Key facts
- Goldman Sachs' Q1 earnings surpassed Wall Street revenue expectations.
- Equities trading revenue hit a record $5.3 billion, up 27% year-over-year.
- FICC revenue declined 10% year-over-year to $4 billion.
- Investment banking fees rose 48% to $2.84 billion.
- Goldman Sachs raised $10 billion for private credit strategies.
- The company's stock price fell nearly 1.9% after the earnings release.
Goldman Sachs reported first-quarter earnings that exceeded Wall Street's revenue expectations, largely driven by a record-breaking performance in its equities trading division. The firm's stock traders generated $5.3 billion in revenue, a 27% increase year-over-year, setting a new all-time record. This surge was attributed to higher equity financing and trading intermediation fees.
However, the overall positive results were dampened by a significant pullback in the bank's fixed-income, currencies, and commodities (FICC) unit. This segment's revenue fell 10% from the previous year to $4 billion, contrary to analyst expectations of a 10% increase. CEO David Solomon attributed the FICC unit's struggles to a volatile debt market, specifically citing lower revenues in mortgages, interest-rate products, and credit products. Despite the miss, Solomon noted that the FICC quarter was still among the best in the firm's history.
Investment banking fees saw a substantial increase of 48% year-over-year, reaching $2.84 billion. However, the bank also indicated that its backlog of investment banking fees has decreased from its record level at the end of 2025. Solomon cautioned that uncertainty related to geopolitical events, such as the war in Iran, had begun to slow initial public offering (IPO) activity in March.
In its private credit division, Goldman Sachs reported that only 4.99% of investors requested to redeem shares, staying just below the 5% cap. The bank also successfully raised $10 billion for private credit strategies, with CFO Denis Coleman emphasizing that the private credit loan book remains well-diversified. During the first quarter, Goldman Sachs also significantly increased its holdings of credit options, and US funds and life insurers became less bearish in equity index options.