Net New Client Assets of $22.2BRecord Average
Client Trades per Day of 943,000GAAP Diluted EPS $0.48; Non-GAAP
Diluted EPS $0.73 (1)
TD Ameritrade Holding Corporation (Nasdaq: AMTD) has released
results for the second quarter of fiscal 2018. The Company gathered
$22.2 billion in net new client assets for the quarter and reported
record client trading activity of approximately 943,000 client
trades per day, on average. These results were driven by a
resurgence of volatility in the equity markets, which in turn
increased investor engagement and trading.
Financial results for the quarter ended March 31, 2018 include
the following:(2)
- Net new client assets of approximately
$22.2 billion, an annualized growth rate of 8 percent
- Record average client trades per day of
approximately 943,000, up 82 percent year over year
- Record net revenues of $1.4 billion, 59
percent of which were asset-based
- Client assets of approximately $1.2
trillion, up 40 percent year over year
- $0.48 in GAAP earnings per diluted
share, up 20 percent year over year, on net income of $271
million
- $0.73 in Non-GAAP earnings per diluted
share(1), up 66 percent year over year
- Pre-tax GAAP income of $372 million, or
26 percent of net revenues
- Interest rate-sensitive assets(3) of
$153 billion, up 23 percent year over year
“Early results of our dual strategy to successfully integrate
Scottrade while continuing to accelerate and diversify revenue
growth in our core business have exceeded our expectations,” said
Tim Hockey, TD Ameritrade president and chief executive officer.
“With the Scottrade client conversion now successfully behind us,
we are turning our focus to increasing our momentum and profitably
growing our business. Further enhancing the client experience,
investing in innovation and employee development, and increasing
our competitive edge will be our priorities as we work through the
balance of the fiscal year.”
“In our second quarter, market volatility returned in full force
as the implications of tax reform became clearer, interest rates
continued to rise, and tariff talks surprised the markets,” said
Steve Boyle, executive vice president and chief financial officer.
“These events drove record revenue in the quarter and more than
offset some volatility-related losses. Scottrade expense synergies
remain on track, and we expect total operating expenses to decline
significantly over the remainder of the fiscal year. Leading with
technology remains a key focus that necessitates continued
investment in order to enhance our offerings and drive efficient
growth in the future.”
Capital ManagementThe Company paid $119 million,
or $0.21 per share, in cash dividends in its second
fiscal quarter.
The Company has declared a $0.21 per share quarterly cash
dividend, payable on May 22, 2018 to all holders of
record of common stock as of May 8, 2018.
Company Hosts Conference CallTD Ameritrade will hold its
March Quarter conference call tomorrow morning, April 24, 2018, at
8:30 a.m. EDT (7:30 a.m. CDT) to take questions from analysts.
Participants may listen to the conference call by dialing
866-393-4306. A complete audio recording of management’s
remarks, an abridged text version of the remarks, a financial fact
sheet containing associated details, as well as a supplemental FAQ
are now available on the “Financial Reports” page
of www.amtd.com under the header “Second Quarter
2018.” Conference call participants are encouraged to reference
these materials prior to the call.
A replay of the phone call will be available by dialing
855-859-2056 and entering the Conference ID 4581279 beginning at
11:30 a.m. EDT (10:30 a.m. CDT) on April 24, 2018. The replay will
be available until 11:59 p.m. EDT (10:59 p.m. CDT) on May 1, 2018.
A transcript of the call will be available on the Company’s
corporate web site, www.amtd.com, via the “Financial Reports” page
beginning Wednesday, April 25, 2018.
More information about TD Ameritrade’s upcoming corporate events
and management speaking engagements, such as quarterly earnings
conference calls, are available on the Company’s Corporate Event
Calendar. Look for the link “Where are we?” on the “Investor
Relations” page of www.amtd.com.
Interested parties should visit or subscribe to newsfeeds at
www.amtd.com for the most up-to-date information on corporate
financial reports, press releases, SEC filings and events. The
Company also communicates this information via Twitter,
@TDAmeritradePR. Website links, corporate titles and telephone
numbers provided in this release, although correct when published,
may change in the future.
