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    SCHW
    Earnings call· Jun 2026(Q2 FY26)

    SCHWAB CHARLES CORP SCHW

    Jul 21, 2026 Source

    Executive summary

    The Charles Schwab Corporation Q2 FY26 — Record Performance and Strong Client Engagement

    The Charles Schwab Corporation delivered record Q2 FY26 results, driven by strong client engagement, asset gathering, and increased trading activity. The company is leveraging its diversified financial model and investments in AI and technology to deepen client relationships and expand its wealth and banking offerings, positioning it for durable earnings growth and continued market leadership. The call highlighted significant opportunities in advice and lending, alongside a strategic approach to emerging technologies like crypto and tokenization.

    Highlights

    5

    • Delivered record financial results with $7.1 billion in total revenue and adjusted EPS of $1.62, up 42% year-over-year.

    • Attracted 1.4 million new brokerage accounts and $120 billion in core net new assets, up nearly 50% over last year.

    • Managed investing net flows increased 53% year-over-year, and bank lending balances reached $67 billion, up 33%.

    • Adjusted pretax profit margin expanded to 54.3%.

    • Daily average trades reached $11.9 million, driving a 28% increase in trading revenue to $1.2 billion.

    Guidance & targets

    9
    CategoryTargetConfidence
    Total revenue growth
    17.5% to 18.5%
    high materiality
    High
    Full year net interest margin
    3% to 3.10%
    high materiality
    High
    Average 4Q 2026 net interest margin
    3.25% to 3.30%
    high materiality
    High
    Full year 2026 interest-earning assets
    expand modestly year-over-year
    medium materiality
    Medium
    Annual expense growth
    9.5% to 10.5%
    high materiality
    High
    Market appreciation assumption
    approximately 13%
    medium materiality
    High
    Organic growth rate (asset gathering)
    5%
    high materiality
    High
    Daily average trades
    10.6 million
    medium materiality
    High
    Underlying expenses
    5.5% to 6.5% range
    medium materiality
    High

    Operational metrics

    47
    Client consolidation preference (affluent clients 25-44)
    61
    Q2 FY26

    61% of affluent clients ages 25 to 44 prefer to consolidate their financial lives.

    Single firm usage by affluent households ($1M-$5M assets)
    22up 11 percentage points YoY
    Q2 FY26

    Households with $1 million to $5 million in assets using only 1 financial services firm jumped 11 percentage points year-over-year to 22%.

    Trading revenue
    1.2up 28% YoY
    Q2 FY26

    Daily average trades of $11.9 million driving a 28% increase in trading revenue to $1.2 billion.

    Other revenue growth
    32YoY
    Q2 FY26

    Other revenue was up 32% versus 2Q '25, with stronger trading volumes as well as typical second quarter seasonality.

    Underlying expense growth range
    5.5% to 6.5%
    FY26

    Underlying expenses still remain in line with the 5.5% to 6.5% range shared at the January winter business update.

    Assumed tax rate
    23
    FY26

    Analyst assumption of 23% tax rate for the full year, not corrected by management.

    Securities lending revenue
    178
    Q2 FY26

    Rebound in SEC lending revenues this quarter, driven by long/short activities rather than hard-to-borrow activity.

    New brokerage accounts
    1.4
    Q2 FY26

    1.4 million new brokerage accounts opened in the second quarter.

    Core net new assets
    120up nearly 50% YoY
    Q2 FY26

    $120 billion in core net new assets, up nearly 50% over last year.

    Managed investing net flows growth
    53YoY
    Q2 FY26

    Managed investing net flows increased 53% over last year.

    Bank lending balances
    67up 33% YoY
    Q2 FY26

    Bank lending balances reached $67 billion, up 33% from 2Q '25 and 16% versus the prior year-end.

    Total revenue
    7.1
    Q2 FY26

    Delivered $7.1 billion in total revenue.

    Adjusted EPS
    1.62up 42% YoY
    Q2 FY26

    Adjusted earnings per share of $1.62, up 42% over last year.

    Total revenue growth
    21YoY
    Q2 FY26

    Total revenue grew 21% year-over-year.

    Net interest revenue growth
    19YoY
    Q2 FY26

    19% increase in net interest revenue versus the prior year period.

    Asset management and administration fees
    1.8up 16% YoY
    Q2 FY26

    16% year-over-year growth in asset management and administration fees to $1.8 billion.

    Bank deposit account fees growth
    35YoY
    Q2 FY26

    Bank deposit account fees grew 35% year-over-year.

