LPL Financial Holdings Inc. 10-K

Item 8. Financial Statements and Supplementary Data Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 34 ) 64 Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023 67 Consolidated Statements of Financial Condition as of December 31, 2025 and 2024 68 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 202 5 , 202 4 and 2023 69 Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 2023 70 Notes to Consolidated Financial Statements 72 Note 1 - Organization and Description of the Company 72 Note 2 - Summary of Significant Accounting Policies 72 Note 3 - Revenue 79 Note 4 - Acquisitions 84 Note 5 - Fair Value Measurements 89 Note 6 - Investment Securities 95 Note 7 - Receivables from and Payables to Brokers, Dealers and Clearing Organizations 95 Note 8 - Property and Equipment, Net 96 Note 9 - Goodwill and Other Intangibles, Net 96 Note 10 - Other Assets and Other Liabilities 98 Note 11 - Corporate Debt and Other Borrowings, Net 99 Note 12 - Leases 102 Note 13 - Income Taxes 103 Note 14 - Commitments and Contingencies 106 Note 15 - Stockholders’ Equity 108 Note 16 - Share-based Compensation, Employee Incentives and Benefit Plans 109 Note 17 - Earnings per Share 112 Note 18 - Net Capital and Regulatory Requirements 112 Note 19 - Financial Instruments with Off-Balance Sheet Credit Risk and Concentrations of Credit Risk 113 Note 20 - Segment Information 113 Note 21 - Subsequent Events 113 63 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholders and the Board of Directors of LPL Financial Holdings Inc. Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial condition of LPL Financial Holdings Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Acquisition of Commonwealth Financial Network – Accounting for the provisional valuation of the acquired definite-lived advisor relationships intangible asset — Refer to Note 4 to the financial statements Critical Audit Matter Description On August 1, 2025, the Company acquired 100% of the outstanding equity interests of Commonwealth Financial Network, a privately-held independent wealth management firm. Total consideration for the transaction was $2,017.8 million, which included a cash payment of $1,927.4 million and other liabilities incurred to the seller of $90.4 million at closing. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. The purchase price is provisionally allocated across the estimated fair value of the definite-lived intangible and tangible assets acquired and liabilities assumed, with the excess purchase price allocated to goodwill. 64 Table of Contents The Company used the income approach to estimate the $1,690.0 million provisional fair value of the advisor relationships intangible asset. The fair value determination of the advisor relationships intangible asset required management to make significant estimates and assumptions related to future net cash flows and the discount rate. Given the fair value determination of the advisor relationships intangible asset requires management to make significant estimates and assumptions related to forecasted net cash flows, as well as the selection of the discount rate, performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the valuation of the advisor relationships intangible asset included the following, among others: • We obtained an understanding, evaluated the design, and tested operating effectiveness of internal controls. For example, we tested controls over management’s valuation of the advisor relationships intangible asset, including the review of forecasts of future net cash flows and the selection of the discount rate. • We evaluated management’s policies and methodology for establishing the fair value of the advisor relationships intangible asset used in the purchase price allocation, which was provisionally allocated as of December 31, 2025. • We assessed the knowledge, skill, ability, and objectivity of management’s valuation specialist and evaluated the work performed. • We evaluated the reasonableness of business assumptions related to future net cash flows for the advisor relationships intangible asset, considering the past performance of the acquired company, the Company’s strategic plan going forward, previous acquisitions by the Company, and evidence obtained in other areas of the audit, and obtained audit support to substantiate the material assumptions therein. • We tested the completeness and accuracy of the underlying data supporting the forecasts of future net cash flows. • With the assistance of our fair value specialists, we tested: – the reasonableness of the income approach valuation methodology by challenging key valuation assumptions related to future net cash flows and the discount rate and comparing them to industry benchmarks and data and testing the mathematical accuracy of the valuation of the advisor relationships intangible asset by performing a recalculation. – the reasonableness of the discount rate by developing a range of independent estimates and comparing those to the discount rate selected by management. • We performed sensitivity analyses of business assumptions related to future net cash flows to evaluate resulting changes in the fair value of the advisor relationships intangible asset. Valuation of contingent consideration as of December 31, 2025 — Refer to Notes 2 and 5 to the financial statements Critical Audit Matter Description Certain of the Company’s acquisitions include contingent consideration, which may result in the transfer of additional cash consideration to the sellers if certain milestones are achieved in the years following an acquisition. For acquisitions accounted for under the acquisition method of accounting for business combinations, any such contingent consideration is recognized at its estimated fair value on the date of acquisition within other liabilities in the consolidated statements of financial condition. This contingent consideration is remeasured at its fair value at each subsequent reporting date until the contingency is resolved. Any changes in fair value are recognized in other expense in the consolidated statements of income. The Company determines the fair value for its contingent consideration obligations using probability-weighted expected return and Monte-Carlo simulation models. Contingent payments are estimated by applying significant unobservable inputs, including forecasted growth rates applied to projected future revenue or asset growth, 65 conversion or retention rates, and discount rates which 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 growth rates over the measurement period or discount rates would result in a higher or lower fair value measurement. The balance of contingent consideration recorded in other liabilities as of December 31, 2025 and December 31, 2024 was $124.0 million and $196.9 million, respectively. Given the fair value determination of contingent consideration requires management to make significant estimates and assumptions related to asset growth, conversion or retention rates and the selection of the discount rates, performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the valuation of contingent consideration included the following, among others: • We obtained an understanding, evaluated the design, and tested operating effectiveness of internal controls over the valuation of contingent consideration. For example, we tested controls over management’s valuation processes, including the review of asset growth, conversion or retention rate, and the selection of the discount rate. • We evaluated management’s policies and methodology for establishing the fair value of contingent consideration used in the purchase price allocation and remeasurement at December 31, 2025. • We assessed the knowledge, skill, ability, and objectivity of management’s valuation specialist and evaluated the work performed. • We evaluated the reasonableness of business assumptions related to projected future revenue, asset growth or conversion or retention rates over the earnout periods for the contingent consideration, considering the past performance of the acquired company, the Company’s strategic plan going forward, previous acquisitions by the Company, and evidence obtained in other areas of the audit, and obtained audit support to substantiate the material assumptions therein. • We tested the completeness and accuracy of the underlying data supporting the significant assumptions and fair value estimates. • With the assistance of our fair value specialists, we tested: – the reasonableness of the Monte-Carlo simulation and probability-weighted expected return models by independently running comparable models to calculate independent estimates of the fair value of contingent consideration. We compared the results of our estimates of fair value of the contingent consideration to the Company’s fair value estimates. – the reasonableness of the discount rates by developing a range of independent estimates and comparing those to the discount rates selected by management. • We performed sensitivity analyses of the key inputs to evaluate the changes in the fair value estimates of the contingent consideration that would result from changes in the key inputs. /s/ Deloitte & Touche LLP San Diego, California February 23, 2026 We have served as the Company's auditor since 2001. 66 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Consolidated Statements of Income (In thousands, except per share data) Years Ended December 31, 2025 2024 2023 REVENUE Advisory $ 8,161,238 $ 5,461,858 $ 4,135,681 Commission: Sales-based 2,645,913 1,763,232 1,252,783 Trailing 1,859,159 1,542,255 1,299,840 Total commission 4,505,072 3,305,487 2,552,623 Asset-based: Client cash 1,657,807 1,426,528 1,509,869 Other asset-based 1,338,126 1,071,170 867,860 Total asset-based 2,995,933 2,497,698 2,377,729 Service and fee 652,395 552,020 508,437 Transaction 270,813 236,274 199,939 Interest income, net 231,616 187,606 159,415 Other 172,412 144,164 119,024 Total revenue 16,989,479 12,385,107 10,052,848 EXPENSE Advisory and commission 11,204,046 7,751,006 5,915,807 Compensation and benefits 1,586,043 1,136,717 979,681 Promotional 737,197 589,339 459,233 Occupancy and equipment 577,224 281,210 248,620 Interest expense on borrowings 403,406 274,181 186,804 Depreciation and amortization 393,434 308,527 246,994 Amortization of other intangibles 236,578 135,234 107,211 Professional services 218,738 93,729 72,583 Brokerage, clearing and exchange 178,133 127,941 105,984 Communications and data processing 85,846 75,838 75,717 Other 219,327 218,493 209,439 Total expense 15,839,972 10,992,215 8,608,073 INCOME BEFORE PROVISION FOR INCOME TAXES 1,149,507 1,392,892 1,444,775 PROVISION FOR INCOME TAXES 286,483 334,276 378,525 NET INCOME $ 863,024 $ 1,058,616 $ 1,066,250 EARNINGS PER SHARE Earnings per share, basic $ 10.97 $ 14.17 $ 13.88 Earnings per share, diluted $ 10.92 $ 14.03 $ 13.69 Weighted-average shares outstanding, basic 78,681 74,713 76,807 Weighted-average shares outstanding, diluted 79,061 75,427 77,861 See notes to consolidated financial statements. 67 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Consolidated Statements of Financial Condition (In thousands, except share data) December 31, 2025 2024 ASSETS Cash and equivalents $ 1,037,378 $ 967,079 Cash and equivalents segregated under federal or other regulations 1,792,064 1,597,249 Restricted cash 225,298 119,724 Receivables from clients, net 803,206 633,834 Receivables from brokers, dealers and clearing organizations 70,897 76,545 Advisor loans, net 3,681,512 2,281,088 Other receivables, net 1,203,539 902,777 Investment securities 91,528 57,481 Property and equipment, net 1,409,376 1,210,027 Goodwill 2,644,723 2,172,873 Other intangibles, net 3,330,788 1,482,988 Other assets 2,202,444 1,815,739 Total assets $ 18,492,753 $ 13,317,404 LIABILITIES AND STOCKHOLDERS’ EQUITY LIABILITIES: Client payables $ 2,308,275 $ 1,898,665 Payables to brokers, dealers and clearing organizations 150,520 129,228 Accrued advisory and commission expenses payable 361,623 323,996 Corporate debt and other borrowings, net 7,258,694 5,494,724 Accounts payable and accrued liabilities 821,641 588,450 Other liabilities 2,247,515 1,951,739 Total liabilities 13,148,268 10,386,802 Commitments and contingencies (Note 14) STOCKHOLDERS’ EQUITY: Common stock, $ 0.001 par value; 600,000,000 shares authorized; 136,637,544 shares and 130,914,541 shares issued at December 31, 2025 and 2024, respectively 136 131 Additional paid-in capital 3,843,017 2,066,268 Treasury stock, at cost — 56,576,672 shares and 56,253,909 shares at December 31, 2025 and 2024, respectively ( 4,333,725 ) ( 4,202,322 ) Retained earnings 5,835,057 5,066,525 Total stockholders’ equity 5,344,485 2,930,602 Total liabilities and stockholders’ equity $ 18,492,753 $ 13,317,404 See notes to consolidated financial statements. 68 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Consolidated Statements of Stockholders’ Equity (In thousands) 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 — — — — — 1,066,250 1,066,250 Issuance of common stock to settle restricted stock units 448 — — 165 ( 40,005 ) — ( 40,005 ) Treasury stock purchases — — — 5,076 ( 1,109,962 ) — ( 1,109,962 ) Cash dividends on common stock - $ 1.20 per share — — — — — ( 92,190 ) ( 92,190 ) Stock option exercises and other 129 — 6,129 ( 72 ) 2,554 9,982 18,665 Share-based compensation — — 68,669 — — — 68,669 BALANCE — December 31, 2023 130,233 $ 130 $ 1,987,684 55,577 $ ( 3,993,949 ) $ 4,085,114 $ 2,078,979 Net income — — — — — 1,058,616 1,058,616 Issuance of common stock to settle restricted stock units 408 — — 158 ( 41,288 ) — ( 41,288 ) Treasury stock purchases — — — 605 ( 170,096 ) — ( 170,096 ) Cash dividends on common stock - $ 1.20 per share — — — — — ( 89,727 ) ( 89,727 ) Stock option exercises and other 274 1 ( 13,177 ) ( 86 ) 3,011 12,522 2,357 Share-based compensation — — 91,761 — — — 91,761 BALANCE — December 31, 2024 130,915 $ 131 $ 2,066,268 56,254 $ ( 4,202,322 ) $ 5,066,525 $ 2,930,602 Net income — — — — — 863,024 863,024 Issuance of common stock to settle restricted stock units 267 — — 93 ( 33,484 ) — ( 33,484 ) Treasury stock purchases — — — 289 ( 100,004 ) — ( 100,004 ) Cash dividends on common stock - $ 1.20 per share — — — — — ( 94,411 ) ( 94,411 ) Stock option exercises and other 65 — 20,171 ( 59 ) 2,085 ( 81 ) 22,175 Share-based compensation — — 79,362 — — — 79,362 Equity Issuance 5,391 5 1,677,216 — — — 1,677,221 BALANCE — December 31, 2025 136,638 $ 136 $ 3,843,017 56,577 $ ( 4,333,725 ) $ 5,835,057 $ 5,344,485 See notes to consolidated financial statements. 