Goldman Sachs Crushes Q3 Forecasts as Deal Boom, Trading Surge, and Record Wealth Flows Fuel Wall Street’s Powerhouse

Goldman Sachs posted a powerful third quarter that beat Wall Street expectations across nearly every line item, reflecting a decisive rebound in global capital markets and record results in key fee-generating businesses. The firm reported net income of $4.1 billion, up 37% from the same quarter last year, with earnings per share of $12.25 versus the $11.00 consensus estimate. Revenue surged 20% to $15.18 billion, comfortably ahead of the $14.07 billion forecast, while return on equity rose to 14.2% from 10.4% a year earlier. It was Goldman’s third-highest quarterly revenue on record—an emphatic turnaround from a year ago when subdued deal flow weighed on results. CEO David Solomon credited the quarter to “the strength of our client franchise and continued recovery in capital markets,” adding that the firm’s performance “demonstrates both resilience and the power of our diversified business model.”

The rebound was led by Goldman’s Global Banking & Markets (GBM) division, which delivered $10.1 billion in revenue—up 18% year over year—and continues to have a record year in 2025. Investment banking fees surged 42% to $2.7 billion as the firm benefited from resurgent M&A activity, a reopened IPO market, and robust debt underwriting volumes. Advisory revenue soared 60%, boosted by a sharp increase in completed mergers, while debt underwriting rose 30% and equity underwriting advanced 21% on the back of a steady pipeline of large-cap tech and industrial offerings. Goldman reaffirmed its No. 1 position in global M&A and maintained top-two rankings in both high-yield and leveraged loan issuance. Management noted that the investment banking backlog remained “essentially unchanged” from the prior quarter but stood higher than at the end of 2024—an encouraging sign for sustained deal flow heading into Q4.

Trading results also stood out as client activity picked up amid higher volatility. Fixed Income, Currencies, and Commodities (FICC) revenue rose 17% to $3.47 billion, beating estimates of $3.18 billion, with particular strength in interest rate products, mortgages, and commodities helping offset softness in credit and FX. Equities trading produced $3.74 billion in revenue—slightly below expectations but still up 7% year over year—fueled by record financing activity in prime brokerage and securities lending. Together, FICC and equities contributed nearly half of firmwide revenue, underscoring the enduring dominance of Goldman’s trading franchise. Management attributed the results to “continued client engagement and strong intermediation demand” as institutional and hedge fund clients repositioned portfolios late in the quarter.

Capital markets activity was the single biggest driver of improvement. The firm noted that global M&A volumes accelerated as financing conditions stabilized and corporate confidence improved, particularly in the U.S. and Europe. The IPO market, dormant for much of 2023, continued to recover with strong deal completions and a growing backlog of offerings slated for Q4. Leveraged finance also rebounded sharply, supported by tightening credit spreads and a broadening investor base willing to move back into higher-yielding paper. Solomon commented that “activity levels across advisory, underwriting, and financing are all trending in the right direction,” pointing to what he called “a healthy normalization” of capital markets rather than a fleeting rebound.

Goldman’s Asset & Wealth Management (AWM) business added another layer of strength and stability to results. The segment’s revenue climbed 17% year over year to $4.4 billion, while pre-tax earnings grew 12%. Management and other fees reached a record $2.95 billion, up 12%, reflecting higher assets under supervision, which hit a record $3.45 trillion. The firm drew $79 billion in net inflows during the quarter, with an additional $80 billion from market appreciation. Private banking and lending revenue jumped 40% to $1.06 billion, aided by the repayment of a previously impaired loan and rising loan balances. CEO Solomon emphasized that AWM remains “a key strategic growth engine” as Goldman continues shifting toward more stable, fee-based income streams. The segment’s wealth management arm—now overseeing $1.8 trillion in client assets—posted an ROE of 12.7%, up from 11% in Q2.

Meanwhile, Platform Solutions—the division encompassing transaction banking and consumer operations—recorded a 71% revenue increase to $670 million. Credit losses fell 37% to $286 million, marking a major step toward profitability. After several years of restructuring its consumer business, the segment’s pre-tax loss narrowed to just $39 million, and management suggested that profitability is within reach by mid-2026. Firmwide net interest income rose 64% to $3.85 billion, reflecting balance sheet growth and improved asset yields. Total loans increased to $222 billion, while deposits climbed 5% quarter-over-quarter to $490 billion.

Operating expenses rose 14% year over year to $9.45 billion, largely due to higher compensation and regulatory costs. The efficiency ratio, however, improved to 62.1% year-to-date from 64.3% last year, demonstrating that revenue growth is outpacing expense expansion. The CET1 capital ratio remained robust at 14.4%, only slightly lower than last quarter’s 14.5%, while Tier 1 capital stood at 15.2%. Goldman returned $3.25 billion to shareholders—$2 billion in buybacks and $1.25 billion in dividends—with book value per share rising to $353.79 from $349.74 in Q2. Liquidity was strong, with global core liquid assets averaging $481 billion, up from $462 billion the previous quarter.

Solomon’s tone on the earnings call was upbeat but measured. He said, “This quarter demonstrates the resilience of our business model and the strength of client engagement as markets continue to normalize. We are seeing encouraging signs of sustained activity across capital markets, especially in advisory and underwriting.” He also pointed to efficiency gains from AI adoption and technology investment as key enablers of margin improvement. Solomon reiterated that Goldman remains disciplined on expenses while staying focused on its long-term strategy: scaling wealth and asset management, optimizing capital allocation, and maintaining leadership in global markets.

In sum, Goldman’s Q3 results painted a picture of a firm firing on all cylinders. The rebound in M&A and IPO activity, record wealth management inflows, and resilient trading performance combined to deliver one of its strongest quarters in recent years. While rising costs and modest margin pressure remain challenges, the firm’s diversified model and robust deal pipeline position it well heading into Q4. Shares were slightly lower after the report—down about 0.5%—but the message from the numbers was clear: Goldman Sachs is back at full speed, reaffirming its reputation as Wall Street’s benchmark for capital markets dominance.