UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June 30, 2023~~March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-34963

LPL Financial Holdings Inc.

(Exact name of registrant as specified in its charter)


Delaware			20-3717839
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)


4707 Executive Drive,			San Diego,			California			92121

(Address of principal executive offices) (Zip Code)


(800)			877-7210

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - $0.001 par value per share	LPLA	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes x No

The number of shares of Common Stock, par value $0.001 per share, outstanding as of ~~July 26, 2023~~April 29, 2024 was ~~76,297,391.~~74,708,931.


TABLE OF CONTENTS			Page

WHERE YOU CAN FIND MORE INFORMATION			ii
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			ii
Glossary of Terms			iv
PART I — FINANCIAL INFORMATION			1
1. Financial Statements (unaudited)			18
Condensed Consolidated Statements of Income (unaudited)			18

Condensed Consolidated Statements of Financial Condition (unaudited)			19
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)			20
Condensed Consolidated Statements of Cash Flows (unaudited)			21
Notes to Condensed Consolidated Financial Statements (unaudited)			23
Note 1 - Organization and Description of the Company			23
Note 2 - Summary of Significant Accounting Policies			23
Note 3 - Revenue			24
Note 4 - Acquisitions			26
Note 5 - Fair Value Measurements			2627
Note 6 - Investment Securities			3133
Note 7 - Goodwill and Other Intangibles, Net			3133
Note 8 - Other Assets and Other Liabilities			3335
Note 9 - Corporate Debt and Other Borrowings, Net			3436

Note 10 - Commitments and Contingencies			3537
Note 11 - Stockholders’ Equity			3739
Note 12 - Share-based Compensation			3739
Note 13 - Earnings per Share			4041


Note 14 - Net Capital and Regulatory Requirements			4041
Note 15 - Financial Instruments with Off-Balance Sheet Credit Risk and Concentrations of Credit Risk			4142
Note 16 - Subsequent Events			4142
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			1
Business Overview			1
Our Sources of Revenue			1
Significant Events			1
Executive Summary			2


Key Performance Metrics			3
Legal and Regulatory Matters			6
~~Acquisitions, Integrations and Divestitures~~			7
Economic Overview and Impact of Financial Market Events			7
Results of Operations			8
Liquidity and Capital Resources			12
Debt and Related Covenants			1516

Contractual Obligations			1617

Risk Management			1617
Critical Accounting Policies and Estimates			17
3. Quantitative and Qualitative Disclosures About Market Risk			4243
4. Controls and Procedures			4445
PART II — OTHER INFORMATION			4445
1. Legal Proceedings			4445
1A. Risk Factors			4445
2. Unregistered Sales of Equity Securities and Use of Proceeds			4445
3. Defaults Upon Senior Securities			4546
4. Mine Safety Disclosures			4546
5. Other Information			4546
6. Exhibits			46
SIGNATURES			47

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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the Securities and Exchange Commission (“SEC”). Our SEC filings are available to the public on the SEC’s website at sec.gov.

We post the following filings to our website at lpl.com as soon as reasonably practicable after they are electronically filed with or furnished to the SEC: our annual reports on Form 10-K, our proxy statements, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act. Copies of all such filings are available free of charge by request via email (investor.relations@lplfinancial.com), telephone ((617) 897-4574) or mail (LPL Financial Investor Relations at 1055 LPL Way, Fort Mill, SC 29715). The information contained or incorporated on our website is not a part of this Quarterly Report on Form 10-Q.

We may use our website as a means of disclosing material information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC. These disclosures are included on our website in the “Investor Relations” or “Press Releases” sections. Accordingly, investors should monitor these portions of our website in addition to following the Company’s press releases, SEC filings, public conference calls and webcasts.

When we use the terms “LPLFH”, “LPL”, “we”, “us”, “our” and “the Company”, we mean LPL Financial Holdings Inc., a Delaware corporation, and its consolidated subsidiaries, taken as a whole, unless the context otherwise indicates.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements in Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other sections of this Quarterly Report on Form 10-Q regarding:

•the Company’s future financial and operating results, outlook, growth, plans, business strategies, liquidity, future share repurchases and dividends, including statements regarding future resolution of regulatory matters, legal proceedings and related costs;

•a potential settlement with the SEC related to its civil investigation into the Company’s compliance with records preservation requirements for business-related electronic communications stored on personal devices in connection with an industry-wide review of off-platform communications (the “Off-Channel Investigation”);

•the Company’s future revenue and expense;

•future affiliation models and capabilities;

•the expected closing of the Company’s acquisition of Atria Wealth Solutions, Inc. (“Atria”);

•the expected transition and onboarding of advisors, ~~enterprises~~institutions and assets in connection with our acquisition and recruitment activity;

•market and macroeconomic trends, including the effects of inflation and the interest rate environment;

•projected savings and anticipated improvements to the Company’s operating model, services and technologies as a result of its investments, initiatives, programs and acquisitions; and

•any other statements that are not related to present facts or current conditions, or that are not purely historical, constitute forward-looking statements.

These forward-looking statements reflect the Company’s expectations and objectives as of ~~August 1, 2023~~.May 2, 2024. The words “anticipates,” “believes,” “expects,” “may,” “plans,” “predicts,” “will” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are not guarantees that expectations or objectives expressed or implied by the Company 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:

•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;

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•effects of competition in the financial services ~~industry;~~

•industry and the success of the Company in attracting and retaining financial advisors and ~~enterprises,~~institutions, and their ability to market financial products and services effectively;

•whether retail investors served by newly-recruited advisors choose to move their respective assets to new accounts at the Company;

•difficulties and delays in onboarding the assets of acquired or recruited ~~advisors;~~

~~Table~~advisors, including the receipt and timing of ~~Contents~~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;

•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 negotiation of the definitive documentation in connection with the settlement of the Off-Channel Investigation;

•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 “Credit Agreement”), the committed revolving credit facility at our primary broker-dealer subsidiary, LPL Financial LLC (the “Broker-Dealer Revolving Credit Facility”), and the indentures governing the Company’s senior unsecured notes (the “Indentures”);

•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;

•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 Prudential Financial, Inc. (“Prudential”) will transition registration to the Company and whether assets reported as serviced by such financial advisors will translate into assets of the Company;

•the failure to satisfy the closing conditions applicable to the ~~Company’s acquisition of~~strategic relationship agreement between the ~~assets of Crown Capital Securities, L.P.,~~Company and Prudential, including ~~receipt of transaction approval from the Financial Industry Regulatory Authority (“FINRA”);~~regulatory approval;

•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;

•~~the effects of the coronavirus disease 2019 (“COVID-19”) pandemic, including efforts to contain it;~~ 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.

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 Quarterly Report on Form 10-Q, 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 Quarterly Report on Form 10-Q.

iii

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GLOSSARY OF TERMS

Acquisition Costs: Expenses that include the costs to setup, onboard and integrate acquired entities and other costs that were incurred as a result of the acquisitions.

Adjusted EBITDA: A non-GAAP financial measure defined as EBITDA plus acquisition costs.

Adjusted EPS: A non-GAAP financial measure defined as Adjusted Net Income divided by the weighted average number of diluted shares outstanding for the applicable period.

Adjusted Net Income: A non-GAAP financial measure defined as net income plus the after-tax impact of amortization of other intangibles and acquisition costs.

Basis Point: One basis point equals 1/100th of 1%.

Core G&A: A non-GAAP financial measure defined as total expense excluding 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.

Corporate Cash: A component of cash and equivalents that includes 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 LLC ~~Financial Resources Group Investment Services, LLC~~ 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 LLC ~~and Financial Resources Group Investment Services, LLC,~~ is net capital in excess of 10% of ~~their~~its aggregate debits, or five times the net capital required in accordance with the Uniform Net Capital Rule, and (3) cash and equivalents held at non-regulated subsidiaries.

Credit Agreement: The Company’s amended and restated credit agreement.

Credit Agreement EBITDA: A non-GAAP financial measure defined in the 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 ~~(including unusual or non-recurring charges) and gains,~~ and to include future expected cost savings, operating expense reductions or other synergies from certain transactions.

EBITDA: A non-GAAP financial measure defined as net income plus interest expense on borrowings, provision for income taxes, depreciation and amortization, and amortization of other intangibles.

FINRA: The Financial Industry Regulatory Authority.

GAAP: Accounting principles generally accepted in the United States of America.

Gross Profit: A non-GAAP financial measure defined as total revenue less advisory and commission expense; brokerage, clearing and exchange expense; and market fluctuations on employee deferred compensation.

Indentures: The indentures governing the Company’s senior unsecured notes.

Leverage Ratio: A financial metric from our Credit Agreement that is calculated by dividing Credit Agreement net debt, which equals consolidated total debt less Corporate Cash, by Credit Agreement EBITDA.

NFA: The National Futures Association.

OCC: The Office of the Comptroller of the Currency.

RIA: Registered investment advisor.

SEC: The U.S. Securities and Exchange Commission.

Uniform Net Capital Rule: Refers to Rule 15c3-1 under the Exchange Act, which specifies minimum capital requirements that are intended to ensure the general financial soundness and liquidity of broker-dealers.

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PART I — FINANCIAL INFORMATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

LPL serves the advisor-mediated marketplace as the nation’s largest independent broker-dealer, a leading investment advisory firm and a top custodian. We serve nearly ~~22,000~~23,000 financial advisors, including advisors at approximately 1,100 ~~enterprises~~institutions and at approximately ~~550~~570 registered investment advisor (“RIA”) firms nationwide, providing the front-, middle- and back-office support our advisors need. WeThrough our comprehensive platform, we offer integrated technology solutions; brokerage and advisory platforms; clearing, compliance, business and planning and advice services; consultative practice management programs and training; and in-house research to help our advisors deliver advice to their clients and run successful businesses.

We are steadfast in our commitment to the advisor-mediated model and the belief that investors deserve access to personalized guidance from a financial advisor. We believe advisors should have the freedom to choose the business model, services and technology they need and to manage their client relationships. We believe investors achieve better outcomes when working with a financial advisor, and we strive to make it easy for advisors to do what is best for their clients.

We believe that we are the only company that offers the unique combination of an integrated technology platform, comprehensive self-clearing services and access to a wide range of curated non-proprietary products all delivered in an environment unencumbered by conflicts from product manufacturing, underwriting and market-making.

Our Sources of Revenue

Our revenue is derived primarily from fees and commissions from products and advisory services offered by our advisors to their clients, a substantial portion of which we pay out to our advisors, as well as fees we receive from our advisors for the use of our technology, custody, clearing, trust and reporting platforms. We also generate asset-based revenue through our insured bank sweep vehicles, money market account balances and the access we provide to a variety of product providers with the following product lines:


• Alternative Investments						• Retirement Plan Products
• Annuities						• Separately Managed Accounts
• Exchange Traded Products						• Structured Products
• Insurance Based Products						• Unit Investment Trusts
• Mutual Funds

Under our self-clearing platform, we custody the majority of client assets invested in these financial products, for which we provide statements, transaction processing and ongoing account management. In return for these services, mutual funds, insurance companies, banks and other financial product sponsors pay us fees based on asset levels or number of accounts managed. We also earn interest from margin loans made to our advisors’ clients, cash and equivalents segregated under federal or other regulations, advisor repayable loans and operating cash, which is included in interest income, net in the condensed consolidated statements of income. A portion of our revenue is not asset-based or correlated with the equity financial markets.

We regularly review various aspects of our operations and service offerings, including our policies, procedures and platforms, in response to marketplace developments. We seek to continuously improve and enhance aspects of our operations and service offerings in order to position our advisors for long-term growth and to align with competitive and regulatory developments. For example, we regularly review the structure and fees of our products and services, including related disclosures, in the context of the changing regulatory environment and competitive landscape for advisory and brokerage accounts.

Significant Events

Entered into ana definitive purchase agreement to acquire ~~the assets of Crown Capital Securities, L.P.~~Atria Wealth Solutions, Inc. (“~~Crown Capital”~~Atria”)

On ~~July 21, 2023, we~~February 13, 2024, the Company announced that it had entered into ana definitive purchase agreement to acquire ~~the assets~~Atria, a wealth management solutions holding company headquartered in New York. As part of the ~~wealth management business of Crown Capital, a firm with approximately 260 advisors who collectively serve approximately $6.5 billion of~~agreement, Atria will transition its brokerage and advisory ~~assets.~~assets, currently custodied with its network of broker-dealers, to the Company’s platform. The ~~acquisition is~~Company expects to close the transaction in the second half of 2024 for an initial purchase price of approximately $805 million with the conversion expected to ~~close~~be completed in ~~early 2024,~~mid-2025, subject to receipt of regulatory approval and other ~~customary~~ closing conditions.

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Executive Summary

Financial Highlights

Results for the ~~second~~first quarter of ~~2023~~2024 included net income of ~~$285.5~~$288.8 million, or ~~$3.65~~$3.83 per diluted share, which compares to ~~$160.5~~$338.9 million, or $~~1.97~~4.24 per diluted share, for the ~~second~~first quarter of ~~2022.~~2023.

Asset Trends

Total advisory and brokerage assets served were $1.4 trillion at March 31, 2024, compared to $1.2 trillion at ~~June 30,~~March 31, 2023 ~~compared to $1.1 trillion for the same period in~~ ~~2022.~~. Total net new assets were ~~$21.7~~$16.7 billion for the three months ended ~~June 30, 2023,~~March 31, 2024, compared to $~~37.2~~24.5 billion for the same period in ~~2022.~~2023.

Net new advisory assets were ~~$18.1~~$16.2 billion for the three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$11.4~~$14.6 billion for the same period in ~~2022.~~2023. Advisory assets were ~~$661.6~~$793.0 billion, or ~~53.3%~~55.0% of total advisory and brokerage assets served, at ~~June 30, 2023~~,March 31, 2024, up ~~18%~~28% from ~~$558.6~~$620.9 billion at ~~June 30, 2022.~~March 31, 2023.

Net new brokerage assets were ~~$3.6~~$0.5 billion for the three months ended ~~June 30, 2023,~~March 31, 2024, compared to ~~$25.8~~$9.9 billion for the same period in ~~2022.~~2023. Brokerage assets were ~~$578.6~~$647.9 billion at ~~June 30, 2023,~~March 31, 2024, up ~~14%~~17% from ~~$506.0~~$554.3 billion at ~~June 30, 2022.~~March 31, 2023.

Gross Profit Trend

Gross profit, a non-GAAP financial measure, was ~~$989.8 million~~$1.1 billion for the three months ended ~~June 30, 2023, an~~March 31, 2024, an increase of ~~39%~~5% from ~~$711.1 million~~$1.0 billion for the three months ended ~~June 30, 2022.~~March 31, 2023. See the “Key Performance Metrics” section for additional information on gross profit.

Common Stock Dividends and Share Repurchases

During the three months ended ~~June 30, 2023,~~March 31, 2024, we paid stockholders cash dividends of ~~$23.1~~$22.4 million and repurchased ~~1.8 million~~296,145 of our outstanding shares for a total of ~~$350.0 million~~.$70.0 million.

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Key Performance Metrics

We focus on several key metrics in evaluating the success of our business relationships and our resulting financial position and operating performance. Our key operating, business and financial metrics are as follows:

As of and for the Three Months Ended
June 30, March 31, June 30,
Operating Metrics (dollars in billions)(1)
2023 2023 2022
Advisory and Brokerage Assets(2)
Advisory assets $ 661.6 $ 620.9 $ 558.6
Brokerage assets 578.6 554.3 506.0
Total Advisory and Brokerage Assets $ 1,240.2 $ 1,175.2 $ 1,064.6
Advisory as a % of total Advisory and Brokerage Assets 53.3% 52.8% 52.5%
Net New Assets(3)
Net new advisory assets $ 18.1 $ 14.6 $ 11.4
Net new brokerage assets 3.6 9.9 25.8
Total Net New Assets $ 21.7 $ 24.5 $ 37.2
Organic Net New Assets
Organic net new advisory assets $ 18.1 $ 13.7 $ 11.4
Organic net new brokerage assets 3.6 7.1 25.8
Total Organic Net New Assets $ 21.7 $ 20.8 $ 37.2
Organic advisory net new assets annualized growth(4)
11.7% 9.4% 7.3%
Total organic net new assets annualized growth(4)
7.4% 7.5% 12.8%
Client Cash Balances
Insured cash account sweep $ 36.0 $ 39.7 $ 40.8
Deposit cash account sweep 9.5 10.2 12.3
Total Bank Sweep 45.5 49.9 53.1
Money market sweep 2.3 2.6 15.0
Total Client Cash Sweep Held by Third Parties 47.9 52.5 68.1
Client cash account 2.1 2.1 1.5
Total Client Cash Balances $ 50.0 $ 54.6 $ 69.6
Client Cash Balances as a % of Total Assets 4.0% 4.6% 6.5%
Net buy (sell) activity(5)
$ 32.3 $ 36.9 $ 5.3
As of and for the Three Months Ended
June 30, March 31, June 30,
Business and Financial Metrics (dollars in millions) 2023 2023 2022
Advisors 21,942 21,521 20,871
Average total assets per advisor(6)
$ 56.5 $ 54.6 $ 51.0
Share repurchases $ 350.0 $ 275.0 $ 50.0
Dividends $ 23.1 $ 23.6 $ 20.0
Leverage ratio(7)
1.25 1.34 2.09


	As of and for the Three Months Ended
	March 31,		December 31,		March 31,
Operating Metrics (dollars in billions)(1)	2024		2023		2023
Advisory and Brokerage Assets(2)
Advisory assets	$	793.0	$	735.8	$	620.9
Brokerage assets	647.9		618.2		554.3
Total Advisory and Brokerage Assets	$	1,440.9	$	1,354.1	$	1,175.2
Advisory as a % of total Advisory and Brokerage Assets	55.0%		54.3%		52.8%

Net New Assets(3)
Net new advisory assets	$	16.2	$	20.5	$	14.6
Net new brokerage assets	0.5		4.2		9.9
Total Net New Assets	$	16.7	$	24.7	$	24.5

Organic Net New Assets
Organic net new advisory assets	$	16.2	$	20.5	$	13.7
Organic net new brokerage assets	0.5		4.2		7.1
Total Organic Net New Assets	$	16.7	$	24.7	$	20.8

Organic advisory net new assets annualized growth(4)	8.8%		12.4%		9.4%
Total organic net new assets annualized growth(4)	4.9%		8.0%		7.5%

Client Cash Balances
Insured cash account sweep	$	32.6	$	34.5	$	39.7
Deposit cash account sweep	9.2		9.3		10.2
Total Bank Sweep	41.8		43.8		49.9
Money market sweep	2.4		2.4		2.6
Total Client Cash Sweep Held by Third Parties	44.2		46.2		52.5
Client cash account(5)	2.1		2.0		1.6
Total Client Cash Balances	$	46.3	$	48.2	$	54.0
Client Cash Balances as a % of Total Assets	3.2%		3.6%		4.6%

Net buy (sell) activity(6)	$	37.8	$	32.8	$	36.9


	As of and for the Three Months Ended
	March 31,		December 31,		March 31,
Business and Financial Metrics (dollars in millions)	2024		2023		2023
Advisors	22,884		22,660		21,521
Average total assets per advisor(7)	$	63.0	$	59.8	$	54.6


Share repurchases	$	70.0	$	225.0	$	275.0
Dividends	$	22.4	$	22.7	$	23.6
Leverage ratio(8)	1.65		1.63		1.34

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		Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
Financial Metrics (dollars in millions, except per share data)
Financial Metrics (dollars in millions, except per share data)
Financial Metrics (dollars in millions, except per share data)	Financial Metrics (dollars in millions, except per share data)	2023		2022		2023		2022
Total revenue	Total revenue	$	2,468.8	$	2,038.9	$	4,886.6	$	4,104.6
Total revenue
Total revenue
Net income
Net income
Net income	Net income	$	285.5	$	160.5	$	624.4	$	294.3
Earnings per share (“EPS”), diluted	Earnings per share (“EPS”), diluted	$	3.65	$	1.97	$	7.90	$	3.61
Earnings per share (“EPS”), diluted
Earnings per share (“EPS”), diluted
Non-GAAP Financial Metrics (dollars in millions, except per share data)	Non-GAAP Financial Metrics (dollars in millions, except per share data)
Adjusted EPS(8)		$	3.94	$	2.24	$	8.44	$	4.20
Gross profit(9)		$	989.8	$	711.1	$	2,009.8	$	1,380.1
EBITDA(10)		$	518.8	$	310.7	$	1,082.6	$	577.9
Core G&A(11)		$	337.0	$	286.0	$	663.2	$	566.9
Non-GAAP Financial Metrics (dollars in millions, except per share data)
Non-GAAP Financial Metrics (dollars in millions, except per share data)
Adjusted EPS(9)
Adjusted EPS(9)
Adjusted EPS(9)
Gross profit(10)
Gross profit(10)
Gross profit(10)
Adjusted EBITDA(11)
Adjusted EBITDA(11)
Adjusted EBITDA(11)
Core G&A(12)
Core G&A(12)
Core G&A(12)

(1)Totals may not foot due to rounding.

(2)Consists of total advisory and brokerage assets under custody at the Company’s primary broker-dealer subsidiary, LPL Financial LLC (“LPL Financial”). Please consult the “Results of Operations” section for a tabular presentation of advisory and brokerage assets.

(3)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. We consider conversions from and to brokerage or advisory accounts as deposits and withdrawals, respectively.

(4)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.

(5)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.

(6)Represents the amount of securities purchased less the amount of securities sold in client accounts custodied with LPL Financial.

~~(6)~~(7)Calculated based on the end of period total advisory and brokerage assets divided by the end of period advisor count.