Source: TD Ameritrade Holding Corporation
About TD Ameritrade Holding CorporationTD Ameritrade
provides investing services and education to more than 11 million
client accounts totaling $1.2 trillion in assets, and custodial
services to more than 6,000 registered investment advisors. We are
a leader in U.S. retail trading, executing an average of more than
940,000 trades per day for our clients, nearly a quarter of which
come from mobile devices. We have a proud history of innovation,
dating back to our start in 1975, and today our team of
10,000-strong is committed to carrying it forward. Together, we are
leveraging the latest in cutting edge technologies and one-on-one
client care to transform lives, and investing, for the better.
Learn more by visiting TD Ameritrade’s newsroom at www.amtd.com, or
read our stories at Fresh Accounts.
Safe HarborThis document contains forward-looking
statements within the meaning of the federal securities laws. We
intend these forward-looking statements to be covered by the safe
harbor provisions of the federal securities laws. In particular,
any projections regarding our future revenues, expenses, earnings,
capital expenditures, effective tax rates, client trading activity,
accounts, stock price or any projections or expectations regarding
the acquisition of Scottrade Financial Services, Inc., as well as
the assumptions on which such expectations are based, are
forward-looking statements. These statements reflect only our
current expectations and are not guarantees of future performance
or results. These statements involve risks, uncertainties and
assumptions that could cause actual results or performance to
differ materially from those contained in the forward-looking
statements. These risks, uncertainties and assumptions include, but
are not limited to: economic, social and political conditions and
other securities industry risks; interest rate risks; liquidity
risks; credit risk with clients and counterparties; risk of
liability for errors in clearing functions; systemic risk; systems
failures, delays and capacity constraints; network security risks;
competition; reliance on external service providers; new laws and
regulations affecting our business; net capital requirements;
extensive regulation, regulatory uncertainties and legal matters;
difficulties and delays in integrating the Scottrade Financial
Services, Inc. ("Scottrade") business or fully realizing cost
savings and other benefits from the acquisition; business
disruption following the Scottrade acquisition; disruptions due to
Scottrade integration-related uncertainty or other factors making
it more difficult to maintain relationships with employees,
customers, other business partners or governmental entities; the
inability to achieve synergies or to implement integration plans
and other consequences associated with other acquisitions; and the
other risks and uncertainties set forth under Item 1A. – Risk
Factors of the Company's annual report on Form 10-K for the fiscal
year ended September 30, 2017. These forward-looking
statements speak only as of the date on which the statements were
made. We undertake no obligation to publicly update or revise these
statements, whether as a result of new information, future events
or otherwise, except to the extent required by the federal
securities laws.
1 See attached reconciliation of non-GAAP financial
measures.
2 Please see the Glossary of Terms, located in “Investor”
section of www.amtd.com for more information on how these metrics
are calculated.
3 Interest rate-sensitive assets consist of spread-based assets
and money market mutual funds. Ending balances as of March 31,
2018.
Brokerage services provided by TD Ameritrade, Inc., member
FINRA (www.FINRA.org) /SIPC (www.SIPC.org).
TD AMERITRADE HOLDING CORPORATION CONSOLIDATED
STATEMENTS OF INCOME In millions, except per share amounts
(Unaudited)
Quarter Ended Six Months Ended Mar.
