Sign in
LF

LPL Financial Holdings Inc. (LPLA)·Q3 2025 Earnings Summary

Executive Summary

  • Record adjusted EPS and robust top-line: Adjusted EPS rose 25% YoY to $5.20, far above S&P Global consensus of $3.51; total revenue was $4.55B, up 19% QoQ and 46% YoY, versus Street at ~$4.31B. GAAP EPS was a loss of $0.37 on $419M of acquisition costs recognized at the Commonwealth close . Estimates marked with * are from S&P Global.
  • Business momentum plus M&A: Assets reached $2.31T (+21% QoQ, +45% YoY) with $308B total net new assets, including $275B acquired (Commonwealth); organic NNA was $33B (7% annualized) .
  • Cost discipline and outlook: Core G&A outlook for FY25 lowered to $1.86–$1.88B (from $1.88–$1.92B including Commonwealth costs); Q3 core G&A was $477M . Management cited automation and process improvements driving leverage .
  • Pricing/actions set 2026 tailwind: New pricing changes (effective July 1, 2026) reduce fees on advisory platforms and are expected to add ~100 bps to trailing 12-month adjusted pre-tax margin in 2026; targeted fee increases align brokerage pricing to market .
  • Near-term watch items: ICA yield was 351 bps and is guided to ~345 bps in Q4 on recent rate cuts; leverage rose to 2.04x post-Commonwealth, with buybacks paused until onboarding completes .

What Went Well and What Went Wrong

What Went Well

  • Record adjusted earnings amid strong revenue mix: Adjusted EPS $5.20 (+25% YoY), gross profit $1.48B (+13% QoQ, +31% YoY), and adjusted pre-tax income $569M (+16% QoQ, +35% YoY) . CEO: “delivering strong business results and record adjusted earnings per share” .
  • Strategic execution across growth vectors: $33B organic NNA (7% annualized) and $33B recruited assets; First Horizon onboarding largely complete ($17B transitioned); Commonwealth closed with advisors representing nearly 80% of assets signed, tracking to 90% retention .
  • Operating leverage and pricing strategy: Core G&A guidance lowered to $1.86–$1.88B for 2025; management emphasized automation, straight-through processing, and targeted fee actions to remain competitive and lift margins ~100 bps in 2026 .

What Went Wrong

  • GAAP loss driven by acquisition accounting: Net loss of $30M (−$0.37 diluted EPS) primarily due to $419M of one-time acquisition costs at Commonwealth closing .
  • Higher operating expense lines tied to M&A and growth: Compensation & benefits up 83% QoQ and 120% YoY; occupancy and equipment up sharply; acquisition-related costs of $538M (ex-interest) in Q3 .
  • ICA yield headwind near term: Management guided ICA yield to ~345 bps in Q4 on recent rate cuts, while interest expense is expected to rise ~$5M sequentially in Q4; interest income guided to ~$30M in Q4 as corporate cash normalizes .

Financial Results

MetricQ3 2024Q2 2025Q3 2025Q3 2025 Consensus*
Total Revenue ($B)3.108 3.835 4.552 4.310*
GAAP Diluted EPS ($)3.39 3.40 (0.37) n/a
Adjusted EPS ($)4.16 4.51 5.20 3.51*
Gross Profit ($B)1.128 1.304 1.479 n/a
Adjusted Pre-tax Income ($M)420.1 489.8 568.8 n/a
Adjusted EBITDA ($M)566.2 688.3 774.8 648.2*

Estimates marked * retrieved from S&P Global.

