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Good morning, my name is Kayte and I will be your conference facilitator today. I would like to welcome everyone to The Goldman Sachs Group, Inc. third quarter 2025 earnings conference call on behalf of The Goldman Sachs Group, Inc. I will begin the call with the following disclaimer. The earnings presentation can be found on the Investor Relations page of The Goldman Sachs Group, Inc. website and contains information on forward-looking statements and non-GAAP measures. This audio cast is copyrighted material of The Goldman Sachs Group, Inc. and may not be duplicated, reproduced, or rebroadcast without consent. This call is being recorded today, October 14, 2025. I will now turn the call over to Chairman and Chief Executive Officer David Solomon and Chief Financial Officer Dennis Coleman. Thank you, Mr. Solomon. You may begin your conference.

Thank you very much, operator, and good morning, everyone. Thank you all for joining us. We delivered very strong results in the third quarter and generated net revenues of $15.2 billion, earnings per share of $12.25, an ROE of 14.2%, resulting in an ROE of 14.6% and an ROE of 15.6% for the year to date. This performance reflects the strength of our market-leading franchises, where we continue to harness the power of One Goldman Sachs to serve our clients with excellence in investment banking. We've seen increased momentum in our number one M&A franchise as clients turn to us for their most consequential transactions. Recently, we hit the milestone of advising on over $1 trillion in announced M&A volumes for 2025 year to date. This is $220 billion ahead of our next closest competitor and underscores our dominant position as the advisor of choice for clients. We've built this leadership position through decades of investment in our dedicated teams across the globe. This allows us to advise our clients on their most important transactions. We were the exclusive advisor to Electronic Arts in its $55 billion sale to a consortium comprised of the Public Investment Fund of Saudi Arabia, Silver Lake, and Affinity Partners. We were also the lead advisor to Baker Hughes on its strategic acquisition of Chart Industries for $14 billion and advised and provided financing to Thoma Bravo for its $12 billion leveraged buyout of Dayforce. Importantly, given our One Goldman Sachs operating approach, increased M&A activity creates a real multiplier effect. Whether it's bridge financing, derivative hedging, or investment opportunities for asset and wealth management clients, our advisory relationships are often the genesis for client activities across the firm. Looking forward, it's important to recognize the tailwinds behind our optimistic outlook for investment banking. We're encouraged by the steady build in sponsor activity, which is now tracking 40% higher versus last year. Considering that sponsors have over $1 trillion of dry powder and $4 trillion of private equity assets in their portfolios, coupled with the expected rate cuts in the U.S., the setup remains constructive for corporates. It's clear from our conversations in boardrooms that after a period of heightened uncertainty and volatility early in the year, many of our clients have navigated and adapted to the current state of play. Though near-term policy considerations are still relevant, many CEOs have shifted their focus back to long-term and strategic decision making, particularly amid a more supportive regulatory environment. Scale and investing for growth remain paramount, especially in the context of harnessing AI capabilities. In addition to a robust investment banking backdrop, we have seen continued strength across our leading FICC and equities businesses, which in total rose on a year-over-year basis for the seventh consecutive quarter. Much of the momentum from the first half of the year persisted through the summer and into September, contributing to our record year-to-date performance for equities and notable strength in our rates business within FICC. All in, our markets businesses continue to demonstrate resilience that comes from having a global, broad, and deep franchise. Taking a step back, there is no question that there is a fair amount of investor exuberance at the moment, with U.S. equity markets consistently hitting record highs over the last several months. Much of this has been fueled by a tremendous amount of investment in AI infrastructure, which has driven significant capital formation. As students of history, we know that following periods of broad-based excitement around new technologies, there will ultimately be a divergence where some ventures thrive and others falter. While I feel good about the forward outlook, on balance, the market operates in cycles and disciplined risk management is imperative. We are especially vigilant in times like these to proactively manage risks as we continue to serve clients with our best-in-class execution capabilities and insights. In asset and wealth management, we are relentlessly driving forward our growth strategy. Assets under supervision rose to a record $3.5 trillion. We again delivered record results across our more durable revenues and management and other fees. In private banking and lending in alternatives, we raised a record $33 billion in the quarter. As a result, we now expect to raise approximately $100 billion in alternatives this year, substantially exceeding our prior full-year fundraising expectations. In wealth, client assets rose to a record $1.8 trillion. As we continue to grow our advisor footprint and expand our suite of client offerings, it is clear that we've been making very strong progress in enhancing our business mix by growing our more durable revenues at AWM. We are also accelerating our growth via innovative partnerships and acquisitions. Yesterday we announced the acquisition of Industry Ventures, a leading venture capital platform with a track record of strong investment performance and the proven ability to invest across all stages of the VC life cycle. This transaction complements our market-leading secondary investing franchise we have been a pioneer for over 25 years and adds a highly attractive technology investment capability to the platform. This business will sit in our External Investing Group, or XIG, which has over $450 billion in assets under supervision across asset classes and is a market leader in investing in alternative manager strategies, secondaries, co-investments, and GP stakes. Importantly, facilitated by our One Goldman Sachs approach, Industry Ventures' deep relationships across the VC ecosystem have the potential to drive new opportunities for the firm, particularly in investment banking and wealth management. Additionally, last month we announced a strategic collaboration with T. Rowe Price to deliver a range of public and private market solutions designed for the unique needs of retirement and wealth investors. We are thrilled to partner with T. Rowe, which, like Goldman Sachs, has a strong brand with a long track record of success across investing in capital markets and in producing strong investment returns for clients. With our 30 years of experience in private markets and an ability to blend asset classes to address outcome-oriented objectives, we can help bridge the gap between growth opportunities in private markets and the needs of individual investors as we drive growth across our businesses. Operating efficiency remains one of our key strategic objectives. Although we review our operations on an ongoing basis, it is also important to make long-term decisions that best position the firm for the future, especially as rapidly accelerating advancements in technology present significant opportunities. To this end, earlier this morning we announced to our people the launch of One Goldman Sachs 3.0 propelled by AI. This is a new, more centralized operating model that we expect to drive efficiencies and create capacity for future growth. This is a multi-year effort that we will build over time, and we plan to measure our progress across six goals: enhancing client experience, improving profitability, driving productivity and efficiency, strengthening resilience and capacity to scale, enriching the employee experience, and bolstering risk management. To start, we are drilling in on a handful of front-to-back work streams that can significantly benefit from AI-driven process reengineering and will help inform our longer-term approach. These include priorities such as sales enablement and client onboarding that directly impact the client experience, as well as other critical areas that have touchpoints across the firm, for example, our lending processes, regulatory reporting, and vendor management. We have been successful by not just adapting to change, but anticipating it and evolving. The firm's operating model is part of the long-term discipline that our people, clients, and shareholders expect of Goldman Sachs. We will provide you with an update with additional details on our call in January. While we've made significant progress on our strategic priorities, we will continue to execute the foundation we've laid to grow and strengthen the firm. Coupled with our market-leading franchises and best-in-class talent, give me confidence in our ability to deliver for clients and drive strong performance for shareholders. I will now turn it over to Dennis to cover our financial results for the quarter.

