Charles Schwab Corporation (the) · NYSE:SCHW
Charles Schwab Corporation (the) — Q1 2025 Earnings Presentation
43 slides from Charles Schwab Corporation (the)'s earnings presentation, Apr 17, 2025
Slide 1: Spring Business Update
Spring Business Update April 17, 2025
Slide 2: Forward Looking Statements
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 c
Slide 3: Strategic Update
Strategic Update Rick Wurster President and Chief Executive Officer Charles Schwab Corporation 3
Slide 4: Key Takeaways
Key Takeaways 1Q25 Attracted $138B of Core NNA during the quarter while opening 1.2M new accounts Further deepened relationships as clients continued to do more with us as a part of an integrated experience across wealth, lending, and trading Supported strong client activity, including 7.4M DA
Slide 5: Macroeconomic uncertainty and volatility dampened equity markets during the quarter
While macroeconomic uncertainty and increased volatility dampened equity markets and sentiment during the quarter,... Macroeconomic Environment1 AAII® Bull-Bear Spread Sentiment Survey2 1Q25 S&P 500® Index Returns Year-to-date -5% Bull 4.23% Bear 10-year U.S. Treasury -35 bps vs. Dec-24 22.3 VIX Dec
Slide 6: Client Solutions Financial
…our “Through Clients’ Eyes” strategy drove growth across all fronts. Client Solutions Financial Charles Schwab Corporation 6
Slide 7: Investors continued to turn to Schwab for their investing needs
Investors continued to turn to Schwab for their investing needs,... Core Net New Assets New Brokerage Accounts Client +44% $138B 1Q25 vs. 1Q24 +8% 1.2M 1Q25 vs. 1Q24 Solutions $137.7B 1,183K 1,094K $95.6B Financial 1Q24 1Q25 1Q24 1Q25 Note: K = Thousand. M = Million. B = Billion. Q = Quarter. Core N
Slide 8: Client demand across wealth, lending, and trading solutions persisted
…and client demand across our wide array of wealth, lending, and trading solutions persisted,… Client Managed Investing Bank Lending Daily Average Net Flows (EOP) Trades Solutions +15% +15% +24% 1Q25 vs. 1Q24 1Q25 vs. 1Q24 1Q25 vs. 1Q24 Financial Note: B = Billion. Q = Quarter. EOP = End of period.
Slide 9: Meaningful year-over-year financial growth
…resulting in meaningful year-over-year financial growth. 1Q25 Total Revenue 1Q25 Earnings per Share, Adjusted1 Client +18% $5.6B 1Q25 vs. 1Q24 +41% $1.04 1Q25 vs. 1Q24 GAAP Solutions Adjusted $5.6B $1.04 $4.7B $0.74 $0.99 $0.68 Financial 1Q24 1Q25 1Q24 1Q25 Note: B = Billion. Q = Quarter. FY = Full
Slide 10: 2025 is off to a strong start
2025 is off to a strong start and we remain confident in our ability to accelerate further growth across a range of environments. Strong Healthy Growing Investments 1 Competitive Positioning 2 Business Fundamentals 3 & Diverse Client Base 4 in Strategic Initiatives Charles Schwab Corporation 10
Slide 11: A leader in the fastest-growing segments of the industry
We are a leader in the fastest-growing segments of the industry. Strong Competitive Healthy Business Growing and Diverse Investments in 1 Positioning 2 Fundamentals 3 Client Base 4 Strategic Initiatives U.S. Retail Investable Wealth 2018-2023 CAGR1 in Total Client Direct / 14% #1 Assets for Publicly
Slide 12: Engagement across our platform is strong
Engagement across our platform is strong as clients utilize our wide range of investment products and solutions. Strong Competitive Healthy Business Growing and Diverse Investments in 1 Positioning 2 Fundamentals 3 Client Base 4 Strategic Initiatives 1Q25 vs. 1Q24 ~1.5X $83.6B 23% $18.6B 34% TOA Rat
Slide 13: Investors and RIAs of all demographics continue to turn to Schwab
Individual investors and RIAs of all demographics are continuing to turn to Schwab. Strong Competitive Healthy Business Growing and Diverse Investments in 1 Positioning 2 Fundamentals 3 Client Base 4 Strategic Initiatives 1Q25 NNA by Advisor Size1 New-to-Firm Age of New-to-Firm Retail Households Ret
Slide 14: Committed to innovating our solutions, capabilities, and experiences
We remain committed to innovating our solutions, capabilities, and experiences as clients’ needs evolve. Strong Competitive Healthy Business Growing and Diverse Investments in 1 Positioning 2 Fundamentals 3 Client Base 4 Strategic Initiatives Drive growth, Deliver the Create value deepening with bri
Slide 15: Committed to innovating our solutions, capabilities, and experiences
