LPL Financial Holdings Inc.
Loading chart...
Item 1. Business
Overview
LPL serves the financial advisor-mediated marketplace as the nation’s largest independent broker-dealer, a leading investment advisory firm, and a top custodian. We support more than 32,000 financial advisors, and the wealth management practices of approximately 1,200 financial institutions, servicing and custodying approximately $2.4 trillion in brokerage and advisory assets. The firm provides a wide range of advisor affiliation models, investment solutions, fintech tools and practice management services, ensuring that advisors and institutions have the flexibility to choose the business model, services, and technology resources they need to run successful businesses.
We are steadfast in our commitment to the advisor-mediated model and the belief that investors deserve access to personalized guidance from a financial advisor. We believe advisors should have the freedom to choose the business model, services and technology they need to manage their client relationships. We believe investors achieve better outcomes when working with a financial advisor, and we strive to make it easy for advisors to do what is best for their clients.
iii
We believe that we are the only company that offers the unique combination of an integrated technology platform, comprehensive self-clearing services and access to a wide range of curated products all delivered in an environment unencumbered by conflicts from product manufacturing, underwriting and market-making.
LPL Financial Holdings Inc., which is the parent company of our business, was incorporated in Delaware in 2005. The Company’s most significant wholly owned subsidiaries are described below:
•LPL Holdings, Inc. is a direct subsidiary of LPL Financial Holdings Inc. and is an intermediate holding company of our business.
•LPL Financial LLC (“LPL Financial”) is a clearing broker-dealer and an investment adviser that clears and settles customer transactions.
•LPL Enterprise, LLC (“LPL Enterprise”) is a limited product shelf introducing broker-dealer and registered investment adviser that supports a portion of the Company’s institutional services’ clients, providing brokerage and investment advisory services.
•LPL Insurance Associates, Inc. (“LPLIA”) operates as an insurance brokerage general agency that offers life and disability insurance products and services.
•Atria Wealth Solutions, Inc. (“Atria”) is a holding company for the previously registered broker-dealers and investment advisers that the Company acquired in connection with the acquisition of Atria. Atria had seven introducing broker-dealer subsidiaries, which cleared transactions through third-party clearing and carrying firms. The Company completed the conversion of assets from these acquired broker-dealers and investment advisers to the Company’s platform and completed the withdrawal of the related registrations of these entities during the fourth quarter of 2025.
•AW Subsidiary, Inc. is a holding company for Blaze Portfolio Systems LLC (“Blaze”), which provides an advisor-facing trading and portfolio rebalancing platform.
•The Private Trust Company, N.A. (“PTC”) provides trust administration, investment management oversight and Individual Retirement Account (“IRA”) custodial services.
•LPL Employee Services, LLC and its subsidiary, Allen & Company of Florida, LLC (“Allen & Company”), provide primary support for the Company’s employee advisor affiliation model.
•CFN Holding Company, LLC is a holding company for Commonwealth Equity Services, LLC (“CES”), which is a registered broker-dealer and investment adviser that does business as Commonwealth Financial Network. CES is an introducing broker-dealer that clears transactions through a third-party clearing and carrying firm. The Company expects to complete the conversion of assets from CES in the fourth quarter of 2026 and withdraw the related registrations of that entity thereafter.
Our Strategy
At LPL, our vision is to be the best firm in wealth management and achieve our purpose of empowering financial advisors to deliver personalized advice to all who need it. In order to achieve this vision, our strategy is to meet advisors and institutions where they are in the evolution of their businesses, expand the addressable market, provide flexible end-to-end solutions to help advisors differentiate and win investors, create an industry-leading service experience that delights advisors and institutions and their clients, and help advisors and institutions run high-performing businesses.
Our Business
Advisor Relationships
Our business is dedicated exclusively to our advisors; we are not a market-maker nor do we offer investment banking services. We offer no proprietary products of our own, and, as a result, we enable the independent financial advisors and institutions that we support to offer their clients lower-conflict advice.
We work alongside advisors to navigate complex market and regulatory environments and strive to empower them to create the best outcomes for investors. In addition, we make meaningful investments in technology and services to support the growth, productivity and efficiency of advisors across a broad spectrum of business models as their practices evolve. Our advisors are a community of diverse financial services professionals who collectively support approximately 11.6 million client accounts. They build long-term relationships with their clients in communities across the United States by guiding them through the complexities of investment decisions, retirement solutions, financial planning and wealth management. Our services are designed to support the evolution of our advisors’ businesses over time and to adapt as our advisors’ needs change.
