Interactive Brokers Group Announces 3Q2024 Results

GAAP Diluted EPS of $1.81, Adjusted1 EPS of $1.75

GAAP Net Revenues of $1,365 Million, Adjusted Net Revenues of $1,327 Million

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

Reported diluted earnings per share were $1.81 for the current quarter and $1.75 as adjusted. For the year-ago quarter, reported diluted earnings per share were $1.56 and $1.55 as adjusted.

Reported net revenues were $1,365 million for the current quarter and $1,327 million as adjusted. For the year-ago quarter, reported net revenues were $1,145 million and $1,139 million as adjusted.

Reported income before income taxes was $987 million for the current quarter and $949 million as adjusted. For the year-ago quarter, reported income before income taxes was $840 million and $834 million as adjusted.

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

• Commission revenue increased 31% to $435 million on higher customer trading volumes. Customer trading volume in options, stocks and futures increased 35%, 22% and 13%, respectively.

• Net interest income increased 9% to $802 million on higher customer margin loans and customer credit balances.

• Other fees and services increased $20 million, or 38%, to $72 million, driven by increases of $13 million in risk exposure fees, $5 million in payments for order flow from exchange-mandated programs, and $2 million in FDIC sweep program fees.

• Execution, clearing and distribution fees expenses increased 18% to $116 million, driven by a higher SEC fee rate and higher customer trading volumes.

• General and administrative expenses increased $30 million, or 67%, to $75 million, driven primarily by a one-time charge of $12 million related to the consolidation of our European subsidiaries and a $9 million increase related to legal and regulatory matters.

• Pretax profit margin for the current quarter was 72% both as reported and as adjusted. For the year-ago quarter, pretax margin was 73% both as reported and as adjusted.

• Total equity of $16.1 billion.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.25 per share. This dividend is payable on December 13, 2024, to shareholders of record as of November 29, 2024.

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

• Customer accounts increased 28% to 3.12 million.
• Customer equity increased 46% to $541.5 billion.
• Total DARTs2 increased 42% to 2.70 million.
• Customer credits increased 19% to $116.7 billion.
• Customer margin loans increased 28% to $55.8 billion.

Other Items

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 increased our comprehensive earnings by $178 million, as the U.S. dollar value of the GLOBAL increased by approximately 1.14%. The effects of the currency diversification strategy are reported as components of (1) Other Income (gain of $25 million) and (2) Other Comprehensive Income (gain of $153 million).

Conference Call Information:

Interactive Brokers Group, Inc. will hold a conference call with investors today, October 15, 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/BI3215f73851b048a8b64604af65ed4ff9 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

 

Nine Months

Ended September 30,

 

Ended September 30,

2024

 

2023

 

2024

 

2023

(in millions, except share and per share data)

 


Revenues:














Commissions

$

435

 

$

333

 

$

1,220

 

$

1,012

 

Other fees and services

72

 

52

 

199

 

142

 

Other income (loss)

56

 

27

 

38

 

(17

)

Total non-interest income

563

 

412

 

1,457

 

1,137

 

Interest income

1,888

 

1,643

 

5,476

 

4,535

 

Interest expense

(1,086

)

(910

)

(3,135

)

(2,471

)

Total net interest income

802

 

733

 

2,341

 

2,064

 

Total net revenues

1,365

 

1,145

 

3,798

 

3,201

 

Non-interest expenses:














Execution, clearing and distribution fees

116

 

98

 

332

 

286

 

Employee compensation and benefits

145

 

127

 

436

 

391

 

Occupancy, depreciation and amortization

26

 

25

 

77

 

74

 

Communications

9

 

10

 

29

 

29

 

General and administrative

75

 

45

 

177

 

166

 

Customer bad debt

7

 

-

 

14

 

2

 

Total non-interest expenses

378

 

305

 

1,065

 

948

 

Income before income taxes

987

 

840

 

2,733

 

2,253

 

Income tax expense

80

 

68

 

222

 

180

 

Net income

907

 

772

 

2,511

 

2,073

 

Net income attributable to noncontrolling interests

708

 

605

 

1,958

 

1,633

 

Net income available for common stockholders

$

199

 

$

167

 

$

553

 

$

440

 

Earnings per share:














Basic

$

1.83

 

$

1.57

 

$

5.12

 

$

4.22

 

Diluted

$

1.81

 

$

1.56

 

$

5.08

 

$

4.19

 

 


Weighted average common shares outstanding:














Basic

108,757,991

 

106,233,557

 

107,852,597

 

104,271,921

 

Diluted

109,536,360

 

107,011,427

 

108,774,195

 

105,184,572

 

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Three Months

 

Nine Months

Ended September 30,

 

Ended September 30,

2024

 

2023

 

2024

 

2023

(in millions, except share and per share data)

 


Comprehensive income:














Net income available for common stockholders

$

199

$

167

 

$

553

$

440

 

Other comprehensive income:














Cumulative translation adjustment, before income taxes

39

(19

)

11

(7

)

