Morgan Stanley reported fourth‑quarter 2025 results that surpassed analyst expectations, delivering net revenue of $17.89 billion—up 10.3% from a year earlier—and GAAP net income of $4.40 billion, or $2.68 per share. The earnings beat was driven by a 47% jump in investment‑banking revenue to $2.41 billion and a 13% rise in wealth‑management net revenue to $8.4 billion, underscoring the strength of the firm’s integrated‑business model.
Revenue growth was concentrated in the core segments that drive the firm’s recurring earnings. Investment‑banking fees surged 47% year‑over‑year, propelled by robust M&A and IPO activity that lifted advisory and underwriting income. Wealth‑management net revenue grew 13% as client assets expanded to $9.3 trillion, with net new assets of $350 billion fueling fee growth. Investment‑management revenue added 5% to $1.72 billion, reflecting steady demand for portfolio‑management services. Compared with Q3 2025, revenue fell slightly to $17.89 billion from $18.2 billion, but the year‑over‑year gain remains strong.
Margins improved across the board. The firm’s efficiency ratio fell to 68% from 71% a year earlier, indicating tighter cost control relative to revenue. Wealth‑management pre‑tax margins rose to 31.4%, driven by higher fee‑to‑expense ratios and a shift toward fee‑based advisory work. Investment‑banking margins expanded as the firm captured higher fee income from larger deals while maintaining disciplined operating costs. The combination of higher revenue mix and cost discipline lifted net income despite a modest sequential decline in total revenue.
CEO Ted Pick highlighted the firm’s integrated‑firm strategy as the engine of growth, noting that full‑year 2025 revenue of $70.6 billion and EPS of $10.21 reflected “multi‑year investments” that have paid off. He added that the firm is “running at a higher run rate” thanks to technology investments, including AI, that are expected to generate additional fee income. CFO Sharon Yeshaya cautioned that macroeconomic and geopolitical uncertainty could still present headwinds, but emphasized the firm’s focus on scaling its business to perform across market environments.
Looking ahead, Morgan Stanley signals confidence in continued momentum, citing constructive capital markets and ongoing technology investment as key tailwinds. While the firm did not provide new quarterly guidance, management’s remarks suggest a positive outlook for the remainder of 2025 and into 2026, with expectations of sustained fee growth and disciplined cost management.
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