7/25/20240001397911false00013979112024-07-252024-07-25



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 25, 2024
LPL Financial Holdings Inc.
(Exact name of registrant as specified in its charter)
Delaware001-3496320-3717839
(State or other jurisdiction of incorporation)(Commission File Number)(IRS Employer Identification No.)
4707 Executive Drive,
San Diego,
California
92121
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code:
(800)877-7210
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock - par value $0.001 per shareLPLAThe Nasdaq Global Select Market
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐



Item 2.02Results of Operations and Financial Condition.
On July 25, 2024, LPL Financial Holdings Inc. (collectively with its subsidiaries, the “Company”) issued a press release announcing its financial results for the three months ended June 30, 2024. A copy of the press release is furnished with this Form 8-K and attached hereto as Exhibit 99.1.
Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits
99.1 
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

      LPL FINANCIAL HOLDINGS INC.
By:/s/ Matthew J. Audette
Name: Matthew J. Audette
Title: Chief Financial Officer and Head of Business Operations


Dated: July 25, 2024

    




lpllogo541largenewnolinesa.jpg
For Immediate Release
LPL Financial Announces Second Quarter 2024 Results

Key Financial Results
•Net Income was $244 million, translating to diluted earnings per share ("EPS") of $3.23, down 12% from a year ago
•Adjusted EPS* decreased 2% year-over-year to $3.88
◦Gross profit* increased 9% year-over-year to $1,079 million
◦Core G&A* increased 10% year-over-year to $371 million
◦Adjusted EBITDA* increased 2% year-over-year to $533 million

Key Business Results
•Total advisory and brokerage assets increased 21% year-over-year to $1.5 trillion
◦Advisory assets increased 25% year-over-year to $829 billion
◦Advisory assets as a percentage of total assets increased to 55.4%, up from 53.3% a year ago
•Total organic net new assets were $29 billion, representing 8% annualized growth
◦Organic net new advisory assets were $27 billion, representing 13% annualized growth
•Recruited assets(1) were $24 billion
◦Recruited assets over the trailing twelve months were $93 billion, up approximately 55% from a year ago
•Advisor count(2) was 23,462, up 578 sequentially and 1,520 year-over-year
•Total client cash balances were $44 billion, a decrease of $2 billion sequentially and $6 billion year-over-year
◦Client cash balances as a percentage of total assets were 2.9%, down from 3.2% in the prior quarter and 4.0% a year ago

Key Capital and Liquidity Results
•Corporate cash(3) was $684 million
•Leverage ratio(4) was 1.68x
•Dividends paid were $22.4 million


*See the Non-GAAP Financial Measures section and the endnotes to this release for further details about these non-GAAP financial measures

1

Key Updates
•Completed debt issuance: Issued $1 billion of senior unsecured notes, including $500 million of 5.700% notes due 2027 and $500 million of 6.000% notes due 2034. Net proceeds will be used for general corporate purposes, including financing the acquisition of Atria Wealth Solutions, Inc. ("Atria").
•Large OSJs: Announced a planned separation from two misaligned large OSJs on our platform that collectively have ~$20 billion of client assets, which began to off-board in July.
SAN DIEGO — July 25, 2024 — LPL Financial Holdings Inc. (Nasdaq: LPLA) (the “Company”) today announced results for its second quarter ended June 30, 2024, reporting net income of $244 million, or $3.23 per share. This compares with $286 million, or $3.65 per share, in the second quarter of 2023 and $289 million, or $3.83 per share, in the prior quarter.
"Over the past quarter, we remained focused on our mission of taking care of our advisors, so they can take care of their clients," said Dan Arnold, President and CEO. "This focus led to another quarter of solid business and financial results, reinforcing our momentum and the building appeal of our model. As we look ahead, we remain committed to delivering an industry-leading value proposition to advisors, as we strive to become the leader across the advisor-mediated marketplace."

"We delivered another quarter of solid results," said Matt Audette, CFO and Head of Business Operations. "We recorded strong organic growth across our affiliation models, closed the acquisition of Crown Capital, continued to build momentum in our Liquidity & Succession solution, and are preparing to onboard the wealth management businesses of Prudential Financial and Wintrust Financial. As we look ahead, our business momentum and financial strength position us well to continue creating long-term shareholder value."
Dividend Declaration
The Company's Board of Directors declared a $0.30 per share dividend to be paid on August 23, 2024 to all stockholders of record as of August 9, 2024.
Conference Call and Additional Information
The Company will hold a conference call to discuss its results at 5:00 p.m. ET on Thursday, July 25, 2024. The conference call will be available for replay at investor.lpl.com/events.
Contacts
Investor Relations
investor.relations@lplfinancial.com

Media Relations
media.relations@lplfinancial.com
About LPL Financial
LPL Financial Holdings Inc. (Nasdaq: LPLA) was founded on the principle that the firm should work for advisors and institutions, and not the other way around. Today, LPL is a leader in the markets we serve(5), serving more than 23,000 financial advisors, including advisors at approximately 1,000 institutions and at approximately 580 registered investment advisor ("RIA") firms nationwide. We are steadfast in our commitment to the advisor-mediated model and the belief that Americans deserve access to personalized guidance from a financial professional. At LPL, independence means that advisors and institution leaders have the freedom they deserve to choose the business model, services, and technology resources that allow them to run a thriving business. They have the flexibility to do business their way. And they have the freedom to manage their client relationships, because they know their clients best. Simply put, we take care of our advisors and institutions, so they can take care of their clients.
Securities and Advisory services offered through LPL Financial LLC ("LPL Financial"), a registered investment advisor. Member FINRA/SIPC. LPL Financial and its affiliated companies provide financial services only from the United States.
Throughout this communication, the terms "financial advisors" and "advisors" are used to refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial.
We routinely disclose information that may be important to shareholders in the "Investor Relations" or "Press Releases" section of our website.


