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Interactive Brokers Group Announces 1Q2024 Results

GAAP DILUTED EPS OF $1.61, ADJUSTED1 EPS OF $1.64

GAAP NET REVENUES OF $1,203 MILLION, ADJUSTED NET REVENUES OF $1,216 MILLION

RAISES QUARTERLY DIVIDEND FROM $0.10 TO $0.25

Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated global electronic broker, announced results for the quarter ended March 31, 2024.

Reported diluted earnings per share were $1.61 for the current quarter and $1.64 as adjusted. For the year-ago quarter, reported diluted earnings per share were $1.42 and $1.35 as adjusted.

Reported net revenues were $1,203 million for the current quarter and $1,216 million as adjusted. For the year-ago quarter, reported net revenues were $1,056 million and $1,015 million as adjusted.

Reported income before income taxes was $866 million for the current quarter and $879 million as adjusted. For the year-ago quarter, reported income before income taxes was $761 million and $720 million as adjusted.

Financial Highlights

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

  • Commission revenue increased 6% to $379 million. Customer trading volume was mixed across product types with options contract volume up 24%, while futures contract and stock share volumes were down 3% and 16%, respectively.
  • Net interest income increased 17% to $747 million on higher benchmark interest rates, customer margin loans and customer credit balances.
  • Other fees and services increased $16 million, or 37%, to $59 million, driven primarily by increases of $13 million in risk exposure fees and $2 million in FDIC sweeps fees.
  • Execution, clearing and distribution fees expenses increased 6% to $101 million, driven by higher customer trading volume in options.
  • Pretax profit margin for the current quarter was 72% both as reported and as adjusted. For the year-ago quarter, reported pretax margin was 72% and 71% as adjusted.
  • Total equity of $14.7 billion.

The Interactive Brokers Group, Inc. Board of Directors declared an increase in the quarterly cash dividend from $0.10 per share to $0.25 per share. This dividend is payable on June 14, 2024, to shareholders of record as of May 31, 2024.

Business Highlights

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

  • Customer accounts increased 25% to 2.75 million.
  • Customer equity increased 36% to $465.9 billion.
  • Total DARTs2 increased 14% to 2.35 million.
  • Customer credits increased 9% to $104.9 billion.
  • Customer margin loans increased 30% to $51.2 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 decreased our comprehensive earnings by $104 million, as the U.S. dollar value of the GLOBAL decreased by approximately 0.73%. The effects of the currency diversification strategy are reported as components of (1) Other Income (loss of $2 million) and (2) Other Comprehensive Income (loss of $102 million).

Conference Call Information:

Interactive Brokers Group, Inc. will hold a conference call with investors today, April 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/BI26c88a82ea0c42b9a6ac91b51a30659c 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. For the sixth consecutive year, Barron’s ranked Interactive Brokers #1 with 5 out of 5 stars in its June 9, 2023, Best Online Brokers Review.

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

Ended March 31,

 

2024

 

 

 

2023

 

(in millions, except share and per share data)

Revenues:
Commissions

$

379

 

 

$

357

 

Other fees and services

 

59

 

 

 

43

 

Other income (loss)

 

18

 

 

 

19

 

Total non-interest income

 

456

 

 

 

419

 

 

 

 

Interest income

 

1,760

 

 

 

1,347

 

Interest expense

 

(1,013

)

 

 

(710

)

Total net interest income

 

747

 

 

 

637

 

Total net revenues

 

1,203

 

 

 

1,056

 

 

 

 

Non-interest expenses:

 

 

 

Execution, clearing and distribution fees

 

101

 

 

 

95

 

Employee compensation and benefits

 

145

 

 

 

128

 

Occupancy, depreciation and amortization

 

26

 

 

 

24

 

Communications

 

10

 

 

 

9

 

General and administrative

 

50

 

 

 

36

 

Customer bad debt

 

5

 

 

 

3

 

Total non-interest expenses

 

337

 

 

 

295

 

Income before income taxes

 

866

 

 

 

761

 

Income tax expense

 

71

 

 

 

61

 

Net income

 

795

 

 

 

700

 

Net income attributable to noncontrolling interests

 

620

 

 

 

552

 

Net income available for common stockholders

$

175

 

 

$

148

 

 

 

 

Earnings per share:

 

 

 

Basic

$

1.63

 

 

$

1.44

 

Diluted

$

1.61

 

 

$

1.42

 

 

 

 

Weighted average common shares outstanding:

 

 

 

Basic

 

107,070,830

 

 

 

102,958,660

 

Diluted

 

108,149,440

 

 

 

104,042,571

 

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

 

Three Months

Ended March 31,

 

2024

 

 

2023

(in millions, except share and per share data)

