Morgan Stanley delivered a solid top-line performance in QQ1 2025 with revenue of $27.912 billion, up 5.98% year-over-year and 7.43% quarter-over-quarter, underpinned by a broad-based mix across Institutional Securities, Wealth Management, and Investment Management. Net income of $4.315 billion and diluted EPS of $2.60–$2.62 reflect margin discipline despite a challenged cash flow dynamic in the quarter. The release highlights a resilient profitability profile (gross margin ~58.7%, operating margin ~19.86%), even as the company contends with a pronounced working capital impact that drove negative operating cash flow of about $23.98 billion. Management’s emphasis on capital allocation, risk controls, and ongoing investment in client-facing franchises remains consistent with Morgan Stanley’s multi-channel business model and long-run strategy.
Key takeaway for investors is the contrast between strong earnings power and stressed near-term cash flow, driven largely by working capital movements and non-operational balance sheet items. The quarter also demonstrates Morgan Stanley’s capacity to fund sizeable financial commitments (financing activities contributed roughly $13.0 billion) while continuing to return capital (modest share repurchases and dividends) and maintaining a substantial cash balance (~$90.7 billion) to navigate a volatile funding environment.