Charles Schwab’s third quarter results reflected strong client activity and product adoption, with management attributing performance to robust organic asset gathering, ongoing growth in core brokerage and lending, and high engagement levels across its digital and branch networks. CEO Rick Wurster highlighted the opening of 1.1 million new brokerage accounts and $138 billion in net new assets, noting, “Clients are deepening their relationships with us by conducting more of their financial lives here.” Management emphasized that elevated margin balances and sustained high trading volumes supported the quarter’s outcome.
Is now the time to buy SCHW? Find out in our full research report (it’s free for active Edge members).
Charles Schwab (SCHW) Q3 CY2025 Highlights:
- Revenue: $6.14 billion vs analyst estimates of $6.00 billion (26.6% year-on-year growth, 2.2% beat)
- Adjusted EPS: $1.31 vs analyst estimates of $1.25 (5.2% beat)
- Adjusted EBITDA: $3.67 billion vs analyst estimates of $3.49 billion (59.9% margin, 5.4% beat)
- Operating Margin: 49.2%, up from 38.4% in the same quarter last year
- Market Capitalization: $171.2 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Charles Schwab’s Q3 Earnings Call
- Benjamin Budish (Barclays): Asked about Advisor business trends and Ameritrade integration. CEO Rick Wurster highlighted accelerated net new assets and improved satisfaction among advisers from both legacy and new firms.
- Alexander Blostein (Goldman Sachs): Inquired about core deposit growth and interest rate impact. CFO Mike Verdeschi explained that deposit trends remain stable and lower rates could support additional cash inflows.
- Kenneth Worthington (JPMorgan): Questioned the profitability and strategic purpose of Schwab’s crypto efforts. Wurster responded that crypto will drive both profits and younger client acquisition, with a pricing strategy aimed at competitive value.
- Daniel Fannon (Jefferies): Sought clarity on the trajectory for Ameritrade client growth. Wurster said satisfaction and engagement are rising, and management is confident in closing the gap with legacy Schwab clients over time.
- Michael Cyprys (Morgan Stanley): Asked about blockchain and tokenization impacts. Wurster indicated Schwab will enable tokenization if client demand emerges, viewing opportunities and challenges as evolving alongside industry trends.
Catalysts in Upcoming Quarters
In the quarters ahead, our analysts will track (1) Schwab’s progress in launching its spot crypto platform and capturing incremental client assets, (2) the ongoing integration and performance of legacy Ameritrade clients as their engagement and net new assets trend toward Schwab’s historic averages, and (3) the impact of interest rate changes on client cash behavior and net interest income. Execution on digital platform enhancements and continued advisor channel growth will also serve as important indicators of future performance.
Charles Schwab currently trades at $94.31, in line with $94.35 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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