~~(7)~~(8)The leverage ratio is a financial metric from our Credit Agreement and is calculated by dividing Credit Agreement net debt, which equals consolidated total debt less Corporate Cash, by Credit Agreement EBITDA. Credit Agreement EBITDA, a non-GAAP financial measure, is defined by the 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, ~~(including unusual or non-recurring charges) and gains,~~ and to include future expected cost savings, operating expense reductions or other synergies from certain transactions. Please consult the “Debt and Related Covenants” section for more information. Below are reconciliations of corporate debt and other borrowings to Credit Agreement net debt as of the dates below and net income to EBITDA and Credit Agreement EBITDA for the trailing twelve-month periods presented ~~below~~ (in millions):


		June 30,		March 31,		June 30,
	March 31,										March 31,		December 31,	March 31,
Credit Agreement Net Debt Reconciliation	Credit Agreement Net Debt Reconciliation	2023				2022		Credit Agreement Net Debt Reconciliation	2024	2023
Corporate debt and other borrowings	Corporate debt and other borrowings	$	3,019.6	$	2,870.2	$	2,743.3
Corporate Cash(12)		(325.5)		(234.2)		(241.5)
Corporate Cash(13)
Credit Agreement Net Debt(†)	Credit Agreement Net Debt(†)	$	2,694.1	$	2,636.0	$	2,501.8

		June 30,		March 31,		June 30,
		March 31,
		March 31,
		March 31,								December 31,		March 31,
EBITDA and Credit Agreement EBITDA Reconciliation	EBITDA and Credit Agreement EBITDA Reconciliation	2023				2022		EBITDA and Credit Agreement EBITDA Reconciliation	2024	2023
Net income	Net income	$	1,175.8	$	1,050.8	$	505.4
Interest expense on borrowings	Interest expense on borrowings	154.3		138.2		110.2
Provision for income taxes	Provision for income taxes	383.5		331.9		154.8
Depreciation and amortization	Depreciation and amortization	220.3		210.4		173.1
Amortization of other intangibles	Amortization of other intangibles	96.0		90.5		84.3
EBITDA(†)	EBITDA(†)	$	2,029.9	$	1,821.9	$	1,027.8
Credit Agreement Adjustments:	Credit Agreement Adjustments:
Acquisition costs and other		$	35.9	$	42.0	$	86.9
Acquisition costs and other(14)(15)
Acquisition costs and other(14)(15)
Acquisition costs and other(14)(15)
Employee share-based compensation	Employee share-based compensation	58.4		55.3		45.8
M&A accretion(13)		36.4		42.0		32.1
M&A accretion(16)
Advisor share-based compensation	Advisor share-based compensation	2.6		2.6		2.3

Credit Agreement EBITDA(†)	Credit Agreement EBITDA(†)	$	2,163.2	$	1,963.7	$	1,194.9

		June 30,		March 31,		June 30,
		2023				2022
		March 31,
		March 31,
		March 31,								December 31,		March 31,
	2024										2024		2023
Leverage Ratio	Leverage Ratio	1.25		1.34		2.09

~~_______________________________~~

(†) Totals may not foot due to rounding.

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~~(8)~~(9)Adjusted EPS is a non-GAAP financial measure defined as adjusted net income, a non-GAAP financial 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, earnings per diluted share or any other performance measure derived in accordance with GAAP. Below is a reconciliation of net income and earnings per diluted share to adjusted net income and adjusted EPS for the periods presented (in millions, except per share data):


		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Adjusted Net Income / Adjusted EPS Reconciliation
Adjusted Net Income / Adjusted EPS Reconciliation
Adjusted Net Income / Adjusted EPS Reconciliation	Adjusted Net Income / Adjusted EPS Reconciliation	Amount		Per Share		Amount		Per Share		Amount		Per Share		Amount		Per Share
Net income / earnings per diluted share	Net income / earnings per diluted share	$	285.5	$	3.65	$	160.5	$	1.97	$	624.4	$	7.90	$	294.3	$	3.61
Net income / earnings per diluted share
Net income / earnings per diluted share

Amortization of other intangibles

Amortization of other intangibles

Amortization of other intangibles	Amortization of other intangibles	26.7		0.34		21.2		0.26		50.8		0.64		42.4		0.52
Acquisition costs(14)	Acquisition costs(14)	4.1		0.05		8.9		0.11		7.2		0.09		22.2		0.27
Acquisition costs(14)
Acquisition costs(14)
Tax benefit
Tax benefit
Tax benefit	Tax benefit	(8.1)		(0.10)		(7.9)		(0.10)		(15.2)		(0.19)		(16.9)		(0.21)
Adjusted Net Income / Adjusted EPS(†)	Adjusted Net Income / Adjusted EPS(†)	$	308.3	$	3.94	$	182.7	$	2.24	$	667.2	$	8.44	$	342.0	$	4.20
Adjusted Net Income / Adjusted EPS(†)
Adjusted Net Income / Adjusted EPS(†)
Weighted-average shares outstanding, diluted	Weighted-average shares outstanding, diluted	78.2				81.4				79.1				81.5
Weighted-average shares outstanding, diluted
Weighted-average shares outstanding, diluted

(†) Totals may not foot due to rounding.

~~(9)~~(10)Gross profit is a non-GAAP financial measure defined 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 by management to be general and administrative in nature. Because our gross profit amounts do not include any depreciation and amortization expense, we consider our gross profit amounts to be non-GAAP financial measures that may not be comparable to those of others in our industry. We believe that gross profit amounts can provide investors with useful insight into our core operating performance before indirect costs that are general and administrative in nature. Below is a calculation of gross profit for the periods presented (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
Gross Profit
Gross Profit
Gross Profit	Gross Profit	2023		2022		2023		2022
Total revenue	Total revenue	$	2,468.8	$	2,038.9	$	4,886.6	$	4,104.6
Total revenue
Total revenue
Advisory and commission expense
Advisory and commission expense
Advisory and commission expense	Advisory and commission expense	1,448.8		1,304.4		2,819.4		2,678.6
Brokerage, clearing and exchange expense	Brokerage, clearing and exchange expense	29.1		23.4		55.3		46.0
Employee deferred compensation(15)		1.1		—		2.2		—
Brokerage, clearing and exchange expense
Brokerage, clearing and exchange expense
Employee deferred compensation
Employee deferred compensation
Employee deferred compensation
Gross Profit(†)	Gross Profit(†)	$	989.8	$	711.1	$	2,009.8	$	1,380.1
Gross Profit(†)
Gross Profit(†)

(†) Totals may not foot due to rounding.

~~(10)~~(11)EBITDA ~~is a~~and adjusted EBITDA are non-GAAP financial ~~measure~~measures. 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 plus acquisition costs. The Company presents EBITDA and adjusted EBITDA because management believes that itthey can be a useful financial ~~metric~~metrics in understanding the Company’s earnings from operations. EBITDA isand adjusted EBITDA are not ~~a measure~~measures 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. Below is a reconciliation of net income to EBITDA and adjusted EBITDA for the periods presented (in millions):
Three Months Ended June 30, Six Months Ended June 30,
EBITDA Reconciliation 2023 2022 2023 2022
Net income $ 285.5 $ 160.5 $ 624.4 $ 294.3
Interest expense on borrowings 44.8 28.8 84.0 56.0
Provision for income taxes 103.3 51.8 208.9 91.4
Depreciation and amortization 58.4 48.5 114.4 93.9
Amortization of other intangibles 26.7 21.2 50.8 42.4
EBITDA(†)
$ 518.8 $ 310.7 $ 1,082.6 $ 577.9
~~_______________________________~~


	Three Months Ended March 31,
EBITDA Reconciliation	2024		2023
Net income	$	288.8	$	338.9
Interest expense on borrowings	60.1		39.2
Provision for income taxes	85.4		105.6
Depreciation and amortization	67.2		56.1
Amortization of other intangibles	29.6		24.1
EBITDA	$	531.0	$	563.8
Acquisition costs(14)	9.5		3.1
Adjusted EBITDA(†)	$	540.5	$	566.9

(†) Totals may not foot due to rounding.

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~~(11)~~(12)Core G&A is a non-GAAP financial measure defined as 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 expense, 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. Below is a reconciliation of the Company’s total expense to core G&A for the periods presented (in millions):


		Three Months Ended June 30,						Six Months Ended June 30,
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
Core G&A Reconciliation
Core G&A Reconciliation
Core G&A Reconciliation	Core G&A Reconciliation	2023			2022			2023			2022
Total expense	Total expense	$	2,080.0		$	1,826.6		$	4,053.3		$	3,718.9
Total expense
Total expense
Advisory and commission
Advisory and commission
Advisory and commission	Advisory and commission	(1,448.8		)	(1,304.4		)	(2,819.4		)	(2,678.6		)
Depreciation and amortization	Depreciation and amortization	(58.4		)	(48.5		)	(114.4		)	(93.9		)
Depreciation and amortization
Depreciation and amortization
Interest expense on borrowings
Interest expense on borrowings
Interest expense on borrowings	Interest expense on borrowings	(44.8		)	(28.8		)	(84.0		)	(56.0		)
Brokerage, clearing and exchange	Brokerage, clearing and exchange	(29.1		)	(23.4		)	(55.3		)	(46.0		)
Brokerage, clearing and exchange
Brokerage, clearing and exchange
Amortization of other intangibles	Amortization of other intangibles	(26.7		)	(21.2		)	(50.8		)	(42.4		)
Employee deferred compensation(15)		(1.1		)	—			(2.2		)	—
Amortization of other intangibles
Amortization of other intangibles
Employee deferred compensation
Employee deferred compensation
Employee deferred compensation
Total G&A(†)	Total G&A(†)	471.0			400.4			927.2			802.1
Promotional (ongoing)(14)(16)		(106.5		)	(83.8		)	(207.7		)	(171.2		)
Total G&A(†)
Total G&A(†)
Promotional (ongoing)(14)(17)
Promotional (ongoing)(14)(17)
Promotional (ongoing)(14)(17)
Employee share-based compensation	Employee share-based compensation	(16.8		)	(13.7		)	(34.7		)	(26.4		)
Employee share-based compensation
Employee share-based compensation
Acquisition costs(14)
Acquisition costs(14)
Acquisition costs(14)
Regulatory charges	Regulatory charges	(6.6		)	(8.1		)	(14.3		)	(15.4		)
Acquisition costs(14)		(4.1		)	(8.9		)	(7.2		)	(22.2		)
Regulatory charges
Regulatory charges
Core G&A(†)	Core G&A(†)	$	337.0		$	286.0		$	663.2		$	566.9
Core G&A(†)
Core G&A(†)

(†) Totals may not foot due to rounding.

~~(12)~~(13)See the “Liquidity and Capital Resources” section for additional information about Corporate Cash.

~~(13)~~(14)Acquisition costs include the costs to setup, onboard and integrate acquired entities and other costs that were incurred as a result of acquisitions. The below table summarizes the primary components of acquisition costs for the periods presented (in millions):


	Three Months Ended March 31,
Acquisition costs	2024		2023
Compensation and benefits	$	3.9	$	0.9
Professional services	3.2		1.6
Promotional(17)	2.3		0.2
Other	0.2		0.4

Acquisition costs(†)	$	9.5	$	3.1

(†) Totals may not foot due to rounding.

(15)In March 2024, the Company and the SEC reached a settlement in principle to resolve the SEC’s civil investigation of the Company's compliance with records preservation requirements for business-related electronic communications stored on personal devices or messaging platforms that have not been approved by the Company. As a result of this settlement, the Company would pay a $50.0 million civil monetary penalty. The Company recorded $40.0 million in regulatory charges during the three months ended September 30, 2023 to reflect the amount of the penalty that is not covered by the Company's captive insurance subsidiary. See Note 10 - Commitments and Contingencies, within the notes to the condensed consolidated financial statements for further detail.

(16)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 such acquisition.

~~(14)Acquisition costs include the costs to setup, onboard and integrate acquired entities. The below table summarizes the primary components of acquisition costs for the periods presented (in millions):~~

Three Months Ended June 30, Six Months Ended June 30,
Acquisition costs 2023 2022 2023 2022
Professional services $ 2.6 $ 1.9 $ 4.2 $ 7.5
Compensation and benefits 1.0 6.7 1.9 12.3
Promotional(16)
0.3 — 0.5 1.9
Other 0.2 0.3 0.6 0.5
Acquisition costs $ 4.1 $ 8.9 $ 7.2 $ 22.2

~~(15)~~During the first quarter of 2023, the Company updated its presentation of employee deferred compensation to be consistent with its presentation of advisor deferred compensation. This change has not been applied retroactively as the impact on prior periods was not material.

~~(16)~~(17)Promotional (ongoing) for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023 includes ~~$4.2~~$8.0 million and ~~$7.4~~$3.2 million, respectively, of support costs related to full-time employees that are classified within ~~Compensation~~compensation and benefits expense in the condensed consolidated statements of ~~income compared to $5.8~~income. Promotional (ongoing) for the three months ended March 31, 2024 and 2023 excludes $2.3 million and ~~$8.1~~$0.2 million, ~~for the same periods in 2022. Promotional (ongoing) excludes~~ ~~costs that have been~~respectively, of expenses incurred as ~~part~~a result of acquisitions, which are included in the ~~Acquisition~~acquisition costs line ~~ite~~m.item.

Legal and Regulatory Matters

The financial services industry is subject to extensive regulation by U.S. federal and state government agencies as well as various self-regulatory organizations. Compliance with all applicable laws and regulations involves a significant investment in time and resources, and we continue to invest in our compliance functions to monitor our adherence to the numerous legal and regulatory requirements applicable to our business. Any new laws or regulations applicable to our business, any changes to existing laws or regulations, or any changes to the interpretations or enforcement of those laws or regulations may affect our operations and/or financial condition. We seek to participate in the development of significant rules and regulations that govern our industry.

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As a regulated entity, we are subject to regulatory oversight and inquiries related to, among other items, our compliance and supervisory systems and procedures and other controls, as well as our disclosures, supervision and reporting. We review these items in the ordinary course of business in our effort to adhere to legal and regulatory requirements applicable to our operations. Nevertheless, additional regulation and enhanced regulatory enforcement has resulted, and may result in the future, in additional operational and compliance costs, as well as increased costs in the form of penalties and fines, investigatory and settlement costs, customer restitution and

~~Table of Contents~~

remediation related to regulatory matters. In the ordinary course of business, we periodically identify or become aware of purported inadequacies, deficiencies and other issues. It is our policy to evaluate these matters for potential legal or regulatory violations and other potential compliance issues. It is also our policy to self-report known violations and issues as required by applicable law and regulation. When deemed probable that matters may result in financial losses, we accrue for those losses based on an estimate of possible fines, customer restitution and losses related to the repurchase of sold securities and other losses, as applicable. Certain regulatory and other legal claims and losses may be covered through our wholly-owned captive insurance subsidiary, which is chartered with the insurance commissioner in the state of Tennessee.

Assessing the probability of a loss occurring and the timing and amount of any loss related to a regulatory matter or legal proceeding, whether or not covered by our captive insurance subsidiary, is inherently difficult and requires judgments based on a variety of factors and assumptions. There are particular uncertainties and complexities involved when assessing the adequacy of loss reserves for potential liabilities that are self-insured by our captive insurance subsidiary, which depends in part on historical claims experience, including the actual timing and costs of resolving matters that begin in one policy period and are resolved in a subsequent period.

Our accruals, including those established through our captive insurance subsidiary at ~~June 30, 2023,~~March 31, 2024, include estimated costs for significant regulatory matters or legal proceedings, generally relating to the adequacy of our compliance and supervisory systems and procedures and other controls, for which we believe losses are both probable and reasonably estimable.

The outcome of regulatory or legal proceedings could result in legal liability, regulatory fines or monetary penalties in excess of our accruals and insurance, which could have a material adverse effect on our business, results of operations, cash flows or financial condition. For more information on management’s loss contingency policies, see Note 10 - Commitments and Contingencies, within the notes to the condensed consolidated financial statements.

~~Acquisitions, Integrations and Divestitures~~

We continuously assess the competitive landscape in connection with our capital allocation framework as we pursue acquisitions, integrations and divestitures. These activities are part of our overall growth strategy but can distort comparability when reviewing revenue and expense trends for periods presented. Our recent acquisition activity includes the following:

•On January 31, 2023, we acquired Financial Resources Group Investment Services, LLC (“FRGIS”), an independent branch office and broker-dealer, for an initial payment of approximately $140 million with potential contingent payments over the three years following the closing.

•~~We acquired intangible assets~~ ~~of $171.1 million as a result of other acquisitions, including acquisitions as part of our Liquidity & Succession solution under which we buy advisor practices, during the six months ended June 30, 2023.~~

•On July 21, 2023, we entered into an agreement to acquire the assets of the wealth management business of Crown Capital, a firm with approximately 260 advisors who collectively serve approximately $6.5 billion of brokerage and advisory assets. The acquisition is expected to close in early 2024, subject to receipt of regulatory approval and other customary closing conditions.

~~See Note 4 -~~ ~~Acquisitions, within the notes to the condensed consolidated financial statements for further detail.~~

Economic Overview and Impact of Financial Market Events

Our business is directly and indirectly sensitive to several macroeconomic factors and the state of the financial markets in the United States. According to the most recent estimate from the U.S. Bureau of Economic Analysis, the U.S. economy grew at an annualized pace of ~~2.4%~~1.6% in the ~~second~~first quarter of ~~2023~~2024 after growing at an annualized pace of ~~2.0%~~3.4% in the ~~first~~fourth quarter of ~~2023.~~

last year. Although inflation, rising interest rates and volatile global markets were all headwinds, the U.S. economy added roughly ~~730,000~~829,000 jobs in the ~~second~~first quarter of ~~this year.~~2024. The unemployment rate averaged ~~3.6%~~3.8% in the ~~second~~first quarter of ~~2023,~~2024, up slightly from the ~~3.5%~~3.7% average in the prior quarter, but still historically low, indicating a tight labor market. The equity ~~and bond~~ markets ~~experienced volatility from an increasingly hawkish~~rebounded as the Federal Reserve (“Fed”) held rates unchanged and ~~uncertainty about~~prepared markets for future ~~economic growth. The~~rate cuts. As a result, the S&P 500 ~~increased 8% and the Bloomberg Barclays U.S. Aggregate Bond Index decreased 0.9%~~returned 10.6% during the ~~second~~first quarter of ~~2023.~~

2024.

Our business is also sensitive to current and expected short-term interest rates, which are largely driven by Fed policy. AtDuring the ~~end of the second~~first quarter of ~~2023,~~2024, Fed policymakers ~~increased~~maintained the target range for the federal funds rate of 5.25% to ~~5.00% to 5.25%~~5.50%. To the extent they pursue tighter monetary policy, the Federal Open Market Committee

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members ~~will~~are expected to take into account the cumulative impacts from higher rates, the inflation trajectory and global financial conditions.

Please consult the “Risks Related to Our Business and Industry” section within Part I, “Item 1A. Risk Factors” in our ~~2022~~2023 Annual Report on Form 10-K for more information about the risks associated with significant interest rate changes and the potential related effects on our profitability and financial condition.

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Results of Operations

The following discussion presents an analysis of our results of operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2024 and 2023 ~~and 2022~~ (in thousands):


		Three Months Ended June 30,						Six Months Ended June 30,
		2023		2022		% Change		2023		2022		% Change
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
REVENUE
REVENUE
REVENUE	REVENUE
Advisory	Advisory	$	1,014,565	$	1,001,851	1	%	$	1,968,622	$	2,048,948	(4)	%
Advisory
Advisory
Commission:	Commission:
Commission:
Commission:
Sales-based
Sales-based
Sales-based
Trailing	Trailing	323,925		320,883		1	%	641,578		666,077		(4)	%
Sales-based		298,961		252,493		18	%	585,033		492,824		19	%
Trailing
Trailing

Total commission

Total commission

Total commission	Total commission	622,886		573,376		9	%	1,226,611		1,158,901		6	%
Asset-based:	Asset-based:
Asset-based:
Asset-based:
Client cash
Client cash
Client cash	Client cash	378,415		154,700		145	%	796,690		239,416		n/m
Other asset-based	Other asset-based	211,300		208,897		1	%	414,773		420,582		(1)	%
Other asset-based
Other asset-based
Total asset-based
Total asset-based
Total asset-based	Total asset-based	589,715		363,597		62	%	1,211,463		659,998		84	%
Service and fee	Service and fee	123,122		112,802		9	%	242,109		225,614		7	%
Service and fee
Service and fee
Transaction
Transaction
Transaction	Transaction	46,936		44,416		6	%	95,871		91,142		5	%
Interest income, net	Interest income, net	37,972		10,121		n/m		75,330		17,866		n/m
Interest income, net
Interest income, net
Other
Other
Other	Other	33,608		(67,276)		(150	%)	66,630		(97,889)		(168	%)
Total revenue	Total revenue	2,468,804		2,038,887		21	%	4,886,636		4,104,580		19	%
Total revenue
Total revenue
EXPENSE
EXPENSE
EXPENSE	EXPENSE
Advisory and commission	Advisory and commission	1,448,763		1,304,422		11	%	2,819,397		2,678,556		5	%
Advisory and commission
Advisory and commission
Compensation and benefits
Compensation and benefits
Compensation and benefits	Compensation and benefits	231,680		196,699		18	%	465,213		388,733		20	%
Promotional	Promotional	102,565		78,027		31	%	200,788		165,029		22	%
Promotional
Promotional
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization
Occupancy and equipment	Occupancy and equipment	65,005		55,906		16	%	125,178		107,018		17	%
Depreciation and amortization		58,377		48,453		20	%	114,431		93,907		22	%
Occupancy and equipment
Occupancy and equipment
Interest expense on borrowings
Interest expense on borrowings
Interest expense on borrowings	Interest expense on borrowings	44,842		28,755		56	%	84,026		55,966		50	%
Brokerage, clearing and exchange	Brokerage, clearing and exchange	29,148		23,362		25	%	55,274		45,962		20	%
Brokerage, clearing and exchange
Brokerage, clearing and exchange
Amortization of other intangibles	Amortization of other intangibles	26,741		21,168		26	%	50,833		42,364		20	%
Amortization of other intangibles
Amortization of other intangibles

Communications and data processing

Communications and data processing

Communications and data processing	Communications and data processing	20,594		16,223		27	%	38,269		31,350		22	%
Professional services	Professional services	18,092		17,290		5	%	32,312		36,312		(11)	%
Professional services
Professional services
Other
Other
Other	Other	34,178		36,261		(6	%)	67,599		73,683		(8)	%
Total expense	Total expense	2,079,985		1,826,566		14	%	4,053,320		3,718,880		9	%
Total expense
Total expense
INCOME BEFORE PROVISION FOR INCOME TAXES
INCOME BEFORE PROVISION FOR INCOME TAXES
INCOME BEFORE PROVISION FOR INCOME TAXES	INCOME BEFORE PROVISION FOR INCOME TAXES	388,819		212,321		83	%	833,316		385,700		116	%
PROVISION FOR INCOME TAXES	PROVISION FOR INCOME TAXES	103,299		51,776		100	%	208,912		91,411		129	%
PROVISION FOR INCOME TAXES
PROVISION FOR INCOME TAXES
NET INCOME	NET INCOME	$	285,520	$	160,545	78	%	$	624,404	$	294,289	112	%
NET INCOME
NET INCOME

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Revenue

Advisory

Advisory revenue represents fees charged to advisors’ clients’ advisory accounts on our corporate RIA advisory platform and is based on a percentage of the market value of the eligible assets in the clients’ advisory accounts. We provide ongoing investment advice and act as a custodian, providing brokerage and execution services on transactions, and perform administrative services for these accounts. Advisory fees are primarily billed to clients on a quarterly basis in advance, and are recognized as revenue ratably during the quarter. The performance obligation for advisory fees is considered a series of distinct services that are substantially the same and are satisfied daily. As the value of the eligible assets in an advisory account is susceptible to changes due to customer activity, this revenue includes variable consideration and is constrained until the date that the fees are determinable. The majority of these client accounts are on a calendar quarter and are billed using values as of the last business day of the preceding quarter. The value of the eligible assets in an advisory account on the billing date is adjusted for estimates of contributions and withdrawals to determine the amount billed, and accordingly, the revenue earned in the following three-month period. Advisory revenue collected on our corporate RIA advisory platform is proposed by the advisor and agreed to by the client and was approximately 1% of the underlying assets for the ~~six~~three months ended ~~June 30, 2023.~~March 31, 2024.

