Schwab earnings beat estimates despite revenue miss

Investing.com -- The Charles Schwab Corporation (NYSE: SCHW) reported third-quarter earnings before the open on Thursday, with shares falling around 2.6% premarket following the release.

Adjusted earnings per share of $1.69 beat analyst estimates of $1.66, though revenue of $7.17 billion came in slightly below the consensus estimate of $7.2 billion. Revenue increased 17% YoY from $6.14 billion in the third quarter of 2025.

The company posted record core net new assets of $190.4 billion during the quarter, up 38% YoY, representing an annualized growth rate of 5.8%. Clients opened 1.2 million new brokerage accounts, bringing total client accounts to 48.6 million. Total client assets increased 15% YoY to $13.33 trillion.

Shares fell 1.3% following the results.

"Deeper client engagement across Schwab’s platform continues to broaden and strengthen our revenue model, helping our third-quarter revenue increase 17% year-over-year to a record $7.2 billion," said CFO Mike Verdeschi.

Net income for the quarter totaled $2.9 billion, or $1.62 per share on a GAAP basis. Excluding $151 million of pre-tax transaction-related costs, adjusted net income reached $3.0 billion. The company’s net interest margin expanded to 3.04% during the quarter.

Bank loan balances reached $72.3 billion at September month-end, up 35% YoY, while margin loan balances increased 14% quarter-over-quarter to $187.9 billion. Daily average trading volume equaled 10.7 million, up 44% YoY, driving trading revenue of $1.2 billion, up 16% YoY.

Asset management and administration fees grew 14% YoY to $1.9 billion. Client transactional sweep cash balances ended September at $492.8 billion, an increase of $7.1 billion versus the prior quarter-end.

Capital ratios remained strong with preliminary consolidated Tier 1 Leverage at 8.9%.

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