31, 2018 Dec. 31, 2017 Mar. 31, 2017 Mar. 31,
2018 Mar. 31, 2017 Revenues: Transaction-based revenues:
Commissions and transaction fees $ 556 $ 440 $ 365 $ 996 $ 719
Asset-based revenues: Bank deposit account fees 381 381 269 762 514
Net interest revenue 308 276 154 585 305 Investment product fees
141 133 103 274 197 Total
asset-based revenues 830 790 526 1,621 1,016 Other revenues
29 27 13 55 27 Net revenues
1,415 1,257 904 2,672 1,762
Operating expenses: Employee compensation and benefits 461 415 229
875 443 Clearing and execution costs 56 47 37 103 73 Communications
46 53 29 99 64 Occupancy and equipment costs 79 80 45 160 89
Depreciation and amortization 35 34 25 69 49 Amortization of
acquired intangible assets 37 38 19 75 38 Professional services 86
74 59 160 111 Advertising 90 64 80 154 137 Other 129
116 23 245 47 Total operating expenses
1,019 921 546 1,940 1,051
Operating income 396 336 358 732 711 Other expense: Interest
on borrowings 24 20 14 44 28 Loss on sale of investments - 11 - 11
- Other - 2 - 2 - Total other
expense 24 33 14 57 28
Pre-tax income 372 303 344 675 683 Provision for income
taxes(1) 101 6 130 107 253
Net income $ 271 $ 297 $ 214 $ 568 $ 430 Earnings per
share - basic $ 0.48 $ 0.52 $ 0.41 $ 1.00 $ 0.81 Earnings per share
- diluted $ 0.48 $ 0.52 $ 0.40 $ 1.00 $ 0.81 Weighted
average shares outstanding - basic 567 567 528 567 528 Weighted
average shares outstanding - diluted 570 569 530 569 530
Dividends declared per share $ 0.21 $ 0.21 $ 0.18 $ 0.42 $ 0.36
(1) The provision for income taxes was lower for the six
months ended March 31, 2018, primarily due to the realization of
approximately $78 million of after-tax benefits recognized during
the quarter ended December 31, 2017. These after-tax benefits were
primarily attributable to the enactment of the Tax Cuts and Jobs
Act for which we recorded a provisional estimate for the
remeasurement of our deferred income tax balances.
TD AMERITRADE HOLDING CORPORATION CONDENSED CONSOLIDATED
BALANCE SHEETS In millions (Unaudited)
Mar. 31, 2018 Sept. 30, 2017 Assets: Cash and
cash equivalents $ 1,373 $ 1,472 Segregated cash and investments
6,863 10,446 Broker/dealer receivables 1,395 1,334 Client
receivables, net 20,823 17,151 Investments available-for-sale, at
fair value 488 746 Goodwill and intangible assets 5,597 5,683 Other
1,871 1,795 Total assets $ 38,410 $ 38,627
Liabilities and stockholders' equity: Liabilities:
Broker/dealer payables $ 3,093 $ 2,504 Client payables 23,848
25,107 Long-term debt and other borrowings 2,795 2,652 Other
1,079 1,117 Total liabilities 30,815 31,380
Stockholders' equity 7,595 7,247 Total
liabilities and stockholders' equity $ 38,410 $ 38,627 NOTE:
The Condensed Consolidated Balance Sheets include provisional
estimates related to property acquired and liabilities assumed in
the Scottrade acquisition. These provisional estimates may be
prospectively adjusted in the event new information becomes
available regarding facts and circumstances which existed at the
date of acquisition.
TD AMERITRADE HOLDING
CORPORATION SELECTED OPERATING DATA (Unaudited)
Quarter Ended Six Months Ended
Mar. 31, 2018 Dec. 31, 2017
Mar. 31, 2017 Mar. 31, 2018
Mar. 31, 2017
Key
Metrics:
Net new assets (in billions) $22.2 $26.5 $19.5 $48.6 $38.1 Net new
asset growth rate (annualized) 8 % 9 % 10 % 9 % 10 % Average client
trades per day 943,058 726,438 516,994 833,432 501,837
Profitability
Metrics:
Operating margin 28.0 % 26.7 % 39.6 % 27.4 % 40.4 % Pre-tax margin
26.3 % 24.1 % 38.1 % 25.3 % 38.8 % Return on average stockholders'
equity (annualized) 14.4 % 16.2 % 16.3 % 15.3 % 16.6 % Net profit
margin 19.2 % 23.6 % 23.7 % 21.3 % 24.4 % EBITDA(1) as a percentage
of net revenues 33.1 % 31.4 % 44.5 % 32.3 % 45.3 %
Liquidity
Metrics:
Interest on borrowings (in millions) $24 $20 $14 $44 $28 Interest
coverage ratio (EBITDA(1)/interest on borrowings) 19.5 19.8 28.7
19.6 28.5 Cash and cash equivalents (in billions) $1.4 $1.6 $2.2
$1.4 $2.2
Liquid assets available for corporate
investing and financing activities(1) (in billions)
$0.5 $0.1 $1.0 $0.5 $1.0
Transaction-Based
Revenue Metrics:
Total trades (in millions) 57.5 45.4 32.1 102.9 62.5 Average
commissions per trade(2) $7.50 $7.54 $8.79 $7.52 $8.92 Trading days
61.0 62.5 62.0 123.5 124.5 Order routing revenue (in millions) $125
$98 $83 $222 $162
Spread-Based
Asset Metrics:
Average bank deposit account balances (in billions) $118.3 $119.1
$95.1 $118.7 $94.2 Average interest-earning assets (in billions)
32.0 31.6 24.6 31.8 24.5 Average
spread-based balances (in billions) $150.3 $150.7
$119.7 $150.5 $118.7 Bank deposit
account fee revenue (in millions) $381 $381 $269 $762 $514 Net
interest revenue (in millions) 308 276 154 585
305 Spread-based revenue (in millions) $689
$657 $423 $1,347 $819 Avg.