We also support independent RIA firms that conduct their business through our separate registered investment advisor firms (“Independent RIAs”) ~~through our Independent RIA~~ advisory platform, which allows advisors to engage us for technology, clearing and custody services, as well as access the capabilities of our investment platforms. The assets held under an Independent RIA’s investment advisory accounts custodied with LPL Financial are included in total advisory assets and net new advisory assets. However, the advisory revenue generated by an Independent RIA is not included in our advisory revenue. We charge separate fees to Independent RIAs for technology, clearing, administrative, oversight and custody services, which may vary and are included in ~~Service~~our service and fee revenue in our condensed consolidated statements of income.

The following table summarizes the composition of advisory assets for the periods presented (in billions):


		June 30,
		2023		2022		$ Change		% Change
	March 31,
		2024
		2024
		2024
		2024
		2024
		2024											2023		$ Change		% Change
Corporate advisory assets	Corporate advisory assets	$	442.1	$	372.1	$	70.0	19	%	Corporate advisory assets	$	537.6	$	415.3	$	122.3	29	29	%
Independent RIA advisory assets	Independent RIA advisory assets	219.5		186.5		33.0		18	%	Independent RIA advisory assets	255.4		205.6	205.6	49.8	49.8	24	24	%
Total advisory assets	Total advisory assets	$	661.6	$	558.6	$	103.0	18	%	Total advisory assets	$	793.0	$	620.9	$	172.1	28	28	%

Net new advisory assets are generated throughout the quarter, therefore, the full impact of net new advisory assets to advisory revenue is not realized in the same period. The following table summarizes activity impacting advisory assets for the periods presented (in billions):


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Balance - Beginning of period
Balance - Beginning of period
Balance - Beginning of period	Balance - Beginning of period	$	620.9	$	624.3	$	583.1	$	643.2
Net new advisory assets(1)	Net new advisory assets(1)	18.1		11.4		32.7		28.8
Net new advisory assets(1)
Net new advisory assets(1)
Market impact(2)
Market impact(2)
Market impact(2)	Market impact(2)	22.6		(77.1)		45.8		(113.4)
Balance - End of period	Balance - End of period	$	661.6	$	558.6	$	661.6	$	558.6
Balance - End of period
Balance - End of period

(1)Net new advisory assets consist of total client deposits into custodied advisory accounts less total client withdrawals from custodied advisory accounts, plus dividends, plus interest, minus advisory fees. We consider conversions from and to brokerage accounts as deposits and withdrawals, respectively.

(2)Market impact is the difference between the beginning and ending asset balance less the net new asset amounts, representing the implied growth or decline in asset balances due to market changes over the same period of time.

Advisory revenue increased during the three months ended June 30, 2023 and decreased during the six months ended June 30, 2023 as compared to the same periods in 2022. The increase during the three months ended June 30, 2023 was due primarily to an increase in advisory asset balances related to market changes. The decrease in advisory revenue during the six months ended June 30, 2023March 31, 2024 as compared to the same period in ~~2022 was~~2023, due primarily to ~~decreases in average eligible~~continued organic growth, which increased advisory asset balances ~~and fee rates. Market decreases~~ during ~~2022 reduced eligible advisory asset balances at~~ the ~~beginning of 2023, resulting in lower average eligible advisory asset balances for the six months ended June 30, 2023 compared to the same period in 2022.~~

period.

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Commission

We generate two types of commission revenue: (1) sales-based commissions that are recognized at the point of sale on the trade date and are based on a percentage of an investment product’s current market value at the time of purchase and (2) trailing commissions that are recognized over time as earned and are generally based on the market value of investment holdings in trail-eligible assets. Sales-based commission revenue, which occurs when clients trade securities or purchase various types of investment products, primarily represents gross commissions generated by our advisors and can vary from period to period based on the overall economic environment, number of trading days in the reporting period and investment activity of our advisors’ clients. We earn trailing commission revenue primarily on mutual funds and variable annuities held by clients of our advisors. See Note 3 - Revenue, within the notes to the condensed consolidated financial statements for further detail regarding our commission revenue by product category.

The following table sets forth the components of our commission revenue for the periods presented (in thousands):


		Three Months Ended June 30,								Six Months Ended June 30,
		2023		2022		$ Change		% Change		2023		2022		$ Change		% Change
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
		2024
		2024
		2024
Sales-based
Sales-based
Sales-based
Trailing	Trailing	$	323,925	$	320,883	$	3,042	1	%	$	641,578	$	666,077	$	(24,499)	(4)	%
Sales-based		298,961		252,493		46,468		18	%	585,033		492,824		92,209		19	%
Trailing
Trailing
Total commission revenue	Total commission revenue	$	622,886	$	573,376	$	49,510	9	%	$	1,226,611	$	1,158,901	$	67,710	6	%
Total commission revenue
Total commission revenue

The ~~decrease~~increase in trailing commission revenue for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 compared to ~~2022~~2023 was primarily due to ~~volatility-driven declines~~an increase in ~~trail eligible~~sales of annuities ~~and mutual funds~~ during the period. The increase in sales-based commission revenue for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 compared to ~~2022~~2023 was primarily driven by an increase in sales of annuities and fixed income securities as a result of the higher interest rate ~~environment, partially offset by a decrease in sales of mutual funds and equities.~~environment.

The following table summarizes activity impacting brokerage assets for the periods presented (in billions):


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Balance - Beginning of period
Balance - Beginning of period
Balance - Beginning of period	Balance - Beginning of period	$	554.3	$	538.8	$	527.7	$	563.2
Net new brokerage assets(1)	Net new brokerage assets(1)	3.6		25.8		13.5		26.0
Net new brokerage assets(1)
Net new brokerage assets(1)
Market impact(2)
Market impact(2)
Market impact(2)	Market impact(2)	20.7		(58.6)		37.4		(83.2)
Balance - End of period	Balance - End of period	$	578.6	$	506.0	$	578.6	$	506.0
Balance - End of period
Balance - End of period

_______________________________

(1) Net new brokerage assets consist of total client deposits into brokerage accounts less total client withdrawals from brokerage accounts, plus dividends, plus interest. We consider conversions from and to advisory accounts as deposits and withdrawals, respectively.

(2) Market impact is the difference between the beginning and ending asset balance less the net new asset amounts, representing the implied growth or decline in asset balances due to market changes over the same period of time.

Asset-Based

Asset-based revenue consists of fees from our client cash programs, fees from our sponsorship programs with financial product manufacturers and fees from omnibus processing and networking services (collectively referred to as “recordkeeping”). Client cash revenue is generated on advisors’ clients’ cash balances in insured bank sweep accounts and money market accounts. We also receive fees from certain financial product manufacturers in connection with sponsorship programs that support our marketing and sales force education and training efforts. Compensation for these performance obligations is either a fixed fee, a percentage of the average annual amount of product sponsor assets held in advisors’ clients’ accounts, a percentage of new sales or a combination. Omnibus processing revenue is paid to us by mutual fund product sponsors or their affiliates and is based on the value of mutual fund assets in accounts for which the Company provides omnibus processing services and the number of accounts in which the related mutual fund positions are held. Networking revenue on brokerage assets is correlated to the number of positions we administer and is paid to us by mutual fund product sponsors and annuity product manufacturers.

Asset-based revenue for the three ~~and six~~ months ended ~~June 30, 2023 increased~~March 31, 2024 decreased by ~~$226.1 million and $551.5~~$21.0 million compared to ~~2022~~2023, primarily due ~~primarily~~ to an ~~increase~~a decrease in client cash revenue. Client cash revenue for the three ~~and six~~ months ended ~~June 30, 2023 increased~~March 31, 2024 decreased compared to ~~2022~~2023 due to ~~increases to the federal funds effective rate, partially offset by~~ lower average client cash balances during the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 as compared to ~~2022.~~2023. For the three months ended ~~June 30, 2023,~~March 31, 2024, our average client cash balances decreased to $44.4 billion compared to $55.7 billion in 2023.

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~~$49.0 billion compared to $63.2 billion in 2022. For the six months ended June 30, 2023, our average client cash balances decreased to $52.3 billion compared to $60.4 billion in 2022.~~

Service and Fee

Service and fee revenue is generated from advisor and retail investor services, including technology, insurance, conferences, licensing, business services and planning and advice services, Individual Retirement Account (“IRA”) custodian and other client account fees. We charge separate fees to RIAs on our Independent RIA advisory platform for technology, clearing, administrative, oversight and custody services, which may vary. We also host certain advisor conferences that serve as training, education, sales and marketing events for which we charge sponsors a fee. Service and fee revenue for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 increased compared to ~~2022,~~2023, primarily due to increases in IRA custodian fees, business services and planning and advice services fees, and fees relating to confirmations and error and omission insurance.

Transaction

Transaction revenue includes transaction charges generated in both advisory and brokerage accounts from mutual funds, exchange-traded funds and fixed income products. Transaction revenue for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 increased compared to ~~2022,~~2023, primarily due to increases in the number of transactions and transaction charges for fixed income products, partially offset by a decrease in charges for managed assets.

~~Interest Income, net~~

We earn interest income primarily from client margin loans, client cash account (“CCA”) balances segregated under federal or other regulations and advisor repayable loans. Interest income, net for the three and six months ended June 30, 2023 increased compared to 2022, primarily due to increases in interest earned on bank deposits, short-term U.S. treasury bills and margin loans, partially offset by an increase in interest paid on CCA balances.

Other

Other revenue primarily includes unrealized gains and losses on assets held by us in our advisor non-qualified deferred compensation plan and model research portfolios and other miscellaneous revenue, which is not generated from contracts with customers. Other revenue for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 increased compared to ~~2022,~~2023, primarily due to unrealized gains on assets held in our advisor non-qualified deferred compensation plan, which are based on the market performance of the underlying investment allocations chosen by advisors in the plan, and a related increase in dividend income on assets held in our advisor non-qualified deferred compensation plan.

Expense

Advisory and Commission

Advisory and commission expense consists of the following: payout amounts that are earned by and paid out to advisors and ~~enterprises~~institutions based on advisory and commission revenue earned on each client’s account, production-based bonuses earned by advisors and ~~enterprises~~institutions based on the levels of advisory and commission revenue they produce, compensation and benefits paid to employee advisors, ~~the recognition of~~ share-based compensation expense from equity awards granted to advisors and ~~enterprises~~institutions based on the fair value of the awards at grant date and the deferred advisory and commission fee expense associated with mark-to-market gains or losses on the non-qualified deferred compensation plan offered to our advisors.

The following table sets forth our payout rate, which is a statistical or operating measure, for the periods presented:

Three Months Ended June 30, Six Months Ended June 30,
2023 2022 Change 2023 2022 Change
Payout rate 86.70% 86.97% (27 bps) 86.45% 86.53% (8 bps)


	Three Months Ended March 31,
	2024	2023	Change
Payout rate	86.64%	86.19%	45 bps

Our payout rate for the three ~~and six~~ months ended ~~June 30, 2023 decreased~~March 31, 2024 increased slightly compared to ~~2022,~~2023, primarily due to the effect of acquisitions during the ~~FRGIS acquisition and lower production bonus.~~

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Compensation and Benefits

Compensation and benefits expense includes salaries, wages, benefits, share-based compensation and related taxes for our employees, as well as compensation for temporary workers and contractors. The following table sets forth our average number of employees for the periods presented:

Three Months Ended June 30, Six Months Ended June 30,
2023 2022 Change 2023 2022 Change
Average number of employees 7,457 6,107 22% 7,291 6,083 20%


	Three Months Ended March 31,
	2024	2023	Change
Average number of employees	8,724	7,124	22%

Compensation and benefits expense for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 increased by ~~$35.0 million and $76.5~~$40.8 million compared to ~~2022,~~2023, primarily due to an increase in average headcount.

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Promotional

Promotional expense includes business development costs related to advisor recruitment and retention, costs related to hosting certain advisory conferences that serve as training, sales and marketing events, and other costs that support advisor business growth. Promotional expense for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 increased by ~~$24.5 million and $35.8~~$28.4 million compared to ~~2022,~~2023, primarily due to increases in recruited assets and advisors that led to higher costs to support transition assistance and retention.

~~Occupancy and Equipment~~

Occupancy and equipment expense includes the costs of leasing and maintaining our office spaces, software licensing and maintenance costs, and maintenance expense on computer hardware and other equipment. Occupancy and equipment expense for the three and six months ended June 30, 2023 increased by $9.1 million and $18.2 million compared to 2022, primarily due to increased expense related to software licenses and our technology portfolio.

Depreciation and Amortization

Depreciation and amortization expense relates to the use of property and equipment, which includes internally developed software, hardware, leasehold improvements and other equipment. Depreciation and amortization expense for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 increased by ~~$9.9 million and $20.5~~$11.1 million compared to ~~2022,~~2023, primarily due to our continued investment in technology to support integrations, enhance our advisor platform and experience, and support onboarding of ~~enterprises.~~institutions.

Interest Expense on Borrowings

Interest expense on borrowings includes the interest associated with the Company’s senior notes, ~~and~~ senior secured Term Loan B (“Term Loan B”), and revolving credit facilities; amortization of debt issuance ~~costs~~costs; and fees associated with the Company’s revolving lines of credit. Interest expense on borrowings for the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 increased by ~~$16.1 million and $28.1~~$20.9 million compared to ~~2022,~~2023, primarily due to increased interest rates on our Term Loan B and revolving credit facilities and higher outstanding ~~balances on LPL Holdings, Inc.’s revolving credit facility.~~debt balances. See Note 9 - Corporate Debt and Other Borrowings, Net, within the notes to the condensed consolidated financial statements for further detail.

Provision for Income Taxes

Our effective income tax rate was ~~26.6%~~22.8% and ~~24.4%~~23.8% for the three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022, respectively, and 25.1% and 23.7% for the six months ended June 30, 2023 and 2022,~~ respectively. The Company’s effective income tax rate differs from the federal corporate tax rate of 21.0%, primarily as a result of state taxes, reserves for uncertain tax positions and non-deductible expenses. ~~These additional~~Our effective income tax ~~expenses are partially offset~~rate is reduced by ~~the benefit of~~tax benefits received from income tax credits as well as share-based compensation vesting and ~~exercises.~~ exercises. The ~~increase~~decrease in our effective tax rate for the ~~three- and six-month periods~~three months ended ~~June 30, 2023~~March 31, 2024 was primarily driven by ~~less tax benefits related~~lower pre-tax income during the first quarter of 2024 as compared to ~~share-based-compensation during 2023.~~the prior year.

Liquidity and Capital Resources

We have established liquidity and capital policies intended to support the execution of strategic initiatives, while meeting regulatory capital requirements and maintaining ongoing and sufficient liquidity. We believe liquidity is of critical importance to the Company and, in particular, to LPL Financial, our primary broker-dealer subsidiary. The objective of our policies is to ensure that we can meet our strategic, operational and regulatory liquidity and capital requirements under both normal operating conditions and under periods of stress in the financial markets.

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Liquidity

Our liquidity needs are primarily driven by capital requirements at LPL Financial, interest due on our corporate debt and other capital returns to stockholders. Our liquidity needs at LPL Financial are driven primarily by the level and volatility of our client activity. Management maintains a set of liquidity sources and monitors certain business trends and market metrics closely in an effort to ensure we have sufficient liquidity. We believe that based on current levels of cash flows from operations and anticipated growth, together with available cash balances and external liquidity sources, we have adequate liquidity to satisfy our short-term and long-term working capital needs, the payment of all of our obligations and the funding of anticipated capital expenditures.

Parent Company Liquidity

LPL Holdings, Inc. (the “Parent”), the direct holding company of our operating subsidiaries, considers its primary ~~source~~sources of liquidity to be ~~Corporate Cash.~~dividends from and excess capital generated by LPL Financial, as well as capacity for additional borrowing under its $2.0 billion secured revolving credit facility, which it has the ability to borrow against for working capital and general corporate purposes.

Dividends from and excess capital generated by LPL Financial are primarily generated through our cash flow from operations. Subject to regulatory approval or notification, capital generated by regulated subsidiaries can be distributed to the Parent to the extent the capital levels exceed regulatory requirements and internal capital thresholds. During the three months ended March 31, 2024, LPL Financial paid dividends of $120.0 million to the Parent. No such dividends were paid during the three months ended March 31, 2023.

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We believe Corporate Cash, a component of cash and equivalents, is a useful measure of the Parent’s liquidity as it represents the capital available for use in excess of the amount we are required to maintain pursuant to the Credit Agreement. Corporate Cash is the sum of cash and equivalents from the following: (1) cash and equivalents held at the Parent, (2) cash and equivalents held at regulated subsidiaries as defined by the Credit Agreement, which include LPL Financial ~~FRGIS~~ and The Private Trust Company, N.A. (“PTC”), in excess of the capital requirements of the Credit Agreement (which, in the case of LPL Financial, ~~and FRGIS,~~ is net capital in excess of 10% of ~~their~~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.

We believe Corporate Cash is a useful measure of the Parent’s liquidity as it represents the capital available for use in excess of the amount we are required to reserve pursuant to the Credit Agreement. The following table presents the components of Corporate Cash (in thousands):


		June 30, 2023		December 31, 2022
	March 31, 2024					March 31, 2024	December 31, 2023
Cash and equivalents	Cash and equivalents	$	761,187	$	847,519
Cash at regulated subsidiaries	Cash at regulated subsidiaries	(648,981)		(392,571)
Excess cash at regulated subsidiaries per the Credit Agreement	Excess cash at regulated subsidiaries per the Credit Agreement	213,254		4,439
Corporate Cash	Corporate Cash	$	325,460	$	459,387

Corporate Cash	Corporate Cash
Corporate Cash
Corporate Cash
Cash at the Parent
Cash at the Parent
Cash at the Parent	Cash at the Parent	$	104,967	$	448,180
Excess cash at regulated subsidiaries per the Credit Agreement	Excess cash at regulated subsidiaries per the Credit Agreement	213,254		4,439
Cash at non-regulated subsidiaries	Cash at non-regulated subsidiaries	7,239		6,768
Corporate Cash	Corporate Cash	$	325,460	$	459,387

Corporate Cash is monitored as part of our liquidity risk management. We target maintaining approximately ~~$200.0~~$200 million in Corporate Cash, which covers approximately 1812 months of principal and interest due on our corporate debt. As of June 30, 2023, the Parent maintains additional liquidity through a $1.0 billion secured committed revolving credit facility. The Parent has the ability to borrow against the credit facility for working capital and general corporate purposes. Dividends from and excess capital generated by LPL Financial are the primary sources of liquidity for the Parent. Subject to regulatory approval or notification, capital generated by regulated subsidiaries can be distributed to the Parent to the extent the capital levels exceed regulatory requirements, Credit Agreement requirements and internal capital thresholds. During the six months ended June 30, 2023 and 2022, LPL Financial paid dividends of $395.0 million and $328.0 million to the Parent, respectively.

~~Cash requirements and liquidity needs are primarily funded through our cash flow from operations and our capacity for additional borrowing.~~ We actively monitor changes to our liquidity needs caused by general business volumes and price volatility, including higher margin requirements of clearing corporations and exchanges, and stress scenarios involving a sustained market downturn and the persistence of current interest rates. We believe that based on current levels of operations and anticipated growth, our cash flow from operations, together with other available sources of funds, which include five uncommitted lines of credit, the revolving credit facility established through our Credit Agreement and the committed revolving credit facility of LPL Financial, will provide us with adequate liquidity to satisfy our short-term and long-term working capital needs, the payment of all of our obligations and the funding of anticipated capital expenditures.

We regularly evaluate our existing indebtedness, including potential issuances and refinancing opportunities, based on a number of factors, including our capital requirements, future prospects, contractual restrictions, the availability of refinancing on attractive terms and general market conditions. As of ~~June 30, 2023,~~March 31, 2024, the earliest principal maturity date for our

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corporate debt with outstanding balances is in 2026 and our revolving credit facilities and uncommitted lines of credit mature between ~~2023~~2024 and ~~2026, which makes us less dependent on capital markets in the near-term.~~2026.

Share Repurchases

We engage in a share repurchase program that was approved by our Board of Directors (the “Board”), pursuant to which we may repurchase our issued and outstanding shares of common stock from time to time. Purchases may be effected in open market or privately negotiated transactions. Our current capital deployment framework remains focused on investing in organic growth first, pursuing acquisitions where appropriate and returning excess capital to stockholders. We repurchased ~~2,982,985~~296,145 shares for a total of ~~$625~~$70.0 million during the ~~six~~three months ended ~~June 30, 2023.~~March 31, 2024. As of ~~June 30, 2023~~March 31, 2024, we had ~~$1.4 billion~~$830.0 million remaining under our existing repurchase program. As a result of our planned acquisition of Atria, we paused share repurchases during the quarter. Subsequent to closing of the transaction, we will evaluate resuming share repurchases, consistent with our existing capital management strategy. The timing and amount of share repurchases, if any, is determined at our discretion within the constraints of our Credit Agreement, ~~the Indentures,~~ applicable laws and consideration of our general liquidity needs. See Note 11 - Stockholders’ Equity, within the notes to the condensed consolidated financial statements for additional information regarding our share repurchases.

Common Stock Dividends

The payment, timing and amount of any dividends are subject to approval by ~~the~~LPLFH’s Board of Directors (the “Board”), as well as certain limits under our Credit ~~Agreement and the Indentures. The Board approved an increase to the quarterly cash dividend to $0.30 per share beginning in the first quarter of 2023.~~Agreement. See Note 11 - Stockholders’ Equity, within the notes to the condensed consolidated financial statements for additional information regarding our dividends.

