Charles Schwab’s SCHW first-quarter 2026 adjusted earnings of $1.43 per share outpaced the Zacks Consensus Estimate of $1.38. The bottom line soared 38% year over year.
Shares of the company lost more than 2.5% in pre-market trading despite posting better-than-expected results, given the 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 $2.48 billion or $1.37 per share, up from $1.91 billion or 99 cents per share in the year-ago quarter.
SCHW’s Revenues Jump, Expenses Rise
Quarterly net revenues were a record $6.48 billion, jumping 16% year over year. The increase was driven by higher NIR (up 16%), trading revenue (20%), bank deposit account fees (20%) and asset management and administration fees (15%). The top line surpassed the Zacks Consensus Estimate of $6.47 billion.
Total non-interest expenses (GAAP basis) increased 5% to $3.29 billion. Excluding non-recurring items, adjusted total expenses were $3.15 billion, up 5% year over year.
The pre-tax profit margin (adjusted) increased to 51.4% from 46.2% in the prior-year quarter.
At the end of the first quarter, Schwab’s average interest-earning assets rose 2% to $437.7 billion.
As of March 31, 2026, the annualized return on equity was 23%, up from 18% in the prior-year quarter.
Schwab’s Other Business Metrics
As of March 31, 2026, Schwab’s total client assets reached a record $11.77 trillion (up 19% year over year). During the reported quarter, net new assets brought by new and existing clients were $139.9 billion.
Schwab added 1.3 million new brokerage accounts during the quarter. As of March 31, 2026, the company had 39.1 million active brokerage accounts, 2.3 million banking accounts and 5.8 million corporate retirement plan participants.
Schwab’s Share Repurchase Update
During the reported quarter, Schwab repurchased 24.3 million shares for $2.4 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. 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.
Interactive Brokers IBKR is scheduled to announce quarterly numbers on April 21.
In the past 30 days, the Zacks Consensus Estimate for Interactive Brokers’ quarterly earnings has been revised 1.6% upward to 62 cents. This indicates a 31.9% jump from the prior-year reported number.
Robinhood HOOD is slated to announce first-quarter 2026 numbers on April 28.
In the past month, the Zacks Consensus Estimate for Robinhood’s quarterly earnings has moved 14.8% lower to 46 cents. This implies a 24.3% increase from the prior-year reported number.
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The Charles Schwab Corporation (SCHW): Free Stock Analysis Report
Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report
Robinhood Markets, Inc. (HOOD): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).