1
The majority of our advisors are independent practitioners who are viewed as local providers of independent advice. Many of our advisors operate under their own business name, with LPL offering assistance with their branding, marketing and promotion and regulatory review. We believe we offer a compelling economic value proposition to independent advisors, which is a key factor in our ability to attract and retain advisors and their practices. Generally, advisors in independent channels receive a greater share of advisory fees and brokerage commissions than advisors in captive channels — typically 80-100% compared to 30-50% for captive channels. Most of our independent financial advisors are business owners who, unlike their captive counterparts, also benefit from building equity value in their own businesses. We also support advisors through our independent employee advisor affiliation model, where they benefit from a full-service employee relationship with us while generally retaining ownership of their client relationships in exchange for a slightly lower payout than our traditional independent model. Furthermore, we believe that our technology and service platforms enable our advisors to operate their practices with a greater focus on serving investors at a lower cost than other independent advisors.
Our more than 32,000 advisors are experienced in the industry, which generally allows us to focus on supporting and enhancing our advisors’ businesses without needing to provide basic training or subsidizing advisors who are new to the industry. Our flexible business platform allows our advisors to choose the most appropriate business model to support their clients whether they conduct brokerage business, offer fee-based services using one of our registered investment adviser (“RIA”) platforms, or provide fee-based services through their own RIA.
Advisors licensed with LPL Financial as investment adviser representatives conduct fee-based business on our corporate RIA platform, and advisors licensed with LPL Financial as registered representatives conduct commission-based business on our brokerage platform. In order to be licensed with LPL Financial, advisors must be approved through our assessment process, which includes a review of each advisor’s education, experience and compliance history, among other factors. Approved advisors become registered with LPL Financial and enter into a representative agreement that establishes the duties and responsibilities of each party. Pursuant to the representative agreement, each advisor makes a series of representations, including that the advisor will disclose to all clients and prospective clients that the advisor is acting as LPL Financial’s investment advisory representative or registered representative, that the advisor will sell only products that LPL Financial has approved and that the advisor will comply with LPL Financial policies and procedures as well as securities rules and regulations. These advisors also agree not to engage in any outside business activity without prior approval from us.
LPL Financial also supports approximately 600 independent firms that conduct their business through separate registered investment advisors (“Independent RIAs”), with approximately 6,240 advisors who conduct their advisory business through these separate entities. Independent RIAs operate pursuant to the Investment Advisers Act of 1940, as amended (the “Advisers Act”), or their respective states’ investment advisory licensing rules. These Independent RIAs engage us for technology, clearing and custody services, as well as access to our investment platforms and business services. Advisors associated with Independent RIAs retain 100% of their advisory fees, and in return, we charge separate fees for custody, trading, administrative and support services. In addition, some financial advisors associated with Independent RIAs are registered representatives of LPL Financial and access our fully-integrated brokerage platform under standard terms.
We believe we are the market leader in the enterprise channel, providing support to over 7,400 financial advisors at approximately 1,200 institutions nationwide. The core capabilities of these institutions may not include investment and financial planning services, or they may find the technology, infrastructure and regulatory requirements of supporting such services to be cost-prohibitive. For these institutions, we provide their financial advisors with the infrastructure and services they need to be successful, allowing the institutions to focus more attention and capital on their core businesses. In addition, through LPL Enterprise, we are able to tailor our offering for the needs of large institutions, insurance companies and product manufacturers that seek support in connection with custom product sets. As an introducing broker-dealer and RIA, LPL Enterprise has the ability to provide key supervisory, compliance and risk, recruiting and middle-office technological support to complex institutional clients that manufacture and distribute their own products. Like advisors who are licensed with LPL Financial, advisors who are licensed with LPL Enterprise must be approved through our assessment process and enter into a representative agreement that establishes the duties and responsibilities of each party.
Finally, we provide support to approximately 4,200 additional financial advisors who are affiliated and licensed with insurance companies. These arrangements allow us to provide outsourced customized clearing, advisory platforms and technology solutions that enable the financial advisors at these insurance companies to offer a breadth of services to their client base in an efficient manner.
Our Value Proposition
We are dedicated to making it easy for advisors to do what is best for their clients. Our scale and self-clearing platform enable us to provide advisors with the capabilities they need, and the service they expect, at a compelling
2
price. We are dedicated to continuously improving the processes, systems and resources we leverage to meet these needs.
We support our advisors by providing front-, middle- and back-office solutions through our distinct value proposition: integrated technology solutions, comprehensive clearing services, compliance services, consultative practice management programs and training, business services and planning and advice services, along with in-house research. The comprehensive and increasingly automated nature of our offering enables our advisors to focus on their clients while successfully and efficiently managing the complexities of running their own practice.
Integrated Technology Solutions
We provide our technology and services to advisors through an integrated technology platform that is cloud-based and web-accessible. Our technology offerings are designed to permit our advisors to effectively manage all critical aspects of their businesses in an efficient manner while remaining responsive to their clients’ needs. We continue to automate time-consuming processes, such as account opening and management, document imaging, transaction execution, and account rebalancing, in an effort to improve our advisors’ efficiency and accuracy.
