GS
Earnings call · Sep 2025 (Q3 FY25)

GOLDMAN SACHS GROUP Q3 FY25 earnings call GS

Oct 14, 2025 Source

Executive summary

Goldman Sachs Q3 FY25 — Strong Investment Banking and Markets Performance, Record AWM Metrics, and AI-Driven Efficiency Initiative

Goldman Sachs delivered strong Q3 FY25 results, driven by robust performance in investment banking and markets, alongside record growth in Asset & Wealth Management. The firm launched 'One Goldman Sachs 3.0,' an AI-propelled initiative aimed at driving efficiencies and capacity for future growth. Management expressed confidence in the improving regulatory environment and its competitive positioning, while emphasizing disciplined risk management in a dynamic market.

Highlights

5

  • Net revenues reached $15.2 billion, with earnings per share of $12.25 and an ROE of 14.2% for the quarter.

  • Advisory revenues were very strong at $1.4 billion, up 60% year-over-year, reflecting a significant increase in completions.

  • Equity underwriting revenues increased 21% year-over-year to $465 million, driven by a significant pickup in IPO activity.

  • Asset & Wealth Management (AWM) assets under supervision (AUS) rose to a record $3.5 trillion, with record alternatives fundraising of $33 billion in the quarter.

  • Equities financing revenues hit a record $1.7 billion, up 33% year-over-year, contributing to total financing revenues of $2.8 billion, up 23%.

Concerns

3

  • Equities intermediation revenues fell 9% year-over-year to $2 billion, primarily driven by lower revenues in cash products.

  • Non-compensation expenses rose 14% year-over-year to $4.8 billion, driven by higher transaction-based costs, charitable giving, and litigation expenses.

  • Provision for credit losses was $339 million, primarily reflecting net charge-offs in the credit card portfolio.

Guidance & targets

CategoryTargetConfidence
Alternatives fundraising
approximately $100 billion
high materiality
High
Management and other fees and private banking and lending revenues growth
high single digits
medium materiality
High
Full-year effective tax rate
approximately 22%
medium materiality
High
M&A activity upswing
next 12 to 24 months
high materiality
High
Year-to-date compensation ratio
32.5%
medium materiality
High
M&A environment
stronger M&A environment
high materiality
High
Incentive fees pull-through
significant amount
medium materiality
High
Medium-term incentive fees target
$1 billion per year
medium materiality
Medium

Segment performance

SegmentRevenueYoYQoQMargin
Global Banking and Markets
Produced strong revenues driven by significant increases in advisory, equity underwriting, and debt underwriting. FICC and Equities businesses demonstrated continued resilience, with financing revenues showing strong growth and contributing significantly to the segment's performance.
ROE YTD: 17%Advisory revenues: $1.4 billionAdvisory revenues YoY growth: 60%Equity underwriting revenues: $465 millionEquity underwriting revenues YoY growth: 21%Debt underwriting revenues: $788 millionDebt underwriting revenues YoY growth: 30%FICC net revenues: $3.5 billionFICC net revenues YoY growth: 17%FICC financing revenues: $1 billionEquities net revenues: $3.7 billionEquities intermediation revenues: $2 billionEquities intermediation revenues YoY change: -9%Equities financing revenues: $1.7 billionEquities financing revenues YoY growth: 33%Total financing revenues (FICC + Equities): $2.8 billionTotal financing revenues YoY growth: 23%
$10.1 billion———
Asset & Wealth Management
Delivered record revenues in management and other fees, driven by higher average assets under supervision. Private banking and lending revenues also showed strong growth. The segment achieved record AUS and significant alternatives fundraising, contributing to its strategic growth objectives.
Management and other fees: $2.9 billionManagement and other fees YoY growth: 12%Private banking and lending revenues: $1.1 billionPrivate banking and lending revenues YTD growth (excl. impaired loan): high single digitsROE YTD: 10.5%Assets under supervision (AUS): $3.5 trillionAlternatives AUS: $374 billionGross third-party alternatives fundraising Q3: $33 billionGross third-party alternatives fundraising YTD: $70 billionWealth client assets: $1.8 trillion
$4.4 billion——Pretax margin YTD: 23%

Operational metrics

Net revenues
$15.2 billion
Q3 FY25

Firm-wide net revenues for the quarter.

Earnings per share
$12.25
Q3 FY25

Firm-wide earnings per share for the quarter.

Return on Equity (ROE)
14.2%
Q3 FY25

Firm-wide ROE for the quarter.

