Charles Schwab (SCHW) Stock: Slides as Q3 Revenue Surges 17% to $7.2B

TLDR

• SCHW stock slides 5.05% to $91.91 despite its strong third-quarter earnings.
• Schwab’s Q3 revenue jumps 17% to $7.2 billion as net income hits $2.9 billion.
• Client assets climb 15% to $13.33 trillion as new inflows reach $190.4 billion.
• Schwab adds 1.2 million brokerage accounts, lifting the total to 48.6 million.
• Schwab expands AI offerings through Charley and its new Anthropic partnership.

Charles Schwab Corporation (SCHW) stock fell 5.05% to $91.91 on Thursday, losing $4.88 despite reporting strong third-quarter financial results. The financial services company recorded $7.2 billion in revenue, representing 17% annual growth. Meanwhile, quarterly net income reached $2.9 billion as the company expanded client assets and brokerage accounts.

The Charles Schwab Corporation, SCHW

Charles Schwab Reports Strong Q3 Earnings and Revenue Growth

Charles Schwab reported third-quarter net income of $2.91 billion, up 23% from $2.36 billion last year. Additionally, diluted earnings per share increased 29% to $1.62 from $1.26 in the comparable period. The company recorded adjusted earnings of $1.69 per share after excluding transaction-related expenses.

Quarterly revenue reached $7.17 billion, compared with $6.14 billion during the third quarter of 2025. Furthermore, the company’s GAAP pre-tax profit margin improved to 52.7% from 49.2% a year earlier. Its adjusted pre-tax profit margin also increased to 54.8%, reflecting stronger operating performance.

Schwab reported $20.73 billion in revenue during the first nine months of 2026, representing 18% annual growth. Meanwhile, nine-month net income increased 28% to $8.19 billion, supported by broader revenue growth. The company also repurchased 4.7 million common shares for approximately $500 million during the quarter.

Charles Schwab Client Assets Reach $13.33 Trillion

Charles Schwab reported $13.33 trillion in total client assets, representing 15% growth from the previous year. Additionally, clients contributed $190.4 billion in core net new assets during the quarter. These contributions represented 38% annual growth and an annualized organic growth rate of 5.8%.

The company opened 1.2 million new brokerage accounts, bringing its total client accounts to 48.6 million. Schwab Wealth Advisory net flows increased 55% compared with the third quarter of 2025. Managed Investing Solutions also recorded 22% annual growth in net flows.

Bank loan balances reached $72.3 billion at September’s end, representing 35% annual growth. Furthermore, margin loan balances increased 14% quarterly to $187.9 billion, including financing for long/short strategies. Pledged Asset Line balances also climbed 59% annually to $37.3 billion.

Schwab Expands Financial Services and Digital Capabilities

Schwab generated $1.9 billion in asset management and administration fees, representing 14% annual growth. Meanwhile, trading revenue increased 16% to $1.2 billion as daily average trading volume reached 10.7 million. The company also expanded its net interest margin to 3.04% during the quarter.

Schwab introduced Charley, an artificial intelligence assistant that provides retail clients with access to financial tools and information. Additionally, the company partnered with Anthropic to offer Claude for Financial Advisors to independent registered investment advisers. It also announced single-stock futures for thinkorswim and plans to expand digital assets through Schwab Crypto.

Operating expenses increased 9% annually, while average interest-earning assets reached $451.5 billion. Meanwhile, client transactional sweep cash balances rose to $492.8 billion, supported partly by organic growth. Schwab maintained a preliminary consolidated Tier 1 leverage ratio of 8.9%, supporting its capital position.

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