Schwab posts Q3 earnings beat estimates as client assets, trading surge

Charles Schwab reported record third-quarter revenue and earnings, buoyed by continued inflows from clients and a surge in trading activity, as the wealth management firm benefited from robust investor engagement and favorable market conditions.

The Westlake, Texas-based company posted net income of $2.4 billion, or $1.26 per share, for the quarter ended September 30.

On an adjusted basis, earnings reached $1.31 per share, surpassing a $1.25 consensus estimate from analysts polled by FactSet. Revenue climbed 27% year over year to $6.14 billion, also ahead of Wall Street expectations.

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Schwab’s core net new assets – a key measure of growth – rose 44% from a year earlier to $137.5 billion. Total client assets reached a record $11.59 trillion, up 17% year over year, as clients continued to add funds and take advantage of rising equity markets.

The company added more than one million new brokerage accounts for the fourth consecutive quarter, pushing its total to 45.7 million client accounts. Managed investing solutions saw net inflows climb 40% compared with the third quarter of last year.

Read more: Schwab hails successful quarter as trading activity and client assets hit new highs

Trading activity remained strong, with daily average trading volume rising 30% to 7.4 million. Margin balances ended the quarter at $97.2 billion, a 16% increase from the same period last year.

Meanwhile, Schwab’s net interest revenue rose to $3.05 billion, up from $2.22 billion a year ago, as the firm continued to pay down higher-cost debt and benefit from increased client cash balances. Bank supplemental funding declined by $12.9 billion during the quarter, ending at $14.8 billion.

“Strengthening organic growth trends, increasing adoption of wealth solutions, and favorable macroeconomic tailwinds powered another quarter of record revenue and earnings per share,” said chief executive Rick Wurster in a statement Thursday announcing the results.

Chief financial officer Mike Verdeschi noted that client transactional sweep cash grew by $13.5 billion during the quarter, which helped Schwab further reduce higher-cost bank funding.

“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,” Verdeschi said.

The company also continued its capital return efforts, buying back 28.9 million shares for $2.7 billion during the quarter. Year-to-date, Schwab has returned $8.5 billion to shareholders across all forms of capital return.

Expenses increased modestly, with GAAP expenses up 4% from a year ago. Excluding amortization of acquired intangibles, adjusted expenses rose 5%. The company’s pre-tax profit margin improved to 49.2% on a GAAP basis, up from 38% a year earlier.

Looking ahead, Schwab said it remains focused on organic growth, expanding its wealth solutions, and maintaining capital flexibility.

Read more: Schwab takes a minority stake in Wealth.com to scale estate planning for its mass-affluent retail clients

The company’s results come as other major Wall Street firms also reported gains in wealth management revenue, reflecting strong investor interest in the stock market and other investments.

Shares of Schwab rose in early trading following the earnings announcement.