Income taxes related to items of other comprehensive income

-

-

 

-

-

 

Other comprehensive income (loss), net of tax

39

(19

)

11

(7

)

Comprehensive income available for common stockholders

$

238

$

148

 

$

564

$

433

 

 


Comprehensive earnings per share:














Basic

$

2.19

$

1.39

 

$

5.23

$

4.15

 

Diluted

$

2.18

$

1.38

 

$

5.18

$

4.12

 

 


Weighted average common shares outstanding:














Basic

108,757,991

106,233,557

 

107,852,597

104,271,921

 

Diluted

109,536,360

107,011,427

 

108,774,195

105,184,572

 

 














 


Comprehensive income attributable to noncontrolling interests:














Net income attributable to noncontrolling interests

$

708

$

605

 

$

1,958

$

1,633

 

Other comprehensive income - cumulative translation adjustment

114

(57

)

30

(19

)

Comprehensive income attributable to noncontrolling interests

$

822

$

548

 

$

1,988

$

1,614

 

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)

September 30,2024

December 31,2023

(in millions)

Assets

Cash and cash equivalents



$

3,595

$

3,753

Cash - segregated for regulatory purposes

35,216

28,840

Securities - segregated for regulatory purposes

31,103

35,386

Securities borrowed

7,513

5,835

Securities purchased under agreements to resell

8,176

5,504

Financial instruments owned, at fair value

2,949

1,488

Receivables from customers, net of allowance for credit losses

56,006

44,472

Receivables from brokers, dealers and clearing organizations

2,210

1,643

Other assets

1,758

1,502

Total assets

$

148,526

$

128,423

Liabilities and equity

Liabilities

Short-term borrowings



$

33

$

17

Securities loaned

16,818

11,347

Financial instruments sold but not yet purchased, at fair value

381

193

Other payables:










Customers

112,579

101,012

Brokers, dealers and clearing organizations

1,202

590

Other payables

1,435

1,197

115,216

102,799

Total liabilities

132,448

114,356

Equity

Stockholders' equity

4,160

3,584

Noncontrolling interests

11,918

10,483

Total equity

16,078

14,067

Total liabilities and equity

$

148,526

$

128,423

September 30, 2024

December 31, 2023

Ownership of IBG LLC Membership Interests

Interests

%

Interests

%

 


IBG, Inc.

108,879,779

25.8%

107,049,483

25.4%

Noncontrolling interests (IBG Holdings LLC)

313,643,354

74.2%

313,976,354

74.6%

 


Total IBG LLC membership interests

422,523,133

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%)

 

3Q2023

119,188

8,187

127,375

3Q2024

171,620

44%

17,722

116%

189,342

49%

 

2Q2024

150,292

13,215

163,507

3Q2024

171,620

14%

17,722

34%

189,342

16%

 

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%)

 

3Q2023

256,481

50,309

59,453,190

3Q2024

344,540

34%

56,825

13%

72,117,769

21%

 

2Q2024

321,141

55,171

73,734,105

3Q2024

344,540

7%

56,825

3%

72,117,769

(2%)

 

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%)

 

3Q2023

245,169

49,459

58,202,858

3Q2024

330,173

35%

56,078

13%

70,751,412

22%

 

2Q2024

308,298

54,106

72,480,534

3Q2024

330,173

7%

56,078

4%

70,751,412

(2%)

 

PRINCIPAL

 

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%)

 

3Q2023

11,312

850

1,250,332

3Q2024

14,367

27%

747

(12%)

1,366,357

9%

 

2Q2024

12,843

1,065

1,253,571

3Q2024

14,367

12%

747

(30%)

1,366,357

9%

 


1 Includes options on futures














 











 

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES OPERATING DATA, CONTINUED

CUSTOMER STATISTICS

Year over Year

3Q2024

 

 

3Q2023

 

% Change

Total Accounts (in thousands)

3,120

2,431

28%

Customer Equity (in billions)1

$

541.5

$

369.8

46%

Total Customer DARTs (in thousands)

2,703

1,907

42%

Cleared Customers

Commission per Cleared Commissionable Order2

$

2.83

$

3.11

(9%)

Cleared Avg. DARTs per Account (Annualized)

198

180

10%

Consecutive Quarters

3Q2024

 

 

2Q2024

 

% Change

Total Accounts (in thousands)

3,120

2,924

7%

Customer Equity (in billions)1

$

541.5

$

497.2

9%

Total Customer DARTs (in thousands)

2,703

2,386

13%

Cleared Customers

Commission per Cleared Commissionable Order2

$

2.83

$

3.01

(6%)

Cleared Avg. DARTs per Account (Annualized)

198

187

6%

 


(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

 

Nine Months

Ended September 30,

 

Ended September 30,

2024

 

2023

 

2024

 

2023

(in millions)

Average interest-earning assets

Segregated cash and securities

$

61,813

 

$

58,131

 

$

61,000

 

$

59,616

 

Customer margin loans

54,647

 

42,853

 

51,240

 