Thank you, David. Good morning. Let's start with our results on page one of the presentation. In the third quarter, we generated net revenues of $15.2 billion, earnings per share of $12.25, an ROE of 14.2%, and an ROTE of 15.2%. Let's turn to performance by segment, starting on page three. Global Banking & Markets produced revenues of $10.1 billion in the quarter, with an ROE for the year to date of 17%. Turning to page four, advisory revenues of $1.4 billion were very strong, up 60% versus a year ago, reflecting a significant increase in completions in the quarter year to date. We remain number one in the league tables for announced and completed M&A, not only globally but in each of the Americas, EMEA, and APAC. Equity underwriting revenues of $465 million were up 21% year over year on significant pickup in IPO activity as we price some of the most highly anticipated IPOs, including Klarna, Figma, and Figure Technologies. More broadly, we're pleased to see the broad-based recovery in the IPO market pick up steam. Debt underwriting revenues of $788 million rose 30%, primarily reflecting higher leveraged finance activity. While acquisition-related activity is picking up amid more deal announcements, there is more room to run, which plays to our strengths as a firm. Year to date, we ranked second in high yield debt underwriting and leveraged lending. Across investment banking, we continue to see strong momentum, with our quarter-end backlog at its highest level in three years despite very strong accruals. FICC net revenues were $3.5 billion in the quarter, up 17% year over year. Intermediation results were driven by improved performance in rates, mortgages, and commodities, partially offset by lower results in currencies and credit products. Financing revenues of $1 billion were driven by strong results in mortgages and structured lending. Equities net revenues were $3.7 billion in the quarter. Equities intermediation revenues of $2 billion fell 9% year over year, driven by lower revenues in cash products, partially offset by better performance in derivatives. Record equities financing revenues of $1.7 billion were 33% higher year over year amid record average prime balances for the quarter. Total financing revenues of $2.8 billion rose 23% versus the prior year as we continue to deploy resources to grow FICC financing and bolster our leading position in equities financing while maintaining a keen eye on risk management. These revenues comprise nearly 40% of overall FICC and equities revenues. Let's turn to page 5. Asset and wealth management revenues in the quarter were $4.4 billion. Management and other fees were up 12% year over year to a record $2.9 billion. On higher average assets under supervision, private banking and lending revenues were $1.1 billion excluding the payment of interest on a previously impaired loan. Year to date, revenues were up in the high single digits year over year driven by higher net interest income from lending to our ultra-high-net-worth clients. In aggregate, our revenues across management and other fees and private banking and lending totaled a record $4 billion in the quarter and $11 billion for the year to date. We continue to expect growth in the high single digits on an annual basis over the medium term. In the AWM segment, we generated a 23% pre-tax margin and a 10.5% ROE for the year to date. Excluding the impact of HPI and its $3.6 billion of average attributed equity, our pre-tax margin and ROE would have been approximately 150 and 250 basis points higher, respectively. Now, moving to page 6. Total assets under supervision ended the quarter at a record $3.5 trillion, up sequentially on $80 billion of net market appreciation as well as $56 billion of long-term net inflows across asset classes representing our 31st consecutive quarter of long-term fee-based net inflows. Turning to page 7 on alternatives, alternative assets under supervision totaled $374 billion at the end of the third quarter, driving $597 million in management and other fees. Gross third-party alternatives fundraising was a record $33 billion in the quarter driven by demand across strategies, including private equity and credit, bringing year to date fundraising to $70 billion on page 9. Firmwide net interest income was $3.9 billion in the third quarter. Our total loan portfolio at quarter end was $222 billion, up modestly versus the second quarter. Our provision for credit losses of $339 million primarily reflected net charge-offs in our credit card portfolio. Turning to expenses on page 10, total quarterly operating expenses were $9.5 billion. Our year to date compensation ratio net of provisions is 32.5% and represents our best estimate for the full year inclusive of higher severance costs. The 100 basis point improvement year over year reflects stronger revenue performance. Quarterly non-compensation expenses of $4.8 billion rose 14% year over year, driven by higher transaction-based costs as well as charitable giving and higher litigation expenses. Our effective tax rate for the year to date was 21.5%. For the full year, we continue to expect a tax rate of approximately 22%. Next, capital on slide 11. In the quarter, we returned $3.3 billion to shareholders, including common stock dividends of $1.3 billion and common stock repurchases of $2 billion. Our common equity tier 1 ratio was 14.4% at the end of the third quarter under the standardized approach. In the current regulatory framework, our CET1 requirement is 10.9%, but the NPR on CCAR averaging is still outstanding. In conclusion, given the continued execution on our strategic objectives, our market positioning, and the improving operating environment, we are confident in the outlook for our businesses. We are the number one M&A advisor globally, well positioned to capitalize on the upswing in investment banking activity, which we expect in the next 12 to 24 months. We're delivering on our growth strategy to drive more durable revenues across AWM. We're focused on efficiency and leveraging AI to meaningfully transform the firm, and this is all in the context of the improving regulatory backdrop, which should allow us to be on offense as we deploy resources in service of our clients. Altogether, we remain confident in our ability to continue to deliver for shareholders. With that, we'll now open up the line for questions.