Comprehensive Clearing Services
We provide custody and clearing services for the majority of our advisors’ transactions and seek to offer a simplified and streamlined advisor experience with expedited processing capabilities. Our self-clearing platform enables us to control client data, more efficiently process and report trades, facilitate platform development, reduce costs and ultimately enhance the service experience for our advisors and their clients.
Compliance Services
We continue to make substantial investments in our compliance function to provide our advisors with a strong framework through which to understand and operate within regulatory guidelines, as well as guidelines that we establish. As the financial industry and regulatory environment evolve and become more complex, we have made a long-term commitment to enhancing our risk management and compliance structure, as well as our technology-based compliance and risk management tools, in order to support the overall effectiveness and scalability of our control environment.
Our team of risk and compliance employees assists our advisors through:
•training and advising advisors on new products, new regulatory guidelines, compliance and risk management tools, security policies and procedures and best practices;
•advising on sales practice activities and facilitating the supervision of activities by branch managers;
•conducting technology-enabled surveillance of trading activities and sales practices;
•monitoring of registered investment adviser activities for advisors who are investment adviser representatives of LPL Financial or LPL Enterprise; and
•inspecting branch offices and advising on how to strengthen compliance procedures.
Consultative Practice Management Programs and Training
Our practice management programs are designed to help leaders and financial advisors in independent practices and institutions enhance and grow their businesses. Our experience gives us the ability to benchmark the best practices of successful advisors and develop customized recommendations to meet the specific needs of an advisor’s business and market, and our scale allows us to dedicate a team of experienced professionals to this effort. Our practice management and training services include:
•personalized business consulting that helps eligible advisors and program leadership enhance the value and operational efficiency of their businesses;
•advisory and brokerage consulting and financial planning to support advisors in growing their businesses through our broad range of products and fee-based offerings and wealth management services;
•marketing strategies, including campaign templates, to enable advisors to build awareness of their services and capitalize on opportunities in their local markets;
•our Liquidity & Succession program, which offers expanded solutions to advisors seeking to monetize their businesses, free themselves from entrepreneurial burdens through the sale of their practices or simplify their businesses through partial book sales;
•an advisor loan program for advisors looking to buy another practice;
3
Loading financial statements...
Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
| Line item |
|---|
| Period ending |
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes to those consolidated financial statements included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. This discussion contains forward-looking statements that involve significant risks and uncertainties. As a result of many factors, such as those set forth under “Risk Factors” and elsewhere in this Annual Report on Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements. Please also refer to the section under heading “Special Note Regarding Forward-Looking Statements.”
Business Overview
We are a leader in the advisor-mediated marketplace as the nation’s largest independent broker-dealer, a leading investment advisory firm, and a top custodian. We serve independent financial advisors and institutions, providing them with the technology solutions, brokerage and advisory platforms, clearing services, compliance services, consultative practice management programs and training, business services and planning and advice services, and in-house research they need to run successful businesses. We enable them to provide personalized financial guidance to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions. Please consult Part I, “Item 1. Business” for information related to our business activities.
39
Our Sources of Revenue
Our revenue is derived primarily from fees and commissions from products and advisory services offered by our advisors to their clients, a substantial portion of which we pay out to our advisors, as well as fees we receive from our advisors for the use of our technology, custody, clearing, trust and reporting platforms. We also generate asset-based revenue through our insured bank sweep vehicles, money market account balances and the access we provide to a variety of product providers with the following product lines:
• Alternative Investments | • Retirement Plan Products | ||||||
• Annuities | • Separately Managed Accounts | ||||||
• Exchange Traded Products | • Structured Products | ||||||
• Insurance Based Products | • Unit Investment Trusts | ||||||
• Mutual Funds | |||||||
Under our self-clearing platform, we custody the majority of client assets invested in these financial products, for which we provide statements, transaction processing and ongoing account management. In return for these services, mutual funds, insurance companies, banks and other financial product sponsors pay us fees based on asset levels or number of accounts managed. We also earn interest from margin loans made to our advisors’ clients, cash and equivalents segregated under federal or other regulations, advisor repayable loans and operating cash, which is included in interest income, net in the consolidated statements of income. A portion of our revenue is not asset-based or correlated with the equity financial markets.
We regularly review various aspects of our operations and service offerings, including our policies, procedures and platforms, in response to marketplace developments. We seek to continuously improve and enhance aspects of our operations and service offerings in order to position our advisors for long-term growth and to align with competitive and regulatory developments. For example, we regularly review the structure and fees of our products and services, including related disclosures, in the context of the changing regulatory environment and competitive landscape for advisory and brokerage accounts.
