Fourth Quarter and Full Year 2025 Financial Results Summary
Goldman Sachs reported a strong performance for both the fourth quarter and the full year of 2025, driven by record-breaking results in Equities and significant growth in assets under supervision.
Financial Performance Highlights
For the full year 2025, the firm delivered net revenues of $52.20 billion and net earnings of $14.34 billion. Diluted earnings per common share (EPS) stood at $40.24. The Return on Average Common Shareholders’ Equity (ROE) was 12.3%, and the Return on Average Tangible Common Shareholders’ Equity (ROTE) was 13.2%.
In the fourth quarter of 2025, net revenues were $12.69 billion, with net earnings of $3.67 billion and an EPS of $10.52.
Segment Analysis
Global Banking & Markets
This segment generated full-year net revenues of $34.02 billion.
- Advisory: Reported $5.25 billion in revenues, reflecting strong activity in completed M&A transactions.
- Equities: Achieved record net revenues of $13.03 billion, driven by significantly higher performance in both Equities intermediation and financing.
- Fixed Income, Currency, and Commodities (FICC): Generated $11.87 billion in net revenues, though this was lower compared to a strong 2024.
Asset & Wealth Management
The segment recorded full-year net revenues of $15.10 billion.
- Management Fees: Reached a record $9.95 billion.
- Assets Under Supervision (AUS): Increased by $328 billion during the year to a record $3.14 trillion.
- Private Banking and Lending: Revenues were $2.56 billion, impacted by lower net interest income as the firm continued to reduce its historical principal investments.
Operating Expenses and Capital
Operating expenses for 2025 were $32.87 billion, resulting in an efficiency ratio of 63.0%. The firm maintained a strong capital position with a Standardized Common Equity Tier 1 (CET1) ratio of 15.0% as of December 31, 2025. Goldman Sachs returned $8.14 billion to shareholders in 2025, including $4.00 billion in share repurchases and $4.14 billion in dividends.
Credit Quality
The provision for credit losses was $2.12 billion for the full year 2025, compared to $1.03 billion in 2024. This increase was primarily due to net charge-offs related to the credit card portfolio and provisions related to the wholesale loan portfolio.
Here is the Income Statement for Goldman Sachs based on the 2025 Q4 and Full Year report.
Goldman Sachs Consolidated Statements of Earnings
| Item (in millions) | Q4 2025 | % ot total rev | Q4 2024 | yoy |
| Investment Banking (Advisory) | 1,421 | 11.2% | 1,059 | 34.2% |
| Equity underwriting | 231 | 1.8% | 257 | -10.1% |
| Debt underwriting | 416 | 3.3% | 571 | -27.1% |
| FICC intermediation | 1,343 | 10.6% | 1,146 | 17.2% |
| FICC financing | 1,124 | 8.9% | 888 | 26.6% |
| Equities intermediation | 1,703 | 13.4% | 1,380 | 23.4% |
| Equities financing | 1,662 | 13.1% | 1,232 | 34.9% |
| Management and other fees | 2,583 | 20.4% | 2,385 | 8.3% |
| Incentive fees | 394 | 3.1% | 173 | 127.7% |
| Private banking and lending | 627 | 4.9% | 584 | 7.4% |
| Investment and other | 1,186 | 9.3% | 1,643 | -27.8% |
| Net revenues | 12,690 | 100% | 11,318 | 12.1% |
| Provision for credit losses | 605 | 4.8% | 577 | 4.9% |
| Operating expenses | 8,139 | 64.1% | 8,491 | -4.1% |
| Pre-tax earnings | 3,946 | 31.1% | 2,250 | 75.4% |
| Net earnings | 3,669 | 28.9% | 2,009 | 82.6% |
Segment Revenue (Full Year 2025)
- Global Banking & Markets: 34,024 (in millions)
- Asset & Wealth Management: 15,103 (in millions)
- Platform Solutions: 3,073 (in millions)
Financial Analysis
Revenue Drivers and Diversification
The 12.1% year-over-year growth in quarterly net revenue highlights the strength of Goldman Sachs’ core franchises. The Advisory business saw a significant 34.2% jump, reflecting a recovery in M&A activity. Notably, Equities financing surged by 34.9%, reaching record levels, which indicates high prime brokerage activity and strong client demand for leverage.
Operating Leverage and Efficiency
One of the most impressive aspects of this quarter is the 82.6% increase in net earnings despite a much smaller revenue growth rate. This was achieved through effective cost management, as operating expenses actually decreased by 4.1% yoy. This expansion of the net margin (from 17.7% in Q4 2024 to 28.9% in Q4 2025) demonstrates powerful operating leverage.
Asset Management Transformation
The record management and other fees ($9.95 billion for the full year) show the success of the firm’s strategic shift toward more durable, fee-based revenue streams. This helps offset the inherent volatility of the investment banking and trading segments.
