Goldman Sachs Q4 net revenue decreased by 3% year-on-year, stock trading income broke Wall Street records, and net profit grew by 12%, exceeding expectations | Earnings report insights

On Thursday, Goldman Sachs released its financial report for the fourth quarter and the full year of 2025. This report not only shows that Goldman Sachs achieved a net profit of $4.617 billion in the fourth quarter, a year-on-year increase of 12%, but also reveals a milestone achievement—its stock trading business generated quarterly revenue of $4.31 billion, setting a new historical high on Wall Street.

This figure surpasses Goldman Sachs' own record set in the second quarter of 2025, solidifying its position as a top global trading bank. Meanwhile, Goldman Sachs announced an increase in its quarterly dividend from $4.00 per share to $4.50 per share, a rise of 12.5%, demonstrating the company's strong confidence in future cash flows.

Financial Performance:

• Full-year net revenue of $58.28 billion, a year-on-year increase of 9%; net profit of $17.18 billion, with EPS of $51.32 (up 27% year-on-year)
• Fourth quarter net revenue of $13.45 billion, a year-on-year decrease of 3%; net profit of $4.62 billion, a year-on-year increase of 12%, with EPS of $14.01 (up 17% year-on-year)
• Full-year ROE of 15.0%, with annualized ROE for the fourth quarter at 16.0%; book value per share increased by 6.2% to $357.60
• Platform solutions business showed significant drag: the withdrawal from the Apple credit card business led to a net revenue of -$1.68 billion for this segment in the fourth quarter (including $2.26 billion in asset impairment), but also resulted in the release of $2.48 billion in credit loss reserves

Core Business Progress:

• Strong performance in global banking and markets: full-year net revenue of $41.45 billion (up 18% year-on-year), fourth quarter $10.41 billion (up 22% year-on-year)

• Investment banking fees for the year were $9.34 billion (up 21%), with fourth quarter fees at $2.58 billion (up 25%), and significant growth in merger advisory services

• Stock trading business generated $16.54 billion for the year (up 23%), with significant improvements in prime brokerage and portfolio financing, quarterly revenue reached $4.31 billion, setting a new historical high on Wall Street

• Asset and wealth management: fourth quarter net revenue of $4.72 billion, full-year $16.68 billion (up 2%), with assets under management reaching $3.61 trillion

• Assets under management (AUM): quarterly net inflow of $116 billion, including a long-term asset net inflow of $66 billion

Capital Management:

• The board raised the quarterly dividend from $4.00 to $4.50 (up 12.5%)
• Full-year returns to shareholders totaled $16.78 billion, including $12.36 billion in buybacks (18.9 million shares) and $4.42 billion in dividends
• CET1 capital adequacy ratio (standard method) at 14.4%, with a supplementary leverage ratio of 5.2%

Core Performance: Steady Growth and Record Breakthroughs

Goldman Sachs' financial performance for the fourth quarter of 2025 presents a complex picture. Net income was $13.454 billion, a year-on-year decrease of 3% and a quarter-on-quarter decrease of 11%, primarily influenced by one-time accounting adjustments in the platform solutions business If we do not consider the accounting impact of the transfer of Apple's credit card business, Goldman Sachs' performance in the fourth quarter was actually stronger.

Diluted earnings per share reached $14.01, a significant increase of 17% compared to the same period last year, far exceeding market expectations. The annualized return on average common equity reached 16.0%, demonstrating efficient use of shareholder capital.

The company's book value per share increased to $357.60, a growth of 6.2% compared to the end of 2024, reflecting the continued accumulation of intrinsic value.

Business Segments: Trading Dominance and Investment Banking Recovery

Under the leadership of CEO David Solomon, Goldman Sachs' global banking and markets business became the biggest highlight of the fourth quarter. The department's total revenue reached $10.411 billion, a year-on-year increase of 22%, with a slight quarter-on-quarter rise of 2%.

The stock trading business performed particularly well, with revenue of $4.31 billion not only setting a new historical high for the company but also breaking the single-quarter record across Wall Street. This achievement was mainly due to strong demand from institutional clients and outstanding performance in derivatives.

The fixed income, foreign exchange, and commodities business also performed well, with revenue reaching $3.111 billion, a year-on-year increase of 12%. The investment banking business generated $2.577 billion in revenue, a year-on-year increase of 25%, setting a historical high for the company in the fourth quarter.

Goldman Sachs' investment banking fee reserves increased compared to the end of the third quarter, indicating continued activity in future transactions. Morgan Stanley analysts commented after the earnings report, "Goldman Sachs has reaffirmed its unmatched advantage in the institutional business sector."

Strategic Shift: Exit from Consumer Business and Rise of Wealth Management

The platform solutions business performed unusually in the fourth quarter, recording a net negative revenue of $1.676 billion, primarily reflecting a one-time accounting impact from the transfer of Apple's credit card business to JPMorgan Chase.

A series of adjustments, including loan portfolio write-downs and contract termination obligations, put pressure on the quarterly revenue.

This accounting adjustment also led to the release of credit loss provisions, positively contributing to net profit. In fact, if we exclude this special item, Goldman Sachs' platform solutions business performed relatively steadily.

This business adjustment marks Goldman Sachs' strategic shift in the consumer banking sector. After several years of attempts, the company has decided to refocus on its traditional institutional business and high-end wealth management.

Meanwhile, Goldman Sachs' asset and wealth management department performed steadily in the fourth quarter, with revenue reaching $4.719 billion, roughly flat compared to the same period last year. The department's management fee income increased with the expansion of managed assets, partially offsetting the decline in investment business revenue.

Capital Strength: Returning to Shareholders and Financial Stability

In the fourth quarter of 2025, Goldman Sachs returned a total of $4.24 billion in capital to shareholders through stock buybacks and dividends. Among them, the stock buyback amounted to $3 billion, with an average price of $822.33 per share, while dividends paid totaled $1.24 billion.

The company's average balance of global core liquid assets remained high at $479 billion, demonstrating a strong liquidity buffer. The common equity tier 1 capital ratio was 14.4%, slightly above regulatory requirements, reflecting a prudent capital management strategy Goldman Sachs' board announced that starting from the first quarter of 2026, the quarterly dividend will be increased to $4.50 per share. This decision not only reflects the company's confidence in its cash generation capabilities but also conveys management's positive outlook on the business prospects to the market.

An increase in dividends is often seen as a vote of confidence from management regarding the stability of the company's future cash flows.

Forward Guidance: Raising Targets and Future Direction

Alongside the earnings report, Goldman Sachs' management updated its medium- to long-term strategic goals, particularly making significant upward adjustments to the targets for the Asset and Wealth Management division.

The company announced that it will raise the pre-tax profit margin target for this division from the mid-teens level to 30%, and the return target from the mid-teens to the high-teens range.

This target adjustment reflects management's high confidence in the growth prospects of this division. Since Mark Nachman took the lead in this division, Goldman Sachs has accelerated the expansion of its Asset and Wealth Management business through a series of strategic acquisitions, including ETF issuer Innovator Capital and venture capital firm Industry Ventures.

David Solomon emphasized during the earnings call: "We are building a more balanced and resilient business portfolio. While trading and investment banking remain our core strengths, the growth of our Asset and Wealth Management business provides us with a more stable revenue base."