Thank you, ladies and gentlemen. We will now take a moment to compile the Q&A roster. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, please press star then two on your telephone keypad. If you're asking a question and you are on a hands-free unit or a speakerphone, we would like to ask that you use your handset when asking your question. Please limit yourself to one question. One follow-up question. We'll take our first question from Glenn Schorr with Evercore.

Hi, wanted to follow up on your question about remaining especially vigilant and actively manage risk at times like these. I did notice some more news stories lately that you and others in the industry have been more active on the SRT front and synthetic risk transfer. I wonder if we could talk about how you're executing that. Especially vigilant on managing risk and what loans are moving off, potentially off balance sheet on these risk transfers. Just curious what's driving that other than just we're 17 years into a good cycle and it's evaluations are high and things like that. Thanks.

Sure, Glenn, thanks. Thanks for the question. Look, there have been a number of articles on those transfers, including naming us. I would say that our practice is pretty unchanged and that we are constantly looking to dynamically risk manage our portfolio of credit exposures. We have a variety of different tools that we use to risk manage and hedge that risk. SRT is one of those tools that's available to us. We're basically trying to ensure that the firm's in a position to continue to be able to support ongoing levels of client activity, and prudently risk managing the existing portfolios we think gives us the capacity to do that. There are no flashing warning signs. It's just prudent risk management. It just so happens to be year end. You know, Fed cutting balance sheets, things like that, just keeping clean, good hygiene. This is ordinary course risk management for us.

