LPL Financial(LPLA) - 2025 Q3 - Quarterly Results

Financial Performance - Net loss for Q3 2025 was $30 million, resulting in a diluted loss per share of $0.37, compared to a net income of $255 million or $3.39 per share in Q3 2024[7] - Adjusted EPS increased by 25% year-over-year to $5.20, with gross profit rising 31% year-over-year to $1,479 million[4] - Total revenue for the three months ended September 30, 2025, was $4,551,977, representing a 19% increase from the previous quarter and a 46% increase year-over-year[20] - Advisory revenue increased to $2,210,499, up 29% from the previous quarter and 60% from the same period last year[20] - Total expenses for the three months ended September 30, 2025, were $4,586,088, a 32% increase from the previous quarter and a 66% increase year-over-year[20] - Net loss for the three months ended September 30, 2025, was $(29,517), compared to a net income of $273,249 in the previous quarter[20] - Earnings per share (diluted) for the three months ended September 30, 2025, was $(0.37), down from $3.40 in the previous quarter[20] - For the nine months ended September 30, 2025, total revenue reached $12,057,009, a 36% increase compared to the same period in 2024[22] - The company reported a decrease in net income for the nine months ended September 30, 2025, to $562,305, down 29% from $787,867 in the same period last year[22] - Adjusted pre-tax income for Q3 2025 was not explicitly stated but is derived from excluding non-cash items and acquisition costs, indicating a focus on core operating performance[51] Assets and Cash Balances - Total advisory and brokerage assets grew by 45% year-over-year to $2.3 trillion, with advisory assets increasing by 51% to $1.3 trillion[4] - Total net new assets reached $308 billion, including $275 billion from the Commonwealth acquisition, while organic net new assets were $33 billion, representing 7% annualized growth[4] - Corporate cash stood at $568 million, and total client cash balances increased by $10 billion year-over-year to $56 billion[4] - Total assets as of September 30, 2025, amounted to $18,032,214, an increase from $17,473,676 as of June 30, 2025[24] - Total client cash balances increased to $55.8 billion, reflecting a 10% rise from Q2 2025 and a 22% rise from Q3 2024[33] - Total client cash balances reached $55.8 million, a 6% increase from August 2025[36] - Total advisory and brokerage assets grew to $2,314.5 billion, up 21% from Q2 2025 and 45% from Q3 2024[29] Acquisitions and Growth - The acquisition of Commonwealth was completed, with an estimated run-rate EBITDA increase from $415 million to $425 million, and a retention target of 90% for advisors[11] - Atria Wealth Solutions conversion was completed with $115 billion of brokerage and advisory assets, leading to an increase in estimated run-rate EBITDA from $150 million to $155 million[11] - Acquired net new advisory assets totaled $199.4 billion, marking a substantial increase from previous quarters[31] - Acquisitions netted $1,526.3 million in Q3 2025, a substantial increase from $102.8 million in Q2 2025[44] - The company reported a significant increase in acquisition-related costs, with $743.0 million recognized in Q3 2025, compared to $269.6 million in Q2 2025[66] Expenses and Costs - Compensation and benefits expenses for the nine months ended September 30, 2025, were $1,210,055, a 49% increase from the previous year[22] - Advisory and commission expense in Q3 2025 was $3,025,274, representing a 21.9% increase from Q2 2025 ($2,483,165) and a 55.4% increase from Q3 2024 ($1,948,065)[54] - Core G&A expenses for Q3 2025 totaled $477,323, an increase from $425,595 in Q2 2025 and $359,134 in Q3 2024[56] - Acquisition costs in Q3 2025 amounted to $538,177, significantly higher than $74,875 in Q2 2025 and $22,243 in Q3 2024[60] Market Performance - The S&P 500 Index at the end of Q3 2025 was 6,688, an 8% increase from Q2 2025[29] - The S&P 500 Index rose by 4% to 6,688 at the end of the period, reflecting positive market conditions[36] Advisor Metrics - The number of advisors increased to 32,128, representing a 9% growth from Q2 2025 and a 36% increase year-over-year[44] - The annualized advisory fees and commissions per advisor increased to $442, an 18% rise from Q2 2025[44] Other Financial Metrics - Adjusted EBITDA for Q3 2025 was $774,789, a 13% increase from Q2 2025[27] - Adjusted EBITDA for Q3 2025 was $774.8 million, an increase from $688.3 million in Q2 2025 and $566.2 million in Q3 2024, reflecting a year-over-year growth of 36.8%[61] - Credit Agreement EBITDA for Q3 2025 was $3.44 billion, compared to $2.92 billion in Q2 2025 and $2.67 billion in Q4 2024, reflecting strong operational performance[66] Recognition and Awards - The company was recognized as the No. 1 Independent Broker-Dealer in the U.S. based on total revenues from 1996 to 2022[55]