    Adjusted expenses growth
    11YoY
    Q2 FY26

    Adjusted expenses for the second quarter grew 11% year-over-year.

    Adjusted pretax profit margin
    54.3
    Q2 FY26

    Record quarterly revenue combined with balanced expense management delivered adjusted pretax profit margin of 54.3%.

    Total margin balances
    165.1
    Q2 FY26

    Total margin balances ended the quarter at $165.1 billion.

    Total bank loan balances growth
    33YoY
    Q2 FY26

    Total bank loan balances grew to $67 billion, up 33% from 2Q '25 and 16% versus the prior year-end.

    Transactional sweep cash increase
    24.2
    Q2 FY26

    Transactional sweep cash increased by $24.2 billion in 2Q, largely driven by demand for long/short strategies as well as organic asset gathering.

    Adjusted Tier 1 leverage ratio
    6.8
    Q2 FY26

    Adjusted Tier 1 leverage ratio finished the quarter at 6.8%, within the 6.75% to 7% range.

    Common shares repurchased
    1
    Q2 FY26

    Repurchase of $1 billion worth of common shares.

    New brokerage accounts
    2.7
    H1 FY26

    2.7 million new brokerage accounts opened in first half of the year.

    Core net new assets
    260up nearly 20% YoY
    H1 FY26

    $260 billion in core net new assets in the first half of the year, representing year-over-year growth of nearly 20%.

    Schwab Wealth Advisory Client Promoter Score
    highest of any offer we have
    Q2 FY26

    The Client Promoter Score for Schwab Wealth Advisory is the highest of any offer the company has.

    US retail market for advice
    37growing
    Q2 FY26

    The U.S. retail market for advice is $37 trillion and growing.

    Schwab market share in advice
    2
    Q2 FY26

    Schwab has just 2% market share in the U.S. retail advice market.

    Schwab retail households in fee-based advice
    5
    Q2 FY26

    Just 5% of Schwab retail households are in a fee-based advice solution.

    Schwab clients willing to pay for advice
    31
    Q2 FY26

    31% of Schwab clients said they are willing to pay for advice.

    ROCA of Schwab Wealth Advisory clients vs retail clients
    3x
    Q2 FY26

    Clients in Schwab Wealth Advisory offer generate 3x the ROCA of retail clients.

    Clients using lending products (Schwab)
    0.5
    Q2 FY26

    0.5% of Schwab clients use one of the lending products.

    Clients using lending products (industry average)
    4
    Q2 FY26

    4% on average across the industry use lending products.

    Average spread on PALs
    north of 100 basis points
    Q2 FY26

    Average spread to securities north of 100 basis points on Pledged Asset Lines (PALs).

    Cost per account
    continues to decrease
    Q2 FY26

    The company's cost per account continues to decrease.

    Expense on client assets
    lowest in the industry
    Q2 FY26

    The company's expense on client assets is the lowest in the industry.

    Developer team productivity improvement (AI)
    15% to 20%
    past year

    Over the past year, developer team productivity has improved by 15% to 20% due to AI.

    Client easy scores
    at or near all-time highs
    Q2 FY26

    Client easy scores are at or near all-time highs with the combination of technology and people.

    Operating leverage (updated scenario)
    800
    FY26

    The updated scenario implies operating leverage of 800 basis points.

    Operating leverage (initial scenario)
    400
    FY26

    The initial scenario had operating leverage of 400 basis points.

    NNA growth rate
    6% plus
    last 4 quarters

    NNA growth in Advisor Services has been 6% plus for the last several quarters.

    NNA growth rate
    5% or higher
    ongoing

    Expectation for NNA growth in Investor Services to be 5% or higher.

    Proprietary wealth offer flows growth
    86YoY
    YTD

    Flows to proprietary wealth offers are up 86% year-to-date.

    PAL originations growth
    60YoY
    YTD

    Pledged Asset Line (PAL) originations are up 60% year-to-date.

    Bank accounts growth
    12YoY
    YTD

    The number of bank accounts is up 12% year-to-date.

    Long/short revenue contribution
    1
    Q2 FY26

    Long/short activities contribute roughly 1% of total revenue.

    Product announcements

    5
    ProductTypeDetails
    Schwab Crypto transfers capabilityroadmap
    Forge private market capabilitiesexpansion
    Wealth.com tax planningexpansion
    Schwab Assistantlaunch
    Portfolio insightslaunch

    Deals & partnerships

    2
    ForgeAcquisition to bring private market capabilities to clients.

    The Forge deal was closed, and progress is being made on integrating their private market capabilities for Schwab clients.

