Goldman Sachs Group, Inc. (GS.US) Q3 Earnings Call: Net revenues hit second-highest in history; CEO says market environment remains in the "top quartile"

Goldman Sachs Group, Inc. (GS.US) reported third-quarter 2026 net revenues of $18.7 billion, the second-highest in history, with EPS of $17.01 and ROE of 18.7%. Excluding charitable donations, EPS was approximately $18. Chairman and CEO Solomon described the quarter as still in a "top quartile" environment, with robust strategic M&A dialogue, a strong backlog, and AI infrastructure investment constituting a tech supercycle. Goldman Sachs Group, Inc. sits at the center of the financing ecosystem but will strictly control underwriting risk. CFO Coleman said financing revenues hit a record, asset and wealth management continued to attract inflows, and capital is being deployed preferentially to client business platforms. Goldman Sachs Group, Inc. reported third-quarter 2026 net revenues of $18.7 billion, the second-highest in history; EPS of $17.01, ROE of 18.7%, and ROTE of 20.5%. Excluding the impact of approximately $450 million in accelerated charitable donations, EPS was approximately $18, with ROE and ROTE of approximately 20% and 21.5%, respectively. Year-to-date revenues were a record, with ROE of 20.7% and ROTE of 22.4%. By segment, Global Banking & Markets revenues were $13.5 billion, the second-highest in history. Investment banking advisory revenues were a quarterly record of $1.7 billion, up 18% year over year; year-to-date, the firm ranked first in announced and completed M&A volumes, with $1.5 trillion in announced transactions, approximately $430 billion ahead of the closest competitor. Equity underwriting revenues were $666 million, up 43% year over year; debt underwriting revenues were $904 million, up 15% year over year. FICC net revenues were roughly flat, with financing revenues up 14%. Equities net revenues were $6.4 billion, up 72% year over year, the second-best in history; equities financing revenues rose 96% to a record. Year-to-date financing revenues were a record $12.7 billion, accounting for more than 40% of FICC and Equities revenues. Asset & Wealth Management revenues were $5.1 billion, up 14% year over year; management fees were a record $3.6 billion, up 22% year over year. AUS reached $4.1 trillion, with long-term net inflows of $97 billion, the 35th consecutive quarter of inflows; wealth management client assets were $2.1 trillion, with net inflows of $47 billion; alternative AUS was $491 billion, up 26% year over year, with full-year fundraising expected at approximately $150 billion. CEO Solomon said the quarter remained a "top quartile" environment, with good capital markets and investment banking activity, robust strategic M&A dialogue, and a strong backlog; despite a more complex macro and rate environment, the U.S. economy is solid, corporate earnings are strong, and the tech supercycle is real. He said a 5% 10-year Treasury yield is not frightening; sharp rate volatility is the market headwind. AI infrastructure is a key focus: U.S. data centers will need more than $10 trillion of investment by 2032, current compute demand far exceeds supply, and Goldman Sachs Group, Inc. sits at the center of the financing ecosystem, but underwriting and capital commitments must be highly disciplined, and no one can predict how the AI financing cycle will evolve. On M&A, sponsor activity is below historical averages, mainly due to a mismatch between asset valuations and market monetization levels, but this will be released later. On succession, Solomon made clear that Goldman Sachs Group, Inc. has no succession transition or timeline. In Asia, years of investment are paying off, with Asia's revenue share significantly higher, especially in equities financing. On capital management, the priority is deploying to client business platforms, continuing to grow the dividend, and returning excess capital. On regulation, the firm welcomes CCAR transparency and Basel III endgame, expected by year-end. CFO Coleman added that the financing business is more durable, the largest SLR expansion is behind us, and the firm will run a buffer going forward; private credit is attracting institutional allocations as spreads normalize; the largest driver of non-compensation expenses is transaction-related expenses, and charitable donations were accelerated by at least 5 years. The following is the content of the Goldman Sachs Group, Inc. third-quarter 2026 earnings call: Executive Remarks David Solomon Chairman and Chief Executive Officer Good morning, everyone. Thank you for joining us. We delivered very strong results in the third quarter, with net revenues of $18.7 billion, the second-highest in the firm's history; EPS of $17.01, ROE of 18.7%, and ROTE of 20.5%. The quarter's results include the impact of an accelerated charitable donation. Excluding that donation, quarterly EPS was approximately $18, with ROE and ROTE of approximately 20% and 21.5%, respectively. Year-to-date, we delivered record revenues, with ROE of 20.7% and ROTE of 22.4%. While the third