in response to Glenn’s earlier question, you noted that you’re still committed to reducing on-balance-sheet alternative investments. Following the Fed’s decision this year to apply more favorable treatment in DFAST, for those types of activities, it appears to have meaningfully reduced the burden for engaging in alternative investments. I wanted to gauge whether you would ever consider pivoting from your strategy to shrinking the investment portfolio just as you evaluate organic growth opportunities. Are these investments potentially ROE enhancing just following the Fed’s decision to meaningfully alter or change the capital treatment?
David Solomon: So on the broad strategy, you know, I never is a big word, Steven, but we have no plans to change our strategy. You know, I would remind you, and I know you’re deeply aware of this, we still do use our balance sheet to seed funds in our asset management business, to co-invest in certain client situations, where we think that enhances our client franchise. But that’s very different than running a full-on alternatives platform on balance sheet. We’ve pivoted away from that strategy. We think that as an asset manager, you know, this strategy where we use some capital alongside a broad management of other client capital is the right strategy.
We’re committed to that, and we’re not gonna pivot from that. But your point remains valid, Steven, in that the strategy is driven by co-investing with clients to drive the growth of the fund business. But based on the changes that have been made, that on-balance-sheet co-investment capital will be more favorably treated, we would expect on an ongoing basis. And present less of a returns headwind to executing on our prioritized strategy.
