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Goldman Gains as Q2 Earnings Beat Estimates, Boosts Dividend 33.3%

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Key Takeaways

  • GS reported Q2 EPS of $10.91, beating the estimate of $9.43 and rising from $8.62 a year ago.
  • Global Banking and Markets revenues rose 24% to $10.1B, led by equities and FICC trading strength.
  • GS raised its quarterly dividend 33.3% to $4.00 per share after clearing the 2025 Fed stress test.

The Goldman Sachs Group, Inc.’s (GS - Free Report) second-quarter 2025 adjusted earnings per share of $10.91 surpassed the Zacks Consensus Estimate of $9.43. This compares favorably with $8.62 in the year-ago quarter.

Shares of the company gained 1.6% in the pre-market trading on better-than-expected results.

The volatile market lifted Goldman's net revenues in Equities by 36% year over year to $4.3 billion. Fixed income, currency and commodities trading revenues rose 9% year over year to $3.5 billion. Investment Banking (IB) fees rose 26% year over year to $2.2 billion in the quarter, driven by significantly higher net revenues in Advisory, reflecting strength in the Americas and EMEA.

Goldman’s results benefited from solid growth in the Global Banking & Markets division. Yet, increased expenses and provision were concerning.

Net earnings (GAAP basis) of $3.7 billion increased 22% from the prior-year quarter.

GS’s Revenues & Expenses Increase

Net revenues rose 15% to $14.6 billion for the quarter from the year-ago quarter. Also, the top line surpassed the Zacks Consensus Estimate by 8.1%.

Total operating expenses increased 8% year over year to $9.2 billion.

Provision for credit losses was $384 million, up 36% from the prior-year quarter.

Goldman’s Quarterly Segmental Performance: Mixed Bag

The Asset & Wealth Management division generated revenues of $3.8 billion in the reported quarter, down 3% year over year. The decrease reflected significantly lower net revenues in equity investments and debt investments, partially offset by higher management and other fees.

Firmwide assets under supervision were $3.3 trillion, up 12.2% from the prior-year quarter.

The Global Banking & Markets division recorded revenues of $10.1 billion, which increased 24% year over year. The improvement was driven by a rise in net revenues in Equities (including an increase in net revenues in financing) and strong performances in Fixed income, currency and commodities.

The Platform Solutions division’s revenues were $685 million, up 2% year over year.

GS’s Capital Ratio Declines

As of June 30, 2025, the standardized Common Equity Tier 1 capital ratio was 14.5%, down from 14.8% as of June 30, 2024. 

The company’s supplementary leverage ratio was 5.3%, down from 5.4% in the year-ago quarter.

Goldman’s Capital Distribution Update

In the reported quarter, GS returned $3.96 billion in capital to common shareholders. This included $3 billion in share repurchases and common stock dividends of $957 million.

The company cleared the 2025 Fed stress test and increased the quarterly dividend to $4.00 per common share, marking an increase of 33.3% from the prior payout. The dividend will be paid out on Sept. 29, 2025, to common shareholders of record on Aug. 29, 2025.

Our View on GS

Goldman’s focus on IB and trading businesses, along with strong deal-making pipelines, will likely support the top line. Active client engagement and a solid position in announced and completed mergers and acquisitions globally are likely to act as tailwinds in the upcoming period. However, a rise in expenses poses near-term concerns.

The Goldman Sachs Group, Inc. Price, Consensus and EPS Surprise

 

Currently, GS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of Other Investment Banks

Raymond James Financial Inc. (RJF - Free Report) is slated to report quarterly results on July 23. The Zacks Consensus Estimate for RJF’s fiscal third-quarter 2025 earnings has been revised upward to $2.37 per share over the past seven days. Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

LPL Financial Holdings Inc. (LPLA - Free Report) is expected to report quarterly results on July 31. The Zacks Consensus Estimate for LPLA’s second-quarter 2025 earnings has been revised downward to $4.26 per share over the past seven days.


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