How Does Goldman Sachs Make its Money?
Goldman Sachs is one of the world’s leading investment banks and financial services companies. The firm serves corporations, governments, financial institutions, and high-net-worth individuals through three major segments: Global Banking & Markets (investment banking and trading), Asset & Wealth Management (investing and advising for institutions and the ultra-wealthy), and Platform Solutions (transaction banking and consumer platforms, though Goldman has been rolling back its consumer ambitions).
Goldman Sachs (GS) Business Model
Goldman Sachs operates in the investment banking sector. Below is a summary of Goldman Sachs’ revenue streams, how the company generates income, and the key financial metrics from its most recent annual report. This breakdown uses data from Goldman Sachs’ 2024 fiscal year filings with the SEC.
Goldman Sachs Competitors
Goldman Sachs’s key competitors and comparable public companies in the financial services sector include JPMorgan Chase and Visa. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Goldman Sachs stacks up by comparing their revenue breakdown, margins, and growth metrics.
Goldman Sachs Competitors
Goldman Sachs’s key competitors and comparable public companies in the financial services sector include JPMorgan Chase and Visa. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Goldman Sachs stacks up by comparing their revenue breakdown, margins, and growth metrics.
Goldman Sachs Competitors
Goldman Sachs’s key competitors and comparable public companies in the financial services sector include JPMorgan Chase and Visa. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Goldman Sachs stacks up by comparing their revenue breakdown, margins, and growth metrics.
Goldman Sachs Competitors
Goldman Sachs’s key competitors and comparable public companies in the financial services sector include JPMorgan Chase and Visa. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Goldman Sachs stacks up by comparing their revenue breakdown, margins, and growth metrics.
Goldman Sachs Competitors
Goldman Sachs’s key competitors and comparable public companies in the financial services sector include JPMorgan Chase and Visa. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Goldman Sachs stacks up by comparing their revenue breakdown, margins, and growth metrics.
Goldman Sachs Competitors
Goldman Sachs’s key competitors and comparable public companies in the financial services sector include JPMorgan Chase and Visa. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Goldman Sachs stacks up by comparing their revenue breakdown, margins, and growth metrics.
Goldman Sachs Competitors
Goldman Sachs’s key competitors and comparable public companies in the financial services sector include JPMorgan Chase and Visa. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Goldman Sachs stacks up by comparing their revenue breakdown, margins, and growth metrics.
Goldman Sachs Competitors
Goldman Sachs’s key competitors and comparable public companies in the financial services sector include JPMorgan Chase and Visa. Each of these companies competes for market share, investor attention, and revenue in overlapping segments. See how Goldman Sachs stacks up by comparing their revenue breakdown, margins, and growth metrics.
Revenue Breakdown
| Segment | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Global Banking & Markets | $34.9B | $28.0B | +24.6% |
| Asset & Wealth Management | $16.1B | $13.8B | +16.7% |
| Platform Solutions | $2.3B | $2.0B | +15.0% |
| Total Net Revenue | $53.5B | $46.3B | +15.5% |
Global Banking & Markets — 65% of Revenue
Goldman’s heritage business:
Investment Banking (~$8.5B):
- M&A Advisory: #1 or #2 globally in most years. Advises on the largest mergers, acquisitions, and restructurings.
- Equity Underwriting: IPOs, follow-on offerings, SPACs. Revenue recovered as IPO activity rebounded.
- Debt Underwriting: Bond issuance, leveraged finance, syndicated loans.
Fixed Income, Currencies & Commodities (FICC) Trading (~$14B):
- Trading in interest rate products, credit, currencies, mortgages, and commodities
- Client execution (facilitating institutional trades) and market-making
Equities Trading (~$12B):
- Cash equities, derivatives, prime brokerage (lending and services to hedge funds)
- Goldman’s equities division is consistently #1 or #2 globally
Asset & Wealth Management — 30% of Revenue
- AUM: $3.1T — Growing through organic flows and market appreciation
- Management Fees (~$10B): The recurring revenue base. Goldman charges basis-point fees on assets under management.
- Private Banking: Advisory and lending to ultra-high-net-worth clients ($10M+ net worth)
- Alternatives (~$315B AUM): Private equity, private credit, real estate, infrastructure. Alternatives carry higher fee rates and are Goldman’s strategic focus for growth.
Platform Solutions — 4% of Revenue
- Transaction Banking: Cash management and payment solutions for corporate clients (competing with JPMorgan Treasury Services)
- GreenSky: Home improvement lending platform (Goldman has been winding down consumer lending)
- Apple Card: Partnership with Apple (Goldman is exiting this partnership)
Income Statement Overview
| Metric | 2024 | 2023 |
|---|---|---|
| Net Revenue | $53.5B | $46.3B |
| Operating Expenses | $33.8B | $31.2B |
| Net Income | $14.3B | $8.5B |
Key Financial Metrics
- ROTCE: 14.6% — Return on tangible common equity. Goldman targets 15-17%. The 2024 result improved significantly from 2023’s 7.5%.
- Compensation Ratio: ~33% — Goldman pays ~33% of revenue as employee compensation — lower than historical averages as the firm improves efficiency.
- Alternatives AUM: $315B — Growing ~20%+ annually. Alternative investments (PE, credit, real estate) are the strategic growth engine because they carry higher fees.
- Book Value Per Share: $351 — Goldman trades at ~1.6x book value, reflecting the premium on its franchise value.
Is Goldman Sachs Profitable?
Yes, Goldman Sachs is profitable. The company reported net income of $14.3B.
What to Watch
- Investment banking cycle — M&A and IPO activity is recovering from 2022-2023 lows. A sustained recovery benefits Goldman disproportionately as the #1-2 global advisor.
- Alternatives scaling — Goldman is growing its alternatives AUM toward $500B+. Each $100B increase drives ~$300-500M in annual management fees at premium fee rates.
- Consumer exit — Goldman is winding down Marcus (consumer banking), Apple Card, and GreenSky. Exiting consumer simplifies the business mix and removes a drag on profitability.
- Trading revenue volatility — Trading (~50% of revenue) is inherently volatile. Quarters with low market volatility can significantly reduce revenue.
- Capital return — Goldman is returning $10B+ annually through dividends and share buybacks, reducing the share count and boosting per-share metrics.
Goldman Sachs (GS) Financial Summary
Goldman Sachs (GS) is an investment banking company. The company earned $14.3B in net income, making it profitable. For a deeper look at Goldman Sachs’ revenue breakdown, business segments, and financial performance, review the detailed analysis above.