2

Forward-Looking Statements
This press release contains statements regarding:

•the amount and timing of the onboarding of acquired, recruited or transitioned brokerage and advisory assets, including Atria, Prudential Financial, Inc. ("Prudential") and Wintrust Financial Corporation ("Wintrust");
•the amount and timing of offboarding of client assets associated with the planned separation of misaligned large OSJs;
•the Company's future financial and operating results, growth, plans, priorities and business strategies, including forecasts and statements related to the Company's core G&A expenses and client cash programs; and
•future capabilities, future advisor service experience, future investments and capital deployment, including share repurchase activity and dividends, if any, and long-term shareholder value.

These and any other statements that are not related to present facts or current conditions, or that are not purely historical, constitute forward-looking statements. They reflect the Company's expectations and objectives as of July 25, 2024 and are not guarantees that expectations or objectives expressed or implied will be achieved. The achievement of such expectations and objectives involves risks and uncertainties that may cause actual results, levels of activity or the timing of events to differ materially from those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include:

•the failure to satisfy the closing conditions applicable to the Company's strategic relationship agreements with Prudential and Wintrust, or the Company's purchase agreement with Atria, including regulatory approvals;
•difficulties and delays in onboarding the assets of acquired, recruited or transitioned advisors, including the receipt and timing of regulatory approvals that may be required;
•disruptions in the businesses of the Company that could make it more difficult to maintain relationships with advisors and their clients;
•the choice by clients of acquired or recruited advisors not to open brokerage and/or advisory accounts at the Company;
•the negotiation of definitive terms of separation with misaligned large OSJs;
•changes in general economic and financial market conditions, including retail investor sentiment;
•changes in interest rates and fees payable by banks participating in the Company's client cash programs, including the Company's success in negotiating agreements with current or additional counterparties;
•the Company's strategy and success in managing client cash program fees;
•fluctuations in the levels of advisory and brokerage assets, including net new assets, and the related impact on revenue;
•effects of competition in the financial services industry and the success of the Company in attracting and retaining financial advisors and institutions, and their ability to market financial products and services effectively;
•whether the retail investors served by newly-recruited advisors choose to move their respective assets to new accounts at the Company;
•changes in the growth and profitability of the Company's fee-based offerings;
•the effect of current, pending and future legislation, regulation and regulatory actions, including disciplinary actions imposed by federal and state regulators and self-regulatory organizations;
•the cost of settling and remediating issues related to regulatory matters or legal proceedings, including actual costs of reimbursing customers for losses in excess of our reserves;
•the SEC's approval of the settlement agreement in connection with the settlement of the industry-wide civil investigation into compliance with records preservation requirements for business-related electronic communications stored on personal devices applicable to broker-dealer firms and investment advisors;
•changes made to the Company’s services and pricing, including in response to competitive developments and current, pending and future legislation, regulation and regulatory actions, and the effect that such changes may have on the Company’s gross profit streams and costs;
•execution of the Company's capital management plans, including its compliance with the terms of the Company's amended and restated credit agreement, the committed revolving credit facility and LPL Financial's committed revolving credit facility, and the indentures governing the Company's senior unsecured notes;
3

•strategic acquisitions and investments, including pursuant to the Company’s Liquidity & Succession solution, and the effect that such acquisitions and investments may have on the Company’s capital management plans and liquidity;
•the price, availability and trading volumes of shares of the Company's common stock, which will affect the timing and size of future share repurchases by the Company, if any;
•the execution of the Company's plans and its success in realizing the synergies, expense savings, service improvements or efficiencies expected to result from its investments, initiatives and acquisitions, expense plans and technology initiatives;
•whether advisors affiliated with Atria, Prudential, and Wintrust will transition registration to the Company and whether assets reported as serviced by such financial advisors will translate into assets of the Company;
•the performance of third-party service providers to which business processes have been transitioned;
•the Company's ability to control operating risks, information technology systems risks, cybersecurity risks and sourcing risks; and
•the other factors set forth in the Company's most recent Annual Report on Form 10-K, as may be amended or updated in the Company's Quarterly Reports on Form 10-Q or other filings with the Securities and Exchange Commission. 

Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this earnings release, and you should not rely on statements contained herein as representing the Company's view as of any date subsequent to the date of this press release.
4

LPL Financial Holdings Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Three Months EndedThree Months Ended
June 30,March 31,June 30,
20242024Change2023Change
REVENUE
Advisory$1,288,163 $1,199,811 7 %$1,014,565 27 %
Commission:
Sales-based423,070 385,235 10 %298,961 42 %
Trailing363,976 361,211 1 %323,925 12 %
Total commission787,046 746,446 5 %622,886 26 %
Asset-based:
Client cash341,475 352,382 (3 %)378,415 (10 %)
Other asset-based259,533 248,339 5 %211,300 23 %
Total asset-based601,008 600,721 — %589,715 2 %
Service and fee135,000 132,172 2 %123,122 10 %
Transaction58,935 57,258 3 %46,936 26 %
Interest income, net47,478 43,525 9 %37,972 25 %
Other14,139 52,660 (73 %)33,608 (58 %)
Total revenue2,931,769 2,832,593 4 %2,468,804 19 %
EXPENSE
Advisory and commission1,819,027 1,733,487 5 %1,448,763 26 %
Compensation and benefits274,000 274,369 — %231,680 18 %
Promotional136,125 126,619 8 %102,565 33 %
Depreciation and amortization70,999 67,158 6 %58,377 22 %
Occupancy and equipment69,529 66,264 5 %65,005 7 %
Interest expense on borrowings64,341 60,082 7 %44,842 43 %
Brokerage, clearing and exchange32,984 30,532 8 %29,148 13 %
Amortization of other intangibles30,607 29,552 4 %26,741 14 %
Professional services22,100 13,279 66 %18,092 22 %
Communications and data processing19,406 19,744 (2 %)20,594 (6 %)
Other62,580 37,315 68 %34,178 83 %
Total expense2,601,698 2,458,401 6 %2,079,985 25 %
INCOME BEFORE PROVISION FOR INCOME TAXES330,071 374,192 (12 %)388,819 (15 %)
PROVISION FOR INCOME TAXES86,271 85,428 1 %103,299 (16 %)
NET INCOME$243,800 $288,764 (16 %)$285,520 (15 %)
EARNINGS PER SHARE
Earnings per share, basic$3.26 $3.87 (16 %)$3.70 (12 %)
Earnings per share, diluted$3.23 $3.83 (16 %)$3.65 (12 %)
Weighted-average shares outstanding, basic74,72574,562— %77,234(3 %)
Weighted-average shares outstanding, diluted75,54875,463— %78,194(3 %)
5

