EPS jumped 42.6%. That is the oddest number in Charles Schwab's latest filing, especially since net income grew a more modest 31.7% in the three months ended June 30, 2026.

Revenue rose 20.9% to $7.1 billion, while net margin widened to 39.6% from 36.3%. Diluted shares fell 4.6%, which helped turn a strong profit increase into an even stronger per-share result. At the latest close, the stock was almost unchanged at $107.66.

The business itself is expanding. Schwab says the main engine was larger margin-lending and bank-lending balances, alongside lower aggregate wholesale borrowings and lower rates paid on most funding sources. That combination was part of the revenue increase, though it also leaves the earnings mix tied to client borrowing and interest-rate conditions.

Management put the revenue driver plainly:

"Net interest revenue increased for both segments primarily due to growth of margin and bank lending balances, lower aggregate wholesale borrowings, and lower average rates paid on most funding sources, partially offset by lower yields on interest-earning assets."

Schwab, 10-Q filed August 7, 2026

Net interest revenue rose 19% in the three months. The same filing says average interest-earning assets increased 5%, primarily because of margin lending and bank lending, even as Schwab carried lower balances of certain securities and segregated cash.

That growth came with a peculiar capital-spending line. Capital expenditures rose 32.7% year over year, but Schwab attributes the increase primarily to a $633 million multi-year software license. The company recognized a corresponding liability in long-term debt, so this is not simply a case of routine technology spending marching higher with revenue.

Schwab disclosed the accounting detail this way:

"Capital expenditures increased in the second quarter and first six months of 2026 compared to the same periods in 2025, primarily due to a $633 million multi-year software license agreement which was recognized with a corresponding liability in long-term debt..."

Schwab, 10-Q filed August 7, 2026

Cash still rose 26% to $40.6 billion. The balance was also shaped by financing activity: net financing outflows were $5.7 billion, including $4.7 billion for common-stock repurchases and dividends, partly offset by $6.9 billion of other short-term borrowing proceeds. Earnings grew, cash accumulated, and the balance sheet absorbed a sizable software commitment. Those facts belong in the same sentence, even if they do not tell the same story about capital intensity.

The annual record supplies some scale. Revenue grew 22.0% in 2025, and net margin improved by 6.7 percentage points from the prior year. Schwab is not coming off a flat base, but the latest three-month figures show the same basic pattern: more client activity and lending, with per-share growth amplified by fewer shares.

The open detail is specific: Schwab's next quarterly report will show whether capital expenditures and long-term debt still reflect that $633 million license. For now, the trade-off is simple enough: Schwab is growing the earnings engine, and paying for the machinery.