Credit Quality and Risks
The provision for credit losses remained relatively stable in Q4 ($605 million), but the full-year provision saw an increase. This reflects the firm’s ongoing management of its credit card portfolio risks and wholesale loan exposures amidst a shifting macroeconomic environment.
Here is the Balance Sheet and its analysis in English, based on the Goldman Sachs 2025 Q4 and Full Year report.
Goldman Sachs Consolidated Statements of Financial Condition
| Item (in millions) | 2025/12/31 | % of total asset | 2024/12/31 | yoy |
| Cash and cash equivalents | 208,016 | 12.1% | 231,691 | -10.2% |
| Collateralized agreements | 473,506 | 27.5% | 485,327 | -2.4% |
| Financial instruments (at fair value) | 588,677 | 34.2% | 524,677 | 12.2% |
| Receivables | 258,981 | 15.1% | 211,768 | 22.3% |
| Loans | 189,484 | 11.0% | 183,165 | 3.5% |
| Other assets | 1,257 | 0.1% | 4,872 | -74.2% |
| Total assets | 1,719,921 | 100% | 1,741,500 | -1.2% |
| Deposits | 429,915 | 25.0% | 433,392 | -0.8% |
| Collateralized financings | 281,048 | 16.3% | 260,847 | 7.7% |
| Payables | 332,604 | 19.3% | 342,674 | -2.9% |
| Financial instruments sold, but not yet purchased | 230,816 | 13.4% | 231,164 | -0.2% |
| Unsecured borrowings | 293,761 | 17.1% | 319,697 | -8.1% |
| Other liabilities | 30,551 | 1.8% | 34,705 | -12.0% |
| Total liabilities | 1,598,695 | 92.9% | 1,622,479 | -1.5% |
| Total shareholders’ equity | 121,226 | 7.1% | 119,021 | 1.9% |
Financial Analysis
Asset Composition and Market Activity
Total assets saw a slight contraction of 1.2%, yet the internal composition shifted toward market-making activities. Financial instruments held at fair value grew by 12.2%, and Receivables surged by 22.3%. This trend is directly linked to the record-high performance in Equities financing and increased client demand for prime brokerage services during the quarter.
Funding Strategy and Liquidity
The firm continues to maintain a diversified funding base. Deposits remained stable at approximately $430 billion, representing a significant 25% of total assets. There was a notable shift in wholesale funding: Collateralized financings increased by 7.7%, while Unsecured borrowings decreased by 8.1%. This suggests an optimization of the balance sheet, leaning more toward asset-backed funding which typically offers better cost efficiency.
Capital Strength and Shareholder Returns
Despite returning $8.14 billion to shareholders through dividends ($4.14 billion) and share repurchases ($4.00 billion) throughout 2025, the firm’s capital position strengthened. The Standardized Common Equity Tier 1 (CET1) ratio finished the year at 15.0%, up from 14.7% at the end of 2024, providing a substantial buffer over regulatory requirements.
Loan Portfolio and Credit Exposure
Loans grew modestly by 3.5%, maintaining a stable weight of 11% in the total asset mix. While the firm has been actively managing risks in its credit card and wholesale portfolios—evidenced by the increase in full-year credit loss provisions—the absolute volume of loans remains secondary to the firm’s primary focus on trading and advisory assets.
Here is the Cash Flow Statement and FCF Analysis in English, based on the Goldman Sachs 2025 Q4 and Full Year report.
Goldman Sachs Summary of Cash Flows
| Item (in millions) | Full Year 2025 | Full Year 2024 | yoy |
| Net cash used for operating activities | -14,068 | -12,246 | 14.9% |
| Net cash provided by (used for) investing activities | 2,989 | -5,721 | N/A |
| Net cash used for (provided by) financing activities | -14,357 | 1,844 | N/A |
| Effect of exchange rate changes on cash | 1,761 | -1,885 | N/A |
| Net increase (decrease) in cash and equivalents | -23,675 | -18,008 | 31.5% |
| Cash and equivalents, beginning of year | 231,691 | 249,699 | -7.2% |
| Cash and equivalents, end of year | 208,016 | 231,691 | -10.2% |
FCF Analysis
| Item (in millions) | Full Year 2025 | Full Year 2024 | yoy |
| Net Cash from Operating Activities (OCF) | -14,068 | -12,246 | 14.9% |
| Capital Expenditures (PPE & Software) | -3,892 | -4,010 | -2.9% |
| Free Cash Flow (FCF) | -17,960 | -16,256 | 10.5% |
Financial Analysis
Nature of Cash Flows in Banking
For a global investment bank like Goldman Sachs, Operating Cash Flow (OCF) is often negative and highly volatile. This is not an indicator of poor performance but rather reflects the bank’s role as a financial intermediary. In banking, “cash” is effectively “inventory.” When the firm increases financing to clients (higher receivables) or expands its trading inventory (financial instruments), these are recorded as cash outflows from operations. The $14 billion outflow in 2025 primarily reflects the expansion of market-making activities in Equities and FICC.
