Goldman Q2 Earnings Beat Estimates on Solid IB Business, Shares Rise

The Goldman Sachs Group, Inc. GS share rose nearly 1% during yesterday’s trading session as second-quarter 2025 adjusted earnings per share of $10.91 topped the Zacks Consensus Estimate by 15.7% and jumped 26.6% from the year-ago quarter. 

GS net revenues increased 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%.

The primary reason for Goldman’s better-than-expected performance was solid investment banking (IB) business. Global mergers and acquisitions in the second quarter of 2025 were impressive than previously expected. Markets plunged at the start of the second quarter as Trump announced sweeping tariffs. However, deal-making activities resumed in the last month of the quarter. This benefited the company’s quarterly performance.

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

The Goldman Sachs Group, Inc. price-consensus-eps-surprise-chart | The Goldman Sachs Group, Inc. Quote

IB Majorly Supports GS’s Revenues

Net revenues in the Global Banking & Markets division (which houses the IB business) were impressive in the second quarter of 2025. The segment witnessed a 24% year-over-year jump in revenues to $10.1 billion.

Specifically, advisory revenues rose a whopping 71% year over year to $1.2 billion. Revenues in Debt underwriting increased 1.5%, and net revenues in Equity underwriting grew nearly 1%. Hence, overall, IB fees rose 26.6% to $2.19 billion in the second quarter. 

Likewise, JPMorgan’s JPM total IB fees (in the Commercial & Investment Bank segment) were up 7% from the prior-year quarter to $2.51 billion in the second quarter of 2025. JPM’s advisory and debt underwriting fees rose 8% and 12% year over year, respectively. On the contrary, equity underwriting fees fell 6%.

In contrast, Morgan Stanley’s MS IB business performance was subdued. Its total IB fees (in the Institutional Securities division) fell 5% year over year to $1.54 billion. MS’s fixed income underwriting fees decreased 21%, while equity underwriting income jumped 42% year over year.

Other Factors That Supported Goldman’s Q2 Earnings

GS’s trading business performance was robust in the second quarter of 2025, driven by massive market turmoil. Net revenues in Equities increased 36% year over year, whereas fixed income, currency and commodities (FICC) trading revenues rose 9% year over year. Financing revenues in both equities and FICC reached record highs.

However, net revenues in Asset & Wealth Management were down 3% year over year. Despite this, the company touched a record asset under supervision of $3.3 trillion in the second quarter. 

Overall, the company’s non-interest revenues rose 7% year over year, while net interest income jumped 56%, as funding/deposit costs stabilized.

Goldman’s total operating expenses increased 8% year over year to $9.2 billion. The uptick was mainly due to higher compensation and benefits expenses, and higher transaction-based expenses.

Given robust top-line growth, Goldman’s net income improved 22% from the prior-year quarter to $3.7 billion. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

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

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This article originally published on Zacks Investment Research (zacks.com).

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