LPL Financial Holdings Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
Six Months Ended
June 30,
20242023Change
REVENUE
Advisory$2,487,974 $1,968,622 26 %
Commission:
Sales-based808,305 585,033 38 %
Trailing725,187 641,578 13 %
Total commission1,533,492 1,226,611 25 %
Asset-based:
Client cash693,857 796,690 (13 %)
Other asset-based507,872 414,773 22 %
Total asset-based1,201,729 1,211,463 (1 %)
Service and fee267,172 242,109 10 %
Transaction116,193 95,871 21 %
Interest income, net91,003 75,330 21 %
Other66,799 66,630 — %
Total revenue5,764,362 4,886,636 18 %
EXPENSE
Advisory and commission3,552,514 2,819,397 26 %
Compensation and benefits548,369 465,213 18 %
Promotional262,744 200,788 31 %
Depreciation and amortization138,157 114,431 21 %
Occupancy and equipment135,793 125,178 8 %
Interest expense on borrowings124,423 84,026 48 %
Brokerage, clearing and exchange63,516 55,274 15 %
Amortization of other intangibles60,159 50,833 18 %
Communications and data processing39,150 38,269 2 %
Professional services35,379 32,312 9 %
Other99,895 67,599 48 %
Total expense5,060,099 4,053,320 25 %
INCOME BEFORE PROVISION FOR INCOME TAXES704,263 833,316 (15 %)
PROVISION FOR INCOME TAXES171,699 208,912 (18 %)
NET INCOME$532,564 $624,404 (15 %)
EARNINGS PER SHARE
Earnings per share, basic$7.13 $8.01 (11 %)
Earnings per share, diluted$7.05 $7.90 (11 %)
Weighted-average shares outstanding, basic74,64477,988(4 %)
Weighted-average shares outstanding, diluted75,52979,083(4 %)

6


LPL Financial Holdings Inc.
Condensed Consolidated Statements of Financial Condition
(In thousands, except share data)
(Unaudited)
June 30, 2024March 31, 2024December 31, 2023
ASSETS
Cash and equivalents$1,318,894 $1,102,270 $465,671 
Cash and equivalents segregated under federal or other regulations1,530,150 1,610,996 2,007,312 
Restricted cash109,618 114,006 108,180 
Receivables from clients, net 563,923 591,503 588,585 
Receivables from brokers, dealers and clearing organizations74,432 103,236 50,069 
Advisor loans, net1,757,727 1,573,774 1,479,690 
Other receivables, net763,632 863,119 743,317 
Investment securities ($73,463, $43,428 and $76,088 at fair value at June 30, 2024, March 31, 2024 and December 31, 2023, respectively)
89,853 57,451 91,311 
Property and equipment, net1,066,395 987,308 933,091 
Goodwill1,860,062 1,840,972 1,856,648 
Other intangibles, net783,031 690,767 671,585 
Other assets1,586,010 1,482,137 1,390,021 
Total assets$11,503,727 $11,017,539 $10,385,480 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Client payables$1,963,988 $2,486,605 $2,266,176 
Payables to brokers, dealers and clearing organizations212,394 190,419 163,337 
Accrued advisory and commission expenses payable240,370 232,084 216,541 
Corporate debt and other borrowings, net4,442,840 3,853,794 3,734,111 
Accounts payable and accrued liabilities461,277 369,244 485,963 
Other liabilities1,667,511 1,615,512 1,440,373 
Total liabilities8,988,380 8,747,658 8,306,501 
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value; 600,000,000 shares authorized; 130,746,590, 130,704,541 shares and 130,233,328 shares issued at June 30, 2024, March 31, 2024 and December 31, 2023, respectively
131 131 130 
Additional paid-in capital2,038,216 2,016,666 1,987,684 
Treasury stock, at cost — 55,985,188, 55,998,999 shares and 55,576,970 shares at June 30, 2024, March 31, 2024 and December 31, 2023, respectively
(4,101,955)(4,101,055)(3,993,949)
Retained earnings4,578,955 4,354,139 4,085,114 
Total stockholders’ equity2,515,347 2,269,881 2,078,979 
Total liabilities and stockholders’ equity$11,503,727 $11,017,539 $10,385,480 

7

LPL Financial Holdings Inc.
Management's Statements of Operations
(In thousands, except per share data)
(Unaudited)
Certain information in this release is presented as reviewed by the Company’s management and includes information derived from the Company’s unaudited condensed consolidated statements of income, non-GAAP financial measures and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures" in this release.
Quarterly Results
Q2 2024Q1 2024ChangeQ2 2023Change
Gross Profit(6)
Advisory$1,288,163 $1,199,811 7 %$1,014,565 27 %
Trailing commissions363,976 361,211 1 %323,925 12 %
Sales-based commissions423,070 385,235 10 %298,961 42 %
Advisory fees and commissions2,075,209 1,946,257 7 %1,637,451 27 %
Production-based payout(7)
(1,812,050)(1,686,332)7 %(1,419,659)28 %
Advisory fees and commissions, net of payout263,159 259,925 1 %217,792 21 %
Client cash(8)
361,316 373,408 (3 %)396,238 (9 %)
Other asset-based(9)
259,533 248,339 5 %211,300 23 %
Service and fee135,000 132,172 2 %123,122 10 %
Transaction58,935 57,258 3 %46,936 26 %
Interest income, net(10)
27,618 22,482 23 %20,136 37 %
Other revenue(11)
6,621 3,382 96 %3,431 93 %
Total net advisory fees and commissions and attachment revenue1,112,182 1,096,966 1 %1,018,955 9 %
Brokerage, clearing and exchange expense(32,984)(30,532)8 %(29,148)13 %
Gross Profit(6)
1,079,198 1,066,434 1 %989,807 9 %
G&A Expense
Core G&A(12)
370,912 363,513 2 %337,025 10 %
Regulatory charges
7,594 7,469 2 %6,600 15 %
Promotional (ongoing)(13)(14)
147,830 132,311 12 %106,535 39 %
Acquisition costs(14)
36,876 9,524 n/m4,091 n/m
Employee share-based compensation19,968 22,633 (12 %)16,777 19 %
Total G&A583,180 535,450 9 %471,028 24 %
EBITDA(15)
496,018 530,984 (7 %)518,779 (4 %)
Depreciation and amortization70,999 67,158 6 %58,377 22 %
Amortization of other intangibles30,607 29,552 4 %26,741 14 %
Interest expense on borrowings64,341 60,082 7 %44,842 43 %
INCOME BEFORE PROVISION FOR INCOME TAXES330,071 374,192 (12 %)388,819 (15 %)
PROVISION FOR INCOME TAXES86,271 85,428 1 %103,299 (16 %)
NET INCOME$243,800 $288,764 (16 %)$285,520 (15 %)
Earnings per share, diluted$3.23 $3.83 (16 %)$3.65 (12 %)
Weighted-average shares outstanding, diluted75,54875,463— %78,194(3 %)
Adjusted EBITDA(15)
$532,894 $540,508 (1 %)$522,870 2 %
Adjusted EPS(16)
$3.88 $4.21 (8 %)$3.94 (2 %)
8

