The investment bank posted stronger-than-expected quarterly profits but saw its revenue drop for the first time in two years, driven by persistent challenges in its consumer lending arm tied to the Apple Card.
- Goldman Sachs reported a 3% year-over-year decline in total revenue for Q4 2025, its first such drop in two years.
- Net income rose 12% to $1.9 billion, surpassing expectations due to strong investment banking and equities performance.
- Consumer lending revenue fell 14%, with the Apple Card contributing to a $280 million revenue decline in Q4.
- Apple Card now represents 11% of Goldman’s consumer lending portfolio but continues to face challenges in credit origination and customer retention.
- Despite positive earnings, the stock dropped 4.3% in after-hours trading on revenue concerns.
- Three consecutive quarters of declining consumer lending revenue have raised questions about strategic direction in consumer finance.
Goldman Sachs recorded a 3% year-over-year decline in total revenue during the fourth quarter of 2025, marking the first reduction in revenue since Q4 2023. Despite this, the firm exceeded profit forecasts, reporting net income of $1.9 billion, up 12% from the same period in 2024. The improvement was largely fueled by robust performance across investment banking and equities trading, which together contributed $6.8 billion in revenue—a 17% increase compared to 2024’s Q4. However, the decline in overall revenue was primarily attributed to continued underperformance in Goldman’s consumer lending segment, where revenue fell 14% year-over-year. This segment includes the Apple Card, a joint venture with Apple Inc. that has faced mounting scrutiny over credit utilization rates and declining customer acquisition. In the fourth quarter alone, Apple Card-related revenues dropped by $280 million, reflecting a broader trend of reduced loan originations and tighter risk controls. The stock reacted negatively to the revenue miss, falling 4.3% in after-hours trading despite the strong earnings. Analysts noted that while the firm's core investment banking operations remain resilient, investor confidence is being tested by recurring issues in its retail credit business, which has now contributed to three consecutive quarters of declining revenue in that division. Market participants are closely monitoring whether Goldman will restructure or scale back its consumer finance initiatives. Given that the Apple Card accounted for approximately 11% of the firm’s consumer lending portfolio in 2025, any further deterioration could impact future capital allocation decisions and potentially limit growth in non-traditional revenue streams.