quarter began with optimism that the conflict in the Middle East might be resolved, renewed geopolitical tensions and continued disruptions to energy flows added complexity to the outlook, pushing oil prices higher, reigniting inflation concerns, and driving bond yields higher. Against this backdrop, the Fed raised rates in September for the first time in three years, and the market expects approximately 75 basis points of additional tightening combined across the U.S., U.K., and Europe in this cycle. Despite these crosscurrents, the fundamentals of the U.S. economy remain solid, with strong corporate earnings growth, GDP growth of 2.2%, and a highly resilient labor market. In such a complex environment, clients rely on Goldman Sachs Group, Inc.'s advisory, execution, and intermediation expertise to navigate uncertainty and advance their most important strategic priorities. In Global Banking & Markets, we delivered the second-highest revenues in our history. In investment banking, advisory revenues set a record, and we maintained our long-standing #1 position in M&A, with $1.5 trillion in announced transactions this year. Our year-to-date lead over the closest competitor is approximately $430 billion, our largest lead ever, as clients seek our advice on significant transactions, including Hugging Face's $13 billion sale to NVIDIA Corporation and Integer Holdings' $6 billion sale to KKR. As you recall, we entered the quarter with the highest backlog in five years. Even with exceptionally strong revenue performance this quarter, our backlog remains very solid, reflecting the depth and breadth of our leading investment banking client engagement. In equities, we delivered our second-best performance, behind only last quarter's record, with strong performance in both intermediation and financing. In fixed income, currencies, and commodities, we steadfastly supported clients' global risk intermediation needs across asset classes, despite significant rate volatility and elevated commodity volatility. Importantly, financing activities have become a larger and more durable component of our markets business, accounting for more than 40% of FICC and Equities revenues year-to-date. This progress reflects strong client demand, disciplined balance sheet deployment, and continued execution of our strategic priorities, including multi-year investments in Asiawhich we highlighted earlier this year as an opportunity to drive further share gains. This dynamic market backdrop also reinforced the value that Asset & Wealth Management clients place on trusted advice and diversified investment solutions. Our scaled and durable platform brings together leading investment capabilities across public and private markets, delivered through deep institutional relationships, an ultra-high-net-worth wealth management business, and an expanding third-party distribution network. The strength of this platform continues to drive growth at scale. In the third quarter, management and other fees increased 22% year over year to a record $3.6 billion, exceeding $10 billion year-to-date. Our assets under supervision reached another record of $4.1 trillion, driven by $97 billion of long-term net inflows, our 35th consecutive quarter of inflows. In wealth management, $47 billion of long-term net inflows drove client assets to a record $2.1 trillion. In 2026, wealth management long-term net inflows have grown at a 12% annualized rate, well above our 5% target, underscoring the strength of client relationships built on trust and long-term performance. In alternatives, we are driving strong growth, with alternative AUS up 26% year over year to a record $491 billion. We continue to see strong fundraising momentum, with $37 billion raised this quarter and $122 billion raised year-to-date, reflecting investor demand for experienced investment managers. Given this strong performance, we now expect full-year fundraising of approximately $150 billion. Given the investment performance we continue to deliver for clients, our leading Asset & Wealth Management business remains well positioned for continued growth with attractive long-term tailwinds. At the same time, we are also accelerating growth through M&A to build stronger platforms and better products for clients. In August, we announced agreements to acquire NEOSa market leader in derivatives income ETFs with approximately $35 billion in AUS at quarter-endand LCN Capital Partnersa leading triple-net lease investment manager. The NEOS acquisition will bring our global active ETF AUS to more than $90 billion, placing Goldman Sachs Group, Inc. among the top 8 providers by AUS and top 6 by revenue; LCN broadens the range of private real estate investment solutions we can offer. Importantly, these acquisitions also bring talented, entrepreneurial teams to Goldman Sachs Group, Inc. We continue to focus on opportunities to strengthen Asset & Wealth Management by enhancing distribution, deepening investment capabilities, and adding products. Our standards for strategic, financial, and cultural fit remain high, and we will continue