Return on Tangible Equity (RoTE)
15.2%
Q3 FY25

Firm-wide RoTE for the quarter.

Return on Equity (ROE)
14.6%
YTD Q3 FY25

Firm-wide ROE year-to-date.

Total operating expenses
$9.5 billion
Q3 FY25

Firm-wide total operating expenses for the quarter.

Compensation ratio
32.5% 100 bps improvement YoY
YTD Q3 FY25

Year-to-date compensation ratio, net of provisions, reflecting stronger revenue performance.

Non-compensation expenses
$4.8 billion up 14% YoY
Q3 FY25

Driven by higher transaction-based costs, charitable giving, and litigation expenses.

Effective tax rate
21.5%
YTD Q3 FY25

Firm-wide effective tax rate year-to-date.

Capital returned to shareholders
$3.3 billion
Q3 FY25

Total capital returned to shareholders, including dividends and share repurchases.

Common stock dividends
$1.3 billion
Q3 FY25

Common stock dividends paid during the quarter.

Common stock repurchases
$2 billion
Q3 FY25

Common stock repurchases executed during the quarter.

CET1 ratio (standardized)
14.4%
Q3 FY25 end

Common Equity Tier 1 ratio under the standardized approach.

CET1 requirement
10.9%
Q3 FY25

Current regulatory CET1 requirement.

Firm-wide net interest income
$3.9 billion
Q3 FY25

Firm-wide net interest income for the quarter.

Total loan portfolio
$222 billion up modestly vs Q2
Q3 FY25 end

Total loan portfolio balance at quarter end.

Provision for credit losses
$339 million
Q3 FY25

Primarily reflected net charge-offs in the credit card portfolio.

Net market appreciation (AUS)
$80 billion
Q3 FY25

Contribution to Assets Under Supervision growth from market appreciation.

Long-term net inflows (AUS)
$56 billion
Q3 FY25

Across asset classes, representing the 31st consecutive quarter of long-term fee-based net inflows.

Unrealized balance of incentive fees
$4.6 billion
Q3 FY25

Unrealized balance of incentive fees as of the last quarter, expected to pull through P&L over several years.

Alternatives fundraising
$70 billion
YTD Q3 FY25

Year-to-date alternatives fundraising.

Sponsor activity
40% higher vs last year
current

Sponsor activity tracking higher compared to the previous year.

Sponsor dry powder
over $1 trillion
current

Amount of dry powder held by sponsors.

Private equity assets in portfolios
$4 trillion
current

Total private equity assets held in portfolios.

Total financing revenues as % of FICC and Equities revenues
nearly 40%
Q3 FY25

Contribution of FICC and Equities financing revenues to the combined total.

AWM pretax margin impact from HPI
approx 150 bps higher
YTD Q3 FY25

Pretax margin would have been higher excluding the impact of HPI.

AWM ROE impact from HPI
approx 250 bps higher
YTD Q3 FY25

ROE would have been higher excluding the impact of HPI.

HPI average attributed equity
$3.6 billion
YTD Q3 FY25

Average attributed equity for HPI.

Product announcements

ProductTypeDetails
One Goldman Sachs 3.0launch
Strategic collaboration with T. Rowe Pricelaunch

Deals & partnerships

Electronic Arts Exclusive advisory on $55 billion sale to a consortium (Public Investment Fund of Saudi Arabia, Silver Lake, Affinity Partners) $55 billion

Goldman Sachs served as the exclusive adviser for the sale.

Baker Hughes Lead advisory on $14 billion strategic acquisition of Chart Industries $14 billion

Goldman Sachs was the lead adviser for the acquisition.

Thoma Bravo Advisory and financing for $12 billion leverage buyout of Dayforce $12 billion

Goldman Sachs advised and provided financing for the LBO.

Industry Ventures Acquisition of a leading venture capital platform

Industry Ventures has a strong track record and ability to invest across all stages of the VC life cycle. It will sit in the External Investing Group (XIG).

T. Rowe Price Strategic collaboration to deliver public and private market solutions for retirement and wealth investors

Leverages Goldman Sachs' 30 years of experience in private markets and ability to blend asset classes for outcome-oriented objectives.

Risks & headwinds

Market cycles and disciplined risk management last several months

U.S. equity markets consistently hitting record highs

Mitigation:Especially vigilant in times like these to proactively manage risks; disciplined risk management is imperative.

