• Net Revenues: $15.1 billion for Q1 2025.
• Earnings Per Share (EPS): $14.12.
• Return on Equity (ROE): 16.9%.
• Return on Tangible Equity (ROTE): 18%.
• Global Banking & Markets Revenues: $10.7 billion.
• Advisory Revenues: $792 million.
• Equity Underwriting Revenues: $370 million.
• Debt Underwriting Revenues: $752 million.
• FICC Net Revenues: $4.4 billion.
• Equities Net Revenues: $4.2 billion.
• Asset & Wealth Management Revenues: $3.7 billion.
• Total Assets Under Supervision: $3.2 trillion.
• Long-term Net Inflows: $29 billion.
• Alternative Assets Under Supervision: $341 billion.
• Net Interest Income: $2.9 billion.
• Provision for Credit Losses: $287 million.
• Total Operating Expenses: $9.1 billion.
• Efficiency Ratio: 60.6%.
• Common Equity Tier 1 Ratio: 14.8%.
• Capital Returned to Shareholders: $5.3 billion.

• Warning! GuruFocus has detected 3 Warning Signs with GS.

Release Date: April 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• The Goldman Sachs Group Inc (NYSE:GS) reported strong first-quarter net revenues of $15.1 billion and earnings per share of $14.12.
• The company achieved a return on equity (ROE) of 16.9% and a return on tangible equity (ROTE) of 18%, indicating robust profitability.
• Assets under supervision reached a record $3.2 trillion, marking the 29th consecutive quarter of long-term fee-based net inflows.
• The Global Banking & Markets segment produced revenues of $10.7 billion, with an ROE of over 20%, showcasing strong performance.
• The company announced a multi-year share repurchase program of up to $40 billion, providing increased capital management flexibility.

Negative Points

• Investment banking activity was more muted than expected due to a volatile market backdrop, impacting expected revenue levels.
• The macroeconomic outlook is uncertain, with expectations for US growth falling from over 2% to 0.5%, increasing recession risks.
• The company faces significant near-term and longer-term uncertainty, constraining clients' ability to make strategic decisions.
• The volatile market environment has led to concerns about the sustainability of financing and trading activities in the short term.
• The company recorded a provision for credit losses of $287 million, primarily related to the credit card portfolio.

Q & A Highlights

Q: How does the recent deleveraging impact Goldman Sachs' financing activities? A: Denis Coleman, CFO, explained that while there was a record level of average prime balances in the first quarter, some of these balances are expected to decrease as asset prices reset. However, the demand for FICC and equity financing remains significant, and the impact of deleveraging is not considered material or major.

Q: What is the outlook for market activities given recent changes in the economic environment? A: David Solomon, CEO, noted that while there is increased uncertainty, client activity remains high as they reposition their portfolios. Despite the shifting perspectives since early April, Goldman Sachs continues to see significant activity levels and remains well-positioned to support clients.

Q: Can you elaborate on the efficiency plan and its impact on expenses? A: Denis Coleman highlighted the three-year efficiency plan, which includes adjustments to the pyramid structure and management of non-compensation expenses. The firm expects to record a severance charge of approximately $150 million in the second quarter as part of this process.

Q: How is Goldman Sachs positioned in the competitive landscape of market businesses? A: David Solomon expressed confidence in the firm's market position, emphasizing the strength of client feedback and the firm's ability to execute well. Despite a tougher comparison to the previous year's extraordinary first quarter, Goldman Sachs continues to maintain a leading position in market activities.

Q: What are the implications of potential regulatory changes on capital management? A: David Solomon discussed the potential benefits of regulatory reforms, such as SLR relief and capital reform, which could provide tailwinds for the industry. While Goldman Sachs is currently CET1 constrained, these changes could improve capital efficiency and support treasury markets.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.