LPL Financial Holdings Inc.
LPLA · Nasdaq
Next quarter
Reports Oct 27, 2026, after the close.
Consensus is $5.77 EPS for Sep 2026 across 6 estimates, ranging $5.72 to $5.83.
LPLA Jun 2026
- 8.35%
- +4.28%
- $5.39
- $5.84
- —
- $5.19B
Reported results
- $5.19B
- $379.26M
- $4.74
Highlights
- Adjusted earnings: Adjusted EPS was $5.84, $0.45 above the $5.39 consensus estimate, an 8.35% surprise and a 29% increase from $4.51 a year ago; GAAP diluted EPS was $4.74 versus $3.40.
- Revenue and profit: Revenue rose 35% year over year to $5.19 billion and 5% sequentially, while net income increased 39% year over year to $379.3 million and 6% from $356.4 million in Q1.
- Operating leverage: Gross profit increased 24% year over year to $1.62 billion, while adjusted pre-tax income rose 30% to $635.4 million; adjusted pre-tax margin expanded to 39.3% from 37.6%.
- Asset growth: Total client assets reached $2.56 trillion, up 34% year over year and 10% sequentially, with advisory assets up 46% to $1.55 trillion and representing 60.4% of total assets.
- Organic flows: Total organic net new assets were $23.1 billion, equivalent to 4.0% annualized growth; advisory net new assets were $30.2 billion, partly offset by a $7.1 billion brokerage outflow.
- Commonwealth conversion: LPL remains on track to convert Commonwealth assets in Q4 2026, expects approximately 90% asset retention and raised estimated run-rate EBITDA from $410 million to $435 million.
- Capital returns: LPL repurchased $309.5 million of stock and paid $24.0 million in dividends during the quarter; the board added $2.5 billion to repurchase authorization and plans approximately $300 million of Q3 buybacks.
- Cost outlook and balance sheet: 2026 Core G&A guidance was lowered to $2.14-$2.165 billion, including Commonwealth expenses; corporate cash was $430.1 million and leverage was 1.91x versus 1.86x in Q1.
Analysis
LPL Financial’s second quarter was another strong growth and execution print, led by market appreciation, advisory expansion and improving operating leverage. Adjusted EPS of $5.84 exceeded the $5.39 consensus by $0.45, or 8.35%, and rose 29% from $4.51 in Q2 2025 and 4% from $5.60 in Q1 2026. GAAP diluted EPS was $4.74, up 39% year over year and 7% sequentially. Revenue increased 35% year over year to $5.19 billion and 5% sequentially, while net income rose 39% to $379.3 million.
The principal driver was scale: total client assets grew 34% year over year to $2.56 trillion, helped by a 15.2% rise in the S&P 500 and a 21.2% increase in the Russell 2000 during the quarter. Organic net new assets reached $23.1 billion, although the $30.2 billion advisory inflow was partly offset by a $7.1 billion brokerage outflow. Advisory assets now comprise 60.4% of assets, up from 55.3% a year ago. Gross profit rose 24% to $1.62 billion, while adjusted pre-tax margin expanded to 39.3% from 37.6%, supporting the lower 2026 Core G&A outlook. LPL also resumed buybacks and increased authorization ahead of the planned Commonwealth conversion in Q4.
Earnings and operating leverage
LPL converted strong asset growth into higher earnings while keeping controllable costs below gross-profit growth. Gross profit rose 24% year over year to $1.618 billion and 2% sequentially, while Core G&A increased 22% year over year to $519.3 million but fell 2% sequentially from $532.0 million. Adjusted pre-tax income reached $635.4 million, up 30% year over year and 4% sequentially, lifting adjusted pre-tax margin to 39.3% from 38.5% in Q1 and 37.6% a year ago.
- Earnings bridge: Adjusted EPS of $5.84 included $0.89 per share of amortization of other intangibles and $0.61 per share of acquisition costs, partially offset by a $0.39 per share tax benefit.
- Cost control: Management lowered 2026 Core G&A guidance to $2.140-$2.165 billion, including expenses related to Commonwealth.
