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Shares of the company jumped almost 2.4% in pre-market trading on better-than-expected results attributable to market volatility and relatively higher interest rates.
Results benefited from the solid performance of the asset management business and trading revenues. Higher net interest revenues (NIR) and solid brokerage account numbers were other positives. However, an increase in expenses acted as a headwind.
Results excluded transaction-related costs. After considering these, net income (GAAP basis) was $2.13 billion or $1.08 per share, up from $1.33 billion or 66 cents per share in the year-ago quarter. We had projected net income (GAAP) of $1.84 billion.
SCHW’s Revenues Surge, Expenses Rise
Quarterly net revenues were $5.85 billion, jumping 25% year over year. The increase was driven by a rise in all revenue components. The top line handily surpassed the Zacks Consensus Estimate of $5.70 billion.
Total non-interest expenses (GAAP basis) increased 4% to $3.05 billion. We had projected this metric to be $3.13 billion. Excluding non-recurring items, adjusted total expenses were $2.92 billion, up 5% year over year.
The pre-tax profit margin increased to 47.9% from 37.2% in the prior-year quarter.
At the end of the second quarter, Charles Schwab’s average interest-earning assets grew almost 1% to $422.7 billion. Our estimate for the metric was $421.7 billion.
As of June 30, 2025, the annualized return on equity was 19%, up from 14% in the prior-year quarter.
Schwab’s Other Business Metrics
As of June 30, 2025, Schwab’s total client assets reached a record $10.76 trillion (up 14% year over year). During the reported quarter, net new assets brought by new and existing clients were $73.6 billion.
Schwab added 1.1 million new brokerage accounts during the quarter. As of June 30, 2025, the company had 37.5 million active brokerage accounts, 2.1 million banking accounts and 5.6 million corporate retirement plan participants.
Schwab’s Share Repurchase Update
During the reported quarter, Schwab repurchased 3.9 million shares for $351 million.
Our Take on Schwab
A steady decline in funding costs and lower rates will support Schwab’s margins. Strategic acquisitions, a rise in advice solution fees and sustainable capital distributions are other major positives. However, rising expenses and near-term macroeconomic turmoil are headwinds.
The Charles Schwab Corporation Price, Consensus and EPS Surprise
Here are some of Schwab’s peers that are yet to come out with quarterly numbers. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Robinhood Markets (HOOD - Free Report) is slated to announce second-quarter 2025 numbers on July 30.
In the past week, the Zacks Consensus Estimate for Robinhood’s quarterly earnings has moved 6.9% upward to 31 cents, implying an 47.6% jump from the prior-year reported number.
Tradeweb Markets (TW - Free Report) is also slated to announce quarterly numbers on July 30.
In the past week, the Zacks Consensus Estimate for TW’s quarterly earnings has been revised 1.2% north to 86 cents, indicating a 22.9% rise from the prior-year reported number.
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Schwab Stock Gains as Q2 Earnings Beat Estimates on Trading & NIR
Key Takeaways
Charles Schwab’s (SCHW - Free Report) second-quarter 2025 adjusted earnings of $1.14 per share beat the Zacks Consensus Estimate of $1.09. The bottom line surged 56% year over year.
Shares of the company jumped almost 2.4% in pre-market trading on better-than-expected results attributable to market volatility and relatively higher interest rates.
Results benefited from the solid performance of the asset management business and trading revenues. Higher net interest revenues (NIR) and solid brokerage account numbers were other positives. However, an increase in expenses acted as a headwind.
Results excluded transaction-related costs. After considering these, net income (GAAP basis) was $2.13 billion or $1.08 per share, up from $1.33 billion or 66 cents per share in the year-ago quarter. We had projected net income (GAAP) of $1.84 billion.
SCHW’s Revenues Surge, Expenses Rise
Quarterly net revenues were $5.85 billion, jumping 25% year over year. The increase was driven by a rise in all revenue components. The top line handily surpassed the Zacks Consensus Estimate of $5.70 billion.
Total non-interest expenses (GAAP basis) increased 4% to $3.05 billion. We had projected this metric to be $3.13 billion. Excluding non-recurring items, adjusted total expenses were $2.92 billion, up 5% year over year.
The pre-tax profit margin increased to 47.9% from 37.2% in the prior-year quarter.
At the end of the second quarter, Charles Schwab’s average interest-earning assets grew almost 1% to $422.7 billion. Our estimate for the metric was $421.7 billion.
As of June 30, 2025, the annualized return on equity was 19%, up from 14% in the prior-year quarter.
Schwab’s Other Business Metrics
As of June 30, 2025, Schwab’s total client assets reached a record $10.76 trillion (up 14% year over year). During the reported quarter, net new assets brought by new and existing clients were $73.6 billion.
Schwab added 1.1 million new brokerage accounts during the quarter. As of June 30, 2025, the company had 37.5 million active brokerage accounts, 2.1 million banking accounts and 5.6 million corporate retirement plan participants.
Schwab’s Share Repurchase Update
During the reported quarter, Schwab repurchased 3.9 million shares for $351 million.
Our Take on Schwab
A steady decline in funding costs and lower rates will support Schwab’s margins. Strategic acquisitions, a rise in advice solution fees and sustainable capital distributions are other major positives. However, rising expenses and near-term macroeconomic turmoil are headwinds.
The Charles Schwab Corporation Price, Consensus and EPS Surprise
The Charles Schwab Corporation price-consensus-eps-surprise-chart | The Charles Schwab Corporation Quote
Currently, Schwab carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Earnings Dates & Expectations of Schwab's Peers
Here are some of Schwab’s peers that are yet to come out with quarterly numbers. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Robinhood Markets (HOOD - Free Report) is slated to announce second-quarter 2025 numbers on July 30.
In the past week, the Zacks Consensus Estimate for Robinhood’s quarterly earnings has moved 6.9% upward to 31 cents, implying an 47.6% jump from the prior-year reported number.
Tradeweb Markets (TW - Free Report) is also slated to announce quarterly numbers on July 30.
In the past week, the Zacks Consensus Estimate for TW’s quarterly earnings has been revised 1.2% north to 86 cents, indicating a 22.9% rise from the prior-year reported number.