Earnings Call Insights: The Goldman Sachs Group, Inc. (GS) Q3 2025
Management View
- CEO David Solomon highlighted that Goldman Sachs delivered net revenues of $15.2 billion, earnings per share of $12.25, and ROE of 14.2% for the third quarter, stating, “This performance reflects the strength of our market-leading franchises where we continue to harness the power of One Goldman Sachs to serve our clients with excellence.”
- Solomon reported that the firm reached a milestone by advising on over $1 trillion in announced M&A volumes for 2025 year-to-date, $220 billion ahead of its next closest competitor, and cited exclusive roles in major transactions such as Electronic Arts’ $55 billion sale and Baker Hughes’ $14 billion acquisition.
- Solomon noted ongoing strength across FICC and equities, with business rising year-over-year for the seventh consecutive quarter, and emphasized the “record year-to-date performance for equities and notable strength in our rates business within FICC.”
- Asset & Wealth Management assets under supervision rose to a record $3.5 trillion, with record results in private banking and lending. The firm raised a record $33 billion in alternatives for the quarter, and now expects to raise approximately $100 billion in alternatives this year.
- Solomon announced the acquisition of Industry Ventures, describing it as “a leading venture capital platform with a track record of strong investment performance” and highlighted a strategic collaboration with T. Rowe Price to deliver solutions for retirement and wealth investors.
- Solomon unveiled the launch of One Goldman Sachs 3.0, a centralized, AI-propelled operating model to “drive efficiencies and create capacity for future growth,” and laid out six goals for this initiative, including enhancing client experience and improving profitability.
- CFO Denis Coleman stated, “In the third quarter, we generated net revenues of $15.2 billion, earnings per share of $12.25, an ROE of 14.2% and an RoTE of 15.2%.”
Outlook
- Management reported expectations to raise approximately $100 billion in alternatives for the year, substantially exceeding prior fundraising expectations.
- Solomon stated, “Looking forward, it’s important to recognize the tailwinds behind our optimistic outlook for investment banking,” noting a 40% increase in sponsor activity versus last year and a constructive setup due to expected U.S. rate cuts.
- Solomon emphasized that the launch of One Goldman Sachs 3.0 is a “multiyear effort that we will build over time,” with updates expected in January.
Financial Results
- Coleman reported Global Banking and Markets produced revenues of $10.1 billion in the quarter and advisory revenues of $1.4 billion, up 60% year-over-year.
- Equity underwriting revenues were $465 million, up 21% year-over-year, and debt underwriting revenues were $788 million, up 30%, reflecting higher leveraged finance activity.
- FICC net revenues were $3.5 billion, up 17% year-over-year, with strong results in rates, mortgages, and commodities, but lower in currencies and credit products. Equities net revenues were $3.7 billion, with record equities financing revenues of $1.7 billion, up 33% year-over-year.
- Asset & Wealth Management revenues were $4.4 billion, with management and other fees up 12% year-over-year to a record $2.9 billion. Private banking and lending revenues reached $1.1 billion.
- Total assets under supervision ended the quarter at $3.5 trillion, up sequentially, while alternative assets under supervision totaled $374 billion. Gross third-party alternatives fundraising was a record $33 billion for the quarter.
- Firm-wide net interest income was $3.9 billion, and the loan portfolio ended the quarter at $222 billion. Provision for credit losses was $339 million.
- Total quarterly operating expenses were $9.5 billion. The year-to-date compensation ratio net of provisions was 32.5%.
- $3.3 billion was returned to shareholders, including $1.3 billion in dividends and $2 billion in share repurchases. CET1 ratio stood at 14.4%.
Q&A
- Glenn Schorr, Evercore: Asked about synthetic risk transfer activity and risk management. Coleman responded that “our practice is pretty unchanged” and SRT is one of several tools for “dynamically risk managing our portfolio of credit exposures.”
- Schorr, Evercore: Asked about the rationale for launching One GS 3.0 despite strong performance. Solomon responded, “The evolution of the technology is allowing enterprises broadly… to really reimagine” processes and drive efficiency, emphasizing this is “to use technology to automate, drive scale, create efficiency and actually give us the capacity to invest more in the growth of our business.”
- Ebrahim Poonawala, BofA: Asked about risks in private credit and lending to NDFIs. Solomon explained, “The vast majority of our lending is collateralized financing and investment-grade rated structures,” and Coleman added, “We obviously don’t have any direct exposure to either of the big names that have been in the press lately.”
