Schwab's Q1 Earnings and Revenues Beat Estimates, Stock Gains

Charles Schwab’s SCHW first-quarter 2025 adjusted earnings of $1.04 per share beat the Zacks Consensus Estimate of $1.00. The bottom line surged 41% year over year.

Shares of the company jumped almost 4.5% in pre-market trading on better-than-expected results.

Results benefited from the solid performance of the asset management business, which drove revenues. Higher net interest revenues and solid brokerage account numbers were other positives. However, an increase in expenses acted as a headwind.

Results excluded transaction-related costs. After considering these, net income (GAAP basis) was $1.91 billion or 99 cents per share, up from $1.36 billion or 68 cents per share in the year-ago quarter. We had projected net income (GAAP) of $1.77 billion.

SCHW’s Revenues Up, Expenses Rise

Quarterly net revenues were $5.6 billion, which rose 18% year over year. The increase was driven by a rise in all revenue components. The top line surpassed the Zacks Consensus Estimate of $5.52 billion.

Total non-interest expenses (GAAP basis) increased 7% to $3.14 billion. We had projected this metric to be $3.11 billion. Excluding non-recurring items, adjusted total expenses were $3.01 billion, up 8% year over year.

The pre-tax profit margin increased to 43.8% from 37.9% in the prior-year quarter.

At the end of the first quarter, Charles Schwab’s average interest-earning assets decreased 2% to $427.3 billion. Our estimate for the metric was $430.95 billion.

As of March 31, 2025, the annualized return on equity was 18%, up from 15% in the prior-year quarter.

Schwab’s Other Business Metrics

As of March 31, 2025, Schwab had total client assets of $9.93 trillion (up 9% year over year). During the reported quarter, net new assets brought by new and existing clients were $132.4 billion.

Schwab added 1.18 million new brokerage accounts during the quarter. As of March 31, 2025, the company had 37 million active brokerage accounts, 2.1 million banking accounts and 5.5 million corporate retirement plan participants.

Schwab’s Capital Distribution Updates

During the reported quarter, Schwab announced an 8% hike in its quarterly dividend to 27 cents per share.

Also, the company repurchased 19.2 million shares for $1.5 billion in connection with The Toronto-Dominion Bank’s secondary offering.

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. (Find the latest earnings estimates and surprises on Zacks  Earnings Calendar.)

Robinhood Markets HOOD is slated to announce first-quarter 2025 numbers on April 30.

In the past week, the Zacks Consensus Estimate for Robinhood’s quarterly earnings has moved 2.9% lower to 34 cents, implying an 88.9% jump from the prior-year reported number.

Tradeweb Markets TW is also slated to announce quarterly numbers on April 30.

In the past week, the Zacks Consensus Estimate for TW’s quarterly earnings has remained unchanged at 85 cents, indicating a 19.7% rise from the prior-year reported number.

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