To The Moon

$Charles Schwab(SCHW)$ $JPMorgan Chase(JPM)$  $Goldman Sachs(GS)$  🚀💰 $SCHW Delivers a Blockbuster Q2! Record Revenue, 42% EPS Growth and NIM Breaks 3.0% 📈🔥

$SCHW delivered one of its strongest quarters in years, putting the cash-sorting bear thesis firmly in the rear-view mirror.

Record revenue, accelerating client asset growth, expanding Net Interest Margin (NIM) and continued product innovation demonstrate that Schwab’s earnings engine is firing on multiple cylinders.

At a glance:

✅ Record net revenue: $7.1B, up 21% YoY

✅ Adjusted EPS: $1.62, up 42% YoY

✅ Core net new assets (NNA): $120B

✅ June core NNA: $62.7B

✅ NIM: 3.00%

✅ Client assets: Over $13T

✅ Record 11.9M Daily Average Trades (DATs)

🐂 Bull Case

💰 NIM Breaks the 3.0% Barrier

Net Interest Margin expanded another 12 basis points sequentially to 3.00%. Schwab has successfully eliminated high-cost supplemental funding and is now benefiting from stronger organic cash generation, higher-yielding assets and an optimised balance sheet.

📈 Asset Gathering Accelerates

Core NNA reached $120B during the quarter, with June alone contributing $62.7B. That represents an annualised organic growth rate of 5.8% and pushed total client assets beyond $13T, highlighting the strength of Schwab’s client acquisition engine.

🟢 Higher-Value Wealth Management

Managed Investing Solutions net flows rose 53% YoY, while Schwab Wealth Advisory net flows surged 80% YoY. Fee-based advisory assets generate significantly higher recurring revenue than self-directed accounts, strengthening long-term earnings quality.

🟢 Innovation Expands the Ecosystem

The launch of Schwab Crypto gives retail clients direct access to Bitcoin and Ethereum trading, while Portfolio Insights uses generative AI to deliver more personalised investment analysis. Both initiatives deepen client engagement and expand future revenue opportunities.

🐻 Bear Case

📉 Trading Economics Are Softening

Daily Average Trades surged 57% YoY to a record 11.9M, yet Revenue Per Trade declined 19% YoY to $1.64. Clients are trading more frequently, but with smaller position sizes and lower economic value per trade.

⚠️ Margin Loan Growth Needs Context

Margin balances climbed 30% sequentially to $165.1B. However, much of the increase was driven by RIA long/short strategies rather than higher-margin retail borrowing, making the headline growth less profitable than it initially appears.

⚪ Interest Rate Risk Remains

Net Interest Revenue still accounts for 47% of total revenue. A faster-than-expected Federal Reserve easing cycle could pressure NIM, although Schwab has significantly strengthened its balance sheet and interest-rate positioning.

⚖️ Verdict

🟢🟢 Extremely Bullish

Schwab delivered an outstanding quarter across nearly every major operating metric. Organic asset growth continues to accelerate, NIM has exceeded management’s previous targets, advisory revenues are compounding and new product launches reinforce the firm’s long-term competitive advantages.

While Revenue Per Trade remains under pressure and lower interest rates could become a headwind, neither currently outweighs Schwab’s exceptional operating momentum.

Key KPIs

📊 Asset Management & Administration Fees: $1.82B

Up 16% YoY and 4% sequentially.

📊 Bank Loan Balances: $67.0B

Up 33% YoY and 10% sequentially.

Guidance

📈 Revenue Growth

Q2 revenue grew 21% YoY, comfortably ahead of management’s full-year target of approximately 10%.

📈 Net Interest Margin

Already above previous guidance after reaching 3.00% in Q2.

📈 Organic Net Asset Growth

June’s $62.7B of core NNA equates to a 5.8% annualised growth rate, putting Schwab comfortably ahead of its approximately 5% full-year objective.

🤔 Question for the community

After this blockbuster quarter, what will be the biggest driver of $SCHW over the next 12 months?

📈 Continued client asset growth

💰 Higher Net Interest Margins

₿ Schwab Crypto

🤖 AI-powered productivity

📉 Federal Reserve policy

Or do you see another catalyst the market is overlooking?

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