69 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) Years Ended December 31, 2025 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 863,024 $ 1,058,616 $ 1,066,250 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 393,434 308,527 246,994 Amortization of other intangibles 236,578 135,234 107,211 Amortization of debt issuance costs 21,601 11,319 8,731 Share-based compensation 79,362 91,761 68,669 Provision for credit losses 16,977 18,970 15,947 Deferred provision (benefit) for income taxes 52,935 ( 76,244 ) ( 68,454 ) Loan forgiveness 430,787 292,446 223,517 Unrealized loss on deferred compensation plans 72,761 66,456 1,164 Change in estimated fair value of contingent consideration 24,163 41,721 26,852 Other ( 4,938 ) ( 25,319 ) 11,156 Changes in operating assets and liabilities: Receivables from clients, net ( 175,845 ) ( 45,808 ) ( 28,070 ) Receivables from brokers, dealers and clearing organizations 7,487 ( 12,742 ) 6,207 Advisor loans, net ( 1,751,748 ) ( 1,103,933 ) ( 594,438 ) Other receivables, net ( 270,373 ) ( 126,829 ) ( 71,328 ) Investment securities - trading 11,640 34,183 ( 38,956 ) Other assets ( 413,296 ) ( 435,255 ) ( 213,043 ) Client payables 409,085 ( 367,511 ) ( 428,753 ) Payables to brokers, dealers and clearing organizations 21,292 ( 34,149 ) 15,585 Accrued advisory and commission expenses payable 23,187 74,699 11,421 Accounts payable and accrued liabilities 161,291 36,977 31,256 Other liabilities ( 617,789 ) 336,412 117,805 Operating lease assets ( 3,019 ) ( 1,942 ) ( 3,112 ) Net cash (used in) provided by operating activities ( 411,404 ) 277,589 512,611 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures ( 570,376 ) ( 562,531 ) ( 403,286 ) Acquisitions, net of cash acquired ( 1,787,592 ) ( 1,020,221 ) ( 453,475 ) Purchases of securities classified as held-to-maturity ( 5,100 ) ( 4,769 ) ( 4,725 ) Proceeds from maturities of securities classified as held-to-maturity 5,100 5,000 5,500 Purchases of other investments ( 29,070 ) — ( 4,200 ) Proceeds from sale of other investments 7,271 — — Capitalized interest ( 6,826 ) ( 9,611 ) — Net cash used in investing activities ( 2,386,593 ) ( 1,592,132 ) ( 860,186 ) Continued on following page 70 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (In thousands) Years Ended December 31, 2025 2024 2023 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit facilities 876,000 1,430,000 1,718,000 Repayments of revolving credit facilities ( 1,844,000 ) ( 663,000 ) ( 1,438,000 ) Proceeds from senior unsecured term loans — 1,020,000 — Repayment of senior secured term loans — ( 1,027,200 ) ( 10,700 ) Proceeds from senior unsecured notes 2,744,930 998,325 749,468 Payment of debt issuance costs ( 31,236 ) ( 17,905 ) ( 13,474 ) Payment of equity issuance costs ( 47,779 ) — — Payment of contingent consideration ( 47,395 ) ( 50,063 ) — Tax payments related to settlement of restricted stock units ( 33,484 ) ( 41,288 ) ( 40,005 ) Proceeds from issuance of common stock 1,725,000 — — Repurchase of common stock ( 100,004 ) ( 170,096 ) ( 1,100,101 ) Dividends on common stock ( 94,411 ) ( 89,727 ) ( 92,190 ) Proceeds from stock option exercises and other 22,175 28,728 18,665 Principal payment of financing obligation ( 902 ) — — Principal payment of finance leases and obligations ( 209 ) ( 342 ) ( 195 ) Net cash provided by (used in) financing activities 3,168,685 1,417,432 ( 208,532 ) NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH 370,688 102,889 ( 556,107 ) CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH — Beginning of year 2,684,052 2,581,163 3,137,270 CASH AND EQUIVALENTS, CASH AND EQUIVALENTS SEGREGATED UNDER FEDERAL OR OTHER REGULATIONS AND RESTRICTED CASH — End of year $ 3,054,740 $ 2,684,052 $ 2,581,163 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Interest paid $ 379,919 $ 268,351 $ 191,350 Income taxes paid $ 328,560 $ 320,259 $ 535,959 Cash paid for amounts included in the measurement of operating lease liabilities $ 39,452 $ 31,737 $ 27,714 Cash paid for amounts included in the measurement of finance lease liabilities $ 209 $ 8,727 $ 8,577 NONCASH DISCLOSURES: Capital expenditures included in accounts payable and accrued liabilities $ 45,544 $ 36,260 $ 26,021 Lease assets obtained in exchange for operating lease liabilities $ 57,734 $ 37,115 $ 17,517 Prefunded acquisition $ 70,202 $ — $ — Contingent consideration and other liabilities recognized at acquisition date $ 86,821 $ 87,883 $ 88,132 December 31, 2025 2024 2023 Cash and equivalents $ 1,037,378 $ 967,079 $ 465,671 Cash and equivalents segregated under federal or other regulations 1,792,064 1,597,249 2,007,312 Restricted cash 225,298 119,724 108,180 Total cash and equivalents, cash and equivalents segregated under federal or other regulations and restricted cash shown in the statements of cash flows $ 3,054,740 $ 2,684,052 $ 2,581,163 See notes to consolidated financial statements. 71 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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 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 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; Tempe, Arizona; Boston, Massachusetts; Austin, Texas; and New York, New York, is a clearing broker-dealer and an investment adviser that principally transacts business for its advisors and 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. • LPL Enterprise, LLC (“LPL Enterprise”) is a limited product shelf introducing broker-dealer and registered investment adviser that supports a portion of the Company’s institutional services’ clients, providing brokerage and investment advisory services to the clients of those institutional businesses. • LPL Insurance Associates, Inc. operates as an insurance brokerage general agency that offers life and disability insurance products and services for LPL Financial advisors. • Atria Wealth Solutions, Inc. (“Atria”) is a holding company for the previously registered broker-dealers and investment advisers that the Company acquired in connection with the acquisition of Atria. Atria had seven introducing broker-dealer subsidiaries, which cleared transactions through third-party clearing and carrying firms. The Company completed the conversion of assets from these acquired broker-dealers and investment advisers to the Company’s platform and completed the withdrawal of the related registrations of these entities during the fourth quarter of 2025. • AW Subsidiary, Inc. is a holding company for Blaze Portfolio Systems LLC (“Blaze”), which 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 also provides Individual Retirement Account (“IRA”) custodial services for LPL Financial. • LPL Employee Services, LLC and its subsidiary, Allen & Company of Florida, LLC, provide primary support for the Company’s employee advisor affiliation model. • CFN Holding Company, LLC (“CFN”) is a holding company for Commonwealth Equity Services, LLC (“CES”), which is a registered broker-dealer and investment adviser that does business as Commonwealth Financial Network (“Commonwealth”). CES is an introducing broker-dealer that clears transactions through a third-party clearing and carrying firm. The Company expects to complete the conversion of assets from CES in the fourth quarter of 2026 and withdraw the related registrations of that entity thereafter. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation These 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, contingent consideration, goodwill and other intangibles, 72 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements allowance for credit losses on receivables, share-based compensation, accruals for liabilities, income taxes, revenue and expense accruals and other matters that affect the consolidated financial statements and related disclosures. Actual results could differ from those estimates under different assumptions or conditions and the differences may be material to the consolidated financial statements. Consolidation These consolidated financial statements include the accounts of LPLFH and its subsidiaries. Intercompany transactions and balances have been eliminated. Related Party Transactions In the ordinary course of business, the Company enters into related party transactions with beneficial owners of more than five percent of the Company’s outstanding common stock. Additionally, through its subsidiary LPL Financial, the Company provides services and charitable contributions to the LPL Financial Charitable Foundation Inc., a charitable organization that provides volunteer and financial support within the Company’s local communities. The Company recognized revenue for services provided to these related parties of $ 31.4 million, $ 25.5 million and $ 19.7 million during the years ended December 31, 2025, 2024 and 2023, respectively. The Company incurred expense for services provided by these related parties of $ 4.2 million, $ 3.6 million and $ 3.6 million during the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, receivables from and payables to related parties were $ 13.6 million and $ 0.6 million, respectively. As of December 31, 2024, receivables from and payables to related parties were $ 6.3 million and $ 0.5 million, respectively. Reportable Segment Management has determined that the Company operates in one segment, given the common nature of its operations, products and services, production and distribution process and regulatory environment. For additional information, see Note 20 - Segment Information . Revenue Recognition Revenue is recognized when control of the promised service is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. For additional information, see Note 3 - Revenue . Compensation and Benefits The Company records compensation and benefits expense for all cash and deferred compensation, benefits and related taxes as earned by its employees. Compensation and benefits expense also includes fees earned by temporary employees and contractors who perform similar services to those performed by the Company’s employees. Share-Based Compensation Certain employees, officers, directors, advisors and institutions participate in the Company’s various long-term incentive plans that provide for granting stock options, warrants, restricted stock awards, restricted stock units, deferred stock units and performance stock units. Stock options, warrants and restricted stock units generally vest in equal increments over a three-year period and expire on the tenth anniversary following the date of grant. Restricted stock awards and deferred stock units generally vest over a one-year period, and performance stock units generally vest in full at the end of a three-year performance period. The Company recognizes share-based compensation for equity awards granted to employees, officers and directors as compensation and benefits expense on the consolidated statements of income. See Note 16 - Share-Based Compensation, Employee Incentives and Benefit Plans for additional information . The fair value of restricted stock awards, restricted stock units and deferred stock units is equal to the closing price of the Company’s stock on the date of grant. The fair value of performance stock units is estimated using a Monte-Carlo simulation model on the date of grant. Share-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. 73 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The Company recognizes share-based compensation for equity awards granted to advisors and institutions as advisory and commission expense on the consolidated statements of income. The fair value of restricted stock units is equal to the closing price of the Company’s stock on the date of grant. Share-based compensation is recognized over the requisite service period of the individual awards, which generally equals the vesting period. The Company makes assumptions regarding the number of restricted stock awards, restricted stock units, deferred stock units and performance stock units that will be forfeited. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. As a result, changes in the forfeiture assumptions do not impact the total amount of expense ultimately recognized over the service period. Rather, different forfeiture assumptions would only impact the timing of expense recognition over the service period. See Note 16 - Share-Based Compensation, Employee Incentives and Benefit Plans , for additional information regarding share-based compensation for equity awards granted. 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. Income Taxes In preparing the consolidated financial statements, the Company estimates income tax expense based on various jurisdictions where it conducts business. The Company needs to estimate current tax obligations and to assess temporary differences between the financial statement carrying amounts and the tax basis of assets and liabilities. These temporary differences result in deferred tax assets and liabilities. The Company then must assess the likelihood that the deferred tax assets will be realized. A valuation allowance is established to the extent that it is more likely than not that such deferred tax assets will not be realized. When the Company establishes a valuation allowance or modifies the existing allowance in a certain reporting period, it generally records a corresponding increase or decrease to tax expense in the consolidated statements of income. Management makes significant judgments in determining its provision for income taxes, deferred tax assets and liabilities and any valuation allowances recorded against the deferred tax assets. Changes in the estimate of these taxes occur periodically due to changes in the tax rates, changes in the business operations, implementation of tax planning strategies, resolution with taxing authorities of issues where the Company had previously taken certain tax positions and newly enacted statutory, judicial and regulatory guidance. These changes could have a material effect on the Company’s consolidated statements of income, financial condition or cash flows in the period or periods in which they occur. The Company recognizes the tax effects of a position in the consolidated financial statements only if it is more likely than not to be sustained based solely on its technical merits; otherwise, no benefits of the position are to be recognized. The more-likely-than-not threshold must continue to be met in each reporting period to support continued recognition of a benefit. Moreover, each tax position meeting the recognition threshold is required to be measured as the largest amount that is greater than 50 percent likely to be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Cash and Equivalents Cash equivalents are highly liquid investments with an original maturity of 90 days or less that are not required to be segregated under federal or other regulations. The Company’s cash equivalents are composed primarily of money market funds. Cash and Equivalents Segregated Under Federal or Other Regulations The Company’s broker-dealer subsidiaries are required to maintain cash or qualified securities in a segregated reserve account for the exclusive benefit of its customers in accordance with Rule 15c3-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other regulations. At December 31, 2025, this line item included interest bearing deposits, U.S. treasury bills with original maturities of 90 days or less and approximately $ 0.2 million of cash for the proprietary accounts of broker-dealers. The U.S. treasury bills accrue income as earned. Discounts are accreted using a method that approximates the effective yield method over the term of the bill and are recorded to interest income, net as an adjustment to the investment yield. 74 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Restricted Cash Restricted cash primarily represents cash held and for use by the captive insurance subsidiary, which is primarily composed of U.S. government obligations, money market funds, and cash held in escrow as a result of the Company’s acquisition of Commonwealth. See Note 4 - Acquisitions for additional information. Receivables from Clients, Net and Client Payables Receivables from clients include amounts due on cash and margin transactions. The Company extends credit to clients of its advisors to finance their purchases of securities on margin and receives income from interest charged on such extensions of credit. Client payables represent credit balances in client accounts arising from deposits of funds, proceeds from sales of securities and dividend and interest payments received on securities held in client accounts at LPL Financial. The Company pays interest on certain client payable balances. Receivables from clients are generally fully secured by securities held in the clients’ accounts. To the extent that margin loans and other receivables from clients are not fully collateralized by client securities, the Company establishes an allowance for credit losses that it believes is sufficient to cover expected credit losses. When establishing this allowance for credit losses, the Company considers a number of factors, including its ability to collect from the client or the client’s advisor and its historical experience in collecting on such transactions. The following table reflects a roll-forward of the allowance for credit losses on receivables from clients (in thousands): December 31, 2025 2024 2023 Beginning balance — January 1 $ 2,044 $ 1,590 $ 909 Provision for credit losses 6,473 559 1,054 (Charge-offs) recoveries, net ( 453 ) ( 105 ) ( 373 ) Ending balance — December 31 $ 8,064 $ 2,044 $ 1,590 Advisor Loans, Net Advisor loans, net include loans made to new and existing advisors and institutions to facilitate their partnership with the Company, transition to the Company’s platform or fund business development activities. The decision to extend credit to an advisor or institution is generally based on their credit history and ability to generate future revenue. Loans made can be either repayable or forgivable over terms generally up to ten years provided that the advisor or institution remains licensed through LPL Financial. Forgivable loans are not repaid in cash and are amortized over the term of the loan. If an advisor or institution terminates their arrangement with the Company prior to the loan maturity