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Interactive Brokers Group Announces 2Q2024 Results

GAAP DILUTED EPS OF $1.65, ADJUSTED1 EPS OF $1.76

GAAP NET REVENUES OF $1,230 MILLION, ADJUSTED NET REVENUES OF $1,290 MILLION

Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated global electronic broker, announced results for the quarter ended June 30, 2024.

Reported diluted earnings per share were $1.65 for the current quarter and $1.76 as adjusted. For the year-ago quarter, reported diluted earnings per share were $1.20 and $1.32 as adjusted.

Reported net revenues were $1,230 million for the current quarter and $1,290 million as adjusted. For the year-ago quarter, reported net revenues were $1,000 million and $1,064 million as adjusted.

Reported income before income taxes was $880 million for the current quarter and $940 million as adjusted. For the year-ago quarter, reported income before income taxes was $652 million and $716 million as adjusted.

Financial Highlights

(All comparisons are to the year-ago quarter.)

  • Commission revenue increased 26% to $406 million on higher customer trading volumes. Customer trading volume in options, stocks and futures increased 35%, 26% and 10%, respectively.
  • Net interest income increased 14% to $792 million on higher benchmark interest rates, customer margin loans and customer credit balances.
  • Other fees and services increased $21 million, or 45%, to $68 million, driven primarily by increases of $14 million in risk exposure fees and $3 million each in payments for order flow from exchange-mandated programs and FDIC sweep program fees.
  • Execution, clearing and distribution fees expenses increased 24% to $115 million, driven by higher customer trading volumes and an increase in the SEC fee rate during the current quarter.
  • Pretax profit margin for the current quarter was 72% as reported and 73% as adjusted. For the year-ago quarter, reported pretax margin was 65% and 67% as adjusted.
  • Total equity of $15.2 billion.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.25 per share. This dividend is payable on September 13, 2024, to shareholders of record as of August 30, 2024.

Business Highlights

(All comparisons are to the year-ago quarter.)

  • Customer accounts increased 28% to 2.92 million.
  • Customer equity increased 36% to $497.2 billion.
  • Total DARTs2 increased 28% to 2.39 million.
  • Customer credits increased 8% to $107.1 billion.
  • Customer margin loans increased 32% to $55.1 billion.

Other Items

As previously disclosed, during the current quarter, we recognized a loss of approximately $48 million on positions taken over as customer accommodation due to a technical issue at the New York Stock Exchange that occurred on the morning of June 3, 2024.

In connection with our currency diversification strategy, we base our net worth in GLOBALs, a basket of 10 major currencies in which we hold our equity. In this quarter, our currency diversification strategy decreased our comprehensive earnings by $30 million, as the U.S. dollar value of the GLOBAL decreased by approximately 0.22%. The effects of the currency diversification strategy are reported as components of (1) Other Income (loss of $20 million) and (2) Other Comprehensive Income (loss of $10 million).

Conference Call Information:

Interactive Brokers Group, Inc. will hold a conference call with investors today, July 16, 2024, at 4:30 p.m. ET to discuss its quarterly results. Members of the public who would like to listen to the conference call should register at https://register.vevent.com/register/BI9f2adf478d354c83b495036e581df05b to obtain the dial-in details. The number should be dialed approximately ten minutes prior to the start of the conference call. The conference call will also be accessible simultaneously, and through replays, as an audio webcast through the Investor Relations section of the Interactive Brokers web site, www.interactivebrokers.com/ir.

About Interactive Brokers Group, Inc.:

Interactive Brokers Group affiliates provide automated trade execution and custody of securities, commodities, and foreign exchange around the clock on over 150 markets in numerous countries and currencies, from a single unified platform to clients worldwide. We serve individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation has enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Interactive Brokers has consistently earned recognition as a top broker, garnering multiple awards and accolades from respected industry sources such as Barron’s, Investopedia, Stockbrokers.com, and many others.

Cautionary Note Regarding Forward-Looking Statements:

The foregoing information contains certain forward-looking statements that reflect the Company’s current views with respect to certain current and future events and financial performance. These forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company’s operations and business environment which may cause the Company’s actual results to be materially different from any future results, expressed or implied, in these forward-looking statements. Any forward-looking statements in this release are based upon information available to the Company on the date of this release. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could potentially affect the Company’s financial results may be found in the Company’s filings with the Securities and Exchange Commission.