    PaxosInvestment in a firm supporting the delivery of Schwab Crypto.

    Schwab made an investment in Paxos, a firm that is supporting the delivery of Schwab Crypto.

    What to watch in Q3 FY26

    5

    Schwab Crypto transfers capability pilot

    by end of July (next quarter)
    Currenton track to start piloting
    TargetPilot started and progress update

    Why it matters

    This capability is expected to create an attractive net new asset opportunity over time⏳, diversifying Schwab's offerings.

    Our Schwab crypto rollout is going as planned, and we are on track to start piloting our crypto transfers capability by the end of this month.

    Q&A highlights

    8

    Inquired about the durability of strong net new asset growth and its drivers, specifically the mix between new clients and existing client wallet share.

    Rick Wurster expressed bullishness on NNA, expecting 5% or higher long-term growth, driven by client consolidation and deepening relationships across Advisor Services (outpacing 5% NNA growth), Investor Services (investments in FCs and AI), and Workplace (opportunity in retirement business). He noted that clients are doing more with Schwab, leading to a positive cycle for NNA.

    “I still believe 5% or higher is the right long-term expectation, and we remain bullish on NNA.”

    asked by Dan Fannon · answered by Richard Wurster

    3 min read6 chapters

    Detailed Narrative

    01

    Client Consolidation and Engagement

    The company highlights a significant trend of clients consolidating their financial lives, with 61% of affluent clients (ages 25-44) preferring a single firm and 22% of households with $1M-$5M in assets using only one firm, an 11 percentage point increase year-over-year. This trend, coupled with investing's increasingly central role in people's financial lives, positions Schwab as a trusted platform for diverse needs across investing, trading, wealth, banking, and lending. The firm's 'no trade-offs value proposition' is seen as unmatched, driving client engagement and asset gathering.

    02

    AI and Technology Integration

    Schwab is rapidly expanding its AI capabilities, with examples like the employee pilot for Schwab Assistant launched earlier this month and the rollout of portfolio insights in May. AI is viewed as a key driver for personalizing client experiences, enhancing productivity (developer team productivity improved by 15-20% over the past year), and enabling scalable growth. The company emphasizes combining human expertise with AI-powered capabilities to create deeper relationships and an 'omnichannel experience' that scales with client needs.

    03

    Wealth and Banking Expansion

    Significant growth opportunities are identified in wealth management, noting a $37 trillion U.S. retail market with only 2% Schwab market share. Investments in Schwab Wealth Advisory, including tax, trust, and estate capabilities, are yielding high client promoter scores. In banking, lending balances grew 33% year-over-year, driven by digital Pledged Asset Line (PAL) adoption. Only 0.5% of Schwab clients currently use lending products compared to an industry average of 4%, indicating substantial room for growth with an average spread to securities north of 100 basis points on PALs.

    04

    Trading Platform Leadership

    Schwab maintains its leadership in trading, executing one-third of retail brokerage trades and being #1 in daily average trades and options contracts. Management attributes sustained high trading activity to broad client participation, growth in young investors, increased comfort with options trading, changes in pattern day trading rules, and AI's role in research and algorithmic trading. Market volatility🌐 and specific events (e.g., AI, 'Mag 7', SpaceX) also drive client interest and engagement across the platform.

    05

    Balance Sheet Management and Capital Allocation

    Schwab's balance sheet management prioritizes flexibility and supporting business growth. The adjusted Tier 1 leverage ratio finished the quarter at 6.8%, within the 6.75% to 7% target range. Capital allocation focuses first on supporting client needs and franchise expansion, with opportunistic share repurchases ($1 billion executed in Q2) considered after these priorities. The firm emphasizes organic growth over M&A, noting that deploying resources into the franchise has been 'enormously profitable,' leading to 800 basis points of operating leverage in the updated scenario.

    06

    Prediction Markets and Tokenization Strategy

    Schwab is actively working with Cboe on the rollout of binary options but has not yet set a timeline. The company distinguishes between valuable prediction market elements, such as information on macro events and financial-related KPIs (for hedging or accentuating positions), and 'sports gambling,' which it calls 'disingenuous' to label as an asset class and has 'no interest' in offering. For tokenization, Schwab aims to support client preferences, building infrastructure to accommodate various forms of securities consumption, acknowledging both pros and cons of 24/7 trading and immediate settlement.

    AI-generated summary of the company’s earnings call. Not investment advice.