date, the remaining balance becomes repayable immediately. An allowance for credit losses is recorded at the inception of a repayable loan or upon conversion to a repayable loan upon termination or change in agreed upon terms using estimates and assumptions based on historical lifetime loss experience and expectations of future loss rates based on current facts. Advisor repayable loans, net totaled $ 406.8 million and $ 360.8 million as of December 31, 2025 and 2024. The following table reflects a roll-forward of the allowance for credit losses on advisor loans (in thousands): December 31, 2025 2024 2023 Beginning balance — January 1 $ 17,901 $ 12,977 $ 15,144 Provision for credit losses 1,867 10,049 8,393 (Charge-offs) recoveries, net ( 2,723 ) ( 5,128 ) ( 10,560 ) Other 116 3 — Ending balance — December 31 $ 17,161 $ 17,901 $ 12,977 75 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Other Receivables, Net Other receivables, net primarily consist of receivables due from product sponsors and others and miscellaneous receivables. An allowance for credit losses is recorded at inception using estimates and assumptions based on historical experience, current facts and other factors. Management monitors the adequacy of these estimates through periodic evaluations against actual trends experienced. The following table reflects a roll-forward of the allowance for credit losses on other receivables (in thousands): December 31, 2025 2024 2023 Beginning balance — January 1 $ 2,345 $ 1,448 $ 2,788 Provision for credit losses 8,637 8,362 6,500 (Charge-offs) recoveries, net ( 7,585 ) ( 8,015 ) ( 7,840 ) Other — 550 — Ending balance — December 31 $ 3,397 $ 2,345 $ 1,448 Investment Securities Investment securities include trading and held-to-maturity securities. The Company also has securities that have been sold, but not yet purchased, which are reflected in other liabilities on the consolidated statements of financial condition. The Company generally classifies its investments in debt and equity instruments as trading securities, except for U.S. government notes held by its wholly owned subsidiary PTC, which are held to satisfy minimum capital requirements of the Office of the Comptroller of the Currency (“OCC”) and classified as held-to-maturity securities because the Company has both the intent and the ability to hold these investments to maturity. The Company has not classified any investments as available-for-sale. Securities classified as trading are carried at fair value while securities classified as held-to-maturity are carried at amortized cost. 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 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. Interest income is accrued as earned. Premiums and discounts are amortized using a method that approximates the effective yield method over the term of the security and are recorded as an adjustment to the investment yield. The Company makes estimates about the fair value of investments and the timing for recognizing losses based on market conditions and other factors. If these estimates change, the Company may recognize additional losses. Realized and unrealized gains and losses on trading securities are recognized in other revenue on a net basis in the consolidated statements of income. Property and Equipment, Net Internally developed software, leasehold improvements, computers and software and furniture and equipment are recorded at historical cost, net of accumulated depreciation and amortization. Depreciation is recognized using the straight-line method over the estimated useful lives of the assets. The Company expenses software development costs as incurred during the preliminary project and post-implementation stages. The Company capitalizes software development costs for projects during the application development phase, in which management has authorized and committed to funding the project and it is probable that the project will be completed and utilized as intended. The costs of internally developed software that qualify for capitalization are included in property and equipment and subsequently amortized over the estimated useful life of the software, which is generally 3 to 5 years. The Company does not capitalize pilot projects or projects for which it believes that the future economic benefits are less than probable. Leasehold improvements are amortized over the lesser of their useful lives or the terms of the underlying 76 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements leases. Computers and software are depreciated over a period of 3 to 5 years. Furniture and equipment are depreciated over a period of 3 to 7 years. Land is not depreciated. Management reviews property and equipment for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. No impairment occurred for the years ended December 31, 2025, 2024 or 2023. Acquisitions Accounting for business combinations requires the Company to make significant estimates and assumptions with respect to intangible assets, liabilities assumed, pre-acquisition contingencies, useful lives and liabilities for contingent consideration, as applicable. These assumptions include, but are not limited to, future expected cash flows, asset or revenue growth, discount rates, conversion or retention rates, and market conditions and are based in part on historical experience, market data and information obtained from the management of the acquired companies. When acquiring companies in business combinations, the Company recognizes separately from goodwill the assets acquired, liabilities assumed and any liabilities for contingent consideration, as applicable, at their acquisition date fair values. Goodwill is recognized for business combinations as of the acquisition date and is measured as the excess of consideration transferred and the net of the acquisition date fair values of the assets acquired and the liabilities assumed or recorded. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, these estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired, liabilities assumed or liabilities for contingent consideration with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed or recorded, whichever comes first, any subsequent adjustments are recognized in the consolidated statements of income. The Company also enters into asset acquisitions for single identifiable intangible assets which are accounted for under a cost accumulation model in which cash consideration and transaction costs are allocated to the intangible assets acquired. Accounting for asset acquisitions requires the Company to make significant estimates and assumptions with respect to the useful life of the asset purchased. These assumptions are based in part on historical experience and market data. The Company does not recognize a liability for contingent payments in acquisitions that are accounted for as asset acquisitions as the amounts to be paid will be uncertain until a future measurement date. Contingent Consideration Certain of the Company’s acquisitions include contingent consideration, which may result in the transfer of additional cash consideration to the sellers if certain milestones are achieved in the years following an acquisition. Contingent payments are estimated by applying forecasted growth or conversion rates to project future revenue or asset growth and discount rates which are based on the cost of capital. For acquisitions accounted for under the acquisition method of accounting for business combinations, any such contingent consideration is recognized at its estimated fair value on the date of acquisition. This contingent consideration is remeasured at its fair value at each subsequent reporting date until the contingency is resolved. Any changes in fair value are recognized in other expense in the consolidated statements of income. Goodwill and Other Intangibles, Net Goodwill and other indefinite-lived intangibles are evaluated annually for impairment in the fourth fiscal quarter and between annual tests if certain events occur indicating that the carrying amounts may be impaired. If a qualitative assessment is used and the Company determines that the fair value of a reporting unit or indefinite-lived intangible is more likely than not (i.e., a likelihood of more than 50%) less than its carrying amount, a quantitative impairment analysis will be performed. An impairment loss will be recognized if a reporting unit’s carrying amount exceeds its fair value, to the extent that it does not exceed the total carrying amount of goodwill. No impairment of goodwill or other indefinite-lived intangibles was recognized for the years ended December 31, 2025, 2024 or 2023. Intangibles that are deemed to have definite lives are amortized over their useful lives generally ranging from 5 to 18 years. They are reviewed for impairment when there is evidence that events or changes in circumstances 77 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements indicate that the carrying amount may not be recoverable. Recoverability of assets to be held and used is measured by comparing the carrying amount to the estimated undiscounted future cash flows expected to be generated. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the estimated fair value. There was no impairment of definite-lived intangibles recognized for the years ended December 31, 2025, 2024 or 2023. See Note 9 - Goodwill and Other Intangibles, Net , for additional information. Securities Borrowed The Company borrows securities from other broker-dealers to make deliveries or to facilitate customer short sales. Securities borrowed, which are included in other assets in the consolidated statements of financial condition, are accounted for as collateralized borrowings and are recorded at the contract value, which represents the amount of cash provided for securities borrowed transactions (generally in excess of market values). The adequacy of the collateral deposited, which is determined by comparing the market value of the securities borrowed to the cash loaned , is continuously monitored and is adjusted when considered necessary to minimize the risk associated with this activity. As of December 31, 2025, the contract and collateral market values of borrowed securities were $ 1.8 million and $ 1.7 million, respectively. As of December 31, 2024, the contract and collateral market values of borrowed securities were $ 4.8 million and $ 4.6 million, respectively. Fractional Shares The Company acts in a principal capacity in respect of fractional shares resulting from the dividend reinvestment program (“DRIP”) that is offered to clients by aggregating dividends received by clients, executing purchases of whole shares and allocating the whole shares to clients on a fractional basis based on the dividend amounts that are reinvested. Shares remaining after this process and fractional shares purchased by the Company in client liquidations are included in the Company’s inventory and reflected as investment securities on the Company’s consolidated statements of financial condition. Fractional shares that have been allocated to clients do not meet the criteria for sale accounting in Accounting Standards Codification 860, Transfers and Servicing , and are accounted for as a secured borrowing (repurchase obligation related to shares held by clients) with a corresponding investment in fractional shares. These are reflected in other assets and other liabilities, respectively, on the Company’s consolidated statements of financial condition. The Company has elected the fair value option to measure these financial assets and the corresponding repurchase obligation and determines fair value based on quoted prices in active markets. Debt Issuance Costs Debt issuance and amendment costs are capitalized and amortized as additional interest expense over the expected term of the related debt agreement. Debt issuance costs are presented as a direct deduction from the carrying amount of the related debt liability. Costs incurred while obtaining the revolving credit facility are included in other assets in the consolidated statements of financial condition and subsequently amortized ratably over the term of the revolving credit facility regardless of whether there are any outstanding borrowings on the revolving credit facility. Leases Lease assets and liabilities are recognized based on the present value of the future lease payments over the lease term at the lease commencement date and reflected in other assets and other liabilities, respectively, on the consolidated statements of financial condition. The Company estimates its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. For additional information, see Note 12 - Leases . Commitments and Contingencies The Company recognizes a liability for loss contingencies when it believes it is probable a liability has occurred and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The 78 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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. The Company also accrues for losses at its captive insurance subsidiary for those matters covered by self-insurance. The captive insurance subsidiary records losses and loss reserve liabilities based on actuarially determined estimates of losses incurred, but not yet reported to the Company as well as specific reserves for proceedings and matters that are probable and estimable. The captive insurance subsidiary is funded by payments from LPL Financial and has cash reserves to cover losses, including $ 127.8 million in restricted cash. 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 and requires management to make significant judgments. For additional information, see Note 14 - Commitments and Contingencies - “Legal and Regulatory Matters.” Recently Issued Accounting Pronouncements In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06 Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software to modernize the accounting for and disclosure of software costs. The ASU may be applied prospectively, retrospectively or via a modified transition approach and is effective for annual periods beginning after December 15, 2027, with early adoption permitted. We are currently assessing the amendment’s impact on our consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) : Disaggregation of Income Statement Expenses , which requires public business entities to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements. The ASU should be applied prospectively and is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact on the related disclosures; however, it does not expect this update to have an impact on its financial condition or results of operations. