Business Update Overview - The Charles Schwab Corporation held its 2025 Winter Business Update Conference Call on January 21, 2025, at 8:30 AM ET [1] - Key participants included Jeff Edwards (Head of Investor Relations), Rick Wurster (President & CEO), and Mike Verdeschi (CFO) [2] - The call focused on reviewing the company's strong performance in Q4 and full-year 2024, as well as discussing growth opportunities for 2025 and beyond [3] Conference Call Logistics - Presentation slides were made available on the Investor Relations website after the prepared remarks [4] - The Q&A session followed a "one question, no follow-up" rule, with participants encouraged to re-enter the queue for additional questions if time allowed [4] - The Investor Relations team remained available for further inquiries following the update [4] Financial Performance - The company reported strong results for Q4 and full-year 2024, which were posted earlier on the day of the conference call [3] - Key drivers of the company's momentum throughout 2024 were discussed during the call [3] Leadership Update - Rick Wurster, previously President, was introduced as the new CEO during the conference call [2]

Industry/Company * **Company**: The Charles Schwab Corporation (NYSE: SCHW) * **Industry**: Investment Banking, Financial Services Core Points and Arguments * **2024 Q3 Results**: Schwab reported strong financial results for the third quarter of 2024, with revenue up 5% year-over-year to $4.8 billion, adjusted pre-tax income up 5%, and adjusted EPS of $0.77. * **Client Growth**: Schwab experienced strong client growth, with net new assets more than doubling from the third quarter of 2023. Former Ameritrade clients continued to contribute positively to net new assets. * **Strategic Focus Areas**: Schwab outlined four strategic focus areas: Scale & Efficiency, Win-Win Monetization, Client Segmentation, and the Brilliant Basics. Progress was made in each area during the third quarter. * **Cost Efficiency**: Schwab captured 95% of its Ameritrade run rate expense synergies and expects to capture the rest by the end of the year. Adjusted expense on client assets (EOCA) fell to 12 basis points in 2024, down from 16 in 2019. * **Wealth Management**: Schwab saw strong growth in managed investing net flows, with year-to-date managed investing net flows up 65% compared to last year. Clients added $11.5 billion to Schwab's full-service wealth offers in the third quarter, a 75% increase from the prior year quarter. * **Pledged Asset Line (PAL)**: PAL balances reached a record $15.7 billion, an increase of 16% over last year. Former Ameritrade clients represented 44% of PAL balance growth. * **RIA Services**: Schwab continues to invest in its custody business for RIAs, providing them with an open architecture platform and unmatched resources, services, and education. * **Client Experience**: Schwab focused on improving the client experience, with average speed to answer the phone less than 40 seconds in the third quarter and client easy scores for service teams at 92%. * **Capital Levels**: Schwab's adjusted Tier 1 Leverage ratio expanded by over 70 basis points to 6.7% in the third quarter, approaching its 6.75% to 7% operating objective. Other Important Points * **Transition**: Walt Bettinger, Co-Chairman and CEO, will transition into his new role as Executive Co-Chairman, and Rick Wurster will assume the role of CEO in January 2025. * **CFO Transition**: Mike Verdeschi joined Schwab as CFO in May 2024 and provided an update on the company's financial performance and outlook. * **Securities Portfolio**: Schwab does not plan to pursue a holistic restructuring of its securities portfolio at this time, as it focuses on paying down supplemental funding at the banks. * **Capital Allocation**: Schwab's capital allocation strategy will focus on supporting business growth, paying down supplemental borrowings, and returning capital to shareholders through various means, including dividends, preferred security redemptions, and stock buybacks. * **2025 Outlook**: Schwab expects to continue building momentum in 2025, with revenue growth in the mid-single digits and adjusted EPS in the upper 80s range. The company remains confident in its ability to deliver profitable growth and return capital to shareholders.

Earnings Performance - Charles Schwab's Q4 2024 adjusted earnings of $1.01 per share beat the Zacks Consensus Estimate of 90 cents, marking a 49% year-over-year increase [1] - Net income (GAAP basis) for Q4 2024 was $1.84 billion or 94 cents per share, up from $1.05 billion or 51 cents per share in the year-ago quarter [3] - For full-year 2024, adjusted earnings were $3.25 per share, surpassing the consensus estimate of $3.16 and rising 4% year-over-year [4] - Full-year net income (GAAP basis) was $5.94 billion or $2.99 per share, up from $5.07 billion or $2.54 per share in 2023 [4] Revenue and Expenses - Q4 2024 net revenues were $5.33 billion, a 20% year-over-year increase, beating the Zacks Consensus Estimate of $5.18 billion [5] - Full-year 2024 net revenues grew 4% to $19.61 billion, surpassing the consensus estimate of $19.46 billion [5] - Total non-interest expenses (GAAP basis) decreased 7% to $3.02 billion in Q4 2024 [6] - Adjusted total expenses were $2.85 billion in Q4 2024, relatively stable year-over-year [6] Business Metrics - Total client assets as of Dec 31, 2024, were $10.1 trillion, up 19% year-over-year [8] - Net new assets in Q4 2024 were $108.4 billion [8] - Schwab added 1.11 million new brokerage accounts in Q4 2024, bringing total active brokerage accounts to 36.5 million [8] - The company had 2 million banking accounts and 5.4 million corporate retirement plan participants as of Dec 31, 2024 [8] Profitability and Assets - Pre-tax profit margin increased to 43.3% in Q4 2024 from 26.8% in the prior-year quarter [6] - Annualized return on equity was 18% as of Dec 31, 2024, up from 12% in the prior-year quarter [7] - Average interest-earning assets decreased 3% to $426.4 billion in Q4 2024 [6] Industry Context - Raymond James is scheduled to announce quarterly earnings on Jan 29, with the Zacks Consensus Estimate revised 1.5% upward to $2.75, suggesting a 14.9% rise from the prior-year quarter [11] - LPL Financial is set to announce Q4 and full-year 2024 results on Jan 30, with the Zacks Consensus Estimate for quarterly earnings at $3.88, implying 10.5% growth from the prior-year quarter [12]