Okay, cool. The other clarifier I wanted to get was the messaging behind the One Goldman Sachs 3.0. Meaning, normally you see some companies go through strong iterations of that when they're having some revenue issues. You're not having any revenue issues. You've been putting up great numbers, and you talked about a great banking pipeline next 12 to 24 months. Is technology enabling this heightened awareness on efficiency in some of your AI investments? I'm just curious a little bit more about the why behind the One Goldman Sachs 3.0.

Yeah, thanks Glenn. I appreciate the question and you know, you've got it right. I think we're at a place where the evolution of the technology is allowing enterprises broadly. I find this as I'm talking to CEOs all over the world, all businesses are focused on this because the technology actually allows you to take a fresh look front to back at certain operating processes and really reimagine. This has nothing to do, obviously, the firm's performing, the firm's growing, we feel very good about the execution, but we see this as an opportunity to use technology to automate, drive scale, create efficiency, and actually give us the capacity to invest more in the growth of our business. Our responsibility to shareholders is to grow earnings. The goal is to run the firm the best that we can, that doesn't matter whether it's good times or bad. In order to execute on something like this at scale in the organization, you have to bring the organization along, too. Part of the purpose, we've been working on this for a while, we've been talking about it as a leadership team. Part of the purpose of putting this out is it now allows us to talk more broadly and create a framework for the organization to understand the process that we're going to go through. I think there's enormous upside for our business here to allow further investment in growth. By the way, I think you're going to hear this from lots of companies in lots of industries that people are very focused on taking advantage of this acceleration in technology to really allow automation, efficiency, and therefore investment. By the way, this is one of the reasons why we're optimistic about the forward, the productivity gains in the economy from enterprises finding ways to do this, I think are going to be very meaningful over the next few years. That creates a good tailwind that will balance other macro factors that may or may not come into play.

Thank you. We'll take our next question from Ebrahim Poonawala with Bank of America.

Good morning. I guess if you could go back to there's been obviously a lot of headlines and some rights are misplaced around risks on the private credit side. I think David Solomon has an interesting perspective given how long you've been in this space and you've seen the evolution of the space. Address it in two ways if you could, please. One, when you think about the leverage that banks and Goldman Sachs provides to some of these players, how should shareholders think about the risk that at the back end you could suffer losses because of the lending to NDFIs? Secondly, does any of this cause you to kind of recalibrate how you're thinking about growing in the oil or the private credit business? Thank you.

Yeah, I mean, I'll start. Dennis can add some more granular detail, maybe comment just on some of the things that have been in the press more recently. First of all, we're in business to serve our clients, finance our clients. All of this is underpinned by the fact that we have a very strong risk management culture and strong underwriting is really central to everything that we do. It's important to take a step back. You asked about NDFIs. It's a very broad category. There are all sorts of different activities. We have a very, very diversified book of lending exposure. The vast majority of our lending is collateralized financing and investment grade rated structures. The vast majority of it is investment grade rated. We're constantly risk managing. We're constantly trying to create more capacity to do other things to support our clients. We think about it as a broad, big diversified portfolio. Obviously, if you got into a period where we had a credit cycle, which we have not had in quite some time, there'd be headwinds for all the banks. I think we feel very, very good about our processes, our collateral, the structure of the book. A little bit back to the question that Glenn Schorr started with, we have a whole series of risk management processes that we constantly execute on to try to make sure we're being prudent at times like this. Dennis, you want to comment a little on some of the specific things that have been in the press and add anything to what I said.

The only things to add, we obviously don't have any direct exposure to either of the big names that have been in the press lately. Picking up on David's point, we've been in the business for a very long period of time. We've been lending through multiple cycles and analyzing downside risk and doing consistent high quality credit. Underwriting is key. The names in our portfolio are underwritten on a bespoke basis. We maintain very stringent standards with respect to our aggregate exposures, our diversification, our concentration risks, the attachment points, collateral packages, the risk return characteristics, duration, et cetera. For us, we're maintaining our standards. We've said on multiple previous calls that we've had good opportunities to grow the FICC financing line. We have said multiple times that the demand from our clients far outstrips the growth that we have maintained a level of selectivity with respect to credit selection, risk return profiles and that's still the case. Credit selection, being disciplined about that going in, is ultimately what protects you when inevitably certain things will go wrong.

