10-QPeriod: Q3 FY2025

SCHWAB CHARLES CORP Quarterly Report for Q3 Ended Sep 30, 2025

Filed November 7, 2025For Securities:SCHWSCHW-PDSCHW-PJ

Summary

Charles Schwab Corporation (SCHW) reported a strong third quarter and first nine months of 2025, demonstrating significant growth across key financial and client metrics. Total net revenues surged by 27% year-over-year for the quarter and 23% year-to-date, driven by robust net interest revenue, which benefited from reduced bank supplemental funding and growth in lending activities. Asset management and administration fees also saw a healthy 13% increase, supported by higher money market fund balances and managed investing solutions. The company reported substantial net income growth, up 67% for the quarter and 56% year-to-date, translating into a significant improvement in diluted earnings per share (EPS), which grew 77% for the quarter and 62% year-to-date. Client asset gathering remained strong, with core net new assets up 44% for the quarter and 34% year-to-date, coupled with an 18% increase in new brokerage accounts. The company also continued its capital return initiatives, repurchasing $2.7 billion in common stock during the quarter and increasing its dividend by 8%. Management highlighted the strategic advantages of its 'Through Clients' Eyes' strategy, emphasizing client relationships as a driver of asset growth and revenue. The acquisition of Forge Global Holdings, Inc. for approximately $660 million was announced, expected to enhance private market capabilities. Financially, Schwab significantly reduced its bank supplemental funding by $35.1 billion year-to-date, improving its funding profile. Capital ratios remain strong, with the consolidated Tier 1 Leverage Ratio at 9.7% as of September 30, 2025. The company appears well-positioned to navigate the evolving market landscape, leveraging its scale, client focus, and disciplined expense management.

Financial Highlights

34 data points
Beta

Revenue

$6.13B

Net Income

$2.36B

38.4% Net Margin

EPS (Diluted)

$1.26

Total Assets

$465.25B

Cash & Equivalents

$30.57B

Free Cash Flow

$393.00M

Financial Statements
Beta
Revenue$6.13B
Net Income$2.36B
EPS (Basic)$1.26
EPS (Diluted)$1.26
Shares Outstanding (Basic)1.81B
Shares Outstanding (Diluted)1.81B

Key Highlights

  • 1Total net revenues increased significantly, up 27% year-over-year in Q3 2025 and 23% year-to-date, driven by strong net interest revenue and asset management fees.
  • 2Net income grew substantially, up 67% for the quarter and 56% year-to-date, leading to a 77% increase in diluted EPS for the quarter and 62% year-to-date.
  • 3Client asset gathering accelerated, with core net new assets up 44% in Q3 2025 and new brokerage accounts increasing by 18% year-over-year.
  • 4The company significantly reduced bank supplemental funding by $35.1 billion (70%) year-to-date, strengthening its funding structure.
  • 5Capital returns remained a priority, with $2.7 billion in common stock repurchased in Q3 2025 and an 8% increase in the quarterly dividend.
  • 6Schwab announced the acquisition of Forge Global Holdings, Inc. for approximately $660 million to expand into private markets.
  • 7Strong operational efficiency was demonstrated through expense growth (4-5%) that lagged revenue growth, improving pre-tax profit margins to 49.2% in Q3 2025.

Frequently Asked Questions

The significant increase in net interest revenue was primarily driven by lower interest expense resulting from substantial paydowns of bank supplemental funding, combined with lower average rates paid on funding sources. This was further supported by growth in bank and margin lending balances and an increase in securities lending revenue.

Client asset gathering was robust. Core net new client assets increased by 44% to $137.5 billion in the third quarter of 2025 compared to the prior year period. The company also saw an 18% increase in new brokerage accounts, with active brokerage accounts reaching 38.0 million.

Total expenses excluding interest increased by 4% in the third quarter and 5% year-to-date, which is lower than the revenue growth. This indicates effective expense discipline. Management continues to invest in growth and client-serving capabilities while driving efficiencies. Key expense increases were noted in compensation, benefits, and professional services, partially offset by lower regulatory fees.

The acquisition of Forge Global Holdings, Inc. for approximately $660 million is expected to enhance Schwab's ability to meet the evolving needs of its growing client base by integrating Forge's private markets capabilities and trading marketplace.