annualized yield - bank deposit account fees 1.29 % 1.25 % 1.13 %
1.27 % 1.08 % Avg. annualized yield - interest-earning assets 3.86
% 3.42 % 2.50 % 3.64 % 2.46 % Net interest margin (NIM) 1.83 % 1.71
% 1.41 % 1.77 % 1.36 %
Fee-Based
Investment Metrics:
Money market mutual
fund fees:
Average balance (in billions) $4.0 $3.8 $3.5 $3.9 $3.6 Average
annualized yield 0.42 % 0.43 % 0.44 % 0.43 % 0.41 % Fee revenue (in
millions) $4 $4 $4 $8 $8
Market fee-based
investment balances:
Average balance (in billions) $247.7 $226.2 $176.9 $236.8 $171.8
Average annualized yield 0.22 % 0.22 % 0.22 % 0.22 % 0.22 % Fee
revenue (in millions) $137 $129 $99 $266
$189 Average fee-based investment balances (in
billions) $251.7 $230.0 $180.4 $240.7 $175.4 Average annualized
yield 0.22 % 0.23 % 0.23 % 0.23 % 0.22 % Investment product fee
revenue (in millions) $141 $133 $103 $274
$197 (1) See attached reconciliation of
non-GAAP financial measures. (2) Effective in September 2017, the
average commissions per trade metric was revised to exclude order
routing revenue. Prior periods have been updated to conform to the
current presentation. NOTE: See Glossary of Terms on the Company's
website at www.amtd.com for definitions of the above metrics.
TD AMERITRADE HOLDING CORPORATION SELECTED
OPERATING DATA (Unaudited)
Quarter Ended Six Months Ended
Mar. 31, 2018 Dec. 31, 2017 Mar. 31, 2017
Mar. 31, 2018 Mar. 31, 2017
Client Account
and Client Asset Metrics:
Funded accounts (beginning of period) 11,129,000 11,004,000
7,046,000 11,004,000 6,950,000 Funded accounts (end of period)
11,266,000 11,129,000 7,189,000 11,266,000 7,189,000 Percentage
change during period 1 % 1 % 2 % 2 % 3 % Client assets
(beginning of period, in billions) $1,178.8 $1,118.5 $797.0
$1,118.5 $773.8 Client assets (end of period, in billions) $1,185.7
$1,178.8 $846.7 $1,185.7 $846.7 Percentage change during period 1 %
5 % 6 % 6 % 9 %
Net Interest
Revenue:
Segregated
cash:
Average balance (in billions) $8.7 $9.9 $8.7 $9.3 $8.7 Average
annualized yield 1.31 % 1.09 % 0.46 % 1.19 % 0.38 % Interest
revenue (in millions) $28 $28 $10 $56
$17
Client margin
balances:
Average balance (in billions) $19.1 $17.6 $11.9 $18.3 $11.9 Average
annualized yield 4.45 % 4.25 % 3.67 % 4.35 % 3.61 % Interest
revenue (in millions) $213 $191 $109 $404
$217
Securities
borrowing/lending:
Average securities borrowing balance (in billions) $0.9 $1.1 $0.9
$1.0 $0.9 Average securities lending balance (in billions) $2.8
$2.6 $1.7 $2.7 $1.8 Net interest
revenue - securities borrowing/lending (in millions) $61 $53
$31 $114 $65
Other cash and
interest-earning investments:
Average balance (in billions) $3.3 $3.0 $3.1 $3.2 $3.0 Average
annualized yield 1.03 % 0.82 % 0.54 % 0.93 % 0.49 % Interest
revenue - net (in millions) $8 $6 $4 $15
$7
Client credit
balances:
Average balance (in billions) $21.5 $21.4 $16.1 $21.4 $16.1 Average
annualized cost 0.04 % 0.03 % 0.01 % 0.03 % 0.01 % Interest expense
(in millions) ($2 ) ($2 ) ($0 ) ($4 ) ($1 ) Average
interest-earning assets (in billions) $32.0 $31.6 $24.6 $31.8 $24.5
Average annualized yield 3.86 % 3.42 % 2.50 % 3.64 % 2.46 % Net
interest revenue (in millions) $308 $276 $154
$585 $305 NOTE: See Glossary of Terms on the
Company's website at www.amtd.com for definitions of the above
metrics.
