Charles Schwab (SCHW) Delivers Record Q3 Revenue and Net New Assets
Key Takeaways
- Record revenue of $7.17 billion, up 17% year over year, driven by growth across lending, trading, and asset management.
- Adjusted earnings per share (EPS) of $1.69 rose 29% and beat the consensus estimate of $1.66.
- Core net new assets hit a record $190.4 billion, up 38% from the prior-year quarter.
- Shares fell after the report as revenue came in slightly below expectations and bank deposits missed forecasts.
- Net interest margin (NIM) reached 3.04%, up from 2.88% a year earlier but shy of analyst projections.
Earnings Context and Industry Significance
Charles Schwab’s third-quarter results provide a useful window into the broader wealth management and retail brokerage sector. As one of the largest U.S. custodians and brokerages, the firm’s performance reflects retail investor activity, deposit trends, and the impact of interest-rate changes on revenue. The quarter unfolded against a shifting rate backdrop, so the balance between lending growth and deposit levels drew particular attention. I was interested to see whether the company could maintain its momentum in net new assets and margin expansion while navigating higher funding costs and evolving client cash patterns.
Quarterly Results in Detail
For the period ended September 30, 2026, Charles Schwab posted record net revenue of $7.17 billion, a 17% increase from $6.14 billion a year earlier. Net interest revenue advanced 14% to nearly $3.48 billion, helped by higher lending balances and a net interest margin that widened to 3.04% from 2.88% in the prior-year quarter. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
GAAP net income reached $2.9 billion, or $1.62 per diluted share, versus $2.36 billion, or $1.26 per share, last year. Adjusted net income, excluding transaction-related costs, was $3.0 billion, with adjusted EPS at $1.69—a 29% gain that topped the $1.66 consensus. The adjusted pre-tax profit margin expanded to 54.8%, roughly 350 basis points higher than the year-ago period.
Other revenue streams showed solid gains. Asset management and administration fees rose 14% to a record $1.9 billion, while trading revenue increased 16% to $1.2 billion on daily average trades of 10.7 million, up 44% year over year. Total client assets grew 15% to $13.33 trillion. Revenue nonetheless landed modestly below expectations, and bank deposits of $244.1 billion came in short of the roughly $250.7 billion analysts had projected.
Market Reaction and Investor Focus
Despite generally positive headline numbers, Charles Schwab shares declined after the release. The stock dropped between roughly 2.6% and 5.4% in premarket and early trading, as attention turned to the softer elements of the report. Adjusted EPS beat estimates, yet revenue and both bank deposits and net interest margin fell short of forecasts.
The reaction highlights how closely the valuation hinges on interest-rate dynamics and deposit stability. Record net new assets and strong trading volumes pointed to healthy client engagement, but the deposit shortfall and guidance that full-year revenue and NIM would grow toward the lower end of prior ranges weighed on sentiment. From what I see, investors are balancing the firm’s resilient model against near-term questions around funding costs and client cash behavior.
Forward Outlook and Items to Watch
Management expressed confidence that positive trends in client engagement across trading and lending would continue into the fourth quarter. Bank loan balances rose 35% year over year to $72.3 billion, and margin balances reached $187.9 billion, underscoring demand for secured lending. Transactional sweep cash ended the quarter at $492.8 billion, up $7.1 billion sequentially.
At the same time, the firm indicated that full-year revenue and NIM are likely to grow toward the lower end of previously communicated ranges, with expenses also expected at the low end. This outlook reflects the volatile rate environment seen during the quarter.
Key areas to monitor include the path of bank deposits, net interest margin expansion, and shifts in client cash allocations that affect funding costs. Lending growth in pledged asset lines and margin loans should remain important drivers of net interest revenue. In addition, continued development of AI-powered tools and new offerings in wealth, trading, and digital assets may support longer-term diversification.
AI Tools in My Research Process
When reviewing earnings like these, I often turn to Tickeron’s AI Screener to quickly compare Charles Schwab with peers on fundamentals and technical signals. The tool helps surface relevant industry context without manual effort. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Disclaimer
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Contributor
Financial writer and active order flow futures trader with a focus on fundamental analysis, macroeconomic factors, and equity research. I make in-depth blogs on stocks and ETFs, bridging the gap between raw market data and real-world trading decisions.
SCHW in downward trend: 10-day moving average moved below 50-day moving average on September 21, 2026
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 9 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 64%.
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 27 of the 48 cases the stock turned lower in the days that followed. This puts the odds of success at 56%.
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.
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%.
The Aroon Indicator for SCHW entered a downward trend on October 16, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the oversold zone for 1 day, which means it's wise to expect a price bounce in the near future.
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. 37 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 66%.
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 60 (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 62 (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 Seasonality Score of 75 (best 1 - 100 worst) indicates that the company is slightly 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 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 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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