The Goldman Sachs Group Q4 Earnings Call Highlights

The Goldman Sachs Group (NYSE:GS) reported what CEO David Solomon called “strong performance” in the fourth quarter of 2025, highlighting improved returns, continued momentum in its Global Banking & Markets (GBM) franchise, and expanding “more durable” revenues across the firm. Management also emphasized a narrower strategic focus following an agreement to transition the Apple Card portfolio and reiterated an emphasis on disciplined capital and risk management.

Quarterly and full-year results

For the fourth quarter, Goldman Sachs posted revenue of $13.5 billion and earnings per share (EPS) of $14.01. The firm reported return on equity (ROE) of 16% and return on tangible equity (ROTE) of 17.1%.

For the full year 2025, EPS was $51.32, up 27% versus 2024. Full-year ROE was 15% and ROTE was 16%, improving 230 and 250 basis points, respectively, compared to the prior year, CFO Denis Coleman said.

Coleman noted that the Apple Card transition had a net positive impact on fourth-quarter results. The firm recorded a $2.3 billion revenue reduction related to moving the portfolio to held for sale, but this was more than offset by a $2.5 billion reserve release. Goldman said the net impact was a $0.46 benefit to EPS and 50 basis points to ROE in the quarter.

Strategic progress and business mix

Solomon used prepared remarks to frame 2025 results as part of a multi-year strategy set out at the firm’s 2020 investor day. He said that since 2020 the firm has increased firmwide revenues by roughly 60%, grown EPS 144%, improved returns by 500 basis points, and delivered total shareholder return of more than 340%, which he described as the highest among peers over the period.

He also pointed to changes intended to reduce capital intensity and improve earnings resilience, including doubling “more durable” revenues and cutting historical principal investments by over 90%, from roughly $64 billion to $6 billion. Solomon said these efforts were reflected in the firm’s most recent CCAR stress test, including a 320-basis-point improvement in the stress capital buffer.

Goldman also said it is taking “final steps” to narrow strategic focus. In addition to the previously completed transition of the General Motors credit card program in August, the firm announced an agreement to transition the Apple Card portfolio.

Global Banking & Markets: investment banking optimism and trading strength

GBM produced record revenue of $41.5 billion for 2025, up 18% year over year, Coleman said. In the fourth quarter, investment banking fees rose 25% from a year earlier to $2.6 billion, with increases across advisory, debt underwriting, and equity underwriting.

Goldman maintained its number-one ranking in announced and completed M&A in 2025, and Coleman said the firm ranked first in leveraged lending. The firm ranked third in equity underwriting and second in common stock offerings, convertibles, and high-yield offerings.

Even with what Coleman described as “very strong accruals” in the fourth quarter, investment banking backlog increased for the seventh consecutive quarter to a four-year high, driven primarily by advisory. Management repeatedly cited the “flywheel” effect of M&A activity, which can drive financing, hedging, market-making, and investment opportunities across the firm.

Solomon said he expects activity to accelerate in 2026, citing catalysts including corporate strategic repositioning, investment tied to AI, and a pickup in sponsor activity. He said the firm’s sponsor clients hold roughly $1 trillion of dry powder and have about $4 trillion of value across portfolio companies that could be monetized.

In trading, FICC net revenues were $3.1 billion in the quarter, up 12% year over year. Coleman said intermediation revenues increased 15% on strength in rates and commodities, while financing revenues rose 7% to a record supported by mortgages and structured lending.

Equities net revenues were $4.3 billion in the quarter. Equities intermediation revenue of $2.2 billion rose 11% year over year, driven by better performance in derivatives. Equities financing reached a quarterly record of $2.1 billion, up 42% from the prior year, as average prime balances hit records. For the full year, equities net revenues were a record $16.5 billion, surpassing the prior year’s record by more than $3 billion.