to allocate capital dynamically and prudently while driving growth. In summary, our record year-to-date revenues are the result of years of focused execution that has strengthened our market-leading businesses and enhanced connectivity across the firm, harnessing the power of "One Goldman Sachs Group, Inc." Importantly, we have created a higher revenue base, with more durable revenues having more than doubled since our 2020 Investor Day and now representing approximately 45% of year-to-date revenues. This increased durability, combined with our expense discipline and prudent capital management, enhances earnings resilience and supports higher returns through the cycle, providing a stronger foundation for Goldman Sachs Group, Inc.'s growth. Looking ahead, while uncertainty remains, corporates and investors recognize that standing still can become a competitive disadvantage. Clients are taking action to modernize operations, secure critical capabilities, and reallocate capital to the highest-return opportunities. All of this is driving demand for M&A, capital formation, financing, risk management, and advice, directly aligned with the strengths of our business platform. One persistent theme is the growth of AI infrastructure investment. Recent research estimates that U.S. data center construction could require more than $10 trillion of investment by 2032, averaging approximately 3.6% of U.S. GDP annually. In our client conversations, current demand for compute significantly exceeds supply, creating opportunities to help develop financing structures to bridge the capacity gap. Our differentiated financing, distribution, and investment capabilities position us to play an important role in mobilizing capital and supporting client activity. While we are proud to be well positioned in the AI investment cycle, no one knows how capital and compute demand will evolve as the broader AI ecosystem matures. That will only become clearer as technology and markets continue to develop. This uncertainty reinforces the importance of remaining vigilant about the types of activities we finance and how we manage risk while supporting clients. We are highly selective about the risks we underwrite and the capital we commit, especially as client financing needs become larger and more complex. Beyond these financial risks, we also recognize broader concerns around the accelerating development of AI technology and the unconstrained advancement of frontier models. As with other transformative technologies, AI presents significant opportunities but also significant risks that must be carefully assessed and managed. However, the choice is not between stopping progress and proceeding without guardrails. We must foster innovation while also demanding responsibility. Experience in the financial services industry demonstrates the value of rigorous testing, independent review, continuous monitoring, and clear human accountability. Applying these principles in ways that reflect AI's unique characteristics can help build the trust and confidence needed to deploy the technology responsibly at scale, while companies, developers, and governments work together to establish appropriate safeguards. In summary, we continue to see significant opportunities ahead. Given our relentless focus on serving clients while remaining vigilant about emerging risks in this dynamic environment, we are very well positioned. Our culture of teamwork, excellence, and partnership remains a key differentiator, enabling us to adapt, innovate, and execute across a range of environments. I have never been more confident in our ability to create long-term value for shareholders by making the right investments to grow the firm and generate sustainable earnings growth. I will now turn it over to Denis to detail our financial results. Denis Coleman Chief Financial Officer Thank you, David. Good morning, everyone. In the third quarter, we delivered net revenues of $18.7 billion, EPS of $17.01, quarterly ROE of 18.7%, and ROTE of 20.5%. Turning to segment performance, Global Banking & Markets revenues were $13.5 billion in the third quarter, our second-highest quarterly revenues, with year-to-date segment ROE of 23.5%. Advisory revenues were $1.7 billion, a quarterly record, up 18% year over year, driven by higher transaction volumes. Year-to-date, we maintained our #1 ranking in announced and completed M&A volumes. In equity underwriting, revenues were $666 million, up 43% year over year, driven by strong IPO and follow-on activity. Debt underwriting revenues were $904 million, up 15% year over year, primarily driven by stronger investment-grade activity. Year-to-date, we ranked #1 in equity underwriting, #2 in leveraged loans, and #3 in high-yield debt underwriting. Even with very strong accrued revenues this quarter, our investment banking backlog remains very solid, as strong advisory revenue realization was roughly offset by solid equity underwriting replenishment. Year-to-date, sponsors' share of announced M&A remains below historical averages, which provides further upside when