• Revenue (Q4 2024): $13.9 billion
• Earnings Per Share (Q4 2024): $11.95
• Return on Equity (Q4 2024): 14.6%
• Return on Tangible Equity (Q4 2024): 15.5%
• Full Year Revenue (2024): $53.5 billion
• Full Year Earnings Per Share (2024): $40.54
• Full Year Return on Equity (2024): 12.7%
• Global Banking and Markets Revenue (2024): $35 billion
• Investment Banking Fees (Q4 2024): $2.1 billion
• FICC Net Revenues (Q4 2024): $2.7 billion
• Equities Net Revenues (Q4 2024): $3.5 billion
• Assets Under Supervision (End of Q4 2024): $3.1 trillion
• Alternative Assets Under Supervision (End of Q4 2024): $336 billion
• Total Loan Portfolio (End of Q4 2024): $196 billion
• Provision for Credit Losses (Q4 2024): $351 million
• Total Operating Expenses (2024): $33.8 billion
• Compensation Ratio (2024): 32%
• Effective Tax Rate (2024): 22.4%
• Common Equity Tier 1 Ratio (End of Q4 2024): 15%
• Shareholder Returns (Q4 2024): $3 billion

• Warning! GuruFocus has detected 8 Warning Signs with GS.

Release Date: January 15, 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 financial performance with fourth-quarter revenues of $13.9 billion and earnings per share of $11.95.
• The company achieved a return on equity (ROE) of 14.6% and a return on tangible equity (ROTE) of 15.5% for the fourth quarter.
• For the full year, The Goldman Sachs Group Inc (NYSE:GS) increased its revenues by 16% to $53.5 billion and grew its EPS by 77% to $40.54.
• The asset and wealth management business reached a record $3.1 trillion in assets under supervision, with consistent growth in management and other fees.
• The company maintained its leadership position as the number 1 M&A adviser and has a strong equities business, reflecting its robust client trust and investment in capabilities.

Negative Points

• The Goldman Sachs Group Inc (NYSE:GS) faces regulatory challenges, including a lawsuit against the Federal Reserve over stress testing transparency.
• Platform solutions, particularly the Apple card partnership, continue to be a drag on the firm's overall ROE, impacting short-term profitability.
• There is uncertainty in the regulatory environment, which could affect the operating backdrop for capital markets and investment banking businesses.
• The company is still working on improving the return profile of its asset and wealth management business to achieve mid-teens returns.
• Despite strong performance, there are concerns about potential geopolitical risks and economic uncertainties that could impact future growth.

Q & A Highlights

Q: Can you discuss the regulatory outlook and its potential impact on Goldman Sachs' capital markets and investment banking businesses? A: David Solomon, CEO, explained that the regulatory environment is uncertain due to changes in administration and Fed leadership. He emphasized the industry's belief in the need for more transparent and consistent capital regulations, which could lead to a more efficient system. Solomon expressed hope for constructive discussions to improve transparency and consistency in the regulatory process.

Q: What are the expectations for M&A and IPO activity in 2025, and how quickly could we see a ramp-up? A: David Solomon indicated that 2025 is expected to be more constructive and robust for M&A and IPO activity. He noted a meaningful pickup in large-cap M&A dialogue and sponsor inquiries, suggesting a positive trend in backlog and client engagement.

Q: How is Goldman Sachs balancing capital return to shareholders with investing in the business, given the improving opportunity set? A: Denis Coleman, CFO, stated that Goldman Sachs is generating significant capital and sees opportunities to deploy it. The firm remains committed to sustainably growing its dividend and returning excess capital to shareholders while maintaining an appropriate buffer due to regulatory uncertainty.

Q: What is the strategy for improving the performance of the platform solutions segment, and how will it impact ROE in 2025 and 2026? A: David Solomon explained that the primary focus is on the Apple partnership, which is driving towards profitability. The improvement in the card's performance will reduce the drag on ROE. The firm aims to exit the business in the medium term, ultimately returning capital.

Q: How does the new Capital Solutions group within Global Banking and Markets enhance revenue growth and client service? A: David Solomon described the Capital Solutions group as a way to optimize Goldman Sachs' capabilities by integrating financing, capital markets, and trading businesses. This structure allows the firm to better serve clients by leveraging its relationships, public market financing capabilities, and asset management platform to provide comprehensive solutions.

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