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency of income tax disclosures relating to the rate reconciliation, disclosure of income taxes paid, and certain other disclosures. The ASU was applied prospectively and is effective for annual periods beginning after December 15, 2024. The adoption did not have an impact on the Company’s financial condition or results of operations. See Note 13 - Income Taxes for related disclosures . NOTE 3 - REVENUE Revenue is recognized when control of the promised services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those services. Revenue is analyzed to determine whether the Company is the principal (i.e., reports revenue on a gross basis) or agent (i.e., reports revenue on a net basis) in the contract. Principal or agent designations depend primarily on the control an entity has over the product or service before control is transferred to a customer. The indicators of which party exercises control include primary responsibility over performance obligations, inventory risk before the good or service is transferred and discretion in establishing the price. Advisory Advisory revenue represents fees charged to advisors’ clients’ advisory accounts on the Company’s corporate RIA advisory platform and is based on a percentage of the market value of the eligible assets in the clients’ advisory accounts. The Company provides ongoing investment advice and acts as a custodian, providing brokerage and execution services on transactions, and performs administrative services for these accounts. Advisory fees are primarily billed to clients in advance, on a quarterly basis, 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 our 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 79 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements adjusted for contributions and withdrawals during the period to determine the amount of revenue earned in the period. Advisory revenue collected on the Company’s corporate advisory platform is proposed by the advisor and agreed to by the client and was approximately 1 % of the underlying assets for the year ended December 31, 2025. The Company also supports independent RIA firms that conduct their business through separate registered investment advisor firms (“Independent RIAs”) through its Independent RIA advisory platform, which allows advisors to engage the Company for technology, clearing and custody services, as well as access the capabilities of the Company’s 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. The advisory revenue generated by an Independent RIA is not included in the Company’s advisory revenue. The Company charges separate fees to Independent RIAs for technology, clearing, administrative, oversight and custody services, which may vary and are included in service and fee revenue in the consolidated statements of income. Commission The Company earns commission revenue from sales commissions generated by advisors for their clients’ purchases and sales of securities or other investment products and from product sponsors for the selling, distribution and marketing, or any combination thereof, of investment products to such clients both of which are viewed as a single performance obligation. The Company is generally the principal for commission revenue, as it is responsible for the execution of the clients’ purchases and sales, and maintains relationships with the product sponsors. Advisors assist the Company in performing its obligations. Accordingly, total commission revenue is reported on a gross basis. The following table presents total commission revenue disaggregated by product category (in thousands): Years Ended December 31, 2025 2024 2023 Commission revenue Annuities $ 2,679,752 $ 1,949,343 $ 1,482,690 Mutual funds 986,441 799,952 666,942 Fixed income 256,520 216,872 154,177 Equities 202,984 152,500 110,698 Other 379,375 186,820 138,116 Total commission revenue $ 4,505,072 $ 3,305,487 $ 2,552,623 The Company generates 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 the Company’s 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 the Company’s advisors’ clients. The Company earns trailing commission revenue primarily on mutual funds and variable annuities held by clients of the Company’s advisors. Trailing commission revenue is recognized over the time the client owns the investment or holds the contract and is generally earned based on a fixed rate applied. The ongoing revenue is not recognized at the time of sale because it is variably constrained due to factors outside the Company’s control including market volatility and the client's investment hold period. The revenue will not be recognized until it is probable that a significant reversal will not occur. 80 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table presents sales-based and trailing commission revenue disaggregated by product category (in thousands): Years Ended December 31, 2025 2024 2023 Commission revenue Sales-based Annuities $ 1,633,309 $ 1,069,811 $ 739,760 Fixed income 256,520 216,872 154,177 Mutual funds 220,251 181,695 145,642 Equities 202,984 152,500 110,698 Other 332,849 142,354 102,506 Total sales-based revenue $ 2,645,913 $ 1,763,232 $ 1,252,783 Trailing Annuities $ 1,046,443 $ 879,532 $ 742,930 Mutual funds 766,190 618,257 521,300 Other 46,526 44,466 35,610 Total trailing revenue $ 1,859,159 $ 1,542,255 $ 1,299,840 Total commission revenue $ 4,505,072 $ 3,305,487 $ 2,552,623 Asset-Based Asset-based revenue consists of fees from the Company’s 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 Client cash revenue is earned daily and is generated on advisors’ clients’ cash balances in insured bank sweep accounts and a money market account based on a rate applied, as a percentage, to the deposits placed. The Company also receives fees for certain account types for services provided, including administration and recordkeeping. These fees are generally earned and recognized over time on a net basis as the Company acts as an agent in these arrangements. The performance obligation with the financial institutions that participate in the sweep program is considered a series of distinct services that are substantially the same and are satisfied each day. Recordkeeping The Company generates revenue from fees it collects for providing recordkeeping, account maintenance, reporting and other related services to product sponsors. This includes revenue from omnibus processing in which the Company establishes and maintains sub-account records for its clients to reflect the purchase, exchange and redemption of mutual fund shares and consolidates clients’ trades within a mutual fund. Omnibus processing fees are paid to the Company by the mutual fund product sponsors or their affiliates and are 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. Recordkeeping also includes revenue from networking services. Networking revenue on brokerage assets is correlated to the number of positions or value of assets that the Company administers and is paid by mutual fund and annuity product manufacturers. Recordkeeping revenue is recognized over time as the Company fulfills its performance obligations. As recordkeeping fees are susceptible to unpredictable market changes that influence market value and fund positions, this revenue includes variable consideration and is constrained until the date that the fees are determinable. 81 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Sponsorship Programs The Company receives fees from certain financial product manufacturers in connection with sponsorship programs that support the Company’s 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 of these. As the value of product sponsor assets held in advisors’ clients’ accounts is susceptible to unpredictable market changes, this revenue includes variable consideration and is constrained until the date that the fees are determinable. Sponsorship revenue is generally recognized over time as the Company fulfills its performance obligations. The following table sets forth asset-based revenue disaggregated by product category (in thousands): Years Ended December 31, 2025 2024 2023 Asset-based revenue Client cash $ 1,657,807 $ 1,426,528 $ 1,509,869 Sponsorship programs 776,749 585,785 452,753 Recordkeeping 561,377 485,385 415,107 Total asset-based revenue $ 2,995,933 $ 2,497,698 $ 2,377,729 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, IRA custodian and other client account fees. The Company charges separate fees to registered investment advisors for technology, clearing, administrative, oversight and custody services, which may vary. The Company also hosts certain advisor conferences that serve as training, education, sales and marketing events for which the Company collects a fee from sponsors. Service and fee revenue is recognized when the Company satisfies its performance obligations. Recognition varies from point-in-time to over time depending on whether the service is provided once at an identifiable point-in-time or if the service is provided continually over the contract life. Performance obligations for service and fee revenue recognized over time are considered a series of distinct services that are substantially the same and are satisfied each day over the contract term. The Company is the principal and recognizes service and fee revenues on a gross basis as it is primarily responsible for delivering the respective services being provided, which is demonstrated by the Company’s ability to control the fee amounts charged to customers. The following table sets forth service and fee revenue disaggregated by recognition pattern (in thousands): Years Ended December 31, 2025 2024 2023 Service and fee revenue Over time (1) $ 463,562 $ 420,470 $ 387,763 Point-in-time (2) 188,833 131,550 120,674 Total service and fee revenue $ 652,395 $ 552,020 $ 508,437 ____________________ (1) Service and fee revenue recognized over time includes revenue such as IRA custodian fees, error and omission insurance fees and technology fees. (2) Service and fee revenue recognized at a point-in-time includes revenue such as account fees, IRA termination fees and registration fees. 82 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Transaction Transaction revenue includes transaction charges generated by advisory and brokerage accounts from mutual funds, exchange-traded funds and fixed income products and is primarily recognized at a point-in-time. Point-in-time transaction revenue includes revenue from clearing and transaction charges and is recognized on a trade-date basis as the performance obligation is satisfied when the underlying financial instrument or purchaser is identified, the pricing is agreed upon and the risks and rewards of ownership have been transferred to/from the customer. The Company is the principal and recognizes transaction revenue on a gross basis as it is primarily responsible for delivering the respective services being provided, which is demonstrated by the Company’s ability to control the fee amounts charged to customers. Interest Income, net The Company earns interest income primarily from client margin loans, cash and equivalents segregated under federal or other regulations and advisor repayable loans and pays interest on certain client cash balances held in the client cash account. Other Other revenue primarily includes unrealized gains and losses on assets held by the Company for its advisor non-qualified deferred compensation plan and model research portfolios and other miscellaneous revenue, which is generally not generated from contracts with customers. 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 increased from $ 207.6 million as of December 31, 2024 to $ 265.0 million as of December 31, 2025. The increase in unearned revenue for the year ended December 31, 2025 is primarily driven by cash payments received or due in advance of satisfying the Company’s performance obligations, partially offset by $ 207.5 million of revenue recognized during the year ended December 31, 2025 that was included in the unearned revenue balance as of December 31, 2024. 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. 83 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 4 - ACQUISITIONS During the year ended December 31, 2025, the Company completed 34 acquisitions, six of which have been accounted for as business combinations and 28 of which have been accounted for as asset acquisitions. Business Combinations Acquisition of Commonwealth Financial Network On August 1, 2025, the Company acquired 100 % of the outstanding equity interests of CFN, a privately-held independent wealth management firm headquartered in Massachusetts, in order to leverage its scale and enhance its capabilities. As part of the transaction, Commonwealth’s advisory and brokerage assets are expected to transition to the Company’s platform in the fourth quarter of 2026. Commonwealth's results were included in the Company's consolidated statements of income from August 1, 2025 through December 31, 2025 and consolidated statements of financial condition as of December 31, 2025. The Company accounted for the transaction under the acquisition method of accounting for business combinations. The following table summarizes the cash funded at closing and total consideration transferred (dollars in thousands): Cash Funded at Close August 1, 2025 Cash consideration $ 1,927,371 Cash for liabilities assumed (1) 405,823 Cash for post-combination expenses (2) 419,049 Total cash funded at close $ 2,752,243 Consideration August 1, 2025 Cash $ 1,927,371 Other liabilities incurred 90,414 Total consideration $ 2,017,785 ____________________ (1) Liabilities assumed are reflected in the Accounts payable and accrued liabilities and Equity awards liability line items in the table below and were paid concurrently with the closing. (2) The post-combination expenses were paid at the closing and primarily included $ 228.4 million of costs related to transaction bonuses and the acceleration of unvested equity awards which were classified as Compensation and benefits and $ 190.1 million of costs related to certain contract termination fees which were classified as Occupancy and equipment in the consolidated financial statements. 84 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table summarizes the Company's provisional purchase price allocation at August 1, 2025 (dollars in thousands): Provisional Purchase Price Allocation (1) August 1, 2025 Fair value of consideration transferred $ 2,017,785 Assets Cash and equivalents 333,927 Restricted cash 95,414 Investment securities 43,719 Receivables from brokers, dealers and clearing organizations 1,839 Other receivables, net 55,788 Advisor loans, net 92,716 Property and equipment, net 7,769 Intangible assets 1,716,000 Other assets 58,330 Total identifiable assets acquired $ 2,405,502 Liabilities Accrued advisory and commission expenses payable 14,440 Accounts payable and accrued liabilities 57,012 Client payables 525 Equity awards liability 382,231 Unearned revenue 309,594 Other liabilities 47,218 Total liabilities assumed $ 811,020 Net assets acquired 1,594,482 Goodwill $ 423,303 ____________________ (1) The Company recorded provisional purchase accounting adjustments during the three months ended December 31, 2025 which resulted in a $ 12.9 million decrease in advisor loans, net, a $ 40.0 million increase in advisor relationship intangibles, a $ 5.0 million increase in trade name intangible, a $ 1.9 million decrease in other assets and a $ 30.1 million decrease in goodwill . The goodwill primarily includes synergies expected to result from combining operations and is deductible for tax purposes. Other intangible assets comprised $ 1.69 billion of advisor relationships, which were assigned useful lives of 14 years, and $ 26.0 million of trade name intangible, which was assigned a useful life of 16 years. See Note 9 - Goodwill and Other Intangibles, Net, for additional information. The fair value determination of certain assets acquired and liabilities assumed required the Company to make significant estimates and assumptions. Intangible assets were valued using an income approach with estimates and assumptions related to future net cash flows, discount and royalty rates. Advisor loans were valued using an income approach with assumptions related to net cash flows and conversion rates. The fair value of repayable loans was $ 88.0 million and approximates its carrying value. Given the recent date of closing, the purchase accounting analysis is ongoing and may result in changes to the value of assets acquired and liabilities recorded, including other intangible assets. The Company’s consolidated statements of income for the year ended December 31, 2025 include total revenues attributable to Commonwealth of $ 1.18 billion and a net loss of $ 201.3 million attributable to Commonwealth that was driven primarily by the acquisition related costs that were recognized at the closing. 