ZACKSยท2025-07-18 14:30Core Insights - Charles Schwab's second-quarter 2025 adjusted earnings per share (EPS) reached $1.14, exceeding the Zacks Consensus Estimate of $1.09, and reflecting a 56% year-over-year increase [1][8] - The company's shares rose nearly 2.4% in pre-market trading due to better-than-expected results driven by market volatility and higher interest rates [1] Financial Performance - The asset management business and trading revenues significantly contributed to the results, alongside higher net interest revenues (NIR) and an increase in brokerage accounts [2] - Quarterly net revenues were reported at $5.85 billion, a 25% increase year over year, surpassing the Zacks Consensus Estimate of $5.70 billion [3][8] - Total non-interest expenses increased by 4% to $3.05 billion, while adjusted total expenses rose 5% year over year to $2.92 billion [3] Profitability Metrics - The pre-tax profit margin improved to 47.9% from 37.2% in the prior-year quarter [4] - Average interest-earning assets grew almost 1% to $422.7 billion, slightly above the estimate of $421.7 billion [4] - The annualized return on equity reached 19%, up from 14% in the prior-year quarter [4] Client Metrics - As of June 30, 2025, total client assets hit a record $10.76 trillion, marking a 14% year-over-year increase [5] - The company attracted $73.6 billion in net new assets during the quarter and added 1.1 million new brokerage accounts, bringing the total to 37.5 million active brokerage accounts [5][8] Shareholder Actions - During the reported quarter, Schwab repurchased 3.9 million shares for $351 million [6] Strategic Outlook - A decline in funding costs and lower rates are expected to support Schwab's margins, along with strategic acquisitions and increased advice solution fees [7] - However, rising expenses and macroeconomic challenges may pose risks to future performance [7]