___________________

1
See the reconciliation of non-GAAP financial measures starting on page 9.

2 Daily average revenue trades (DARTs) are based on customer orders.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months Six Months
Ended June 30, Ended June 30,

2024

2023

2024

2023

(in millions, except share and per share data)
 
Revenues:
Commissions $

406

 

$

322

 

$

785

 

$

679

 

Other fees and services

68

 

47

 

127

 

90

 

Other income (loss)

(36

)

(63

)

(18

)

(44

)

Total non-interest income

438

 

306

 

894

 

725

 

 
Interest income

1,828

 

1,545

 

3,588

 

2,892

 

Interest expense

(1,036

)

(851

)

(2,049

)

(1,561

)

Total net interest income

792

 

694

 

1,539

 

1,331

 

Total net revenues

1,230

 

1,000

 

2,433

 

2,056

 

 
Non-interest expenses:
Execution, clearing and distribution fees

115

 

93

 

216

 

188

 

Employee compensation and benefits

146

 

136

 

291

 

264

 

Occupancy, depreciation and amortization

25

 

25

 

51

 

49

 

Communications

10

 

10

 

20

 

19

 

General and administrative

52

 

85

 

102

 

121

 

Customer bad debt

2

 

(1

)

7

 

2

 

Total non-interest expenses

350

 

348

 

687

 

643

 

 
Income before income taxes

880

 

652

 

1,746

 

1,413

 

Income tax expense

71

 

51

 

142

 

112

 

Net income

809

 

601

 

1,604

 

1,301

 

Net income attributable to noncontrolling interests

630

 

476

 

1,250

 

1,028

 

Net income available for common stockholders $

179

 

$

125

 

$

354

 

$

273

 

 
Earnings per share:
Basic $

1.67

 

$

1.21

 

$

3.30

 

$

2.65

 

Diluted $

1.65

 

$

1.20

 

$

3.27

 

$

2.62

 

 
Weighted average common shares outstanding:
Basic

107,719,020

 

103,587,557

 

107,394,925

 

103,274,846

 

Diluted

108,626,836

 

104,463,729

 

108,388,138

 

104,254,888

 

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 
Three Months Six Months
Ended June 30, Ended June 30,

2024

2023

2024

2023

(in millions, except share and per share data)
 
Comprehensive income:
Net income available for common stockholders $

179

 

$

125

$

354

 

$

273

Other comprehensive income:
Cumulative translation adjustment, before income taxes

(2

)

7

(28

)

12

Income taxes related to items of other comprehensive income

-

 

-

-

 

-

Other comprehensive income (loss), net of tax

(2

)

7

(28

)

12

Comprehensive income available for common stockholders $

177

 

$

132

$

326

 

$

285

 
Comprehensive earnings per share:
Basic $

1.64

 

$

1.28

$

3.03

 

$

2.76

Diluted $

1.63

 

$

1.27

$

3.00

 

$

2.74

 
Weighted average common shares outstanding:
Basic

107,719,020

 

103,587,557

107,394,925

 

103,274,846

Diluted

108,626,836

 

104,463,729

108,388,138

 

104,254,888

 
 
Comprehensive income attributable to noncontrolling interests:
Net income attributable to noncontrolling interests $

630

 

$

476

$

1,250

 

$

1,028

Other comprehensive income - cumulative translation adjustment

(8

)

24

(84

)

38

Comprehensive income attributable to noncontrolling interests $

622

 

$

500

$

1,166

 

$

1,066

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

 
June 30,

2024
December 31,

2023
(in millions)
 
