SCHW earnings analysis
What we found in SCHW's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Schwab delivered strong Q2 growth, with revenue up 20.9% year over year to $7,072 million, diluted EPS up 42.6% to $1.54, and pre-tax income up 30.9% to $3,669 million. Growth was broad-based across Investor Services and Advisor Services, while operating cash flow reached $11,642 million for the first six months. The main offsets are increased short-term funding, substantial unrealized securities losses, and new operational and regulatory risks associated with the spot cryptocurrency offer.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue and earnings accelerated
- Q2 net revenue reached a record $7,072 million, up $1,221 million, or 20.9%, from $5,851 million in the prior-year quarter. Net income increased 31.7% to $2,800 million from $2,126 million.
- Diluted EPS increased 43%
- GAAP diluted EPS rose to $1.54 from $1.08, a 42.6% increase. Net income available to common stockholders was $2,681 million versus $1,977 million.
- Core revenue streams expanded
- Net interest revenue increased 19.0% to $3,357 million from $2,822 million, while asset management and administration fees grew 16.2% to $1,825 million from $1,570 million.
- Broad-based segment growth
- Both reportable segments grew: Investor Services revenue rose 19.3% to $5,528 million and Advisor Services revenue rose 27.0% to $1,544 million. Advisor Services pre-tax income increased 52.0% to $804 million.
- Positive operating leverage
- Operating expense pressure moderated relative to revenue growth: total expenses excluding interest increased 11.6% to $3,403 million from $3,048 million, lifting pre-tax income 30.9% to $3,669 million from $2,803 million.
- Strong cash generation
- Six-month operating cash flow was $11,642 million, up from $9,536 million in the prior-year period. Capital expenditures were $325 million, compared with $245 million previously, or approximately 2.4% of six-month revenue.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- New cryptocurrency custody risk
- The company added a new Item 1A Cryptocurrency risk factor for its spot cryptocurrency offer. The filing states that client cryptocurrency is not a deposit or security and is not protected by the FDIC or SIPC, creating potential custody, cybersecurity, insolvency, regulatory, and reputational exposure.
- Large unrealized securities losses
- The filing identifies $3,850 million of unrealized losses on available-for-sale securities as of June 30, 2026, including $3,810 million on securities held for 12 months or longer. AOCI remained a loss of $10,575 million, creating sensitivity to interest rates and forced-sale conditions.
- Higher short-term funding reliance
- Liquidity and funding usage increased: other short-term borrowings rose to $13,945 million from $6,913 million, while bank deposits declined to $249,682 million from $255,747 million. Repurchase agreements outstanding increased to $4,300 million from $1,300 million.
- Elevated software commitment
- The company entered a multi-year software licensing agreement with a total liability of $592 million and an underlying contract value of $633 million, recorded as long-term debt and an equipment asset. An initial debt payment of $49 million was made in Q2, with payments due annually through March 2033.
- Higher securities-financing exposure
- Client and securities-financing balances expanded materially, with receivables from brokers rising to $22,004 million from $7,190 million and payables to brokers increasing to $43,826 million from $25,689 million. Securities borrowed increased to $18,600 million from $4,600 million, increasing counterparty and collateral-management exposure.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.54
- Segment
- Investor Services: Q2 revenue $5,528 million, up 19.3% from $4,635 million; pre-tax income $2,865 million, up 26.0% from $2,274 million.
- Segment
- Advisor Services: Q2 revenue $1,544 million, up 27.0% from $1,216 million; pre-tax income $804 million, up 52.0% from $529 million.
What they said about what is next.
The 10-Q provides no quantitative revenue or EPS guidance and does not establish a change versus prior outlook.
The filing reads better than the one before it.
What came before.
- 10-Q · May 8, 2026
- Charles Schwab reported Q1 2026 earnings characterized by a considerable revenue increase of 16% year-over-year to $6.48 billion, coupled with a 30% growth in net income to $2.48 billion, resulting in an EPS of $1.43,…
- 10-K · February 25, 2026
- The 2025 10-K emphasizes Schwab’s scale-driven, client-first “Through Clients’ Eyes” strategy and highlights $11.90 trillion in client assets and product expansion (including expanded crypto access expected in 2026).…
- 10-Q · May 9, 2025
- Schwab delivered a strong Q1 2025: total net revenues rose to $5,599 million (+18% YoY) and net income was $1,909 million (+40% YoY). Diluted EPS was $0.99 (up 46% YoY) with adjusted diluted EPS of $1.04; management…
- 10-K · February 26, 2025
- Schwab completed the Ameritrade integration in 2024, converting approximately $1.9 trillion of client assets across more than 17 million client accounts and ending the final conversions in May 2024. The company reports…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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