SCHW · Q1 2026 Earnings

Q: Deep dive on March strength: Was advisor NNA growth elevated from RIA conversions/wire house wins? Was deposit build driven by risk-off sentiment or tax payment season preparation?

Management highlighted March as second-strongest month for NNA ever (behind only December). Noted investor services reached all-time monthly high, exceeding advisor services NNA—demonstrating broad-based strength. Attributed to value proposition, strong advisor custodial offerings (new structured asset lending enabling alternative/restricted share lending), and fiduciary model advantages. On deposits: March cash build reflected equity market decline/sentiment shift plus long-short strategy inflows and strong NNA. Suggested some tax-related cash may have remained on sidelines for April tax season.

Bullish

Charles Schwab Corporation

Reported April 16, 2026

30-second summary

Schwab opened FY2026 with Q1 revenue of $6.48B (+16% YoY, +2.3% QoQ) and adjusted EPS of $1.43, with core NNA of $140.0B clearing the $130B watch threshold and DATs of 9.9M running materially above the 7.4M FY assumption. Management explicitly stated they are "tracking higher than the $5.70 to $5.80 EPS range" set in January — a soft raise that defers quantification to the July business update while preserving optionality. The AI/crypto/Forge narrative shifted from "future capability" to "launching in coming weeks," with concrete rollout timelines for spot crypto (75bps pricing), Investor AI Assistant (June), and portfolio insights (next month).

Headline numbers

EPS

Q1 FY2026

$1.43

Revenue

Q1 FY2026

$6.48B

+16.0% YoY

Operating margin

Q1 FY2026

49.2%

Key financials

Q1 FY2026

Metric	Q1 FY2026	YoY	Q4 FY2025	QoQ
Revenue	$6.48B	+16.0%	$6.34B	+2.3%
EPS	$1.43	—	$1.39	+2.9%
Operating margin	49.2%	—	50.2%	-100bps

Guidance

Company tracking higher than $5.70–$5.80 FY2026 EPS guidance; full-year revenue and margin guidance reaffirmed; comprehensive update expected July.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q1 FY2026	—	$6.482 billion	No prior Q1 FY2026 guidance provided; reported +16% YoY	Beat
EPS (non-GAAP)	Q1 FY2026	—	$1.43	No prior Q1 FY2026 guidance provided; implied quarterly run-rate from FY guide ~$1.43–$1.45	Beat

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
EPS (non-GAAP)	FY2026	$5.70–$5.80	Tracking higher than $5.70–$5.80	Raised (amount TBD; company noted tracking 'higher' than January scenario, detailed update in July)	Raised

Reaffirmed unchanged this quarter: Revenue Growth (YoY %) (9.5% to 10.5% (implied; no explicit restatement)), Net Interest Margin (2.85% to 2.95% (implied; no explicit restatement)), Expense Growth (5.5% to 6.5% (implied; no explicit restatement)), Pre-tax Margin (low 50s (implied; no explicit restatement)), Daily Average Trades (roughly 7.4 million (implied; no explicit restatement))

Segment performance

Q1 FY2026

Segment	Q1 FY2026	YoY
Net Interest Revenue	$3.144B	+16.2%
Asset Management and Administration Fees	$1.759B	+15.0%
Trading Revenue	$1.089B	+20.0%
Bank Deposit Account Fees	$0.295B	+20.0%

Capital & returns

Q1 FY2026

Segment	Q1 FY2026
Tier 1 Leverage Ratio	8.9%

Other KPIs

Q1 FY2026

Segment	Q1 FY2026
Core Net New Assets	$140.0 billion
Total Client Assets	$11.77 trillion
Active Brokerage Accounts	39.1 million
Daily Average Trading Volume (DATs)	9.9 million
Managed Investing Solutions Net Flows Growth	46% YoY
Bank Loan Balances	$60.9 billion
Return on Tangible Common Equity (annualized)	40%

Management tone

Narrative arc: Q2 FY2025 "playing offense" → Q3 FY2025 record print with guide left untouched → Q4 FY2025 wallet-share monetization framework → Q1 FY2026 AI/crypto/Forge as operating reality, EPS tracking higher.