85 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Acquisition related costs incurred as part of the Commonwealth acquisition during the year ended December 31, 2025 were $ 486.5 million. These costs include post-combination expense of $ 419.0 million, which primarily comprised amounts related to transaction bonuses and equity award acceleration, and amounts related to certain contract termination fees, which were classified as Compensation and benefits expense and Occupancy and equipment expense, respectively, in the Company's consolidated statements of income, and $ 67.5 million of costs primarily related to professional service costs, which were classified as Professional services expense in the Company’s consolidated statements of income. The following table presents unaudited pro forma results as if the acquisition of Commonwealth had occurred on January 1, 2024 (dollars in thousands): Years Ended December 31, LPL Financial and Commonwealth Pro Forma Combined Financial Information (unaudited) 2025 2024 Total revenue $ 18,634,628 $ 15,073,569 Net income $ 1,330,159 $ 536,737 The unaudited pro forma results above were prepared by combining the historical financial information of the Company and Commonwealth and making certain adjustments. Pro forma adjustments include the impact of amortization of intangible assets recognized as part of the acquisition, amortization of transition assistance loans made to advisors that will transition to the Company’s platform in 2026, and the impact of related interest and issuance costs of financing the transaction. Pro forma results for the year ended December 31, 2024 also include the impact of $ 486.5 million of transaction costs incurred during the year ended December 31, 2025 as a result of the acquisition. The unaudited pro forma information does not reflect the potential benefits of cost and funding synergies, opportunities to earn additional revenues or other factors, and, therefore, does not represent the actual results that would have occurred had the companies actually been combined as of January 1, 2024. The Company financed this transaction through a combination of corporate cash, proceeds from the debt and equity issuances completed in April 2025, and borrowings under LPL Holdings, Inc.’s revolving credit facility. See Note 11 - Corporate Debt and Other Borrowings, Net, and Note 15 - Stockholders’ Equity for additional information. Acquisition of The Investment Center, Inc. (“The Investment Center”) On March 4, 2025, the Company acquired The Investment Center for total consideration of $ 72.6 million, which included $ 72.2 million of cash and liabilities of $ 0.4 million for contingent consideration. The Company was introduced to The Investment Center as part of the Atria acquisition, and the cash consideration was prefunded in 2024 in conjunction with the close of the Atria acquisition. The Company subsequently transitioned The Investment Center’s brokerage and advisory assets to the Company’s platform. The transaction also includes potential contingent consideration of up to $ 10.4 million based on revenue growth in the years following the acquisition. The Company accounted for the acquisition under the acquisition method of accounting for business combinations. Acquisition related costs incurred during the year ended December 31, 2025 were $ 6.0 million, primarily related to costs which were classified as compensation and benefits expenses and promotional expenses in the Company's consolidated statements of income. The Company recorded purchase accounting adjustments during the year ended December 31, 2025 which resulted in a $ 2.0 million increase in cash consideration, a $ 6.1 million decrease in other liabilities, a $ 0.4 million decrease in advisor relationships, and a $ 3.7 million decrease in goodwill. As of December 31, 2025, the Company had allocated $ 43.5 million and $ 29.1 million of the consideration to advisor relationships and goodwill, respectively. The advisor relationships were assigned a useful life of 16 years. See Note 9 - Goodwill and Other Intangibles, Net, for additional information. Other Business Combinations The Company accounted for four other transactions under the acquisition method of accounting for business combinations. Total consideration for these transactions was $ 75.2 million, which included $ 58.3 million of cash, and liabilities of $ 15.2 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 or revenue growth metrics are achieved in the years following the closing. This contingent consideration may be settled for amounts up to $ 46.9 million in the years following the closing. The Company allocated $ 63.3 million of the consideration to client relationships and $ 0.3 million to advisor relationships, which were assigned useful lives of 14 years to 15 years, and $ 11.6 million to goodwill. 86 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Asset Acquisitions The Company accounted for 28 other transactions as asset acquisitions. These transactions included total initial consideration of $ 227.9 million, including $ 222.4 million which was allocated to client relationships and $ 5.5 million which was allocated to advisor relationships. These relationships were assigned useful lives of 14 years to 15 years, respectively, and the related transactions include potential contingent payments of up to $ 158.1 million in the years following the closing if certain asset or revenue growth metrics are 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 9 - Goodwill and Other Intangibles, Net , for additional information. Acquisitions Completed in Prior Periods During the year ended December 31, 2024, the Company completed 24 acquisitions, eight of which have been accounted for as business combinations and 16 of which were accounted for as asset acquisitions. Business Combinations Acquisition of Atria Wealth Solutions, Inc. On October 1, 2024, the Company acquired 100 % of the outstanding common shares of Atria Wealth Solutions, Inc., a wealth management solutions holding company headquartered in New York, in order to expand its addressable markets and complement organic growth. As part of the acquisition, the Company acquired Atria's seven introducing broker-dealer subsidiaries and completed the conversion of the related brokerage and advisory assets to the Company’s platform in July 2025. The Company accounted for the transaction under the acquisition method of accounting for business combinations. The following table summarizes the total consideration for the transaction at October 1, 2024 (dollars in thousands): Total Consideration October 1, 2024 Cash $ 853,429 Fair value of contingent consideration 19,545 Total consideration $ 872,974 The contingent consideration, which may be settled for amounts up to $ 330 million, represents the estimated fair value of the additional cash consideration that may be paid to the sellers if certain asset conversion, retention and other milestones are achieved in the year following the closing. The Company determined the fair value for each of its contingent consideration obligations using probability weighted or Monte-Carlo simulation models. These methods use significant unobservable inputs, including forecasted conversion rates and discount rates which are based on the cost of debt and equity. See Note 5 - Fair Value Measurements, for additional information. 87 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table summarizes the Company's purchase price allocation at October 1, 2024 (dollars in thousands): Purchase Price Allocation (1) October 1, 2024 Fair value of consideration transferred $ 872,974 Assets Cash and equivalents 76,259 Restricted cash 15,866 Receivables from brokers, dealers and clearing organizations 13,734 Other receivables 37,163 Other intangibles 620,100 Other assets 30,482 Total identifiable assets acquired $ 793,604 Liabilities Accrued advisory and commission expenses payable 32,756 Accounts payable and accrued liabilities 58,691 Deferred tax liabilities 110,643 Other liabilities 26,409 Total liabilities assumed $ 228,499 Net assets acquired 565,105 Goodwill $ 307,869 ________________ (1) During the year ended December 31, 2025, the Company recorded purchase accounting adjustments that resulted in a $ 15.4 million decrease in total consideration, a $ 13.5 million decrease in advisor relationships, a $ 6.3 million decrease in institutional relationships, a $ 4.8 million decrease in other receivables, a $ 5.2 million increase in other assets, a $ 1.3 million decrease in deferred tax liabilities, and a $ 6.2 million increase in accounts payable and accrued liabilities. These cumulative adjustments resulted in an $ 8.9 million increase to goodwill . The goodwill primarily includes synergies expected to result from combining operations. Other intangible assets comprised $ 195.4 million of institutional relationships and $ 424.7 million of advisor relationships which were each assigned useful lives of 16 years. These intangible assets were valued using the income approach and are included in the Advisor and institution relationships line item in Note 9 - Goodwill and Other Intangibles, Net . The fair value determination of institutional and advisor relationships required the Company to make significant estimates and assumptions related to future net cash flows and discount rates. Acquisition related costs incurred as part of the Atria acquisition during the year ended December 31, 2024 were $ 18.0 million, and primarily related to professional services, which were classified as professional services in the Company's consolidated statements of income. Atria's results were included in the Company's consolidated statements of income from October 1, 2024 through December 31, 2024. For this period, total revenues attributable to Atria were approximately $ 194.0 million and net income was not material. The following table presents unaudited pro forma results as if the acquisition of Atria had occurred on January 1, 2024 (dollars in thousands): Year Ended December 31, LPL Financial and Atria Pro Forma Combined Financial Information (unaudited) 2024 Total revenue $ 12,998,942 Net income $ 982,067 The unaudited pro forma results above were prepared by combining the historical financial information of the Company and Atria and making certain adjustments. Pro forma adjustments include the impact of amortization of intangible assets recognized as part of the acquisition, amortization of transition assistance loans made to advisors 88 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements and institutions that have converted to the Company's platform in 2025, and the related interest impact of financing the transaction. Pro forma results for the year ended December 31, 2024 also include the impact of $ 18.0 million of transaction costs incurred during the year ended December 31, 2024 as a result of the acquisition. The unaudited pro forma information does not reflect the potential benefits of cost and funding synergies, opportunities to earn additional revenues or other factors, and, therefore, does not represent the actual results that would have occurred had the companies actually been combined as of January 1, 2024. Other Business Combinations The Company accounted for seven other transactions under the acquisition method of accounting for business combinations during the year ended December 31, 2024. Total consideration for these transactions was $ 113.2 million, which included $ 64.4 million of cash, and liabilities of $ 48.8 million for contingent consideration. At December 31, 2024, the Company allocated $ 34.3 million of the purchase price to goodwill and $ 78.9 million to client relationships acquired as part of these acquisitions, which included a provisional allocation of $ 3.8 million to goodwill and $ 11.3 million to client relationships for acquisitions completed in the fourth quarter for which purchase accounting was finalized in 2025. The goodwill primarily includes synergies expected to result from combining operations and is deductible for tax purposes. See Note 9 – Goodwill and Other Intangibles, Net , for additional information. Asset Acquisitions The Company accounted for 16 other transactions as asset acquisitions during the year ended December 31, 2024. These transactions included total initial consideration of $ 178.3 million, including $ 48.5 million which was allocated to advisor relationships and$ 129.8 million which was allocated to client relationships. These transactions include potential contingent payments of up to $ 97.2 million in the 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 9 – 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 of assets or liabilities between these fair value measurement classifications during the years ended December 31, 2025 or 2024. 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 December 31, 2025 and 2024, 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 primarily include money market funds and U.S. government obligations, which are short term in nature with readily determinable values derived from active markets. 89 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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. Restricted Cash — The Company’s restricted cash is primarily composed of U.S. government obligations and money market funds 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 December 31, 2025 and 2024, 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, 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 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. At December 31, 2025 and 2024, the Company did not adjust prices received from the independent third-party pricing services. Contingent Consideration — The Company measures contingent consideration liabilities 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 reflected in other liabilities. See Note 2 - Summary of Significant Accounting Policies and Note 4 - Acquisitions for additional information. Level 3 Recurring Fair Value Measurements The Company determines the fair value for its contingent consideration obligations using probability weighted and Monte-Carlo simulation models. Contingent payments are estimated by applying significant unobservable inputs, including forecasted growth rates applied to project future revenue or asset growth, conversion or retention rates, and discount rates which 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 growth rates over the measurement period or discount rates would result in a higher or lower fair value measurement. 90 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following tables summarize inputs used in the measurement of contingent consideration (dollars in thousands): Quantitative Information About Level 3 Fair Value Measurements December 31, 2025 Type Valuation Techniques Unobservable Inputs Range $ 115,464 Contingent Consideration Monte-Carlo Simulation Model Forecasted Growth Rates 1.3 % - 26.0 % Discount Rate 12.0 % - 17.9 % Equivalency Rate (1) 4.7 % - 5.9 % 8,574 Contingent Consideration Probability Weighted Expected Return Method Equivalency Rate (1) 5.3 % - 5.3 % Conversion Rate — % - 100.0 % $ 124,038 ____________________ (1) Equivalency rate is defined as the prevailing market interest rate used to discount future payments. Quantitative Information About Level 3 Fair Value Measurements December 31, 2024 Type Valuation Techniques Unobservable Inputs Range $ 170,343 Contingent Consideration Monte-Carlo Simulation Model Forecasted Growth Rates 2.0 % - 29.5 % Discount Rate 10.5 % - 18.0 % Equivalency Rate (1) 4.9 % - 5.8 % 26,555 Contingent Consideration Probability Weighted Expected Return Method Equivalency Rate (1) 5.7 % - 5.7 % Conversion Rate — % - 100.0 % $ 196,898 The following table summarizes the changes in fair value for the Company’s Level 3 liabilities during the periods presented (in thousands): Year Ended December 31, 2025 2024 Balance - January 1 $ 196,898 $ 118,844 Additions and purchase accounting adjustments ( 3,593 ) 97,333 Payments ( 93,430 ) ( 61,000 ) Fair value adjustments 24,163 41,721 Balance - December 31 $ 124,038 $ 196,898 91 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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): December 31, 2025 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 104,377 $ — $ — $ 104,377 Cash equivalents segregated under federal or other regulations 821,334 — — 821,334 Restricted cash 127,585 — — 127,585 Investment securities - trading: U.S. treasury obligations 40,029 — — 40,029 Mutual funds 33,559 — — 33,559 Equity securities 2,505 — — 2,505 Debt securities — 15 — 15 Total investment securities - trading 76,093 15 — 76,108 Other assets: Deferred compensation plan 1,097,514 — — 1,097,514 Fractional shares - investment (1) 371,683 — — 371,683 Other investments — 2,423 — 2,423 Total other assets 1,469,197 2,423 — 1,471,620 Total assets at fair value $ 2,598,586 $ 2,438 $ — $ 2,601,024 Liabilities Other liabilities: Securities sold, but not yet purchased: Equity securities $ 174 $ — $ — $ 174 Total securities sold, but not yet purchased 174 — — 174 Fractional shares - repurchase obligation (1) 371,683 — — 371,683 Contingent consideration — — 124,038 124,038 Total other liabilities 371,857 — 124,038 495,895 Total liabilities at fair value $ 371,857 $ — $ 124,038 $ 495,895 ____________________ (1) Investment in and related repurchase obligation for fractional shares resulting from the Company’s DRIP. 92 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table summarizes the Company’s financial assets and financial liabilities measured at fair value on a recurring basis (in thousands): December 31, 2024 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ 53,672 $ — $ — $ 53,672 Cash equivalents segregated