LPL Financial's Q1 Earnings Beat on Higher Revenues, Expenses Soar

LPL Financial’s LPLA first-quarter 2025 adjusted earnings of $5.15 per share handily outpaced the Zacks Consensus Estimate of $4.54. The bottom line also grew 22% year over year.

Results benefited from robust revenue improvement, partly offset by higher expenses. LPLA recorded growth in brokerage and advisory assets, which acted as a tailwind.

After considering certain non-recurring items, net income was $318.6 million or $4.24 per share, up from $288.8 million or $3.83 per share in the prior-year quarter. Our estimate for net income was $280.8 million.

LPLA’s Revenues Improve, Expenses Rise

Total net revenues of $3.67 billion surged 30% year over year. The top line beat the Zacks Consensus Estimate of $3.61 billion.

Total expenses jumped 32% to $3.25 billion. The rise was due to an increase in all cost components except communications and data processing expenses. Our estimate for total expenses was $3.24 billion.

As of March 31, 2025, LPL Financial’s total brokerage and advisory assets were $1,794.9 billion, up 25%. In the reported quarter, total net new assets were $78.8 billion, up from $16.7 billion in the prior-year quarter.

Total client cash balances rose 15% year over year to $53.1 billion.

LPLA’s Balance Sheet Position Solid

As of March 31, 2025, total assets were $13.96 billion, up 5% on a sequential basis. As of the same date, cash and cash equivalents totaled $1.23 billion, up from $967.1 million.

Total stockholders’ equity was $3.12 billion as of March 31, 2025, up 7% sequentially.

Update on LPL Financial’s Share Repurchases

In the reported quarter, the company repurchased $100 million worth of shares.

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 keep supporting 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

Charles Schwab’s SCHW first-quarter 2025 adjusted earnings of $1.04 per share beat the Zacks Consensus Estimate of $1.00. The bottom line surged 41% year over year. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Schwab’s results benefited from the solid performance of the asset management business, which drove revenues. Higher net interest revenues and solid brokerage account numbers were other positives. However, an increase in expenses acted as a headwind.
 
Interactive Brokers Group’s IBKR first-quarter 2025 adjusted earnings per share of $1.88 lagged the Zacks Consensus Estimate of $1.92. However, the bottom line indicates a rise of 14.6% from the prior-year quarter.

Results were adversely impacted by higher expenses. On the other hand, an increase in revenues and growth in customer accounts and a rise in daily average revenue trades (DARTs) acted as tailwinds for Interactive Brokers.

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The Charles Schwab Corporation (SCHW): Free Stock Analysis Report
 
Interactive Brokers Group, Inc. (IBKR): Free Stock Analysis Report
 
LPL Financial Holdings Inc. (LPLA): Free Stock Analysis Report

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