The Charles Schwab Corporation

Third-quarter revenue increased 17% year over year to a record $7.2 billion. Net interest revenue grew 14% year over year to nearly $3.5 billion; asset management and administration fees rose 14% to a record $1.9 billion; trading revenue increased 16% to $1.2 billion; and bank deposit account fees rose 40%. Adjusted expenses were approximately $3.2 billion, up 9% year over year, and adjusted pre-tax profit margin was 54.8%, up about 350 basis points versus 3Q25. Adjusted EPS was a record $1.69, up 29% year over year. On the balance sheet, total margin balances were $187.9 billion, bank loan balances were $72.3 billion, and transactional sweep cash balances were $492.8 billion. For the outlook, management expects continued strong fourth-quarter trends, revenue and full-year NIM growth toward the lower end of the prior ranges, expenses at the low end of the range, and about 800 basis points of positive operating leverage for full-year 2026.

Rick Wurster framed Schwab as being in a position of strength and said the firm is winning across client acquisition, deepening relationships, and efficiency. He emphasized the enduring “Through Clients’ Eyes” strategy, a broad no-trade-off value proposition, and a diversified model that can drive durable earnings growth across cycles. He was notably upbeat on AI, saying it is already helping engagement and productivity, while stressing that client relationships, trust, and human support still matter.

Mike Verdeschi focused on how stronger client engagement translated into record financials and how the balance sheet is being used to support client demand. He cited Q3 revenue of $7.2 billion, NIR of nearly $3.5 billion, expenses of about $3.2 billion, adjusted EPS of $1.69, and a 54.8% adjusted pre-tax profit margin. He also noted $187.9 billion of margin balances, $72.3 billion of bank loans, $492.8 billion of sweep cash, an adjusted Tier 1 leverage ratio at 7%, and nearly $4 billion of common share repurchases through the first nine months of 2026. On outlook, he said Schwab expects Q4 NIM to expand, full-year revenue/NIM toward the lower end of prior ranges, expenses at the low end, and continued flexibility in capital return.

Analysts focused on AI monetization, cash and NIM sensitivity, capital returns, long/short demand, prediction markets, and trading-related initiatives. Management said AI is already helping revenue indirectly through higher engagement and wealth conversations, and directly through efficiency, but it is more a platform accelerant than a standalone revenue stream. On cash and NIM, Mike said Schwab remains asset sensitive, expects roughly 25 to 30 basis points of year-over-year NIM expansion in 4Q26 versus 4Q25, and does not see the recent cash movement as cash ‘sorting’ but rather clients putting money back into markets. On long/short, Rick said demand remains strong, but growth was throttled to ensure operational sustainability; he added there has been no sign of NNA deceleration since that change. He also said Schwab plans to expand financial prediction markets and expects to offer a proprietary long/short solution over time.