Summary of SCHW-PD Q2 2026 Earnings Call

1Key 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.

2Strategic 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.

3Forward 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.

4Bad 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.

5Notable 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.