TD AMERITRADE HOLDING CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES Dollars in
millions, except per share amounts (Unaudited)
Quarter Ended Six Months Ended Mar. 31,
2018 Dec. 31, 2017 Mar. 31, 2017 Mar. 31,
2018 Mar. 31, 2017
Non-GAAP Net
Income and Non-GAAP Diluted EPS (1)
Amount Diluted EPS Amount Diluted EPS
Amount Diluted EPS Amount Diluted EPS
Amount Diluted EPS Net income and diluted EPS
- GAAP $ 271 $ 0.48 $ 297 $ 0.52 $ 214 $ 0.40 $ 568 $ 1.00 $ 430 $
0.81 Non-GAAP adjustments: Amortization of acquired intangible
assets 37 0.06 38 0.07 19 0.04 75 0.13 38 0.07 Acquisition-related
expenses 158 0.28 179 0.31 8 0.02 337 0.59 11 0.02 Income tax
effect of above adjustments (52 ) (0.09 ) (59
) (0.10 ) (10 ) (0.02 ) (111 )
(0.19 ) (19 ) (0.03 ) Non-GAAP net income and
non-GAAP diluted EPS $ 414 $ 0.73 $ 455 $ 0.80
$ 231 $ 0.44 $ 869 $ 1.53 $ 460
$ 0.87
Quarter Ended Six
Months Ended Mar. 31, 2018 Dec. 31, 2017 Mar.
31, 2017 Mar. 31, 2018 Mar. 31, 2017 $
% of Net Rev. $ % of Net Rev. $ % of
Net Rev. $ % of Net Rev. $ % of Net
Rev.
EBITDA
(2)
Net income - GAAP $ 271 19.2 % $ 297 23.6 % $ 214 23.7 % $ 568 21.3
% $ 430 24.4 % Add: Depreciation and amortization 35 2.5 % 34 2.7 %
25 2.8 % 69 2.6 % 49 2.8 % Amortization of acquired intangible
assets 37 2.6 % 38 3.0 % 19 2.1 % 75 2.8 % 38 2.2 % Interest on
borrowings 24 1.7 % 20 1.6 % 14 1.5 % 44 1.6 % 28 1.6 % Provision
for income taxes 101 7.1 % 6 0.5 %
130 14.4 % 107 4.0 % 253
14.4 % EBITDA - non-GAAP $ 468 33.1 % $ 395 31.4 % $
402 44.5 % $ 863 32.3 % $ 798 45.3 %
As of Mar. 31, Dec. 31, Sept.