activity rebounds. FICC net revenues were roughly flat year over year. Intermediation revenues declined 7%, as lower mortgage, rates, and credit performance was roughly offset by strong performance in currencies and commodities. Financing revenues increased 14% to the second-highest level, driven by strong mortgages and structured financing. Equities net revenues were $6.4 billion, up 72% year over year, our second-best quarter, driven by strong performance in intermediation and financing. Equities intermediation revenues increased 52% to the second-highest level, driven by strong derivatives. Equities financing revenues increased 96% to a record, primarily driven by higher average prime brokerage balances and strong activity in Asia. Equities financing demand continues to exceed available industry capacity, supporting attractive pricing and enabling us to deploy resources selectively. After years of significant investment, our focus is increasingly shifting to optimizing a diversified global portfolio, guided by our risk management framework, client relationships, and returns. More broadly, we continue to see structural tailwinds from growth in tradable assets and the associated increase in financing demand, which helps support continued growth in the equities financing industry. Year-to-date, total financing revenues were a record $12.7 billion, accounting for more than 40% of combined FICC and Equities revenues. As David mentioned, the growth in financing revenues enhances the durability of FICC and Equities, supported by a robust risk framework, including diversified exposures, limits, concentration management, and comprehensive stress testing. Asset & Wealth Management revenues were $5.1 billion, up 14% year over year. Management and other fees increased 22% year over year to a record $3.6 billion, reflecting the impact of higher average AUS. Performance fees were $587 million. Through our ultra-high-net-worth wealth management business, we provided clients with early access to high-growth investment opportunities and recognized performance fees following that company's IPO. Based on our current outlook, we expect performance fees to remain elevated in the fourth quarter. Private banking and lending revenues were $827 million, up 20% quarter over quarter, driven by higher net interest income from consumer deposits. Loan balances increased 6% to $51 billion. Investment income was $50 million, due to the timing of certain realizations after a strong second quarter and certain write-downs. Total AUS at quarter-end reached a record $4.1 trillion, driven by $97 billion of long-term fee-based net inflows, marking our 35th consecutive quarter of long-term fee-based net inflows. Wealth management client assets reached another record of $2.1 trillion, with long-term net inflows of $47 billion. Alternative AUS totaled $491 billion at the end of the third quarter, driving management and other fees to $860 million, the best performance since our 2020 Investor Day. Total third-party alternative fundraising was $37 billion in the quarter and $122 billion year-to-date. Firmwide net interest income was $3.8 billion. Total loan portfolio increased 6% from the prior quarter to $276 billion, reflecting broad-based growth across the portfolio. Credit loss provisions were $368 million. While overall credit quality and portfolio performance remain strong, our provisions reflected certain impairments in the portfolio as well as overall loan growth. Total operating expenses were $11.3 billion in the quarter. Year-to-date, total operating expenses were $33.4 billion, with an efficiency ratio of 59.4%, an improvement of 270 basis points from last year, in line with our target. Year-to-date, the compensation ratio, excluding provisions, declined to 30%. We remain committed to paying for performance and delivering operating leverage to shareholders. Quarterly non-compensation expenses were $6.2 billion, up 30% year over year, primarily driven by higher transaction-related expenses. In addition, given the strong realization of performance fees this quarter, we made approximately $450 million of tax-efficient charitable donations as part of our plan to accelerate charitable efforts. We also expect to make a meaningful donation in the fourth quarter. Together, these actions will accelerate planned charitable donations by at least 5 years. The impact of charitable donations on quarterly EPS was approximately $1, and the impact on ROE and ROTE was approximately 1.1 percentage points each. The year-to-date effective tax rate was 20.4%. For the full year, we continue to expect an effective tax rate of approximately 20%. At the end of the third quarter, under the standardized approach, our common equity tier 1 ratio was 12.4%, 100 basis points above the current 11.4% capital requirement. Regarding recent regulatory developments, we welcome the Fed's finalization of rules to enhance the transparency and accountability of the CCAR stress test and reduce volatility in capital requirements. We also recognize progress on the Basel III endgame and G-SIB