under federal or other regulations 672,164 — — 672,164 Restricted cash 100,368 — — 100,368 Investment securities - trading: Mutual funds 13,627 — — 13,627 U.S. treasury obligations 28,511 — — 28,511 Money market funds 110 — — 110 Equity securities 8 — — 8 Debt securities — 11 — 11 Total investment securities — trading 42,256 11 — 42,267 Other assets: Deferred compensation plan 856,843 — — 856,843 Fractional shares - investment (1) 278,683 — — 278,683 Other investments — 3,989 — 3,989 Total other assets 1,135,526 3,989 — 1,139,515 Total assets at fair value $ 2,003,986 $ 4,000 $ — $ 2,007,986 Liabilities Other liabilities: Securities sold, but not yet purchased: Equity securities 151 — — 151 Debt securities — 18 — 18 Total securities sold, but not yet purchased 151 18 — 169 Fractional shares - repurchase obligation (1) 278,683 — — 278,683 Contingent consideration — — 196,898 196,898 Total other liabilities 278,834 18 196,898 475,750 Total liabilities at fair value $ 278,834 $ 18 $ 196,898 $ 475,750 ____________________ (1) Investment in and related repurchase obligation for fractional shares resulting from the Company’s DRIP. 93 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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): December 31, 2025 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash $ 933,001 $ 933,001 $ — $ — $ 933,001 Cash segregated under federal or other regulations 970,730 970,730 — — 970,730 Restricted cash 97,713 97,713 — — 97,713 Receivables from clients, net 803,206 — 803,206 — 803,206 Receivables from brokers, dealers and clearing organizations 70,897 — 70,897 — 70,897 Advisor repayable loans, net (1) 406,793 — — 335,050 335,050 Other receivables, net 1,203,539 — 1,203,539 — 1,203,539 Investment securities - held-to-maturity securities 15,420 — 15,520 — 15,520 Other assets: Deferred compensation plan (2) 10,038 10,038 — — 10,038 Securities borrowed 1,789 — 1,789 — 1,789 Other investments (3) 7,874 — 7,874 — 7,874 Total other assets 19,701 10,038 9,663 — 19,701 Liabilities Client payables $ 2,308,275 $ — $ 2,308,275 $ — $ 2,308,275 Payables to brokers, dealers and clearing organizations 150,520 — 150,520 — 150,520 Corporate debt and other borrowings, net 7,258,694 — 7,420,447 — 7,420,447 December 31, 2024 Carrying Value Level 1 Level 2 Level 3 Total Fair Value Assets Cash $ 913,407 $ 913,407 $ — $ — $ 913,407 Cash segregated under federal or other regulations 925,085 925,085 — — 925,085 Restricted cash 19,356 19,356 — — 19,356 Receivables from clients, net 633,834 — 633,834 — 633,834 Receivables from brokers, dealers and clearing organizations 76,545 — 76,545 — 76,545 Advisor repayable loans, net (1) 360,760 — — 281,146 281,146 Other receivables, net 902,777 — 902,777 — 902,777 Investment securities - held-to-maturity securities 15,214 — 15,190 — 15,190 Other assets: Deferred compensation plan (2) 8,742 8,742 — — 8,742 Securities borrowed 4,811 — 4,811 — 4,811 Other investments (3) 7,706 — 7,706 — 7,706 Total other assets 21,259 8,742 12,517 — 21,259 Liabilities Client payables $ 1,898,665 $ — $ 1,898,665 $ — $ 1,898,665 Payables to brokers, dealers and clearing organizations 129,228 — 129,228 — 129,228 Corporate debt and other borrowings, net 5,494,724 — 5,480,389 — 5,480,389 ____________________ (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. 94 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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 PTC, to satisfy minimum capital requirements of the OCC. The U.S. government notes 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): December 31, 2025 2024 Trading securities - at fair value: U.S. treasury obligations $ 40,029 $ 28,511 Mutual funds 33,559 13,627 Money market funds — 110 Equity securities 2,505 8 Debt securities 15 11 Total trading securities $ 76,108 $ 42,267 Held-to-maturity securities - at amortized cost: U.S. government notes $ 15,420 $ 15,214 Total held-to-maturity securities $ 15,420 $ 15,214 Total investment securities $ 91,528 $ 57,481 At December 31, 2025, 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 U.S. government notes — at amortized cost $ 5,432 $ 9,988 $ — $ — $ 15,420 U.S. government notes — at fair value $ 5,444 $ 10,076 $ — $ — $ 15,520 NOTE 7 - RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS AND CLEARING ORGANIZATIONS Receivables from and payables to brokers, dealers, and clearing organizations were as follows (in thousands): December 31, 2025 2024 Receivables: Receivables from clearing organizations $ 59,298 $ 68,962 Securities failed-to-deliver 9,960 7,009 Receivables from brokers and dealers 1,639 574 Total receivables $ 70,897 $ 76,545 Payables: Payables to brokers and dealers $ 97,956 $ 77,440 Payables to clearing organizations 28,716 33,229 Securities failed-to-receive 23,848 18,559 Total payables $ 150,520 $ 129,228 95 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 8 - PROPERTY AND EQUIPMENT, NET The components of property and equipment, net were as follows at December 31, 2025 (in thousands): Historical Cost Accumulated Depreciation and Amortization Net Carrying Value Internally developed software $ 2,053,301 $ ( 1,163,845 ) $ 889,456 Computers and software 612,222 ( 423,455 ) 188,767 Buildings 106,450 ( 25,192 ) 81,258 Leasehold improvements 118,011 ( 67,086 ) 50,925 Furniture and equipment 104,040 ( 86,047 ) 17,993 Land 9,978 — 9,978 Work in progress (1) 170,999 — 170,999 Total property and equipment, net $ 3,175,001 $ ( 1,765,625 ) $ 1,409,376 ____________________ (1) Work in progress includes $ 110.6 million of internal software in development and related hardware and software at December 31, 2025. The components of property and equipment, net were as follows at December 31, 2024 (in thousands): Historical Cost Accumulated Depreciation and Amortization Net Carrying Value Internally developed software $ 1,628,889 $ ( 871,226 ) $ 757,663 Computers and software 519,209 ( 339,553 ) 179,656 Buildings 107,873 ( 23,254 ) 84,619 Leasehold improvements 107,359 ( 61,142 ) 46,217 Furniture and equipment 100,399 ( 89,084 ) 11,315 Land 4,678 — 4,678 Work in progress (1) 125,879 — 125,879 Total property and equipment, net $ 2,594,286 $ ( 1,384,259 ) $ 1,210,027 ____________________ (1) Work in progress includes $ 102.4 million of internal software in development and related hardware and software at December 31, 2024. Depreciation and amortization was $ 393.4 million, $ 308.5 million and $ 247.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. NOTE 9 - GOODWILL AND OTHER INTANGIBLES, NET During the year ended December 31, 2025 , 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. See Note 4 - Acquisitions , for additional information. A summary of the activity impacting goodwill is presented below (in thousands): Balance at December 31, 2023 $ 1,856,648 Goodwill acquired 333,205 Purchase accounting adjustments ( 16,980 ) Balance at December 31, 2024 2,172,873 Goodwill acquired 497,885 Purchase accounting adjustments ( 26,035 ) Balance at December 31, 2025 $ 2,644,723 96 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The components of other intangibles, net were as follows at December 31, 2025 (thousands): Weighted-Average Life Remaining (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value Definite-lived intangibles, net (1) : Advisor and institution relationships 13.6 $ 3,350,706 $ ( 859,100 ) $ 2,491,606 Client relationships 12.3 909,868 ( 143,039 ) 766,829 Trade name 15.6 26,000 ( 677 ) 25,323 Technology 3.0 20,930 ( 15,443 ) 5,487 Product sponsor relationships 1.2 234,086 ( 232,362 ) 1,724 Total definite-lived intangible assets, net $ 4,541,590 $ ( 1,250,621 ) $ 3,290,969 Other indefinite-lived intangibles: Trademark and trade name 39,819 Total other intangibles, net $ 3,330,788 ____________________ (1) During the year ended December 31, 2025, the Company completed various acquisitions. See Note 4 - Acquisitions , for additional information . The components of other intangibles, net were as follows at December 31, 2024 (thousands): Weighted-Average Life Remaining (in years) Gross Carrying Value Accumulated Amortization Net Carrying Value Definite-lived intangibles, net (1) : Advisor and institution relationships 13.4 $ 1,626,281 $ ( 699,385 ) $ 926,896 Client relationships 12.7 581,519 ( 86,292 ) 495,227 Product sponsor relationships 1.3 234,086 ( 220,880 ) 13,206 Technology 7.6 20,930 ( 13,090 ) 7,840 Total definite-lived intangibles, net $ 2,462,816 $ ( 1,019,647 ) $ 1,443,169 Other indefinite-lived intangibles: Trademark and trade name 39,819 Total other intangibles, net $ 1,482,988 ____________________ (1) During the year ended December 31, 2024, t he Company completed various acquisitions. See Note 4 - Acquisitions , for additional information . Total amortization of other intangibles was $ 236.6 million, $ 135.2 million and $ 107.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. Future amortization is estimated as follows (in thousands): 2026 $ 260,211 2027 256,453 2028 254,756 2029 247,915 2030 245,920 Thereafter 2,025,714 Total $ 3,290,969 97 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 10 - OTHER ASSETS AND OTHER LIABILITIES The components of other assets and other liabilities were as follows (dollars in thousands): December 31, 2025 2024 Other assets: Deferred compensation $ 1,107,552 $ 865,585 Prepaid assets 240,010 194,690 Fractional shares - investment 371,683 278,683 Deferred tax assets, net 78,222 129,902 Operating lease assets 173,544 119,144 Referral fee 106,038 85,780 Income tax receivables 53,245 20,026 Debt issuance costs, net 10,824 14,154 Other 61,326 107,775 Total other assets $ 2,202,444 $ 1,815,739 Other liabilities: Deferred compensation $ 1,100,018 $ 862,698 Unearned revenue 265,024 207,563 Operating lease liabilities 203,970 147,718 Fractional shares - repurchase obligation 371,683 278,683 Finance lease liabilities (1) — 105,123 Financing obligation liabilities (1) 108,433 — Taxes payable 69,348 134,815 Contingent consideration 124,038 196,898 Other 5,001 18,241 Total other liabilities $ 2,247,515 $ 1,951,739 (1) During the year ended December 31, 2025 , t he Company entered into a financing arrangement that resulted in the derecognition of its finance lease and the recognition of a financing obligation. See Note 12 - Leases , for additional information . 98 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 11 - CORPORATE DEBT AND OTHER BORROWINGS, NET The Company’s outstanding corporate debt and other borrowings, net were as follows (in thousands): December 31, 2025 December 31, 2024 Corporate Debt Balance Applicable Margin Interest Rate Balance Applicable Margin Interest rate Maturity Term Loan A (1) $ 1,020,000 SOFR+ 125 bps 4.984 % $ 1,020,000 SOFR+ 147.5 bps 6.000 % 12/5/2028 2027 Senior Notes (1) 500,000 Fixed Rate 5.700 % 500,000 Fixed Rate 5.700 % 5/20/2027 2027 Senior Notes (1) 400,000 Fixed Rate 4.625 % 400,000 Fixed Rate 4.625 % 11/15/2027 2028 Senior Notes (1) 500,000 Fixed Rate 4.900 % — Fixed Rate — % 4/3/2028 2028 Senior Notes (1) 750,000 Fixed Rate 6.750 % 750,000 Fixed Rate 6.750 % 11/17/2028 2029 Senior Notes (1) 900,000 Fixed Rate 4.000 % 900,000 Fixed Rate 4.000 % 3/15/2029 2030 Senior Notes (1) 750,000 Fixed Rate 5.200 % — Fixed Rate — % 3/15/2030 2030 Senior Notes (1) 500,000 Fixed Rate 5.150 % — Fixed Rate — % 6/15/2030 2031 Senior Notes (1) 400,000 Fixed Rate 4.375 % 400,000 Fixed Rate 4.375 % 5/15/2031 2034 Senior Notes (1) 500,000 Fixed Rate 6.000 % 500,000 Fixed Rate 6.000 % 5/20/2034 2035 Senior Notes (1) 500,000 Fixed Rate 5.650 % — Fixed Rate — % 3/15/2035 2035 Senior Notes (1) 500,000 Fixed Rate 5.750 % — Fixed Rate — % 6/15/2035 Total Corporate Debt 7,220,000 4,470,000 Less: Unamortized Debt Issuance Cost ( 40,306 ) ( 22,276 ) Corporate debt, net $ 7,179,694 $ 4,447,724 Other Borrowings Revolving Credit Facility 79,000 ABR+ 37.5 bps / SOFR+ 147.5 bps 5.634 % 1,047,000 ABR+ 37.5 bps / SOFR+ 147.5 bps 6.007 % 5/20/2029 Total other borrowings $ 79,000 $ 1,047,000 Corporate Debt and Other Borrowings, Net $ 7,258,694 $ 5,494,724 _______________________________ (1) No leverage or interest coverage maintenance covenants. The minimum calendar year payments and maturities of the corporate debt and other borrowings as of December 31, 2025 were as follows (in thousands): 2026 $ — 2027 900,000 2028 2,270,000 2029 979,000 2030 1,250,000 Thereafter 1,900,000 Total $ 7,299,000 99 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table presents amounts outstanding and available under the Company’s external lines of credit at December 31, 2025 (in millions): Description Borrower Maturity Date Outstanding Available Senior unsecured, revolving credit facility LPL Holdings, Inc. May 2029 $ 79 $ 2,170 Broker-dealer revolving credit facility LPL Financial LLC May 2026 $ — $ 1,000 Unsecured, uncommitted lines of credit LPL Financial LLC None $ — $ 75 Unsecured, uncommitted lines of credit LPL Financial LLC September 2026 $ — $ 50 Secured, uncommitted lines of credit LPL Financial LLC March 2028 $ — $ 75 Secured, uncommitted lines of credit LPL Financial LLC None $ — unspecified Secured, uncommitted lines of credit LPL Financial LLC None $ — unspecified Refinanced Existing Term Loan B Facility with Term Loan A Facility and Subsequent Extension On December 5, 2024, LPLH refinanced its existing $ 1.0 billion Term Loan B facility (the “Term Loan B”) with a new $ 1.0 billion Term Loan A facility (the “Term Loan A”). On November 21, 2025, LPLH executed the tenth amended and restated credit agreement (the “Credit Agreement”) with its existing syndicate of lenders. As part of this agreement, LPL engaged JPMorgan Chase Bank to refinance the Term Loan A, extending its maturity by two years from December 5, 2026 to December 5, 2028. Additionally, the Company's borrowing rate applicable to the Term Loan A decreased by 0.125% at all pricing levels. Issuance of 2028 4.900 % Senior Notes, 2030 5.150 % Senior Notes, and 2035 5.750 % Senior Notes On April 3, 2025, the Company completed the issuance and sale of $ 500.0 million in aggregate principal amount of 4.900 % senior unsecured notes due 2028 (“2028 4.900 % Senior Notes”), $ 500.0 million in aggregate principal amount of 5.150 % senior unsecured notes due 2030 (“2030 5.150 % Senior Notes”) and $ 500.0 million in aggregate principal amount of 5.750 % senior unsecured notes due 2035 (“2035 5.750 % Senior Notes”). The proceeds of the issuance were utilized to fund the acquisition of Commonwealth. The 2028 4.900 % Senior Notes will mature on April 3, 2028, and interest is payable semi-annually. The Company may redeem all or part of the 2028 4.900 % Senior Notes on or prior to March 3, 2028 at a redemption price that is equal to the greater of: (i) the remaining scheduled payments of principal and interest discounted at the Treasury Rate (as defined in the Sixth Supplemental Indenture dated April 3, 2025) plus 20 basis points less interest accrued to the redemption date, and (ii) 100 % of the principal amount of the 2028 4.900 % Senior Notes to be redeemed plus accrued interest. On or after March 3, 2028, the Company may redeem the 2028 4.900 % Senior Notes at 100 % of the principal amount of the notes to be redeemed plus accrued and unpaid interest. The 2030 5.150 % Senior Notes will mature on June 15, 2030, and interest is payable semi-annually. The Company may redeem all or part of the 2030 5.150 % Senior Notes on or prior to May 15, 2030 at a redemption price that is equal to the greater of: (i) the remaining scheduled payments of principal and interest discounted at the Treasury Rate (as defined in the Seventh Supplemental Indenture dated April 3, 2025) plus 20 basis points less interest accrued to the redemption date, and (ii) 100 % of the principal amount of the 2030 5.150 % Senior Notes to be redeemed plus accrued interest. On or after May 15, 2030, the Company may redeem the 2030 5.150 % Senior Notes at 100 % of the principal amount of the notes to be redeemed plus accrued and unpaid interest. The 2035 5.750 % Senior Notes will mature on June 15, 2035, and interest is payable semi-annually. The Company may redeem all or part of the 2035 5.750 % Senior Notes on or prior to March 15, 2035 at a redemption price that is equal to the greater of: (i) the remaining scheduled payments of principal and interest discounted at the Treasury Rate (as defined in the Eighth Supplemental Indenture dated April 3, 2025) plus 25 basis points less interest accrued to the redemption date, and (ii) 100 % of the principal amount of the 2035 5.750 % Senior Notes to be redeemed plus accrued interest. On or after March 15, 2035, the Company may redeem the 2035 5.750 % Senior Notes at 100 % of the principal amount of the notes to be redeemed plus accrued and unpaid interest. In connection with the issuance of the 2028 4.900 % Senior Notes, 2030 5.150 % Senior Notes and 2035 5.750 % Senior Notes, the Company incurred $ 11.0 million in costs, which were capitalized as debt issuance costs in the consolidated statements of financial condition. 