Significant Events
Closed on the acquisition of Commonwealth Financial Network
On August 1, 2025, the Company closed on the acquisition of Commonwealth, a privately-held independent wealth management firm headquartered in Massachusetts, for a cash payment of approximately $2.7 billion. As part of the transaction, Commonwealth will transition its advisory and brokerage assets to the Company’s platform. The Company expects to complete the conversion in the fourth quarter of 2026. Commonwealth's results were included in the Company's consolidated statements of income from August 1, 2025 through December 31, 2025 and consolidated statements of financial condition as of December 31, 2025. See Note 4 - Acquisitions within the notes to the consolidated financial statements for additional information.
Completed offerings of $2.75 billion of debt and $1.7 billion of equity
On February 26, 2025, the Company completed the issuance and sale of $750.0 million in aggregate principal amount of 5.200% senior unsecured notes due 2030 and $500.0 million in aggregate principal amount of 5.650% senior unsecured notes due 2035. On April 3, 2025, the Company completed the issuance and sale of $500.0 million in aggregate principal amount of 4.900% senior unsecured notes due 2028, $500.0 million in aggregate principal amount of 5.150% senior unsecured notes due 2030 and $500.0 million in aggregate principal amount of 5.750% senior unsecured notes due 2035. See Note 11 - Corporate Debt and Other Borrowings, Net within the notes to the consolidated financial statements for additional information.
On April 2, 2025, the Company completed a public offering of approximately 5.4 million shares of the Company’s common stock at an offering price of $320.00 per share. See Note 15 - Stockholders’ Equity within the notes to the consolidated financial statements for additional information.
40
Executive Summary
Financial Highlights
Results for the year ended December 31, 2025 included net income of $0.9 billion, or $10.92 per diluted share, which compares to $1.1 billion, or $14.03 per diluted share, for the year ended December 31, 2024.
Asset Trends
Total advisory and brokerage assets served were $2.4 trillion at December 31, 2025, compared to $1.7 trillion at December 31, 2024. Total net new assets were $431.5 billion for the year ended December 31, 2025, compared to $235.6 billion for the same period in 2024.
Net new advisory assets were $317.4 billion for the year ended December 31, 2025, compared to $137.8 billion in 2024. Advisory assets were $1,392.7 billion, or 58.8% of total advisory and brokerage assets served, at December 31, 2025, up 46% from $957.0 billion at December 31, 2024.
Net new brokerage assets were $114.1 billion for the year ended December 31, 2025, compared to $97.8 billion in 2024. Brokerage assets were $977.9 billion at December 31, 2025, up 25% from $783.7 billion at December 31, 2024.
Gross Profit Trend
Gross profit, a non-GAAP financial measure, was $5.6 billion for the year ended December 31, 2025, an increase of 24% from $4.5 billion for the year ended December 31, 2024. See the “Key Performance Metrics” section for additional information on gross profit.
Common Stock Dividends and Share Repurchases
During the year ended December 31, 2025, we paid stockholders cash dividends of $94.4 million and repurchased 289,371 of our outstanding shares for a total of $100.0 million.
Key Performance Metrics
We focus on several key metrics in evaluating the success of our business relationships and our resulting financial position and operating performance. Our key operating, business and financial metrics are as follows:
| As of and for the Years Ended December 31, | ||||||||||
Operating Metrics (dollars in billions)(1) | 2025 | 2024 | ||||||||
Advisory and Brokerage Assets(2) | ||||||||||
| Advisory assets | $ | 1,392.7 | $ | 957.0 | ||||||
| Brokerage assets | 977.9 | 783.7 | ||||||||
| Total Advisory and Brokerage Assets | $ | 2,370.5 | $ | 1,740.7 | ||||||
| Advisory as a % of total Advisory and Brokerage Assets | 58.8 | % | 55.0 | % | ||||||
Net New Assets(3) | ||||||||||
| Net new advisory assets | $ | 317.4 | $ | 137.8 | ||||||
| Net new brokerage assets | 114.1 | 97.8 | ||||||||
| Total Net New Assets | $ | 431.5 | $ | 235.6 | ||||||
| Organic Net New Assets | ||||||||||
| Organic net new advisory assets | $ | 116.1 | $ | 115.3 | ||||||
| Organic net new brokerage assets | 30.4 | 25.5 | ||||||||
| Total Organic Net New Assets | $ | 146.5 | $ | 140.7 | ||||||
Organic advisory net new assets annualized growth(4) | 12.1 | % | 15.7 | % | ||||||
Total organic net new assets annualized growth(4) | 8.4 | % | 10.4 | % | ||||||
41
| As of and for the Years Ended December 31, | ||||||||||
| 2025 | 2024 | |||||||||
| Client Cash Balances | ||||||||||
