Charles Schwab reported record second-quarter revenue and earnings on Tuesday, driven by a surge in client trading activity that pushed daily average trades to an all-time high.
The Westlake, Texas-based brokerage posted net income of $2.8 billion for the quarter ended June 30, with diluted earnings per share of $1.54 on a GAAP basis and $1.62 on an adjusted basis. Total net revenue rose 21% year over year to a record $7.1 billion. Adjusted earnings per share beat analyst expectations of $1.56, and revenue exceeded analyst forecasts of $6.9 billion, according to Barron's.
Despite those results, Schwab stock ended Tuesday down 2.5%.
Trading revenue climbed 28% year over year to $1.2 billion, fueled by client daily average trades reaching a record 11.9 million — up 57% from the same period a year ago. Margin loan balances hit $165.1 billion at quarter-end, a 30% jump from the prior quarter, as clients increased their borrowing to fund securities purchases. Net interest revenue totaled $3.4 billion, a 19% year-over-year gain, while the net interest margin reached 3.00%, widening by 12 basis points relative to the first quarter.
Fees from asset management and administration came to $1.8 billion, a 16% increase versus the same quarter last year. Total client assets stood at $13.08 trillion, reflecting 22% growth from a year earlier.
Schwab also lifted its full-year 2026 revenue guidance, now calling for growth of 17.5% to 18.5%, compared with the 14% to 15% increase it had forecast when it held its investor day in May, according to Barron's.
"During the second quarter, strong client engagement helped drive year-over-year revenue growth," CEO Rick Wurster said in a statement. On the earnings call, Wurster attributed the elevated trading levels to structural trends. "Young investors, AI, all of that is leading towards a more sustained period of high levels of trading from our perspective," he told analysts, according to Yahoo Finance.
The quarter saw 1.4 million new brokerage accounts added, pushing the total number of client accounts to 48 million. Core net new assets came in at $119.8 billion, compared with $80.3 billion in the second quarter of last year, a 49% increase.
Schwab has been expanding its product lineup to capture more client activity. The company launched direct spot trading for bitcoin and ether through a new service called Schwab Crypto, with each transaction carrying a 0.75% fee. The company also introduced Portfolio Insights, a generative AI tool designed to help investors understand portfolio performance, and is working with Cboe Global Markets to launch binary options tied to financial and economic events, according to Yahoo Finance.
Source: Yahoo Finance Top News — This article was automatically imported from the source. Read full article at original source →
