Charles Schwab (SCHW) delivered record-breaking results in the second quarter of 2025, showcasing strong momentum across client growth, revenue generation, and profitability. Net revenues surged 25% year-over-year to $5.85 billion, fueled by broad-based strength in both interest and non-interest income. GAAP net income rose an impressive 60% to $2.13 billion, while adjusted net income increased 52%, reaching $2.22 billion. This translated into GAAP diluted EPS of $1.08 and adjusted EPS of $1.14, up 64% and 56%, respectively.

The firm's profitability expanded meaningfully, with a GAAP pre-tax margin of 47.9%, up from 37.2% a year ago, and an adjusted pre-tax margin of 50.1%. Return on equity climbed to 19%, reflecting operational efficiency and disciplined capital management.

Key revenue drivers included net interest revenue of $2.82 billion, up 31%, benefiting from a net interest margin of 2.65%—a 62 basis point improvement year-over-year—supported by lower funding costs and improved securities lending. Asset management and administration fees rose 14% to $1.57 billion, while trading revenue climbed 23% to $952 million, buoyed by a 38% increase in daily average trading volume. Schwab also saw a sharp increase in bank deposit account fees, up 61%, and continued strong growth in managed investing solutions net inflows, up 37% year-over-year.

Client growth remained robust. Total client assets reached $10.76 trillion, up 14% from the prior year, with core net new assets of $80.3 billion, a 31% increase. Year-to-date, Schwab has added $218 billion in net new assets, a 39% rise from the same period in 2024. The firm opened 1.1 million new brokerage accounts in the quarter, bringing active brokerage accounts to 37.5 million and total client accounts to 45.2 million. Margin balances rose 16% year-over-year to $83.4 billion, and client sweep cash grew $4.3 billion sequentially to $412.1 billion.

On the expense side, total non-interest expenses rose a modest 4%, demonstrating cost discipline. Notably, compensation and benefits expenses increased 6%, while professional services and occupancy costs rose 12% and 9%, respectively. Meanwhile, regulatory fees and amortization of acquired intangibles declined, partially offsetting growth in other areas.

Schwab also returned $2.8 billion to shareholders, including the redemption of $2.5 billion in preferred equity and $351 million in share repurchases. The firm's Tier 1 Leverage Ratio stood at 9.8%, with an adjusted Tier 1 Leverage Ratio of 7.2%.

CEO Rick Wurster emphasized Schwab’s scale, client trust, and the strength of its diversified revenue model. The company also earned industry accolades, including being named “Best Investing Platform Overall” by U.S. News and securing the top spot in J.D. Power’s Direct Banking Satisfaction Study for the seventh year running.

Overall, Schwab’s Q2 2025 performance highlights its continued success in attracting assets and clients, maintaining operational efficiency, and delivering strong returns—setting a solid foundation for sustained growth.