Revenue mix (company-defined):

Revenue Component ($M)Q3 2024Q2 2025Q3 2025
Advisory1,378.1 1,717.7 2,210.5
Commission (Total)806.5 1,038.1 1,187.5
Asset-based (Client cash)353.9 397.3 428.2
Asset-based (Other)272.3 305.0 354.1
Service & Fee145.7 151.8 174.7
Transaction58.5 60.5 67.3
Interest Income, net49.9 76.9 60.9
Other43.4 87.5 68.9
Total Revenue3,108.4 3,835.0 4,552.0

Key KPIs and balance/capital metrics:

KPIQ3 2024Q2 2025Q3 2025
Total Advisory & Brokerage Assets ($T)1.592 1.919 2.314
Advisory as % of Total56.0% 55.3% 58.2%
Total Organic NNA ($B)27.0 20.5 32.7
Acquired NNA ($B)0.6 — 275.0
Recruited AUM ($B)25.7 18.4 32.6
Client Cash Balances ($B)45.8 50.6 55.8
ICA Yield (bps)335 (Total Client Cash net yield) 326 (Total) 351 (ICA; mgmt)
Payout Rate87.46% 87.33% 87.47%
Advisors (Count)23,686 29,353 32,128
Corporate Cash ($M)—3,616.97 568.39
Leverage Ratio (x)—1.23x 2.04x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Core G&AFY 2025$1.88–$1.92B (incl. $160–$170M for Commonwealth) $1.86–$1.88B (incl. $165–$170M Prudential & Atria; $160–$165M Commonwealth) Lowered
ICA YieldQ4 2025n/a~345 bps (reflecting recent rate cuts) New
Service & Fee RevenueQ4 2025n/aRoughly flat sequentially (full-quarter Commonwealth offset by lower conference, seasonally lower IRA fees) Qualitative
Transaction RevenueQ4 2025n/a~ $70M New
Depreciation & AmortizationQ4 2025n/a+ ~$5M QoQ New
Interest ExpenseQ4 2025n/a+ ~$5M QoQ New
Interest IncomeQ4 2025n/a~$30M (corporate cash normalizing) New
Share RepurchasesOngoingPaused since earlier in 2025Remain paused; revisit post-Commonwealth onboarding Maintained
DividendQ4 2025n/a$0.30/sh payable Dec 1, 2025 Declared
Pricing/Fees (Advisory/Brokerage)Effective 7/1/2026n/aFee reductions on SAM/MWP/GWP; targeted brokerage fee increases to market; expected +~100 bps to TTM adjusted pre-tax margin in 2026 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Pricing & monetizationQ1: Brand campaign, tech updates; Q2: preparing for Commonwealth, no specific pricing shift Reduce advisory platform fees; targeted brokerage fee increases; net +~100 bps to 2026 adj. pre-tax margin Positive for competitiveness and 2026 margins
M&A integration (Commonwealth, Atria)Q1: Announced Commonwealth; Atria conversion on track Commonwealth closed; ~80% of assets signed, tracking to 90% retention; Atria onboarding complete; run-rate EBITDA raised (Commonwealth ~$425M; Atria ~$155M) Executing; improved synergy outlook
Large institutionsQ1: Prudential onboarded; First Horizon slated for 2H25 First Horizon onboarded (~$18B, $17B transitioned) Positive milestone
Organic growth & recruitingQ1: $71B organic NNA; Q2: $21B; depressed industry movement noted $33B organic NNA; $33B recruited; capture rates remain industry-leading despite low advisor mobility Solid despite macro
Client cash & ICA yieldQ2: Total client cash $50.6B; bank sweep yield 351 bps Total client cash $55.8B; ICA yield 351 bps; guide ~345 bps in Q4 on rate cuts Slightly negative near term
Expense discipline / automation & AIQ1–Q2: Lowered core G&A outlook; automation mentioned Further lowered FY25 core G&A; cited automation, straight-through processing, reduced service friction Structural leverage improving
Alts & cryptoQ1: Launched Alts Learning Hub [65 in list]Alts lineup expanding to ~120 by year-end; Alts Connect live; five crypto ETFs available; no direct crypto trading Enhanced offering
Capital deploymentQ1–Q2: Raised equity/notes for Commonwealth; buybacks paused Buybacks remain paused; leverage 2.04x; capital focused on M&A and organic investments Conservative until onboarding

Management Commentary

  • “Over the past quarter, we… delivered strong business results and record adjusted earnings per share.” — CEO Rich Steinmeier .
  • “We are lowering our 2025 Core G&A outlook to a range of $1,860–1,880 million… as we continue to make progress driving incremental operating leverage.” — President & CFO Matt Audette .
  • “We continue to track towards our 90% [Commonwealth] retention target, with advisors representing nearly 80% of assets already signed.” — Matt Audette .
  • “We will… reduce pricing across our advisory platforms, and make targeted offsetting fee increases where we've been priced below the market… estimated to increase our trailing 12‑month adjusted pre-tax margin by approximately 1% [in 2026].” — Matt Audette .
  • “ICA yield… was 351 basis points in Q3… we expect… ~345 basis points [in Q4], driven by… rate cuts.” — Matt Audette .