Comprehensive income:
Net income available for common stockholders

$

175

 

 

$

148

Other comprehensive income:

 

 

 

Cumulative translation adjustment, before income taxes

 

(26

)

 

 

5

Income taxes related to items of other comprehensive income

 

-

 

 

 

-

Other comprehensive income (loss), net of tax

 

(26

)

 

 

5

Comprehensive income available for common stockholders

$

149

 

 

$

153

 

 

 

Comprehensive earnings per share:

 

 

 

Basic

$

1.39

 

 

$

1.48

Diluted

$

1.37

 

 

$

1.47

 

 

 

Weighted average common shares outstanding:

 

 

 

Basic

 

107,070,830

 

 

 

102,958,660

Diluted

 

108,149,440

 

 

 

104,042,571

 

 

 

 

 

 

Comprehensive income attributable to noncontrolling interests:

 

 

 

Net income attributable to noncontrolling interests

$

620

 

 

$

552

Other comprehensive income - cumulative translation adjustment

 

(76

)

 

 

14

Comprehensive income attributable to noncontrolling interests

$

544

 

 

$

566

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

March 31,

2024

 

December 31,

2023

(in millions)

Assets
Cash and cash equivalents

$

4,063

$

3,753

 

Cash - segregated for regulatory purposes

 

29,961

 

28,840

 

Securities - segregated for regulatory purposes

 

29,292

 

35,386

 

Securities borrowed

 

6,362

 

5,835

 

Securities purchased under agreements to resell

 

6,674

 

5,504

 

Financial instruments owned, at fair value

 

1,112

 

1,488

 

Receivables from customers, net of allowance for credit losses

 

51,395

 

44,472

 

Receivables from brokers, dealers and clearing organizations

 

1,684

 

1,643

 

Other assets

 

1,695

 

1,502

 

Total assets

$

132,238

$

128,423

 

 

 

Liabilities and equity

 

 

 

 

Liabilities

 

 

Short-term borrowings

$

14

$

17

 

Securities loaned

 

14,216

 

11,347

 

Financial instruments sold but not yet purchased, at fair value

 

236

 

193

 

Other payables:

 

 

Customers

 

101,197

 

101,012

 

Brokers, dealers and clearing organizations

 

561

 

590

 

Other payables

 

1,355

 

1,197

 

 

103,113

 

102,799

 

Total liabilities

 

117,579

 

114,356

 

 

 

Equity

 

 

Stockholders' equity

 

3,732

 

3,584

 

Noncontrolling interests

 

10,927

 

10,483

 

Total equity

 

14,659

 

14,067

 

Total liabilities and equity

$

132,238

$

128,423

 

 

March 31, 2024

December 31, 2023

Ownership of IBG LLC Membership Interests

Interests

 

%

 

Interests

 

%

 
IBG, Inc.

107,099,483

 

25.4

%

 

 

107,049,483

 

 

25.4

%

Noncontrolling interests (IBG Holdings LLC)

313,976,354

 

74.6

%

 

 

313,976,354

 

 

74.6

%

 

 

 

 

 

 

 

Total IBG LLC membership interests

421,075,837

 

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

%)

 

1Q2023

127,329

6,757

134,086

1Q2024

143,320

13

%

9,190

36

%

152,510

14

%

 

4Q2023

120,886

7,932

128,818

1Q2024

143,320

19

%

9,190

16

%

152,510

18

%

 
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

%)

 

1Q2023

247,508

55,197

75,522,066

1Q2024

307,593

24

%

54,046

(2

%)

64,027,092

(15

%)

 

4Q2023

279,945

53,883

59,046,908

1Q2024

307,593

10

%

54,046

0

%

64,027,092

8

%

 
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

%)

 

1Q2023

239,038

54,577

74,562,384

1Q2024

296,146

24

%

53,018

(3

%)

62,898,480

(16

%)

 

4Q2023

269,082

52,996

58,112,082

1Q2024

296,146

10

%

53,018

0

%

62,898,480

8

%

 

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

%)

 

1Q2023

8,470

620

959,682

1Q2024

11,447

35

%

1,028

66

%

1,128,612

18

%

 

4Q2023

10,863

887

934,826

1Q2024

11,447

5

%

1,028

16

%

1,128,612

21

%

 
1 Includes options on futures

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA, CONTINUED

 
CUSTOMER STATISTICS
 
Year over Year

1Q2024

1Q2023

% Change

Total Accounts (in thousands)

2,746

2,195

25%

Customer Equity (in billions)1

$465.9

$343.1

36%

Total Customer DARTs (in thousands)

2,350

2,054

14%

 

 

 

Cleared Customers

 

 

 

