Charles Schwab took a victory lap Friday morning as it reported a significant jump in second-quarter profit, driven by a surge in trading activity and record client assets.
The brokerage’s net income for the quarter rose 60% to $2.13 billion, or $1.08 per share, compared with $1.33 billion, or 66 cents per share, a year earlier as investors responded to a volatile market environment marked by policy shifts and tariff concerns.
The Wall Street Journal reported that earnings reached $1.14 per share on an adjusted basis, surpassing the average analyst estimate of $1.10, according to FactSet. Total revenue climbed 25% to a record $5.85 billion, outpacing expectations and reflecting robust client engagement .
Trading revenue increased 23% year-over-year to $952 million, as clients stepped up their activity during the steep selloff in April – that came in the aftermath of President Donald Trump's landmark Liberation Day tariff announcement – and the subsequent market rebound.
Schwab’s daily average revenue trades reached 7.57 million, narrowly topping forecasts in a quarter characterized by rapid shifts in investor sentiment .
The company’s client base continued to expand, with more than 1 million new brokerage accounts opened during the quarter – an 11% increase from the prior year. Total client assets rose 14% to a record $10.76 trillion, while core new assets reached $80.3 billion, up 31%. However, total net new assets of $73.6 billion came in below some analyst expectations .
Schwab’s stock reacted positively to the results, rising as much as 3.4% in premarket trading and briefly surpassing its previous record close before settling up 2.3%. Year to date, the shares have rallied more than 25%, outpacing both the broader financial sector and the S&P 500 index .
Chief executive Rick Wurster highlighted the firm’s broad-based growth in the company's Friday earnings release, stating “Schwab delivered growth on all fronts during the second quarter.” He also noted that “retail investors and RIAs continued to turn to Schwab as a trusted partner.”
The quarter was marked by heightened trading activity, with Schwab reporting two of its busiest trading days ever in May. The firm said it proactively contacted clients nearing margin calls, encouraging them to top off accounts rather than face automatic liquidations. Margin balances ended the quarter at $83.4 billion, largely unchanged from the previous period, as some investors selectively increased leverage amid the market’s recovery.
Schwab also reported that client transactional sweep cash totaled $412.1 billion at the end of June, which enabled the company to further reduce higher-cost bank funding by $10.4 billion to $27.7 billion at quarter-end, according to chief financial officer Mike Verdeschi .
Net inflows into managed investing solutions also posted 37% year-on-year growth versus the second quarter of 2024. Bank deposits, however, declined 8% year-over-year to $233 billion, reflecting ongoing shifts in client cash management preferences.
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