100 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Issuance of 2030 5.200 % Senior Notes and 2035 5.650 % Senior Notes On February 26, 2025, LPLH issued $ 750.0 million in aggregate principal amount of 5.200 % senior notes due 2030 (“2030 5.200 % Senior Notes”) and $ 500.0 million in aggregate principal amount of 5.650 % senior notes due 2035 (the “2035 5.650 % Senior Notes”). The 2030 5.200 % Senior Notes and 2035 5.650 % Senior Notes are unsecured obligations of the Company and are fully and unconditionally guaranteed on a senior unsecured basis by LPLFH. The Company used a portion of the proceeds from the issuance to repay borrowings made under its senior unsecured revolving credit facility and for general corporate purposes. The 2030 5.200 % Senior Notes will mature on March 15, 2030, and interest is payable semi-annually. The Company may redeem all or part of the 2030 5.200 % Senior Notes on or prior to February 15, 2030 at a redemption price that is equal to the greater of: (i) the remaining scheduled payments of principal and interest discounted at the Treasury Rate (as defined in the Fourth Supplemental Indenture dated February 26, 2025) plus 15 basis points less interest accrued to the redemption date, and (ii) 100 % of the principal amount of the 2030 5.200 % Senior Notes to be redeemed plus accrued interest. On or after February 15, 2030, the Company may redeem the 2030 5.200 % Senior Notes at 100 % of the principal amount of the notes to be redeemed plus accrued and unpaid interest. The 2035 5.650 % Senior Notes will mature on March 15, 2035, and interest is payable semi-annually. The Company may redeem all or part of the 2035 5.650 % Senior Notes on or prior to December 15, 2034 at a redemption price that is equal to the greater of: (i) the remaining scheduled payments of principal and interest discounted at the Treasury Rate (as defined in the Fifth Supplemental Indenture dated February 26, 2025) plus 20 basis points less interest accrued to the redemption date, and (ii) 100 % of the principal amount of the 2035 5.650 % Senior Notes to be redeemed plus accrued interest. On or after December 15, 2034, the Company may redeem the 2035 5.650 % Senior Notes at 100 % of the principal amount of the notes to be redeemed plus accrued and unpaid interest. In connection with the issuance of the 2030 5.200 % Senior Notes and 2035 5.650 % Senior Notes, the Company incurred $ 10.4 million in costs, which were capitalized as debt issuance costs in the consolidated statements of financial condition. Issuance of 2027 Senior Notes and 2034 Senior Notes On May 20, 2024, LPLH issued $ 500.0 million in aggregate principal amount of 5.700 % senior notes due 2027 (“2027 Senior Notes”) and $ 500.0 million in aggregate principal amount of 6.000 % senior notes due 2034 (the “2034 Senior Notes” and, together with the 2027 Notes, the “Senior Notes”). In connection with the issuance of the Senior Notes, the Company incurred $ 7.1 million in costs, which were capitalized as debt issuance costs in the consolidated statements of financial condition. Credit Agreement and Parent Revolving Credit Facility On May 20, 2024, LPLH amended its revolving credit facility to, among other things, increase the maximum borrowing from $ 2.0 billion to $ 2.25 billion and extend the maturity of the revolving credit facility to May 2029. In connection with the amendment of the credit facility, LPLH incurred $ 8.6 million in costs, which were capitalized as debt issuance costs in the consolidated statements of financial condition. The Credit Agreement subjects the Company to certain financial and non-financial covenants. As of December 31, 2025, the Company was in compliance with such covenants. Broker-Dealer Revolving Credit Facility On May 19, 2025, LPL Financial, the Company’s broker-dealer subsidiary, renewed its revolving credit facility to extend the maturity of the revolving credit facility to May 18, 2026. The revolving credit facility allows for a maximum borrowing of up to $ 1.0 billion and borrowings under the credit facility bear interest at a rate per annum equal to 1.25 % per annum plus the greatest of (i) SOFR, (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 $ 1.3 million in costs, which were capitalized as debt issuance costs in the 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 December 31, 2025. Other External Lines of Credit LPL Financial maintained five uncommitted lines of credit as of December 31, 2025. Two of the lines have unspecified limits, which are primarily dependent on LPL Financial’s ability to provide sufficient collateral. The other 101 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements three lines have a total limit of $ 200.0 million, of which $ 125.0 million is uncollateralized. There were no balances outstanding under these lines at December 31, 2025 or December 31, 2024. NOTE 12 - LEASES The Company determines if an arrangement is a lease or contains a lease at inception. The Company has operating leases for corporate offices and equipment with remaining lease terms of 1 to 12 years, some of which include options to extend the lease for up to 21 years. For leases with renewal options, the lease term is extended to reflect renewal options the Company is reasonably certain to exercise. Operating lease assets and operating lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. As most of the Company’s leases do not provide an implicit rate, the Company estimates its incremental borrowing rate based on information available at the commencement date in determining the present value of future payments. Lease expense related to the net present value of payments is recognized on a straight-line basis over the lease term. The lease for the Company’s Fort Mill, South Carolina office was previously accounted for as a financing lease. In April 2025, the Company entered into a 20 year credit tenant lease which was accounted for as a financing arrangement as it did not qualify for sale-leaseback accounting primarily due to the existence of an option to purchase the property for $ 1 at the end of the lease term. As a result of the transaction, the term was extended, a financing obligation of $ 109.3 million was recorded, and the existing finance lease liability of $ 105.0 million was derecognized. The Company allocated $ 104.0 million and $ 5.3 million to building and land, respectively, in the property and equipment, net line item in the Company's consolidated statements of financial condition. In connection with the sale-leaseback, the Company incurred incremental costs of $ 2.5 million, which were included in the basis of the amount financed. The financing obligation has a stated interest rate of 6.4 % and matures on May 1, 2045. Net carrying values of building and land assets associated with financing obligations were $ 81.3 million and $ 5.3 million, respectively, at December 31, 2025 and are included in property and equipment, net in the consolidated statements of financial condition. Assets associated with finance leases were $ 84.6 million at December 31, 2024, and were included in property and equipment, net in the consolidated statements of financial condition. The components of lease expense were as follows (in thousands): Years Ended December 31, 2025 2024 2023 Operating lease cost $ 31,316 $ 21,274 $ 19,303 Finance lease cost: Amortization of right-of-use assets $ 969 $ 3,876 $ 3,876 Interest on lease liabilities 2,057 8,385 8,382 Total finance lease cost $ 3,026 $ 12,261 $ 12,258 Supplemental weighted-average information related to leases was as follows: December 31, 2025 2024 Weighted-average remaining lease term (years): Finance leases 0.0 21.8 Operating leases 5.9 5.0 Weighted-average discount rate: Finance leases — 7.94 % Operating leases 6.26 % 6.55 % 102 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Maturities of operating lease liabilities as of December 31, 2025 were as follows (in thousands): 2026 $ 48,174 2027 49,063 2028 47,704 2029 29,785 2030 17,084 Thereafter 57,017 Total lease payments 248,827 Less imputed interest 44,857 Total $ 203,970 The minimum calendar year payments and maturities of the financing obligation as of December 31, 2025 were as follows (in thousands): 2026 $ 1,540 2027 1,816 2028 2,113 2029 2,433 2030 2,777 Thereafter 97,754 Total $ 108,433 NOTE 13 - INCOME TAXES The components of the provision for income taxes were as follows (in thousands): Years Ended December 31, 2025 2024 2023 Current provision for income taxes: Federal $ 158,426 $ 325,858 $ 355,393 State 75,122 84,662 91,586 Total current provision for income taxes 233,548 410,520 446,979 Deferred provision (benefit) for income taxes: Federal 66,574 ( 66,056 ) ( 56,539 ) State ( 13,639 ) ( 10,188 ) ( 11,915 ) Total deferred provision (benefit) for income taxes 52,935 ( 76,244 ) ( 68,454 ) Provision for income taxes $ 286,483 $ 334,276 $ 378,525 103 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table reflects a reconciliation of the U.S. federal statutory income tax rates to the Company’s effective income tax rates: Year Ended December 31, 2025 Amount % Federal at statutory income tax rates $ 241,413 21.0 % State income taxes, net of federal benefit (1) 47,832 4.2 Tax credits: General business credits ( 9,914 ) ( 0.9 ) Changes in unrecognized tax benefits 9,717 0.8 Nontaxable or nondeductible items: Share-based payment awards ( 4,163 ) ( 0.4 ) Other 1,598 0.2 Effective income tax rate $ 286,483 24.9 % (1) State taxes in California, Illinois, New York, Pennsylvania, New Jersey, and Minnesota made up the majority (greater than 50%) of the tax effect in this category. The following table reflects a reconciliation of the U.S. federal statutory income tax rates to the Company’s effective income tax rates in accordance with the guidance in effect prior to the adoption of the new income tax disclosure requirements during the year ended December 31, 2025: Years Ended December 31, 2024 2023 Federal statutory income tax rates 21.0 % 21.0 % State income taxes, net of federal benefit 4.2 5.0 Non-deductible expenses 0.2 0.9 Federal research and development credits ( 0.7 ) ( 0.6 ) Share-based compensation ( 0.8 ) ( 0.2 ) Other 0.1 0.1 Effective income tax rates 24.0 % 26.2 % The Company’s effective income tax rate differs from the federal corporate tax rate of 21.0 % primarily as a result of state taxes, non-deductible expenses, uncertain tax position reserves, tax credits and benefits from the vesting and exercise of share-based compensation. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. 104 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The components of the net deferred income taxes included in the consolidated statements of financial condition were as follows (in thousands): December 31, 2025 2024 Deferred tax assets: Deferred compensation $ 290,055 $ 230,757 Operating lease liabilities 55,072 40,240 Tax credit carryforwards 28,999 24,244 Finance lease liabilities — 28,383 Forgivable loans 89,783 41,003 Capitalized research and development expenditures 2,062 22,164 Accrued liabilities 33,369 29,813 Share-based compensation 17,433 15,323 Other 14,290 19,329 Deferred tax assets 531,063 451,256 Less: valuation allowance ( 24,131 ) ( 23,215 ) Total deferred tax assets 506,932 428,041 Deferred tax liabilities: Internally developed software ( 201,680 ) ( 43,053 ) Depreciation of property and equipment ( 33,901 ) ( 55,334 ) Amortization of other intangibles ( 110,091 ) ( 147,574 ) Operating lease assets ( 47,019 ) ( 32,167 ) Unrealized gains and losses ( 31,276 ) ( 15,842 ) Other ( 4,743 ) ( 4,169 ) Total deferred tax liabilities ( 428,710 ) ( 298,139 ) Deferred tax assets, net $ 78,222 $ 129,902 The decrease in deferred tax assets, net as of December 31, 2025 compared to December 31, 2024 was primarily driven by tax acceleration of Section 174 research and development expenditures. At December 31, 2025, there were $ 22.3 million of tax credits that can be carried forward 15 years and will begin to expire during 2032, and $ 6.7 million of tax credits that can be carried forward 10 years and will begin to expire during 2032. We believe that it is more likely than not that a portion of the tax credit carryforwards will not be realized and have recorded a valuation allowance of $ 24.1 million on the deferred tax assets related to these tax credit carryforwards. The following table reflects a reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits (in thousands): December 31, 2025 2024 2023 Balance — beginning of year $ 46,519 $ 61,592 $ 52,270 Increases for tax positions taken during the current year 5,384 7,795 10,433 Increases for tax positions taken in the prior years 10,074 2,950 10,606 Reductions as a result of a lapse of the applicable statute of limitations and decreases in prior-year tax positions ( 9,223 ) ( 25,818 ) ( 11,717 ) Balance — end of year $ 52,754 $ 46,519 $ 61,592 At December 31, 2025 and 2024, there were $ 45.5 million and $ 40.1 million, respectively, of unrecognized tax benefits that if recognized, would favorably affect the effective income tax rate in any future periods. 105 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The Company accrues interest and penalties related to unrecognized tax benefits in its provision for income taxes within the consolidated statements of financial condition. At December 31, 2025 and 2024, the liability for unrecognized tax benefits included accrued interest of $ 12.0 million and $ 9.4 million, respectively, and penalties of $ 4.6 million and $ 4.1 million, respectively. The Company and its subsidiaries file federal, state and local income tax returns, which are subject to routine examinations by the respective taxing authorities. The Company is not currently under exam for federal purposes. The tax years of 2022 to 2024 remain open to examination in the federal jurisdiction. The tax years of 2015 to 2024 remain open to examination in the state jurisdictions. Net cash paid (refunds received) for income taxes consisted of the following (in thousands): Year Ended December 31, 2025 Federal $ 257,101 Aggregated state and local jurisdictions (1) 71,459 Net cash paid for income taxes $ 328,560 (1) No individual state taxing jurisdiction comprised more than 5% of net cash paid (refunds received). On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted into law. The Act includes several changes to the corporate income tax system, including accelerated tax deductions for qualified property and U.S. based research expenditures, and modifications to computations of the business interest expense limitation. The Act did not meaningfully impact our effective tax rate for 2025; however, the Act reduced our cash tax payments made during 2025. NOTE 14 - 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. Future minimum payments under service, development and agency contracts, and other contractual obligations with initial terms greater than one year were as follows at December 31, 2025 (in thousands): 2026 $ 93,277 2027 68,622 2028 21,049 2029 7,206 2030 7,710 Thereafter — Total $ 197,864 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. 106 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements Loan Commitments LPL Financial makes loans to advisors and institutions, primarily to newly recruited advisors and 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 the advisor or institution joining LPL Financial. LPL Financial had no significant unfunded loan commitments at December 31, 2025 or 2024. 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 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 February 2023, the Company received a request for information from the SEC in connection with an investigation of certain elements of the Company’s Anti-Money Laundering compliance program. In 2024, the SEC proposed a resolution under which the Company would pay an $ 18.0 million civil monetary penalty. As a result, the Company recorded $ 18.0 million in other expense in the consolidated statements of income for the year ended December 31, 2024. The Company reached a settlement with the staff of the SEC and paid the civil monetary penalty in January 2025. 