LPL Financial Holdings Inc.
Operating Metrics
(Dollars in billions, except where noted)
(Unaudited)
Q2 2024Q1 2024ChangeQ2 2023Change
Market Drivers
S&P 500 Index (end of period)5,460 5,254 4%4,450 23%
Russell 2000 Index (end of period)2,048 2,125 (4%)1,889 8%
Fed Funds daily effective rate (average bps)533 533 —bps499 34bps
Advisory and Brokerage Assets(17)
Advisory assets$829.1 $793.0 5%$661.6 25%
Brokerage assets668.7 647.9 3%578.6 16%
Total Advisory and Brokerage Assets$1,497.8 $1,440.9 4%$1,240.2 21%
Advisory as a % of Total Advisory and Brokerage Assets55.4%55.0%40bps53.3%210bps
Assets by Platform
Corporate advisory assets(18)
$567.8 $537.6 6%$442.1 28%
Independent RIA advisory assets(18)
261.3 255.4 2%219.5 19%
Brokerage assets668.7 647.9 3%578.6 16%
Total Advisory and Brokerage Assets$1,497.8 $1,440.9 4%$1,240.2 21%
Centrally Managed Assets
Centrally managed assets(19)
$126.9 $121.7 4%$99.8 27%
Centrally Managed as a % of Total Advisory Assets15.3%15.3%—bps15.1%20bps
9

LPL Financial Holdings Inc.
Operating Metrics
(Dollars in billions, except where noted)
(Unaudited)
Q2 2024Q1 2024ChangeQ2 2023Change
Net New Assets (NNA)(20)
Net new advisory assets$26.8 $16.2 n/m$18.1 n/m
Net new brokerage assets7.2 0.5 n/m3.6 n/m
Total Net New Assets$34.0 $16.7 n/m$21.7 n/m
Organic Net New Assets
Organic net new advisory assets$26.6 $16.2 n/m$18.1 n/m
Organic net new brokerage assets2.5 0.5 n/m3.6 n/m
Total Organic Net New Assets $29.0 $16.7 n/m$21.7 n/m
Net brokerage to advisory conversions(21)
$3.7 $3.6 n/m$2.2 n/m
Organic advisory NNA annualized growth(22)
13.4%8.8%n/m11.7%n/m
Total organic NNA annualized growth(22)
8.1%4.9%n/m7.4%n/m
Net New Advisory Assets(20)
Corporate RIA net new advisory assets$23.4 $13.9 n/m$11.8 n/m
Independent RIA net new advisory assets3.4 2.3 n/m6.4 n/m
Total Net New Advisory Assets$26.8 $16.2 n/m$18.1 n/m
Centrally managed net new advisory assets(20)
$4.4 $3.6 n/m$2.0 n/m
Net buy (sell) activity(23)
$39.3 $37.8 n/m$32.3 n/m
Note: Totals may not foot due to rounding.
10

LPL Financial Holdings Inc.
Client Cash Data
(Dollars in thousands, except where noted)
(Unaudited)
Q2 2024
Q1 2024
Change
Q2 2023
Change
Client Cash Balances (in billions)(24)
Insured cash account sweep$31.0 $32.6 (5%)$36.0 (14%)
Deposit cash account sweep9.2 9.2 —%9.5 (3%)
Total Bank Sweep40.2 41.8 (4%)45.5 (12%)
Money market sweep2.3 2.4 (4%)2.3 —%
Total Client Cash Sweep Held by Third Parties42.5 44.2 (4%)47.9 (11%)
Client cash account (CCA)(25)
1.5 2.1 (29%)1.7 (12%)
Total Client Cash Balances$44.0 $46.3 (5%)$49.6 (11%)
Client Cash Balances as a % of Total Assets2.9%3.2%(30bps)4.0%(110bps)
Note: Totals may not foot due to rounding.
Three Months Ended
June 30, 2024March 31, 2024June 30, 2023
Interest-Earnings Assets
Average Balance
(in billions)
Revenue
Net Yield (bps)(26)
Average Balance
(in billions)
Revenue
Net Yield (bps)(26)
Average Balance
(in billions)
Revenue
Net Yield (bps)(26)
Insured cash account sweep
$31.7 $250,804 318 $33.2 $266,792 323 $36.9 $296,994 322 
Deposit cash account sweep
9.089,070 399 8.983,978 3789.679,612 333 
  Total Bank Sweep
40.7339,874 336 42.1350,770 33546.5376,606 325 
Money market sweep
2.31,601 28 2.31,612 282.51,809 30 
  Total Client Cash Held By
  Third Parties
43.0341,475 320 44.4352,382 31949.0378,415 310 
Client cash account (CCA)(25)
1.719,841 472 1.821,026 4671.617,823 441 
  Total Client Cash
44.7361,316 326 46.2373,408 32550.6396,238 314 
Margin receivables
0.510,521 889 0.510,249 8900.510,133 865 
Other interest revenue
1.317,097 545 0.912,233 5350.810,003 490 
  Total Client Cash and
  Interest Income, Net
$46.5 $388,934 337 $47.6 $395,890 334 $51.9 $416,374 322 
Note: Totals may not foot due to rounding.
11


