Charles Schwab Corp. (NYSE:SCHW) stock traded little changed Tuesday after reporting second-quarter fiscal 2026 results that exceeded analysts’ estimates for earnings and revenue.
Adjusted earnings were $1.62 per share, beating the analyst consensus estimate of $1.55. Revenue increased 21% year over year to $7.07 billion, ahead of the consensus estimate of $6.89 billion.
Trading, Net Interest Income Drive Growth
Trading revenue rose 28% year over year to $1.22 billion, supported by strong client trading activity.
Net interest revenue increased 19% to $3.36 billion, while net interest margin expanded to 3.00% from 2.66% a year earlier.
Asset management and administration fees climbed 16% to $1.82 billion, driven by organic growth and higher adoption of the firm’s wealth and asset management solutions.
Average daily trading volume reached 11.9 million. Total margin balances ended the quarter at $165.1 billion, including continued growth in long-short related activity led by new pledged asset line originations.
President and CEO Rick Wurster said investor engagement across Schwab’s expanding suite of products and services remained strong during the quarter. Net inflows into Schwab Wealth Advisory increased 80% year over year, while Pledged Asset Line balances rose 59% to $33.4 billion.
During the earnings call, Wurster said record trading activity reflected broad-based client engagement rather than enthusiasm surrounding the SpaceX IPO, noting the offering generated significant interest but did not materially boost net new assets.
Charles Schwab, which executes roughly one-third of all U.S. retail brokerage trades, reported daily average trades of 11.9 million, driving a 28% increase in trading revenue. Wurster said client engagement remains strong and expects elevated trading activity to be sustainable, supported by broad investor participation.
Client Assets, Accounts Expand
Total client assets increased 22% year over year to $13.08 trillion. Core net new assets rose 49% to $119.8 billion during the quarter.
The company added 1.4 million new brokerage accounts, bringing active brokerage accounts to 39.8 million and total client accounts to 48.0 million.
Schwab ended the quarter with $40.6 billion in cash and cash equivalents. Deposits increased 7% year over year to $249.7 billion.
The company repurchased 11.2 million shares for $1.0 billion during the quarter.
Client transactional sweep cash balances totaled $485.7 billion at the end of June, up $24.2 billion from the previous quarter, supported by seasonal tax-related inflows, organic growth and client asset allocation activity.
Preliminary consolidated Tier 1 leverage and adjusted Tier 1 leverage ratios were 8.7% and 6.8%, respectively.
SCHW Price Action: Charles Schwab shares were up 0.02% at $102.57 at the time of publication on Tuesday, according to Benzinga Pro data.
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