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LPL Financial Liquidity

LPL Financial relies primarily on client payables to fund margin lending. LPL Financial maintains additional liquidity through external lines of credit totaling ~~$1.2~~$1.2 billion at ~~June 30, 2023.~~March 31, 2024. LPL Financial also maintains a line of credit with the Parent.

External Liquidity Sources

The following table presents amounts outstanding and available under our external lines of credit at ~~June 30, 2023~~March 31, 2024 (in millions):

Description Borrower Maturity Date Outstanding Available
Senior secured, revolving credit facility(1)
LPL Holdings, Inc. March 2026 $ 287 $ 713
Broker-dealer revolving credit facility(2)
LPL Financial LLC August 2023 $ — $ 1,000
Unsecured, uncommitted lines of credit LPL Financial LLC September 2023 $ — $ 75
Unsecured, uncommitted lines of credit LPL Financial LLC September 2023 $ — $ 50
Unsecured, uncommitted lines of credit LPL Financial LLC None $ — $ 75
Secured, uncommitted lines of credit LPL Financial LLC None $ — unspecified
Secured, uncommitted lines of credit LPL Financial LLC None $ — unspecified

~~(1)On July 18, 2023, LPL Holdings, Inc. amended its revolving credit facility to increase the maximum borrowing from $1.0 billion to $2.0 billion.~~ ~~See Note 9 -~~ ~~Corporate Debt and Other Borrowings, Net, within the notes to the condensed consolidated financial statements for additional details.~~

~~(2)On July 18, 2023, LPL Financial LLC renewed its revolving credit facility and extended the maturity date to July 16, 2024.~~ ~~See Note 9 -~~ ~~Corporate Debt and Other Borrowings, Net, within the notes to the condensed consolidated financial statements for additional details.~~


Description	Borrower	Maturity Date	Outstanding		Available
Senior secured, revolving credit facility	LPL Holdings, Inc.	March 2026	$	401	$	1,599
Broker-dealer revolving credit facility	LPL Financial LLC	July 2024	$	—	$	1,000
Unsecured, uncommitted lines of credit	LPL Financial LLC	None	$	—	$	75
Unsecured, uncommitted lines of credit	LPL Financial LLC	September 2024	$	—	$	50
Secured, uncommitted lines of credit	LPL Financial LLC	March 2025	$	—	$	75
Secured, uncommitted lines of credit	LPL Financial LLC	None	$	—	unspecified
Secured, uncommitted lines of credit	LPL Financial LLC	None	$	—	unspecified

Capital Resources

The Company seeks to manage capital levels in support of its business strategy of generating and effectively deploying capital for the benefit of our stockholders.

Our primary requirement for working capital relates to funds we loan to our advisors’ clients for trading conducted on margin and funds we are required to maintain for regulatory capital and reserves based on the requirements of our regulators and clearing organizations, which also consider client balances and trading activities. We have several sources of funds that enable us to meet increases in working capital requirements that relate to increases in client margin activities and balances. These sources include cash and equivalents on hand, the committed revolving credit facility of LPL Financial and proceeds from repledging or selling client securities in margin accounts. When an advisor’s client purchases securities on margin or uses securities as collateral to borrow from us on margin, we are permitted, pursuant to the applicable securities industry regulations, to repledge, loan or sell securities, up to 140% of the client’s margin loan balance, that collateralize those margin accounts.

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Our other working capital needs are primarily related to loans we are making to advisors and timing associated with receivables and payables, which we have satisfied in the past from internally generated cash flows.

We may sometimes be required to fund capital requirements necessary to effect client transactions in securities markets and cash sweep balances held at third-party banks that arise from the delayed receipt of client funds. These capital requirements are funded either with internally generated cash flows or, if needed, with funds drawn on our uncommitted lines of credit at LPL Financial or one of our revolving credit facilities.

Our broker-dealer subsidiaries are subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1 under the Exchange Act), which requires the maintenance of minimum net capital. LPL Financial, our primary broker-dealer subsidiary, computes net capital requirements under the alternative method, which requires firms to maintain minimum net capital equal to the greater of $250,000 or 2% of aggregate debit balances arising from client transactions.

The following table presents the net capital position of the Company’s primary broker-dealer subsidiary (in thousands):


	~~June 30, 2023~~March 31, 2024
LPL Financial LLC
Net capital	$	~~279,982~~328,479
Less: required net capital	~~16,154~~18,070
Excess net capital	$	~~263,828~~310,409

Payment by our broker-dealer subsidiaries of dividends greater than 10% of their respective excess net capital during any 35-day rolling period requires approval from FINRA. In addition, each broker-dealer subsidiary’s ability to pay dividends would be restricted if its net capital would be less than 5% of aggregate customer debit balances.

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LPL Financial also acts as an introducing broker-dealer for commodities and futures. Accordingly, its trading activities are subject to the National Futures Association’s (“NFA”) financial requirements and it is required to maintain net capital that is in excess of or equal to the greatest of NFA’s minimum financial requirements. The NFA was designated by the Commodity Futures Trading Commission as LPL Financial’s primary regulator for such activities. Currently, the highest NFA requirement is the minimum net capital calculated and required pursuant to the SEC’s Uniform Net Capital Rule.

Our subsidiary PTC is also subject to various regulatory capital requirements. Failure to meet the respective minimum capital requirements can result in certain mandatory and discretionary actions by regulators that, if undertaken, could have substantial monetary and non-monetary impacts on PTC’s operations.

Supplemental Guarantor Financial Information

The Company filed a registration statement on Form S-3 to register, among other things, non-convertible debt securities that may be offered by LPL Holdings, Inc. (the “Issuer”), a wholly owned subsidiary of LPL Financial Holdings Inc. (“LPLFH” and together with the Issuer, the “Obligor Group”), and full and unconditional guarantees by LPLFH of such debt securities. The debt securities issued by the Issuer pursuant to such registration statement are fully and unconditionally guaranteed by LPLFH. LPLFH is a Delaware holding corporation that manages substantially all of its operations through investments in subsidiaries. See Note 1 - Organization and Description of the Company and Note 9 - Corporate Debt and Other Borrowings, Net, within the notes to the condensed consolidated financial statements for additional information.

Pursuant to Rule 3-10 of Regulation S-X under the Securities Act of 1933, as amended, the following tables present unaudited summarized financial information for the Obligor Group on a combined basis. Balances and transactions between the Obligor Group have been eliminated. Financial information for non-guarantor subsidiaries, which includes all other subsidiaries of the Issuer, has been excluded and intercompany balances and transactions between the Obligor Group and non-guarantor subsidiaries are presented on separate lines. The summarized financial information below should be read in conjunction with the Company’s condensed consolidated financial statements contained herein as the summarized financial information for the Obligor Group may not be indicative of results of operations or financial position of the Issuer or LPLFH had they operated as independent entities.

The following tables present the summarized financial information for the periods presented (in thousands):


	LPL Holdings, Inc. & LPL Financial Holdings Inc.
	Three Months Ended March 31,
Combined Summarized Statements of Income	2024
Revenues(1)	$	49,734
Revenues from non-guarantor subsidiaries	5,335
Advisory and commission expense(1)	49,140
Interest expense on borrowings	59,158
Expenses from non-guarantor subsidiaries	3,509
Loss before provision for income taxes	(68,692)
Net loss	(53,128)

____________________

(1)Revenues primarily include unrealized gains and losses on assets held in the non-qualified deferred compensation plan offered to advisors and employees, while advisory and commission expense includes the deferred advisory and commission fee expense associated with mark-to-market gains or losses on the non-qualified deferred compensation plan offered to advisors.

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	LPL Holdings, Inc. & LPL Financial Holdings Inc.
Combined Summarized Statements of Financial Condition	March 31, 2024		December 31, 2023
Cash and equivalents	$	30,781	$	26,587
Other receivables, net	3,330		2,793
Property and equipment, net	155,133		154,920
Goodwill	1,251,908		1,251,908
Other intangibles, net	88,467		95,461
Receivables from non-guarantor subsidiaries	152,179		153,377
Other assets	1,050,215		1,017,289
Corporate debt and other borrowings, net	3,853,794		3,734,111
Accounts payable and accrued liabilities	64,793		53,817
Payables to non-guarantor subsidiaries	77,292		76,683
Other liabilities	1,091,363		986,274

Debt and Related Covenants

The Credit Agreement ~~and the Indentures contain~~contains a number of covenants that, among other things, restrict, subject to certain exceptions, our ability to:

•incur additional indebtedness or issue disqualified stock or preferred stock;

•declare dividends, or other distributions to stockholders;

•repurchase equity interests;

•redeem indebtedness that is subordinated in right of payment to certain debt instruments;

•make investments or acquisitions;

•create liens;

•sell assets;

•guarantee indebtedness;

•engage in certain transactions with affiliates;

•enter into agreements that restrict dividends or other payments from subsidiaries; and

•consolidate, merge or transfer all or substantially all of our assets.

Our Credit Agreement ~~and the Indentures allow~~allows us to pay dividends and distributions or repurchase our common stock only when certain conditions are met. In addition, our revolving credit facility requires us to be in compliance with certain financial covenants as of the last day of each fiscal quarter. The financial covenants require the calculation of Credit Agreement EBITDA, as defined in, and calculated by management in accordance with, the Credit Agreement. The Credit Agreement defines Credit Agreement EBITDA 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

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exclude certain non-cash charges and other adjustments, ~~(including unusual or non-recurring charges) and gains,~~ and to include future expected cost savings, operating expense reductions or other synergies from certain transactions.

As of ~~June 30, 2023,~~March 31, 2024, we were in compliancewith our Credit Agreement financial covenants, which include a maximum Consolidated Total Debt to Consolidated EBITDA Ratio (as defined in the Credit Agreement) or “Leverage Ratio” and a minimum Consolidated EBITDA to Consolidated Interest Expense Ratio (as defined in the Credit Agreement) or “Interest Coverage”. The breach of these financial covenants would be subject to certain equity cure rights. The required ratios under our financial covenants and actual ratios were as follows:

June 30, 2023

March 31, 2024

Financial Ratio

Covenant Requirement

Actual Ratio

Financial Ratio

Covenant Requirement

Actual Ratio

Leverage Ratio (Maximum)(1)

5.00

1.25

Leverage Ratio (Maximum)

4.0

1.65

Interest Coverage (Minimum)

3.00

15.19

Interest Coverage (Minimum)

3.0

11.02

~~(1)On July 18, 2023, LPL Holdings, Inc. amended its revolving~~Certain restrictive covenants under certain of our Indentures are currently suspended. However, a credit ~~facility~~rating downgrade to ~~among other things, decrease the maximum Leverage Ratio~~a below investment grade rating could cause currently suspended restrictive covenants under certain of our Indentures to ~~4.00.~~ ~~See Note 9 -~~ ~~Corporate Debt and Other Borrowings, Net, within the notes to the condensed consolidated financial statements for additional details.~~be automatically reinstated.

See Note 9 - Corporate Debt and Other Borrowings, Net, within the notes to the condensed consolidated financial statements for further detail regarding the Credit ~~Agreement and the Indentures.~~Agreement.

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Contractual Obligations

During the ~~six~~three months ended ~~June 30, 2023,~~March 31, 2024, there were no material changes in our contractual obligations, other than in the ordinary course of business, from those disclosed in our ~~2022~~2023 Annual Report on Form 10-K. See Note 9 - Corporate Debt and Other Borrowings, Net and Note 10 - Commitments and Contingencies, within the notes to the condensed consolidated financial statements, as well as the Contractual Obligations section within Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our ~~2022~~2023 Annual Report on Form 10-K, for further detail.

Risk Management

~~In order to assist in the mitigation~~Risk is an inherent part of our business and ~~control of operational risk,~~activities. To effectively manage these risks, we have an enterprise risk management (“ERM”) framework that is designed to ~~enable~~facilitate the incorporation of risk assessment ~~and reporting on operational risk~~into decision-making processes across the ~~firm.~~Company, enable execution our business strategy, and protect our Company and its franchise. This framework aims to ensure policies and procedures are in place and appropriately designed to identify and manage ~~operational~~ risk at appropriate levels throughout our organization and within various departments. These control mechanisms attempt to ensure that operational policies and procedures are being followed and that our employees and advisors operate within established corporate policies and limits. Please consult the “Risks Related to Our Technology” and the “Risks Related to Our Business and Industry” sections within Part I, “Item 1A. Risk Factors” ~~in our 2022 Annual Report on Form 10-K for more information about the risks associated with our technology, including risks related to security, our risk management policies~~ and ~~procedures, and the potential related effects on our operations.~~

We employ an ERM framework that is intended to address key risks and responsibilities, enable us to execute our business strategy and protect our Company and its franchise. For a discussion of our ERM framework, please see the “Risk Management” section within Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”in our ~~2022~~2023 Annual Report on Form ~~10-K.~~10-K for more information about our risks, our risk management policies and procedures, the potential related effects on our operations, and our ERM framework.

Operational Risk

Operational Risk is reviewed, monitored and challenged by the Operational Risk Oversight Committee. Operational risk is defined as the risk of loss resulting from failed or inadequate processes or systems, actions by people or external events. ~~We operate~~Please consult the “Risk Management” section within Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in ~~diverse markets and are reliant~~our 2023 Annual Report on Form 10-K for more information about the ability of our employees and information technology systems, as well as third-party service providers and their systems, to manage a large volume of transactions and confidential information, including personally identifiable information, effectively and securely. Managing theseoperational risks is critical, particularly in a rapidly changing operating environment with increasing transaction volumes and in light of increasing reliance on systems capabilities and performance, as well as third-party service providers. In the event of the breakdown, obsolescence or improper operation of systems, malicious cyber activity or improper action by employees, advisors or third-party service providers,that we could suffer business disruptions, financial loss, data loss, regulatory sanctions and damage to our reputation. Although we have developed business continuity and disaster recovery plans, those plans could be inadequate, disrupted or otherwise unsuccessful in maintaining the competitiveness, stability, security or continuity of critical systems as a result of,

~~Table of Contents~~face.

~~among other things, obsolescence, improper operation, third-party dependencies or limitations of our current technology.~~

Regulatory and ~~Legal~~Compliance Risk

The regulatory environment in which we operate is discussed in detail within Part I, “Item 1. Business” in our ~~2022~~2023 Annual Report on Form 10-K. In recent years, and during the periods presented in this Quarterly Report on Form 10-Q, we have observed the SEC, FINRA, the U.S. Department of Labor and state regulators broaden the scope, frequency and depth of their examinations and inquiries to include greater emphasis on the quality, consistency and oversight of our compliance systems and programs. Please consult the “Risks Related to Our Regulatory Environment” and the “Risks Related to Our Business and Industry” sections within Part I, “Item 1A. Risk Factors” in our ~~2022~~2023 Annual Report on Form 10-K for more information about the risks associated with operating within our regulatory environment, pending regulatory matters and the potential related effects on our operations.

Critical Accounting Policies and Estimates

In the notes to our consolidated financial statements and in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our ~~2022~~2023 Annual Report on Form 10-K, we have disclosed those accounting policies that we consider to be most significant in determining our results of operations and financial condition and involve a higher degree of judgment and complexity. There have been no changes to those policies that we consider to be material since the filing of our ~~2022~~2023 Annual Report on Form 10-K. The accounting principles used in preparing our condensed consolidated financial statements conform in all material respects to GAAP.

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Item 1. Financial Statements (unaudited)

LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(In thousands, except per share data)

(Unaudited)


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
REVENUE
REVENUE
REVENUE	REVENUE
Advisory	Advisory	$	1,014,565	$	1,001,851	$	1,968,622	$	2,048,948
Advisory
Advisory
Commission:	Commission:
Commission:
Commission:
Sales-based
Sales-based
Sales-based
Trailing	Trailing	323,925		320,883		641,578		666,077
Sales-based		298,961		252,493		585,033		492,824
Trailing
Trailing

Total commission

Total commission

Total commission	Total commission	622,886		573,376		1,226,611		1,158,901
Asset-based:	Asset-based:
Asset-based:
Asset-based:
Client cash
Client cash
Client cash	Client cash	378,415		154,700		796,690		239,416
Other asset-based	Other asset-based	211,300		208,897		414,773		420,582
Other asset-based
Other asset-based
Total asset-based
Total asset-based
Total asset-based	Total asset-based	589,715		363,597		1,211,463		659,998
Service and fee	Service and fee	123,122		112,802		242,109		225,614
Service and fee
Service and fee
Transaction
Transaction
Transaction	Transaction	46,936		44,416		95,871		91,142
Interest income, net	Interest income, net	37,972		10,121		75,330		17,866
Interest income, net
Interest income, net
Other
Other
Other	Other	33,608		(67,276)		66,630		(97,889)
Total revenue	Total revenue	2,468,804		2,038,887		4,886,636		4,104,580
Total revenue
Total revenue
EXPENSE
EXPENSE
EXPENSE	EXPENSE
Advisory and commission	Advisory and commission	1,448,763		1,304,422		2,819,397		2,678,556
Advisory and commission
Advisory and commission
Compensation and benefits
Compensation and benefits
Compensation and benefits	Compensation and benefits	231,680		196,699		465,213		388,733
Promotional	Promotional	102,565		78,027		200,788		165,029
Promotional
Promotional
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization
Occupancy and equipment	Occupancy and equipment	65,005		55,906		125,178		107,018
Depreciation and amortization		58,377		48,453		114,431		93,907
Occupancy and equipment
Occupancy and equipment
Interest expense on borrowings
Interest expense on borrowings
Interest expense on borrowings	Interest expense on borrowings	44,842		28,755		84,026		55,966
Brokerage, clearing and exchange	Brokerage, clearing and exchange	29,148		23,362		55,274		45,962
Brokerage, clearing and exchange
Brokerage, clearing and exchange
Amortization of other intangibles	Amortization of other intangibles	26,741		21,168		50,833		42,364
Amortization of other intangibles
Amortization of other intangibles

Communications and data processing

Communications and data processing

Communications and data processing	Communications and data processing	20,594		16,223		38,269		31,350
Professional services	Professional services	18,092		17,290		32,312		36,312
Professional services
Professional services
Other
Other
Other	Other	34,178		36,261		67,599		73,683
Total expense	Total expense	2,079,985		1,826,566		4,053,320		3,718,880
Total expense
Total expense
INCOME BEFORE PROVISION FOR INCOME TAXES
INCOME BEFORE PROVISION FOR INCOME TAXES
INCOME BEFORE PROVISION FOR INCOME TAXES	INCOME BEFORE PROVISION FOR INCOME TAXES	388,819		212,321		833,316		385,700
PROVISION FOR INCOME TAXES	PROVISION FOR INCOME TAXES	103,299		51,776		208,912		91,411
PROVISION FOR INCOME TAXES
PROVISION FOR INCOME TAXES
NET INCOME
NET INCOME
NET INCOME	NET INCOME	$	285,520	$	160,545	$	624,404	$	294,289
EARNINGS PER SHARE	EARNINGS PER SHARE
EARNINGS PER SHARE
EARNINGS PER SHARE
Earnings per share, basic
Earnings per share, basic
Earnings per share, basic	Earnings per share, basic	$	3.70	$	2.01	$	8.01	$	3.68
Earnings per share, diluted	Earnings per share, diluted	$	3.65	$	1.97	$	7.90	$	3.61
Earnings per share, diluted
Earnings per share, diluted
Weighted-average shares outstanding, basic
Weighted-average shares outstanding, basic
Weighted-average shares outstanding, basic	Weighted-average shares outstanding, basic	77,234		79,947		77,988		79,961
Weighted-average shares outstanding, diluted	Weighted-average shares outstanding, diluted	78,194		81,410		79,083		81,493
Weighted-average shares outstanding, diluted
Weighted-average shares outstanding, diluted

See notes to unaudited condensed consolidated financial statements.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Financial Condition

(In thousands, except share data)

(Unaudited)


ASSETS	ASSETS	June 30, 2023		December 31, 2022		ASSETS	March 31, 2024	December 31, 2023
Cash and equivalents	Cash and equivalents	$	761,187	$	847,519
Cash and equivalents segregated under federal or other regulations	Cash and equivalents segregated under federal or other regulations	1,548,065		2,199,362
Restricted cash	Restricted cash	103,741		90,389
Receivables from clients, net	Receivables from clients, net	579,143		561,569
Receivables from brokers, dealers and clearing organizations	Receivables from brokers, dealers and clearing organizations	66,924		56,276
Advisor loans, net	Advisor loans, net	1,230,477		1,123,004
Other receivables, net	Other receivables, net	670,998		677,766
Investment securities	Investment securities	50,080		52,610
Property and equipment, net	Property and equipment, net	850,139		780,357
Goodwill	Goodwill	1,772,162		1,642,468
Other intangibles, net	Other intangibles, net	606,180		427,676
Other assets	Other assets	1,153,100		1,023,230
Total assets	Total assets	$	9,392,196	$	9,482,226
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:	LIABILITIES:
LIABILITIES:
LIABILITIES:
Client payables
Client payables
Client payables	Client payables	$	2,088,669	$	2,694,929
Payables to brokers, dealers and clearing organizations	Payables to brokers, dealers and clearing organizations	155,985		147,752
Accrued advisory and commission expenses payable	Accrued advisory and commission expenses payable	208,314		203,292
Corporate debt and other borrowings, net	Corporate debt and other borrowings, net	3,001,136		2,717,444
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	421,043		448,630
Other liabilities	Other liabilities	1,394,983		1,102,627
Total liabilities	Total liabilities	7,270,130		7,314,674

Commitments and contingencies (Note 10)	Commitments and contingencies (Note 10)
STOCKHOLDERS’ EQUITY:
Common stock, $0.001 par value; 600,000,000 shares authorized; 130,141,562 shares and 129,655,843 shares issued at June 30, 2023 and December 31, 2022, respectively		130		130
Commitments and contingencies (Note 10)
Commitments and contingencies (Note 10)
Common stock, $0.001 par value; 600,000,000 shares authorized; 130,704,541 shares and 130,233,328 shares issued at March 31, 2024 and December 31, 2023, respectively
Common stock, $0.001 par value; 600,000,000 shares authorized; 130,704,541 shares and 130,233,328 shares issued at March 31, 2024 and December 31, 2023, respectively
Common stock, $0.001 par value; 600,000,000 shares authorized; 130,704,541 shares and 130,233,328 shares issued at March 31, 2024 and December 31, 2023, respectively
Additional paid-in capital	Additional paid-in capital	1,952,828		1,912,886
Treasury stock, at cost — 53,515,229 shares and 50,407,844 shares at June 30, 2023 and December 31, 2022, respectively		(3,514,364)		(2,846,536)
Treasury stock, at cost — 55,998,999 shares and 55,576,970 shares at March 31, 2024 and December 31, 2023, respectively
Retained earnings	Retained earnings	3,683,472		3,101,072
Total stockholders’ equity	Total stockholders’ equity	2,122,066		2,167,552
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	9,392,196	$	9,482,226

