Schwab Posts Record Q3 Revenue, US$190 Billion in New Assets

Charles Schwab Corp delivered the strongest quarter in its history on Thursday, posting record revenue and a record haul of new client money, but its shares fell sharply after revenue came in a touch below forecasts and management guided full-year numbers towards the bottom of earlier ranges, Investing.com reported.

The US brokerage and wealth management giant said net revenue for the three months to September rose about 17% from a year earlier to US$7.17 billion. That was roughly US$30 million short of the US$7.20 billion analysts had pencilled in. Adjusted earnings per share climbed 29% to US$1.69, ahead of the US$1.66 consensus cited by Investing.com.

On a reported basis, net income rose to US$2.81 billion, or US$1.62 a share, from US$2.28 billion, or US$1.26 a share, a year earlier, according to RTTNews. Adjusted net income was US$2.93 billion.

Record inflows and a US$13 trillion client base

Client money continued to pour in. Core net new assets reached a record US$190.4 billion in the quarter, up 38% year on year, Quartz and Grafa reported, taking the year-to-date total to around US$450 billion. Total client assets rose 15% to a record US$13.33 trillion at the end of September, while Schwab opened 1.2 million new brokerage accounts, lifting its client base to 48.6 million.

All three main revenue lines grew by double digits. Net interest revenue rose 14% to US$3.5 billion, asset management and administration fees gained 14% to US$1.9 billion, and trading revenue increased 16% to US$1.2 billion on an average of 10.7 million trades a day. With expenses up only 9%, the adjusted pre-tax profit margin widened to 54.8%. Client margin balances stood at US$187.9 billion, up 67% since the end of 2025.

Schwab: Why the shares fell

Investors focused on the outlook rather than the records. Schwab shares dropped about 5% to around US$92 in Thursday trading from a previous close of US$96.80, RTTNews reported. Chief Financial Officer Mike Verdeschi told analysts that full-year revenue and net interest margin growth would land towards the lower end of the ranges given at the company’s summer business update, although expenses were also expected to come in at the low end.

Analysts also questioned the trend in client cash. Verdeschi rejected suggestions that clients were shifting money into higher-yielding alternatives, saying “this is not cash sorting in any way” and attributing the movement to customers putting cash back to work as market sentiment improved. The company also disclosed it had slowed growth in its long/short investing programme from mid-September and tightened its minimums in October.

Chief Executive Rick Wurster argued that the firm remains better placed than rivals to keep winning clients, and highlighted the role of artificial intelligence in supporting client engagement, while noting that most investors still want human advice alongside the technology.

What’s next

For the fourth quarter, Schwab expects its net interest margin to expand by about 25 to 30 basis points from a year earlier, and it is targeting roughly 800 basis points of positive operating leverage for 2026 as a whole. Management said it would set out a detailed scenario for 2027 at its winter business update in January, with its longer-term financial formula aimed at mid-teens growth in earnings per share.

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