Assets
Cash and cash equivalents $

3,918

$

3,753

Cash - segregated for regulatory purposes

31,370

28,840

Securities - segregated for regulatory purposes

28,318

35,386

Securities borrowed

6,218

5,835

Securities purchased under agreements to resell

6,211

5,504

Financial instruments owned, at fair value

1,766

1,488

Receivables from customers, net of allowance for credit losses

55,252

44,472

Receivables from brokers, dealers and clearing organizations

1,810

1,643

Other assets

1,785

1,502

Total assets $

136,648

$

128,423

 
Liabilities and equity
 
Liabilities
Short-term borrowings $

11

$

17

Securities loaned

15,682

11,347

Financial instruments sold but not yet purchased, at fair value

473

193

Other payables:
Customers

103,373

101,012

Brokers, dealers and clearing organizations

570

590

Other payables

1,355

1,197

105,298

102,799

Total liabilities

121,464

114,356

 
Equity
Stockholders' equity

3,927

3,584

Noncontrolling interests

11,257

10,483

Total equity

15,184

14,067

Total liabilities and equity $

136,648

$

128,423

 
June 30, 2024 December 31, 2023
Ownership of IBG LLC Membership Interests Interests % Interests %
 
IBG, Inc.

108,496,779

25.7%

107,049,483

25.4%

Noncontrolling interests (IBG Holdings LLC)

313,976,354

74.3%

313,976,354

74.6%

 
Total IBG LLC membership interests

422,473,133

100.0%

421,025,837

100.0%

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA

 
EXECUTED ORDER VOLUMES:
(in 000's, except %)
 

Customer

%

Principal

%

Total

%

Period

Orders

Change

Orders

Change

Orders

Change

2021

646,440

27,334

673,774

2022

532,064

(18%)

26,966

(1%)

559,030

(17%)

2023

483,015

(9%)

29,712

10%

512,727

(8%)

 

2Q2023

115,611

6,836

122,447

2Q2024

150,292

30%

13,215

93%

163,507

34%

 

1Q2024

143,320

9,190

152,510

2Q2024

150,292

5%

13,215

44%

163,507

7%

 
CONTRACT AND SHARE VOLUMES:
(in 000's, except %)
 
TOTAL

Options

%

Futures1

%

Stocks

%

Period

(contracts)

Change

(contracts)

Change

(shares)

Change

2021

887,849

154,866

771,273,709

2022

908,415

2%

207,138

34%

330,035,586

(57%)

2023

1,020,736

12%

209,034

1%

252,742,847

(23%)

 

2Q2023

236,803

49,644

58,720,684

2Q2024

321,141

36%

55,171

11%

73,734,105

26%

 

1Q2024

307,593

54,046

64,027,092

2Q2024

321,141

4%

55,171

2%

73,734,105

15%

 
CUSTOMER

Options

%

Futures1

%

Stocks

%

Period

(contracts)

Change

(contracts)

Change

(shares)

Change

2021

852,169

152,787

766,211,726

2022

873,914

3%

203,933

33%

325,368,714

(58%)

2023

981,172

12%

206,073

1%

248,588,960

(24%)

 

2Q2023

227,884

49,040

57,711,637

2Q2024

308,298

35%

54,106

10%

72,480,534

26%

 

1Q2024

296,146

53,018

62,898,480

2Q2024

308,298

4%

54,106

2%

72,480,534

15%

 
PRINCIPAL TRANSACTIONS

Options

%

Futures1

%

Stocks

%

Period

(contracts)

Change

(contracts)

Change

(shares)

Change

2021

35,680

2,079

5,061,983

2022

34,501

(3%)

3,205

54%

4,666,872

(8%)

2023

39,564

15%

2,961

(8%)

4,153,887

(11%)

 

2Q2023

8,919

604

1,009,047

2Q2024

12,843

44%

1,065

76%

1,253,571

24%

 

1Q2024

11,447

1,028

1,128,612

2Q2024

12,843

12%

1,065

4%

1,253,571

11%

 
1 Includes options on futures

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA, CONTINUED

 
CUSTOMER STATISTICS
 
Year over Year

2Q2024

2Q2023

% Change

Total Accounts (in thousands)

2,924

2,290

28%

Customer Equity (in billions)1 $

497.2

$

365.0

36%

Total Customer DARTs (in thousands)

2,386

1,865

28%

 
Cleared Customers
Commission per Cleared Commissionable Order2 $

3.01

$

3.11

(3%)

Cleared Avg. DARTs per Account (Annualized)