30, June 30, Mar. 31, 2018 2017
2017 2017 2017
Liquid Assets
Available for Corporate Investing and Financing Activities
(3)
Cash and cash equivalents - GAAP $ 1,373 $ 1,644 $ 1,472 $ 2,880 $
2,231 Less: Non-corporate cash and cash equivalents (1,013 )
(844 ) (1,174 ) (973 ) (1,286 )
Corporate cash and cash equivalents 360 800 298 1,907 945 Corporate
investments 292 - 714 747 747 Less: Corporate liquidity maintained
for operational contingencies (248 ) (723 ) (723 ) (723 ) (723 )
Amounts maintained for corporate working capital (65 ) (65 ) (87 )
(87 ) (87 ) Amounts held as collateral for derivative contracts,
net - (8 ) (40 ) (34 )
(40 ) Excess corporate cash and cash equivalents and investments
339 4 162 1,810 842 Excess regulatory net capital over management
targets 119 85 46
8 122 Liquid assets available for corporate
investing and financing activities - non-GAAP $ 458 $ 89
$ 208 $ 1,818 $ 964 Note:
The term "GAAP" in the following explanation refers to generally
accepted accounting principles in the United States. (1)
Non-GAAP net income and non-GAAP diluted earnings per share
(EPS) are non-GAAP financial measures as defined by SEC Regulation
G. We define non-GAAP net income as net income adjusted to remove
the after-tax effect of amortization of acquired intangible assets
and acquisition-related expenses. We consider non-GAAP net income
and non-GAAP diluted EPS as important measures of our financial
performance because they exclude certain items that may not be
indicative of our core operating results and business outlook and
may be useful in evaluating the operating performance of the
business and facilitating a meaningful comparison of our results in
the current period to those in prior and future periods.
Amortization of acquired intangible assets is excluded because
management does not believe it is indicative of our underlying
business performance. Acquisition-related expenses are excluded as
these costs are not representative of the costs of running the
Company’s on-going business. Non-GAAP net income and non-GAAP
diluted EPS should be considered in addition to, rather than as a
substitute for, GAAP net income and diluted EPS.
(2)
EBITDA (earnings before interest, taxes,
depreciation and amortization) is considered a non-GAAP financial
measure as defined by SEC Regulation G. We consider EBITDA to be an
important measure of our financial performance and of our ability
to generate cash flows to service debt, fund capital expenditures
and fund other corporate investing and financing activities. EBITDA
is used as the denominator in the consolidated leverage ratio
calculation for covenant purposes under our senior revolving credit
facility. EBITDA eliminates the non-cash effect of tangible asset
depreciation and amortization and intangible asset amortization.
EBITDA should be considered in addition to, rather than as a
substitute for, GAAP pre-tax income, net income and cash flows from
operating activities.
(3)
Liquid assets available for corporate
investing and financing activities is considered a non-GAAP
financial measure as defined by SEC Regulation G. We consider
"liquid assets available for corporate investing and financing
activities" to be an important measure of our liquidity. We include
the excess capital of our regulated subsidiaries in the calculation
of liquid assets available for corporate investing and financing
activities, rather than simply including regulated subsidiaries'
cash and cash equivalents, because capital requirements may limit
the amount of cash available for dividend from the regulated
subsidiaries to the parent company. Excess capital, as defined
below, is generally available for dividend from the regulated
subsidiaries to the parent company. Liquid assets available for
corporate investing and financing activities should be considered
as a supplemental measure of liquidity, rather than as a substitute
for GAAP cash and cash equivalents.
We define liquid assets available for
corporate investing and financing activities as the sum of (a)
excess corporate cash and cash equivalents and investments, less
securities sold under agreements to repurchase, and (b) our
regulated subsidiaries' net capital in excess of minimum
operational targets established by management. Excess corporate
cash and cash equivalents and investments includes cash and cash
equivalents from our investment advisory subsidiaries and excludes
(i) amounts being maintained to provide liquidity for operational
contingencies, including amounts available to be drawn by our
broker-dealer and FCM/FDM subsidiaries under the Parent's
intercompany committed lines of credit, (ii) amounts maintained for
corporate working capital and (iii) the net amounts held as
collateral for derivative contracts. Liquid assets available for
corporate investing and financing activities is based on more
conservative measures of net capital than regulatory requirements
because we generally manage to higher levels of net capital at our
regulated subsidiaries than the regulatory thresholds require.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180423006270/en/
TD Ameritrade Holding CorporationBecky Niiya,
402-574-6652Director, Corporate
Communicationsrebecca.niiya@tdameritrade.comorJeff Goeser,
402-597-8464Director, Investor
Relationsjeffrey.goeser@tdameritrade.com
TD Ameritrade (NASDAQ:AMTD)
Historical Stock Chart
From Mar 2024 to Apr 2024
TD Ameritrade (NASDAQ:AMTD)
Historical Stock Chart
From Apr 2023 to Apr 2024