We remain committed to innovating our solutions, capabilities, and experiences as clients’ needs evolve. Strong Competitive Healthy Business Growing and Diverse Investments in 1 Positioning 2 Fundamentals 3 Client Base 4 Strategic Initiatives Drive growth, Deliver the Create value deepening with bri
Slide 16: Committed to innovating our solutions, capabilities, and experiences
We remain committed to innovating our solutions, capabilities, and experiences as clients’ needs evolve. Strong Competitive Healthy Business Growing and Diverse Investments in 1 Positioning 2 Fundamentals 3 Client Base 4 Strategic Initiatives Drive growth, Deliver the Create value deepening with bri
Slide 17: Committed to innovating our solutions, capabilities, and experiences
We remain committed to innovating our solutions, capabilities, and experiences as clients’ needs evolve. Strong Competitive Healthy Business Growing and Diverse Investments in 1 Positioning 2 Fundamentals 3 Client Base 4 Strategic Initiatives Drive growth, Deliver the Create value deepening with bri
Slide 18: Committed to innovating our solutions, capabilities, and experiences
We remain committed to innovating our solutions, capabilities, and experiences as clients’ needs evolve. Strong Competitive Healthy Business Growing and Diverse Investments in 1 Positioning 2 Fundamentals 3 Client Base 4 Strategic Initiatives Drive growth, Deliver the Create value deepening with bri
Slide 19: Through Clients' Eyes strategy sustained momentum to begin 2025
Our “Through Clients’ Eyes” strategy helped sustain strong momentum to begin 2025, positioning us to further accelerate long-term growth. 1Q25 2025 Long-term Sustained Continuing to Profitable growth momentum to play offense through-the-cycle begin the year Note: Q = Quarter. Charles Schwab Corporat
Slide 20: Financial Perspectives
Financial Perspectives Michael Verdeschi Managing Director, Chief Financial Officer Charles Schwab Corporation 20
Slide 21: Consistent client focus enables profitable growth through-the-cycle
Our consistent focus on clients and disciplined approach enables Schwab to drive profitable growth through-the-cycle. 1Q25 Delivered strong growth across client, solutions, and financial measures Grew 1Q25 revenue by 18% year-over-year Sustained Expanded 1Q25 GAAP earnings per share by 46%, 41
Slide 22: Net interest margin expansion enabled record top-line results
Meaningful net interest margin expansion and robust investor engagement enabled record top-line results. $5.6B $5.3B 1Q25 vs. 1Q24 $0.5B $4.8B $0.4B $4.7B $4.7B NIR grew 21%, due to improved liability Other $0.3B $0.4B $0.9B $0.4B $0.9B funding costs, higher margin utilization, Trading $0.8B $0.8B
Slide 23: Quarterly expense trends
Quarterly expense trends reflect our balanced approach to investing for growth while driving efficiency. 1Q25 vs. 1Q24 $3.0B $3.1B GAAP $2.9B $2.9B $3.0B GAAP expenses up 7%, reflecting typical first quarter seasonality plus higher trading-related expenses given a pick-up in client volumes $2.8B $
Slide 24: 46% adjusted PTPM and EPS grew over 40% versus 1Q24
We delivered a 46% adjusted1 PTPM and EPS grew by over 40% versus 1Q24. Pre-tax Profit Margin Earnings per Share GAAP GAAP Adjusted1 Adjusted1 +41% 46.6% 46.2% $1.01 $1.04 40.9% 41.0% 41.2% $0.74 $0.77 $0.73 43.3% 43.8% $0.94 $0.99 37.9% 37.2% 38.0% $0.68 $0.66 $0.71 1Q24 2Q24 3Q24 4Q24 1Q25 1Q24 2Q
Slide 25: Tracking towards the upper-end of full-year 2025 scenario
Our diversified financial model delivered strong results in 1Q25 and we are currently tracking towards the upper-end of our full-year 2025 scenario. Winter Business Update Spring Business Update Forward curve as of Forward curve as of Trajectory of January 17, 2025 April 16, 2025 Interest Rates Fed
Slide 26: 1Q25 Balance Sheet Highlights
1Q25 Balance Sheet Highlights Supported Client-Driven Growth Balance Sheet – Client margin balances declined during the month of March to finish the quarter Principles at $83.6 billion, or essentially flat from year-end 2024 – Bank loans to clients increased 4% versus year-end 2024 Support our cli
Slide 27: Bank Supplemental Funding is down 24% sequentially
Bank Supplemental Funding1 is down 24% sequentially. Factors Influencing Paydown Bank Supplemental Funding Balances1 ($B) 1 Securities Portfolio Cash Flows (Principal & Interest) -61% 2 Macroeconomic Environment $97.1 $73.7 3 Seasonality $64.8 $49.9 4 Client Engagement $38.1 5 Client Asset Allocatio
Slide 28: Returned capital to stockholders during the first quarter
