Earnings Call Insights: Goldman Sachs (GS) Q4 2025
Management View
- Chairman & CEO David Solomon expressed satisfaction with the company’s fourth quarter results, highlighting “earnings per share of $14.01, an ROE of 16% and an ROTE of 17.1%.” For the full year, Solomon reported “earnings per share of $51.32, a 27% increase versus last year, an ROE of 15% and an ROTE of 16%.” Solomon emphasized the execution of strategy since 2020, noting “we increased firm-wide revenues by roughly 60%…grew EPS by 144%…improved our returns by 500 basis points…and delivered a total shareholder return of over 340%.”
- Solomon stated that Global Banking & Markets maintained its “#1 M&A adviser in investment banking and #1 equities franchise alongside our leading position in FICC,” with “350 basis points of wallet share gains in GBM since 2019.” He also underscored record FICC and equity financing revenues of $11.4 billion and a record $115 billion in alternatives fundraising within Asset & Wealth Management.
- Solomon announced strategic moves to “narrow our strategic focus,” including the completed transition of the General Motors credit card program and an agreement to transition the Apple Card portfolio. He highlighted setting new targets, such as “increasing our pretax margin target to 30%” in Asset & Wealth Management and introducing “a new target of 5% long-term fee-based net inflows annually across the platform.”
- On capital deployment, Solomon announced “a $0.50 increase in our quarterly dividend to $4.50, representing a 50% increase from a year ago,” and mentioned “$32 billion of remaining buyback capacity.”
- Chief Financial Officer Denis Coleman stated, “In the fourth quarter, we generated revenues of $13.5 billion, earnings per share of $14.01, an ROE of 16% and an ROTE of 17.1%. For the full year, we delivered earnings per share of $51.32, a 27% increase versus last year.” Coleman detailed that “the transition [of the Apple Card portfolio] had a net positive impact of $0.46 to EPS and 50 basis points to ROE as a $2.3 billion revenue reduction was more than offset by a $2.5 billion reserve release.”
Outlook
- Management reaffirmed its mid-teens ROE target, with Solomon noting, “we’re reaffirming our mid-teens target…this is an environment where the potential to be positioned to exceed targets in the near term is there.”
- The company introduced a “5% long-term fee-based net inflows annually across the platform” target and raised the pretax margin target for Asset & Wealth Management to 30%.
- Solomon stated, “our outlook is supported by a number of catalysts: corporate focus on strategically positioning scale and innovation; the tremendous public and private capital fueling growth in AI; as well as a strong pickup in sponsor activity.”
Financial Results
- Revenues for the quarter were reported at $13.5 billion, with full-year revenues not directly stated in the transcript for this section.
- Coleman reported “Global Banking & Markets produced record revenues of $41.5 billion for the year, up 18% amid broad-based strength versus last year.”
- Investment banking fees in the fourth quarter were $2.6 billion, with FICC net revenues at $3.1 billion and equities net revenues at $4.3 billion. Equities financing results hit a quarterly record of $2.1 billion.
- Asset & Wealth Management revenues were $16.7 billion for the year with a pretax margin of 25% and segment ROE of 12.5%.
- Management and other fees reached a record $3.1 billion in the quarter. Private Banking and lending revenues were $776 million. Incentive fees for the quarter were $181 million.
- Total assets under supervision reached $3.6 trillion, including $66 billion of long-term fee-based net inflows and $50 billion of liquidity inflows in the quarter.
- Alternative AUS totaled $420 billion at year-end, with gross third-party fundraising of $45 billion in the quarter and $115 billion for the year.
- The total loan portfolio at quarter-end was $238 billion. A provision for credit losses reflected a net benefit of $2.1 billion due to the reserve release from the Apple Card transition.
- Full-year operating expenses were $37.5 billion, with compensation expenses at $18.9 billion.
Q&A
- Glenn Schorr, Evercore, asked about scaling wealth management. Solomon responded that the strategy is to expand the ultra-high net worth footprint and focus on “making very significant investments in our third-party wealth capability,” while direct full-service wealth remains focused on ultra-high net worth clients.
- Schorr also questioned the firm’s ability to raise its return “floor.” Solomon said, “I think we’ve raised the floor meaningfully based on the work we’ve done, the growth that we’ve done. In particular, the growth of durable revenues.”
- Ebrahim Poonawala, BofA, asked if the business is “rebasing to maybe something better than mid-teens returns towards closer to high teens?” Solomon highlighted, “our goal is going to continue to be to work very, very hard to do everything we can to continue to take the returns higher,” but reaffirmed “mid-teens target.”
- Betsy Graseck, Morgan Stanley, inquired about the impact of issuance on market revenues. Coleman explained, “primary market activity makes to enhance the overall liquidity provision, secondary market making opportunity set.”
- Brennan Hawken, BMO, asked about the Apple Card transition’s impact. Coleman noted, “our expectation is we’ll have a small pretax loss for the year in the segment, but nothing that’s material for Goldman Sachs.”
- Michael Mayo, Wells Fargo, pressed for AI-driven outcomes. Solomon said, “AI and the technology is an opportunity for us to drive productivity and efficiency…we are very, very focused on it, because it will add to our capacity to invest in growth in the business.”
Sentiment Analysis
- Analysts’ tone reflected confidence in the company’s strategic direction and results, with some pressing for more details on AI outcomes and capital deployment. Questions often sought clarification on long-term targets and the scale of wealth management ambitions.
- Management maintained an upbeat and confident tone in prepared remarks, frequently using phrases such as “we are optimistic” and “we are confident,” but was more cautious and measured during Q&A, especially on AI specifics and the potential for transformational M&A.
- Compared to the previous quarter, management displayed increased confidence in raising financial targets and highlighted more catalysts for growth, while analysts continued to probe for more granular details and clarity on execution.
Quarter-over-Quarter Comparison
- The current quarter saw the introduction of new long-term targets, including a 30% pretax margin for Asset & Wealth Management and a 5% annual fee-based inflow target, compared to a previous focus on “high single digits” growth and operating efficiency.
- Management announced a $0.50 increase in the quarterly dividend and confirmed the Apple Card portfolio transition, which was previously speculated upon.
- Analysts in both quarters focused on the durability of returns, expense management, and strategic clarity, but in Q4, there was heightened attention on explicit growth targets and capital deployment.
- Management’s sentiment shifted from caution around market cycles in Q3 to a more assertive outlook for 2026, citing a “highly constructive setup” and readiness to capitalize on market upswings.
Risks and Concerns
- Coleman cautioned that “the operating environment can shift quickly. Economic growth, policy uncertainty, geopolitical developments and market volatility are factors we continue to monitor closely.”
- Management reiterated the importance of disciplined risk management, highlighting a “robust capital position, diversified funding mix, dynamic liquidity management and strong risk discipline.”
- Analysts raised concerns about the efficiency ratio and the impact of the Apple Card transition on future financials, with management pointing to the need to evaluate efficiency on a full-year basis.
Final Takeaway
Goldman Sachs management emphasized strong fourth quarter and full-year results, the narrowing of strategic focus, and the setting of new growth and profitability targets, particularly within Asset & Wealth Management. The transition of the Apple Card portfolio, a significant dividend increase, and robust capital deployment underscore the company’s confidence in its ability to deliver durable returns amid a constructive capital markets environment and ongoing investments in technology and talent.