Charles Schwab Posts Record Revenue and Biggest-Ever Quarterly Asset Haul

Charles Schwab Corp. reported record third-quarter revenue and the largest quarterly haul of new client money in its history, as the discount brokerage's post-pandemic push into banking and advice continued to outrun the online-trading business that built it.

Net revenue rose 17 percent from a year earlier to a record $7.2 billion, the Westlake, Texas-based firm said in results filed with the Securities and Exchange Commission. Net income under generally accepted accounting principles climbed 23 percent to $2.9 billion, or $1.62 a share; adjusted earnings, which exclude $151 million in transaction-related costs, came to $1.69 a share, topping Wall Street's consensus estimate of $1.66.

The bigger number for Schwab was client growth rather than trading volume. Core net new assets reached $190.4 billion for the quarter, up 38 percent from a year earlier, including $67.5 billion in September alone, up 46 percent. Customers opened 1.2 million new brokerage accounts in the period, pushing total client assets to $13.33 trillion, up 15 percent year over year, and active brokerage accounts to 40.3 million. Schwab's banking arm also expanded, with loans outstanding up 35 percent to $72.3 billion and net interest revenue up 14 percent to $3.48 billion as its net interest margin widened to 3.04 percent from 2.88 percent.

Trading itself was softer. Daily average trades fell 10 percent from the prior quarter to 10.7 million, and revenue collected per trade dropped 20 percent from a year earlier to $1.69, a reminder that commission-free trading has pushed Schwab to lean on asset-based fees, lending and cash management rather than transaction volume for growth. Asset management and administration fees rose 14 percent to $1.9 billion.

"Deeper client engagement across Schwab's platform continues to broaden and strengthen our revenue model," chief financial officer Mike Verdeschi said in the earnings release, which was also reported by ValueTheMarkets.

Chief executive Rick Wurster attributed the inflows to the breadth of the firm's offerings, saying clients continue to turn to Schwab for its wealth, trading and banking capabilities. The company's adjusted pre-tax profit margin rose to 54.8 percent from 51.3 percent a year earlier, and annualized return on tangible common equity reached 44 percent. Schwab also raised its quarterly dividend 19 percent, to 32 cents a share, and repurchased 4.7 million shares for about $500 million during the quarter, continuing a capital-return program it resumed after completing its 2020 purchase of TD Ameritrade.

Looking ahead, Schwab said it expects roughly 800 basis points of positive operating leverage for 2026 as a whole, and noted that each quarter-point move in the Federal Reserve's benchmark rate shifts its annualized net interest revenue by an estimated $250 million to $300 million — a sensitivity that has drawn scrutiny as investors weigh the path of further rate cuts. The results, detailed further in independent coverage of the filing, extend a string of quarterly beats for the company since its 2020 acquisition of TD Ameritrade, which roughly doubled its client base and accelerated its shift toward fee-based wealth management alongside its traditional brokerage business. Schwab's report capped a heavy week of third-quarter disclosures across the financial-services sector, with brokerages and asset managers broadly reporting stronger fee income even as trading commissions kept shrinking as a share of revenue industrywide.