See notes to unaudited condensed consolidated financial statements.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands)

(Unaudited)


	Three Months Ended March 31, 2023																																	Three Months Ended March 31, 2023
				Additional Paid-In Capital																													Additional Paid-In Capital		Retained Earnings	Total Stockholders’ Equity
																							Common Stock					Treasury Stock
						Additional Paid-In Capital									Retained Earnings			Total Stockholders’ Equity				Shares		Amount		Shares			Amount
		Common Stock			Treasury Stock
		Shares	Amount		Shares				Amount
BALANCE — March 31, 2022		129,221	$		129					$	1,861,019		49,160			$	(2,569,035)		$	2,442,893	$	1,735,006
Net income		—	—		—				—			—			160,545			160,545
Issuance of common stock to settle restricted stock units		32	—		—			13			(2,397)			—			(2,397)
Treasury stock purchases		—	—		—			272			(50,005)			—			(50,005)
Cash dividends on common stock - $0.25 per share		—	—		—			—			—			(19,982)			(19,982)
Stock option exercises and other		113	—		3,975			(17)			639			1,961			6,575
Share-based compensation		—	—		14,318			—			—			—			14,318
BALANCE — June 30, 2022		129,366	$	129	$		1,879,312		49,428			$	(2,620,798)		$	2,585,417		$	1,844,060

					Additional Paid-In Capital									Retained Earnings			Total Stockholders’ Equity
		Common Stock						Treasury Stock
		Shares	Amount					Shares			Amount
BALANCE — March 31, 2023		130,086	$	130	$	1,933,988		51,749			$	(3,159,714)		$	3,418,529		$	2,192,933
BALANCE — December 31, 2022
Net income	Net income	—	—		—			—			—			285,520			285,520
Issuance of common stock to settle restricted stock units	Issuance of common stock to settle restricted stock units	28	—		—			10			(1,994)			—			(1,994)
Treasury stock purchases	Treasury stock purchases	—	—		—			1,777			(353,405)			—			(353,405)
Cash dividends on common stock - $0.30 per share	Cash dividends on common stock - $0.30 per share	—	—		—			—			—			(23,139)			(23,139)
Stock option exercises and other	Stock option exercises and other	28	—		1,422			(21)			749			2,562			4,733
Share-based compensation	Share-based compensation	—	—		17,418			—			—			—			17,418
BALANCE — June 30, 2023		130,142	$	130	$	1,952,828		53,515			$	(3,514,364)		$	3,683,472		$	2,122,066
BALANCE — March 31, 2023

		Three Months Ended March 31, 2024
		Three Months Ended March 31, 2024
		Three Months Ended March 31, 2024
				Additional Paid-In Capital																													Additional Paid-In Capital		Retained Earnings	Total Stockholders’ Equity
	Common Stock																													Common Stock		Treasury Stock
	Shares																								Shares		Amount			Shares	Amount
BALANCE — December 31, 2023
Net income
Issuance of common stock to settle restricted stock units
Treasury stock purchases
Cash dividends on common stock - $0.30 per share
Stock option exercises and other
Share-based compensation
BALANCE — March 31, 2024

Additional
Paid-In
Capital
Retained
Earnings
Total
Stockholders’
Equity
Common Stock Treasury Stock
Shares Amount Shares Amount
BALANCE — December 31, 2021 128,758 $ 129 $ 1,841,402 48,768 $ (2,498,600) $ 2,327,602 $ 1,670,533
Net income — — — — — 294,289 294,289
Issuance of common stock to settle restricted stock units 311 — — 128 (23,359) — (23,359)
Treasury stock purchases — — — 564 (100,011) — (100,011)
Cash dividends on common stock - $0.50 per share —�� — — — — (39,995) (39,995)
Stock option exercises and other 297 — 10,249 (32) 1,172 3,521 14,942
Share-based compensation — — 27,661 — — — 27,661
BALANCE — June 30, 2022 129,366 $ 129 $ 1,879,312 49,428 $ (2,620,798) $ 2,585,417 $ 1,844,060
Additional
Paid-In
Capital
Retained
Earnings
Total
Stockholders’
Equity
Common Stock Treasury Stock
Shares Amount Shares Amount
BALANCE — December 31, 2022 129,656 $ 130 $ 1,912,886 50,408 $ (2,846,536) $ 3,101,072 $ 2,167,552
Net income — — — — — 624,404 624,404
Issuance of common stock to settle restricted stock units 396 — — 158 (38,596) — (38,596)
Treasury stock purchases — — 2,983 (630,458) — (630,458)
Cash dividends on common stock - $0.60 per share — — — — — (46,723) (46,723)
Stock option exercises and other 90 — 3,888 (34) 1,226 4,719 9,833
Share-based compensation — — 36,054 — — — 36,054
BALANCE — June 30, 2023 130,142 $ 130 $ 1,952,828 53,515 $ (3,514,364) $ 3,683,472 $ 2,122,066

See notes to unaudited condensed consolidated financial statements.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES	LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES					LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows	Condensed Consolidated Statements of Cash Flows					Condensed Consolidated Statements of Cash Flows
(In thousands)	(In thousands)					(In thousands)
(Unaudited)	(Unaudited)					(Unaudited)
		Six Months Ended June 30,
		2023		2022
	Three Months Ended March 31,							Three Months Ended March 31,
	2024						2024	2023
CASH FLOWS FROM OPERATING ACTIVITIES:	CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	Net income	$	624,404	$	294,289
Net income
Net income
Adjustments to reconcile net income to net cash provided by (used in) operating activities:	Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization
Depreciation and amortization
Depreciation and amortization	Depreciation and amortization	114,431		93,907
Amortization of other intangibles	Amortization of other intangibles	50,833		42,364
Amortization of debt issuance costs	Amortization of debt issuance costs	4,051		2,977
Share-based compensation	Share-based compensation	36,054		27,661
Provision for credit losses	Provision for credit losses	7,834		7,840
Deferred benefit for income taxes	Deferred benefit for income taxes	(142)		(305)
Loan forgiveness	Loan forgiveness	100,891		88,069
Other	Other	11,400		875
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:
Receivables from clients, net
Receivables from clients, net
Receivables from clients, net	Receivables from clients, net	(17,701)		(116,476)
Receivables from brokers, dealers and clearing organizations	Receivables from brokers, dealers and clearing organizations	(10,648)		30,948
Advisor loans, net	Advisor loans, net	(217,793)		(161,539)
Other receivables, net	Other receivables, net	4,328		(20,325)
Investment securities - trading	Investment securities - trading	2,211		3,164
Other assets	Other assets	(87,539)		(50,318)
Client payables	Client payables	(606,260)		(213,850)
Payables to brokers, dealers and clearing organizations	Payables to brokers, dealers and clearing organizations	8,233		(15,210)
Accrued advisory and commission expenses payable	Accrued advisory and commission expenses payable	3,194		(22,688)
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	(61,614)		71,813
Other liabilities	Other liabilities	232,304		(64,733)
Operating lease assets	Operating lease assets	(1,578)		(899)
Net cash provided by (used in) in operating activities		196,893		(2,436)
Net cash provided by (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:	CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
Capital expenditures
Capital expenditures	Capital expenditures	(202,395)		(149,805)
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(300,320)		(19,913)

Purchases of securities classified as held-to-maturity		(2,442)		(4,919)

Proceeds from maturities of securities classified as held-to-maturity

Proceeds from maturities of securities classified as held-to-maturity

Proceeds from maturities of securities classified as held-to-maturity	Proceeds from maturities of securities classified as held-to-maturity	3,000		2,500

Net cash used in investing activities	Net cash used in investing activities	(502,157)		(172,137)
Net cash used in investing activities
Net cash used in investing activities
Continued on following page	Continued on following page					Continued on following page

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES	LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES					LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows	Condensed Consolidated Statements of Cash Flows					Condensed Consolidated Statements of Cash Flows
(In thousands)	(In thousands)					(In thousands)
(Unaudited)	(Unaudited)					(Unaudited)
		Six Months Ended June 30,
		2023		2022
	Three Months Ended March 31,							Three Months Ended March 31,
	2024						2024	2023
CASH FLOWS FROM FINANCING ACTIVITIES:	CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from revolving credit facilities
Proceeds from revolving credit facilities
Proceeds from revolving credit facilities	Proceeds from revolving credit facilities	607,000		465,000
Repayments of revolving credit facilities	Repayments of revolving credit facilities	(320,000)		(555,000)

Repayment of senior secured term loans	Repayment of senior secured term loans	(5,350)		(5,350)
Repayment of senior secured term loans
Repayment of senior secured term loans

Payment of contingent consideration

Payment of contingent consideration

Payment of contingent consideration
Tax payments related to settlement of restricted stock units	Tax payments related to settlement of restricted stock units	(38,596)		(23,359)
Repurchase of common stock	Repurchase of common stock	(625,059)		(100,011)
Dividends on common stock	Dividends on common stock	(46,723)		(39,995)

Proceeds from stock option exercises and other	Proceeds from stock option exercises and other	9,833		14,942
Proceeds from stock option exercises and other
Proceeds from stock option exercises and other
Principal payment of finance leases and obligations	Principal payment of finance leases and obligations	(118)		(290)
Net cash used in financing activities	Net cash used in financing activities	(419,013)		(244,063)
NET DECREASE IN CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH		(724,277)		(418,636)
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH
CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH — Beginning of period	CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH — Beginning of period	3,137,270		2,072,364
CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH — End of period	CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH — End of period	$	2,412,993	$	1,653,728

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:	SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid
Interest paid
Interest paid	Interest paid	$	84,000	$	53,936
Income taxes paid	Income taxes paid	$	75,239	$	92,727
Cash paid for amounts included in the measurement of operating lease liabilities	Cash paid for amounts included in the measurement of operating lease liabilities	$	13,781	$	12,052
Cash paid for amounts included in the measurement of finance lease liabilities	Cash paid for amounts included in the measurement of finance lease liabilities	$	4,276	$	4,477
NONCASH DISCLOSURES:	NONCASH DISCLOSURES:
Capital expenditures included in accounts payable and accrued liabilities	Capital expenditures included in accounts payable and accrued liabilities	$	13,317	$	31,969
Capital expenditures included in accounts payable and accrued liabilities
Capital expenditures included in accounts payable and accrued liabilities
Lease assets obtained in exchange for operating lease liabilities	Lease assets obtained in exchange for operating lease liabilities	$	10,408	$	7,837
Contingent consideration liabilities recognized at acquisition date

		June 30,
		2023		2022
		March 31,
		March 31,
		March 31,
	2024						2024	2023
Cash and equivalents	Cash and equivalents	$	761,187	$	700,395
Cash and equivalents segregated under federal or other regulations	Cash and equivalents segregated under federal or other regulations	1,548,065		863,500
Restricted cash	Restricted cash	103,741		89,833
Total cash and equivalents, cash and equivalents segregated under federal or other regulations and restricted cash shown in the statements of cash flows	Total cash and equivalents, cash and equivalents segregated under federal or other regulations and restricted cash shown in the statements of cash flows	$	2,412,993	$	1,653,728

See notes to unaudited condensed consolidated financial statements.


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 - ORGANIZATION AND DESCRIPTION OF THE COMPANY

LPL Financial Holdings Inc. (“LPLFH”), a Delaware holding corporation, together with its consolidated subsidiaries (collectively, the “Company”), provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at ~~enterprises~~institutions (collectively, “advisors”) in the United States. Through its custody and clearing platform, using both proprietary and third-party technology, the Company provides access to diversified financial products and services, enabling its advisors to offer personalized financial advice and brokerage services to retail investors (their “clients”). The Company’s most significant, wholly owned subsidiaries are described below:

•LPL Holdings, Inc. (“LPLH” or “Parent”) is an intermediate holding company and directly or indirectly owns 100% of the issued and outstanding common equity interests of all of LPLFH’s indirect subsidiaries, including a captive insurance subsidiary ~~(the “Captive Insurance Subsidiary”)~~ that underwrites insurance for various legal and regulatory risks of the Company.

•LPL Financial LLC (“LPL Financial”), with primary offices in San Diego, California; Fort Mill, South Carolina; Boston, Massachusetts; and Austin, Texas is a clearing broker-dealer and an investment advisor that principally transacts business ~~as an agent~~ for its advisors and ~~enterprises~~institutions on behalf of their clients in a broad array of financial products and services. LPL Financial is licensed to operate in all 50 states, Washington D.C., Puerto Rico and the U.S. Virgin Islands.

•Fortigent Holdings Company, Inc. and its subsidiaries provide solutions and consulting services to registered investment advisors (“RIAs”), banks and trust companies serving high-net-worth clients.

•LPL Insurance Associates, Inc. operates as an insurance brokerage general agency that offers life and disability insurance products and services for LPL Financial advisors.

•AW Subsidiary, Inc. is a holding company for AdvisoryWorld and Blaze Portfolio Systems LLC (“Blaze”). AdvisoryWorld offers technology products, including proposal generation, investment analytics and portfolio modeling, to both the Company’s advisors and external clients in the wealth management industry. Blaze provides an advisor-facing trading and portfolio rebalancing platform.

•PTC Holdings, Inc. (“PTCH”) is a holding company for The Private Trust Company, N.A. (“PTC”). PTC is chartered as a non-depository limited purpose national bank, providing a wide range of trust, investment management oversight and custodial services for estates and families. PTC, together with its affiliate Fiduciary Trust Company of New Hampshire, also provides Individual Retirement Account (“IRA”) custodial services for LPL Financial. ~~Each member of PTCH’s Board of Directors meets the direct equity ownership interest requirements that are required by the Office of the Comptroller of the Currency (“OCC”).~~

•LPL Employee Services, LLC and its subsidiary, Allen & Company of Florida, LLC, along with their affiliate Financial Resources Group Investment Services, LLC (“FRGIS”), provide primary support for the Company’s employee advisor affiliation model.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These unaudited condensed consolidated financial statements (“condensed consolidated financial statements”) are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which require the Company to make estimates and assumptions regarding the valuation of certain financial instruments, acquisitions, goodwill and other intangibles, allowance for credit losses on receivables, share-based compensation, accruals for liabilities, income taxes, revenue and expense accruals and other matters that affect the condensed consolidated financial statements and related disclosures. The condensed consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary to present fairly the results of operations for the interim periods presented. Actual results could differ from those estimates under different assumptions or conditions and the differences may be material to the condensed consolidated financial statements.


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~~LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES~~ ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

The condensed consolidated financial statements include the accounts of LPLFH and its subsidiaries. Intercompany transactions and balances have been eliminated. The condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the related notes for the year


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

ended December 31, ~~2022,~~2023, contained in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission (“SEC”).

Recently Issued or Adopted Accounting Pronouncements

There ~~are~~are no relevant recently issued accounting pronouncements that would materially impact the Company’s condensed consolidated financial statements and related disclosures. There were no new accounting pronouncements adopted during the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 that materially impacted the Company’s condensed consolidated financial statements and related disclosures.

NOTE 3 - REVENUE

Commission

The following table presents total commission revenue disaggregated by product category (in thousands):

Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Commission revenue
Annuities $ 358,845 $ 311,263 $ 702,906 $ 610,997
Mutual funds 165,194 168,234 330,232 357,761
Fixed income 36,183 29,013 71,450 54,218
Equities 27,474 29,909 53,364 64,542
Other 35,190 34,957 68,659 71,383
Total commission revenue $ 622,886 $ 573,376 $ 1,226,611 $ 1,158,901

~~The following table presents sales-based and trailing commission revenue disaggregated by product category (in thousands):~~
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Commission revenue
Trailing
Annuities $ 186,305 $ 181,892 $ 368,190 $ 374,893
Mutual funds 128,763 128,712 256,324 270,694
Other 8,857 10,279 17,064 20,490
Total trailing revenue $ 323,925 $ 320,883 $ 641,578 $ 666,077
Sales-based
Annuities $ 172,540 $ 129,371 $ 334,716 $ 236,104
Mutual funds 36,431 39,522 73,908 87,067
Fixed income 36,183 29,013 71,450 54,218
Equities 27,474 29,909 53,364 64,542
Other 26,333 24,678 51,595 50,893
Total sales-based revenue $ 298,961 $ 252,493 $ 585,033 $ 492,824
Total commission revenue $ 622,886 $ 573,376 $ 1,226,611 $ 1,158,901


	Three Months Ended March 31,
	2024		2023
Commission revenue
Annuities	$	436,473	$	344,061
Mutual funds	186,540		165,038
Fixed income	48,641		35,267
Equities	35,451		25,890
Other	39,341		33,469
Total commission revenue	$	746,446	$	603,725


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents sales-based and trailing commission revenue disaggregated by product category (in thousands):


	Three Months Ended March 31,
	2024		2023
Commission revenue





Sales-based
Annuities	$	229,077	$	162,176
Fixed income	48,641		35,267
Mutual funds	43,496		37,477

Equities	35,451		25,890
Other	28,570		25,262
Total sales-based revenue	$	385,235	$	286,072
Trailing
Annuities	$	207,396	$	181,885
Mutual funds	143,044		127,561
Other	10,771		8,207
Total trailing revenue	$	361,211	$	317,653
Total commission revenue	$	746,446	$	603,725

Asset-Based

The following table sets forth asset-based revenue disaggregated by product category (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Asset-based revenue
Asset-based revenue
Asset-based revenue	Asset-based revenue
Client cash	Client cash	$	378,415	$	154,700	$	796,690	$	239,416
Client cash
Client cash
Sponsorship programs
Sponsorship programs
Sponsorship programs	Sponsorship programs	109,256		104,593		211,726		205,975
Recordkeeping	Recordkeeping	102,044		104,304		203,047		214,607
Recordkeeping
Recordkeeping
Total asset-based revenue	Total asset-based revenue	$	589,715	$	363,597	$	1,211,463	$	659,998
Total asset-based revenue
Total asset-based revenue

Service and Fee

The following table sets forth service and fee revenue disaggregated by recognition pattern (in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,
		2024
		2024
		2024
Service and fee revenue
Service and fee revenue
Service and fee revenue	Service and fee revenue
Over time(1)	Over time(1)	$	94,587	$	88,741	$	187,616	$	169,746
Over time(1)
Over time(1)
Point-in-time(2)
Point-in-time(2)
Point-in-time(2)	Point-in-time(2)	28,535		24,061		54,493		55,868
Total service and fee revenue	Total service and fee revenue	$	123,122	$	112,802	$	242,109	$	225,614
Total service and fee revenue
Total service and fee revenue

(1)Service and fee revenue recognized over time includes revenue such as error and omission insurance fees, IRA custodian fees, and technology fees.

(2)Service and fee revenue recognized at a point-in-time includes revenue such as IRA termination fees, ~~registration~~account fees, and ~~account~~confirmation fees.


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

Unearned Revenue

The Company records unearned revenue when cash payments are received or due in advance of the Company’s performance obligations, including amounts which are refundable. Unearned ~~revenue~~revenue increased from ~~$138.1~~$156.2 million as of December 31, ~~2022 to $173.0~~2023 to $206.7 million as of ~~June 30, 2023.~~March 31, 2024. Theincrease in u~~in unearned~~nearned revenue for the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 is primarily driven by cash payments received or due in advance of satisfying the Company’s performance obligations, partially offset by ~~$136.4~~$154.2 million of rrev~~evenue~~enue recognized during the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 that was included in the unearned revenue balance as of December 31, ~~2022.~~2023.

The Company receives cash in advance for advisory services to be performed and conferences to be held in future periods. For advisory services, revenue is recognized as the Company provides the administration, brokerage and execution services over time to satisfy the performance obligations. For conference revenue, the Company recognizes revenue as the conferences are held.


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~~LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES~~ ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

NOTE 4 - ACQUISITIONS

Acquisitions in the Current Period

Entered into a definitive purchase agreement to acquire Atria Wealth Solutions, Inc (“Atria”)

On February 13, 2024, the Company announced that it had entered into a definitive purchase agreement to acquire Atria, a wealth management solutions holding company headquartered in New York. As part of the agreement, Atria will transition its brokerage and advisory assets to the Company’s platform. The Company expects to close the transaction in the second half of 2024 for an initial purchase price of approximately $805 million and potential contingent consideration of up to $230 million based on future retention. The closing and the conversion, which is expected to be completed in mid-2025, are both subject to receipt of regulatory approval and other closing conditions.

Other Acquisitions

During the three months ended March 31, 2024, the Company completed two acquisitions under the Liquidity & Succession solution, in which the Company buys advisor practices.

Total consideration for these transactions, which were accounted for under the acquisition method of accounting for business combinations, was $22.0 million, which included $9.5 million of cash, and liabilities of $12.5 million for contingent consideration, which represents the acquisition date fair value of the additional cash consideration that may be transferred to the sellers if certain asset growth is achieved in the three to seven years following the closing. This contingent consideration may be settled for amounts up to $84.3 million in the years following the closing.

At March 31, 2024, the Company provisionally allocated $3.9 million of the purchase price to goodwill and $18.1 million to client relationships acquired as part of these acquisitions. The goodwill primarily includes synergies expected to result from combining operations and is deductible for tax purposes. The client relationships were valued using the income approach and assigned useful lives of 14 years. See Note 7 – Goodwill and Other Intangibles, Net, for additional information.

Acquisitions Completed in Prior Periods

Acquisition of Financial Resources Group Investment Services, LLC

On January 31, 2023, the Company acquired Financial Resources Group Investment Services, LLC, a broker-dealer and independent branch office, in order to expand its addressable markets and complement organic growth. The ~~transaction closed on January 31, 2023 for an initial payment of approximately $140 million with potential contingent payments over the three years following the closing. The~~ Company accounted for the acquisition under the acquisition method of accounting for business ~~combinations. At June 30, 2023,~~combinations, and total consideration for the transaction was $189.2 million, which included an initial cash payment of $143.8 million and a liability of $45.4 million for contingent consideration. The Company ~~had provisionally~~ allocated $129.7 million of the purchase price to goodwill, $53.5 million to definite-lived intangible assets, ~~$45.4 million to liabilities for contingent consideration,~~ $9.0 million to cash acquired and the remainder to other assets acquired and liabilities assumed as part of the acquisition. The goodwill primarily includes


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

synergies expected to result from combining operations and is deductible for tax purposes. See Note 7 – Goodwill and Other Intangibles, Net, for additional information.

