Charles Schwab Corp. reported results that exceeded Wall Street estimates as it continues to attract record inflows to its retail brokerage.
Fourth-quarter revenue grew by 20% from a year earlier to $5.33 billion, topping estimates of $5.19 billion. The company posted adjusted earnings per share of $1.01, also exceeding forecasts.
"We are in a position of strength and poised for liftoff in 2025," Chief Executive Officer Rick Wurster, who stepped into the role at the beginning of this year, said Tuesday on a call with analysts. "With integration behind us, we are focused on helping our clients while growing and deepening relationships."
Full-year revenue growth was 4%, surpassing the
The firm's shares were up 5.5% in midmorning trade in New York.
Westlake, Texas-based Schwab called 2024 a transition year after faltering during the regional banking chaos in 2023. Wurster and Chief Financial Officer Mike Verdeschi were recently appointed as the firm eyed a return to stability, and so far earnings have improved. Schwab will devote this year to using its momentum to continue to build, according to the presentation.
It would be reasonable to expect various forms of capital returns over the course of the year, Verdeschi said on the conference call.
Total client assets were $10.1 trillion, after passing $10 trillion for the first time in November. That just missed analysts' estimates of $10.17 trillion.
Part of Schwab's plan to attract and retain client assets is to leverage its existing size and scale. Schwab plans on adding more than a dozen branches this year and will relocate some of its 400-plus existing locations to take advantage of areas where customers have been moving, and which have thoroughfares and neighborhoods with more foot traffic.
Schwab is also diversifying its customer base.
"We are attracting younger investors, with 33% of our new-to-firm retail households under the age of 30, and more than 50% under the age of 40," Wurster said on the call.
Schwab doesn't currently offer crypto spot trading, and Wurster has said in the past that the firm will consider its options
"We have a crypto site that we attract clients to. In fact, in the fourth quarter, we had a 400% increase in the number of visitors to our crypto site — 70% of those visitors were prospects," Wurster said. "It just shows you that when investors in the marketplace are thinking about crypto, they want to be able to work with Schwab."
During the year, Schwab
"We expect strong growth for both revenue and earnings as we project our supplemental borrowing to diminish significantly in 2025, and our investments in deepening client relationships to continue to pay off," Wurster said on the call.
