LPL Financial (LPLA) Q2 2024 earnings summary

Executive summary

• Total advisory and brokerage assets reached $1.5 trillion at June 30, 2024, up from $1.2 trillion a year earlier, reflecting a 21% year-over-year increase and a 16% CAGR since 2019.

• Net income for Q2 2024 was $244 million ($3.23 per diluted share), down 12% year-over-year; adjusted EPS was $3.88, down 2% year-over-year.

• Organic net new assets were $29 billion in Q2, representing 8% annualized growth; $104 billion over the past 12 months.

• The firm is executing horizontal and vertical expansion strategies, including major acquisitions (Atria, Prudential) and onboarding large institutions to broaden its advisor and institution base.

• Asset retention remained strong at approximately 98% for both Q2 and the last 12 months.

Financial highlights

• Total revenue for Q2 2024 was $2.93 billion, up 19% year-over-year; gross profit reached $1.079 billion, up 9% year-over-year.

• Adjusted EPS for Q2 2024 was $3.88; adjusted EBITDA was $533 million, up 2% year-over-year.

• Leverage ratio was 1.68x at quarter-end, within the 1.5–2.5x target range.

• Client cash balances were $44 billion, representing 2.9% of total assets, down $2 billion sequentially.

• Core G&A expense for Q2 2024 was $371 million, up 10% year-over-year.

Outlook and guidance

• Company expects to close the acquisition of Atria Wealth Solutions in the second half of 2024, with integration and onboarding of assets expected to complete by mid-2025.

• Share repurchases paused due to the planned Atria acquisition; resumption to be evaluated post-closing.

• Q3 payout rate expected to rise to approximately 87.5% due to seasonality.

• Service and fee revenue projected to increase by $10 million in Q3, with potential for an additional $5 million from OSJ separations.

• Core G&A expected to increase by $5–$10 million in Q3; likely to be in the upper half of 2024 guidance if organic growth persists.