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    GS
    Earnings call· Sep 2025(Q3 FY25)

    GOLDMAN SACHS GROUP INC 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

    8
    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

    2
    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

    28
    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 billionup 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 billionup 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% highervs 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

    2
    ProductTypeDetails
    One Goldman Sachs 3.0launch
    Strategic collaboration with T. Rowe Pricelaunch

    Deals & partnerships

    5
    Electronic ArtsExclusive 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 HughesLead advisory on $14 billion strategic acquisition of Chart Industries$14 billion

    Goldman Sachs was the lead adviser for the acquisition.

    Thoma BravoAdvisory and financing for $12 billion leverage buyout of Dayforce$12 billion

    Goldman Sachs advised and provided financing for the LBO.

    Industry VenturesAcquisition 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 PriceStrategic 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

    5
    Market cycles and disciplined risk managementlast 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 declineQ3 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 increaseQ3 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-offsQ3 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

    5

    One Goldman Sachs 3.0 Update

    January (Q1 FY26 earnings call)
    CurrentLaunched in Q3 FY25
    TargetFurther 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

    8

    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 read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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%.

    04

    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.

    05

    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.

    06

    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.