40,715

 

Securities borrowed

6,241

 

5,557

 

5,836

 

5,358

 

Other interest-earning assets

11,678

 

10,054

 

10,949

 

9,974

 

FDIC sweeps1

4,330

 

3,311

 

4,071

 

2,819

 

$

138,709

 

$

119,906

 

$

133,097

 

$

118,482

 

Average interest-bearing liabilities

Customer credit balances

$

106,865

 

$

95,506

 

$

103,028

 

$

95,908

 

Securities loaned

14,258

 

9,848

 

13,227

 

9,383

 

Other interest-bearing liabilities

1

 

1

 

1

 

1

 

$

121,124

 

$

105,355

 

$

116,255

 

$

105,291

 

Net interest income

Segregated cash and securities, net

$

763

 

$

728

 

$

2,267

 

$

2,031

 

Customer margin loans2

787

 

623

 

2,220

 

1,647

 

Securities borrowed and loaned, net

16

 

66

 

67

 

233

 

Customer credit balances, net2

(936

)

(832

)

(2,711

)

(2,259

)

Other net interest income1/3

196

 

159

 

550

 

429

 

Net interest income3

$

826

 

$

744

 

$

2,393

 

$

2,081

 

Net interest margin ("NIM")

2.37

%

2.46

%

2.40

%

2.35

%

Annualized yields

Segregated cash and securities

4.91

%

4.97

%

4.96

%

4.55

%

Customer margin loans

5.73

%

5.77

%

5.79

%

5.41

%

Customer credit balances

3.48

%

3.46

%

3.51

%

3.15

%

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 nine months ended September 30, 2024 and 2023, $7 million, $20 million, $6 million, and $14 million were reported in other fees and services, respectively. For the three and nine months ended September 30, 2024 and 2023, $17 million, $32 million, $5 million, and $3 million were reported in other income, respectively.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)

Three Months

 

Nine Months

Ended September 30,

 

Ended September 30,

2024

 

2023

 

2024

 

2023

(in millions)

Adjusted net revenues1

Net revenues - GAAP

$

1,365

 

$

1,145

 

$

3,798

 

$

3,201

 

 


Non-GAAP adjustments














Currency diversification strategy, net

(25

)

17

 

(3

)

71

 

Mark-to-market on investments2

(13

)

(23

)

38

 

(54

)

Total non-GAAP adjustments

(38

)

(6

)

35

 

17

 

Adjusted net revenues

$

1,327

 

$

1,139

 

$

3,833

 

$

3,218

 

Adjusted income before income taxes1

Income before income taxes - GAAP

$

987

 

$

840

 

$

2,733

 

$

2,253

 

 


Non-GAAP adjustments














Currency diversification strategy, net

(25

)

17

 

(3

)

71

 

Mark-to-market on investments2

(13

)

(23

)

38

 

(54

)

Total non-GAAP adjustments

(38

)

(6

)

35

 

17

 

Adjusted income before income taxes

$

949

 

$

834

 

$

2,768

 

$

2,270

 

 


Adjusted pre-tax profit margin

72

%

73

%

72

%

71

%

Three Months

 

Nine Months

Ended September 30,

 

Ended September 30,

2024

 

2023

 

2024

 

2023

(in millions)

Adjusted net income available for common stockholders1

Net income available for common stockholders - GAAP

$

199

 

$

167

 

$

553

 

$

440

 

Non-GAAP adjustments














Currency diversification strategy, net

(6

)

4

 

(1

)

18

 

Mark-to-market on investments2

(3

)

(6

)

10

 

(14

)

Income tax effect of above adjustments3

2

 

1

 

(2

)

(0

)

Total non-GAAP adjustments

(8

)

(1

)

7

 

4

 

Adjusted net income available for common stockholders

$

191

 

$

166

 

$

560

 

$

444

 

 


Note: Amounts may not add due to rounding.


























 

Three Months

Nine Months

Ended September 30,

Ended September 30,

2024

 

 

2023

 

 

2024

 

 

2023

 

(in dollars)

Adjusted diluted EPS1

Diluted EPS - GAAP

$

1.81

 

$

1.56

 

$

5.08

 

$

4.19

 

 


Non-GAAP adjustments














Currency diversification strategy, net

(0.06

)

0.04

 

(0.01

)

0.17

 

Mark-to-market on investments2

(0.03

)

(0.05

)

0.09

 

(0.13

)

Income tax effect of above adjustments3

0.02

 

0.01

 

(0.02

)

(0.00

)

Total non-GAAP adjustments

(0.07

)

(0.01

)

0.06

 

0.04

 

Adjusted diluted EPS

$

1.75

 

$

1.55

 

$

5.14

 

$

4.22

 

 


Diluted weighted average common shares outstanding

109,536,360

 

107,011,427

 

108,774,195

 

105,184,572

 

 


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/20241015423214/en/

For Interactive Brokers Group, Inc. Investors: Nancy Stuebe, [e-mail] or Media: Rob Garfield, [e-mail].