Across the prior three quarters, AI moved from slide deck to roadmap to pilot. This quarter it crossed into operating reality: management stated AI tools are now deployed to all 33,000 employees daily, with the Investor AI Assistant launching June, portfolio insights starting next month, and multiple agentic assistants in pipeline. The anchor quote: "Schwab is already an AI-enabled company...we are doing the same now, benefiting from our massive scale, data, and technological prowess." This shift signals that AI's contribution is now embedded in the FY guide rather than treated as upside option — and explains why management is comfortable saying "tracking higher" before having a single quarter of evidence on AI-driven productivity gains.

Crypto's trajectory is even sharper: Q2 FY2025 framed crypto as a three-bucket taxonomy with Bitcoin/Ethereum spot trading on the roadmap; Q4 FY2025 was silent; this quarter management announced an employee pilot is underway with phased client rollout in coming weeks and disclosed pricing — "75 basis points on the dollar value of each trade." The 75bps print is the first piece of dollar-translatable crypto economics Schwab has ever shared. Combined with the framing — "launching the Schwab way with the powerful combination of education, research, risk management and service" — this is positioned as a deliberate wealth-preservation differentiator against Robinhood-style speculation venues.

The Forge acquisition closed in early March and management explicitly excluded its impact from the January scenario, then signaled it as part of the "tracking higher" framing. Q2 FY2025 introduced alternatives as a UHNW growth pillar; Q4 FY2025 quantified the willingness-to-pay gap at 31%; this quarter Forge is closed and operational. "With the Forge transaction now closed, we continue to see upside in engaging the private market ecosystem." The shift signals that private markets are no longer a 2026 setup story — they are a 2026 contribution story.

The EPS guide language deserves scrutiny. Q3 FY2025 management chose silence on guidance while actuals ran hot; Q1 FY2026 management chose explicit "tracking higher" language while deferring quantification. The change from passive (let actuals speak) to active (tell investors EPS is tracking higher) is the most committal posture Schwab has taken on its own earnings outlook in this cycle. The carve-out of buybacks and Forge from the January scenario is the technical anchor; the "tracking higher" language is the editorial overlay.

Recurring themes management leaned on this quarter:

AI as embedded operational and client-facing multiplier across all business linesWealth deepening and product diversification (managed investing, crypto, private equity)Record client growth and engagement through volatile markets (1.3M new accounts, $158B NNA)Scale efficiency and margin expansion through AI-driven productivityMonetization pathway for AI-powered advisory and planning tools (estate, tax, portfolio insights)Balance sheet strength supporting lending and margin expansion despite volatility

Risks management surfaced:

Market volatility and its impact on client cash allocations and trading activityRegulatory or competitive dynamics around AI deployment in wealth managementExecution risk on AI rollouts and new product launches (crypto, Forge, AI assistants)Client cash allocation sensitivity and potential shift away from transactional sweepIntegration complexity of Forge and Wealth.com capabilities at scale

Q&A highlights

Steven Chubak · Wolf Research

How does the evolving rate backdrop (market now pricing no rate cuts vs. two cuts in original guidance) impact NIM outlook for year-end and IEA/cash growth expectations in a higher-for-longer rate environment?

Management indicated the absence of anticipated rate cuts is favorable for NIM. They expect continued upward trajectory of cash driven by organic growth, strong client engagement bringing new assets, and robust lending. Promised more details on NIM outlook in July financial scenario refresh with potential upside to current guidance.

Original guidance assumed two rate cuts (June and September); market now pricing no cutsStrong first-quarter cash growth with expected seasonality headwinds in Q2Continued momentum in lending, particularly pledged asset linesManagement expects to provide refreshed financial scenario in July

Bill Katz · TD Cowen

How is Schwab balancing growth in earning assets (lending vs. other higher-yielding opportunities) against capital return given the adjusted tier one leverage ratio of 6.8% and three consecutive strong quarters of buybacks?

