01-08-2025
LPL Financial's Q2 Earnings Beat on Higher Revenues, Stock Jumps
Shares of LPL Financial LPLA gained 3.1% in after-hours trading following the release of better-than-expected second-quarter results. Adjusted earnings of $4.51 per share handily outpaced the Zacks Consensus Estimate of $4.21. The bottom line also grew 16% year over year.
Results benefited from robust revenue improvement, partly offset by higher expenses. LPLA recorded strong growth in brokerage and advisory assets, which acted as a tailwind.
After considering certain non-recurring items, net income was $273.2 million or $3.40 per share, up from $243.8 million or $3.23 per share in the prior-year quarter. Our estimate for net income was $254.6 million.
LPLA's Revenues Improve, Expenses Rise
Total net revenues were $3.84 billion, jumping 31% year over year. The top line beat the Zacks Consensus Estimate of $3.77 billion.
Total expenses surged 33% to $3.47 billion. The rise was due to an increase in all cost components except other expenses. Our estimate for total expenses was $3.42 billion.
As of June 30, 2025, LPL Financial's total brokerage and advisory assets were $1,919.2 billion, up 28%. Our estimate for the metric was $1,847.5 billion. In the reported quarter, total net new assets were $20.5 billion.
Total client cash balances rose 15% year over year to $50.6 billion.
LPLA's Balance Sheet Position Solid
As of June 30, 2025, total assets were $17.47 billion, up 25% on a sequential basis. As of the same date, cash and cash equivalents totaled $4.19 billion, up from $1.23 billion in the last quarter.
Total stockholders' equity was $5.07 billion as of June 30, 2025, up 62% sequentially.
Our View on LPL Financial
LPL Financial's recruiting efforts and solid advisor productivity will likely continue aiding advisory revenues. Strategic acquisitions and a strong balance sheet will support financials. However, rising expenses and uncertainty regarding capital markets are likely to adversely impact commission revenues.
Currently, LPL Financial carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performances of LPLA's Peers
Interactive Brokers ' IBKR second-quarter 2025 adjusted earnings per share of $1.51 surpassed the Zacks Consensus Estimate of $1.46. The bottom line grew 15.9% from the prior-year quarter.
Results primarily benefited from an increase in revenues as trading volume, customer accounts and daily average revenue trades increased in the quarter. As such, Interactive Brokers recorded a 27.1% jump in commissions.
Charles Schwab 's SCHW second-quarter 2025 adjusted earnings of $1.14 per share outpaced the Zacks Consensus Estimate of $1.09 and surged 56% year over year.
The solid performance of the asset management business and higher net interest revenues supported the results. Also, trading revenues, which soared 22.5% year over year, drove Schwab's quarterly performance.
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The Charles Schwab Corporation (SCHW): Free Stock Analysis Report
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LPL Financial Holdings Inc. (LPLA): Free Stock Analysis Report