That's helpful. I guess just one more when we think about regulatory changes. We had the Treasury Secretary talk about this in a speech last week. Just give us a mark to market around your expectations as you think about the G-SIB surcharge and Basel III endgame. How are you thinking about the timeline and capital planning around all of that? I think the bigger question that's come up with investors is, is the competitive positioning of Goldman Sachs getting better where you're not being buried with incrementally new regulations? When we think about Goldman Sachs competing with the non-banks across a varied businesses, is that also just at the margin getting better? If you can comment on that. Thank you.

Sure. I mean on the second point, I absolutely think that the regulatory direction of travel is improving our competitive position significantly on the timeline. It's harder to give you an exact timeline, but I'd say you're going to see real progress this fall and real progress during the first half of 2026. I would expect we'll have a very, very, very clear picture of a bunch of the regulatory issues that we're all focused on collectively over the course of the fall and the first half of 2026 into the end of the CCAR cycle next summer. I think we're certainly going to see SLR relief. I think we're certainly going to see more transparency around CCAR and a continued recalibration because of that. I think we're going to see a recalibration of G-SIB. I think we're going to see a much more constructive Basel III endgame. Obviously, the regulatory tone and the focus of resources that we have to direct toward regulatory is shifting in a way that we can redeploy those other things that create avenues of growth. I would say quite constructive. These things take time, but it's happening real time. Going back to where I started, I do think this improves our competitive position relative to others that are outside of the regulatory landscape.

We'll take our next question from Erika Najarian with UBS.

Hi, thank you. Given the comments about the regulatory landscape and focusing on growth and the opportunity to play offense, and clearly you announced the cost collaboration with T. Rowe Price and Industry Ventures, I'm just wondering, David, as you think about Goldman Sachs in the future, One Goldman Sachs 3.0, what are those opportunities for growth that you think maybe are missing or not scaled in the business right now that will really maybe stabilize, enhance that 15% ROE as we look forward even without such a robust capital markets backdrop?

Sure. I think we've, and I appreciate the question, I think we've talked about this a lot, Erica, but at the end of the day our strategy remains the same. We continue to invest in Global Banking & Markets and are very, very focused on share and wallet share. We believe through the cycle that is a mid teens business. That doesn't mean there couldn't be a year or environment where that business is different in a different capital markets environment. We believe consistently through the cycle we now have that business operating as a mid teens return business. We've been clear that Asset & Wealth Management remains a very, very attractive growth channel for the firm. You can see us improving margins and uplifting returns there. There's still more to go and we are highly confident in our ability to uplift the returns in Asset & Wealth Management over the next couple of years. That obviously strengthens and enhances the overall return profile and durability of the firm. We are executing against that. I think you can see through T. Rowe Price and also through our acquisition of Industry Ventures that this gives you an idea of how we're thinking about strategically accelerating that growth and strengthening that overall platform. We're going to do it thoughtfully, we're going to do it carefully, we're going to do it prudently, but we're going to make investments that we think strengthen the platform and allow us to continue on that trajectory. When you think about the firm, two big businesses, Banking & Markets, Asset & Wealth Management, Banking & Markets, mid teens through the cycle and as we execute on Asset & Wealth Management and continue to enhance the returns, that should produce a significantly higher return than it currently produces. We're confident on our ability to deliver that. That therefore gives you a more durable, targeted return.

Thank you, David.

Thank you. We'll take our next question from Christian Bolu with Autonomous Research.

Good morning David and Dennis. Just firstly on the equities business, I appreciate that we can't read too much into one quarter, but curious what drove or what you think drove the underperformance versus peers. Also, would love to get some more color around, I guess, the decline in equity intermediation revenues. I believe you called out cash equity as a driver.

Sure, Christian. As you say at the beginning of your question, the overall strength of our equities platform remains in excellent condition. We're having our best year-to-date performance ever for that business. The cash component of equities intermediation was softer. In the prior year period, that activity was up almost 30% and the prior quarter was a top decile quarter. Our comps were difficult and we had slightly less robust performance in the cash portion of the business. The rest of the franchise continues to perform extremely well across the derivative components of intermediation. The financing piece was a record and in aggregate, again, the franchise feels extremely well positioned. We're seeing high levels of client engagement and feel good about how it's set up for the forward.

Okay, thank you. This one's a bit of a wonky question, so please bear with me. Given all the jitters around things like First Brands and Tricolor, which apparently had, I guess, some fraud issues around collateral being pledged multiple times, can you talk about or at least remind us how you manage risk in your financing businesses, especially around collateral integrity?

