Goldman Sachs(GS) - 2025 Q2 - Quarterly Results

Financial Highlights Goldman Sachs reported strong Q2 2025 financial results, marked by significant revenue growth and increased shareholder returns Second Quarter 2025 Performance Summary Goldman Sachs reported strong Q2 2025 results, achieving significant revenue and earnings growth, alongside a substantial increase in its quarterly dividend Q2 2025 Financial Summary ($ in billions, except EPS and ROE) | Metric | Q2 2025 | YTD 2025 | | :--- | :--- | :--- | | Net Revenues | $14.58 | $29.65 | | Net Earnings | $3.72 | $8.46 | | Diluted EPS | $10.91 | $25.07 | | Annualized ROE | 12.8% | 14.8% | | Book Value Per Share | $349.74 | 3.9% Growth YTD | - Diluted EPS of $10.91 for Q2 2025 compares to $8.62 for Q2 2024 and $14.12 for Q1 2025. For the first half of 2025, EPS was $25.07, up from $20.21 in the first half of 2024[3] - The Board of Directors increased the quarterly dividend to $4.00 per common share, a 33% increase from the previous $3.00[2][29] - Book value per common share increased by 1.6% during Q2 2025 and 3.9% during the first half of 2025 to $349.74[4] Business Segment Performance This section provides an overview of the performance across Goldman Sachs' core business segments, highlighting key revenue drivers and trends Global Banking & Markets Global Banking & Markets reported robust revenue growth, driven by strong performance in Investment Banking, FICC, and Equities Global Banking & Markets Net Revenues (Q2 2025) | Category | Revenue (billions) | | :--- | :--- | | Investment banking fees | $2.19 | |    Advisory | $1.17 | |    Equity underwriting | $0.43 | |    Debt underwriting | $0.59 | | FICC | $3.47 | |    FICC intermediation | $2.42 | |    FICC financing | $1.04 | | Equities | $4.30 | |    Equities intermediation | $2.60 | |    Equities financing | $1.71 | | Other | $0.16 | | Total | $10.12 | - Investment banking fees were $2.19 billion, up 26% YoY, driven by significantly higher Advisory revenues. The firm's Investment banking fees backlog increased compared to Q1 2025 and year-end 2024[9] - FICC net revenues rose 9% YoY to $3.47 billion, primarily due to significantly higher revenues in FICC financing[10] - Equities net revenues surged 36% YoY to $4.30 billion, reflecting significantly higher revenues in both Equities intermediation and financing[11] Asset & Wealth Management Asset & Wealth Management experienced a slight revenue decline, primarily due to lower investment gains, partially offset by growth in fees and lending Asset & Wealth Management Net Revenues (Q2 2025) | Category | Revenue (billions) | | :--- | :--- | | Management and other fees | $2.81 | | Incentive fees | $0.10 | | Private banking and lending | $0.79 | | Equity investments | $(0.001) | | Debt investments | $0.08 | | Total | $3.78 | - The 3% YoY revenue decline was driven by significantly lower net gains from private equities and lower net interest income in Debt investments[14][15] - Growth drivers included higher Management fees (from higher average AUS), increased net interest income in Private banking and lending, and higher Incentive fees from harvesting[14][15] Platform Solutions Platform Solutions reported modest revenue growth, primarily driven by increased contributions from Consumer platforms Platform Solutions Net Revenues (Q2 2025) | Category | Revenue (millions) | | :--- | :--- | | Consumer platforms | $623 | | Transaction banking and other | $62 | | Total | $685 | - The 2% YoY revenue increase was driven by slightly higher net revenues from Consumer platforms, while Transaction banking and other revenues were lower[17] Financial Condition and Operating Results This section examines Goldman Sachs' financial health, covering credit provisions, operating efficiency, capital management, and balance sheet strength Provision for Credit Losses The provision for credit losses increased in Q2 2025, primarily reflecting higher net charge-offs and portfolio growth Provision for Credit Losses Comparison | Period | Provision (millions) | | :--- | :--- | | Q2 2025 | $384 | | Q1 2025 | $287 | | Q2 2024 | $282 | - Provisions for Q2 2025 were primarily driven by net charge-offs related to the credit card portfolio and growth in both credit card and wholesale portfolios[19] Operating Expenses and Profitability Operating expenses increased due to higher compensation, while the efficiency