| Insured cash account sweep | $ | 41.0 | $ | 38.3 | ||||||
| Deposit cash account sweep | 15.3 | 10.7 | ||||||||
| Total Bank Sweep | 56.3 | 49.0 | ||||||||
| Money market sweep | 2.5 | 4.3 | ||||||||
| Total Client Cash Sweep Held by Third Parties | 58.8 | 53.3 | ||||||||
Client cash account | 2.2 | 1.8 | ||||||||
| Total Client Cash Balances | $ | 61.0 | $ | 55.1 | ||||||
| Client Cash Balances as a % of Total Assets | 2.6% | 3.2% | ||||||||
Net buy (sell) activity(5) | $ | 160.9 | $ | 153.1 | ||||||
| Business and Financial Metrics (dollars in millions) | ||||||||||
| Advisors | 32,178 | 28,888 | ||||||||
Average total assets per advisor(6) | $ | 73.7 | $ | 60.3 | ||||||
| Share repurchases | $ | 100.0 | $ | 170.0 | ||||||
| Dividends | $ | 94.4 | $ | 89.7 | ||||||
Leverage ratio(7) | 1.95 | 1.89 | ||||||||
| Years Ended December 31, | ||||||||||
| Financial Metrics (dollars in millions, except per share data) | 2025 | 2024 | ||||||||
| Total revenue | $ | 16,989.5 | $ | 12,385.1 | ||||||
| Net income | $ | 863.0 | $ | 1,058.6 | ||||||
| Earnings per share (“EPS”), diluted | $ | 10.92 | $ | 14.03 | ||||||
| Non-GAAP Financial Metrics (dollars in millions, except per share data) | ||||||||||
Adjusted EPS(8) | $ | 20.09 | $ | 16.51 | ||||||
Gross profit(9) | $ | 5,597.9 | $ | 4,501.3 | ||||||
Adjusted EBITDA(10) | $ | 2,914.9 | $ | 2,224.4 | ||||||
Core G&A(11) | $ | 1,852.1 | $ | 1,515.5 | ||||||
____________________
(1)Totals may not foot due to rounding.
(2)Consists of total advisory and brokerage assets under custody at the Company’s primary broker-dealer subsidiary, LPL Financial, as well as assets under custody of a third-party custodian related to CES and Atria’s introducing broker-dealer subsidiaries. Please consult the “Results of Operations” section for a tabular presentation of advisory and brokerage assets.
(3)Consists of total client deposits into advisory or brokerage accounts less total client withdrawals from advisory or brokerage accounts, plus dividends, plus interest, minus advisory fees. We consider conversions from and to brokerage or advisory accounts as deposits and withdrawals, respectively.
(4)Calculated as annualized current period organic net new assets divided by preceding period assets in their respective categories of advisory assets or total advisory and brokerage assets.
(5)Represents the amount of securities purchased less the amount of securities sold in client accounts custodied with LPL Financial.
(6)Calculated based on the end of period total advisory and brokerage assets divided by the end of period advisor count.
42
(7)The leverage ratio is a financial metric from our Credit Agreement and is calculated by dividing Credit Agreement net debt, which equals consolidated total debt less Corporate Cash, by Credit Agreement EBITDA. Credit Agreement EBITDA, a non-GAAP financial measure, is defined in the Credit Agreement as “Consolidated EBITDA,” which is Consolidated Net Income (as defined in the Credit Agreement) plus interest expense on borrowings, provision for income taxes, depreciation and amortization, and amortization of other intangibles, and is further adjusted to exclude certain non-cash charges and other adjustments, and to include future expected cost savings, operating expense reductions or other synergies from certain transactions. Please consult the “Debt and Related Covenants” section for more information. Below are reconciliations of corporate debt and other borrowings to Credit Agreement net debt as of the dates below and net income to EBITDA and Credit Agreement EBITDA for the periods presented (in millions):
| December 31, | ||||||||
| Credit Agreement Net Debt Reconciliation | 2025 | 2024 | ||||||
| Corporate debt and other borrowings | $ | 7,299.0 | $ | 5,517.0 | ||||
Corporate Cash(12) | (469.7) | (479.4) | ||||||
Credit Agreement Net Debt(†) | $ | 6,829.3 | $ | 5,037.6 | ||||
| Years Ended December 31, | ||||||||
| EBITDA and Credit Agreement EBITDA Reconciliation | 2025 | 2024 | ||||||
| Net income | $ | 863.0 | $ | 1,058.6 | ||||
| Interest expense on borrowings | 403.4 | 274.2 | ||||||
| Depreciation and amortization | 393.4 | 308.5 | ||||||
| Provision for income taxes | 286.5 | 334.3 | ||||||
| Amortization of other intangibles | 236.6 | 135.2 | ||||||
EBITDA(†) | $ | 2,182.9 | $ | 2,110.8 | ||||
| Credit Agreement Adjustments: | ||||||||
Acquisition costs and other(13)(14) | $ | 777.3 | $ | 223.6 | ||||
| Employee share-based compensation | 76.0 | 89.0 | ||||||
M&A accretion(15) | 462.6 | 235.0 | ||||||
| Advisor share-based compensation | 3.1 | 2.6 | ||||||
| Loss on extinguishment of debt | — | 4.0 | ||||||
Credit Agreement EBITDA(†) | $ | 3,501.8 | $ | 2,665.0 | ||||
| December 31, | ||||||||
| 2025 | 2024 | |||||||
| Leverage Ratio | 1.95 | 1.89 | ||||||
(†) Totals may not foot due to rounding.