Management emphasized continued strength in lending (pledged asset lines, margin lending) funded efficiently by client cash, supporting modest balance sheet expansion. They prioritize capital for franchise growth but have flexibility for capital returns given strong earnings. Outlined capital allocation framework including dividend increase, evaluation of preferred redemption, and buybacks.

Adjusted tier one leverage ratio at 6.8%, within target rangePledged asset lines generating healthy spreads above cash/securities alternativesModest balance sheet expansion in Q1 funded by client activityDividend increased in Q1; preferred securities becoming redeemable will be evaluated for economics

Brennan Hawkin · BMO Capital

Is Schwab considering tools similar to JPMorgan's new cash friction-reduction product? How flexible is Schwab in adjusting to competitive environment and business economics realities?

Management stated Schwab already has multiple mechanisms to help clients optimize cash allocation (FCS outreach, UI prompts, advisor fiduciary management). Emphasized reasons clients intentionally keep cash in sweep programs (liquidity for trading/payments, ~$300B equity trades bi-weekly). Announced summer launch of agentic AI capabilities with basic functions, expanding over time. Noted multiple monetization levers beyond cash sweep and characterized advisory cash management as a fee-based solution.

Couple hundred billion in monthly cash flows for bill payments and life expensesRoughly $300 billion in equity trades over two-day period requiring cash liquidityAgentic AI capability launching summer 2024 with incremental feature additions over timeCash represents less than 4% of client relationship value; helping clients on 100% of financial life

Michael Cypress · Morgan Stanley

How does Schwab monitor customer behavior shifts regarding cash monetization and competitive threats? What alternative monetization and leverage models might Schwab pursue if cash sweep economics deteriorate?

Management downplayed current risk, reaffirming clients have intentionally allocated cash and Schwab has made it easy to optimize. Outlined multiple alternative monetization approaches: trading, wealth, lending, fee-based advisory solutions, and AI-driven agentic capabilities. Emphasized long-standing client relationships, high NPS scores, and confidence in ability to adapt (as they did with commission decline). Noted cash is <4% of relationship value with optionality across 100% of client financial life.

Client Net Promoter Scores at all-time highsCash less than 4% of overall client relationship valueMultiple revenue generation approaches: trading, wealth management, lending, fee-based solutionsHistorical precedent: successfully adapted business model as commissions declined

Brian Bedell · Deutsche Bank

Deep dive on March strength: Was advisor NNA growth elevated from RIA conversions/wire house wins? Was deposit build driven by risk-off sentiment or tax payment season preparation?

Management highlighted March as second-strongest month for NNA ever (behind only December). Noted investor services reached all-time monthly high, exceeding advisor services NNA—demonstrating broad-based strength. Attributed to value proposition, strong advisor custodial offerings (new structured asset lending enabling alternative/restricted share lending), and fiduciary model advantages. On deposits: March cash build reflected equity market decline/sentiment shift plus long-short strategy inflows and strong NNA. Suggested some tax-related cash may have remained on sidelines for April tax season.

March NNA: second highest month ever, investor services reached all-time monthly high NNAInvestor services NNA in March exceeded advisor services NNANew structured asset lending program launched, enabling client borrowing against alternatives and restricted sharesMonthly cash flows: combination of market volatility, long-short strategy activity, and strong NNA contributions

Answers to last quarter's watch list

Q1 FY2026 core NNA sustains a $130B+ run-rate. Q1 core NNA of $140.0B clears the threshold, with March alone the second-strongest NNA month ever (behind only December 2021) and investor services hitting an all-time monthly high. The 5% organic algorithm on a larger asset base is intact.

Resolved positively

Managed investing flows accelerate from FY2025's $70B / +36% YoY pace. Net flows grew 46% YoY in Q1 — a 10-percentage-point acceleration from the FY2025 exit pace, validating the 5%-to-31% wallet-share penetration thesis as monetization-ready rather than aspirational.