ratio improved and headcount decreased - Operating expenses increased 8% YoY, primarily due to higher compensation and benefits expenses and higher transaction-based expenses[25] - The efficiency ratio for the first half of 2025 was 62.0%, an improvement from 63.8% for the first half of 2024[24] - Headcount decreased by 2% compared to the end of the first quarter of 2025[26] - The effective income tax rate for the first half of 2025 was 20.2%, up from 16.1% for Q1 2025[28] Capital Management and Shareholder Returns The firm demonstrated a strong commitment to shareholder returns through increased dividends and significant share repurchases Q2 2025 Capital Return to Common Shareholders | Category | Amount (billions) | | :--- | :--- | | Share Repurchases | $3.00 | | Common Stock Dividends | $0.96 | | Total | $3.96 | - The firm repurchased 5.3 million common shares at an average cost of $564.57 per share[29] - The quarterly dividend was increased to $4.00 per common share, payable on September 29, 2025[29] Balance Sheet, Liquidity, and Risk The firm maintained a strong financial position with robust total assets, solid capital ratios, and ample liquidity Key Balance Sheet Items (As of June 30, 2025) | Item | Amount (billions) | | :--- | :--- | | Total Assets | $1,785 | | Total Liabilities | $1,661 | | Total Shareholders' Equity | $124 | Capital and Leverage Ratios (As of June 30, 2025) | Ratio | Value | | :--- | :--- | | Common Equity Tier 1 (Standardized) | 14.5% | | Common Equity Tier 1 (Advanced) | 15.3% | | Supplementary Leverage Ratio | 5.3% | - Global core liquid assets averaged $462 billion for Q2 2025, up from $441 billion in Q1 2025[29] - Average daily Value-at-Risk (VaR) was $98 million in Q2 2025, compared to $91 million in Q1 2025[44] Detailed Financial Statements (Unaudited) This section provides unaudited detailed financial statements, including segment revenues, consolidated earnings, and assets under supervision Segment and Geographic Net Revenues This section presents detailed net revenues by business segment and geographic region for both quarterly and year-to-date periods Segment Net Revenues - Three Months Ended June 30, 2025 ($ in millions) | Segment | Q2 2025 | Q2 2024 | % Change YoY | | :--- | :--- | :--- | :--- | | Global Banking & Markets | $10,120 | $8,184 | 24% | | Asset & Wealth Management | $3,778 | $3,878 | (3)% | | Platform Solutions | $685 | $669 | 2% | | Total Net Revenues | $14,583 | $12,731 | 15% | Segment Net Revenues - Six Months Ended June 30, 2025 ($ in millions) | Segment | YTD 2025 | YTD 2024 | % Change YoY | | :--- | :--- | :--- | :--- | | Global Banking & Markets | $20,827 | $17,910 | 16% | | Asset & Wealth Management | $7,457 | $7,667 | (3)% | | Platform Solutions | $1,361 | $1,367 | – | | Total Net Revenues | $29,645 | $26,944 | 10% | Consolidated Statements of Earnings This section provides consolidated statements of earnings, detailing total net revenues, operating expenses, and net earnings for both quarterly and year-to-date periods Consolidated Earnings - Three Months Ended June 30, 2025 ($ in millions) | Item | Q2 2025 | Q2 2024 | % Change YoY | | :--- | :--- | :--- | :--- | | Total net revenues | $14,583 | $12,731 | 15% | | Total operating expenses | $9,241 | $8,533 | 8% | | Pre-tax earnings | $4,958 | $3,916 | 27% | | Net earnings | $3,723 | $3,043 | 22% | | Diluted EPS | $10.91 | $8.62 | 27% | Consolidated Earnings - Six Months Ended June 30, 2025 ($ in millions) | Item | YTD 2025 | YTD 2024 | % Change YoY | | :--- | :--- | :--- | :--- | | Total net revenues | $29,645 | $26,944 | 10% | | Total operating expenses | $18,369 | $17,191 | 7% | | Pre-tax earnings | $10,605 | $9,153 | 16% | | Net earnings | $8,461 | $7,175 | 18% | | Diluted EPS | $25.07 | $20.21 | 24% | Assets Under Supervision (AUS) Total Assets Under Supervision (AUS) grew significantly, driven by net inflows and market appreciation across various asset classes AUS by Asset Class (As of June 30, 2025) | Asset Class | Amount (billions) | | :--- | :--- | | Alternative investments | $355 | | Equity | $857 | | Fixed income | $1,253 | | Liquidity products | $828 | | Total AUS | $3,293 | AUS Roll-Forward for Q2 2025 (billions) | Item | Amount | | :--- | :--- | | Beginning Balance (Mar 31, 2025) | $3,173 | | Total AUS net inflows | $5 | | Net market appreciation | $115 | | Ending Balance (Jun 30, 2025) | $3,293 |