Charles Schwab (SCHW) Delivers Record Q3 Revenue and EPS Despite Deposit Miss
Key Takeaways
- Schwab posted record total net revenue of roughly $7.2 billion, up 17% year over year.
- Adjusted diluted earnings per share (EPS) rose 29% to a record $1.69, narrowly beating analyst expectations.
- Core net new assets reached $190 billion, up 38% from a year ago, with 1.2 million new brokerage accounts opened.
- Net interest revenue climbed 14% to nearly $3.5 billion, while trading revenue grew 16% to $1.2 billion.
- Despite the strong headline numbers, bank deposits and net interest margin (NIM) came in below forecasts, and shares fell after the report.
Why These Results Matter for Investors
Charles Schwab's third-quarter report gives a clear window into the state of retail investing and wealth management. As one of the largest brokers and RIA custodians, SCHW results show how everyday investors are trading, saving, and borrowing. Strong client engagement and record asset gathering point to ongoing market confidence, while deposit balances and NIM highlight how interest rates continue to affect the banking side of the business. In my view, this quarter shows whether the diversified model can keep turning client growth into steady earnings even when some rate-sensitive metrics fall short.
Q3 Results in Detail
For the third quarter of 2026, SCHW reported total net revenue of approximately $7.2 billion, a 17% increase from the prior-year period and a company record. Net income available to common stockholders came in near $2.9 billion, with GAAP diluted EPS of $1.62, up from $1.26 a year earlier.
On an adjusted basis, diluted EPS reached a record $1.69, up 29% year over year and slightly ahead of the roughly $1.65 to $1.66 consensus estimate. The adjusted pre-tax profit margin expanded to 54.8%, an improvement of about 350 basis points from the prior-year quarter.
Revenue came from multiple areas. Net interest revenue grew 14% to nearly $3.5 billion, asset management and administration fees rose 14% to a record $1.9 billion, and trading revenue increased 16% to $1.2 billion. Client engagement stayed elevated, with daily average trades of roughly 10.7 million. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Some rate-sensitive figures landed lighter than expected, however. Bank deposits of about $244.1 billion missed the roughly $250.7 billion analysts anticipated, and NIM of 3.04% was below the expected 3.09%. Management also signaled that full-year revenue and NIM growth would likely land toward the lower end of its guidance ranges.
Market Reaction and Sentiment
The market response to the report was muted despite the record headline numbers. Shares slipped in premarket trading and fell roughly 5% intraday, as investors focused on the revenue miss and softer-than-expected deposit and NIM figures rather than the EPS beat. The slight shortfall in net revenue and net interest revenue underscored lingering sensitivity to interest-rate dynamics, even as client activity reached new highs.
Sentiment heading into the print had been constructive, with strong trading volumes and record asset flows supporting optimism. The post-earnings pullback suggests the market had already priced in much of that momentum and was looking for cleaner beats on the interest-sensitive side of the business.
Key Factors to Watch Going Forward
SCHW enters its fourth quarter with strong momentum in client acquisition and asset gathering. Core net new assets have accelerated sharply, and managed investing flows hit a quarterly record, pointing to continued growth in fee-based revenue.
Several factors will shape the quarters ahead. First, watch how transactional sweep cash balances and bank deposits evolve, since these fund the lending book and drive net interest revenue. Management expects continued cash build through year-end from net new assets and seasonal inflows.
Second, monitor NIM and the adjusted Tier 1 leverage ratio. Management indicated revenue and full-year NIM will likely grow toward the lower end of guidance, reflecting a volatile rate environment. Lending demand remains a bright spot, with bank loan balances up 35% year over year.
Finally, keep an eye on expense discipline and capital returns. Schwab repurchased nearly $4 billion of common shares in the first nine months of 2026 and continues to raise its dividend, while reinvesting efficiency savings into technology, including its AI-powered initiatives.
My Take on Using Tickeron Tools
When reviewing earnings like these, I often rely on Tickeron's AI Screener to quickly compare SCHW against sector peers and spot any emerging technical setups. The tool helps filter for patterns and fundamentals without spending hours on manual work, which keeps my analysis focused on what actually moves the numbers.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
SCHW's Indicator enters downward trend
The Aroon Indicator for SCHW entered a downward trend on October 15, 2026. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 114 similar instances where the Aroon Indicator formed such a pattern. In 68 of the 114 cases the stock moved lower. This puts the odds of a downward move at 60%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Moving Average Convergence Divergence Histogram (MACD) for SCHW turned negative on October 15, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 48 similar instances when the indicator turned negative. In 26 of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at 54%.
SCHW moved below its 50-day moving average on September 22, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for SCHW crossed bearishly below the 50-day moving average on September 21, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 8 of 14 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 57%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SCHW declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 59%.
Bullish Trend Analysis
The RSI Indicator entered the oversold zone -- be on the watch for SCHW's price rising or consolidating in the future. That's also the time to consider buying the stock or exploring call options.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 38 of 56 cases where SCHW's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 68%.
Following a +2.15% 3-day Advance, the price is estimated to grow further. Considering data from situations where SCHW advanced for three days, in 190 of 325 cases, the price rose further within the following month. The odds of a continued upward trend are 58%.
SCHW may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 5 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Price Growth Rating for this company is 57 (best 1 - 100 worst), indicating steady price growth. SCHW’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 61 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock slightly better than average.
The Tickeron PE Growth Rating for this company is 78 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Valuation Rating of 86 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.870) is normal, around the industry mean (4.320). P/E Ratio (17.905) is within average values for comparable stocks, (30.932). Projected Growth (PEG Ratio) (0.832) is also within normal values, averaging (0.809). Dividend Yield (0.013) settles around the average of (0.016) among similar stocks. P/S Ratio (7.148) is also within normal values, averaging (16.763).
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a provider of securities brokerage and other financial services
Industry InvestmentBanksBrokers
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