Other Acquisitions

During the year ended December 31, 2023, the Company completed a total of 19 acquisitions under the Liquidity & Succession solution. The Company also completed the acquisition of Boenning & Scattergood’s Private Client Group on January 31, 2023. Certain of these acquisitions have been accounted for as business combinations and certain have been accounted for as asset acquisitions.

Business Combinations

The Company accounted for five Liquidity & Succession transactions under the acquisition method of accounting for business combinations during the year ended December 31, 2023. Total consideration for these transactions was $190.2 million, which included initial consideration of $147.4 million, including $140.3 million of cash and a liability of $42.7 million for contingent consideration. At December 31, 2023, the Company allocated $84.5 million of the purchase price to goodwill and $105.7 million to the definite-lived intangible assets acquired as part of these acquisitions. The goodwill primarily includes synergies expected to result from combining operations and is deductible for tax purposes.

The Company recorded purchase accounting adjustments during the three months ended March 31, 2024 related to acquisitions which were completed during the fourth quarter of 2023 and for which the Company’s purchase accounting analysis is ongoing. These adjustments resulted in a $39.6 million increase in customer relationships, a $7.4 million increase in liabilities for contingent consideration, a $12.6 million decrease in technology, and a $19.6 million decrease in goodwill. At March 31, 2024, the Company has provisionally allocated $42.7 million of the purchase price to goodwill and $64.5 million to definite-lived intangible assets acquired. The intangible assets are comprised primarily of ~~$34.7 million of bank relationships and $18.8 million of advisor~~client relationships which were ~~valued using the income approach and are included in the Advisor and enterprise relationships line item in~~assigned useful lives of 15 years. See Note 7 -– Goodwill and Other Intangibles, Net~~. The fair value determination of bank and advisor relationships required the Company to make significant estimates and assumptions related to future net cash flows and discount rates.~~

~~Other Acquisitions~~, for additional information.

Asset Acquisitions

~~During~~The Company accounted for fifteen other acquisitions as asset acquisitions during the ~~six months~~year ended ~~June 30, 2023, the Company also~~December 31, 2023. These transactions included initial consideration of $180.4 million, including $142.3 million of which was allocated ~~$171.1~~to client relationships and $38.1 million of which was allocated to ~~intangible assets acquired under its Liquidity & Succession solution and as part of the acquisition of Boenning & Scattergood’s Private Client Group on January 31, 2023.~~advisor relationships. These transactions include potential contingent payments of up to ~~$91.6~~$73.1 million ~~which may become payable over~~in the ~~next five years.~~three years following the closing if certain asset growth is achieved. The Company has not recognized a liability for these contingent payments as the amounts to be paid will be uncertain until a future measurement date. See Note 7 - Goodwill and Other Intangibles, Net, for additional information.

NOTE 5 - FAIR VALUE MEASUREMENTS

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Inputs used to measure fair value are prioritized within a three-level fair value hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

There have been no transfers ofof assets or liabilities between these fair value measurement classifications during the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 or ~~2022.~~2023.


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company’s fair value measurements are evaluated within the fair value hierarchy, based on the nature of inputs used to determine the fair value at the measurement date. At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company had the following financial assets and liabilities that are measured at fair value on a recurring basis:

Cash Equivalents — The Company’s cash equivalents include money market funds and U.S. government obligations, which are short term in nature with readily determinable values derived from active markets.


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~~LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES~~ ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

Cash Equivalents Segregated Under Federal or Other Regulations — The Company’s cash equivalents segregated under federal or other regulations include U.S. treasury bills, which are short term in nature with readily determinable values derived from active markets.

Trading Securities and Securities Sold, But Not Yet Purchased — The Company’s trading securities consist of house account model portfolios established and managed for the purpose of benchmarking the performance of its fee-based advisory platforms and temporary positions resulting from the processing of client transactions.

The Company uses prices obtained from independent third-party pricing services to measure the fair value of its trading securities. Prices received from the pricing services are validated when security prices move beyond a certain deviation threshold using various methods including comparison to prices received from additional pricing services, comparison to available quoted market prices and review of other relevant market data including implied yields of major categories of securities. In general, these quoted prices are derived from active markets for identical assets or liabilities. When quoted prices in active markets for identical assets and liabilities are not available, the quoted prices are based on similar assets and liabilities or inputs other than the quoted prices that are observable, either directly or indirectly. For negotiable certificates of deposit and treasury securities, the Company utilizes market-based inputs, including observable market interest rates that correspond to the remaining maturities or the next interest reset dates. At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company did not adjust prices received from the independent third-party pricing services.

Other Assets — The Company’s other assets include: (1) deferred compensation plan assets that are invested in life insurance, money market and other mutual funds, which are actively traded and valued based on quoted market prices; and (2) certain non-traded real estate investment trusts, ~~and auction rate notes,~~ which are valued using quoted prices for identical or similar securities and other inputs that are observable or can be corroborated by observable market data.

Fractional Shares — The Company’s investment in fractional shares held by customers is reflected in other assets while the related purchase obligation for such shares is reflected in other liabilities. The Company uses prices obtained from independent third-party pricing services to measure the fair value of its investment in fractional shares held by customers and the related repurchase obligation. Prices received from the pricing services are validated using various methods including comparison to prices received from additional pricing services, comparison to available quoted market prices and review of other relevant market data including implied yields of major categories of securities. At ~~June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, the Company did not adjust prices received from the independent third-party pricing services.

~~Accounts Payable and Accrued Liabilities~~Contingent Consideration — The ~~Company’s accounts payable and accrued liabilities include~~Company measures contingent consideration liabilities ~~that~~at fair value at the acquisition date, as applicable, and thereafter on a recurring basis using unobservable (Level 3) inputs. These contingent consideration liabilities are ~~measured using Level 3 inputs.~~reflected in other liabilities. See Note 4 - Acquisitions for additional information.

Level 3 Recurring Fair Value Measurements

The Company determines the fair value for its contingent consideration obligations using ~~a scenario-based approach whereby the Company assesses the forecasted assets under management or number of future transactions. The contingent~~Monte Carlo simulation and discounted cash flows models. Contingent payments are estimated by applying ~~assumptions,~~significant unobservable inputs, including forecasted ~~volatility~~growth rates applied to project future revenue or asset growth and discount rates towhich are based on the cost of debt and equity. These projections are measured against the performance targets specified in each respective acquisition agreement, which may include growth in assets under management, net new assets, asset conversion or retention, or revenue growth. Significant increases or decreases in the Company’s forecasted ~~payments to calculate~~growth rates over the measurement period or discount rates would result in a higher or lower fair value as of the valuation date. The Company evaluates the underlying projections and other related factors used in determining fair value each period and makes updates when there have been significant changes in management’s expectations.measurement.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table summarizes inputs used in the measurement of contingent consideration (dollars in thousands):


				Quantitative Information About Level 3 Fair Value Measurements
March 31, 2024		December 31, 2023		Type	Valuation Techniques	Unobservable Inputs	Range
$	84,762	$	114,844	Contingent Consideration	Monte-Carlo Simulation Model	Forecasted Growth Rates	12.0% - 29.5%
						Discount Rate	13.1% - 23.2%
2,500		4,000		Contingent Consideration	Discounted Cash Flow Model	Discount Rate	9.3%
$	87,262	$	118,844

The following table summarizes the changes in fair value for the Company’s Level 3 liabilities during the periods presented (in thousands):


	Three Months Ended March 31,
	2024		2023
Balance - Beginning of period	$	118,844	$	3,860
Additions	19,918		41,334
Payments	(51,500)		—
Fair value adjustments	—		86
Balance - End of period	$	87,262	$	45,280


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

Recurring Fair Value Measurements

The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (in thousands):


June 30, 2023		Level 1		Level 2		Level 3		Total
March 31, 2024										March 31, 2024	Level 1	Level 2	Level 3	Total
Assets	Assets									Assets
Cash equivalents	Cash equivalents	$	652	$	—	$	—	$	652
Cash equivalents segregated under federal or other regulations	Cash equivalents segregated under federal or other regulations	546,614		—		—		546,614
Restricted cash
Investment securities — trading:	Investment securities — trading:									Investment securities — trading:
U.S. treasury obligations	U.S. treasury obligations	24,367		—		—		24,367
Mutual funds	Mutual funds	9,059		—		—		9,059
Equity securities	Equity securities	1,096		—		—		1,096
Money market funds	Money market funds	109		—		—		109
Debt securities	Debt securities	—		101		—		101
Total investment securities — trading	Total investment securities — trading	34,631		101		—		34,732
Other assets:	Other assets:
Deferred compensation plan	Deferred compensation plan	588,966		—		—		588,966
Deferred compensation plan
Deferred compensation plan
Fractional shares — investment(1)	Fractional shares — investment(1)	147,084		—		—		147,084
Other investments	Other investments	—		4,894		—		4,894
Total other assets:	Total other assets:	736,050		4,894		—		740,944
Total assets at fair value	Total assets at fair value	$	1,317,947	$	4,995	$	—	$	1,322,942
Liabilities	Liabilities									Liabilities
Accounts payable and accrued liabilities(2)		$	—	$	—	$	49,387	$	49,387
Other liabilities:	Other liabilities:
Securities sold, but not yet purchased:	Securities sold, but not yet purchased:
Mutual funds		45		—		—		45
Debt securities		—		41		—		41
Securities sold, but not yet purchased:
Securities sold, but not yet purchased:
Equity securities	Equity securities	16		—		—		16
U.S. treasury obligations
Total securities sold, but not yet purchased	Total securities sold, but not yet purchased	61		41		—		102
Fractional shares — repurchase obligation(1)	Fractional shares — repurchase obligation(1)	147,084		—		—		147,084
Contingent consideration
Total other liabilities	Total other liabilities	147,145		41		—		147,186
Total liabilities at fair value	Total liabilities at fair value	$	147,145	$	41	$	49,387	$	196,573

____________________

(1)Investment in and related repurchase obligation for fractional shares resulting from the Company’s dividend reinvestment program (“DRIP”).

~~(2)Includes contingent consideration liabilities recorded in connection with acquisitions.~~

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (in thousands):


December 31, 2022		Level 1		Level 2		Level 3		Total
December 31, 2023										December 31, 2023	Level 1	Level 2	Level 3	Total
Assets	Assets
Cash equivalents	Cash equivalents	$	13,639	$	—	$	—	$	13,639
Cash equivalents
Cash equivalents
Cash equivalents segregated under federal or other regulations	Cash equivalents segregated under federal or other regulations	1,131,040		—		—		1,131,040
Restricted cash
Investment securities — trading:	Investment securities — trading:
Mutual funds
Mutual funds
Mutual funds
U.S. treasury obligations	U.S. treasury obligations	24,402		—		—		24,402
Mutual funds		10,679		—		—		10,679
Money market funds
Equity securities	Equity securities	980		—		—		980
Debt securities	Debt securities	—		585		—		585
Money market funds		112		—		—		112
Total investment securities — trading	Total investment securities — trading	36,173		585		—		36,758
Other assets:	Other assets:
Deferred compensation plan
Deferred compensation plan
Deferred compensation plan	Deferred compensation plan	489,976		—		—		489,976
Fractional shares — investment(1)	Fractional shares — investment(1)	122,253		—		—		122,253
Other investments	Other investments	—		5,248		—		5,248
Total other assets	Total other assets	612,229		5,248		—		617,477
Total assets at fair value	Total assets at fair value	$	1,793,081	$	5,833	$	—	$	1,798,914
Liabilities	Liabilities
Accounts payable and accrued liabilities		$	—	$	—	$	3,860	$	3,860
Other liabilities:
Other liabilities:
Other liabilities:	Other liabilities:
Securities sold, but not yet purchased:	Securities sold, but not yet purchased:
Debt securities		—		61		—		61
Securities sold, but not yet purchased:
Securities sold, but not yet purchased:

Equity securities

Equity securities

Equity securities	Equity securities	20		—		—		20
Mutual funds	Mutual funds	4		—		—		4
Total securities sold, but not yet purchased	Total securities sold, but not yet purchased	24		61		—		85
Fractional shares — repurchase obligation(1)	Fractional shares — repurchase obligation(1)	122,253		—		—		122,253
Contingent consideration
Total other liabilities	Total other liabilities	122,277		61		—		122,338
Total liabilities at fair value	Total liabilities at fair value	$	122,277	$	61	$	3,860	$	126,198

____________________

(1)Investment in and related repurchase obligation for fractional shares resulting from the Company’s DRIP.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

Fair Value of Financial Instruments Not Measured at Fair Value

The following tables summarize the carrying values, fair values and fair value hierarchy level classification of financial instruments that are not measured at fair value (in thousands):


June 30, 2023		Carrying Value		Level 1		Level 2		Level 3		Total Fair Value
March 31, 2024												March 31, 2024	Carrying Value	Level 1	Level 2	Level 3	Total Fair Value
Assets	Assets											Assets
Cash	Cash	$	760,535	$	760,535	$	—	$	—	$	760,535
Cash segregated under federal or other regulations	Cash segregated under federal or other regulations	1,001,451		1,001,451		—		—		1,001,451
Restricted cash	Restricted cash	103,741		103,741		—		—		103,741
Receivables from clients, net	Receivables from clients, net	579,143		—		579,143		—		579,143
Receivables from brokers, dealers and clearing organizations	Receivables from brokers, dealers and clearing organizations	66,924		—		66,924		—		66,924
Advisor repayable loans, net(1)	Advisor repayable loans, net(1)	296,682		—		—		223,351		223,351
Other receivables, net	Other receivables, net	670,998		—		670,998		—		670,998
Investment securities — held-to-maturity securities	Investment securities — held-to-maturity securities	15,348		—		14,961		—		14,961
Other assets:	Other assets:
Securities borrowed	Securities borrowed	13,331		—		13,331		—		13,331
Securities borrowed
Securities borrowed
Deferred compensation plan(2)	Deferred compensation plan(2)	6,462		6,462		—		—		6,462
Other investments(3)	Other investments(3)	4,692		—		4,692		—		4,692
Total other assets	Total other assets	24,485		6,462		18,023		—		24,485
Liabilities	Liabilities
Client payables	Client payables	$	2,088,669	$	—	$	2,088,669	$	—	$	2,088,669
Client payables
Client payables
Payables to brokers, dealers and clearing organizations	Payables to brokers, dealers and clearing organizations	155,985		—		155,985		—		155,985
Corporate debt and other borrowings, net	Corporate debt and other borrowings, net	3,001,136		—		2,827,615		—		2,827,615


December 31, 2022		Carrying Value		Level 1		Level 2		Level 3		Total Fair Value
December 31, 2023												December 31, 2023	Carrying Value	Level 1	Level 2	Level 3	Total Fair Value
Assets	Assets
Cash
Cash
Cash	Cash	$	833,880	$	833,880	$	—	$	—	$	833,880
Cash segregated under federal or other regulations	Cash segregated under federal or other regulations	1,068,322		1,068,322		—		—		1,068,322
Restricted cash	Restricted cash	90,389		90,389		—		—		90,389
Receivables from clients, net	Receivables from clients, net	561,569		—		561,569		—		561,569
Receivables from brokers, dealers and clearing organizations	Receivables from brokers, dealers and clearing organizations	56,276		—		56,276		—		56,276
Advisor repayable loans, net(1)	Advisor repayable loans, net(1)	280,040		—		—		219,062		219,062
Other receivables, net	Other receivables, net	677,766		—		677,766		—		677,766
Investment securities - held-to-maturity securities	Investment securities - held-to-maturity securities	15,852		—		15,471		—		15,471
Other assets:	Other assets:
Securities borrowed	Securities borrowed	9,626		—		9,626		—		9,626
Securities borrowed
Securities borrowed
Deferred compensation plan(2)	Deferred compensation plan(2)	6,343		6,343		—		—		6,343
Other investments(3)	Other investments(3)	4,647		—		4,647		—		4,647
Total other assets	Total other assets	20,616		6,343		14,273		—		20,616
Liabilities	Liabilities
Client payables	Client payables	$	2,694,929	$	—	$	2,694,929	$	—	$	2,694,929
Client payables
Client payables
Payables to brokers, dealers and clearing organizations	Payables to brokers, dealers and clearing organizations	147,752		—		147,752		—		147,752
Corporate debt and other borrowings, net	Corporate debt and other borrowings, net	2,717,444		—		2,530,011		—		2,530,011

__________________

(1)Includes repayable loans and forgivable loans which have converted to repayable upon advisor termination or change in agreed upon terms.

(2)Includes cash balances awaiting investment or distribution to plan participants.

(3)Other investments include Depository Trust Company common shares and Federal Reserve stock.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 6 - INVESTMENT SECURITIES

The Company’s investment securities include debt and equity securities that the Company has classified as trading securities, which are carried at fair value, as well as investments in U.S. government notes, which are held by The Private Trust Company, N.A. to satisfy minimum capital requirements of the OCC. These securities are recorded at amortized cost and classified as held-to-maturity as the Company has both the intent and ability to hold these investments to maturity.

The following table summarizes investment securities (in thousands):


		June 30, 2023		December 31, 2022			March 31, 2024	December 31, 2023
Trading securities — at fair value:	Trading securities — at fair value:					Trading securities — at fair value:
U.S. treasury obligations	U.S. treasury obligations	$	24,367	$	24,402
Mutual funds	Mutual funds	9,059		10,679
Equity securities	Equity securities	1,096		980
Money market funds	Money market funds	109		112
Debt securities	Debt securities	101		585
Total trading securities	Total trading securities	$	34,732	$	36,758
Held-to-maturity securities — at amortized cost:	Held-to-maturity securities — at amortized cost:
U.S. government notes	U.S. government notes	$	15,348	$	15,852
U.S. government notes
U.S. government notes
Total held-to-maturity securities	Total held-to-maturity securities	$	15,348	$	15,852
Total investment securities	Total investment securities	$	50,080	$	52,610

At ~~June 30, 2023,~~March 31, 2024, the held-to-maturity securities were scheduled to mature as follows (in thousands):


		Within one year		After one but within five years		After five but within ten years		After ten years		Total
	Within one year											Within one year	After one but within five years	After five but within ten years	After ten years	Total
U.S. government notes — at amortized cost	U.S. government notes — at amortized cost	$	4,974	$	10,374	$	—	$	—	$	15,348
U.S. government notes — at fair value	U.S. government notes — at fair value	$	4,881	$	10,080	$	—	$	—	$	14,961

NOTE 7 - GOODWILL AND OTHER INTANGIBLES, NET

~~On January 31, 2023, the Company acquired Financial Resources Group Investment Services, LLC. See Note 4 -~~ ~~Acquisitions, for additional information.~~

A summary of the activity impacting goodwill is presented below (in thousands):


Balance at December 31, ~~2021~~2022	$	~~1,642,443~~1,642,468
Goodwill acquired	25214,180
Balance at December 31, ~~2022~~2023	1,856,648
Purchase accounting adjustments	~~1,642,468~~ (19,627)
Goodwill acquired	~~129,694~~3,951
Balance at ~~June 30, 2023~~March 31, 2024	$	~~1,772,162~~1,840,972

The Company completed various acquisitions, which were accounted for under the acquisition method of accounting for business combinations and as asset acquisitions, and recorded purchase accounting adjustments during the periods presented. See Note 4 - Acquisitions, for additional information.


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

The components of other intangibles, net were as follows at ~~June 30, 2023~~March 31, 2024 (in thousands):


		Weighted-Average Life Remaining (in years)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
	Weighted-Average Life Remaining (in years)									Weighted-Average Life Remaining (in years)	Gross Carrying Value	Accumulated Amortization	Net Carrying Value
Definite-lived intangibles, net(1):	Definite-lived intangibles, net(1):								Definite-lived intangibles, net(1):
Advisor and enterprise relationships		5.9	$	908,130	$	(577,246)	$	330,884
Advisor and institution relationships
Product sponsor relationships	Product sponsor relationships	2.7	234,086		(203,120)		30,966
Client relationships	Client relationships	12.8	233,570		(39,237)		194,333
Technology	Technology	5.0	19,040		(8,862)		10,178
Total definite-lived intangible assets, net	Total definite-lived intangible assets, net		$	1,394,826	$	(828,465)	$	566,361
Other indefinite-lived intangibles:	Other indefinite-lived intangibles:								Other indefinite-lived intangibles:
Trademark and trade name	Trademark and trade name						39,819
Total other intangibles, net	Total other intangibles, net						$	606,180

(1)During the ~~six~~three months ended ~~June 30, 2023,~~ March 31, 2024, the Company allocated $171.1 million to intangible assets acquired under its Liquidity & Succession solution and the acquisition of Boenning & Scattergood’s Private Client Group. These intangible assets were comprised primarily of customer relationships with an assigned useful life of 14 years.completed various acquisitions.See Note 4 - Acquisitions, for additional information.

The components of other intangibles, net were as follows at December 31, ~~2022~~2023 (in thousands):


		Weighted-Average Life Remaining (in years)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Definite-lived intangibles, net:
Advisor and enterprise relationships		5.1	$	809,872	$	(542,415)	$	267,457
	Weighted-Average Life Remaining (in years)									Weighted-Average Life Remaining (in years)	Gross Carrying Value	Accumulated Amortization	Net Carrying Value
Definite-lived intangibles, net(1):									Definite-lived intangibles, net(1):
Advisor and institution relationships
Product sponsor relationships	Product sponsor relationships	3.2	234,086		(197,165)		36,921
Client relationships(1)		8.0	102,491		(30,318)		72,173
Client relationships
Technology	Technology	5.4	19,040		(7,734)		11,306
Total definite-lived intangibles, net	Total definite-lived intangibles, net		$	1,165,489	$	(777,632)	$	387,857
Other indefinite-lived intangibles:	Other indefinite-lived intangibles:
Trademark and trade name	Trademark and trade name						39,819
Trademark and trade name
Trademark and trade name
Total other intangibles, net	Total other intangibles, net						$	427,676

(1)During the year ended December 31, ~~2022,~~2023, the Company ~~acquired client relationship intangible assets of $54.1 million as a result of acquisitions under its Liquidity & Succession solution. These acquisitions were accounted~~completed various acquisitions.See Note 4 - Acquisitions, for ~~as asset acquisitions with an assigned useful life of 9 years.~~additional information.

