Continuing its strong momentum, Charles Schwab Corporation (NYSE:SCHW) reported yet another earnings beat, leading to an increase in stock price.
- SCHW is gathering positive momentum. Watch the momentum here.
The company reported third-quarter adjusted earnings per share of $1.31, up 70% year over year (Y/Y), beating the analyst consensus estimate of $1.25.
Quarterly sales of $6.135 billion (+27% Y/Y) outpaced the Street view of $6.009 billion.
Trading revenue increased 25% Y/Y to $995 million due to strong volumes and increased client interest in derivatives.
Meanwhile, net interest revenue gained 37% Y/Y to $3.050 billion in the quarter.
Net interest margin expanded sequentially by 21 basis points to 2.86% led by further reduction of higher cost liabilities, robust securities lending activity, and greater client use of lending solutions.
Asset management and administration fees increased by 13% Y/Y to $1.7 billion, led by organic growth, improved equity markets, and higher utilization of the wealth and asset management solutions.
The average daily trading volume reached 7.4 million, which is an increase of 30% compared to the third quarter of 2024.
Margin balances reached $97.2 billion at the end of the quarter, reflecting a 16% increase compared to year-end 2024.
Other Key Figures
In the quarter under review, total client assets increased 17% Y/Y to a record $11.6 trillion.
Core net new assets of $137.5 billion bring year-to-date asset gathering to $355.5 billion, up 41% Y/Y.
New brokerage account openings rose 18% Y/Y to 1.1 million in the quarter. This growth led to 38.0 million active brokerage accounts and 45.7 million total client accounts.
The company exited the third quarter with cash and equivalents worth $30.6 billion.
The bank had $239.1 billion in deposits at the end of the quarter, down 3% Y/Y. During the quarter, the company repurchased 28.9 million shares for $2.7 billion.
Management Commentary
President & CEO Rick Wurster stated, "Strengthening organic growth trends, increasing adoption of wealth solutions, and favorable macroeconomic tailwinds powered another quarter of record revenue and earnings per share."
"Client transactional sweep cash grew by $13.5 billion versus 2Q25, helping us to further reduce higher cost bank funding by $12.9 billion to $14.8 billion at quarter-end," added CFO Mike Verdeschi.
Investors can gain exposure to the stock via iShares U.S. Broker-Dealers & Securities Exchanges ETF (NYSE:IAI) and Tidal Trust I SMART Trend 25 ETF(NYSE:STRN).
Price Action: Charles Schwab shares were up 3.16% at $97.31 premarket at last check on Thursday
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