10-QPeriod: Q1 FY2025

SCHWAB CHARLES CORP Quarterly Report for Q1 Ended Mar 31, 2025

Filed May 9, 2025For Securities:SCHWSCHW-PDSCHW-PJ

Summary

Charles Schwab Corporation (SCHW) reported strong financial results for the first quarter ended March 31, 2025, showcasing significant growth across key client and financial metrics. The company experienced a substantial increase in net new client assets, up 44% year-over-year, and a 9% rise in total client assets, demonstrating continued client trust and engagement amidst a volatile macroeconomic environment. This asset growth, coupled with strong demand for margin and bank lending, drove total net revenues up 18% to $5.6 billion. Net income surged by 40% to $1.9 billion, translating to a 46% increase in diluted earnings per share (EPS) to $0.99. The company also successfully reduced its reliance on higher-cost bank supplemental funding, improving its net interest margin. Management remains focused on client-centric strategies and expense discipline, positioning Schwab for continued earnings growth and long-term stockholder value creation. Despite market uncertainties, Schwab's robust performance highlights its resilience and strategic execution.

Financial Highlights

36 data points
Beta

Revenue

$5.60B

Net Income

$1.91B

34.1% Net Margin

EPS (Diluted)

$0.99

Total Assets

$462.90B

Cash & Equivalents

$35.01B

Free Cash Flow

$6.24B

Financial Statements
Beta
Revenue$5.60B
Net Income$1.91B
EPS (Basic)$0.99
EPS (Diluted)$0.99
Shares Outstanding (Basic)1.82B
Shares Outstanding (Diluted)1.82B

Key Highlights

  • 1Client assets reached $9.93 trillion, a 9% increase year-over-year, indicating strong asset gathering capabilities.
  • 2Core net new client assets grew by 44% to $137.7 billion, demonstrating significant client inflows.
  • 3Total net revenues increased by 18% to $5.6 billion, driven by growth in net interest revenue and asset management/administration fees.
  • 4Net income rose 40% to $1.9 billion, with diluted EPS increasing 46% to $0.99.
  • 5The company reduced bank supplemental funding by $11.8 billion (24%) during the quarter, improving its funding profile.
  • 6Consolidated Tier 1 Leverage Ratio remained strong at 9.9%, consistent with the prior year.
  • 7Dividends were increased by 8% to $0.27 per common share, and the company repurchased $1.5 billion of its nonvoting common stock.

Frequently Asked Questions

Schwab saw strong client asset growth, with total client assets reaching $9.93 trillion, an increase of 9% year-over-year. Core net new client assets also showed robust growth, up 44% to $137.7 billion for the quarter.

Total net revenues increased by 18% to $5.6 billion. Key drivers included a 21% increase in net interest revenue, benefiting from lower interest expenses and growth in margin and bank lending, and a 14% rise in asset management and administration fees due to growth in money market funds and managed investing solutions.

Schwab demonstrated effective management of its funding costs by reducing bank supplemental funding by $11.8 billion (24%) during the quarter. This strategic move, along with improved net interest margin, contributed to its solid financial performance. The company maintained strong liquidity, with an average daily Liquidity Coverage Ratio (LCR) of 138%.

Schwab returned capital to shareholders by increasing its common dividend by 8% to $0.27 per share. Additionally, the company repurchased $1.5 billion of its nonvoting common stock. Management indicated that future capital returns will consider the level of bank supplemental funding outstanding.