Charles Schwab (SCHW) Stock Rises After Record Q1 Results Beat Estimates

TLDR

• Adjusted EPS came in at $1.43, beating estimates by $0.04
• Q1 net revenue hit a record $6.5B, up 16% year-over-year
• Total client assets grew 19% to $11.77 trillion
• Schwab repurchased $2.4B in stock and raised its dividend 19%
• Daily average trading volume hit a record 9.9 million, up 34% vs Q1 2025

Charles Schwab posted a strong first quarter, with adjusted earnings per share of $1.43 beating the Wall Street consensus of $1.39 by $0.04.

GAAP EPS came in at $1.37. Net revenue reached a record $6.5 billion, up 16% from the same period last year and just ahead of the $6.47B estimate.

GAAP net income for the quarter was $2.48 billion, up 30% year-over-year. Adjusted net income was $2.59 billion, a 29% increase from Q1 2025.

The Charles Schwab Corporation, SCHW

The pre-tax profit margin expanded to 49.2% on a GAAP basis, compared to 43.8% in Q1 2025. On an adjusted basis, the margin hit 51.4%.

Clients brought in $140 billion in core net new assets during the quarter. Excluding a planned mutual fund clearing deconversion that resulted in a $17.5 billion outflow, that figure rises to $157.5 billion.

1.3 million new brokerage accounts were opened in Q1. Total active brokerage accounts now stand at 39.1 million, with total client accounts reaching 47.2 million.

Record Trading and Asset Growth

Daily average trading volume hit a record 9.9 million in the quarter, up 34% versus Q1 2025. Trading revenue increased 20% year-over-year as a result.

Total client assets grew 19% year-over-year to $11.77 trillion. Asset management and administration fees rose 15% to $1.8 billion.

Managed Investing Solutions net flows grew 46% compared to Q1 2025. Bank loan balances expanded 29% year-over-year to $60.9 billion at March month-end.

Margin loan balances rose 13% from year-end 2025 to $126.7 billion, which includes $21.3 billion tied to long/short strategies used by RIA clients.

Net interest margin for the quarter was 2.88%. Client transactional sweep cash balances ended March at $461.5 billion, up $7.8 billion from the prior quarter.

Capital Returns and Dividend Hike

Schwab repurchased 24.3 million common stock units for $2.4 billion during Q1. The company also raised its quarterly common stock dividend by 19% to $0.32 per share.

Return on average common stockholders’ equity came in at 23% annualized, up from 18% in Q1 2025. Return on tangible common equity hit 40%.

The company closed its acquisition of Forge Global in early March. GAAP expenses rose 5% year-over-year, with adjusted expenses also up 5% after excluding $143 million in acquisition and integration-related costs.

Schwab also launched the Schwab Teen Investor Account this quarter, targeting users aged 13 to 17.

The company was ranked the number one overall broker by StockBrokers.com for the second year in a row. March core net new assets of $79.7 billion were the second highest for any single month on record.

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