(8)Adjusted EPS is a non-GAAP financial measure defined as adjusted net income, a non-GAAP financial measure defined as net income plus the after-tax impact of amortization of other intangibles, acquisition costs, certain regulatory charges, losses on extinguishment of debt and amounts related to the departure of the Company’s former CEO, divided by the weighted average number of diluted shares outstanding for the applicable period. The Company presents adjusted net income and adjusted EPS because management believes that these metrics can provide investors with useful insight into the Company’s core operating performance by excluding non-cash items, acquisition costs and certain other charges that management does not believe impact the Company’s ongoing operations. Adjusted net income and adjusted EPS are not measures of the Company's financial performance under GAAP and should not be considered as alternatives to net income, earnings per diluted share or any other performance measure derived in accordance with GAAP. Below is a reconciliation of net income and earnings per diluted share to adjusted net income and adjusted EPS for the periods presented (in millions, except per share data):
| Years Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
Adjusted Net Income / Adjusted EPS Reconciliation | Amount | Per Share | Amount | Per Share | ||||||||||
| Net income / earnings per diluted share | $ | 863.0 | $ | 10.92 | $ | 1,058.6 | $ | 14.03 | ||||||
Regulatory charge(14) | — | — | 18.0 | 0.24 | ||||||||||
| Amortization of other intangibles | 236.6 | 2.99 | 135.2 | 1.79 | ||||||||||
Acquisition costs(16) | 740.4 | 9.37 | 105.9 | 1.40 | ||||||||||
Departure of former CEO(17) | — | — | (14.4) | (0.19) | ||||||||||
| Loss on extinguishment of debt | — | — | 4.0 | 0.05 | ||||||||||
| Tax benefit | (251.6) | (3.18) | (62.1) | (0.82) | ||||||||||
Adjusted Net Income / Adjusted EPS(†) | $ | 1,588.4 | $ | 20.09 | $ | 1,245.3 | $ | 16.51 | ||||||
| Weighted-average shares outstanding, diluted | 79.1 | 75.4 | ||||||||||||
(†) Totals may not foot due to rounding.
43
(9)Gross profit is a non-GAAP financial measure defined as total revenue less advisory and commission expense; brokerage, clearing and exchange expense; and market fluctuations on employee deferred compensation. All other expense categories, including depreciation and amortization of property and equipment and amortization of other intangibles, are considered by management to be general and administrative in nature. Because our gross profit amounts do not include any depreciation and amortization expense, we consider our gross profit amounts to be non-GAAP financial measures that may not be comparable to those of others in our industry. We believe that gross profit amounts can provide investors with useful insight into our core operating performance before indirect costs that are general and administrative in nature. Below is a calculation of gross profit for the periods presented (in millions):
| Years Ended December 31, | ||||||||
| Gross Profit | 2025 | 2024 | ||||||
| Total revenue | $ | 16,989.5 | $ | 12,385.1 | ||||
| Advisory and commission expense | 11,204.0 | 7,751.0 | ||||||
| Brokerage, clearing and exchange expense | 178.1 | 127.9 | ||||||
Employee deferred compensation | 9.4 | 4.8 | ||||||
Gross Profit(†) | $ | 5,597.9 | $ | 4,501.3 | ||||
____________________
(†) Totals may not foot due to rounding.
(10)EBITDA and adjusted EBITDA are non-GAAP financial measures. EBITDA is defined as net income plus interest expense on borrowings, provision for income taxes, depreciation and amortization, and amortization of other intangibles. Adjusted EBITDA is defined as EBITDA plus acquisition costs excluding interest, certain regulatory charges, losses on extinguishment of debt, and amounts related to the departure of the Company’s former CEO. The Company presents EBITDA and adjusted EBITDA because management believes that they can be useful financial metrics in understanding the Company’s earnings from operations. EBITDA and adjusted EBITDA are not measures of the Company's financial performance under GAAP and should not be considered as alternatives to net income or any other performance measure derived in accordance with GAAP. Below is a reconciliation of net income to EBITDA and adjusted EBITDA for the periods presented (in millions):
| Years Ended December 31, | ||||||||
| EBITDA Reconciliation | 2025 | 2024 | ||||||
| Net income | $ | 863.0 | $ | 1,058.6 | ||||
| Interest expense on borrowings | 403.4 | 274.2 | ||||||
| Provision for income taxes | 286.5 | 334.3 | ||||||
| Depreciation and amortization | 393.4 | 308.5 | ||||||
| Amortization of other intangibles | 236.6 | 135.2 | ||||||
EBITDA(†) | $ | 2,182.9 | $ | 2,110.8 | ||||
Regulatory charge(14) | — | 18.0 | ||||||
Acquisition costs excluding interest(16) | 732.0 | 105.9 | ||||||
Departure of former CEO(17) | — | (14.4) | ||||||
| Loss on extinguishment of debt | — | 4.0 | ||||||
Adjusted EBITDA(†) | $ | 2,914.9 | $ | 2,224.4 | ||||
(†) Totals may not foot due to rounding.
