Schwab posts record $7.1B revenue as trading surges 57%

Charles Schwab Corp. reported record second-quarter revenue of $7.1 billion, beating analyst estimates as retail trading activity surged to an all-time high.

"Young investors, AI, all of that is leading toward a more sustained period of high levels of trading from our perspective," Chief Executive Officer Rick Wurster said on the earnings call.

Adjusted earnings per share of $1.62 topped the $1.56 consensus, rising 42% from a year earlier. Daily average revenue trades reached 11.9 million, a 57% jump, pushing trading revenue up 28% to $1.2 billion. Net interest revenue climbed 19% to $3.4 billion, with the net interest margin widening 12 basis points from the prior quarter to 3%. Asset management and administration fees rose 16% to $1.8 billion.

Schwab added 1.4 million new brokerage accounts in the quarter, bringing total client accounts to 48 million, while core net new assets jumped 49% to $119.8 billion. Despite the results, shares fell 2.5% on Tuesday.

The Westlake, Texas-based brokerage posted net income of $2.8 billion for the three months ended June 30. Total client assets reached $13.08 trillion, up 22% from a year earlier. Margin loan balances hit $165.1 billion, a 30% increase from the prior quarter, as clients increased borrowing to fund securities purchases.

Schwab raised its full-year 2026 revenue outlook, now calling for growth of 17.5% to 18.5%, compared with the 14% to 15% increase it forecast in May. The company expects full-year net interest margin of 3% to 3.1%, with the fourth quarter finishing in the 3.25% to 3.3% range.

The company has been expanding its product lineup to capture more client activity. It launched direct spot trading for bitcoin and ether through Schwab Crypto, with each transaction carrying a 0.75% fee. Schwab also introduced Portfolio Insights, a generative AI tool for portfolio analysis, and is working with Cboe Global Markets to launch binary options tied to financial and economic events.

The guidance raise signals management expects elevated retail engagement to persist, driven by younger investors and AI-powered trading tools. Investors will watch the third-quarter earnings call for updates on Schwab's crypto transfer pilot and tokenization infrastructure.

This article is for informational purposes only and does not constitute investment advice.