Sure, Kristen, this will sound familiar to some of my previous remarks, but the process for us is, and the importance for us is to make sure we have a consistent set of underwriting standards and that we have robust upfront due diligence, that we have ongoing monitoring and reporting diligence underlying collateral, that we manage the granularity of our portfolio within our own internally set diversification and concentration limits, and that we have consistent standards for what we expect the risk return characteristics to be. Some of those idiosyncratic names that you give reference to, we didn't have direct exposure to those names. Part of the key to credit underwriting is to make sure that you miss some of the more challenged credits, and that all comes down to upfront diligence and having a long-standing track record and an ability to be selective. We have a very big market presence here. We see a lot of opportunities, there's a lot of demand from clients for us to support them, and we have the ability to be selective with respect to where we extend our balance sheet, make sure it comports with our own standards of risk management.

We'll take our next question from Betsy Graseck with Morgan Stanley.

Good morning. Thank you. David, you mentioned earlier about how prudent, careful strategy execution. As you were discussing the partnerships and acquisition that you announced the other day, it would be interesting to understand what you think the opportunity set is for you in this space in wealth and asset management from an acquisition perspective in the sense of should we expect these kind of bite sized overtime building up over time or are there opportunities that you see that could potentially get you to a larger scale faster?

Yeah, I mean, first of all, Betsy, I appreciate the question and some of this will sound familiar to things I've said on other earnings calls and I say publicly in my public comments. We're obviously focused on accelerating the asset wealth management business. Our wealth management business is an ultra-high-net-worth franchise and I would say it is scaled and we don't, unlike other peers, we are not looking to directly control client relationships in the broad high net worth space or in other broad wealth channels, that's not really our strategy. Our strategy is to continue to grow and be the leading ultra-high-net-worth, high touch wealth platform and to have it married with our extraordinary manufacturing capability and product offering in our asset management business. The acquisition that you saw today of Industry Ventures adds to that. It's giving our very, very wealthy clients access to other investment opportunities and products that are hard to access in different channels. We feel very good that that's very on strategy. Are there larger acquisitions that could enhance our wealth platform? Absolutely. Things I've said before, the bar to do more significant things is always going to be very high. I've also said when you look at the best companies and the best businesses around asset wealth management, they're generally sold, not bought, and most of the best ones are not for sale and not available. If we saw something that could accelerate our journey in asset wealth management, we'd certainly consider it, but always with a very, very high bar. At the moment, what we're seeing is interesting things that enhance our distribution, enhance our ability to offer very, very unique products to our client base already. We'll continue to capture through third party wealth channels opportunities to use our manufacturing capability and asset management more broadly.

Thank you. Just separately, should we still be anticipating an exit from the Apple Card at some point in the near or medium term, or is that no longer expected?

We've been clear that credit cards are not a go forward focus for Goldman Sachs. I don't have anything more to say on the Apple Card program at the moment. You saw us completely, and we now are completely exited from the GM card platform. When there's something more for me to report on the Apple Card, I guarantee that this broad group that's on the call will be among the first to know it.

Thank you. We'll take our next question from Mike Mayo with Wells Fargo Securities.

Hi. In what role does, on the negative side, Goldman Sachs 3.0, I would think platform solutions might not make the cut, and I guess that relates to the Apple Card. I guess I'm just wondering why you're the leading deal maker in the world and that's still hanging around. I guess that's a follow up. On the positive side, you said the quarter end backlog is at the highest level in three years. Can you give us a sense of that mix? Also, if I heard you correctly, you said—I might have heard this incorrectly—40% of your FICC and equity trading is financing. If I got that wrong, if you could correct me. What's comprising that?

Sure. You heard correctly, our backlog is the highest level in three years. That backlog that we report comprises the advisory, equity underwriting, and debt underwriting components in aggregate. We made a point that it actually stands at that position notwithstanding very high levels of accruals over the course of the previous quarter. It gives you a sense for our optimism on the outlook and our expectation for other types of activity that are to come through our franchise. Broadly, you're also correct in your understanding of the contribution of FICC financing and equities financing as a combined component of the FICC and equity lines combined. We continue to focus on growing those durable and predictable financing revenue streams and are just reporting out on the sort of marginal contribution that they represent within the overall FICC and equities business. As far as that 40%, that's up, I think, from 33% quarter over quarter. I'm just wondering what were the sources of that incremental growth. This has been an activity that we have been steadily, steadily growing over the last couple of years. As we think about the durable revenue profile of the firm, those components of Global Banking & Markets, together with management and other fees, private banking, lending, and asset wealth management, those are the areas of the firm that we've been consistently deploying resources against and been focused on that has been steadily growing. I don't think there's a new step function change in that contribution. It's been a constant commitment. It's been steadily growing the last couple of years.