44
(11)Core G&A is a non-GAAP financial measure defined as total expense less the following expenses: advisory and commission; depreciation and amortization; interest expense on borrowings; amortization of other intangibles; brokerage, clearing and exchange; market fluctuations on employee deferred compensation; losses on extinguishment of debt; promotional (ongoing); regulatory charges; employee share-based compensation; acquisition costs excluding interest and transition assistance loan amortization. Management presents core G&A because it believes core G&A reflects the corporate expense categories over which management can generally exercise a measure of control, compared with expense items over which management either cannot exercise control, such as advisory and commission expense, or which management views as promotional expense necessary to support advisor growth and retention, including conferences and transition assistance. Core G&A is not a measure of the Company’s total expense as calculated in accordance with GAAP. Below is a reconciliation of the Company’s total expense to core G&A for the periods presented (in millions):
| Years Ended December 31, | ||||||||
| Core G&A Reconciliation | 2025 | 2024 | ||||||
| Total expense | $ | 15,840.0 | $ | 10,992.2 | ||||
| Advisory and commission | (11,204.0) | (7,751.0) | ||||||
| Depreciation and amortization | (393.4) | (308.5) | ||||||
| Interest expense on borrowings | (403.4) | (274.2) | ||||||
| Amortization of other intangibles | (236.6) | (135.2) | ||||||
| Brokerage, clearing and exchange | (178.1) | (127.9) | ||||||
Employee deferred compensation | (9.4) | (4.8) | ||||||
| Loss on extinguishment of debt | — | (4.0) | ||||||
Total G&A(†) | 3,415.0 | 2,386.5 | ||||||
Acquisition costs excluding interest(16) | (732.0) | (105.9) | ||||||
Promotional (ongoing)(18)(19) | (317.2) | (363.4) | ||||||
Transition assistance loan amortization(18) | (408.7) | (265.5) | ||||||
| Employee share-based compensation | (76.0) | (89.0) | ||||||
Regulatory charges(14) | (29.0) | (47.3) | ||||||
Core G&A(†) | $ | 1,852.1 | $ | 1,515.5 | ||||
____________________
(†) Totals may not foot due to rounding.
(12)See the “Liquidity and Capital Resources” section for additional information about Corporate Cash.
(13)Acquisition costs and other for the twelve months ending December 31, 2025 and 2024 primarily include costs related to acquisitions and the integration of the strategic relationship with Prudential. Acquisition costs and other for the twelve months ending December 31, 2024 also includes a $26.4 million reduction related to the departure of the Company’s former Chief Executive Officer and an $18.0 million regulatory charge related to a penalty proposed by the SEC as part of its civil investigation of the Company’s compliance with certain elements of the Company’s anti-money laundering compliance program.
(14)The Company recorded an $18.0 million regulatory charge for the year ended December 31, 2024 related to a penalty proposed by the SEC as part of its civil investigation of the Company’s compliance with certain elements of the Company’s anti-money laundering compliance program.
(15)M&A accretion is an adjustment to reflect the annualized expected run rate EBITDA of an acquisition as permitted by the Credit Agreement for up to eight fiscal quarters following the close of such acquisition.
(16)Acquisition costs include the costs to setup, onboard and integrate acquired entities and other costs that were incurred as a result of acquisitions. The below table summarizes the primary components of acquisition costs for the periods presented (in millions):
| Years Ended December 31, | ||||||||
Acquisition Costs | 2025 | 2024 | ||||||
Compensation and benefits(20) | $ | 312.1 | $ | 35.0 | ||||
Occupancy and equipment(20) | 203.7 | 0.1 | ||||||
Promotional(19) | 86.0 | 7.0 | ||||||
| Professional services | 41.7 | 20.9 | ||||||
Change in fair value of contingent consideration | 24.2 | 41.7 | ||||||
Interest | 8.5 | — | ||||||
| Other | 64.3 | 1.3 | ||||||
Acquisition Costs(†) | $ | 740.4 | $ | 105.9 | ||||
____________________
(†) Totals may not foot due to rounding.