Commission per Cleared Commissionable Order2

$2.93

$3.16

(7%)

Cleared Avg. DARTs per Account (Annualized)

197

214

(8%)

 

 

 

Consecutive Quarters

1Q2024

4Q2023

% Change

Total Accounts (in thousands)

2,746

2,562

7%

Customer Equity (in billions)1

$465.9

$426.0

9%

Total Customer DARTs (in thousands)

2,350

1,934

22%

 

 

 

Cleared Customers

 

 

 

Commission per Cleared Commissionable Order2

$2.93

$3.19

(8%)

Cleared Avg. DARTs per Account (Annualized)

197

172

15%

 
(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

Ended March 31,

 

2024

 

 

 

2023

 

 

 

 

(in millions)

Average interest-earning assets
Segregated cash and securities

$

61,132

 

$

59,679

 

Customer margin loans

 

46,653

 

 

39,303

 

Securities borrowed

 

5,368

 

 

4,868

 

Other interest-earning assets

 

9,952

 

 

9,777

 

FDIC sweeps1

 

3,861

 

 

2,428

 

$

126,966

 

$

116,055

 

 

 

Average interest-bearing liabilities

 

 

Customer credit balances

$

99,510

 

$

95,802

 

Securities loaned

 

11,734

 

 

8,571

 

Other interest-bearing liabilities

 

-

 

 

1

 

$

111,244

 

$

104,374

 

 

 

Net interest income

 

 

Segregated cash and securities, net

$

764

 

$

603

 

Customer margin loans2

 

678

 

 

477

 

Securities borrowed and loaned, net

 

26

 

 

88

 

Customer credit balances, net2

 

(881

)

 

(653

)

Other net interest income1/3

 

175

 

 

125

 

Net interest income3

$

762

 

$

640

 

 

 

Net interest margin ("NIM")

 

2.41

%

 

2.24

%

 

 

Annualized yields

 

 

Segregated cash and securities

 

5.03

%

 

4.10

%

Customer margin loans

 

5.85

%

 

4.92

%

Customer credit balances

 

3.56

%

 

2.76

%

______________________________

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 months ended March 31, 2024 and 2023, $6 million and $3 million were reported in other fees and services, respectively. For the three months ended March 31, 2024 and 2023, $9 million and $0 million were reported in other income, respectively.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

 

Three Months

Ended March 31,

 

2024

 

 

 

2023

 

(in millions)

Adjusted net revenues1
Net revenues - GAAP

$

1,203

 

$

1,056

 

 

 

Non-GAAP adjustments

 

 

Currency diversification strategy, net

 

2

 

 

(1

)

Mark-to-market on investments2

 

11

 

 

(40

)

Total non-GAAP adjustments

 

13

 

 

(41

)

Adjusted net revenues

$

1,216

 

$

1,015

 

 

 

Adjusted income before income taxes1

 

 

Income before income taxes - GAAP

$

866

 

$

761

 

 

 

Non-GAAP adjustments

 

 

Currency diversification strategy, net

 

2

 

 

(1

)

Mark-to-market on investments2

 

11

 

 

(40

)

Total non-GAAP adjustments

 

13

 

 

(41

)

Adjusted income before income taxes

$

879

 

$

720

 

 

 

Adjusted pre-tax profit margin

 

72

%

 

71

%

Three Months
Ended March 31,

 

2024

 

 

2023

 

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

$

175

 

$

148

 

 

 

Non-GAAP adjustments

 

 

Currency diversification strategy, net

 

0

 

 

0

 

Mark-to-market on investments2

 

3

 

 

(10

)

Income tax effect of above adjustments3

 

(1

)

 

2

 

Total non-GAAP adjustments

 

2

 

 

(8

)

Adjusted net income available for common stockholders

$

177

 

$

140

 

 
Note: Amounts may not add due to rounding.
 
Three Months
Ended March 31,

 

2024

 

 

2023

 

(in dollars)
Adjusted diluted EPS1
Diluted EPS - GAAP

$

1.61

 

$

1.42

 

 

 

Non-GAAP adjustments

 

 

Currency diversification strategy, net

 

0.00

 

 

(0.00

)

Mark-to-market on investments2

 

0.03

 

 

(0.09

)

Income tax effect of above adjustments3

 

(0.01

)

 

0.02

 

Total non-GAAP adjustments

 

0.02

 

 

(0.07

)

Adjusted diluted EPS

$

1.64

 

$

1.35

 

 

 

Diluted weighted average common shares outstanding

 

108,149,440

 

 

104,042,571

 

 
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 portfolio, which are typically held to maturity, and on certain other investments, including equity securities taken over by the Company from customers related to losses on margin loans.

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

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