LPL Financial Holdings Inc.
Monthly Metrics
(Dollars in billions, except where noted)
(Unaudited)
June 2024May 2024ChangeApril 2024March 2024
Advisory and Brokerage Assets(17)
Advisory assets$829.1 $809.4 2%$775.5 $793.0 
Brokerage assets668.7 655.0 2%637.5 647.9 
Total Advisory and Brokerage Assets$1,497.8 $1,464.4 2%$1,413.0 $1,440.9 
Net New Assets (NNA)(20)
Net new advisory assets$9.2 $9.9 n/m$7.6 $7.5 
Net new brokerage assets1.6 1.3 n/m4.3 0.4 
Total Net New Assets$10.8 $11.2 n/m$12.0 $7.9 
Net brokerage to advisory conversions(21)
$1.2 $1.2 n/m$1.2 $1.3 
Organic Net New Assets (NNA)
Net new advisory assets$9.2 $9.9 n/m$7.4 $7.5 
Net new brokerage assets1.6 1.3 n/m(0.4)0.4 
Total Organic Net New Assets $10.8 $11.2 n/m$7.0 $7.9 
Client Cash Balances(24)
Insured cash account sweep$31.0 $31.8 (3%)$32.5 $32.6 
Deposit cash account sweep9.2 9.0 2%9.1 9.2 
Total Bank Sweep 40.2 40.8 (1%)41.6 41.8 
Money market sweep2.3 2.3 —%2.3 2.4 
Total Client Cash Sweep Held by Third Parties42.5 43.1 (1%)43.8 44.2 
Client cash account (CCA)(25)
1.5 1.3 15%1.9 2.1 
Total Client Cash Balances$44.0 $44.5 (1%)$45.7 $46.3 
Net buy (sell) activity(23)
$12.1 $15.0 n/m$12.3 $12.9 
Market Drivers
S&P 500 Index (end of period)5,460 5,278 3%5,036 5,254 
Russell 2000 Index (end of period)2,048 2,070 (1%)1,974 2,125 
Fed Funds effective rate (average bps)533 533 —bps533 533 
Note: Totals may not foot due to rounding.
12

LPL Financial Holdings Inc.
Financial Measures
(Dollars in thousands, except where noted)
(Unaudited)

Q2 2024Q1 2024ChangeQ2 2023Change
Commission Revenue by Product
Annuities$469,100 $436,473 7%$358,845 31%
Mutual funds187,432 186,540 —%165,194 13%
Fixed income53,192 48,641 9%36,183 47%
Equities34,434 35,451 (3%)27,474 25%
Other42,888 39,341 9%35,190 22%
Total commission revenue$787,046 $746,446 5%$622,886 26%
Commission Revenue by Sales-based and Trailing
Sales-based commissions
Annuities$260,188 $229,077 14%$172,540 51%
Mutual funds42,981 43,496 (1%)36,431 18%
Fixed income53,192 48,641 9%36,183 47%
Equities34,434 35,451 (3%)27,474 25%
Other32,275 28,570 13%26,333 23%
Total sales-based commissions$423,070 $385,235 10%$298,961 42%
Trailing commissions
Annuities$208,912 $207,396 1%$186,305 12%
Mutual funds144,451 143,044 1%128,763 12%
Other10,613 10,771 (1%)8,857 20%
Total trailing commissions$363,976 $361,211 1%$323,925 12%
Total commission revenue$787,046 $746,446 5%$622,886 26%
Payout Rate(7)
87.32%86.64%68bps86.70%62bps

13

LPL Financial Holdings Inc.
Capital Management Measures
(Dollars in thousands, except where noted)
(Unaudited)
Q2 2024Q1 2024Q4 2023
Cash and equivalents$1,318,894 $1,102,270 $465,671 
Cash at regulated subsidiaries(828,145)(1,038,241)(410,313)
Excess cash at regulated subsidiaries per the Credit Agreement193,342 247,033 128,327 
Corporate Cash(3)
$684,091 $311,062 $183,685 
Corporate Cash(3)
Cash at the Parent$450,505 $30,781 $26,587 
Excess cash at regulated subsidiaries per the Credit Agreement193,342 247,033 128,327 
Cash at non-regulated subsidiaries40,244 33,248 28,771 
Corporate Cash$684,091 $311,062 $183,685 
Leverage Ratio
Total debt$4,471,850 $3,875,525 $3,757,200 
Total corporate cash684,091 311,062 183,685 
Credit Agreement Net Debt$3,787,759 $3,564,463 $3,573,515 
Credit Agreement EBITDA (trailing twelve months)(27)
$2,260,165 $2,160,464 $2,194,807 
Leverage Ratio
1.68x
1.65x1.63x

June 30, 2024
Total DebtBalanceCurrent Applicable
Margin		Interest RateMaturity
Revolving Credit Facility(a)
$— 
ABR+37.5 bps / SOFR+147.5 bps
8.875 %5/20/2029
Broker-Dealer Revolving Credit Facility— SOFR+135 bps6.680 %5/19/2025
Senior Secured Term Loan B1,021,850 
SOFR+185 bps(b)
7.179 %11/12/2026
Senior Unsecured Notes
500,000 
5.700% Fixed
5.700 %5/20/2027
Senior Unsecured Notes400,000 4.625% Fixed4.625 %11/15/2027
Senior Unsecured Notes750,000 
6.750% Fixed
6.750 %11/17/2028
Senior Unsecured Notes900,000 4.000% Fixed4.000 %3/15/2029
Senior Unsecured Notes400,000 4.375% Fixed4.375 %5/15/2031
Senior Unsecured Notes500,000 
6.000% Fixed
6.000 %5/20/2034
Total / Weighted Average$4,471,850 5.691 %

(a)Secured borrowing capacity of $2.25 billion at LPL Holdings, Inc. (the "Parent").
(b)The SOFR rate option is a one-month SOFR rate and subject to an interest rate floor of 0 bps.