- L. Erika Penala, UBS: Inquired about growth opportunities and sustaining 15% ROE. Solomon stated, “We continue to invest in global banking markets and are very, very focused on share and wallet share,” and emphasized ongoing margin improvement in Asset & Wealth Management.
- Chinedu Bolu, Autonomous Research: Asked about underperformance in equities intermediation. Coleman attributed this to “slightly less robust performance in the cash portion of the business,” but noted “the rest of the franchise continues to perform extremely well.”
- Betsy Graseck, Morgan Stanley: Inquired about acquisition strategy in wealth and asset management. Solomon reiterated, “Are there larger acquisitions that could enhance our wealth platform? Absolutely. But… the bar to do more significant things is always going to be very high.”
- Michael Mayo, Wells Fargo: Asked about the backlog and FICC/equities financing. Coleman confirmed, “Our backlog is the highest level in 3 years,” and clarified the 40% financing revenue contribution.
- Brennan Hawken, BMO: Asked about AWM margins and drivers of ROE. Solomon pointed to fundraising and scaling as drivers for margin and return improvement.
- Dan Fannon, Jefferies: Asked about incentive fees in AWM. Coleman said, “The unrealized balance of incentive fees as of the last quarter is now at $4.6 billion.”
- Devin Ryan, Citizens: Queried about advisory business recovery. Solomon said, “We are going to see a very constructive M&A environment through the end of the year into 2026.”
- Gerard Cassidy, RBC: Pressed for ways to measure success of GS 3.0. Solomon promised, “as we go into the first quarter and the second quarter, you’ll have more transparency on what we’re doing.”
Sentiment Analysis
- Analysts raised concerns about risk management, private credit exposure, the rationale for new operational initiatives despite strong numbers, and the sustainability of margins and ROE, with a questioning but constructive tone.
- Management maintained a confident, optimistic tone throughout, frequently using phrases indicating confidence such as “we feel very, very good about our processes” and “we are confident in our ability to deliver for clients and drive strong performance for shareholders.” During Q&A, management was open and detailed in responses, rarely deflecting questions.
- Compared to the previous quarter, analysts were more focused on operational changes, risk management, and new growth initiatives, while management’s tone shifted from reassurance and risk discipline to a more proactive and forward-looking stance, especially regarding technology and strategic growth.
Quarter-over-Quarter Comparison
- Guidance language shifted to emphasize substantially exceeding prior alternatives fundraising targets, now expecting $100 billion for the year, compared to the prior quarter’s expectation to be “in line with recent years.”
- Strategic focus expanded with the launch of One Goldman Sachs 3.0, described as a multiyear, AI-driven operational shift, and the acquisition of Industry Ventures, whereas the prior quarter emphasized AI pilots and incremental technology deployment.
- Analysts’ questions moved from capital deployment and dividend policy to the specifics of risk management tools, the rationale for operational transformation, and execution risks in growth segments.
- Key financial metrics improved, with higher net revenues, EPS, and assets under supervision, and record performance in several business lines.
- Management’s confidence in delivering mid-teens ROE was reiterated, but now supported by expanded durable revenue streams and larger-scale technology initiatives.
Risks and Concerns
- Management identified “investor exuberance” and record market highs as potential risk factors, noting the need for “disciplined risk management.”
- Coleman underscored the importance of maintaining “a keen eye on risk management” and described ordinary course risk management practices, including synthetic risk transfers.
- Analyst concerns centered on private credit exposures, collateral integrity, and the possibility of credit cycles leading to increased losses, but management reiterated strong underwriting standards and diversified, largely investment-grade exposures.
- Management acknowledged ongoing regulatory developments, with Solomon stating, “the regulatory direction of travel is improving our competitive position significantly,” but also cautioned that timelines for clarity remain uncertain.
Final Takeaway
Goldman Sachs’ third quarter marked record achievements in assets, durable fee revenues, and alternatives fundraising, with management announcing a bold multiyear, AI-driven operational transformation under One Goldman Sachs 3.0. The firm remains focused on expanding its leadership across investment banking and wealth management, supported by disciplined risk management, high client engagement, and accelerating technology adoption. Management expressed confidence in its ability to deliver consistent shareholder value through continued execution on strategic growth initiatives and operational efficiency, backed by robust financial results and a constructive outlook for key business segments.