Net Revenues: $14.6 billion for the second quarter.
Earnings Per Share (EPS): $10.91.
Return on Equity (ROE): 12.8% for the quarter, 14.8% for the first half of the year.
Global Banking and Markets Revenues: $10.1 billion for the quarter.
Advisory Revenues: $1.2 billion, up 71% year-over-year.
Equity Underwriting Revenues: $428 million, flat year-over-year.
Debt Underwriting Revenues: $589 million, down 5% year-over-year.
FICC Net Revenues: $3.5 billion, up 9% year-over-year.
Equities Net Revenues: $4.3 billion, a record for the quarter.
Asset and Wealth Management Revenues: $3.8 billion.
Management and Other Fees: $2.8 billion, up 11% year-over-year.
Private Banking and Lending Revenues: $789 million, up 12% year-over-year.
Total Assets Under Supervision: $3.3 trillion, a record high.
Alternative Assets Under Supervision: $355 billion.
Net Interest Income: $3.1 billion for the second quarter.
Total Loan Portfolio: $217 billion at quarter-end.
Operating Expenses: $9.2 billion for the quarter.
Effective Tax Rate: 20.2% for the first half of 2025.
Capital Returned to Shareholders: $4 billion, including $957 million in dividends and $3 billion in stock repurchases.
Common Equity Tier 1 Ratio: 14.5% at the end of the second quarter.
Warning! GuruFocus has detected 10 Warning Signs with GS.
Release Date: July 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
The Goldman Sachs Group Inc (NYSE:GS) reported strong financial performance in Q2 2025 with net revenues of $14.6 billion and earnings per share of $10.91.
The company\'s Investment Banking division saw a 30% year-over-year increase in announced M&A volumes, indicating a resilient dealmaking environment.
Asset and Wealth Management achieved record client assets of $1.7 trillion, with continued momentum in alternatives and long-term fee-based net inflows.
The firm set a new record for total assets under supervision at $3.3 trillion, marking the 30th consecutive quarter of long-term fee-based net inflows.
The Board approved a 33% increase in the quarterly dividend, reflecting confidence in the firm\'s financial durability and commitment to returning capital to shareholders.
Negative Points
Despite strong performance, there is ongoing uncertainty in industries sensitive to trade policy, which could impact future results.
The company faces challenges in the harvesting environment for private equity-type portfolio assets, which may affect future returns.
Geopolitical concerns, particularly in the Middle East, and unresolved trade agreements pose risks to the global economic outlook.
The firm is navigating a complex regulatory environment, with ongoing discussions around capital requirements and stress testing transparency.
There is a need for more transparency in the capital process, which currently lacks clarity and affects strategic planning.
Q & A Highlights
Q: What will Goldman Sachs do with its excess capital now that regulatory reforms have been implemented? A: David Solomon, Chairman and CEO, stated that the first priority is to deploy capital towards client franchises to produce accretive returns and support client activity. Opportunities are seen in M&A and financing. After that, the focus will be on returning capital to shareholders through dividends and buybacks.
Q: How is Goldman Sachs handling the challenging environment for harvesting historical principal investments? A: Denis Coleman, CFO, explained that while asset prices and credit markets are improving, the environment for harvesting private equity-type assets remains challenging. The firm is committed to reducing historical principal investments, which now stand at about $8 billion, and will continue to do so as market conditions allow.
Q: What is Goldman Sachs\' approach to capital deployment opportunities, particularly regarding inorganic acquisitions? A: David Solomon emphasized that while the firm is always looking for ways to accelerate its franchise, especially in Asset and Wealth Management, the bar for significant acquisitions is very high. Opportunities must align with strategic priorities and offer a high level of confidence in the people and cultural fit.
Q: How does Goldman Sachs view the impact of AI on efficiency and growth? A: David Solomon highlighted that AI presents a significant opportunity to automate processes, create efficiency, and drive productivity. The firm is investing in AI to enhance software development and client service, which will lead to both cost savings and growth opportunities.
Q: What is Goldman Sachs\' outlook on M&A activity, and what gives them confidence in this area? A: David Solomon noted that announced M&A is up 30% year-over-year, and the backlog driven by Advisory growth is strong. The level of dialogue with clients has increased significantly, and there is confidence in regulatory environments allowing for significant industry consolidation.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
