LPL Financial — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net income was $357 million ($4.52 diluted EPS), compared to a net loss of $30 million ($0.37 diluted EPS) in Q3 2025 and net income of $379 million ($4.74 diluted EPS) in Q2 2026.
• Adjusted EPS increased 15% year-over-year to $5.97.
• Gross profit increased 12% year-over-year to $1,662 million.
• Core G&A increased 11% year-over-year to $532 million.
• Adjusted pre-tax income increased 13% year-over-year to $641 million.
• Total revenue was $5,344 million, up 17% year-over-year from $4,552 million.
• Total expense was $4,859 million, up 6% year-over-year from $4,586 million.
• Income before taxes was $485 million, compared to a loss of $34 million in Q3 2025.
• EBITDA was $781 million, compared to $237 million in Q3 2025.
• Adjusted EBITDA was $864 million, up 12% year-over-year from $775 million.
• Corporate cash was $563 million.
• Leverage ratio was 1.93x.
• Total debt balance was $7,836 million.

Guidance and Future Outlook:

• 2026 Core G&A outlook range narrowed to $2,140–$2,160 million, including expenses related to Commonwealth.
• Commonwealth conversion is on track to complete in the fourth quarter of 2026.
• Asset retention for Commonwealth is now expected to be approximately 83%.
• Estimated run-rate EBITDA for Commonwealth is now expected to be $415 million.
• Management stated efforts position the company to sustain momentum through year-end and into 2027.

Business Segments and Product Lines:

• Total client assets increased 11% year-over-year to $2.6 trillion.
• Advisory assets increased 16% year-over-year to $1.6 trillion.
• Advisory assets as a percentage of total client assets increased to 60.9% from 58.2% a year ago.
• Total organic net new assets were $29 billion, representing 5% annualized growth.
• Recruited assets were $24 billion, down 26% from a year ago; recruited assets over the trailing twelve months were $81 billion.
• Total client cash balances were $57 billion, consistent with the prior quarter and an increase of $1 billion year-over-year.
• Client cash balances as a percentage of total client assets were 2.2%, consistent with the prior quarter and down from 2.4% in the prior year.
• Advisory revenue was $2,873 million, up 30% year-over-year.
• Total commission revenue was $1,251 million, up 5% year-over-year.
• Total asset-based revenue was $862 million, up 10% year-over-year.
• Service and fee revenue was $218 million, up 25% year-over-year.
• Transaction revenue was $79 million, up 18% year-over-year.
• Interest income, net was $49 million, down 20% year-over-year.
• Net brokerage to advisory conversions were $7.4 billion.
• Organic advisory NNA annualized growth was 8.5%.
• Total organic NNA annualized growth was 4.5%.
• Centrally managed assets were $250.4 billion, up 23% year-over-year.
• Centrally managed assets as a percentage of total advisory assets were 16.0%.
• Advisors increased to 32,597, up 1% year-over-year.
• Net new advisors were 122.
• Annualized advisory fees and commissions per advisor were $507, up 15% year-over-year.
• Average total assets per advisor were $78.7 million, up 9% year-over-year.
• Total client accounts were 11.9 million, up 4% year-over-year.
• AUM retention rate (quarterly annualized) was 97.4%.

Market and Competitive Landscape:

• The S&P 500 Index ended the quarter at 7,652, up 14% from 6,688 in Q3 2025.
• The Russell 2000 Index ended the quarter at 2,797, up 15% from 2,436 in Q3 2025.
• The Fed Funds daily effective rate averaged 367 bps, down from 430 bps in Q3 2025.
• LPL Financial was named a Top RIA custodian (Cerulli Associates, 2025 U.S. RIA Marketplace Report).
• Among third-party providers of brokerage services to banks and credit unions, LPL ranked No. 1 in Market Share of AUM from Financial Institutions and No. 1 in Share of Advisors (Cerulli Associates, 2025 U.S. Broker-Dealer Marketplace Report).
• Commonwealth and LPL ranked No. 1 and No. 2, respectively, in the JD Power 2026 Independent Advisor Satisfaction survey.

Risks and Challenges:

• Risks include difficulties and delays in onboarding assets of acquired, recruited, or transitioned advisors, including regulatory approvals.
• Potential disruptions in business operations could affect advisor and client relationships.
• Clients of acquired or recruited advisors may choose not to open brokerage or advisory accounts.
• General economic and financial market conditions, including retail investor sentiment, may impact results.
• Changes in interest rates and fees payable by banks participating in client cash programs.
• Fluctuations in advisory and brokerage assets levels and related revenue impacts.
• Competition in the financial services industry affecting the ability to attract and retain advisors and institutions.
• Regulatory actions, legislation, and legal proceedings could result in costs, penalties, or reimbursements.
• Changes to services and pricing in response to competitive or regulatory developments.
• Execution of capital management plans and compliance with credit agreement terms.
• Strategic acquisitions and investments may affect capital management plans and liquidity.
• Trading volume and price of common stock may affect share repurchase timing and size.
• Realization of synergies, expense savings, or efficiencies from investments and acquisitions.
• Performance of third-party service providers.
• Control of operating, IT, cybersecurity, and sourcing risks.

Management Commentary and Tone:

• CEO Rich Steinmeier described the quarter as delivering "strong business performance and excellent financial results" with "improved organic growth" and progress on strategic initiatives.
• Management highlighted the rollout of the proprietary AI agent, Cyan, to advisors.
• CFO Matt Audette noted "outstanding results," "strong organic growth," and "record adjusted earnings per share."
• Management expressed confidence in sustaining momentum through year-end and into 2027.

Other Key Points:

• Share repurchases were $301 million.
• Dividends paid were $24 million.
• The Board declared a $0.30 per share dividend to be paid on November 30, 2026, to stockholders of record as of November 12, 2026.
• Approximately $20 million of capital was deployed to close three deals in Q3 under the Liquidity & Succession program.
• Capital expenditures were $229.7 million.
• Acquisitions, net, were $102.2 million.
• Total capital returned was $324.2 million.
• The company supports more than 32,000 financial advisors and the wealth management practices of approximately 1,100 financial institutions.
• The firm services and custodys approximately $2.6 trillion in brokerage and advisory assets on behalf of approximately 8 million Americans.