TLDR
- Charles Schwab Q1 2025 EPS rose 41% YoY to $1.04, beating estimates.
- Net revenues hit $5.6 billion, a year-over-year increase of 18%.
- Net interest revenue climbed 21.2% while client assets reached $9.93 trillion.
- Schwab added 1.18 million new brokerage accounts in Q1.
- Stock gained 4.5% in pre-market trading following the earnings release.
Charles Schwab kicked off 2025 with a robust earnings report that outpaced Wall Street expectations. For Q1, the company posted adjusted earnings of $1.04 per share, a 41% jump from the previous year. Revenue also beat estimates, coming in at $5.6 billion compared to the expected $5.52 billion.
Net income on a GAAP basis stood at $1.91 billion, up from $1.36 billion a year earlier. This strong performance came despite a market environment pressured by economic uncertainty and rate fluctuations. At close, April 17 at 4:00:12 PM EDT, the stock ended at $76.15 (+0.59%).
Revenue Growth Driven by Asset Management and Trading
Schwab saw solid growth across all revenue streams. Net interest revenue climbed 21.2% to $2.71 billion, while asset management and administration fees rose 13.5% to $1.53 billion. Trading revenue totaled $908 million, slightly below estimates but still marking an 11.1% gain year-over-year.
Other key segments such as Schwab money market funds and non-transaction fee funds saw revenue increases of 24.4% and 6.2%, respectively. This broad-based growth shows resilience across Schwab’s diverse business operations.
Client Assets, New Accounts, and Profit Margins Improve
Client engagement remained strong. Total client assets reached $9.93 trillion, a 9% increase from last year. Schwab added 1.18 million new brokerage accounts, bringing the total to 37 million.
The company’s pre-tax profit margin rose to 43.8%, up from 37.9% in the year-ago quarter. Return on equity also climbed to 18%. These numbers reflect operational efficiency gains and improved earnings quality.
Ameritrade Integration and AI Investments in Focus
Schwab’s ongoing integration of TD Ameritrade continues to offer long-term potential through cross-selling and an expanded client base. The launch of its Alternative Investments Platform for high-net-worth individuals is another step in Schwab’s strategy to broaden its product offerings.
AI-driven solutions and streamlined banking services are expected to improve client experience and reduce costs. Analysts believe these moves could drive revenue growth at an annual pace of over 11%.
Dividend Growth and Share Repurchases
Schwab increased its quarterly dividend by 8% to $0.27 per share and repurchased 19.2 million shares for $1.5 billion during the quarter. These actions reflect strong capital positioning and shareholder commitment.
Stock Performance and Outlook
SCHW stock has gained 6.52% over the past year, slightly outperforming the S&P 500’s 5.19% rise. However, its three-year return of 3.86% lags behind the broader market’s 20.26%.
Analysts have a price target of $87.35 for SCHW, with projections ranging between $65.00 and $103.00. The stock’s performance going forward will depend on how well Schwab executes its strategic growth plans, including the full realization of Ameritrade synergies and AI integration.
In a volatile market, Schwab’s steady earnings growth, rising client assets, and efficient cost management signal potential stability and upside for investors.