Credit cycle turn

not had in quite some time

Mitigation:Very strong risk management culture, strong underwriting, diversified book of lending exposure, mostly collateralized and investment-grade rated structures.

Equities intermediation revenue decline Q3 FY25

fell 9% year-over-year to $2 billion

Mitigation:Driven by lower revenues in cash products, partially offset by better performance in derivatives. Attributed to difficult prior-year comps.

Non-compensation expense increase Q3 FY25

rose 14% year-over-year to $4.8 billion

Mitigation:Driven by higher transaction-based costs (correlated with elevated activity), charitable giving, and higher litigation expenses. Firm maintains programming and discipline around managing non-comp growth.

Credit card portfolio net charge-offs Q3 FY25

Provision for credit losses of $339 million

Mitigation:Primarily reflected net charge-offs in the credit card portfolio. Firm is exiting the credit card business.

What to watch in Q4 FY25

One Goldman Sachs 3.0 Update

January (Q1 FY26 earnings call)
Current Launched in Q3 FY25
Target Further details and concrete metrics on progress and impact

Why it matters

This AI-driven initiative is expected to drive significant efficiencies and create capacity for future growth, impacting profitability and operational leverage.

We will provide you with an update with additional details on our call in January.

Q&A highlights

Inquired about the firm's increased activity in SRTs and whether it signals underlying warning signs or is part of ordinary risk management.

Denis Coleman clarified that SRTs are an ordinary course risk management tool used to dynamically manage credit exposures and ensure capacity for client activity, not indicative of flashing warning signs.

“This is ordinary course risk management for us.”

asked by Glenn Schorr · answered by Denis Coleman

2 min read 6 chapters

Detailed narrative

Investment Banking Momentum and Outlook

Goldman Sachs' investment banking division demonstrated strong momentum, advising on over $1 trillion in announced M&A volumes year-to-date 2025, leading its closest competitor by $220 billion. The firm's quarter-end backlog reached its highest level in three years, signaling continued strength. Management noted a 40% increase in sponsor activity year-over-year, supported by over $1 trillion in dry powder and $4 trillion in private equity assets, which, combined with expected U.S. rate cuts, creates a constructive outlook for M&A into 2026.

Markets Businesses Resilience

The FICC and Equities businesses continued to show resilience, with revenues rising on a year-over-year basis for the seventh consecutive quarter. This performance contributed to a record year-to-date for equities and notable strength in the rates business within FICC. Total financing revenues, comprising nearly 40% of overall FICC and Equities revenues, grew 23% year-over-year to $2.8 billion, reflecting a strategic focus on durable and predictable revenue streams.

Asset & Wealth Management Strategic Growth

Asset & Wealth Management (AWM) continued its growth trajectory, achieving a record $3.5 trillion in assets under supervision (AUS) and $1.8 trillion in wealth client assets. The segment recorded a record $33 billion in alternatives fundraising in Q3, bringing the year-to-date total to $70 billion, significantly exceeding prior expectations. The firm is focused on enhancing its business mix by growing more durable revenues in AWM, with a year-to-date pretax margin of 23% and ROE of 10.5%.

Launch of One Goldman Sachs 3.0

The firm announced the launch of 'One Goldman Sachs 3.0,' a new, more centralized operating model propelled by AI. This multiyear effort aims to drive efficiencies, create capacity for future growth, enhance client experience, improve profitability, strengthen resilience, enrich employee experience, and bolster risk management. Initial focus areas include sales enablement, client onboarding, lending processes, regulatory reporting, and vendor management, with a further update expected in January.

Improving Regulatory Landscape and Capital Planning

Management expressed confidence in an improving regulatory backdrop, anticipating progress on Basel III Endgame, G-SIB surcharge recalibration, and SLR relief in late 2025 and the first half of 2026. This shift is expected to provide more clarity on capital planning and improve the firm's competitive position. The firm's CET1 ratio stood at 14.4% against a requirement of 10.9%, with a view towards operating with narrower capital buffers given increased regulatory clarity.

Disciplined Risk Management Approach

The firm maintains a vigilant and disciplined approach to risk management, describing synthetic risk transfers (SRTs) as ordinary course risk management to dynamically manage credit exposures and ensure capacity for client activity. For private credit, Goldman Sachs emphasizes a strong underwriting culture, robust upfront due diligence, ongoing monitoring, and strict diversification and concentration limits, ensuring selectivity in credit extension.

AI-generated summary of the company's earnings call. Not investment advice.