re-proposal and hope for finalization by year-end. Overall, these developments represent meaningful steps toward a more balanced, more risk-sensitive regulatory capital framework that maintains the strength and resilience of the banking system. As rules are finalized, we support appropriately calibrated requirements that align with the risks the firm actually takes and look forward to the timely completion of these reforms. We expect regulatory focus to shift soon to liquidity regulation reform. We currently have more than $570 billion in average global core liquid assets, approximately 25% of total assets, and our liquidity coverage ratio is among the best in our peer group. In the quarter, we repurchased $3 billion of common stock and paid $1.5 billion in dividends. We continue to have ample capacity to deploy capital prudently while serving clients and maintaining appropriate buffers. In summary, our third-quarter results reflect the strength of our client business platforms, driven by years of strategic execution. We have built market-leading business platforms, deep relationships, and a higher, more durable revenue base. We remain focused on delivering strong returns while continuing to invest in our people, technology, and client business platforms to drive long-term earnings growth and deliver for shareholders. We will now open the line for questions. Q&A Session Glenn Schorr Evercore ISI Institutional Equities Research The first question is about trading and markets. I have a short-term and a long-term question. The short-term is simple. Were there any unique factors in the quarter, such as situational awareness or something else, that contributed to the quarter's results, so that we don't over-model the fourth quarter? But the bigger question is that there is so much development going ontokenization, agentic trading, DeFi vaults, prediction markets. All of these theoretically erode the core of your markets business, but clearly you are not standing still. Maybe you can talk about where you are investing and how you think about these things and how we should think about them in the context of your markets platform? David Solomon Chairman and Chief Executive Officer Sure. Thanks, Glenn. On the first point, I didn't see anything I would point to. Denis, do you... Denis Coleman Chief Financial Officer No. I agree. David Solomon Chairman and Chief Executive Officer Yes. On the first point, I didn't see anything I would point to, so let's set that aside. On your second question, obviously we see market structure evolving over the long term with technological progress. We have discussed for a long time that, as a leading market maker and risk intermediary, we must continue to invest in technology and infrastructure capabilities to ensure we support clients at the forefront, and I think we continue to do so. Glenn, you will recall that not long ago people were worried about the electronification of equity trading and its impact on our business. But today, as we sit here and look at our equities revenues and the way we have adapted and the way the business has evolved, the opportunity set is larger than anyone could have imagined at the time. Today, tokenization is clearly an important trend. We see it across asset classes. We have publicly supported CLARITY passing. It is not perfect, but we think giving the market more clarityno pun intendedand ensuring investor protection is good. But even without it, we have seen institutions take steps to provide clearer rules for the market, and we are very actively involved in those conversations. We continue to invest and closely monitor developments, both opportunities and risks. These developments clearly create more products, greater activity, potential new clients, and broader distribution channels. Naturally, when you look at these things, they expand our TAM, which is one of the interesting and exciting things. At the same time, we remain very focused on ensuring that, as these markets evolve, we are well positioned to serve clients. We have been investing for years in companies in digital assets and broader market infrastructure and continue to be very focused on this. We have been building capabilities such as GS DAP, and we were early in building our own digital asset rails. We have tokenized bonds. We have many money market funds that are tokenized, and we have tokenized real estate for certain clients, so we have been focused on trying to be at the forefront of these activities, although I would say that, broadly speaking, these activities are currently very small. We are participating in a range of market developments. In July, we participated in the launch of DTCC's tokenization service, and we are now actively evaluating scalable use cases that can be deployed within it. We expect that over time the underlying technology can drive greater efficiency, automation, streamlined processes, lower costs, reduced friction, and improved liquidity across asset classes. So we will continue to focus on this. I think you are right to raise this as something to watch, but I would