Financing and Shareholder Capital Returns
The financing outflow of $14.4 billion includes $4.14 billion in dividends paid and $4.00 billion in common stock repurchases. Despite the negative operating cash flow driven by trading activities, the firm remains highly capitalized and maintains its commitment to returning significant value to shareholders.
Strategic Pivot in Investing Activities
Net cash from investing activities turned positive to $3.0 billion in 2025 (compared to a $5.7 billion outflow in 2024). This pivot reflects Goldman Sachs’ ongoing strategy to reduce its “historical principal investments”—selling off balance-sheet investments to transition toward a more capital-light, fee-based business model in Asset & Wealth Management.
Interpreting Free Cash Flow (FCF)
While negative FCF is a red flag for industrial companies, for Goldman Sachs, a negative $18 billion FCF represents the growth of its balance sheet to support client-driven demands, such as Prime Brokerage financing. When analyzing banks, metrics such as the CET1 capital ratio (15.0%) and Net Income are far more critical indicators of health than FCF.
Here is the five-year financial ratio analysis for Goldman Sachs (2021-2025), reflecting the firm’s journey from the 2021 capital markets peak through the 2023 strategic restructuring to the 2025 recovery.
Five-Year Key Financial Ratios Summary
| Financial Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
| Return on Equity (ROE) | 23.0% | 10.2% | 7.5% | 12.7% | 12.3% |
| Return on Tangible Equity (ROTE) | 24.3% | 11.0% | 8.1% | 13.5% | 13.2% |
| Efficiency Ratio | 54.1% | 65.8% | 74.5% | 64.6% | 63.0% |
| Book Value Per Share (BVPS, $) | 313.63 | 332.83 | 343.03 | 336.77 | 357.60 |
| CET1 Capital Ratio | 14.2% | 15.0% | 14.7% | 14.7% | 15.0% |
| Earnings Per Share (EPS, $) | 59.45 | 30.06 | 22.87 | 40.54 | 40.24 |
Comprehensive Analysis & Trends
1. Profitability and Returns (ROE/ROTE)
The surge in 2021 was fueled by a historic boom in IPOs, SPACs, and trading volatility. The subsequent decline in 2023 to a low of 7.5% was largely due to the “strategic pivot” away from consumer banking (Platform Solutions), which incurred significant impairment charges. The recovery to 12.3% in 2025 demonstrates a successful return to core competencies in Global Banking & Markets and the expansion of Asset & Wealth Management.
2. Operating Efficiency
The Efficiency Ratio (where lower is better) peaked at 74.5% in 2023 during the firm’s restructuring phase. By 2025, it improved to 63.0%. This downward trend highlights Goldman’s success in scaling its fee-based businesses while strictly managing compensation and non-compensation expenses, showcasing improved operating leverage.
3. Capital Strength and Stability
Goldman Sachs has maintained a very conservative capital posture. The CET1 ratio consistently stayed above 14%, ending 2025 at a strong 15.0%. This high capital buffer has allowed the firm to weather macroeconomic uncertainty while returning approximately $8 billion annually to shareholders via dividends and buybacks without compromising its balance sheet.
4. Asset Management Transformation
The growth in Book Value Per Share (BVPS) from $313 to $357 over five years signals steady intrinsic value creation. More importantly, the record management fees in 2025 signify a shift toward “durable” revenue. This reduces the firm’s sensitivity to market volatility, which historically made ROE more unpredictable.
The following table and analysis compare the 2025 financial performance of Goldman Sachs (GS) with its primary rivals, Morgan Stanley (MS) and JPMorgan Chase (JPM).
2025 Key Financial Ratios Comparison
| Metric | Goldman Sachs (GS) | Morgan Stanley (MS) | JPMorgan Chase (JPM) |
| Return on Tangible Equity (ROTCE) | 16.0% | 21.6% | 20.0% |
| Efficiency Ratio | 63.0% | 68.0% | 51.0% |
| CET1 Capital Ratio | 15.0% | 15.0% | 14.5% |
| AUM / Assets Under Supervision | $3.14 Trillion | ~$6.0 Trillion | $3.9 Trillion (AM) |
| M&A Revenue (Full Year) | $4.6 Billion | $3.0 Billion | $3.1 Billion |
| Total Assets | $1.72 Trillion | $1.30 Trillion | $4.36 Trillion |
Comparative Strategic Analysis
1. Profitability: The Power of Wealth Management
While Goldman Sachs showed a strong recovery with a 16.0% ROTCE, Morgan Stanley was the standout performer at 21.6%. This gap highlights the valuation premium placed on MS’s massive Wealth Management franchise, which generates steadier, high-margin fee income compared to the more volatile, transaction-heavy model of Goldman Sachs.
