Goldman Sachs reported a 72% jump in equities revenue Tuesday, powered by financing for large investors and stronger derivatives trading, as weaker mortgage, credit and interest-rate trading held back its bond business. The results showed a sharp divide in demand for the Wall Street firm’s services, with stock-related activity driving much of its growth.
Equities revenue reached $6.44 billion for the three months ended Sept. 30, the second-highest quarterly total in Goldman’s history. It remained below the $7.42 billion earned in the second quarter, underscoring that the business grew sharply from a year earlier while cooling from its recent peak.
The largest contributor was equities financing, which generated $3.37 billion, up 96% from a year earlier. Goldman supplies financing and securities to hedge funds and other institutional investors, helping them fund portfolios and carry out trading strategies.
That business differs from simply earning a commission when someone buys a stock. Financing can generate income while investors maintain positions, although it also exposes the bank to risks involving borrowers, collateral and market prices.
Equities intermediation, the business of facilitating client transactions and managing trading exposures, produced another $3.08 billion, up 52%. Goldman said derivatives were the main driver. Those contracts allow clients to protect against price changes or take exposure to markets without directly owning the underlying asset.
The fixed-income, currency and commodities business, known as FICC, generated $3.47 billion. Goldman described that as essentially unchanged; its financial tables show a rounded 1% decline from a year earlier.
The headline concealed a weaker trading business supported by stronger financing. FICC intermediation revenue fell 7% to $2.26 billion, with significantly lower results in mortgages and credit products and weaker interest-rate trading. Higher currency and commodity revenue partly offset those declines.
FICC financing rose 14% to $1.21 billion, primarily because of mortgages and structured lending. Together, those figures show why lower mortgage-related trading revenue does not necessarily mean every mortgage-related business is shrinking: financing and buying or selling securities are different sources of income.
For the firm overall, net earnings rose 29% to $5.29 billion, from $4.10 billion a year earlier. Earnings per share increased to $17.01 from $12.25, exceeding the $13.02 analysts expected, according to LSEG estimates cited by Reuters.
Net revenue rose 23% to $18.68 billion. However, it fell 8% from the second quarter, while net earnings declined 20% over the same period.
Investment banking fees supplied another source of annual growth, rising 21% to $3.22 billion. Equity underwriting revenue increased 43%, reflecting stronger fees from initial public offerings and subsequent stock sales. Debt underwriting also improved, led by investment-grade activity.
The outlook was less clear. Goldman said its backlog of investment banking fees decreased from the end of June and was slightly below the end of 2025. That backlog represents potential business from transactions still to be completed, rather than guaranteed future revenue.
Chairman and Chief Executive David Solomon said the firm remained well positioned to serve clients despite global complexity and uncertainty. Goldman’s results nevertheless leave investors watching whether the recent pace of financing and completed deals can continue.
Apple Card remained a drag on the smaller Platform Solutions division. Revenue fell 72% to $170 million, primarily reflecting markdowns on the card loan portfolio, which Goldman classified as held for sale in late 2025.
The exit is already agreed. In January, Goldman announced a deal to transfer the Apple Card program to Chase, with the transition expected to take approximately 24 months. Goldman said it would continue operating the program and recording its results until completion. The latest markdowns therefore reflect an ongoing transition, rather than a newly announced withdrawal.
Operating expenses increased 20% to $11.31 billion. Transaction-based expenses rose 54% to $3.02 billion, while compensation and benefits increased 9%. Goldman also reported significantly higher charitable contributions.
Headcount reached 47,500, up 3% from June because of the timing of campus hiring, but down 2% from a year earlier. The provision for credit losses totaled $368 million, primarily reflecting impairments on wholesale loans.
Goldman returned $4.49 billion to common shareholders during the quarter through buybacks and dividends. Its next declared dividend is $5 per share, payable Dec. 30 to shareholders of record Dec. 2.
Beyond that payment, the business question is whether equity financing can sustain its momentum as the deal backlog contracts and bond trading remains softer. Strong annual growth gives Goldman room to absorb those pressures, but the declines from the second quarter show the pace is already uneven.
JBizNews Desk | Wall Street
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