Schwab's Q4 Earnings Beat Estimates on Trading & NIR, Shares Down

Charles Schwab’s SCHW fourth-quarter 2025 adjusted earnings of $1.39 per share beat the Zacks Consensus Estimate of $1.37. The bottom line soared 38% year over year.

Shares of the company lost nearly 1.5% in pre-market trading despite posting better-than-expected results on solid market volatility, rising client engagement and record asset growth.

Quarterly results benefited from the robust performance of the asset management business and an increase in trading revenues. Higher net interest revenues (NIR) and solid brokerage account numbers were other positives. However, an increase in expenses was the undermining factor.

Results excluded transaction-related costs. After considering these, net income (GAAP basis) was $2.46 billion or $1.33 per share, up from $1.84 billion or 94 cents per share in the year-ago quarter. 

For 2025, adjusted earnings per share of $4.87 surpassed the consensus estimate of $4.84 and grew 50% year over year. Net income (GAAP) jumped 49% to $8.85 billion.

SCHW’s Revenues Jump, Expenses Rise

Quarterly net revenues were a record $6.33 billion, jumping 19% year over year. The increase was driven by higher NIR (up 25%), trading revenue (22%) and asset management and administration fees (15%). The top line handily surpassed the Zacks Consensus Estimate of $6.3 billion.

For 2025, net revenues surged 22% to $23.92 billion. The top line also outpaced the Zacks Consensus Estimate of $23.87 billion.

Total non-interest expenses (GAAP basis) increased 4% to $3.16 billion. Excluding non-recurring items, adjusted total expenses were $3.03 billion, up 6% year over year.

The pre-tax profit margin increased to 50.2% from 43.3% in the prior-year quarter.

At the end of the fourth quarter, Charles Schwab’s average interest-earning assets rose 1% to $431.1 billion. 

As of Dec. 31, 2025, the annualized return on equity was 22%, up from 18% in the prior-year quarter.

Schwab’s Other Business Metrics

As of Dec. 31, 2025, Schwab’s total client assets reached a record $11.9 trillion (up 18% year over year). During the reported quarter, net new assets brought by new and existing clients were $158.2 billion.

Schwab added 1.27 million new brokerage accounts during the quarter. As of Dec. 31, 2025, the company had 38.5 million active brokerage accounts, 2.2 million banking accounts and 5.7 million corporate retirement plan participants.

Schwab’s Share Repurchase Update

During the reported quarter, Schwab repurchased 29.2 million shares for $2.7 billion.

Our Take on Schwab

A steady decline in funding costs and lower rates will support Schwab’s margins. Strategic acquisitions, a rise in advice solution fees and sustainable capital distributions are other major positives. However, rising expenses and near-term macroeconomic turmoil are headwinds.
 

The Charles Schwab Corporation Price, Consensus and EPS Surprise

The Charles Schwab Corporation price-consensus-eps-surprise-chart | The Charles Schwab Corporation Quote

Currently, Schwab carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates & Expectations of Schwab's Peers

Here are some of Schwab’s peers that are yet to come out with quarterly numbers.

Tradeweb Markets TW is scheduled to announce quarterly numbers on Feb. 5.

In the past week, the Zacks Consensus Estimate for Tradeweb’s quarterly earnings has been revised 1.2% upward to 85 cents, indicating a 11.8% rise from the prior-year reported number.

Robinhood HOOD is slated to announce fourth-quarter and full-year 2025 numbers on Feb. 10.

In the past seven days, the Zacks Consensus Estimate for Robinhood’s quarterly earnings has moved 3.4% north to 61 cents, implying a 13% jump from the prior-year reported number.

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This article originally published on Zacks Investment Research (zacks.com).

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