Total amortization of other intangibles was ~~$26.7~~$29.6 million and ~~$21.2~~$24.1 million for the three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022, respectively, and $50.8 million and $42.4 million for the six months ended June 30, 2023 and 2022,~~ respectively. Future amortization is estimated as follows (in thousands):


2023 - remainder		$	51,664
2024		102,986
2024 - remainder
2025	2025	94,613
2026	2026	56,356
2027	2027	51,207
2028
Thereafter	Thereafter	209,535
Total	Total	$	566,361

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 8 - OTHER ASSETS AND OTHER LIABILITIES

The components of other assets and other liabilities were as follows (dollars in thousands):


		June 30, 2023		December 31, 2022		March 31, 2024	December 31, 2023
Other assets:	Other assets:
Deferred compensation
Deferred compensation
Deferred compensation	Deferred compensation	$	595,428	$	496,319
Prepaid assets	Prepaid assets	136,457		144,607
Fractional shares — investment(1)	Fractional shares — investment(1)	147,084		122,253
Deferred tax assets, net	Deferred tax assets, net	99,139		98,997
Operating lease assets	Operating lease assets	94,830		92,534
Debt issuance costs, net	Debt issuance costs, net	4,413		6,422
Other	Other	75,749		62,098
Total other assets	Total other assets	$	1,153,100	$	1,023,230

Other liabilities:	Other liabilities:
Other liabilities:
Other liabilities:
Deferred compensation
Deferred compensation
Deferred compensation	Deferred compensation	$	595,946	$	497,736
Unearned revenue(2)	Unearned revenue(2)	172,957		138,109
Fractional shares — repurchase obligation(1)	Fractional shares — repurchase obligation(1)	147,084		122,253
Operating lease liabilities	Operating lease liabilities	126,034		125,280
Finance lease liabilities	Finance lease liabilities	105,542		105,660
Taxes payable
Contingent consideration
Other	Other	247,420		113,589
Total other liabilities	Total other liabilities	$	1,394,983	$	1,102,627

(1)Investment in and related repurchase obligation for fractional shares resulting from the Company’s DRIP program.

(2)See Note 3 - Revenue for further information.


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 9 - CORPORATE DEBT AND OTHER BORROWINGS, NET

The Company’s outstanding corporate debt and other borrowings, net were as follows (in thousands):


		June 30, 2023					December 31, 2022
	March 31, 2024
Corporate Debt	Corporate Debt	Balance		Applicable Margin	Interest Rate		Balance		Applicable Margin	Interest rate		Maturity
Term Loan B(1)(2)		$	1,032,550	SOFR+185 bps	7.010	%	$	1,037,900	LIBOR+175 bps	5.870	%	11/12/2026
Corporate Debt
Corporate Debt														Balance		Applicable Margin		Interest Rate		Balance		Applicable Margin		Interest rate		Maturity
Term Loan B(1)													Term Loan B(1)	$	1,024,525	SOFR+185 bps		7.176	%	$	1,027,200	SOFR+185 bps		7.206	%	11/12/2026
2027 Senior Notes(1)	2027 Senior Notes(1)	400,000		Fixed Rate	4.625	%	400,000		Fixed Rate	4.625	%	11/15/2027	2027 Senior Notes(1)	400,000		Fixed Rate	Fixed Rate	4.625	%	400,000		Fixed Rate	Fixed Rate	4.625	%	11/15/2027
2028 Senior Notes(1)													2028 Senior Notes(1)	750,000		Fixed Rate		6.750	%	750,000		Fixed Rate		6.750	%	11/17/2028
2029 Senior Notes(1)	2029 Senior Notes(1)	900,000		Fixed Rate	4.000	%	900,000		Fixed Rate	4.000	%	3/15/2029	2029 Senior Notes(1)	900,000		Fixed Rate	Fixed Rate	4.000	%	900,000		Fixed Rate	Fixed Rate	4.000	%	3/15/2029
2031 Senior Notes(1)	2031 Senior Notes(1)	400,000		Fixed Rate	4.375	%	400,000		Fixed Rate	4.375	%	5/15/2031	2031 Senior Notes(1)	400,000		Fixed Rate	Fixed Rate	4.375	%	400,000		Fixed Rate	Fixed Rate	4.375	%	5/15/2031
Total Corporate Debt	Total Corporate Debt	2,732,550					2,737,900

Less: Unamortized Debt Issuance Cost	Less: Unamortized Debt Issuance Cost	(18,414)					(20,456)

Less: Unamortized Debt Issuance Cost

Less: Unamortized Debt Issuance Cost
Corporate debt, net
Corporate debt, net
Corporate debt, net	Corporate debt, net	$	2,714,136				$	2,717,444
Other Borrowings	Other Borrowings
Revolving Credit Facility(2)(3)		287,000		ABR+25 bps / SOFR+135 bps	7.363	%	—		LIBOR+25 bps	5.642	%	3/15/2026
Broker-Dealer Revolving Credit Facility		—		SOFR+135 bps	6.440	%	—		SOFR+135 bps	5.650	%	8/3/2023
Unsecured, Uncommitted Lines of Credit		—		Rate Determined at Time of Borrowing	—	%	—		Rate Determined at Time of Borrowing	—	%	9/30/2023
Other Borrowings
Other Borrowings
Revolving Credit Facility(2)
Revolving Credit Facility(2)
Revolving Credit Facility(2)														401,000		ABR+37.5 bps / SOFR+147.5 bps		6.852	%	280,000		ABR+37.5 bps / SOFR+147.5 bps		6.966	%	3/15/2026

Total other borrowings

Total other borrowings

Total other borrowings	Total other borrowings	$	287,000				$	—
Corporate Debt and Other Borrowings, Net	Corporate Debt and Other Borrowings, Net	$	3,001,136				$	2,717,444
Corporate Debt and Other Borrowings, Net
Corporate Debt and Other Borrowings, Net

(1)No leverage or interest coverage maintenance covenants.

(2)In March 2023, the Company amended its Credit Agreement to transition the Parent Revolving Credit Facility and Term Loan B from London Interbank Offered Rate (“LIBOR”)-based to Secured Overnight Financing Rate (“SOFR”)-based interest rates, which became effective in March and April 2023, respectively.

~~(3)~~The Parent’s outstanding balance at ~~June 30, 2023~~March 31, 2024 was comprised of an alternate base rate (“ABR”)-based balance of ~~$128.0~~$10.0 million with the applicable margin of ABR + 2537.5 bps ~~(8.500%~~(8.875%) and a SOFR-based balance of ~~$159.0~~$391.0 million with the applicable margin of SOFR + ~~135~~147.5 bps ~~(6.448%~~(6.800%).

The following table presents amounts outstanding and available under the Company’s external lines of credit at ~~June 30, 2023~~March 31, 2024 (in millions):

Description

Borrower

Maturity Date

Outstanding

Available

Description

Borrower

Maturity Date

Outstanding

Available

Senior secured, revolving credit facility

LPL Holdings, Inc.

March 2026

287

713

Broker-dealer revolving credit facility

LPL Financial LLC

August 2023

—

1,000

Unsecured, uncommitted lines of credit

LPL Financial LLC

September 2023

—

Unsecured, uncommitted lines of credit

LPL Financial LLC

September 2023

—

Unsecured, uncommitted lines of credit

LPL Financial LLC

None

—

Secured, uncommitted lines of credit

LPL Financial LLC

None

—

unspecified

Secured, uncommitted lines of credit

LPL Financial LLC

None

—

unspecified

Secured, uncommitted lines of credit

LPL Financial LLC

None

—

unspecified

Secured, uncommitted lines of credit

LPL Financial LLC

None

—

unspecified

Issuance of 2028 Senior Notes

LPLH issued $750.0 million in aggregate principal amount of 6.750% senior notes on November 17, 2023 at 99.929% (“2028 Senior Notes”). The 2028 Senior Notes are unsecured obligations that will mature on November 17, 2028, and are fully and unconditionally guaranteed on a senior unsecured basis by LPLFH. The Company used the proceeds from the issuance to repay borrowings made under its senior secured revolving credit facility and for general corporate purposes. In connection with the issuance of the 2028 Senior Notes, the Company incurred $6.3 million in costs, which were capitalized as debt issuance costs in the condensed consolidated statements of financial condition.

Credit Agreement

On March 13, 2023, LPLFH and LPLH entered into a sixth amendment agreement to the Company’s amended and restated credit agreement (the “Credit Agreement”), which, among other things, replaced LIBOR with SOFR. The Credit Agreement subjects the Company to certain financial and non-financial covenants. As of ~~June 30, 2023,~~March 31, 2024, the Company was in compliance with such covenants.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

Parent Revolving Credit Facility

On July 18, 2023, LPLH amended its revolving credit facility to, among other things, increase the maximum borrowing from $1.0 billion to $2.0 billion. Borrowings under the revolving credit facility bear interest at a rate per annum ranging from ~~125~~112.5 to ~~175~~187.5 basis points over SOFR plus 10 basis points or 2512.5 to 7587.5 basis points over the alternate base rate (the greatest of (i) the NYFRB Rate plus 1/2 of 1%, (ii) the Prime Rate and (iii) the Adjusted Term SOFR Rate for a one month Interest Period plus 1%, each as defined in the Credit Agreement) depending on the ~~Consolidated Secured~~ Debt ~~to Consolidated EBITDA Ratio~~Ratings (as defined in the Credit Agreement).

~~On July 18, 2023, LPLH amended its revolving~~ In connection with the amendment of the credit facility, ~~to, among other things, increase~~LPLH incurred $5.5 million in costs, which were capitalized as debt issuance costs in the ~~maximum borrowing from $1.0 billion to $2.0 billion.~~condensed consolidated statements of financial condition.

Broker-Dealer Revolving Credit Facility

On ~~August 4, 2022,~~July 18, 2023, LPL Financial, the Company’s broker-dealer subsidiary, ~~entered into a~~renewed its committed senior unsecured revolving credit facility that matures on ~~August 3, 2023~~July 16, 2024 and allows for a maximum borrowing of up to $1.0 billion. Borrowings under the credit facility bear interest at a rate per annum equal to 1.25% per annum plus the greatest of (i) SOFR plus 0.10%, (ii) the effective federal funds rate and (iii) the overnight bank funding rate, in each case, as such rate is administered or determined by the Federal Reserve Bank of New York from time to time. In connection with the renewal of the credit facility, LPL Financial incurred $~~1.9~~1.7 million in costs, which were capitalized as debt issuance costs in the condensed consolidated statements of financial condition. The broker-dealer credit agreement subjects LPL Financial to certain financial and non-financial covenants. LPL Financial was in compliance with such covenants as of ~~June 30, 2023.~~March 31, 2024.

~~On July 18, 2023, LPL Financial renewed its revolving credit facility and extended the maturity date to July 16, 2024.~~

Other External Lines of Credit

LPL Financial maintained five uncommitted lines of credit as of ~~June 30, 2023.~~ March 31, 2024. Two~~Two~~ of the lines have unspecified limits, which are primarily dependent on LPL Financial’s ability to provide sufficient collateral. The other three lines have a total limit of ~~$200.0~~$200.0 million, which allow for uncollateralized borrowings. There were nono balances outstanding under these lines at ~~June 30, 2023~~March 31, 2024 or December 31, ~~2022.~~2023.

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Service and Development Contracts

The Company is party to certain long-term contracts for systems and services that enable back-office trade processing and clearing for its product and service offerings.

Guarantees

The Company occasionally enters into contracts that contingently require it to indemnify certain parties against third-party claims. The terms of these obligations vary and, because a maximum obligation is not explicitly stated, the Company has determined that it is not possible to make an estimate of the amount that it could be obligated to pay under such contracts.

LPL Financial provides guarantees to securities clearing houses and exchanges under their standard membership agreements, which require a member to guarantee the performance of other members. Under these agreements, if a member becomes unable to satisfy its obligations to the clearing houses and exchanges, all other members would be required to meet any shortfall. The Company’s liability under these arrangements is not quantifiable and could exceed the cash and securities it has posted as collateral. However, the potential requirement for the Company to make payments under these agreements is remote. Accordingly, no liability has been recognized for these transactions.

Loan Commitments

From time to time, LPL Financial makes loans to advisors and ~~enterprises,~~institutions, primarily to newly recruited advisors and ~~enterprises~~institutions to assist in the transition process, which may be forgivable. Due to timing differences, LPL Financial may make commitments to issue such loans prior to actually funding them. These commitments are generally contingent upon certain events occurring, including but not limited to the advisor or ~~enterprise~~institution joining LPL Financial. LPL Financial had no significant unfunded loan commitments at ~~June 30, 2023~~March 31, 2024 or December 31, ~~2022.~~2023.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

Legal and Regulatory Matters

The Company is subject to extensive regulation and supervision by U.S. federal and state agencies and various self-regulatory organizations. The Company and its advisors periodically engage with such agencies and organizations, in the context of examinations or otherwise, to respond to inquiries, informational requests and investigations. From time to time, such engagements result in regulatory complaints or other matters, the resolution of which has in the past and may in the future include fines, customer restitution and other remediation. Assessing the probability of a loss occurring and the timing and amount of any loss related to a legal proceeding or regulatory matter is inherently difficult. While the Company exercises significant and complex judgments to make certain estimates presented in its condensed consolidated financial statements, there are particular uncertainties and complexities involved when assessing the potential outcomes of legal proceedings and regulatory matters. The Company’s assessment process considers a variety of factors and assumptions, which may include: the procedural status of the matter and any recent developments; prior experience and the experience of others in similar matters; the size and nature of potential exposures; available defenses; the progress of fact discovery; the opinions of counsel and experts; or the potential opportunities for settlement and the status of any settlement discussions. The Company monitors these factors and assumptions for new developments and re-assesses the likelihood that a loss will occur and the estimated range or amount of loss, if those amounts can be reasonably determined. The Company has established an accrual for those legal proceedings and regulatory matters for which a loss is both probable and the amount can be reasonably estimated.

In October 2022, the Company received a request for information from the SEC in connection with an investigation of the Company’s compliance with records preservation requirements for business-related electronic communications stored on personal devices or messaging platforms that have not been approved by the Company. In 2023, the SEC proposed a potential settlement, under which the Company would pay a $50.0 million civil monetary penalty. As a result, the Company recorded $40.0 million in other expense in the consolidated statements of income for the year ended December 31, 2023 to reflect the amount of the penalty that is not covered by the Company’s captive insurance subsidiary. On March 22, 2024, the Company reached a settlement in principle with the staff of the SEC to resolve its civil investigation. The Company ~~intends~~expects to ~~cooperate fully with~~pay the ~~SEC’s inquiry.~~civil monetary penalty of $50.0 million during the second quarter of 2024. The ~~Company has estimated that it is reasonably possible that it could incur losses as a result~~settlement in principle remains subject to the negotiation of ~~this request; however,~~definitive documentation and approval by the Company cannot estimate a possible loss or range of loss at this time. At this time, the Company does not believe that this request will have a material adverse effect on its results of operations, financial position or cash flows.SEC.

Third-Party Insurance

The Company maintains third-party insurance coverage for certain potential legal proceedings, including those involving certain client claims. With respect to such client claims, the estimated losses on many of the pending matters are less than the applicable deductibles of the insurance policies.

Self-Insurance

The Company has self-insurance for certain potential liabilities through ~~the Captive Insurance Subsidiary.~~its captive insurance subsidiary. Liabilities associated with the risks that are retained by the Company are not discounted and are estimated by considering, in part, historical claims experience, severity factors, and actuarial assumptions and estimates. The estimated accruals for these potential liabilities could be significantly affected if future occurrences and claims differ from such assumptions and historical trends, so there are particular complexities and uncertainties involved when assessing the adequacy of loss reserves for potential liabilities that are self-insured. Self-insurance liabilities are included in accounts payable and accrued liabilities in the condensed consolidated statements of financial condition. Self-insurance related charges are included in other expense in the condensed consolidated statements of income.

The following table provides a reconciliation of the beginning and ending balances of self-insurance liabilities for the periods presented (in thousands):

Six Months Ended June 30,
2023 2022
Beginning balance — January 1 $ 74,071 $ 67,152
Losses incurred 18,093 18,251
Losses paid (10,424) (11,657)
Ending balance — June 30 $ 81,740 $ 73,746

~~Other Commitments~~

As of June 30, 2023, the Company had approximately $472.0 million of client margin loans that were collateralized with securities having a fair value of approximately $660.8 million that LPL Financial can repledge, loan or sell. Of


	Three Months Ended March 31,
	2024		2023
Beginning balance — January 1	$	82,883	$	74,071
Losses incurred	9,306		9,047



Losses paid	(12,205)		(5,725)



Ending balance — March 31	$	79,984	$	77,393

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

Other Commitments

As of March 31, 2024, the Company had approximately $484.9 million of client margin loans that were collateralized with securities having a fair value of approximately $678.9 million that LPL Financial can repledge, loan or sell. Of these securities, approximately ~~$249.9~~$357.2 million were client-owned securities pledged to the Options Clearing Corporation as collateral to secure client obligations related to options positions. As of ~~June 30, 2023,~~March 31, 2024, there were no restrictions that materially limited the Company’s ability to repledge, loan or sell the remaining ~~$410.9~~$321.7 million of client collateral.

Investment securities on the condensed consolidated statements of financial condition include ~~$4.5~~$8.4 million and $5.5 million of trading securities pledged to the Options Clearing Corporation at ~~both June 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively, and $19.7 million and $19.9 million of trading securities pledged to the National Securities Clearing Corporation at ~~both June 30, 2023~~March 31, 2024 and December 31, ~~2022.~~2023, respectively.

NOTE 11 - STOCKHOLDERS’ EQUITY

Dividends

The payment, timing and amount of any dividends are subject to approval by ~~LPLFH’s~~the Company’s Board of Directors (the “Board”) as well as certain limits under the Credit ~~Agreement and the indentures governing the Company’s senior unsecured notes (the “Indentures”).~~Agreement. Cash dividends per share of common stock and total cash dividends paid on a quarterly basis were as follows (in millions, except per share data):


	2024										2024		2023
	Dividend per Share									Dividend per Share	Total Cash Dividend	Dividend per Share	Total Cash Dividend
First quarter

		2023				2022
		Dividend per Share		Total Cash Dividend		Dividend per Share		Total Cash Dividend
First quarter		$	0.30	$	23.6	$	0.25	$	20.0
Second quarter		$	0.30	$	23.1	$	0.25	$	20.0

Share Repurchases

The Company engages in a share repurchase program that was approved by the Board, pursuant to which LPLFH may repurchase its issued and outstanding shares of common stock from time to time. Repurchased shares are included in treasury stock on the condensed consolidated statements of financial condition.

During the ~~six~~three months ended ~~June 30, 2023~~March 31, 2024 LPLFH repurchased ~~2,982,985~~296,145 shares of common stock at a weighted-average price of ~~$209.54~~$236.39 for a total of ~~$625~~$70.0 million. ~~The Company also recognized $5.4 million of excise tax in connection with these repurchases during the six months ended June 30, 2023.~~ As of ~~June 30, 2023,~~March 31, 2024, the Company had ~~$1.4 billion~~$830.0 million remaining under the existing share repurchase program. As a result of our planned acquisition of Atria, the Company paused share repurchases during the quarter. Future share repurchases may be effected in open market or privately negotiated transactions, including transactions with affiliates, with the timing of purchases and the amount of stock purchased generally determined at the discretion of the Company within the constraints of the Credit Agreement ~~the Indentures~~ and the Company’s general working capital needs.

NOTE 12 - SHARE-BASED COMPENSATION

In May 2021, the Company adopted its 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), which provides for the granting of stock options, warrants, restricted stock awards, restricted stock units, deferred stock units, performance stock units and other equity-based compensation to the Company’s employees, non-employee directors and other service providers. The 2021 Plan serves as the successor to the Company’s 2010 Omnibus Equity Incentive Plan (the “2010 Plan”). Following the adoption of the 2021 Plan, the Company is no longer making grants under the 2010 Plan, and the 2021 Plan is the only plan under which equity awards are granted. However, awards previously granted under the 2010 Plan will remain outstanding until vested, exercised or forfeited, as applicable.

There were ~~17,754,197~~17,754,197 shares authorized for grant under the 2021 Plan and ~~12,818,635~~11,656,366 shares remaining available for future issuance at ~~June 30, 2023.~~March 31, 2024.

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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

Stock Options and Warrants

The Company has not granted stock options or warrants since 2019. The following table summarizes the Company’s stock option and warrant activity as of and for the ~~six~~three months ended ~~June 30, 2023:~~March 31, 2024:

Number of
Shares Weighted-
Average
Exercise Price Weighted-Average
Remaining
Contractual Term
(Years) Aggregate
Intrinsic
Value
(In thousands)
Outstanding — December 31, 2022 673,764 $ 53.45
Granted — $ —
Exercised (87,388) $ 43.98
Forfeited and Expired — $ —
Outstanding — June 30, 2023 586,376 $ 54.87 4.11 $ 95,324
Exercisable — June 30, 2023 586,376 $ 54.87 4.11 $ 95,324
Exercisable and expected to vest — June 30, 2023 586,376 $ 54.87 4.11 $ 95,324


	Number of Shares	Weighted- Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (In thousands)
Outstanding — December 31, 2023	546,820	$	54.81
Granted	—	$	—
Exercised	(119,010)	$	47.30
Forfeited and Expired	—	$	—
Outstanding — March 31, 2024	427,810	$	56.90	3.59	$	88,684
Exercisable — March 31, 2024	427,810	$	56.90	3.59	$	88,684
Exercisable and expected to vest — March 31, 2024	427,810	$	56.90	3.59	$	88,684

The following table summarizes information about outstanding stock options and warrants as of ~~June 30, 2023:~~March 31, 2024:


		Outstanding				Exercisable				Outstanding			Exercisable
Range of Exercise Prices	Range of Exercise Prices	Number of Shares	Weighted- Average Exercise Price		Weighted-Average Remaining Life (Years)	Number of Shares	Weighted- Average Exercise Price		Range of Exercise Prices	Number of Shares	Weighted- Average Exercise Price	Weighted-Average Remaining Life (Years)	Number of Shares	Weighted- Average Exercise Price
$19.85 - $25.00	$19.85 - $25.00	63,919	$	19.85	2.65	63,919	$	19.85
$25.01 - $35.00	$25.01 - $35.00	—	$	—	0.00	—	$	—
$35.01 - $45.00	$35.01 - $45.00	162,934	$	39.48	3.70	162,934	$	39.48
$45.01 - $65.00	$45.01 - $65.00	57,173	$	48.68	1.34	57,173	$	48.68
$65.01 - $75.00	$65.01 - $75.00	145,797	$	65.50	4.65	145,797	$	65.50
$75.01 - $80.00	$75.01 - $80.00	156,553	$	77.53	5.66	156,553	$	77.53
		586,376	$	54.87	4.11	586,376	$	54.87

The Company recognized no share-based compensation expense related to the vesting of stock options awarded to employees and officers during the three months ended ~~June 30, 2023~~March 31, 2024 and ~~2022, no expense during the six months ended June 30, 2023, and $0.2 million of expense during the six months ended June 30, 2022.~~2023. As of ~~June 30, 2023,~~March 31, 2024, there was no unrecognized compensation cost related to non-vested stock ~~options as the remaining share-based compensation expense was recognized during the three months ended March 31, 2022.~~


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~~LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES~~ ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

options.

