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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240716047794/en/
For Interactive Brokers Group, Inc. Investors: Nancy Stuebe,
investor-relations@ibkr.com or Media: Rob Garfield,
media@ibkr.com.
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