SCHW — The Charles Schwab Corporation

Summary of Schwab Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Revenue: Increased 16% year-over-year to a record $6.5 billion.
• Earnings Per Share (EPS): Adjusted EPS reached a record $1.43, up 38% from the previous year.
• Net New Assets (NNA): Achieved $158 billion in core NNA, a first-quarter record, with total client assets reaching $11.8 trillion.
• Daily Average Trades: Supported a record 9.9 million trades, reflecting strong client engagement.
• Bank Lending: Grew 29% year-over-year, with total bank loan balances reaching $61 billion.
• Client Margin Loan Balances: Increased 13% from year-end 2025 to nearly $127 billion.

2. Strategic Updates and Business Highlights:

• Client Growth: Opened 1.3 million brokerage accounts, up 10% year-over-year.
• Wealth Management: Managed investing net flows surged 46%, with Schwab Wealth Advisory seeing a record $10 billion in net flows, up 90% year-over-year.
• Digital Innovations: Launched the Schwab Team Investor account for teens and completed the acquisition of Forge to enhance access to pre-IPO shares.
• AI Initiatives: Schwab is integrating AI across its services, enhancing client interactions and operational efficiency, with plans for AI-powered tools in wealth management and tax planning.
• Crypto Offering: Preparing to launch Schwab Crypto, starting with Bitcoin and Ether, aimed at providing clients with a secure and educational trading environment.

3. Forward Guidance and Outlook:

• Anticipating continued strong client engagement and upward trajectory in cash and net interest margin (NIM) growth, potentially exceeding the previously communicated EPS range of $5.70 to $5.80 for the year.
• Expecting typical seasonal cash drawdown due to tax payments in April, but overall positive outlook for client cash management and asset growth.

4. Bad News, Challenges, or Points of Concern:

• Market Volatility: Increased volatility led to smaller trade sizes and less conviction among traders, impacting revenue per trade.
• Competitive Landscape: Concerns about evolving client preferences and competitive pressures, particularly regarding cash management solutions and the potential need for innovative offerings to retain clients.
• Economic Environment: Ongoing geopolitical uncertainties and economic conditions may influence trading behaviors and client cash allocations.

5. Notable Q&A Insights:

• NIM and Cash Growth: CFO Mike Verdeschi indicated a favorable outlook for NIM growth due to strong client engagement and potential lack of rate cuts.
• ETF Strategy: Schwab is actively negotiating with asset managers to develop an ETF monetization strategy, focusing on both active and passive ETFs.
• Cash Management: Schwab's approach to cash management is designed to be flexible, with a focus on helping clients optimize their cash allocations.
• Digital Asset Strategy: The launch of Schwab Crypto is seen as a response to client demand, with expectations for significant asset movement to Schwab once the offering is live.
• Alternative Investments: Schwab is looking to enhance its platform for alternative investments, with a focus on making it easier for advisers to integrate these into client portfolios.

Overall, Schwab's Q1 2026 results reflect strong financial performance and strategic initiatives aimed at enhancing client engagement and expanding service offerings, while navigating challenges posed by market volatility and competitive pressures.