say current activity is small and at the margin. But we will continue to devote real resources to thinking about how these changes evolve over time. I think this is why, for example, when you think about electronification, we were able to manage disruption and change in the equities business so well. So we use that as a bit of a guide. I hope this provides some useful information. Glenn Schorr Evercore ISI Institutional Equities Research Yes, you haven't thought about it at all. No, I'm joking. That was very helpful. I have covered you since the IPO, and I have seen some management transitions, and Goldman Sachs Group, Inc. has become stronger at every step. This time it seems to be managed quite methodically. There have been some articles recently about acceleration. So, David, I don't know if you want to talk about any of that to set the record straight. I appreciate it. David Solomon Chairman and Chief Executive Officer No, of course. I appreciate the question because some articles have created noise. Let me start there, Glenn. I am very pleased with the progress the firm has made since we set our strategy at Investor Day. In terms of execution, this team has worked hard to truly significantly develop the firm, and I think we have indeed made it increasingly durable. I must say, at the stage where we are now seeing the results of the broad team effort, I really enjoy the job. But more importantly, as a team, we are very excited about what lies ahead in the coming years and how we continue to develop the business platform and truly accelerate the firm's earnings potential. So I want to be clear that Goldman Sachs Group, Inc. currently has no succession transition or timeline underway. The Board and I are aligned on our strategy to grow the firm and continue to serve clients exceptionally well. L. Erika Penala UBS Group AG Investment Banking Research David, you already answered this in your prepared remarks, so maybe a more nuanced way to ask is that the investor community has had a lot of concern that the global bond market rout would have a chilling effect on activity levels. Given your description of the business pipeline, maybe talk about how discussions are evolving, or whether considering higher long-end rates is a factor. And then a compound question. If we think about fourth-quarter capital consumption, obviously capital declined 50 basis points. You still have plenty of excess. JPMorgan mentioned that fourth-quarter trading should be very active and there should not be a seasonal slowdown. How should we think about capital consumption going forward? David Solomon Chairman and Chief Executive Officer Well, just quickly on capital consumption. We talk about running a 50 to 100 basis point buffer. We are at a 100 basis point buffer. The firm has very good earnings momentum, so we generate capital. We feel comfortable that we have enough capital to deploy in an active fourth quarter. So we feel we are managing it well. We continue to feel very flexible and able to manage capital allocation effectively, prioritizing clients, and then returning to shareholders when we cannot deploy. On the first topic, about rates and the impact on activity, we did see very significant rate moves this quarter. I think from early July to now, the 10-year rate moved about 75 basis points, don't hold me exactly to the number, but the 10-year moved about 75 basis points. But I think what is missed is the historical perspective on term premium, because since the financial crisis we have effectively been operating in an environment where rates are fundamentally low. As a 64-year-old, I look back over the past 64 years, and a 5% 10-year Treasury does not frighten me in terms of the operating environment. In fact, for the vast majority of my life, the 10-year Treasury has been higher than it is now. So we can have very, very effective capital markets. What creates headwinds for markets is very, very sudden moves. Yes, we had significant moves this quarter. There may have been sudden days, but you also have many other very important things going on. We have a very, very strong underlying economy. Despite some headwinds, the economy continues to be very, very resilient. We have an extraordinary tech supercycle. I think we have a regulatory environment that truly encourages strategic activity to continue scaling. If you put all of that together and balance it, I think it is a pretty good environment. So I know people look at this quarter and feel it is somewhat different from the second quarter. I think that is fair. I would say, if I go back to late May or June, I would have called it a top decile environment for market activity and capital markets activity. But now we are in a top quartile environment, which is still very, very good when you think about long periods of time. So we feel quite good about activity levels. Obviously, if rates are more volatile, that could create headwinds, but we will watch the market carefully. Right now, when we look at activity levels, it feels good. Ebrahim Poonawala BofA Securities Research First question, David, I