Financial Performance - Revenue for Q4 2024 was $5.33 billion, a 19.5% increase YoY [1] - EPS for Q4 2024 was $1.01, compared to $0.68 in the year-ago quarter [1] - Revenue surprise of +2.82% over the Zacks Consensus Estimate of $5.18 billion [1] - EPS surprise of +12.22% over the consensus estimate of $0.90 [1] Key Metrics - Total client assets: $10,101.3 billion vs. $10,030.82 billion estimated [4] - Clients daily average trades - Total: 6.31 million vs. 6 million estimated [4] - Average Interest Earning Assets: $426.44 billion vs. $426.15 billion estimated [4] - Average Client Assets - Total advice Solutions: $698.18 million vs. $673.06 million estimated [4] Revenue Breakdown - Net revenues- Other: $175 million vs. $180.22 million estimated, +19.1% YoY [4] - Net revenues- Bank deposit account fees: $241 million vs. $202.55 million estimated, +38.5% YoY [4] - Net revenues- Net interest revenue: $2.53 billion vs. $2.42 billion estimated, +18.8% YoY [4] - Net revenues- Asset management and administration fees: $1.51 billion vs. $1.52 billion estimated, +21.6% YoY [4] - Net revenues- Trading revenue: $873 million vs. $855.44 million estimated, +13.8% YoY [4] Asset Management and Administration Fees - Schwab money market funds: $389 million vs. $391.06 million estimated, +30.1% YoY [4] - Schwab equity and bond funds, ETFs and collective trust funds (CTFs): $125 million vs. $129.72 million estimated, +27.6% YoY [4] - Mutual Fund OneSource and other non-transaction fee funds: $231 million vs. $231.49 million estimated, +22.9% YoY [4] Stock Performance - Shares of Charles Schwab returned +2.3% over the past month vs. Zacks S&P 500 composite's +1.2% change [3] - The stock currently has a Zacks Rank 2 (Buy), indicating potential outperformance in the near term [3]

Key TakeawaysCharles Schwab shares rose Tuesday after the financial services firm's earnings for the fourth quarter topped estimates.Revenue and profits surged from the same time a year ago as asset management fees set a quarterly record.Trading activity also rose, as the company said "client engagement surged" after the election. Shares of Charles Schwab (SCHW) rose Tuesday morning after the financial services company's fourth-quarter results beat analysts' expectations as trading activity rose and asset m ...

The Charles Schwab Corporation (SCHW) came out with quarterly earnings of $1.01 per share, beating the Zacks Consensus Estimate of $0.90 per share. This compares to earnings of $0.68 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 12.22%. A quarter ago, it was expected that this company would post earnings of $0.75 per share when it actually produced earnings of $0.77, delivering a surprise of 2.67%.Over the last four quarters ...

Winter Business Update January 21, 2025 Forward Looking Statements This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward- looking statements include statements that refer to expectations, projections or other characterizations of future events or circumstances and are identified by words such as "believe," "expect," "will," "may," "should," "could," "estimate," "anticipate," "con ...

The Charles Schwab Corporation SCHW will release its fourth-quarter financial results, before the opening bell, on Tuesday, Jan. 21, 2025.Analysts expect the Westlake, Texas-based company to report quarterly earnings at 91 cents per share, up from 68 cents per share in the year-ago period. Charles Schwab projects quarterly revenue of $5.2 billion, compared to $4.46 billion a year earlier, according to data from Benzinga Pro.On Dec. 13, Charles Schwab said it expects FY24 net revenue to grow by 3.0%-3.5% ver ...

Wall Street analysts forecast that The Charles Schwab Corporation (SCHW) will report quarterly earnings of $0.90 per share in its upcoming release, pointing to a year-over-year increase of 32.4%. It is anticipated that revenues will amount to $5.18 billion, exhibiting an increase of 16.2% compared to the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted upward by 2.7% to its current level. This demonstrates the covering analysts' collective reassessment of ...

Stock Performance and Technical Analysis - Shares of The Charles Schwab Corporation (SCHW) have lost 5.8% over the past four weeks [1] - A hammer chart pattern formed in the last trading session, indicating potential support and a trend reversal [1] - The hammer pattern suggests that selling pressure may be exhausted and bulls are gaining control [2][4] - The hammer pattern is characterized by a small candle body and a long lower wick, signaling potential trend reversal during a downtrend [3][4] - The hammer pattern should be used in conjunction with other bullish indicators for confirmation [5] Fundamental Analysis and Earnings Revisions - There has been an upward trend in earnings estimate revisions for SCHW, a bullish fundamental indicator [6] - The consensus EPS estimate for the current year has increased by 2.8% over the last 30 days [7] - SCHW currently holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks [8] - Stocks with a Zacks Rank 1 or 2 typically outperform the market, indicating strong potential for SCHW [8] - The Zacks Rank serves as a timing indicator, suggesting improving prospects for SCHW [8]