(17)The departure of the Company’s former CEO resulted in other income of $26.4 million during the year ended December 31, 2024 related to the clawback of share-based compensation awards, which was offset by share-based compensation expense of $12.0 million related to the modification of certain stock options that were retained as part of the settlement agreement that the Company reached with the former CEO. See Note 16 - Share-Based Compensation, Employee Incentives and Benefit Plans within the notes to the consolidated financial statements for additional information.
(18)During the fourth quarter of 2025, the Company updated its definition of Promotional (ongoing) to exclude transition assistance loan amortization. As a result, transition assistance loan amortization is now disclosed as a separate line in Core G&A. Prior period disclosures have been updated to reflect these changes as applicable.
45
(19)Promotional (ongoing) for the years ended December 31, 2025 and December 31, 2024 includes $74.7 million and $46.6 million, respectively, of support costs related to full-time employees that are classified within compensation and benefits expense in the consolidated statements of income. Promotional (ongoing) for the years ended December 31, 2025 and December 31, 2024 excludes $86.0 million and $7.0 million, respectively, of expenses incurred as a result of acquisitions, which are included in the Acquisition costs line item.
(20)The Company incurred $419.0 million of acquisition costs at the Commonwealth closing. This primarily includes $228.4 million of costs related to transaction bonuses and the acceleration of unvested equity awards which were classified as Compensation and benefits and $190.1 million of costs related to certain contract termination fees which were classified as Occupancy and equipment.
Economic Overview and Impact of Financial Market Events
Our business is directly and indirectly sensitive to several macroeconomic factors and the state of the financial markets in the United States. The equity markets rose during the year ended December 31, 2025, reaching new heights, with the S&P 500 and Russell 2000 small cap index rising 17.9% and 11.3%, respectively.
Our business is also sensitive to current and expected short-term interest rates, which are largely driven by Federal Reserve (“Fed”) policy. During the fourth quarter of 2025, Fed policymakers lowered the target federal funds rate to a range of 3.50% to 3.75%. To the extent they pursue faster easing in monetary policy, the Federal Open Market Committee members will continue to take into account the evolving economic outlook and balance of risks.
Please consult the “Risks Related to Our Business and Industry” section within Part I, “Item 1A. Risk Factors” for more information about the risks associated with significant interest rate changes and the potential related effects on our profitability and financial condition.
46
Results of Operations
A discussion of changes in our results of operations during the year ended December 31, 2024 compared to the year ended December 31, 2023 has been omitted from this Annual Report on Form 10-K, but may be found in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 20, 2025.
The following discussion presents an analysis of our results of operations for the years ended December 31, 2025 and 2024 (in thousands):
| Years Ended December 31, | |||||||||||
| 2025 | 2024 | % Change | |||||||||
| REVENUE | |||||||||||
| Advisory | $ | 8,161,238 | $ | 5,461,858 | 49 | % | |||||
| Commission: | |||||||||||
| Sales-based | 2,645,913 | 1,763,232 | 50 | % | |||||||
| Trailing | 1,859,159 | 1,542,255 | 21 | ||||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-04-15 | Audette Matthew J | President and CFO | Sell | -1,110 ×4 | $330.01 | -$366,314 |
| 2026-04-14 | Audette Matthew J | President and CFO | Sell | -469 ×2 | $325.34 | -$152,586 |
| 2026-03-10 | Cohen Marc Eliot | Group Managing Director | Sell | -1,088 | $309.72 | -$337,041 |
| 2026-03-09 | Cohen Marc Eliot | Group Managing Director | Sell | -2,212 | $308.75 | -$682,955 |
| 2026-03-02 | Jambusaria Aneri | Group Managing Director | Sell | -308 | $306.00 | -$94,248 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-08-03 10-Q expected by 2026-08-10 (in 64 days)
- ~2026-11-02 10-Q expected by 2026-11-09 (in 155 days)
- ~2027-02-22 10-K expected by 2027-03-01 (in 267 days)
- ~2027-05-03 10-Q expected by 2027-05-10 (in 337 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-05-04 10-Q Quarterly Report
- 2026-04-30 8-K Earnings Release; Financial Statements and Exhibits
- 2026-02-23 10-K Annual Report
- 2026-01-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-08 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
- 2025-11-03 10-Q Quarterly Report
- 2025-10-30 8-K Earnings Release; Financial Statements and Exhibits
- 2025-08-04 10-Q Quarterly Report
- 2025-08-01 8-K Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
- 2025-07-31 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-03 8-K Officer/Director Change; Financial Statements and Exhibits
- 2025-06-03 8-K Officer/Director Change
- 2025-05-09 10-Q Quarterly Report
- 2025-05-08 8-K Earnings Release; Financial Statements and Exhibits
- 2025-04-03 8-K Material Agreement Entered; Material Financial Obligation; Other Events; Financial Statements and Exhibits