$51.32 EPS Caps a Year of 340% TSR and Strategic Narrowing (GS Q4 2025 Earnings Call)

Record $51.32 EPS and 16% ROTE Crown a Five-Year Transformation

Goldman Sachs reported full-year revenues driven by record Global Banking and Markets revenue of $41.5 billion, up 18% year over year. Fourth quarter EPS of $14.01 delivered 16% ROE and 17.1% ROTE. Equities posted a record $16.5 billion for the year, surpassing the prior record by over $3 billion on multiyear investments in the franchise. FICC net revenues contributed $3.1 billion in Q4, up 12%, while equities financing hit a quarterly record of $2.1 billion on record prime brokerage balances. Since the 2020 Investor Day, Goldman grew firm-wide revenues roughly 60%, improved returns by 500 basis points, and reduced historical principal investments by over 90% from $64 billion to $6 billion. David Solomon noted that durable revenues (FICC and equity financing) grew to a record $11.4 billion, generating returns above 16% and comprising 37% of total FICC and equity revenues.

AWM Targets Raised to 30% Margins as Alternatives Hit $420B

Asset and Wealth Management revenues reached $16.7 billion for 2025 with a 25% pretax margin. Management raised the AWM pretax margin target to 30%, which it expects will drive high-teen segment returns over the medium term. Alternative AUS totaled $420 billion, driving $2.4 billion in record management and other fees. Gross third-party fundraising reached a record $115 billion for the year, with management projecting $75 to $100 billion in sustainable annual raises. Fee-paying alternative AUS is targeted to reach $750 billion by 2030, supporting the existing $1 billion annual incentive fee target. Goldman introduced a new 5% annual long-term fee-based net inflow target for wealth management, where client assets reached $1.9 trillion. Solomon stated the firm's ultra-high-net-worth share in the US is mid-single digits (likely leading), underscoring the fragmented nature of the opportunity.

IB Backlog Hits Four-Year High as Solomon Sees Advisory Near 2021 Levels

Investment banking fees of $2.6 billion in Q4 rose 25% year over year across advisory, debt underwriting, and equity. Goldman maintained its number one league table position in announced and completed M&A for the 23rd consecutive year, having advised on over $1.6 trillion in announced volumes, more than $250 billion ahead of the nearest competitor. The IB backlog rose for a seventh consecutive quarter to a four-year high, driven primarily by advisory. Solomon clarified that internal modeling shows base-case 2026 advisory volumes approaching 2021 levels, with bull-case scenarios exceeding them. He noted that sponsors hold $1 trillion in dry powder and roughly $4 trillion in portfolio company value, calling Goldman's best-in-class sponsor franchise "uniquely positioned" to capture the deployment cycle.

Apple Card Exit Completes Strategic Narrowing as $32B Buyback Capacity Awaits

The announcement to transition the Apple Card portfolio had a net positive Q4 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. Goldman also confirmed it will maintain the Apple savings program with no current agreement to transition it. Solomon announced a $0.50 quarterly dividend increase to $4.50, representing a 50% year-over-year increase, with $32 billion in remaining buyback capacity. On capital deployment philosophy, CFO Dennis Coleman confirmed the firm prioritizes franchise investment first but emphasized that given excess capital and strong earnings generation, buybacks remain "an important part of our capital deployment strategy." Solomon highlighted three regulatory tailwinds: improved stress capital buffers (320 basis point SCB improvement), neutral Basel III expectations, and pending G-SIB recalibration.