01—Abstract
Summary
Summary of the 10-K filed February 20, 2025. Cited figures are marked; the original filing is the authoritative source.
LPL Financial Holdings Inc. (LPLA) reported net income of $1.06 billiona, or $14.03 per diluted share, for the year ended December 31, 2024, compared with $1.07 billion, or $13.69 per diluted share, in 2023.
Total revenue rose to $12.39 billionb from $10.05 billion, and gross profit, a non-GAAP measure, was $4.50 billion versus $4.03 billion. Advisory and brokerage assets reached $1.74 trillion, and total net new assets were $235.6 billion, up from $104.1 billion. The company describes itself as the nation's largest independent broker-dealer, a leading investment advisory firm, and a top custodian, supporting nearly 29,000 financial advisors.
Growth was driven by the acquisition of Atria Wealth Solutions, Inc., which closed on October 1, 2024, for an initial cash payment of approximately $859 million plus up to $330 millionc in contingent consideration, and by the completed transition of Prudential Advisors to the company's platform. Total indebtedness rose to $5.5 billion at year-end, of which $2.1 billion carried floating rates, and the leverage ratio was 1.89 against a covenant maximum of 4.0. Client cash balances were $55.1 billion, and the filing notes that the Federal Reserve reduced rates in the second half of 2024, which the company expects to affect its client cash revenue.
The filing also discloses an SEC request for information in August 2024 about the company's cash management program for corporate advisory accounts, which the company describes as likely part of an industry-wide inquiry, and putative class actions filed in July 2024 relating to cash sweep programs. The company paid a $50.0 milliond SEC penalty in August 2024 and an $18.0 million AML-related civil penalty, which was paid in January 2025. Share repurchases of $170.0 million were made in 2024 after a pause tied to the Atria deal, and $730.0 million remained under the authorization at year-end.
02—Key points
Key Highlights
- Net income of $1.06 billion, or $14.03 per diluted share, for 2024, versus $1.07 billion, or $13.69 per diluted share, in 2023.
- Total revenue of $12.39 billion, up from $10.05 billion, with advisory revenue of $5.46 billion and total commission revenue of $3.31 billion.
- Gross profit (non-GAAP) of $4.50 billion, up from $4.03 billion; adjusted EBITDA of $2.22 billion, up from $2.07 billion.
- Total advisory and brokerage assets of $1.74 trillion, with total net new assets of $235.6 billion versus $104.1 billion in 2023.
- Acquisition of Atria Wealth Solutions closed October 1, 2024, for an initial cash payment of approximately $859 million, with up to $330 million in contingent consideration.
- Total corporate debt and other borrowings of $5.5 billion at year-end; leverage ratio of 1.89 against a covenant maximum of 4.0.
- Regulatory matters include a $50.0 million SEC civil penalty paid in August 2024, an $18.0 million AML-related penalty paid in January 2025, and an SEC inquiry into the corporate advisory cash management program.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 20, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $12.39B$10.05B | +23.2% |
| Operating Expenses | $10.99B$8.61B | +27.7% |
| Interest Expense | $274.18M$186.80M | +46.8% |
| Net Income | $1.06B$1.07B | −0.7% |
| EPS (Basic) | $14.17$13.88 | +2.1% |
| EPS (Diluted) | $14.03$13.69 | +2.5% |
| Shares Outstanding (Basic) | 74.71M76.81M | −2.7% |
| Shares Outstanding (Diluted) | 75.43M77.86M | −3.1% |
05—Questions
Frequently Asked Questions
How did LPL Financial's profitability change in 2024?
Net income was $1,058.6 million, or $14.03 per diluted share, compared with $1,066.3 million, or $13.69 per diluted share, in 2023. Net income was essentially flat in dollar terms, while diluted EPS increased, reflecting lower weighted-average diluted shares of 75.4 million versus 77.9 million. Total expense rose 28% to $10.99 billion, driven largely by advisory and commission expense.
What drove the growth in revenue and assets?
Total revenue increased 23% to $12.39 billion. Advisory revenue rose 32% and sales-based commission revenue rose 41%. Total net new assets were $235.6 billion, including $137.8 billion of net new advisory assets and $97.8 billion of net new brokerage assets. The filing attributes part of the growth to the Atria acquisition and the Prudential Advisors transition.
How much debt does LPL carry, and how does it compare with covenant limits?
Total corporate debt and other borrowings were $5.5 billion at December 31, 2024, of which $2.1 billion was subject to floating interest rates. The Credit Agreement leverage ratio was 1.89 against a maximum covenant of 4.0, and the interest coverage ratio was 10.09 against a minimum of 3.0. The company stated it was in compliance with its financial covenants.
What regulatory risks does the filing highlight?
The filing discloses an August 2024 SEC request for information about the cash management program for corporate advisory accounts, which the company believes is part of an industry-wide inquiry, and July 2024 putative class actions tied to cash sweep programs. It also describes prior SEC penalties of $50.0 million (paid August 2024) and $18.0 million (paid January 2025) and notes the company faces ongoing regulatory oversight of its compliance programs.
How is the company returning capital to shareholders?
In 2024 LPL paid cash dividends of $89.7 million, or $1.20 per share, and repurchased 605,361 shares for $170.0 million after pausing repurchases in the first quarter following the Atria announcement. As of December 31, 2024, $730.0 million remained under the repurchase authorization. The Board declared a $0.30 per share dividend payable March 25, 2025.
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