think Broadcom Inc.'s Hock Tan, I think he spoke last night, and he questioned the sustainability of AI capex financing. You obviously were involved this quarter with Jensen. First, do you agree with that concern that the real bottleneck for AI capex will be financing, especially given rising rates and returns that look uncertain? Given that you may have the best visibility into where the interest is, frame it for us. David Solomon Chairman and Chief Executive Officer Ebrahim, that is a very good question, and my answer may disappoint you, which is that I don't know, and no one knows. What I will say is that, as you saw in our remarks, we are extremely aware that, based on people's forecasts, the scale of financing needed to build data center infrastructure in the U.S. is expected to be quite enormous. Over time, there are risks. There is a risk of squeezing scale. Not every project will be received equally well. So we feel very fortunate, as I said in my prepared remarks, that we sit at the center of this ecosystem, but we also recognize that we have an extraordinary obligation to be very disciplined about what we underwrite. I justI think broad comments about the direction of travel and what will happen, I think we have to be very careful. There will be a lot of financing to do, and we will be in the middle of it. Over time, as financing needs grow, that could put pressure on rates, which will affect the returns and viability of certain projects. As an intermediary, asset manager, and capital provider, our job is to sort through that and make prudent decisions. I think we are very good at that, and we will be. But one thing is clear: currently demand for compute is very strong. Supply has not yet balanced. More will be built. More financing will be necessary. There will always be a point when this recalibrates and resets, of course. When that happens, there will certainly be some bumps. But it is hard to predict. I think broad assertions that any of us know the direction of travel, how the technology will evolve, how it will be deployedthat is simply an unknown we have to live with. But it is an exciting time because there will be a lot of very interesting things to do around it. Ebrahim Poonawala BofA Securities Research Understood. I guess the other question. Improving and durable earnings have been your focus. Help me resolve this: when we look at the growth in prime brokerage and equities financing, you could argue it adds cyclicality to the business if hedge funds deleverage, etc. Of course, I am not talking about quarter-to-quarter volatility, but how should we think about whether equities financing actually makes these earnings more durable or adds cyclicality? How do you sort through that, if you can help us? David Solomon Chairman and Chief Executive Officer I think the way to think about it is that we all have tothis is how we think about running the company. You have to step back from the quarter, okay? None of us here are confused when risk-managing our prime brokerage business. Equity markets go up. When equity markets go down, there will be deleveraging. Because clients need to finance against a smaller equity market, a smaller market cap, there will be some cyclicality in the size of the prime brokerage business. However, if you step back and move beyond quarterly fluctuations, you fundamentally believe the world grows, therefore global GDP grows, therefore market cap and technological innovation grow over any 3- to 5-year period, and the durability of that business growing on some baseline will be very attractive for Goldman Sachs Group, Inc. So when you step back from the quarter and think in 3, 5, 7 years, you really seelook, our revenues have compounded at 11% over the past 5 years since 2022. I don't believe our revenues will compound at 11% over the next 5 years. As equity markets fluctuate, there will be fits and starts. But what we are trying to demonstrate is that the durable base is much larger. This is a much more diversified business. Fundamentally, it is highly correlated over the long term with GDP growth and market cap growth. If we stop looking quarter by quarter and start looking at 3- to 5-year periods and the earnings growth driven by that, you get a very, very constructive result. Chinedu Bolu Autonomous Research US LP David, on the investment banking cycle. I want to understand where you think we are in the cycle. The macro seems slightly more challenging, rates are higher. We have seen some IPOs withdrawn. The political climate could change after the midterms. Your backlog seems impressive, but it did pull back slightly. So give me a sense of where you think we are in the cycle. Have we peaked or is there more? David Solomon Chairman and Chief Executive Officer I know everyone wants to call the top. It is hard to call the top, but let's step back. I want to return to a point I just made: I still think capital markets activity is a top quartile environment. For strategic M&A, there is a lot of dialogue continuing. Our backlog is very solid. To be fair, we had enormous accrued