Charles Schwab (SCHW) Fall 2024 Business Update summary

Leadership and Strategic Focus

• CEO Walt Bettinger and Managing Director Peter Crawford are stepping down, with Rick Wurster set to become CEO in January and Mike Verdeschi as the new CFO.

• The company remains committed to a client-centric strategy, emphasizing scale, efficiency, and tailored solutions for distinct client segments.

• Leadership highlighted the importance of maintaining a low-cost position and ongoing investments in operations and infrastructure.

• Strategic initiatives focus on scale, efficiency, win-win monetization, and client loyalty, driving growth and value creation.

• Schwab received multiple industry recognitions for service, trust, and online brokerage leadership.

Financial Performance and Growth Momentum

• Net revenues grew 5% year-over-year to $4.85 billion, with adjusted pre-tax margin at 41.2% and adjusted EPS of $0.77 for Q3 2024.

• Net income for Q3 2024 reached $1.4 billion ($0.71 per diluted share), with adjusted net income at $1.5 billion ($0.77 per share), reflecting a 25% year-over-year increase in net income and 27% rise in EPS.

• Total client assets reached a record $9.92 trillion, up 27% year-over-year, with core net new assets of $95.3 billion in Q3 and $252.1 billion year-to-date.

• Active brokerage accounts grew 4% to 36.0 million, with 972,000 new accounts opened in Q3.

• Managed investing net flows reached $40 billion year-to-date, up 65% from 2023, with strong interest from converted Ameritrade clients.

Ameritrade Integration and Client Engagement

• Former Ameritrade clients are now contributing positively to net new assets for the second consecutive quarter.

• Attrition from the Ameritrade acquisition is receding, and client satisfaction scores are rising as clients adapt to the Schwab platform.

• Over a third of record flows into wealth management and half of new Pledged Asset Line originations came from former Ameritrade clients.

• Enhanced digital processes, such as for the Pledged Asset Line, have improved client satisfaction and operational efficiency.

• Schwab continues to deliver fast, easy client experiences, ranking #1 in participant satisfaction for retirement plan digital experiences.