Q&A Highlights

  • Commonwealth retention and economics: Nearly 80% of assets signed; sensitivity of +1% retention ≈ +$5M run-rate EBITDA and ~0.1x lower multiple; on track to 90% by onboarding (4Q26) .
  • Pricing adjustments: 100 bps margin uplift is from pricing alone; advisory fees lowered to boost competitiveness; brokerage fees raised to align with market .
  • Expense trajectory: Savings seen as structural via automation (lower NIGO, fewer calls, more digital tools); FY26 will include full-year Commonwealth costs with synergies primarily in 2027 .
  • Advisor mobility/TA rates: Industry movement still depressed; LPL remains No.1 capture; TA rates historically track rates and competition; underwriting remains at 3–4x EBITDA, leaning higher amid current conditions .
  • October intra-quarter update: Client cash up ~$0.7B net after $2.4B advisory fees; ~4% organic growth for the month (before ~$1B OSJ offboarding) .

Estimates Context

  • EPS: Adjusted EPS of $5.20 vs S&P Global consensus $3.51 — a significant beat driven by higher gross profit, Commonwealth/Atria contributions, and lower core G&A; GAAP EPS was −$0.37 due to $419M of one-time acquisition costs at Commonwealth closing . Consensus marked * retrieved from S&P Global.
  • Revenue: Company reported $4.55B vs S&P Global consensus ~$4.31B*, aided by advisory growth, higher commissions (notably annuities), and client cash revenues . Consensus marked * retrieved from S&P Global.
  • EBITDA: Adjusted EBITDA $775M vs S&P Global consensus $648M* . Consensus marked * retrieved from S&P Global.
  • Where estimates may adjust: Street models likely raise 2025–2026 adjusted EPS/EBITDA on stronger revenue attachment, updated run-rate EBITDA for Commonwealth/Atria, and 2026 pricing tailwinds; GAAP figures will continue to reflect non-cash intangibles amortization and integration costs .

Key Takeaways for Investors

  • Underlying earnings power accelerating: Strong adjusted EPS/EBITDA outperformance plus lowered core G&A guidance indicate durable operating leverage, despite GAAP noise from M&A .
  • Commonwealth tracking better than feared: ~80% signed vs 90% target with improved run-rate EBITDA outlook ($425M) and modest leverage at 2.04x post-close .
  • Pricing resets are a 2026 catalyst: Advisory fee cuts and targeted brokerage increases should enhance competitiveness and lift adjusted pre-tax margin by ~100 bps in 2026 .
  • Near-term pressure from rates: ICA yield guided down to ~345 bps in Q4; interest expense to rise ~$5M QoQ; interest income to ~$30M as corporate cash normalizes .
  • Organic growth resilient: $33B organic NNA and $33B recruited AUM in Q3; advisor mobility remains muted, but LPL’s capture rate remains industry-leading .
  • Capital returns on hold: Buybacks paused until Commonwealth onboarding; dividend maintained at $0.30/sh for Dec 1 .
  • Watch list: Q4 revenue mix (service/fee flat, transactions ~$70M), expense cadence (D&A, interest), and any updates on Commonwealth retention trajectory and 2026 pricing execution .

Additional details and sources:

  • Q3 2025 8-K earnings release (full financials, non-GAAP reconciliations, KPIs) .
  • Earnings call transcript (prepared remarks and Q&A) .
  • Q2 2025 and Q1 2025 8-K for trends .
  • Pricing and fee structure press release (Oct 31, 2025) .

Notes: Estimates (cells marked with *) are values retrieved from S&P Global.