Charles Schwab Posts Record Q3 Revenue and Adjusted EPS as Client Activity Grows

The Charles Schwab Corporation reported record third-quarter results as stronger client asset gathering, lending and trading activity lifted revenue and earnings. The brokerage and wealth management company also said it expects about 800 basis points of operating leverage for full-year 2026 while continuing to invest in growth and efficiency initiatives.

Total net revenue rose 17% from a year earlier to a quarterly record of $7.2 billion. GAAP diluted earnings per share increased 29% to $1.62, while adjusted diluted EPS climbed 29% to a record $1.69. Net income available to common stockholders was $2.81 billion on a GAAP basis and $2.93 billion after adjustments.

Profitability expanded as revenue growth outpaced expenses. Schwab’s GAAP pre-tax profit margin increased to 52.7% from 49.2% a year earlier, while the adjusted pre-tax margin rose to 54.8% from 51.3%. GAAP and adjusted expenses each increased 9%, reflecting higher client engagement and transaction volumes.

Asset gathering and engagement support growth

Core net new assets reached a quarterly record of $190 billion, up 38% from $138 billion in the third quarter of 2025. Year-to-date core net new assets totaled a record $450 billion, 27% above the comparable 2025 period. Schwab added 1.24 million brokerage accounts during the quarter, an increase of 9%, bringing the year-to-date total to 3.93 million.

Managed investing generated $24 billion of quarterly net inflows, up 22% year over year. Schwab Wealth Advisory net flows rose 55%, while the company said it continued to invest in wealth hubs, discretionary portfolios, tax, trust and estate capabilities, and AI-powered planning.

Trading activity also remained elevated. Daily average trades totaled 10.7 million in the third quarter, while retail equity notional volume for the 12 months through September was approximately $21 trillion. Year-to-date daily average trades were 10.8 million, 45% higher than in the same period of 2025.

Schwab’s Advisor Services business continued to attract registered investment advisers across a range of sizes. Of the unit’s third-quarter institutional net new assets, 36% came from RIAs with more than $5 billion on the Schwab platform, while 30% came from firms with $100 million to $1 billion.

Revenue rises across major categories

Net interest revenue increased 14% year over year to approximately $3.5 billion, reflecting higher lending balances and growth in long/short strategies. Asset management and administration fees also rose 14% to about $1.9 billion, supported by equity markets and managed investing inflows. Trading revenue advanced 16% to roughly $1.2 billion as client volumes increased.

Client margin loan balances reached $187.9 billion at September 30, up 67% from the end of 2025. That amount included $60.7 billion associated with certain long/short strategies. Net consolidated bank loans ended the quarter at $72.3 billion, 25% above year-end 2025, as demand for Schwab’s pledged asset line product continued.

Transactional sweep cash increased by $7.1 billion during the quarter to $492.8 billion. Schwab attributed the movement to organic growth, client asset-allocation decisions and demand for long/short strategies. Short credits associated with long/short margin positions increased by $19.6 billion to $63.3 billion during the quarter.

Investment, efficiency and capital priorities

Schwab said its current investment program is focused on expanding client relationships while improving platform efficiency. Initiatives introduced or expanded during 2026 include cryptocurrency services, fractional trading, new advisory capabilities and AI-supported tools for advisers, employees and clients. The company reported that a relationship-management assistant increased meeting capacity by about 10% among the pilot’s highest-use financial consultants, while AI-powered developer tools produced an approximately 25% productivity increase.

The company repurchased 4.7 million common shares for $500 million during the third quarter. Year-to-date common-stock repurchases totaled $3.9 billion, and Schwab increased its common dividend by 19% in January 2026.

Schwab’s preliminary consolidated Tier 1 leverage ratio was 8.9% at quarter-end, compared with 9.7% a year earlier. Its adjusted Tier 1 leverage ratio, which incorporates accumulated other comprehensive income, was 7.0%, versus 7.3% in September 2025. The company ended the quarter with $51.45 billion of stockholders’ equity and $12.07 billion of parent liquidity.

Outlook remains sensitive to markets and client behavior

Heading into 2027, management said financial performance will depend on the macroeconomic environment, interest rates, market sentiment and client engagement. Schwab’s financial framework calls for high-single-digit to low-double-digit revenue growth, positive operating leverage and mid-teens EPS growth, alongside balance-sheet management and opportunistic capital returns.

The outlook remains exposed to shifts in client cash allocation, funding costs, interest rates, equity valuations and trading activity. Other identified uncertainties include Schwab’s ability to manage expenses, attract and retain retail and adviser clients, develop new technology, meet capital and liquidity needs, and respond to litigation, regulatory or legislative developments.