To compare brokerage stocks, separate each company’s interest-related revenue from its trading-related revenue, then trace which balances generate the interest. “Cash,” “net interest,” and “trading revenue” are not standardized labels across firms, so compare figures only after aligning definitions, fiscal periods, and business structures. This is a way to analyze brokerage business models and filings—not a ranking of brokerage accounts or a stock recommendation.
What do brokerage firms earn revenue from?
A brokerage’s revenue usually combines several activities. Schwab identifies net interest revenue, asset-management and administration fees, trading revenue, and bank deposit account fees among its largest sources. Interactive Brokers reports net interest income on customer balances alongside execution, clearing, and distribution fees. Robinhood describes interest revenues and transaction-based revenues as separate categories.
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Those labels matter: a company’s “net interest” line should not automatically be treated as equivalent to another company’s “interest revenue,” and transaction-based revenue is not necessarily the same as a competitor’s trading-revenue category.
How do brokerage firms make money from cash balances?
Client cash can affect a broker’s economics depending on where it is held and how the company uses or pays on it. Schwab says uninvested client cash held on its balance sheet is a primary funding source for interest-earning assets. Other disclosed sources can include swept bank deposits, segregated cash, margin loans, corporate cash, and investments, but companies may classify these differently.
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Robinhood’s 2025 Form 10-K describes interest revenues from margin loans; segregated cash, cash equivalents, and securities; deposits with clearing organizations; corporate cash and investments; Cash Sweep; and carried customer credit-card balances. These categories illustrate why a single “cash balance” figure may not describe the same economic pool at different firms.
When reviewing a filing, note whether client cash is described as on the broker’s balance sheet, swept to bank deposits, segregated, or held in another way. Then identify what the company says earns interest, what it pays or owes on funding, and how the resulting amount is presented in revenue. Do not assume all customer cash is available to fund the same assets or that each company includes the same assets and costs in its interest measure.
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How much of a broker’s revenue comes from trading?
Start with each issuer’s own reported trading or transaction-related line, then read the accompanying discussion for what it includes. Relevant items may include commissions, transaction-based revenue, execution and clearing fees, exchange and clearing costs, or principal activity where disclosed. A company may present some of these separately rather than under a single trading label.
For example, Interactive Brokers’ 2025 Form 10-K reports $420 million in execution, clearing, and distribution fees for the year and discusses exchange-fee and clearing-fee drivers. That figure is a specific reported category; it should not be treated as a directly comparable total trading-revenue measure for another issuer without reconciling definitions.
A practical method for comparing brokerage filings
- Choose a common period. Use the same fiscal year for every company, preferably full-year figures rather than mixing annual results with quarterly results. Record the filing year and note any changes in presentation or reclassification.
- Build each company’s revenue picture. From the income statement and revenue discussion, record the issuer’s exact interest-related and trading-related line names, amounts, and other material revenue categories.
- Trace the balances behind interest. Read the notes and management discussion for customer cash, sweep deposits, segregated balances, margin lending, corporate cash, securities lending, and other disclosed assets or funding items. Mark which are on the balance sheet and how the company describes their role.
- Examine trading drivers and costs. Look for commissions or transaction-based revenues, execution and clearing fees, exchange costs, and principal activity, as applicable to the issuer’s disclosures.
- Compare direction and explanation. Calculate year-over-year changes only for matching company-defined categories. Check management’s explanation: interest revenue can respond to both rates and the amount or type of balances, so a change should not be attributed to rates alone without evidence.
- State comparability limits before drawing conclusions. Note differences in accounting definitions, company structure, reporting period, and reclassifications. If categories do not align, compare each company’s mix within its own reporting framework instead of forcing a raw cross-company ranking.
What Schwab’s 2025 results show—and do not show
Schwab reported net interest revenue of $11.750 billion and trading revenue of $3.921 billion for 2025, compared with $9.144 billion and $3.264 billion, respectively, for 2024. These are company-reported figures for those fiscal years, not industry averages. They provide a same-company illustration of two separate revenue lines and their year-over-year movement; they do not, by themselves, establish how Schwab compares with another broker whose categories may be defined differently. Schwab’s full-year 2025 results and its 2025 annual report provide the company’s figures and discussion.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Why a cash or interest-income league table can mislead
A cross-company table is useful only if its rows represent comparable things. The reviewed filings use distinct labels and describe different sources of interest-related balances. A raw “cash balance” or “interest income” ranking can therefore mix customer deposits, segregated balances, margin lending, corporate funds, and other items—or compare gross interest with a net measure.
- Keep each line’s reported name and definition beside its value.
- Separate client cash categories from corporate cash where the filing allows.
- Distinguish gross interest revenue from net interest income or revenue.
- Align fiscal periods and currencies, and identify reclassifications.
- Leave a measure unranked when the filings do not establish a comparable definition.
For issuer-specific definitions, consult the Interactive Brokers 2025 Form 10-K, Schwab 2025 annual report, and Robinhood 2025 Form 10-K.
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