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. The Company reached a settlement with the staff of the SEC to resolve its civil investigation and paid the civil monetary penalty of $ 50.0 million in August 2024. In July 2024, putative class action lawsuits were filed against LPL Financial in federal district court alleging certain violations of law in connection with its cash sweep programs. The Company intends to defend vigorously against the lawsuits. In August 2024, the Company received a request for information from the SEC regarding certain elements of the Company’s cash management program for corporate advisory accounts. On January 23, 2026, the SEC informed the Company that it had concluded its investigation and did not intend to recommend an enforcement action. 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 its captive insurance subsidiary. Liabilities associated with the risks that are retained by the Company are not discounted and are estimated by considering, in 107 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements 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 consolidated statements of financial condition. Self-insurance related charges are included in other expense in the consolidated statements of income. The following table provides a reconciliation of the beginning and ending balances of self-insurance liabilities for the years presented (in thousands): December 31, 2025 2024 2023 Beginning balance — January 1 $ 79,637 $ 82,883 $ 74,071 Losses incurred 45,282 37,392 36,319 Losses paid ( 23,368 ) ( 40,638 ) ( 27,507 ) Ending balance — December 31 $ 101,551 $ 79,637 $ 82,883 Other Commitments As of December 31, 2025, the Company had approximately $ 744.5 million of client margin loans that were collateralized with securities having a fair value of approximately $ 1.0 billion that LPL Financial can repledge, loan or sell. Of these securities, approximately $ 502.5 million were client-owned securities pledged to the Options Clearing Corporation as collateral to secure client obligations related to options positions. As of December 31, 2025, there were no restrictions that materially limited the Company’s ability to repledge, loan or sell the remaining $ 539.9 million of client collateral. Investment securities on the consolidated statements of financial condition include $ 15.0 million and $ 8.5 million of trading securities pledged to the Options Clearing Corporation at December 31, 2025 and 2024, respectively, and $ 25.0 million and $ 20.0 million of trading securities pledged to the National Securities Clearing Corporation at December 31, 2025 and 2024, respectively. NOTE 15 - STOCKHOLDERS’ EQUITY Dividends The payment, timing, and amount of any dividends are subject to approval by LPLFH’s Board of Directors (the “Board”) as well as certain limits under the Credit 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): 2025 2024 2023 Dividend per Share Total Cash Dividend Dividend per Share Total Cash Dividend Dividend per Share Total Cash Dividend First quarter $ 0.30 $ 22.4 $ 0.30 $ 22.4 $ 0.30 $ 23.6 Second quarter $ 0.30 $ 24.0 $ 0.30 $ 22.4 $ 0.30 $ 23.1 Third quarter $ 0.30 $ 24.0 $ 0.30 $ 22.4 $ 0.30 $ 22.8 Fourth quarter $ 0.30 $ 24.0 $ 0.30 $ 22.5 $ 0.30 $ 22.7 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 consolidated statements of financial condition. On September 21, 2022, the Board authorized a $ 2.1 billion increase to the amount available for repurchases of the Company’s issued and outstanding common shares. During the year ended December 31, 2025, LPLFH repurchased 289,371 shares of common stock at a weighted-average price of $ 345.59 for a total of $ 100.0 million. As of December 31, 2025, the Company had $ 630.0 million 108 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements remaining under the existing share repurchase program. The Company paused share repurchases in early 2025 in anticipation of the Commonwealth acquisition. 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 and the Company’s general working capital needs. Equity Offering On April 2, 2025, the Company completed a public offering of approximately 5.4 million shares of the Company’s common stock at an offering price of $ 320.00 per share. The Company received proceeds of approximately $ 1.7 billion, which were used to fund the acquisition of Commonwealth. In connection with the issuance, the Company incurred incremental costs of $ 48.1 million, which were recorded as a reduction to the offering proceeds. See Note 4 - Acquisitions for additional information. NOTE 16 - SHARE-BASED COMPENSATION, EMPLOYEE INCENTIVES AND BENEFIT PLANS 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 shares authorized for grant under the 2021 Plan and 11,662,238 shares remaining available for future issuance at December 31, 2025. Stock Options and Warrants The following table summarizes the Company’s stock option and warrant activity as of and for the year ended December 31, 2025: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (In thousands) Outstanding — December 31, 2024 135,510 $ 61.08 Granted — $ — Exercised ( 70,200 ) $ 59.07 Forfeited and Expired — $ — Outstanding — December 31, 2025 65,310 $ 63.23 2.24 $ 19,197 Exercisable — December 31, 2025 65,310 $ 63.23 2.24 $ 19,197 Exercisable and expected to vest — December 31, 2025 65,310 $ 63.23 2.24 $ 19,197 109 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements The following table summarizes information about outstanding stock options and warrants as of December 31, 2025: Outstanding Exercisable Range of Exercise Prices Total Number of Shares Weighted- Average Remaining Life (Years) Weighted- Average Exercise Price Number of Shares Weighted- Average Exercise Price $ 19.85 - $ 25.00 3,083 0.15 $ 19.85 3,083 $ 19.85 $ 25.01 - $ 35.00 — 0.00 $ — — $ — $ 35.01 - $ 45.00 14,746 1.20 $ 39.48 14,746 $ 39.48 $ 45.01 - $ 65.00 — 0.00 $ — — $ — $ 65.01 - $ 75.00 16,190 2.12 $ 65.50 16,190 $ 65.50 $ 75.01 - $ 80.00 31,291 3.00 $ 77.53 31,291 $ 77.53 65,310 2.24 $ 63.23 65,310 $ 63.23 The Company has not granted stock options or warrants since 2019; however, during the fourth quarter of 2024, certain previously vested and outstanding stock option awards granted to the Company’s former Chief Executive Officer (“CEO”) were clawed back and certain awards were modified in connection with his termination for “Cause” as defined in the Company’s Executive Severance Plan, the 2010 Plan, and the 2021 Plan. The clawback of stock options resulted in $ 2.6 million of other income, which was recorded in other revenue in the consolidated statements of income for the year ended December 31, 2024. The modification of certain of these previously vested options resulted in $ 12.0 million of share-based compensation expense, which was included in compensation and benefits in the consolidated statements of income. The modified options were exercised in December 2024. The Company recognized no share-based compensation expense related to the vesting of stock options during the years ended December 31, 2025 or 2024. As of December 31, 2025, 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. 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, for the year ended December 31, 2025: Restricted Stock Awards Stock Units Number of Shares Weighted-Average Grant-Date Fair Value Number of Shares Weighted-Average Grant-Date Fair Value Outstanding — December 31, 2024 6,291 $ 268.64 622,564 $ 233.79 Granted 1,820 $ 372.50 332,430 $ 363.67 Vested ( 6,907 ) $ 277.90 ( 260,216 ) $ 241.06 Forfeited — $ — ( 59,691 ) $ 324.57 Outstanding — December 31, 2025 1,204 $ 372.50 635,087 (1) $ 290.26 Expected to vest — December 31, 2025 1,204 $ 372.50 489,507 $ 324.11 ____________________ (1) Includes 97,544 vested and undistributed deferred stock units. 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 $ 64.9 million, $ 66.5 million and $ 57.4 million of share-based compensation expense related to the vesting of these restricted stock awards and stock units during the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, total unrecognized compensation cost for restricted stock awards and stock units was $ 97.0 110 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements million, which is expected to be recognized over a weighted-average remaining period of 1.9 years. The Company recognized $ 23.8 million of other income, with an offset to additional paid-in capital, during the three months ended December 31, 2024 relating to the clawback of restricted stock units of the Company’s former CEO’s in connection with his termination for “Cause” as defined in the Company’s Executive Severance Plan, the 2010 Plan, and the 2021 Plan. The Company also grants restricted stock units to its advisors and to institutions. The Company recognized share-based compensation expense of $ 3.4 million, $ 2.8 million and $ 2.6 million related to the vesting of these awards during the years ended December 31, 2025, 2024 and 2023, respectively. As of December 31, 2025, total unrecognized compensation cost for restricted stock units granted to advisors and institutions was $ 7.5 million, which is expected to be recognized over a weighted-average remaining period of 2.2 years. Employee Incentives and Benefit Plan s The Company sponsors a 401(k) defined contribution plan sponsored for all employees meeting eligibility requirements. The Company matches eligible employee contributions after completing six months of service. For eligible employees, the Company matches up to 75 % of the first 8 % of an employee’s designated deferral of their eligible compensation. The Company’s total cost related to the 401(k) plan was $ 40.6 million, $ 35.8 million and $ 30.3 million for the years ended December 31, 2025, 2024 and 2023, respectively, which is classified as compensation and benefits expense in the consolidated statements of income. The Company established its Employee Stock Purchase Plan (the “ESPP”) as a benefit to enable eligible employees to purchase common stock of LPLFH at a discount from the market price through payroll deductions, subject to limitations. The ESPP provides for a 15 % discount on the market value of the stock at the lower of the grant date price (first day of the offering period) and the purchase date price (last day of the offering period). The Company recognized $ 11.1 million, $ 10.5 million and $ 8.7 million of share-based compensation expense related to the ESPP during the years ended December 31, 2025, 2024 and 2023, respectively. The Company’s 2012 Employee Stock Purchase Plan was replaced by its 2021 Employee Stock Purchase Plan in May 2021. The Company sponsors a non-qualified deferred compensation plan for the purpose of attracting and retaining advisors who operate, for tax purposes, as independent contractors, by providing an opportunity for participating advisors to defer receipt of a portion of their gross commissions generated primarily from commissions earned on the sale of various products. The deferred compensation plan has been fully funded to date by participant contributions. Plan assets are invested in mutual funds, which are held by the Company in a Rabbi Trust. The liability for benefits accrued under the non-qualified deferred compensation plan totaled $ 1,033.0 million and $ 817.5 million at December 31, 2025 and 2024, respectively, which is included in other liabilities in the consolidated statements of financial condition. The cash value of the related trust assets was $ 1,033.8 million and $ 818.4 million at December 31, 2025 and 2024, respectively, which is measured at fair value and included in other assets in the consolidated statements of financial condition. Certain employees of the Company participate in a non-qualified deferred compensation plan that permits participants to defer portions of their compensation and may receive a return based on the allocation of notional investments offered under the plan. Plan assets are held by the Company in a Rabbi Trust and accounted for in the manner described above. As of December 31, 2025, the Company has recorded assets of $ 73.8 million and liabilities of $ 67.0 million, which are included in other assets and other liabilities, respectively, in the consolidated statements of financial condition. As of December 31, 2024, the Company had recorded assets of $ 47.2 million and liabilities of $ 45.2 million. 111 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 17 - 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 years noted was as follows (in thousands, except per share data): Years Ended December 31, 2025 2024 2023 Net income $ 863,024 $ 1,058,616 $ 1,066,250 Basic weighted-average number of shares outstanding 78,681 74,713 76,807 Dilutive common share equivalents 380 714 1,054 Diluted weighted-average number of shares outstanding 79,061 75,427 77,861 Basic earnings per share $ 10.97 $ 14.17 $ 13.88 Diluted earnings per share $ 10.92 $ 14.03 $ 13.69 The computation of diluted earnings per share excludes stock options, warrants and stock units that are anti-dilutive. For the years ended December 31, 2025, 2024 and 2023, stock options, warrants and stock units representing common share equivalents of 41,871 shares, 42,918 shares and 55,298 shares, respectively, were anti-dilutive. NOTE 18 - 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), which requires the maintenance of minimum net capital. The Uniform Net Capital Rule also provides 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 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. The following table presents the net capital position of the Company’s primary broker-dealer subsidiary (in thousands): December 31, 2025 LPL Financial LLC Net capital $ 336,201 Less: required net capital 24,789 Excess net capital $ 311,412 The Company’s other regulated subsidiaries, including LPL Enterprise, CES, and PTC, are 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 their operations. As of December 31, 2025, the Company’s other regulated subsidiaries met all capital adequacy requirements to which they were subject. 112 Table of Contents LPL FINANCIAL HOLDINGS INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements NOTE 19 - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET CREDIT RISK AND CONCENTRATIONS OF CREDIT RISK LPL Financial may offer loans to new and existing advisors and 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 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 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 one business day 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 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 20 - SEGMENT INFORMATION The Company's Chief Operating Decision Maker (“CODM”) is the group that includes the Chief Executive Officer and the President and Chief Financial Officer of the Company. The Company determined that it has one reportable segment, given the common nature of the Company’s operations, products and services, production and distribution process, and regulatory environment. The Company provides an integrated platform of brokerage and investment advisory services to independent financial advisors and advisors at financial institutions from which the Company derives its revenues and incurs expenses. For additional information see Note 3 - Revenue. The CODM regularly reviews pre-tax net income as presented on the Company’s consolidated statements of income for purposes of assessing performance and making decisions about resource allocation. Expenses regularly reviewed by the CODM include those line items reported on the Company’s consolidated statements of income, the most significant of which include advisory and commission, compensation and benefits, promotional, and occupancy and equipment expenses. See our consolidated financial statements in Part II, “ Item 8. Financial Statements and Supplementary Data” and Note 2 - Summary of Significant Accounting Policies for additional information about these line items and the related accounting policies. NOTE 21 - SUBSEQUENT EVENTS The Company’s Board declared a cash dividend of $ 0.30 per share on the Company’s outstanding common stock to be paid on March 24, 2026 to all stockholders of record on March 10, 2026 . 113 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.