Record Client Growth and Account Openings
Clients opened 1.3 million brokerage accounts in 1Q26, up 10% year-over-year, driving strong engagement across the platform and making March the firm's second-highest month of net new assets (NNA) on record.
Charles Schwab
· SCHW
October 16th, 2025
Summary
- Earnings Call Date:
- 2025-10-16
- Change Since:
- -1.20%
- Next Earnings Date:
- 2026-07-21
Earnings Call Sentiment
PositiveThe call conveyed strong operational and financial momentum with record revenue, EPS and client asset gathering, broad engagement across trading, lending and managed solutions, and notable progress in AI, crypto, and product innovation. The firm showed disciplined expense management and maintained a solid capital position while executing strategic M&A. Notable challenges include compressed revenue per trade from smaller, shorter-duration trades, sizable client cash build that raises questions around monetization and competitive dynamics, and the expected seasonal cash draw in Q2. Management presented clear plans for AI-enabled growth and multiple monetization levers, while acknowledging risks associated with crypto launch costs and evolving cash economics.
Company Guidance
Schwab said Q1 momentum gives upside to prior plans, reporting record revenue of $6.5B (+16% YoY), adjusted EPS $1.43 (+38%), an adjusted pretax margin of 51.4% and adjusted expenses up 5% YoY; management said they are tracking above the prior $5.70–$5.80 FY EPS scenario and will refresh the financial outlook in July. Client metrics were strong: core net new assets $158B (Q1 record), 1.3M brokerage accounts opened (+10% YoY), ~47M client accounts and total client assets ~$11.8T (≈$12T); March produced $25B of cash inflows and was the second‑highest NNA month ever. Engagement/operational stats included 9.9M daily average trades (600M+ trades Q1), 570M digital log‑ins (+12% YoY), >7.8M service calls with sub‑30 second entry, managed investing flows +46% (Schwab Wealth Advisory net flows $10B, +90%), bank loan balances $61B (+29% YoY), margin loans ≈$127B (+13% vs YE), $2.4B of share repurchases in Q1, a 19% dividend increase and an adjusted Tier‑1 leverage ratio of 6.8% (target 6.75–7%); they expect a typical Q2 cash drawdown for taxes.
Record Core Net New Assets and Total Client Assets
Excluding a one-time mutual fund clearing outflow, Schwab attracted $158 billion in core net new assets in 1Q26 (a first-quarter record), bringing total client assets to approximately $11.8 trillion.
Record Revenue, Trading Activity and EPS
Revenue increased 16% year-over-year to a record $6.5 billion for 1Q26; trading revenue rose 20% YoY. Adjusted diluted EPS reached a record $1.43, up 38% YoY, and adjusted pretax profit margin was 51.4%.
Strong Asset Management and Adviser Flows
Asset management and administration fees grew 15% YoY to a record $1.8 billion. Managed investing net flows rose 46% YoY, and Schwab Wealth Advisory net flows reached a record $10 billion, up 90% YoY (with ~30% of those flows from legacy Ameritrade clients).
Robust Lending and Balance Sheet Growth
Bank loan balances grew to $61 billion, up 29% YoY; client margin loan balances ended the quarter near $127 billion, up 13% vs year-end 2025. Bank lending and pledged asset lines reached all-time records.
Exceptional Client Engagement and Platform Usage
Supported a record 9.9 million daily average trades, over 600 million trades supported in the quarter, ~570 million digital log-ins (up ~12% YoY), and more than 7.8 million calls to service centers with average call entry under 30 seconds.
Disciplined Expense Management and Investment in Growth
Adjusted expenses grew just 5% YoY despite significant client activity and continued investments in organic growth, new products, AI, and platform modernization, contributing to strong margin expansion.
Capital Returns and Strong Capital Position
Repurchased $2.4 billion of common shares in 1Q26, increased the common dividend (impacting adjusted Tier 1 leverage), and finished the quarter with an adjusted Tier 1 leverage ratio of 6.8% within the 6.75%–7% target range.
Strategic M&A and Product Innovation
Completed acquisition of Forge to provide access to pre-IPO shares and private market services, increased strategic investment in Wealth.com for AI estate and tax planning tools, launched Schwab Team Investor accounts (ages 13–17), and rolled out structured asset line offerings for advisers.
Material Progress on AI and Digital Capabilities
Deployed AI broadly: equipped 33,000 employees with AI tools; 8,000 technologists using AI for development; launched Schwab Knowledge Assistant, Research Assistant, AI Service Assistant (transcribing ~60,000 live interactions/day); plan to roll out portfolio insights, generative search, and the first investor AI assistant in June.
Crypto Pilot and Spot Crypto Rollout
Employee pilot for Schwab Crypto is underway with a phased client rollout expected in coming weeks for bitcoin and ether; initial trade pricing set at 75 basis points, with additional assets and transfer capabilities planned over time.
Jeff Edwards
Good morning, everyone. Thank you for joining us for Schwab's 2026 Spring business update. This is Jeff Edwards, Head of Investor Relations, and I'm joined in Westlake this morning by our President and CEO, Rick Wurster as well as our CFO, Mike Verdeschi. Let's jump on in today, and hopefully, everyone had a chance to review our earnings release that crossed the wires earlier this morning and per the usual, slides for today's business update will be posted to the IR website at the conclusion of today's prepared remarks. Please adhere to our one-question policy during Q&A. And as always, the IR team is available to assist with any questions following today's update. And finally, the [indiscernible] wall of words or perhaps more widely known as the forward-looking statements page, which reminds us that outcomes may differ from expectations, so please stay up-to-date with our disclosures. And with that, I'll turn it over to Rick.
Richard Wurster
Thank you, Jeff, and good morning. Thank you for joining us for our spring business update. I hope you walk away from the call this morning with three overarching messages. One, our Through Clients' Eyes strategy drove record client growth and financial results in the first quarter. Two, Schwab is delivering for clients and is uniquely capable of meeting client needs across investor types and investment environments. And three, we are innovating at a rapid pace with tangible progress in AI, digital assets and client capabilities and experiences. Our Through Clients' Eyes strategy continues to drive results with strong growth across all fronts in the f...
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