SCHW-PD — The Charles Schwab Corporation

Summary of SCHW-PD Q2 2026 Earnings Call

1. Key Financial Results and Metrics

• Total Revenue: $7.1 billion, up 21% year-over-year.
• Adjusted Earnings Per Share (EPS): $1.62, a 42% increase from the previous year.
• Net New Assets (NNA): $120 billion, a 50% increase year-over-year; 1.4 million new brokerage accounts opened.
• Managed Investing Net Flows: Increased by 53% year-over-year.
• Bank Lending Balances: Reached $67 billion, up 33% year-over-year.
• Daily Average Trades: 11.9 million, a 28% increase in trading revenue to $1.2 billion.

2. Strategic Updates and Business Highlights

• Schwab is focusing on a "true client size strategy" to fuel growth, emphasizing a no trade-offs value proposition.
• Continued expansion of branch footprint and hiring of financial consultants and advisors.
• Launch of Schwab Crypto and progress in private market capabilities through the Forge acquisition.
• Strong client engagement with high client promoter scores across investor and advisor services.
• Investment in AI capabilities to enhance client service and operational efficiency.

3. Forward Guidance and Outlook

• 2026 Revenue Growth: Expected to be between 17.5% and 18.5%.
• Net Interest Margin (NIM): Projected to expand to 3%-3.1% for the full year, with Q4 guidance of 3.25%-3.30%.
• Expense Growth: Anticipated to be between 9.5% and 10.5%, driven by increased client engagement and the Forge acquisition.
• Continued expectation of 5% or higher NNA growth in the long term.

4. Bad News, Challenges, or Points of Concern

• Securities Lending: Revenue from securities lending remains subdued, with expectations for continued low activity in this area.
• Market Volatility: The sustainability of high trading volumes is uncertain, as it is influenced by market conditions and client behavior.
• Competitive Pressures: The firm faces ongoing competition in the RIA space and must maintain its edge through innovation and service.

5. Notable Q&A Insights

• NNA Sustainability: CEO Rick Wurster expressed confidence in maintaining NNA growth above 5%, driven by deepening client relationships and consolidation of financial services.
• Trading Activity: Wurster noted that current trading engagement levels are supported by structural shifts in investor behavior, particularly among younger clients and increased use of AI.
• Long-Short Strategies: There is growing interest in long-short strategies, which are expected to become more significant over time, benefiting both clients and Schwab's business model.
• Tokenization and Wallet Strategy: Schwab is building infrastructure to support client activity in tokenized securities, with a flexible approach to meet client preferences.

Overall, Schwab reported strong financial performance in Q2 2026, with significant growth in client engagement and revenue. The firm is well-positioned for future growth, although it faces challenges in certain areas like securities lending and must navigate competitive pressures effectively.