Restricted Stock and Stock Units

The following summarizes the Company’s activity in its restricted stock awards and stock units, which include restricted stock units, deferred stock units and performance stock units, as of and for the ~~six~~three months ended ~~June 30, 2023:~~March 31, 2024:


		Restricted Stock Awards			Stock Units
		Number of Shares	Weighted-Average Grant-Date Fair Value		Number of Units		Weighted-Average Grant-Date Fair Value
Outstanding — December 31, 2022		814	$	173.78	863,174		$	148.98
	Restricted Stock Awards									Restricted Stock Awards		Stock Units
	Number of Shares								Number of Shares	Weighted-Average Grant-Date Fair Value	Number of Units		Weighted-Average Grant-Date Fair Value
Outstanding — December 31, 2023
Granted	Granted	2,753	$	190.92	373,791		$	218.47
Vested	Vested	(1,999)	$	186.29	(395,578)		$	109.47
Forfeited	Forfeited	—	$	—	(26,038)		$	199.83
Outstanding — June 30, 2023		1,568	$	187.93	815,349	(1)	$	198.39
Expected to vest — June 30, 2023		1,568	$	187.93	665,978		$	210.60
Outstanding — March 31, 2024
Expected to vest — March 31, 2024

(1) Includes ~~90,167~~90,412 vested and undistributed deferred stock units.


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

The Company grants restricted stock awards and deferred stock units to its directors and restricted stock units and performance stock units to its employees and officers. Restricted stock awards and stock units must vest or are subject to forfeiture; however, restricted stock awards are included in shares outstanding upon grant and have the same dividend and voting rights as the Company’s common stock. The Company recognized ~~$14.6~~$20.3 million and ~~$12.8~~$16.2 million of share-based compensation expense related to the vesting of these restricted stock awards and stock units during the three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022, respectively, and $30.8 million and $24.7 million during the six months ended June 30, 2023 and 2022,~~ respectively. As of ~~June 30, 2023,~~March 31, 2024, total unrecognized compensation cost for restricted stock awards and stock units was ~~$100.6~~$138.4 million, which is expected to be recognized over a weighted-average remaining period of ~~2.18~~2.23 years.

The Company also grants restricted stock units to its advisors and to ~~enterprises.~~institutions. The Company recognized share-based compensation expense of ~~$0.6~~$0.7 million related to the vesting of these awards during ~~each of~~both the three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022 and $1.3 million and $1.2 million during the six months ended June 30, 2023 and 2022,~~ respectively. As of ~~June 30, 2023,~~March 31, 2024, total unrecognized compensation cost for restricted stock units granted to advisors and ~~enterprises~~institutions was ~~$3.6~~$4.5 million, which is expected to be recognized over a weighted-average remaining period of ~~1.81~~1.98 years.


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~~LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES~~ ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

NOTE 13 - EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if dilutive potential shares of common stock had been issued. The calculation of basic and diluted earnings per share for the periods noted was as follows (in thousands, except per share data):


		Three Months Ended March 31,
		Three Months Ended March 31,
		Three Months Ended March 31,

		Three Months Ended June 30,				Six Months Ended June 30,
		2023		2022		2023		2022
Net income	Net income	$	285,520	$	160,545	$	624,404	$	294,289
Net income
Net income

Basic weighted-average number of shares outstanding

Basic weighted-average number of shares outstanding

Basic weighted-average number of shares outstanding	Basic weighted-average number of shares outstanding	77,234		79,947		77,988		79,961
Dilutive common share equivalents	Dilutive common share equivalents	960		1,463		1,095		1,532
Dilutive common share equivalents
Dilutive common share equivalents
Diluted weighted-average number of shares outstanding
Diluted weighted-average number of shares outstanding
Diluted weighted-average number of shares outstanding	Diluted weighted-average number of shares outstanding	78,194		81,410		79,083		81,493

Basic earnings per share	Basic earnings per share	$	3.70	$	2.01	$	8.01	$	3.68

Basic earnings per share

Basic earnings per share
Diluted earnings per share	Diluted earnings per share	$	3.65	$	1.97	$	7.90	$	3.61
Diluted earnings per share
Diluted earnings per share

The computation of diluted earnings per share excludes stock options, warrants and stock units that are anti-dilutive. For the three months ended ~~June 30,~~March 31, 2024 and 2023, ~~and 2022,~~ stock options, warrants and stock units representing common share equivalents of ~~208,654~~162,078 shares and 142 shares, respectively, were anti-dilutive. For the six months ended June 30, 2023 and 2022, stock options, warrants and stock units representing common share equivalents of 107,544 shares and 2,00175,416 shares, respectively, were anti-dilutive.

NOTE 14 - NET CAPITAL AND REGULATORY REQUIREMENTS

The Company’s broker-dealer subsidiaries are subject to the SEC’s Uniform Net Capital Rule (Rule 15c3-1 under the Exchange Act of 1934, as amended), which requires the maintenance of minimum net capital. The net capital rules also provide that a broker-dealer’s capital may not be withdrawn if the resulting net capital would be less than minimum requirements. Additionally, certain withdrawals require the approval of the SEC and the Financial Industry Regulatory Authority (“FINRA”) to the extent they exceed defined levels, even though such withdrawals would not cause net capital to be less than minimum requirements. Net capital and the related net capital requirement may fluctuate on a daily basis.


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LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents the net capital position of the Company’s primary broker-dealer subsidiary (in thousands):


	~~June 30, 2023~~March 31, 2024
LPL Financial LLC
Net capital	$	~~279,982~~328,479
Less: required net capital	~~16,154~~18,070
Excess net capital	$	~~263,828~~310,409

The Company’s subsidiary, PTC, also operates in a highly regulated industry and is subject to various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have substantial monetary and non-monetary impacts on PTC’s operations.

As of ~~June 30, 2023,~~March 31, 2024, LPL Financial and PTC met all capital adequacy requirements to which they were subject.


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~~LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES~~ ~~Notes to Condensed Consolidated Financial Statements (Unaudited)~~

NOTE 15 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET CREDIT RISK

AND CONCENTRATIONS OF CREDIT RISK

LPL Financial may offer loans to new and existing advisors and ~~enterprises~~institutions to facilitate their relationship with LPL Financial, transition to LPL Financial’s platform or fund business development activities. LPL Financial may incur losses if advisors or ~~enterprises~~institutions do not fulfill their obligations with respect to these loans. To mitigate this risk, LPL Financial evaluates the performance and creditworthiness of the advisor or ~~enterprise~~institution prior to offering repayable loans.

LPL Financial’s client securities activities are transacted on either a cash or margin basis. In margin transactions, LPL Financial extends credit to the advisor’s client, subject to various regulatory and internal margin requirements, which is collateralized by cash and securities in the client’s account. As clients write options contracts or sell securities short, LPL Financial may incur losses if the clients do not fulfill their obligations and the collateral in the clients’ accounts is not sufficient to fully cover losses that clients may incur from these strategies. To control this risk, LPL Financial monitors margin levels daily and clients are required to deposit additional collateral, or reduce positions, when necessary.

LPL Financial is obligated to settle transactions with brokers and other financial institutions even if its advisors’ clients fail to meet their obligation to LPL Financial. Clients are required to complete their transactions on the settlement date, generally two business days after the trade date. If clients do not fulfill their contractual obligations, LPL Financial may incur losses. In addition, the Company occasionally enters into certain types of contracts to fulfill its sale of when-issued securities. When-issued securities have been authorized but are contingent upon the actual issuance of the security. LPL Financial has established procedures to reduce this risk by generally requiring that clients deposit cash or securities into their account prior to placing an order.

LPL Financial may at times hold equity securities on both a long and short basis that are recorded on the condensed consolidated statements of financial condition at market value. While long inventory positions represent LPL Financial’s ownership of securities, short inventory positions represent obligations of LPL Financial to deliver specified securities at a contracted price, which may differ from market prices prevailing at the time of completion of the transaction. Accordingly, both long and short inventory positions may result in losses or gains to LPL Financial as market values of securities fluctuate. To mitigate the risk of losses, long and short positions are marked-to-market daily and are continuously monitored by LPL Financial.

NOTE 16 - SUBSEQUENT EVENTS

The Board declared a cash dividend of $0.30 per share on LPLFH’s outstanding common stock to be paid on ~~August 25, 2023~~ June 4, 2024 to all stockholders of record on ~~August 11, 2023~~.

May 21, 2024.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Risk

We maintain trading securities and securities sold, but not yet purchased in order to facilitate client transactions, to meet a portion of our clearing deposit requirements at various clearing organizations, to track the performance of our research models and in connection with our dividend reinvestment program. Trading securities are included in investment securities while securities sold, but not yet purchased are included in other liabilities on the condensed consolidated statements of financial condition and can include mutual funds, money market funds, debt securities and equity securities. We enter into market risk sensitive instruments for purposes other than trading, which are included in other assets on the condensed consolidated statements of financial condition and can include deferred compensation plan assets invested in life insurance, money market and other mutual funds, investments in fractional shares held by customers, and other non-traded real estate investment ~~trusts and auction rate notes.~~trusts. Changes in the value of our market risk sensitive instruments may result from fluctuations in interest rates, credit ratings of the issuer, equity prices or a combination of these factors.

In facilitating client transactions, our trading securities and securities sold, but not yet purchased generally involve mutual funds, including dividend reinvestments. Our positions held are based upon the settlement of client transactions, which are monitored by our Trading and Operations ~~departments.~~department.

Positions held to meet clearing deposit requirements consist of U.S. government securities and equity securities. The amount of securities deposited depends upon the requirements of the clearing organization. The level of securities deposited is monitored by the settlements group within our Trading and Operations ~~departments.~~department.

Our Research department develops model portfolios that are used by advisors in developing client portfolios. We maintain ~~trading~~ securities owned in internal accounts based on these model portfolios to track the performance of our Research department. At the time a portfolio is developed, we purchase the securities in that model portfolio in an amount equal to the account minimum, which varies by product.

In addition, we are subject to market risk resulting from operational risk events, which can require customer trade corrections. We also bear market risk on the fees we earn that are based on the market value of advisory and brokerage assets, as well as assets on which trailing commissions are paid and assets eligible for sponsor payments.

As of ~~June 30, 2023,~~March 31, 2024, the fair value of our trading securities was ~~$34.7~~$43.4 million and securities sold, but not yet purchased were not material. The fair value of market risk sensitive instruments entered into for other than trading purposes included within other assets was ~~$740.9~~$941.9 million as of ~~June 30, 2023.~~March 31, 2024. See Note 5 - Fair Value Measurements, within the notes to the condensed consolidated financial statements for information regarding the fair value of trading securities; securities sold, but not yet purchased; and other assets associated with our client facilitation activities.

Interest Rate Risk

We are exposed to risk associated with changes in interest rates. As of ~~June 30, 2023,~~ ~~$1.3~~March 31, 2024, $1.4 billion of our outstanding debt was subject to floating interest rate risk. While our senior secured term loan is subject to increases in interest rates, we do not believe that a short-term change in interest rates would have a material impact on our net income given revenue generated by our client cash balances, which is generally subject to the same, but off-setting, interest rate risk.

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The following table summarizes the impact of increasing interest rates on our interest expense from the variable portion of our debt outstanding, calculated using the projected average outstanding balance over the subsequent twelve-month period (in thousands):


		Outstanding Balance at June 30, 2023		Annual Impact of an Interest Rate(†) Increase of									Outstanding Balance at March 31, 2024	Annual Impact of an Interest Rate(†) Increase of
				10 Basis		25 Basis		50 Basis		100 Basis				10 Basis	25 Basis	50 Basis	100 Basis
Corporate Debt and Other Borrowings	Corporate Debt and Other Borrowings			Points								Corporate Debt and Other Borrowings		Points
Term Loan B	Term Loan B	$	1,032,550	$	1,026	$	2,565	$	5,129	$	10,259
Revolving Credit Facility	Revolving Credit Facility	287,000		287		718		1,435		2,870
Variable Rate Debt Outstanding	Variable Rate Debt Outstanding	$	1,319,550	$	1,313	$	3,283	$	6,564	$	13,129

____________________

(†) Our interest rate for our Term Loan B is locked in for one, two, three, six or twelve months as allowed under the Credit Agreement. At the end of the selected periods, the rates will be locked in at the then current rate. The effect of these interest rate locks are not included in the table above.

See Note 9 - Corporate Debt and Other Borrowings, Net, within the notes to the condensed consolidated financial statements for additional information.

We offer our advisors and their clients two FDIC insured bank sweep vehicles and a client cash account (“CCA”) that are interest rate sensitive. Our FDIC insured sweep vehicles include an (1) insured cash account (“ICA”) for individuals, trusts, sole proprietorships and entities organized or operated to make a profit, such as corporations, partnerships, associations, business trusts and other organizations and (2) an insured deposit cash account (“DCA”) for advisory individual retirement accounts. Clients earn interest on deposits in the ICA and the DCA while we earn a fee. The fees we earn from cash held in the ICA are based primarily on prevailing interest rates in the current interest rate ~~environment.~~environment, and are therefore subject to interest rate risk. The fees we earn from the DCA are calculated as a per account fee, and such fees increase as the federal funds target rate increases, subject to a cap.

The Company places ICA sweep overflow into the CCA. These deposits are either used to fund client margin lending or placed in third-party bank or investment accounts, both of which are segregated under federal or other regulations, where they are held as cash or invested in short-term U.S. treasury bills. We earn interest income on these bank deposits and investments in short-term U.S. treasury bills and pay interest to clients on these CCA balances, which are sensitive to prevailing interest rates. This interest income and expense is included in interest income, net in the condensed consolidated statements of income. Changes in interest rates and fees for the deposit sweep vehicles are monitored by our Rate Setting Committee (the “RSC”), which governs and approves any changes to our fees. By meeting promptly around the time of Federal Open Market Committee meetings, or for other market or non-market reasons, the RSC considers financial risk of the deposit sweep vehicles relative to other products into which clients may move cash balances.

Credit Risk

Credit risk is the risk of loss due to adverse changes in a borrower’s, issuer’s or counterparty’s ability to meet its financial obligations under contractual or agreed upon terms. We are subject to credit risk from certain loans extended to advisors and ~~enterprises~~institutions when we extend loans with repayment terms to facilitate advisors’ and ~~enterprises’~~institutions’ transition to our platform or to fund business development activities. We are also subject to credit risk when a forgivable loan to an advisor or ~~enterprise~~institution converts to repayable upon advisor or institution termination or change in agreed upon terms.

Credit risk also arises when collateral posted with LPL Financial by clients to support margin lending or derivative trading is insufficient to meet clients’ contractual obligations to LPL Financial. Our credit exposure in these transactions consists primarily of margin accounts, through which we extend credit to advisors’ clients collateralized by securities in the clients’ accounts. Under many of these agreements, we are permitted to sell, repledge or loan these securities held as collateral and use these securities to enter into securities lending arrangements or to deliver to counterparties to cover short positions.

As our advisors execute margin transactions on behalf of their clients, we may incur losses if clients do not fulfill their obligations, the collateral in the clients’ accounts is insufficient to fully cover losses from such investments and our advisors fail to reimburse us for such losses. Our losses on margin accounts were ~~immaterial~~not material during the three ~~and six~~ months ended ~~June 30, 2023~~March 31, 2024 and ~~2022.~~2023. We monitor exposure to industry sectors and individual securities and perform analyses on a regular basis in connection with our margin lending activities. We adjust our margin requirements if we believe our risk exposure is not appropriate based on market conditions.

We are subject to concentration risk if we extend large loans to or have large commitments with a single counterparty, borrower or group of similar counterparties or borrowers, or if we accept a concentrated position as

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collateral for a margin loan. Receivables from and payables to clients and stock borrowing and lending activities are conducted with a large number of clients and counterparties and potential concentration is monitored. We seek to limit this risk through review of the underlying business and the use of limits established by senior management taking into consideration factors including current market conditions, the financial strength of the counterparty, the size of the position or commitment, the expected duration of the position or commitment and other positions or commitments outstanding.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective.

Change in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the ~~second~~first quarter ended ~~June 30, 2023~~March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we have been subjected to and are currently subject to legal and regulatory proceedings arising out of our business operations, including lawsuits, arbitration claims, and inquiries, investigations and enforcement proceedings initiated by the SEC, FINRA and state securities regulators, as well as other actions and claims. See Note 10 - Commitments and Contingencies, within the notes to the condensed consolidated financial statements for additional information.

Item 1A. Risk Factors

There have been no material changes in the information regarding the Company’s risks, as set forth under Part I, “Item 1A. Risk Factors” in the Company’s ~~2022~~2023 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The table below sets forth information regarding repurchases, reported on a trade date basis, during the three months ended ~~June 30, 2023:~~

Period Total Number of Shares Purchased Weighted-Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Programs
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (millions)(1)
April 1, 2023 through April 30, 2023 745,002 $ 199.66 745,002 $ 1,576.3
May 1, 2023 through May 31, 2023 900,213 $ 194.36 900,213 $ 1,401.3
June 1, 2023 through June 30, 2023 131,908 $ 199.52 131,908 $ 1,375.0
Total 1,777,123 1,777,123
March 31, 2024:


Period	Total Number of Shares Purchased	Weighted-Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (millions)(1)
January 1, 2024 through January 31, 2024	296,145	$	236.39	296,145	$	830.0
February 1, 2024 through February 29, 2024	—	$	—	—	$	830.0
March 1, 2024 through March 31, 2024	—	$	—	—	$	830.0
Total	296,145			296,145

(1) On September 21, 2022, the Board authorized a $2.1 billion increase to the amount available for repurchases of LPLFH’s issued and outstanding common ~~shares~~shares. See . ~~See~~ Note 11 - Stockholders’ Equity, within the notes to the condensed consolidated financial statements for additional information.

The repurchases may be executed from time to time, subject to general business and market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including transactions with affiliates, with the timing of purchases and the amount of shares purchased generally determined at the discretion of the Company within the constraints of the Credit Agreement, ~~the Indentures,~~ applicable laws and consideration of the Company’s general liquidity needs.

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Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the three months ended ~~June 30, 2023,~~March 31, 2024, certain of our officers (as defined in Rule 16a-1(f) under the Exchange Act) entered into contracts, instructions or written plans for the purchase or sale of our common stock that are intended to satisfy the affirmative defense conditions specified in Rule 10b5-1(c) under the Exchange Act (“Rule 10b5-1 trading arrangements”). The table below sets forth certain information regarding such Rule 10b5-1 trading arrangements:

Officer

Date of Plan Adoption

Commencement of Trading Period

Termination of Trading Period(1)

Maximum Number of Securities to be Purchased or Sold Pursuant to the Rule 10b5-1 Trading Arrangements

Purchase or Sale

Dan Arnold, President and Chief Executive Officer

March 13, 2024

June ~~9, 2023~~14, 2024

September ~~13, 2023~~

~~December 13, 2023~~12, 2024

20,000

Sale

~~Matthew Enyedi, Managing Director, Client Success~~

~~May 24, 2023~~

~~August 22, 2023~~

~~December 1, 2023~~

~~4,646~~

~~Sale~~

~~Richard Steinmeier, Managing Director, Divisional President, Business Development~~

~~June 14, 2023~~

~~September 13, 2023~~

~~September 20, 2023~~

~~13,511~~

~~Sale~~

(1) Represents the outside termination date pursuant to terms of each applicable plan. The agreement governing the applicable plan may terminate earlier pursuant to its terms in certain circumstances outside of the control of the applicable officer, including if all trades under the plan are completed prior to the termination of the trading period.

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Item 6. Exhibits


3.1						Amended and Restated Certificate of Incorporation of LPL Investment Holdings Inc., dated November 23, 2010 (incorporated by reference to Amendment No. 2 to the Registration Statement on Form S-1 filed on July 9, 2010, File No. 333-167325).
3.2						Certificate of Ownership and Merger Merging LPL Financial Holdings Inc. with and into LPL Investment Holdings Inc., dated June 14, 2012 (incorporated by reference to the Form 8-K filed on June 19, 2012, File No. 001-34963).
3.3						Certificate of Amendment to the Amended and Restated Certificate of Incorporation of LPL Financial Holdings Inc., dated May 8, 2014 (incorporated by reference to the Form 8-K filed on May 9, 2014, File No. 001-34963).
3.4						~~Sixth~~S e venth Amended and Restated Bylaws of LPL Financial Holdings Inc. (incorporated by reference to the Form 8-K filed on February ~~23, 2022,~~2 0 , 202 4 , File No. 001-34963).
22.1						List of Subsidiary Guarantors and Issuers of Guaranteed Securities.*
31.1						Certification of the Chief Executive Officer pursuant to Rule 13a-14(a).*
31.2						Certification of the Chief Financial Officer pursuant to Rule 13a-14(a).*
32.1						Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.SCH						Inline XBRL Taxonomy Extension Schema*
101.CAL						Inline XBRL Taxonomy Extension Calculation*
101.LAB						Inline XBRL Taxonomy Extension Label*
101.PRE						Inline XBRL Taxonomy Extension Presentation*
101.DEF						Inline XBRL Taxonomy Extension Definition*
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

____________________


*						Filed herewith.
**						Furnished herewith.

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SIGNATURES

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 thereunto duly authorized.


		LPL Financial Holdings Inc.
Date:	~~August 1, 2023~~May 2, 2024	By:	/s/ DAN H. ARNOLD
			Dan H. Arnold
			President and Chief Executive Officer

Date:	~~August 1, 2023~~May 2, 2024	By:	/s/ MATTHEW J. AUDETTE
			Matthew J. Audette
			Chief Financial Officer and Head of Business Operations