Resolved positively

PAL originations and balance growth from the 9% retail UHNW / 23% advisor penetration baseline. Bank loan balances reached $60.9B with management calling out pledged asset lines as the spread-accretive lending engine; a new structured asset lending program launched enabling borrowing against alternatives and restricted shares. Explicit origination growth pace not separately disclosed on the print.

Continue monitoring

Q1 NIM trajectory within the FY guide range of 2.85–2.95%. Q1 NIM printed at 2.88%, squarely within the FY range, with net interest revenue up 16.2% YoY to $3.14B. The market repricing of expected cuts (from two to zero) was flagged in Q&A as a tailwind to outlook vs. original guide assumptions.

Resolved positively

Whether DATs run materially above the 7.4M FY2026 assumption. Q1 DATs printed at 9.9M — 34% above the FY assumption — making trading the single largest source of upside vs. the January scenario. Management has not yet reset the FY DAT assumption, deferring to the July update. Status: Resolved positively (on the print; sustainability is the next watch)

Explicit quantification of Bitcoin/Ethereum spot trading economics or workplace/crypto contribution to NNA. Spot crypto pricing disclosed at 75bps per trade with employee pilot underway and phased client rollout beginning in coming weeks — the first dollar-translatable crypto economics Schwab has ever shared. Workplace contribution to NNA was not separately quantified. Status: Resolved positively (on crypto pricing); Continue monitoring (on workplace and full crypto contribution sizing)

What to watch into next quarter

The July business update — magnitude of the formal FY2026 EPS guide raise. Management's "tracking higher than $5.70–$5.80" language sets up a binding moment. A new range with midpoint above $5.85 would validate the soft-raise telegraphing; failure to raise by July would imply the macro tailwinds (no rate cuts) are being offset by something not yet disclosed.

Whether DATs in Q2 sustain materially above 7.4M or pull back toward the FY assumption. Q1 ran 34% hot at 9.9M; a Q2 print of 8.5M+ would force a DAT assumption reset and translate directly to trading-revenue upside vs. guide; reversion to 7.5M would frame Q1 as volatility-driven.

Spot crypto rollout pace and any early take-rate disclosure on the 75bps pricing. Phased client rollout begins in coming weeks; even directional commentary on adoption velocity (employee pilot results, first weeks of client engagement) on the Q2 print would re-rate the crypto contribution thesis.

ETF monetization rollout progression. Management committed to having a strategy live by year-end 2026, structured as % of ETF fees with active strategies offering greater economic opportunity. Q2 commentary on negotiation pace with the 400+ asset managers, and any early sizing of the addressable opportunity, would be the first dollar-translatable read on this new revenue stream.

Forge contribution to revenue and any quantification of the private-markets pipeline. Q1 explicitly excluded Forge from the January scenario but signaled it as part of "tracking higher"; Q2 should bring the first dollar attribution.

Managed investing net flow run-rate after +46% YoY Q1 print. Holding +40% YoY+ pace in Q2 would force a re-rating of the wallet-share monetization algorithm; reversion below +30% would suggest Q1 captured episodic March strength.

Whether core NNA sustains $120B+ in Q2 given normal post-Q1 seasonality. Q4 FY2025 hit $158.2B; Q1 FY2026 at $140.0B (or $139.9B net); a Q2 print holding above $120B would confirm the ~5% organic algorithm on the now-larger $11.77T base.

Sources

Charles Schwab Q1 FY2026 press release (Exhibit 99.1, SEC filing): https://www.sec.gov/Archives/edgar/data/316709/000031670926000016/a1q26exhibit991.htm
Charles Schwab Q1 FY2026 earnings call commentary (Q&A and prepared remarks references for AI deployment, spot crypto pricing, Forge close, ETF monetization timeline, and EPS "tracking higher" language).
Charles Schwab Q4 FY2025 prior brief (FY2026 framework baseline: $5.70–$5.80 adjusted EPS, 9.5–10.5% revenue growth, NIM 2.85–2.95%, expense growth 5.5–6.5%, DATs ~7.4M).

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