Asset & Wealth Management: higher margin targets and inflows

In Asset & Wealth Management (AWM), full-year revenue was $16.7 billion, and pre-tax margin was 25%, Coleman said. Segment ROE was 12.5% for the year, and “in the mid-teens” when adjusted for a 230-basis-point impact from historical principal investments (HPI) and related equity, as well as the FDIC special assessment fee.

Fourth-quarter management and other fees were a record $3.1 billion, up 5% sequentially and 10% year over year. Private banking and lending revenues rose 5% year over year to $776 million, with higher lending and deposit-related results in wealth management partly offset by net interest margin compression in the Marcus deposit portfolio. Incentive fees were $181 million for the quarter, bringing full-year incentive fees to $489 million, up 24% year over year; Coleman said the firm expects to make further progress in 2026 toward its $1 billion annual target.

Total assets under supervision ended the quarter at a record $3.6 trillion, driven by $66 billion of long-term fee-based net inflows and $50 billion of liquidity inflows, Coleman said. Alternative assets under supervision totaled $420 billion at quarter end, and the firm raised $45 billion in gross third-party fundraising in the fourth quarter and $115 billion for the year.

Solomon outlined several new or updated longer-term targets and growth ambitions, including:

• A new AWM pre-tax margin target of 30%, intended to support “high-teens returns” in the segment over the medium term.
• A new target of 5% long-term fee-based net inflows annually across the wealth management platform.
• An expectation to raise $75 billion to $100 billion annually in alternatives on a sustainable basis, with fee-paying alternative assets under supervision expected to reach $750 billion by 2030.

In Q&A, Solomon said Goldman’s direct wealth management strategy will remain centered on ultra-high net worth clients, while broader wealth distribution efforts will be pursued through third-party wealth channels, including partnerships with RIAs. He cited secular tailwinds including generational wealth transfer and described the ultra-high net worth space as fragmented, with Goldman seeking additional share through advisor growth and expanded coverage.

Capital return, balance sheet, expenses, and outlook

Goldman announced a $0.50 increase in the quarterly dividend to $4.50, which Solomon said represents a 50% increase from a year ago. The firm also disclosed $32 billion of remaining share repurchase authorization. Coleman said the firm returned about $4.2 billion to common shareholders in the fourth quarter, including $3 billion of repurchases and $1.2 billion in dividends.

Common equity tier 1 ratio was 14.4% at quarter end under the standardized approach. Total loans ended the quarter at $238 billion, up sequentially due to higher collateralized lending balances. Provision for credit losses reflected a net benefit of $2.1 billion, including the Apple Card-related reserve release.

On expenses, total operating expenses were $37.5 billion for the year. Compensation expenses were $18.9 billion and included $250 million of severance, producing a full-year compensation ratio net of provisions of 31.8%. Non-compensation costs were $18.6 billion, up 9% year over year, primarily due to higher transaction-based activity. Coleman said the firm remains focused on productivity initiatives under “One Goldman Sachs 3.0,” the firm’s AI-propelled operating model, though Solomon said the company is not yet prepared to provide detailed metrics on expected outputs.

Looking ahead, management described a constructive setup for 2026 but emphasized uncertainty. Coleman cited factors including economic growth, policy uncertainty, geopolitical developments, and market volatility. Solomon said the firm is reaffirming its mid-teens through-the-cycle return targets, while noting catalysts that could support exceeding those targets in the near term, particularly if capital markets activity accelerates and AWM margins improve toward the firm’s new targets.

About The Goldman Sachs Group (NYSE:GS)

The Goldman Sachs Group, Inc is a global investment banking and financial services firm headquartered in New York City. Founded in 1869 as a commercial paper business, the company has grown into a diversified financial institution that provides a broad range of services to corporations, financial institutions, governments and individuals. The firm is led by Chief Executive Officer David M. Solomon and operates across major financial centers worldwide.

Goldman Sachs’ core businesses include investment banking, global markets, asset and wealth management, and consumer banking.