187

186

1%

 
Consecutive Quarters

2Q2024

1Q2024

% Change

Total Accounts (in thousands)

2,924

2,746

6%

Customer Equity (in billions)1 $

497.2

$

465.9

7%

Total Customer DARTs (in thousands)

2,386

2,350

2%

 
Cleared Customers
Commission per Cleared Commissionable Order2 $

3.01

$

2.93

3%

Cleared Avg. DARTs per Account (Annualized)

187

197

(5%)

 
(1) Excludes non-Customers.
(2) Commissionable Order - a customer order that generates commissions.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

NET INTEREST MARGIN

(UNAUDITED)

 
Three Months Six Months
Ended June 30, Ended June 30,

2024

2023

2024

2023

 
(in millions)
Average interest-earning assets
Segregated cash and securities $

60,057

 

$

61,038

 

$

60,595

 

$

60,359

 

Customer margin loans

52,422

 

39,989

 

49,538

 

39,646

 

Securities borrowed

5,898

 

5,649

 

5,633

 

5,259

 

Other interest-earning assets

11,218

 

10,090

 

10,585

 

9,934

 

FDIC sweeps1

4,023

 

2,719

 

3,942

 

2,574

 

$

133,618

 

$

119,485

 

$

130,292

 

$

117,770

 

 
Average interest-bearing liabilities
Customer credit balances $

102,709

 

$

96,416

 

$

101,110

 

$

96,109

 

Securities loaned

13,688

 

9,729

 

12,711

 

9,150

 

Other interest-bearing liabilities

1

 

-

 

1

 

1

 

$

116,398

 

$

106,145

 

$

113,821

 

$

105,260

 

 
Net interest income
Segregated cash and securities, net $

740

 

$

700

 

$

1,504

 

$

1,303

 

Customer margin loans2

755

 

547

 

1,433

 

1,024

 

Securities borrowed and loaned, net

25

 

79

 

51

 

167

 

Customer credit balances, net2

(894

)

(774

)

(1,775

)

(1,427

)

Other net interest income1/3

179

 

145

 

354

 

270

 

Net interest income3 $

805

 

$

697

 

$

1,567

 

$

1,337

 

 
Net interest margin ("NIM")

2.42

%

2.34

%

2.42

%

2.29

%

 
Annualized yields
Segregated cash and securities

4.96

%

4.60

%

4.99

%

4.35

%

Customer margin loans

5.79

%

5.49

%

5.82

%

5.21

%

Customer credit balances

3.50

%

3.22

%

3.53

%

2.99

%

_______________________________

1

Represents the average amount of customer cash swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program. This item is not recorded in the Company's consolidated statements of financial condition. Income derived from program deposits is reported in other net interest income in the table above.
 

2

Interest income and interest expense on customer margin loans and customer credit balances, respectively, are calculated on daily cash balances within each customer’s account on a net basis, which may result in an offset of balances across multiple account segments (e.g., between securities and commodities segments).
 

3

Includes income from financial instruments that has the same characteristics as interest, but is reported in other fees and services and other income in the Company’s consolidated statements of comprehensive income. For the three and six months ended June 30, 2024 and 2023, $7 million, $13 million, $5 million, and $8 million were reported in other fees and services, respectively. For the three and six months ended June 30, 2024 and 2023, $6 million, $15 million, -$2 million, and -$2 million were reported in other income, respectively.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

 
Three Months Six Months
Ended June 30, Ended June 30,

2024

2023

2024

2023

 
(in millions)
 
Adjusted net revenues1
Net revenues - GAAP $

1,230

 

$

1,000

 

$

2,433

 

$

2,056

 

 
Non-GAAP adjustments
Currency diversification strategy, net

20

 

55

 

22

 

54

 

Mark-to-market on investments2

40

 

9

 

51

 

(31

)

Total non-GAAP adjustments

60

 

64

 

73

 

23

 

Adjusted net revenues $

1,290

 

$

1,064

 

$

2,506

 

$

2,079

 

 
Adjusted income before income taxes1
Income before income taxes - GAAP $

880

 

$

652

 

$

1,746

 

