LPL Financial (LPLA) Tops Q1 EPS by 20c, Revenues Beat

LPL Financial (NASDAQ: LPLA) reported Q1 EPS of $1.79, $0.20 better than the analyst estimate of $1.59. Revenue for the quarter came in at $1.37 billion versus the consensus estimate of $1.35 billion.

First Quarter 2019 Key Performance Indicators

• Earnings per share ("EPS") increased 77% year-over-year to $1.79. -- Net Income increased 66% year-over-year to $155 million.
• EPS Prior to Amortization of Intangible Assets** increased 74% year-over-year to $1.93.
• Total Brokerage and Advisory Assets increased 6% year-over-year to $684 billion.
• Total Net New Assets were an inflow of $4.0 billion, translating to a 2.5% annualized growth rate.-- Net new advisory assets were an inflow of $4.6 billion, translating to a 6.5% annualized growth rate. -- Net new brokerage assets were an outflow of $0.7 billion, translating to a (0.8)% annualized rate. -- Recruited Assets(1) were $7.1 billion. -- Advisor count was 16,189, up 80 sequentially, and up 122 year-over-year; production retention rate was 96%.
• Total client cash sweep balances were $30.7 billion, down $4.1 billion sequentially. -- Total client cash sweep balances as a percent of total assets was 4.5%, down from 5.6% in the prior quarter.
• Gross Profit** increased 20% year-over-year to $556 million.
• EBITDA** increased 51% year-over-year to $276 million. -- EBITDA** as a percentage of Gross Profit** was 50%, up from 40% a year ago. -- Core G&A** increased 6% year-over-year to $213 million, down 2% sequentially.
• Shareholder capital returns were $146 million, translating to $1.68 per share. -- Share repurchases were $125 million for 1.7 million shares at an average purchase price of $71.57. -- Weighted average fully diluted share count was 86.7 million, down 7% year-over-year. -- Dividends were $21 million.
• Cash available for corporate use was $376 million.
• Credit Agreement Net Leverage Ratio(2) was 2.05x, down 0.10x from the prior quarter.

Key Updates

• Maintained 2019 Core G&A** outlook range of $850 to $875 million.
• Completed $125 million of share repurchases in the first quarter.
• Reminder that the Company's Investor and Analyst Day is on May 22, 2019 in New York City.

“We continue to focus on providing differentiated capabilities to help our advisors win in the marketplace,” said Dan Arnold, President and CEO. "In the first quarter, we introduced new CRM capabilities, rolled out goals-based planning, and integrated our AdvisoryWorld acquisition. These capabilities will help our advisors digitize their workflows to more efficiently turn prospects into clients. Looking ahead, we remain focused on our strategic priorities of growing our core business and executing with excellence.”

“We began 2019 with another quarter of business and financial strength,” said Matt Audette, CFO. "We grew gross profit while investing for growth and still delivering operating leverage. Looking forward, we plan to continue to invest to drive organic growth and return capital to shareholders. We believe our business results and financial strength position us well to continue creating long-term shareholder value."

For earnings history and earnings-related data on LPL Financial (LPLA) click here.

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