The Goldman Sachs Group, Inc. Q4 FY2025 earnings call

• Strong performance in 2025 with record revenues in GBM and growth in AWM. • Since 2020 Investor Day, firm-wide revenues up ~60%, EPS up 144%, ROE improved by 500 bps. • GBM maintained number one M&A advisor position, FICC and equity financing revenues at record highs. • AWM has $3.6 trillion in assets under supervision, with durable revenues growing, and raised a record $115 billion in alternatives. • Completed transition of General Motors credit card program and announced Apple Card portfolio transition. • Launched One Goldman Sachs 3.0 operating model powered by Ella AI, focusing on six work streams for efficiency. • Prioritize capital deployment to client franchises, dividend increase, and share repurchases.

Global Banking and Markets (GBM) produced record revenues of $41.5 billion for the year 2025, up 18%. In Q4, investment banking fees were $2.6 billion, up 25% y/y. FICC net revenues were $3.1 billion in Q4, up 12% y/y. Equities net revenues were $4.3 billion in Q4, with equities financing hitting a quarterly record of $2.1 billion, up 42% y/y. For the full year, total equities net revenues were a record $16.5 billion. Asset and Wealth Management (AWM) had revenues of $16.7 billion in 2025, with management and other fees at a record $3.1 billion in Q4. Alternatives AUS totaled $420 billion at the end of Q4 2025, driving $645 million in management and other fees.

• Expect 2026 to be constructive for investment banking with growth opportunities across the firm. • Raised AWM pretax margin target to 30% to drive high-teen returns. • Increased quarterly dividend to $4.5, representing a 50% increase from a year ago. • $32 billion remaining buyback capacity under current authorization. • New target of 5% long-term fee-based net inflows annually in wealth management.

• Economic growth, policy uncertainty, geopolitical developments, and market volatility are factors to monitor. • Disciplined risk management remains central to serving clients and allocating resources.

Q: I was hoping to follow-up on the 5% long-term asset flow target within wealth. You were slightly above this in 4Q and just wanted to get more color in terms of how you arrived at that and maybe framing how much is doing more with existing advisers and customers versus the efforts that you have to hire more advisers? And presumably attract new customers?

A: Wealth is a big opportunity with strong current business. Target of 5% long-term fee-based net inflows is an external signal of focus. Scales with people, adding advisors and broadening footprint to grow market share in ultra-high-net-worth, with opportunities in alternatives and lending.

Q: Good morning, Dennis. Good morning, David. Can you guys share with us, in the past, David, you talked about the IPO market and the sponsors maybe not getting the valuation that they would like as being one of the areas that had to loosen up, and it appears like it is. But when you look at this year, and I think, Dennis, you touched on it in your remarks, that we're still below where's IPO business is still below the long-term averages. Is it market conditions do you think will be a greater influence on the market this year? Or is it still the valuation challenge that you've referenced in the past?

A: Not the valuation challenge referenced. Expect sponsor momentum and more large private companies going public, leading to constructive IPO and M&A activity provided no exogenous events change sentiment.

Q: I was hoping to follow-up on the capital impact from dereg. I think in your earlier remarks, you talked about expenses. I'm wondering if you could quantify that potential pool of money that could be freed and redeployed? I guess, how much of a drag has it been?

A: Deregulatory impact frees up capacity from secondary/tertiary activities to redeploy towards growth. Quantification involves looking at stress capital buffers, Basel III, and G SIB recalibration, but exact numbers aren't provided, with focus on redeployment to strengthen the firm.

Q: Lot of discussion on the capital impact from dereg. I think in your earlier remarks, you talked about expenses. I'm wondering if you could quantify that potential pool of money that could be freed and redeployed? I guess, how much of a drag has it been?

A: Deregulatory impact frees up capacity from secondary/tertiary activities to redeploy towards growth. Quantification involves looking at stress capital buffers, Basel III, and G SIB recalibration, but exact numbers aren't provided, with focus on redeployment to strengthen the firm.

Q: Oh, great. Good morning. Lot of discussion on the capital impact from dereg. I think in your earlier remarks, you talked about expenses. I'm wondering if you could quantify that potential pool of money that could be freed and redeployed? I guess, how much of a drag has it been?

A: Deregulatory impact frees up capacity from secondary/tertiary activities to redeploy towards growth. Quantification involves looking at stress capital buffers, Basel III, and G SIB recalibration, but exact numbers aren't provided, with focus on redeployment to strengthen the firm.

Q: Hi, thanks for taking my questions, squeezing me in. I just have one question. And it is a clarification more than anything to Erika's question about where we are in the investment banking cycle. And I think, David, in your response, you said that your people are suggesting that in a base case view, 2026 investment banking fees could be closer to approach where they were in 2021, which was, you know, over $14 billion and, you know, we're running, you know, I think '25 was a bit over 9. The delta really is ECM, obviously, and, you know, advisory and DCM are kind of tracking to those the '21 levels already. But just wanted to clarify that. Were you talking about IV fees as a whole, or were you talking about the individual segments, advisory, DCM? You know, I apologize if it was clear to everybody else but me. But, you know, obviously, an environment where you do $14 billion of investment banking fees would seem like an environment where your ROEs for GBM and the firm as a whole would be, you know, materially above the mid-teen level. But just if you can just clarify that, that would be helpful.

A: Was referring to advisory volumes specifically, not total IV fees. Advisory volumes are correlated to fees, and industry-wide advisory volume is expected to grow, with equity capital markets likely to be higher in 2026 but still below 2021 peaks.