Results reported October 15, 2026 (before market open) | NYSE: SCHW | Brokerage and Wealth Management
The Quick Take
Schwab posted record results but the stock slipped about 4% in premarket trading. Adjusted EPS of $1.69 (up 29% year over year) matched consensus, while revenue of $7.17B (up 17%) landed a touch below the roughly $7.2B estimate. Core net new assets of $190.4B were a record. The sell-off looks like a reaction to a very high bar rather than any real deterioration.
Results
| Metric | Q3 2026 | Comparison |
|---|---|---|
| Adjusted EPS | $1.69 | +29% YoY; in line with consensus |
| GAAP EPS | $1.62 | Net income $2.91B |
| Net revenue | $7.17B | +17% YoY; slight miss vs about $7.2B |
| Core net new assets | $190.4B | Record; +38% YoY |
| Client assets | $13.33T | +15% YoY |
| Net interest revenue | $3.48B | +14% YoY; margin 3.04% |
| Adjusted pre-tax margin | 54.8% | Up about 350 bps YoY |
What Drove the Quarter
- Asset gathering: 1.2M new brokerage accounts (+9%) and $24B of managed investing inflows (+22%) show the franchise is still taking share.
- Fees: Asset management and administration fees rose 14% to $1.91B, and trading revenue rose 16% to $1.16B.
- Lending: Bank lending balances reached $72B, up 35%.
- Expenses: Adjusted expenses of $3.2B grew about 9%, well below revenue growth, which produced the margin expansion.
- Capital return: $0.5B of buybacks in the quarter and $3.9B year to date.
What Management Said
Management expects Q4 net interest margin to expand roughly 25 to 30 bps year over year, full-year revenue and margin growth toward the lower end of prior ranges, and expenses at the low end of the range. The long-term target remains mid-teens EPS growth.
Why the Reaction Makes Sense
The company is guiding to the lower end of earlier revenue ranges, and management said it is deliberately throttling growth in its long/short program to protect service quality. With the stock priced for perfection, a tiny revenue miss plus softer guidance was enough to trigger profit-taking.
Risks
- Revenue and margin growth drifting to the low end of ranges.
- Dependence on sweep cash and interest rates for net interest revenue.
- Market-sensitive trading and asset-based fees if equities reverse.
- Tier 1 leverage of 8.9% (7.0% adjusted for unrealized losses) limits flexibility.
Recommendation: BUY (on weakness)
Record asset gathering, 800 bps of operating leverage and mid-teens EPS growth make this a high-quality compounder. The dip on a rounding-error revenue miss offers a reasonable entry for long-term investors; those worried about market-sensitive revenue can build the position gradually.
This is educational analysis, not personalized investment advice. Do your own research before investing.
Sources: Schwab Q3 2026 earnings release (Business Wire); Investing.com Q3 2026 slides summary; Digrin earnings calendar for consensus. Consensus figures vary by provider.
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