Goldman Sachs Beats Q2 Estimates as Equities Revenue Hits Record
Goldman Sachs reported stronger-than-expected second-quarter earnings, fueled by record revenues in its equities division amid heightened market volatility and a rebound in deal activity that lifted investment banking performance.
The bank’s equity trading revenue surged 36% year-over-year to $4.3 billion, significantly outpacing analyst expectations of $3.6 billion, according to LSEG data. Turbulent markets, driven by tariff-related concerns, have spurred a trading boom across Wall Street as investors reshuffle portfolios.
Revenue from fixed income, currencies, and commodities (FICC) rose 9% to $3.47 billion, while financing revenue for both equities and FICC reached all-time highs.
Although trade uncertainty kept some companies cautious, pent-up demand for M&A activity led to a wave of transactions. Still, recent trade tensions have raised concerns about the durability of this momentum.
Goldman’s investment banking fees jumped 26% to $2.19 billion, far surpassing the nearly 10% gain analysts had forecast. CEO David Solomon credited improved economic clarity and increased CEO confidence for the uptick in strategic activity, noting increased engagement from both corporate and private equity clients.
Goldman maintained its lead as the top global M&A adviser in Q2, per Dealogic, playing key roles in major deals such as Holcim’s $28 billion Amrize spinoff and Salesforce’s $8 billion acquisition of Informatica.
Stephen Biggar of Argus Research noted the scale of the investment banking surprise, saying many analysts underestimated the sector’s resilience amid macroeconomic uncertainty.
Advisory fees saw a significant boost, especially across the Americas, Europe, the Middle East, and Africa. Debt underwriting revenue slipped slightly, and equity underwriting remained flat.
Kenneth Leon of CFRA Research pointed to a strong investment banking backlog as a positive sign for upcoming deal activity.
Overall, net income rose 22% to $3.7 billion, or $10.91 per share, beating consensus estimates of $9.53. While shares dipped 0.6% on the day, they are up 23% year-to-date, ranking Goldman as the fifth-best performer in the S&P 500 financial sector.
Asset and Wealth Management Weighs on Results
Revenue from the asset and wealth management division declined 3% to $3.78 billion, pressured by weaker performance in equity and debt investments. This unit is considered more stable than trading and banking and remains a strategic focus for the firm.
Solomon emphasized a cautious approach to acquisitions in this space, stating that any deal must align with Goldman’s growth priorities and pass a rigorous financial review. “The bar is high,” he said.
The bank allocated $384 million for credit loss provisions, up from $282 million a year ago, largely due to its credit card portfolio. Headcount fell 2% quarter-over-quarter to 45,900, as part of Goldman’s annual workforce trimming plan targeting a 3%–5% reduction.
Goldman’s recent share performance has been buoyed by passing the Fed’s annual stress test, enabling the firm to raise its dividend by $1 per share starting in Q3.