14

LPL Financial Holdings Inc.
Key Business and Financial Metrics
(Dollars in thousands, except where noted)
(Unaudited)
 
Q2 2024Q1 2024ChangeQ2 2023Change
Advisors
Advisors23,462 22,884 3%21,942 7%
Net new advisors578 224 158%421 37%
Annualized advisory fees and commissions per advisor(28)
$358 $342 5%$301 19%
Average total assets per advisor ($ in millions)(29)
$63.8 $63.0 1%$56.5 13%
Transition assistance loan amortization ($ in millions)(30)
$61.9 $58.3 6%$50.5 23%
Total client accounts (in millions)8.6 8.4 2%8.1 6%
Employees7,451 7,413 1%6,827 9%
Services Group
Services Group subscriptions(31)
Professional Services1,892 1,824 4%1,791 6%
Business Optimizers3,606 3,487 3%3,118 16%
Planning and Advice665 624 7%329 102%
Total Services Group subscriptions6,163 5,935 4%5,238 18%
Services Group advisor count4,169 4,035 3%3,506 19%
AUM retention rate (quarterly annualized)(32)
98.4%97.4%100bps98.8%(40bps)
Capital Management
Capital expenditures ($ in millions)(33)
$128.9 $121.0 7%$101.1 27%
Acquisitions, net ($ in millions)(34)
$115.1 $10.2 n/m$49.0 135%
Share repurchases ($ in millions)$— $70.0 (100%)$350.0 (100%)
Dividends ($ in millions)22.4 22.4 —%23.1 (3%)
Total Capital Returned ($ in millions)$22.4 $92.4 (76%)$373.1 (94%)
Non-GAAP Financial Measures
Management believes that presenting certain non-GAAP financial measures by excluding or including certain items can be helpful to investors and analysts who may wish to use this information to analyze the Company’s current performance, prospects and valuation. Management uses this non-GAAP information internally to evaluate operating performance and in formulating the budget for future periods. Management believes that the non-GAAP financial measures and metrics discussed below are appropriate for evaluating the performance of the Company.
Adjusted EPS and Adjusted net income
Adjusted EPS is defined as adjusted net income, a non-GAAP measure defined as net income plus the after-tax impact of amortization of other intangibles and acquisition costs, 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 and acquisition costs 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,
15

earnings per diluted share or any other performance measure derived in accordance with GAAP. For a reconciliation of net income and earnings per diluted share to adjusted net income and adjusted EPS, please see the endnote disclosures in this release.
Gross profit
Gross profit is calculated 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 general and administrative in nature. Because the Company’s gross profit amounts do not include any depreciation and amortization expense, the Company considers gross profit to be a non-GAAP financial measure that may not be comparable to similar measures used by others in its industry. Management believes that gross profit can provide investors with useful insight into the Company’s core operating performance before indirect costs that are general and administrative in nature. For a calculation of gross profit, please see the endnote disclosures in this release.
Core G&A
Core G&A consists of total expense less the following expenses: advisory and commission; depreciation and amortization; interest expense on borrowings; brokerage, clearing and exchange; amortization of other intangibles; market fluctuations on employee deferred compensation; promotional (ongoing); employee share-based compensation; regulatory charges; and acquisition costs. 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, 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. For a reconciliation of the Company's total expense to core G&A, please see the endnote disclosures in this release. The Company does not provide an outlook for its total expense because it contains expense components, such as advisory and commission, that are market-driven and over which the Company cannot exercise control. Accordingly, a reconciliation of the Company’s outlook for total expense to an outlook for core G&A cannot be made available without unreasonable effort.
EBITDA and Adjusted EBITDA
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, a non-GAAP measure, plus acquisition costs. 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. For a reconciliation of net income to EBITDA and adjusted EBITDA, please see the endnote disclosures in this release.
Credit Agreement EBITDA
Credit Agreement EBITDA is defined in, and calculated by management in accordance with, the Company's amended and restated credit agreement (“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. The Company presents Credit Agreement EBITDA because management believes that it can be a useful financial metric in understanding the Company’s debt capacity and covenant compliance under its Credit Agreement. Credit Agreement EBITDA is not a measure of the Company's financial performance under GAAP and should not be considered as an alternative to net income or any other performance measure derived in accordance with GAAP. For a reconciliation of net income to Credit Agreement EBITDA, please see the endnote disclosures in this release.

Endnote Disclosures
(1) Represents the estimated total advisory and brokerage assets expected to transition to the Company's primary broker-dealer subsidiary, LPL Financial, in connection with advisors who transferred their licenses to LPL Financial during the period. The estimate is based on prior business reported by the advisors, which has not been independently and fully verified by LPL Financial. The actual transition of assets to LPL Financial generally occurs over several quarters and the actual amount transitioned may vary from the estimate.
16

(2) The terms “Financial Advisors” and “Advisors” refer to registered representatives and/or investment advisor representatives affiliated with LPL Financial, an SEC-registered broker-dealer and investment advisor.
(3) Corporate cash, a component of cash and equivalents, is the sum of cash and equivalents from the following: (1) cash and equivalents held at LPL Holdings, Inc., (2) cash and equivalents held at regulated subsidiaries as defined by the Company's Credit Agreement, which include LPL Financial and The Private Trust Company, N.A., in excess of the capital requirements of the Company's Credit Agreement (which, in the case of LPL Financial is net capital in excess of 10% of its aggregate debits, or five times the net capital required in accordance with Exchange Act Rule 15c3-1) and (3) cash and equivalents held at non-regulated subsidiaries.
(4) Compliance with the Leverage Ratio is only required under the Company's revolving credit facility.
(5)    The Company was named Top RIA custodian (Cerulli Associates, 2023 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S. (based on total revenues, Financial Planning magazine 1996-2022); and, among third-party providers of brokerage services to banks and credit unions, No. 1 in AUM Growth from Financial Institutions; No. 1 in Market Share of AUM from Financial Institutions; No. 1 in Market Share of Revenue from Financial Institutions; No. 1 on Financial Institution Market Share; No. 1 on Share of Advisors (2021-2022 Kehrer Bielan Research and Consulting Annual TPM Report). Fortune 500 as of June 2021.
(6) Gross profit is a non-GAAP financial measure. Please see a description of gross profit under the "Non-GAAP Financial Measures" section of this release for additional information. Below is a calculation of gross profit for the periods presented (in thousands):
Q2 2024Q1 2024Q2 2023
Total revenue$2,931,769 $2,832,593 $2,468,804 
Advisory and commission expense1,819,027 1,733,487 1,448,763 
Brokerage, clearing and exchange expense32,984 30,532 29,148 
Employee deferred compensation
560 2,140 1,086 
Gross profit$1,079,198 $1,066,434 $989,807 

