The Goldman Sachs Group, Inc. · Q2 2026 call

We delivered record results for the second quarter and year to date. In the quarter, we generated record revenues of $20.3 billion, record earnings per share of $20.98, and an ROE of 23.5% and an ROTE of 25.5%.

Momentum across our franchise has accelerated as clients continue to pursue greater scale to invest and compete more effectively. This desire for scale has driven a significant increase in strategic deal-making activity with large cap corporate M&A volumes up 90% through the first half of 2026.

We have further expanded our lead as the number one M&A advisor and earlier this year became the first bank to cross the $1 trillion in announced volumes over a six-month period.

Our advisory relationships are often the genesis of client activity across the franchise. What starts as an advisory mandate in the boardroom increasingly extends into opportunities for our Capital Solutions Group, including financing, risk management, capital markets execution, and distribution, as well as investment opportunities for Asset Wealth Management clients.

Even with very strong investment banking revenues this quarter, our backlog increased to its highest level in five years and its second highest level on record, underpinned by a record advisory backlog and reflecting the strength and breadth of our client engagement.

There has been much debate around the broader implications of AI on the workforce. It will change how work gets done, it will not replace what matters most in driving our business, our extraordinary people.

Through the first half of the year, we advised on $1.2 trillion in announced deal volumes with a lead of approximately $425 billion ahead of our closest peer.

Equities net revenues were a record $7.4 billion for the second quarter. Record equities intermediation revenues of $4.2 billion increased 60% year-over-year, reflecting stronger activity across derivatives and cash products. Equity financing was also a record, up 91% year-over-year, driven by continued strength in Asia and another record for average prime balances.

Across FICC and equities, financing revenues of $4.5 billion rose 62% versus the prior year and comprised 37% of total FICC and equities revenues.

Incentive fees were $112 million. We expect these fees to increase materially for the remainder of the year. […] We do expect in the third and fourth quarter to have materially higher incentive fees. It is related to specific transactions that are known and out there.

Gross third-party alternatives fundraising was a record $59 billion for the quarter and $85 billion for the first half of the year. Given the strength we've seen year to date, we now expect full-year fundraising to exceed $125 billion.

On page eight, Platform Solutions revenues were $221 million in the quarter. We expect quarterly revenues for the remainder of the year to be broadly consistent with the second quarter.

Through the first half of the year, we generated material operating leverage with an efficiency ratio of 58.8%, improving 320 basis points from the prior year period, helped by a decline in our compensation ratio net of provisions to 31%.

Our effective tax rate for the year to date was 18.5%. For the full year, we continue to expect an effective tax rate of approximately 20%.

Common equity Tier 1 ratio was 12.9% at the end of the second quarter under the standardized approach, 150 basis points above our current capital requirement of 11.4%.

All the indicators we have is that we are in the relative early innings of a very, very significant, when you're talking about the AI build-out cycle, of an AI build-out cycle. We all know, because we've all been around for a long time, that these things don't go in a straight line, and they can ebb and flow. I'm not smart enough to tell you whether or not there can be recalibrations, in the short term, sometime in the next six months, the next 18 months.

We've been able to grow our revs at about 40%, revs net of PCL slightly higher. Comp expense is only growing at 30% and non-comp at 22%. […] I would not say that there's been any structural change in our expense base at this point.

We're at a moment in time where the demands for the provision of financing are outstripping what we think is the appropriate quantum. That should come as no surprise. We are in the middle of an AI CapEx super cycle where there are demands on financing into every single financing instrument, in every region of the world and across every single industry.

I'd say while there is more sponsored dialogue, the sponsor stuff still has not accelerated, and candidly, it's going to come at some point, and that's still a big upside in these flows if the strategic dialogue takes hold.

I think we said we were top three with 44 of the top 100. We set out to do better. I think today we're top three with close to 80 of the top 100, but we are top three with 127 of the top 150.

One of the most obvious ones is wealth. There's just an enormous, we have a very strong ultra-high net worth, high touch wealth business. The growth in very wealthy people that have investable assets is expanding at an even faster pace. It's a very fragmented business where people have fragmented share.