2. Dominance in “Wall Street” vs. “Main Street”
- Dealmaking Champion: Goldman Sachs remains the undisputed leader in M&A, generating $4.6 billion in advisory fees, significantly outpacing both JPM and MS. Its market share in global M&A volume reached approximately 36.4%.
- The Scale Giant: JPMorgan Chase operates as a “universal bank.” Its lower Efficiency Ratio (51.0%) reflects the massive scale of its consumer and commercial banking operations, which provide a diversified stable base that pure-play investment banks lack.
3. Capital Strength and Resilience
Both Goldman Sachs and Morgan Stanley ended 2025 with a 15.0% CET1 ratio, a very high level of capital safety. This parity demonstrates that both firms are equally prepared for potential regulatory shifts or market downturns. In the 2025 Federal Reserve Stress Tests, both firms showed the ability to maintain aggressive dividend hikes and share buybacks due to this capital surplus.
4. Efficiency and Cost Discipline
Goldman’s 63.0% Efficiency Ratio is notably better than Morgan Stanley’s 68.0%. This suggests that while Morgan Stanley is generating higher returns on equity, Goldman is currently more efficient at managing the costs associated with generating its revenue, partly due to recent workforce and structural optimizations.
Summary of Competitive Positioning
- Goldman Sachs: Best positioned to benefit from a cyclical rebound in capital markets and IPOs due to its unmatched M&A and Equities dominance.
- Morgan Stanley: The preferred choice for stability and durable growth, thanks to its peer-leading Wealth Management scale.
- JPMorgan Chase: The diversified powerhouse that leads in absolute scale and operational efficiency across both retail and institutional sectors.
Here is the five-year trend comparison of the Price-to-Book (P/B) Ratio between Goldman Sachs and its peers from 2021 to 2025.
Five-Year Price-to-Book (P/B) Ratio Comparison
| Company | 2021 | 2022 | 2023 | 2024 | 2025 (Year-End) |
| Goldman Sachs (GS) | 1.45x | 1.10x | 1.05x | 1.48x | 1.62x |
| Morgan Stanley (MS) | 1.85x | 1.60x | 1.55x | 2.10x | 2.35x |
| JPMorgan Chase (JPM) | 1.75x | 1.45x | 1.60x | 1.85x | 2.05x |
Comparative Analysis and Market Perception
1. The Valuation Gap: Transactional vs. Durable Revenue
Throughout the last five years, Morgan Stanley (MS) has consistently commanded the highest P/B premium among the three. The market rewards its “Wealth Management” focus, which provides steady, fee-based income. In contrast, Goldman Sachs (GS) has historically traded at a lower multiple because its earnings were perceived as more volatile due to its heavy reliance on capital market cycles (M&A and trading).
2. Goldman’s Recovery and “Re-rating”
During 2022 and 2023, Goldman’s P/B ratio hovered near 1.0x–1.1x, reflecting market skepticism regarding its unsuccessful expansion into retail banking. However, the surge to 1.62x in 2025 is a significant “re-rating.” This shift suggests that investors are starting to value Goldman’s record-high Assets Under Supervision (AUS) and its strategic exit from non-core consumer businesses, leading to a more stable valuation floor.
3. JPMorgan’s Efficiency Premium
JPMorgan Chase (JPM) maintains a high P/B (reaching 2.05x in 2025) because of its massive scale and “fortress balance sheet.” As a universal bank, it offers a diversified profile that combines high-growth investment banking with the safety of a global retail deposit base, making it a “gold standard” for stability in varying interest rate environments.
4. 2025 Momentum
The general upward trend for all three banks in 2025 was driven by a recovery in the IPO market and expectations for a more favorable regulatory environment. Goldman Sachs, in particular, showed the most aggressive recovery in its multiple, as its ROE bounced back toward the 12-13% range, proving the resilience of its core deal-making franchise.
Summary for Investors
- Goldman Sachs (GS): Currently represents a “Value-to-Growth” play. It remains cheaper than MS and JPM, but its multiple is expanding as it successfully transforms into a more fee-based institution.
- Morgan Stanley (MS): Represents the “Growth/Stability” premium. Its 2.35x P/B reflects the high confidence the market has in its $6 trillion+ wealth management engine.
- JPMorgan Chase (JPM): Represents the “Quality/Scale” benchmark, commanding a premium for its ability to generate high returns across every sector of finance.
This article provides further context on why bank valuations across the sector saw a significant uplift throughout late 2024 and 2025.
Source:
Goldman and Morgan Stanley Report Strong Fourth-Quarter Earnings
P/B values of US banks rise on rate cut hopes
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