We'll take our next question from Brandon Hawken with Bank of Montreal.

Good morning. Thanks for taking my question. I was curious about an AWM. If we adjust for the impact of HPI, pretax margins are roughly at the mid-20% and the roughly mid-20% target on a core basis. If we think about what's going to drive you to that mid-teens ROE, is it more around the capital side or do you still have continued room on the profitability front that drives that ROE higher?

I think, Brennan, at a high level, you know, just to boil this down, and we've been pretty consistent on this, we continue to fundraise and we continue to grow the scale of the platform as that fundraising goes on. That adds to the management fee and the marginal margin as you scale, the business continues to improve significantly. We are very confident as we continue to fundraise and scale the platform that there's more room on the margin side as we continue to shift our strategy and finish with the HPI portfolio, that will free up a little bit of capital. At this point most of the margin and return improvement is coming from the continued growth and scaling of the platform.

Perfect. Thanks for that color. David, on the expense side, you were clear in your expectations on the comp ratio. Curious about non-comp. We saw a charitable contribution this quarter, which is normally, I believe, in the fourth quarter instead. Was that just a timing change, or is there going to be contributions just the back half going forward, like third and fourth quarter? What's the right way to think about a jumping off point for non-comp?

Appreciate the comment on non comp. We continue to have all the same programming and discipline around managing overall non comp growth. The biggest driver for us again was transaction-based expenses. That's obviously correlated with the elevated levels of activity we're seeing across the board. We did call out the charitable expenses. You are correct in your recollection that traditionally we did recognize most of those expenses in the fourth quarter. This year we're making an effort to actually spread it out over the course of the year, so it won't be showing up only in the third quarter.

Thank you. We'll take our next question from Dan Fannon with Jefferies.

Thanks. Good morning. You've exceeded or met most if not all of your targets in asset and wealth management except the kind of billion dollars of incentive fees, you're tracking below that this year. Just curious as to when you think your ability to hit that is sure.

Fair point, Dan. Your question actually also helps answer the question on how asset and wealth management sort of migrates towards a higher return profile over time. It's another one of the contributors to top line that also has significant marginal margin contribution. You're right to ask because the unrealized balance of incentive fees as of the last quarter is now at $4.6 billion. We still do have visibility and expectations that there's significant amounts of incentive fees that will pull through the P&L over the next several years. Ultimately it's going to be a function of the way in which certain of those vehicles are able to finally monetize their investments and return carry to their investors, enable us to recognize the incentives. The overall environment, deal making environment, monetization environment, proportion of sponsor activity in the world, all of that is trending in the right direction and that should help propel us closer to our medium-term targets of $1 billion of incentive fees per year.

Great, that's helpful. I just wanted to follow up on the ULTS business. Given the strength in fundraising, you raised the guidance after several years of strong growth. Can you talk about the funds that are coming in either bigger, or are more funds coming to market? Anything specific you could point to that's driving some of that excess growth?

Sure. Obviously, the last five years we've been raising about $65 billion a year, which was a healthy clip. Our expectations now for this year are a step function higher, you know, approximately $100 billion. The contribution is broad based, so it's across multiple different asset types. It is a combination of having certain vehicles that are larger than previous vintages as well as launching new types of fundraising vehicles. It's a pretty broad-based contribution across the board.

We'll take our next question from Devin Ryan with Citizens.

Great morning. David, Dennis, first question just on the financial advisory strength, obviously really nice on an absolute basis and then relative to peers as well. All the data we look at would suggest we're still pretty early in the recovery for that business. Sponsors are just starting to re-engage, and I know you touched on the market share gains as well. Just be good to get some additional context on where you feel like we are in the broader recovery for the advisory business for the industry right now. You know how far away we are from the baseline. From a market share perspective, is that Senior Banker headcount up a lot or is that just One Goldman Sachs resonating?