revenues this quarter, but if you listen to our prepared remarks, we are very forward-leaning about how solid the backlog remains. Capital markets activity remains good. One thing I think is missed is that, obviously, some IPOs did not move forward. But when you look at ECM revenues this quarter and over the past few quarters, they are running significantly above 5- and 10-year averages. So this is a good environment. The 5- and 10-year averages would be a 50% capital markets environment. Significantly above 5- and 10-year averages is a better environment. So I think we are still in a very good capital markets environment. I think what happened with some IPOs is that when people do an IPO, they decide months in advance to move forward and discuss valuation expectations. Investors have expectations. So the IPOs that came in September were really the result of conversations in May and June about valuation expectations. In September, things became somewhat more difficult. The IPO market is open. It is just that if you expected one valuation and got something 10% to 15% lower, you might choose not to move forward, and you might choose to wait. But the IPO market is still quite good. I would say capital markets activity is strong. There is no doubt that the overall macro environment is slightly more complex. The rate environment is slightly more complex, but the activity levels we see are still quite good, though we will have to watch during the quarter. I think all the technological innovation and AI infrastructure activity is a real good ballast for future capital markets activity. That does not mean there won't be bumps in future quarters. But when I look at it, we are certainly in a very good environment for capital markets and investment banking activity. Chinedu Bolu Autonomous Research US LP Okay. Very helpful. Maybe on the balance sheet and capital management. Obviously, you are seeing enormous balance sheet demand, as evidenced by the strong growth in your financing business. I was somewhat surprised that you are still buying back a lot of stock at 3x tangible book value, especially with your SLR below peers. So maybe talk about how we should think about capital management priorities going into 2027. Denis Coleman Chief Financial Officer So look, all of this is taken in the context David outlined. We are optimistic about the opportunity set. We made some decisions this year to expand deployment to client business platforms after regulatory capital relief. We also happened to buy a lot of stock. We generated significant earnings, which allowed us both to buy back stock, reduce share count, and give us the ability to consistently and systematically reduce shares outstanding over time. That gives us more follow-on capacity, but we were also able to make decisions to drive client business platforms, which ultimately delivered the results we are talking about here this quarter. I think as we go into 2027, you should expect a similar approach from us. We will prioritize deployment to business platforms. We do expect to continue investing in sustainable dividend growth. It is obviously up 25% year over year. It is now $5 per share. A year ago it was $4. Five years ago it was $2 per share. So we have been consistently investing in dividend growth. That remains important. Obviously, when there is excess, we will return it to shareholders and ensure we have the right buffers to run the company. So I think our approach to deployment is consistent, including going into 2027. Michael Mayo Wells Fargo Securities, LLC Research I want to discuss more the extraordinary tech supercycle headwinds you described, involving power, labor costs. Capex going from billions to trillions, climate. So is financing the constraint on this tech supercycle? Are youis your conviction as strong as it was 3 or 6 months ago? And then on the positive side, you talked about global tradable asset growth. You are expanding in Asia. What is that growth? What are your numbers around that? David Solomon Chairman and Chief Executive Officer So on the first part, Mike, are you saying there is enough capital in the market to fund all of this technology expansion? Or are you saying our financing? I assume you are talking about the general availability of capital to fund major AI infrastructure growth? Michael Mayo Wells Fargo Securities, LLC Research Yes. I mean, if the bond market strikes, or rates rise too much, or there is just a hiccup, a political hiccup, opposition to data centers, I know it is not a straight line, but you still describe it as a tech supercycle. Do you think it is as strong as it was 6 months ago, for example, given some of the headlines we have seen and the reaction of technology companies? David Solomon Chairman and Chief Executive Officer Yes. I do think this is a very strong tech supercycle, Mike, there is no way around it, okay? The things you highlightedobviously, if other factors cause significant rate volatility and push rates higher, that will affect the pace of construction and which projects are completed and how. If there is