- Reported earnings: GAAP net income was $379.3 million, compared with $273.2 million in Q2 2025 and $356.4 million in Q1 2026.
Advisory asset growth
The quarter continued LPL’s shift toward the higher-value advisory platform. Advisory assets increased $487.7 billion year over year to $1.548 trillion, while brokerage assets rose 18% to $1.014 trillion. The mix of total assets served that was advisory reached 60.4%, up 510 basis points from a year ago and 90 basis points from Q1.
- Organic advisory flows: Organic net new advisory assets were $30.2 billion, producing 8.7% annualized growth; $27.9 billion came from the corporate RIA platform and $2.3 billion from independent RIAs.
- Brokerage pressure: Organic brokerage net new assets were negative $7.1 billion, worse than the negative $2.6 billion in Q2 2025, although $6.6 billion of brokerage assets converted to advisory.
- Advisor productivity: Advisors increased 11% year over year to 32,475, annualized advisory fees and commissions per advisor rose 27% to $478,000, and average total assets per advisor increased 21% to $78.9 million.
Revenue drivers
Revenue growth was broad, although the earnings mix was increasingly tied to advisory and market-sensitive asset streams. Advisory revenue increased 53% year over year to $2.632 billion, commission revenue rose 19% to $1.232 billion and asset-based revenue grew 19% to $835.1 million. Service and fee revenue increased 38% to $208.9 million, while transaction revenue rose 37% to $83.2 million.
- Market backdrop: The S&P 500 rose 15.2% and the Russell 2000 rose 21.2% in Q2, contributing $127.3 billion of market impact to advisory assets and $75.5 billion to brokerage assets.
- Commission mix: Sales-based commissions increased 17% to $728.2 million and trailing commissions increased 20% to $503.9 million, with annuities the largest product category at $727.7 million.
- Cash economics: Average client cash held by third parties rose to $53.9 billion from $49.1 billion a year ago, supporting $443.5 million of client cash revenue, even as ending cash balances fell 4% sequentially to $56.9 billion.
- Rate sensitivity: Net interest income declined 40% year over year to $46.5 million as the average federal funds rate fell 70 basis points to 3.63%.
Commonwealth and acquisitions
Commonwealth remains the central strategic event for the next quarter. LPL expects to complete the conversion of Commonwealth assets in Q4 2026, with approximately 90% asset retention. The company increased estimated run-rate EBITDA from $410 million to $435 million, while continuing to incur integration and onboarding costs.
- Conversion preparation: Commonwealth-related acquisition costs were $17.1 million in Q2 and $30.4 million in the first half of 2026.
- Additional platform transaction: LPL completed its acquisition of Mariner Advisor Network, which supported 367 advisors managing approximately $31 billion of client assets; 223 advisors remain directly affiliated with LPL and 144 hybrid advisors moved to Private Advisor Group’s hybrid RIA model.
- Smaller transactions: LPL deployed approximately $21 million to close four Liquidity & Succession deals in Q2, including one external practice, and completed 13 acquisitions in the first half.
Capital deployment and leverage
LPL resumed returning excess capital through repurchases while continuing to fund technology, acquisitions and the Commonwealth integration. The company’s capital position remained within its stated parameters, though leverage increased modestly as debt and investment spending rose.
- Buybacks: LPL repurchased 1.055 million shares for $309.5 million during the first half, including $309.5 million in Q2, at a weighted-average price of $293.33; it repurchased another $134.3 million from July 1 through July 30.
- Authorization: The board approved a $2.5 billion increase in repurchase authorization on July 23, leaving $320.5 million under the prior program at June 30.
- Liquidity: Corporate cash was $430.1 million versus $567.3 million at the end of Q1 and $469.7 million at year-end 2025; leverage was 1.91x against a 4.0x covenant maximum, with interest coverage of 9.16x.
- Regulatory capital: LPL Financial held $375.0 million of net capital against a $29.0 million requirement, leaving $346.1 million of excess net capital.