$

1,413

 

 
Non-GAAP adjustments
Currency diversification strategy, net

20

 

55

 

22

 

54

 

Mark-to-market on investments2

40

 

9

 

51

 

(31

)

Total non-GAAP adjustments

60

 

64

 

73

 

23

 

Adjusted income before income taxes $

940

 

$

716

 

$

1,819

 

$

1,436

 

 
Adjusted pre-tax profit margin

73

%

67

%

73

%

69

%

Three Months Six Months
Ended June 30, Ended June 30,

2024

2023

2024

2023

 
(in millions)
Adjusted net income available for common stockholders1
Net income available for common stockholders - GAAP $

179

 

$

125

 

$

354

 

$

273

 

 
Non-GAAP adjustments
Currency diversification strategy, net

5

 

14

 

5

 

14

 

Mark-to-market on investments2

10

 

2

 

13

 

(8

)

Income tax effect of above adjustments3

(3

)

(3

)

(4

)

(1

)

Total non-GAAP adjustments

12

 

13

 

14

 

5

 

Adjusted net income available for common stockholders $

191

 

$

138

 

$

368

 

$

278

 

 
Note: Amounts may not add due to rounding.
 
Three Months Six Months
Ended June 30, Ended June 30,

2024

2023

2024

2023

 
(in dollars)
Adjusted diluted EPS1
Diluted EPS - GAAP $

1.65

 

$

1.20

 

$

3.27

 

$

2.62

 

 
Non-GAAP adjustments
Currency diversification strategy, net

0.05

 

0.13

 

0.05

 

0.13

 

Mark-to-market on investments2

0.09

 

0.02

 

0.12

 

(0.07

)

Income tax effect of above adjustments3

(0.03

)

(0.03

)

(0.04

)

(0.01

)

Total non-GAAP adjustments

0.11

 

0.12

 

0.13

 

0.04

 

Adjusted diluted EPS $

1.76

 

$

1.32

 

$

3.40

 

$

2.67

 

 
Diluted weighted average common shares outstanding

108,626,836

 

104,463,729

 

108,388,138

 

104,254,888

 

 
Note: Amounts may not add due to rounding.

Note: The term “GAAP” in the following explanation refers to generally accepted accounting principles in the United States.

1 Adjusted net revenues, adjusted income before income taxes, adjusted net income available for common stockholders and adjusted diluted earnings per share (“EPS”) are non-GAAP financial measures.

  • We define adjusted net revenues as net revenues adjusted to remove the effect of our currency diversification strategy and our net mark-to-market gains (losses) on investments2.
  • We define adjusted income before income taxes as income before income taxes adjusted to remove the effect of our currency diversification strategy and our net mark-to-market gains (losses) on investments.
  • We define adjusted net income available to common stockholders as net income available for common stockholders adjusted to remove the after-tax effects attributable to IBG, Inc. of our currency diversification strategy and our net mark-to-market gains (losses) on investments.
  • We define adjusted diluted EPS as adjusted net income available for common stockholders divided by the diluted weighted average number of shares outstanding for the period.

Management believes these non-GAAP items are important measures of our financial performance because they exclude certain items that may not be indicative of our core operating results and business outlook and may be useful to investors and analysts in evaluating the operating performance of the business and facilitating a meaningful comparison of our results in the current period to those in prior and future periods. Our currency diversification strategy and our mark-to-market on investments are excluded because management does not believe they are indicative of our underlying core business performance. Adjusted net revenues, adjusted income before income taxes, adjusted net income available to common stockholders and adjusted diluted EPS should be considered in addition to, rather than as a substitute for, GAAP net revenues, income before income taxes, net income attributable to common stockholders and diluted EPS.

2 Mark-to-market on investments represents the net mark-to-market gains (losses) on investments in equity securities that do not qualify for equity method accounting, which are measured at fair value; on our U.S. government and municipal securities portfolios, which are typically held to maturity; and on certain other investments, including equity securities taken over by the Company as a customer accommodation due to a technical issue at the New York Stock Exchange that occurred on the morning of June 3, 2024.

3 The income tax effect is estimated using the statutory income tax rates applicable to the Company.

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