SCHW · Forward model · Trading revenue
What has to happen in Trading revenue
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Trading revenue
Commissions, order-flow revenue and principal transactions, earned on 739.04 million trades in the basis quarter - 11.92 million daily average trades over 62 trading days - at $1.644 of revenue per trade. 17.2% of the basis quarter, and the only line where volume and price are BOTH disclosed every quarter and BOTH guided down: management guides full-year daily average trades to about 10.6 million against the 11.92 million just printed, and revenue per trade has fallen $2.03 to $1.64 across five quarters as the mix moves to more, smaller trades. It is a unit-times-price line whose two legs point the same way, which is why it is the largest single source of the base case's caution.
Latest: $979M (2031Q2E)
| Period | Value |
|---|---|
| 2021Q4 | $1.02B |
| 2022Q1 | $963M |
| 2022Q2 | $885M |
| 2022Q3 | $930M |
| 2022Q4 | $895M |
| 2023Q1 | $892M |
| 2023Q2 | $803M |
| 2023Q3 | $768M |
| 2023Q4 | $767M |
| 2024Q1 | $817M |
| 2024Q2 | $777M |
| 2024Q3 | $797M |
| 2024Q4 | $873M |
| 2025Q1 | $908M |
| 2025Q2 | $952M |
| 2025Q3 | $995M |
| 2025Q4 | $1.07B |
| 2026Q1 | $1.09B |
| 2026Q2 | $1.22B |
| 2026Q3E | $1.10B |
| 2026Q4E | $1.02B |
| 2027Q1E | $978M |
| 2027Q2E | $950M |
| 2027Q3E | $933M |
| 2027Q4E | $923M |
| 2028Q1E | $918M |
| 2028Q2E | $917M |
| 2028Q3E | $918M |
| 2028Q4E | $920M |
| 2029Q1E | $924M |
| 2029Q2E | $929M |
| 2029Q3E | $934M |
| 2029Q4E | $940M |
| 2030Q1E | $946M |
| 2030Q2E | $952M |
| 2030Q3E | $958M |
| 2030Q4E | $965M |
| 2031Q1E | $972M |
| 2031Q2E | $979M |
Assumptions & reasoning
- A UNIT driver because Schwab prints daily average trades, the number of trading days and revenue per trade every quarter, so volume and price are both disclosed rather than one being backed out of the other. The derived $1.6440 is used instead of the printed $1.64 so the driver reproduces the reported $1,215M exactly.
- SEASONALITY TESTED AND REJECTED, contrary to the prior that a retail broker's trading line should be seasonal. Ratio to a CENTRED four-quarter moving average gives [1.0302, 0.9757, 0.9891, 1.0050], a signal of 0.0545 against a worst window-to-window spread of 0.0604 - a 0.90:1 ratio, so the spread EXCEEDS the signal and the vertical stays aseasonal. Schwab's trading variation is regime - volatility, retail engagement, the 2025-26 surge - not calendar.
- The unit identity is verified twice: the three reported components multiply back to the reported revenue within 0.25%, and management's own published sensitivity of about $40M a year per 100 thousand daily average trades reproduces from the same three numbers. The double-counting warning applies here too - a unit driver's units and price are the basis quarter's own levels, so a seasonal factor would be applied twice.
- BOTH LEGS ARE GUIDED DOWN and the model follows both. Holding the basis quarter's 11.92 million daily trades flat instead of stepping to the guided ~10.6 million would add roughly $460M to 2026 revenue that management has explicitly told the market not to expect.