Lpl Financial Holdings Inc. · NASDAQ:LPLA

Lpl Financial — Q3 2017 Earnings Presentation

14 slides from Lpl Financial's earnings presentation, Oct 26, 2017

  1. Slide 1: Q3 2017 Earnings Key Metrics

    Q3 2017 Earnings Key Metrics LPL Financial Holdings Inc. Q3 2017 Earnings October 26, 2017 Member FINRA/SIPC 1 LPL Financial Member FINRA/SIPC

  2. Slide 2: Notice to Investors: Non-GAAP Financial Measures

    Notice to Investors: Non-GAAP Financial Measures The management of LPL Financial Holdings Inc. (“the Company”) believes that presenting certain non-GAAP measures by excluding or including certain items can be helpful to investors and analysts who may wish to use some or all of this information to an

  3. Slide 3: Performance has steadily improved on four key metrics

    Performance has steadily improved on four key metrics (1) Total Brokerage & Advisory Assets ($ billions) Gross Profit ($ millions) YoY SEQ YoY SEQ Change Change Change Change $389 $387 12% 0% $502 $509 $530 $542 $560 11% 3% $356 $345 $347 $347 $376 $340 $322 $462 $476 $479 $488 Q3 Q4 Q1 Q2 Q3 Q4 Q1

  4. Slide 4: Q3 Total Brokerage and Advisory Assets increased 11% year-over-year to $560 billion

    Q3 Total Brokerage and Advisory Assets increased 11% year-over-year to $560 billion, and increased 3% sequentially Total Brokerage and Advisory Assets ($ billions) Total Brokerage and Advisory Asset Mix (4) Brokerage Assets (3) Corporate Platform Advisory Assets (4) Brokerage Assets % of Total Asset

  5. Slide 5: Q3 EBIT ROA increased 1.6 bps year-over-year

    Q3 EBIT ROA increased 1.6 bps year-over-year as Gross Profit ROA remained flat and OPEX ROA decreased year-over-year Total Brokerage & Advisory Assets ($ billions) (6) (7) Total Brokerage & Advisory Assets Gross Profit ROA OPEX ROA YoY SEQ Change Change $542 $560 11% 3% $530 $502 $509 $476 $479 $488

  6. Slide 6: Q3 Total Net New Assets were an inflow of $2.9 billion

    Q3 Total Net New Assets were an inflow of $2.9 billion (9) (10) (11) Total Net New Assets ($ billions) Net New Advisory Assets ($ billions) Net New Brokerage Assets ($ billions) Total NNA Total NNA Annualized Growth Advisory NNA Advisory NNA Annualized Growth Brokerage NNA Brokerage NNA Anualized Gr

  7. Slide 7: Q3 Gross Profit ROA was flat year-over-year, and down 1.1 basis points sequentially

    Q3 Gross Profit ROA was flat year-over-year, and down 1.1 basis points sequentially Gross Profit ROA (bps) (13) Net Commission and Advisory Fees ROA Cash Sweep ROA Other Asset-Based ROA Net Commission and Advisory Fees ROA Cash Sweep ROA Other Asset-Based ROA Transaction and Fee, net of BC&E ROA Int

  8. Slide 8: Q3 Gross Profit increased 12% year-over-year

    Q3 Gross Profit increased 12% year-over-year, and decreased slightly on a sequential basis Gross Profit ($ millions) (13) Net Commission and Advisory Fees Cash Sweep Other Asset-Based YoY SEQ Transaction and Fee, net of BC&E Interest Income and Other Change Change $389 $387 12% 0% $376 $15 $16 -5% 5

  9. Slide 9: Q3 Cash sweep balances decreased 3% year-over-year, and yields increased 60 bps

    Q3 Cash sweep balances decreased 3% year-over-year, and yields increased 60 bps year-over-year Client cash sweep balances ($ billions) ICA Balances (EOP) DCA Balances (EOP) Money Market Balances (EOP) Cash Sweep % of Total Assets YoY SEQ $30.4 $31.3 Change Change $29.0 $29.2 $29.2 $30.0 $27.7 $27.8

  10. Slide 10: Q3 Total Opex ROA was down 1.6 basis points year-over-year

    Q3 Total Opex ROA was down 1.6 basis points year-over-year, and up 0.3 basis points sequentially Total Opex ROA (bps) (16) Core G&A ROA(15) Other Historical Adjustments ROA Promotional ROA Regulatory ROA Employee Share-based Compensation ROA D&A Expense (ex Amortization of Intangibles) ROA Amortizat

  11. Slide 11: Q3 Total Opex increased 3% year-over-year and 5% sequentially

    Q3 Total Opex increased 3% year-over-year and 5% sequentially Total Opex ($ millions) (15) (16) Core G&A Other Historical Adjustments Promotional Regulatory Employee Share-based Compensation D&A Expense (ex Amortization of Intangibles) YoY SEQ Amortization of Intangible Assets Change Change $258 $25

  12. Slide 12: Q3 EBITDA was up 30% year-over-year

    Q3 EBITDA was up 30% year-over-year and EBITDA margin was up ~570 bps year-over-year (17) EBITDA ($ millions) (17) EBITDA Margin as a Percent of Gross Profit YoY SEQ Change Change $170 $152 $156 30% -8% $137 $132 $120 $119 $109 $96 43.7% ~570 bps ~-340 bps 38.5% 40.4% 40.3% 38.2% 34.6% 34.4% 32.1% 2

  13. Slide 13: Q3 2017 EPS was up 57% year-over-year prior to certain items

    Q3 2017 EPS was up 57% year-over-year prior to certain items Earnings per share $0.66 $0.63 $0.58 $0.03 $0.42 57% $0.16 Q3 2016 GAAP Management tax Q3 2016 EPS prior Q3 2017 EPS prior to Costs related to Q3 2017 GAAP EPS planning initiatives to cetain items* certain items** NPH and Sept EPS and acco

  14. Slide 14: Footnotes

    Footnotes (1) Gross Profit is a non-GAAP financial measure. Please see a description of Gross Profit under “Non-GAAP Financial Measures” on page 2 of this presentation for additional information. (2) EBITDA is a non-GAAP financial measure. Please see a description of EBITDA under “Non-GAAP Financial

LPL Financial Holdings — Q3 2017 Earnings Presentation on 6ix