Charles Schwab Q1 2025: Record Revenue, Balance Sheet De-Risking, and Proactive Shareholder Returns
Source 8-K and SEC Exhibit 99.1
Charles Schwab (NYSE: SCHW) set new benchmarks in the first quarter of 2025, achieving a record \(5.6 billion in net revenues—an 18% year-over-year increase—driven by powerful organic asset gathering, diversified revenue growth, and robust client activity. In the increasingly unpredictable 2025 market environment, clients entrusted Schwab with \)137.7 billion in core net new assets, a 44% surge versus Q1 2024, underpinned by growth across Retail, Advisor Services, and Workplace Financial Services. Total client assets increased 9% year-over-year, reaching $9.93 trillion, marking Charles Schwab as a dominant wealth management platform in the U.S. [SEC 8-K]
Q1 2025 core net new assets: $137.7 billion (44% YoY growth) [CEO Rick Wurster: “Investors turned to Schwab to navigate an increasingly uncertain environment in 1Q25, entrusting us with $138 billion in core net new assets.”]
Net new brokerage accounts: 1.2 million (+8% YoY)
Total active brokerage accounts: 37.0 million
Managed Investing Solutions net inflows hit a quarterly record, +15% YoY
Net revenues: $5.6 billion (18% YoY growth; record)
GAAP net income: $1.9 billion (+40% YoY)
Adjusted net income: $2.0 billion (+37% YoY)
GAAP diluted EPS: $0.99 (+46% YoY)
Adjusted EPS: $1.04 (+41% YoY)
Pre-tax profit margin: 43.8% (GAAP), 46.2% (adjusted)
Return on average common equity: 18% (GAAP)
Return on tangible common equity: 35% (non-GAAP)
Bank Supplemental Funding reduced by $11.8 billion in Q1, ending at $38.1 billion (a 46% YoY reduction)
Client transactional sweep cash: $407.8 billion at quarter end
Capital ratios: Tier 1 Leverage 9.9% (GAAP), 7.1% (Adjusted)
Quoting CFO Mike Verdeschi: “We further reduced Bank Supplemental Funding to $38.1 billion at quarter-end – a 46% decrease versus 1Q24.” This strategic deleveraging reflects Schwab’s proactive risk management, as previously discussed in Q4 2024 calls when management flagged the priority to reduce supplemental funding and enhance capital ratios in the face of volatile depositor behavior and market swings.
Dividend per share boosted 8% to $0.27
Common share repurchases totaled $1.5 billion (19.2 million shares)
These returns align with prior earnings call commentary, emphasizing capital return flexibility and disciplined payout execution following improvements in capital resilience.
Trading revenue rose 11% YoY on a 17% QoQ increase in daily average trades—fuelled by volatility spikes
Asset management and administration fees climbed 14% YoY to $1.5 billion
Margin balances flat sequentially at $83.6 billion, reflecting mild investor caution
Schwab named “#1 Overall Broker” by StockBrokers.com, reinforcing client trust and platform competitiveness
Net interest margin expanded to 2.53%, supporting revenue growth
Expenses excluding interest increased 7% YoY, reflecting business scale
Adjusted Tier 1 Leverage Ratio improvement reflects rigorous balance sheet and risk controls, a theme consistently stressed by executives in recent calls
Schwab’s Q1 2025 performance underscored its unique position at the intersection of scale, innovation, and prudent risk management. The company’s record revenue, soaring new assets, expanding profitability, and decisive capital actions illustrate operational excellence as well as unyielding focus on shareholder value and risk-adjusted growth. As underscored in multiple recent earnings call transcripts, Schwab continues to balance growth ambitions with active funding, liquidity, and risk management amid ongoing market volatility.
Read the official 8-K filing here: SEC Q1 2025 Charles Schwab 8-K Source