(7) Production-based payout is a financial measure calculated as advisory and commission expense plus (less) advisor deferred compensation. The payout rate is calculated by dividing the production-based payout by total advisory and commission revenue. Below is a reconciliation of the Company’s advisory and commission expense to the production-based payout and a calculation of the payout rate for the periods presented (in thousands, except payout rate):
Q2 2024Q1 2024Q2 2023
Advisory and commission expense$1,819,027 $1,733,487 $1,448,763 
(Less) Plus: Advisor deferred compensation
(6,977)(47,155)(29,104)
Production-based payout$1,812,050 $1,686,332 $1,419,659 
Advisory and commission revenue$2,075,209 $1,946,257 $1,637,451 
Payout rate87.32%86.64%86.70%
(8) Below is a reconciliation of client cash revenue per Management's Statements of Operations to client cash revenue, a component of asset-based revenue, on the Company's condensed consolidated statements of income for the periods presented (in thousands):
Q2 2024Q1 2024Q2 2023
Client cash on Management's Statement of Operations$361,316 $373,408 $396,238 
Interest income on CCA balances segregated under federal or other regulations(10)
(19,841)(21,026)(17,823)
Client cash on Condensed Consolidated Statements of Income
$341,475 $352,382 $378,415 
(9)     Consists of revenue from the Company's sponsorship programs with financial product manufacturers, omnibus processing and networking services but does not include fees from client cash programs.
17

(10) During the first quarter of 2024, the Company disaggregated the activity previously reported in the interest income and other, net line item into its interest income, net and other revenue components. Prior period amounts have been reclassified to conform to the current presentation. Below is a reconciliation of interest income, net per Management's Statements of Operations to interest income, net on the Company's condensed consolidated statements of income for the periods presented (in thousands):
Q2 2024Q1 2024Q2 2023
Interest income, net on Management's Statement of Operations$27,618 $22,482 $20,136 
Interest income on CCA balances segregated under federal or other regulations(8)
19,841 21,026 17,823 
Interest income on deferred compensation
19 17 13 
Interest income, net on Condensed Consolidated Statements of Income
$47,478 $43,525 $37,972 
(11) During the first quarter of 2024, the Company disaggregated the activity previously reported in the interest income and other, net line item into its interest income, net and other revenue components. Prior period amounts have been reclassified to conform to the current presentation. Below is a reconciliation of other revenue per Management's Statements of Operations to other revenue on the Company's condensed consolidated statements of income for the periods presented (in thousands):
Q2 2024Q1 2024Q2 2023
Other revenue on Management's Statement of Operations$6,621 $3,382 $3,431 
Interest income on deferred compensation
(19)(17)(13)
Deferred compensation
7,537 49,295 30,190 
Other revenue on Condensed Consolidated Statements of Income $14,139 $52,660 $33,608 
(12)     Core G&A is a non-GAAP financial measure. Please see a description of core G&A under the “Non-GAAP Financial Measures” section of this release for additional information. Below is a reconciliation of the Company's total expense to core G&A for the periods presented (in thousands):
Q2 2024Q1 2024Q2 2023
Core G&A Reconciliation
Total expense$2,601,698 $2,458,401 $2,079,985 
Advisory and commission(1,819,027 )(1,733,487 )(1,448,763 )
Depreciation and amortization(70,999 )(67,158 )(58,377 )
Interest expense on borrowings(64,341 )(60,082 )(44,842 )
Brokerage, clearing and exchange(32,984 )(30,532 )(29,148 )
Amortization of other intangibles
(30,607 )(29,552 )(26,741 )
Employee deferred compensation
(560)(2,140)(1,086 )
Total G&A583,180 535,450 471,028 
Promotional (ongoing)(13)(14)
(147,830 )(132,311 )(106,535 )
Acquisition costs(14)
(36,876 )(9,524 )(4,091 )
Employee share-based compensation(19,968 )(22,633 )(16,777 )
Regulatory charges
(7,594 )(7,469 )(6,600 )
Core G&A$370,912 $363,513 $337,025 
18

(13) Promotional (ongoing) includes $12.2 million, $8.0 million and $4.2 million for the three months ended June 30, 2024, March 31, 2024 and June 30, 2023, respectively, of support costs related to full-time employees that are classified within Compensation and benefits expense in the condensed consolidated statements of income and excludes costs that have been incurred as part of acquisitions that have been classified within acquisition costs for the same periods.
(14) Acquisition costs include the costs to setup, onboard and integrate acquired entities and other costs that were incurred as a result of the acquisitions. The below table summarizes the primary components of acquisition costs for the periods presented (in thousands):
Q2 2024Q1 2024Q2 2023
Acquisition costs
Fair value mark on contingent consideration(35)
$24,624 $— $— 
Compensation and benefits6,827 3,850 1,020 
Professional services3,567 3,246 2,575 
Promotional(13)
539 2,268 260 
Other1,319 160 236 
Acquisition costs$36,876 $9,524 $4,091 