We returned capital to stockholders in a variety of forms during the first quarter. Consolidated Tier 1 Leverage Ratio 1Q25 Capital Actions Capital Management Framework Regulatory T1LR Adjusted T1LR 1 Support ongoing 9.9% $1.5B business growth 8.8% Worth of common stock repurchase 7.1% Common divide
Slide 29: Long-term diversified financial model remains intact
Our long-term diversified financial model remains intact. Sustainable organic Further revenue growth plus diversification as we Balance sustained deepen client investment to Efficient utilization of increasing relationships support growth while capital and liquidity engagement with our wealth soluti
Slide 30: Consistent focus enables profitable growth through-the-cycle
Our consistent focus on clients and disciplined approach enables Schwab to drive profitable growth through-the-cycle. 1Q25 2025 Long-term Sustained Continuing to Profitable growth momentum to play offense through-the-cycle begin the year Note: Q = Quarter. Charles Schwab Corporation 30
Slide 31: Q&A
Q&A Charles Schwab Corporation 31
Slide 32: Spring Business Update
Spring Business Update April 17, 2025
Slide 33: Appendix
Appendix Charles Schwab Corporation 33
Slide 34: Select Revenue Sensitivities
Select Revenue Sensitivities As of March 31, 2025 Target Fed BDA Bank Sweep ~$350M Funds Rate Balances ~$40M Balances ~$45M – $450M +/- 25 bps +/- $1B +/- $1B Daily Margin S&P 500® Average ~$30M ~$50M Balances ~$25M +/- 1% Trades +/- $1B +/- 100K Note: Bps = Basis points. K = Thousand. B = Billion.
Slide 35: Balance Sheet (as of March 31, 2025)
Appendix Balance Sheet (as of March 31, 2025) ($M, EOP) 1Q24 2Q24 3Q24 4Q24 1Q25 Total Assets $468,784 $449,675 $466,055 $479,843 $462,903 Bank Deposits $269,460 $252,420 $246,462 $259,121 $246,160 Payables to Brokerage Clients $84,005 $79,966 $89,164 $101,559 $100,579 Long-term Debt $22,865 $22,449
Slide 36: Average Interest-earning Assets & Bank Investment Portfolio
Appendix Average Interest-earning Assets & Bank Investment Portfolio (as of March 31, 2025) 1Q25 Avg. Interest-earning Assets ($B,%)1, 2 Bank Investment Portfolio Spotlight Fixed vs. Other IEA Floating 96% Fixed / 4% Floating Cash & Equiv. 9% 7% 62% 28% 11% Securities Agency RMBS Agency CMBS Other M
Slide 37: Bank Deposit Account Summary
Appendix Bank Deposit Account Summary (as of March 31, 2025) Mix of Average BDA Balances ($B,%) BDA Balances by Maturity, EOP ($B) Total Balance: $83.7 Net Rate2: 1.21% Annual Revenue3: $1,030.1M $18.2 (22%) Fixed Maturities: $64.9 (77% of total)1 | Net Rate2: 0.40% $84.2 $18.8 $21.9 $17.7 $18.0 $7.
Slide 38: Non-GAAP Introduction
Appendix Non-GAAP Introduction In addition to disclosing financial results in accordance with generally accepted accounting principles in the U.S. (GAAP), this presentation contains references to the non-GAAP financial measures described below. We believe these non-GAAP financial measures provide us
Slide 39: Adjusted total expenses and Adjusted net income
Appendix Non-GAAP Reconciliation: Adjusted total expenses and Adjusted net income Three Months Ended, Three Months Ended, Three Months Ended, Three Months Ended, Three Months Ended, March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 Total Expenses Total Expenses Total E
Slide 40: Adjusted income before taxes and Adjusted pre-tax profit margin
Appendix Non-GAAP Reconciliation: Adjusted income before taxes on income and Adjusted pre-tax profit margin Three Months Ended, Three Months Ended, Three Months Ended, Three Months Ended, Three Months Ended, March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 % of % of %
Slide 41: Adjusted net income to common stockholders and Adjusted diluted EPS
Appendix Non-GAAP Reconciliation: Adjusted net income to common stockholders and Adjusted diluted EPS Three Months Ended, Three Months Ended, Three Months Ended, Three Months Ended, Three Months Ended, March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 (In millions, exc
Slide 42: Consolidated Adjusted Tier 1 Leverage Ratio
Appendix Non-GAAP Reconciliation: Consolidated Adjusted Tier 1 Leverage Ratio Three Months Ended, Three Months Ended, Three Months Ended, Three Months Ended, Three Months Ended, Preliminary (In millions, except ratios and per share amounts) March 31, 2025 December 31, 2024 September 30, 2024 June 30
Slide 43: Spring Business Update
Spring Business Update April 17, 2025
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