Interactive Brokers Group Announces 3Q2023 Results

Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated global electronic broker, announced results for the quarter ended September 30, 2023.

Reported diluted earnings per share were $1.56 for the current quarter and $1.55 as adjusted. For the year-ago quarter, reported diluted earnings per share were $0.97 and $1.08 as adjusted.

Reported net revenues were $1,145 million for the current quarter and $1,139 million as adjusted. For the year-ago quarter, reported net revenues were $790 million and $847 million as adjusted.

Reported income before income taxes was $840 million for the current quarter and $834 million as adjusted. For the year-ago quarter, reported income before income taxes was $523 million and $580 million as adjusted.

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

• Commission revenue increased 4% to $333 million. Customer trading volume was mixed across product types with options contracts volume up 18% while futures contracts and stock share volumes were down 1% and 22%, respectively.
• Net interest income increased 55% to $733 million on higher benchmark interest rates and customer credit balances.
• Other income increased $75 million to a gain of $27 million. This increase was mainly comprised of $37 million related to our investment in Tiger Brokers and $23 million related to our currency diversification strategy.
• Execution, clearing and distribution fees expenses increased 14% to $98 million, driven by higher customer trading volume in options.
• Pretax profit margin for the current quarter was 73% as reported and as adjusted. For the year-ago quarter, reported pretax margin was 66% and 68% as adjusted.
• Total equity of $13.3 billion.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.10 per share. This dividend is payable on December 14, 2023, to shareholders of record as of December 1, 2023.

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

• Customer accounts increased 21% to 2.43 million.
• Customer equity increased 29% to $369.8 billion.
• Total DARTs² decreased 1% to 1.91 million.
• Cleared DARTs increased slightly to 1.71 million.
• Customer credits increased 3% to $98.0 billion.
• Customer margin loans increased 8% to $43.6 billion.

Effects of Foreign Currency Diversification

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 $93 million, as the U.S. dollar value of the GLOBAL decreased by approximately 0.66%. The effects of the currency diversification strategy are reported as components of (1) Other Income (loss of $17 million) and (2) Other Comprehensive Income (loss of $76 million).

Conference Call Information:

Interactive Brokers Group, Inc. will hold a conference call with investors today, October 17, 2023, 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/BIcf6925535ae646959727257076fcafce 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.