(15) EBITDA and adjusted EBITDA are non-GAAP financial measures. Please see a description of EBITDA and adjusted EBITDA under the "Non-GAAP Financial Measures" section of this release for additional information. Below is a reconciliation of net income to EBITDA and adjusted EBITDA for the periods presented (in thousands):
Q2 2024Q1 2024Q2 2023
EBITDA and adjusted EBITDA Reconciliation
Net income$243,800 $288,764 $285,520 
Interest expense on borrowings64,341 60,082 44,842 
Provision for income taxes86,271 85,428 103,299 
Depreciation and amortization70,999 67,158 58,377 
Amortization of other intangibles30,607 29,552 26,741 
EBITDA$496,018 $530,984 $518,779 
Acquisition costs(14)
36,876 9,524 4,091 
Adjusted EBITDA
$532,894 $540,508 $522,870 
(16) Adjusted net income and adjusted EPS are non-GAAP financial measures. Please see a description of adjusted net income and adjusted EPS under the “Non-GAAP Financial Measures” section of this release for additional information. Below is a reconciliation of net income and earnings per diluted share to adjusted net income and adjusted EPS for the periods presented (in thousands, except per share data):
Q2 2024Q1 2024Q2 2023
AmountPer ShareAmountPer ShareAmountPer Share
Net income / earnings per diluted share$243,800 $3.23 $288,764 $3.83 $285,520 $3.65 
Amortization of other intangibles30,607 0.41 29,552 0.39 26,741 0.34 
Acquisition costs(14)
36,876 0.49 9,524 0.13 4,091 0.05 
Tax benefit(17,816)(0.24)(10,340)(0.14)(8,081)(0.10)
Adjusted net income / adjusted EPS$293,467 $3.88 $317,500 $4.21 $308,271 $3.94 
Diluted share count75,548 75,463 78,194 
Note: Totals may not foot due to rounding.
(17) Consists of total advisory and brokerage assets under custody at the Company's primary broker-dealer subsidiary, LPL Financial.
19

(18) Assets on the Company's corporate advisory platform are serviced by investment advisor representatives of LPL Financial. Assets on the Company's independent RIA advisory platform are serviced by investment advisor representatives of separate registered investment advisor firms rather than representatives of LPL Financial.
(19) Consists of advisory assets in LPL Financial’s Model Wealth Portfolios, Optimum Market Portfolios, Personal Wealth Portfolios and Guided Wealth Portfolios platforms.
(20) 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. The Company considers conversions from and to brokerage or advisory accounts as deposits and withdrawals, respectively.
(21) Consists of existing custodied assets that converted from brokerage to advisory, less existing custodied assets that converted from advisory to brokerage.
(22) 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.
(23) Represents the amount of securities purchased less the amount of securities sold in client accounts custodied with LPL Financial.
(24) Client cash balances include CCA and exclude purchased money market funds. CCA balances include cash that clients have deposited with LPL Financial that is included in Client payables in the condensed consolidated balance sheets. The following table presents purchased money market funds for the periods presented (in billions):
Q2 2024Q1 2024Q2 2023
Purchased money market funds$35.7 $32.6 $20.0 
(25) During the first quarter of 2024, the Company updated its definition of client cash account balances to exclude other client payables. Prior period disclosures have been updated to reflect this change as applicable.
(26) Calculated by dividing revenue for the period by the average balance during the period.
(27) EBITDA and Credit Agreement EBITDA are non-GAAP financial measures. Please see a description of EBITDA and Credit Agreement EBITDA under the “Non-GAAP Financial Measures” section of this release for additional information. Under the Credit Agreement, management calculates Credit Agreement EBITDA for a trailing twelve month period at the end of each fiscal quarter and in doing so may make further adjustments to prior quarters. Below are reconciliations of trailing twelve month net income to trailing twelve month EBITDA and Credit Agreement EBITDA for the periods presented (in thousands):
Q2 2024Q1 2024
Q4 2023
EBITDA and Credit Agreement EBITDA Reconciliations
Net income$974,410 $1,016,130 $1,066,250 
Interest expense on borrowings227,201 207,702 186,804 
Provision for income taxes341,312 358,340 378,525 
Depreciation and amortization270,720 258,098 246,994 
Amortization of other intangibles116,537 112,671 107,211 
 EBITDA$1,930,180 $1,952,941 $1,985,784 
Credit Agreement Adjustments:
Acquisition costs and other(14)(36)
$224,687 $117,246 $110,170 
Employee share-based compensation73,884 70,693 66,024 
M&A accretion(37)
28,843 17,024 30,268 
Advisor share-based compensation2,571 2,560 2,561 
Credit Agreement EBITDA$2,260,165 $2,160,464 $2,194,807 
(28) Calculated based on the average advisor count from the current period and prior periods.
(29)    Calculated based on the end of period total advisory and brokerage assets divided by end of period advisor count.
(30) Represents amortization expense on forgivable loans for transition assistance to advisors and institutions.
20

(31) Refers to active subscriptions related to professional services offerings (CFO Solutions, Marketing Solutions, Admin Solutions, Advisor Institute, Bookkeeping, Partial Book Sales and CFO Essentials) and business optimizer offerings (M&A Solutions, Digital Office, Resilience Plans and Assurance Plans), as well as planning and advice services (Paraplanning, Tax Planning, and High Net Worth Services) for which subscriptions are the number of advisors using the service.
(32) Reflects retention of total advisory and brokerage assets, calculated by deducting quarterly annualized attrition from total advisory and brokerage assets, divided by the prior quarter total advisory and brokerage assets.
(33) Capital expenditures represent cash payments for property and equipment during the period.
(34) Acquisitions, net represent cash paid for acquisitions, net of cash acquired during the period.
(35) Represents a fair value adjustment to our contingent consideration liabilities that is reflected in other expense in the condensed consolidated statements of income.
(36) Acquisition costs and other primarily include acquisition costs, costs incurred related to the integration of the strategic relationship with Prudential, and a $40.0 million regulatory charge recognized during the three months ended September 30, 2023 to reflect the amount of a penalty proposed by the SEC as part of its civil investigation of the Company's compliance with records preservation requirements for business-related electronic communications stored on personal devices that have not been approved by the Company.
(37)    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 the transaction.

21
v3.24.2
Document and Entity Information Document
Jul. 25, 2024
Cover page. [Abstract]  
Document Type 8-K
Document Period End Date Jul. 25, 2024
Entity Registrant Name LPL Financial Holdings Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-34963
Entity Tax Identification Number 20-3717839
Entity Address, Address Line One 4707 Executive Drive,
Entity Address, City or Town San Diego,
Entity Address, State or Province CA
Entity Address, Postal Zip Code 92121
City Area Code (800)
Local Phone Number 877-7210
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock - par value $0.001 per share
Trading Symbol LPLA
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Entity Central Index Key 0001397911
Amendment Flag false
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