LPL Financial (LPLA) Q3 2024 earnings summary

Executive summary

• Total advisory and brokerage assets reached $1.6 trillion at Q3 2024, up 29% year-over-year, with organic net new assets of $27 billion (7% annualized growth) and nearly $100 billion in net new assets over the past 12 months at an 8% growth rate.

• Net income for Q3 2024 was $255.3 million ($3.39 per diluted share), up 16% year-over-year; adjusted EPS was $4.16.

• Closed the acquisition of Atria Wealth Solutions for $835 million, with onboarding expected by mid-2025, and entered an agreement to acquire The Investment Center, expected to close in H1 2025.

• Advisor count rose to 23,700+, with industry-leading asset retention at 98% over the last 12 months.

• Leadership changes included the appointment of Rich Steinmeier as CEO and Matt Audette as President and CFO.

Financial highlights

• Q3 2024 total revenue was $3.11 billion, up 23% year-over-year; gross profit was $1.128 billion, up 12% year-over-year.

• Adjusted EBITDA for Q3 2024 was $566 million, up 12% year-over-year; adjusted EBITDA (LTM Q3'24) was $2.12 billion.

• Core G&A expense for Q3 2024 was $359 million, up 5% year-over-year.

• Client cash balances were $46 billion, representing 2.9% of total assets.

• Payout rate for Q3 2024 was 87.46%, up 16 bps year-over-year.

Outlook and guidance

• 2024 Core G&A outlook tightened to $1,510–$1,525 million, including $35–$40 million from Atria and Prudential integration.

• Share repurchases to resume in Q4 2024, targeting $100 million.

• Anticipate onboarding Prudential Advisors in Q4 2024 and Atria advisors in mid-2025, with run-rate EBITDA benefits of $70 million and $150 million, respectively.

• Dividend of $0.30 per share declared, payable December 2, 2024.

• Expect ICA yield to increase by ~5 bps in Q4, with service and fee revenue roughly flat and transaction revenue to rise by ~$5 million sequentially.