A couple of aspects to it. Devin, appreciate the question. First, on the cycle we've been talking about an improvement in M&A all year because one of the things we see inside the firm is we've got really great transparency inside the firm as to all the transactions that are in progress and kind of what CEOs are doing and thinking. In my prepared remarks, if you remember, I said after a little bit of volatility early in the year, CEOs are really focused strategically where they want to go. I think one of the things to frame is that we're in an environment at the moment where CEOs think that the opportunity to get things done strategically is now possible after being in a period of time where they felt it was not possible. That's turning them all to focusing strategically. We have significant activity in the shop. You saw the comments around our backlog. That kind of shows you the sustainability. I think that we are going to see a very constructive M&A environment through the end of the year into 2026. I'd expect 2026 to be a stronger M&A environment unless there's some macro disruption. I think there's been a meaningful improvement in where we are in the cycle. I still think given market cap expansion growth, the fact that we were underpenetrated in terms of activity because of the regulatory environment for the last four years, I expect a pretty healthy environment. We commented on sponsors, sponsor activity is up kind of 40%. We see more of that in the pipeline and I think you're going to see an acceleration there. I think it's quite constructive.

That's great. Okay. Just want to come back to the prime services and financing as well. I know it's been steady growth as Dennis mentioned, but I suspect there's also a bit of a cyclical component there, just tied to higher risk appetites. There's obviously the secular and kind of Goldman Sachs market share story. With where we are with record valuations across a number of assets, is there a way to frame how you're thinking about the cyclical demand in that business right now, significantly elevated? From a secular growth story, just talk about how much more room there is over the next handful of years here.

Thanks. Sure. You're right. This business definitely benefits from the underlying environment. Balances are very, very correlated with overall levels in the markets. That is an attractive feature of the business. There's obviously the composition of the portfolio and the nature of the activities and the flows that go into it. You can calibrate more or less growth relative to the underlying backdrop based on how you manage your portfolio of credit extension. It has been, together with FICC financing, a good source of stable revenues for us across the franchise. It's a product that is highly valued by our clients. There's a lot of demand for us to provide more by way of prime brokerage services to our clients. It's something that we're very strategically focused on continuing to provide to meet with clients' demand.

Thank you. We'll take our next question from Gerard Cassidy with RBC.

Good morning, Dennis. Good morning, David. On the comments you made, David, on One Goldman Sachs 3.0, which obviously is very positive, as outsiders, how do you direct or where should you direct us? How we measure that success over the next three to five years as you roll this out throughout the organization, is it going to be primarily through the ROTCE number or is there something else we should focus on?

Gerard, I appreciate the question. In my prepared remarks, when I laid it out, I said to you that, you know, in the first quarter we'll give you a further update on this. If you go back and you think about the way we've operated in the past, we give you information, we then hold ourselves accountable to that. Part of the reason that we made this announcement today is to do these kinds of things in an organization like Goldman Sachs. We have to bring the organization along and we have to create a roadmap for the organization when we're in a position that we can give you more concrete metrics that you can track and we can quantify and proportionalize. We have good ideas on those things now, really good ideas on those things. We're not prepared to lay that all out specifically for you. I promise you that as we go into the first quarter and the second quarter, you'll have more transparency on what we're doing, the opportunity, how to think about it, and how it drives further earnings growth for the firm.

Very good, thank you. As a follow-up, obviously you guys are very well capitalized with a CET1 ratio just over 14%, the requirement 10.9%. You've been very active in returning that excess capital through share repurchases. As we go forward, assuming the regulatory environment continues to move in the direction that you referenced, David, where should we see the buffer? I mean, if you come in with a final number, maybe in a year or two, something closer to 10.5%, the regulatory requirement, what kind of buffer do you guys like to operate above your regulatory requirement when it comes to CET1?

I think the way to think about a buffer is it depends on the clarity you have in the capital regime. I think that there is a reasonable chance or a good chance that after operating in a period of time where there was a lot of capital volatility and firms had a hard time planning their capital on a year-to-year basis, there's a good chance we're going to be in a regime where we have more clarity on our capital for a multi-year period of time, certainly within a tighter range. That would lead to narrower buffers than what we and others on the street have been running with over the course of the last five years when there's been more capital volatility. If you go back and you look over the last few years, most of the institutions have been running larger buffers because there was more capital volatility through the CCAR process. You have more transparency around that process, and also because you put in something like averaging, that means that there's going to be less volatility on a year-to-year basis. I think most firms, including ourselves, would be comfortable running with buffers that are less than the buffers you've seen on average over the last few years. As we have more clarity in that, as I said earlier, I think the direction of travel is quite positive. We'll give you more of a sense of how we think about the buffers, but that's a big macro way to think about it. This is another thing that's actually quite constructive for Goldman Sachs and for others in the industry.