Interactive Brokers Group Announces 4Q2024 Results

GREENWICH, Conn.--(BUSINESS WIRE)--Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated global electronic broker, announced results for the quarter ended December 31, 2024. Reported diluted earnings per share were $1.99 for the current quarter and $2.03 as adjusted. For the year-ago quarter, reported diluted earnings per share were $1.48 and $1.52 as adjusted. Reported net revenues were $1,387 million for the current quarter and $1,424 million as adjusted. For the year-ago quarter, reported net revenues were $1,139 million and $1,149 million as adjusted. Reported income before income taxes was $1,040 million for the current quarter and $1,077 million as adjusted. For the year-ago quarter, reported income before income taxes was $816 million and $831 million as adjusted. Financial Highlights (All comparisons are to the year-ago quarter.) Commission revenue increased 37% to $477 million on higher customer trading volumes. Customer trading volume in options and stocks increased 32% and 65%, respectively, while customer futures volume decreased by 3%. Net interest income increased 11% to $807 million on higher average customer margin loans and customer credit balances. Other fees and services increased $26 million, or 47%, to $81 million, led by increases of $14 million in risk exposure fees and $4 million in payments for order flow from exchange-mandated programs. Execution, clearing and distribution fees expenses increased 15% to $115 million, driven by a higher SEC fee rate, a new FINRA Consolidated Audit Trail (“CAT”) fee initiated during the current quarter, and higher customer trading volumes in options and stocks. General and administrative expenses increased $14 million, or 31%, to $59 million, driven primarily by an increase of $9 million in advertising expenses. Pretax profit margin for the current quarter was 75% as reported and 76% as adjusted. For the year-ago quarter, pretax margin was 72% both as reported and as adjusted. Total equity of $16.6 billion. The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.25 per share. This dividend is payable on March 14, 2025, to shareholders of record as of February 28, 2025. Business Highlights (All comparisons are to the year-ago quarter.) Customer accounts increased 30% to 3.34 million. Customer equity increased 33% to $568.2 billion. Total DARTs2 increased 61% to 3.12 million. Customer credits increased 15% to $119.7 billion. Customer margin loans increased 45% to $64.2 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 $266 million, as the U.S. dollar value of the GLOBAL decreased by approximately 1.63%. The effects of the currency diversification strategy are reported as components of (1) Other Income (loss of $18 million) and (2) Other Comprehensive Income (loss of $248 million). This quarter, Other Income also includes a $24 million net gain from our investment in Tiger Brokers, which is comprised of a one-time realized gain of $34 million from the sale of a portion of such investment and a $10 million unrealized loss. Conference Call Information: Interactive Brokers Group, Inc. will hold a conference call with investors today, January 21, 2025, 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/BI6ae762cae1c640e587dcb275064fe06c 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, foreign exchange, and forecast contracts 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 have 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 Twelve Months Ended December 31, Ended December 31, 2024 2023 2024 2023 (in millions, except share and per share data) Revenues: Commissions $ 477 $ 348 $ 1,697 $ 1,360 Other fees and services 81 55 280 197 Other income (loss) 22 6 60 (11 ) Total non-interest income 580 409 2,037 1,546 Interest income 1,863 1,695 7,339 6,230 Interest expense (1,056 ) (965 ) (4,191 ) (3,436 ) Total net interest income 807 730 3,148 2,794 Total net revenues 1,387 1,139 5,185 4,340 Non-interest expenses: Execution, clearing and distribution fees 115 100 447 386 Employee compensation and benefits 138 136 574 527 Occupancy, depreciation and amortization 24 25 101 99 Communications 10 12 39 41 General and administrative 59 45 314 211 Customer bad debt 1 5 15 7 Total non-interest expenses 347 323 1,490 1,271 Income before income taxes 1,040 816 3,695 3,069 Income tax expense 71 77 288 257 Net income 969 739 3,407 2,812 Net income attributable to noncontrolling interests 752 579 2,652 2,212 Net income available for common stockholders $ 217 $ 160 $ 755 $ 600 Earnings per share: Basic $ 2.00 $ 1.49 $ 6.99 $ 5.72 Diluted $ 1.99 $ 1.48 $ 6.93 $ 5.67 Weighted average common shares outstanding: Basic 108,885,363 107,021,836 108,112,199 104,965,050 Diluted 109,683,522 107,811,190 109,002,938 105,846,877 INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Twelve Months Ended December 31, Ended December 31, 2024 2023 2024 2023 (in millions, except share and per share data) Comprehensive income: Net income available for common stockholders $ 217 $ 160 $ 755 $ 600 Other comprehensive income: Cumulative translation adjustment, before income taxes (64 ) 37 (53 ) 30 Income taxes related to items of other comprehensive income - - - - Other comprehensive income (loss), net of tax (64 ) 37 (53 ) 30 Comprehensive income available for common stockholders $ 153 $ 197 $ 702 $ 630 Comprehensive earnings per share: Basic $ 1.42 $ 1.84 $ 6.50 $ 6.00 Diluted $ 1.41 $ 1.83 $ 6.44 $ 5.95 Weighted average common shares outstanding: Basic 108,885,363 107,021,836 108,112,199 104,965,050 Diluted 109,683,522 107,811,190 109,002,938 105,846,877 Comprehensive income attributable to noncontrolling interests: Net income attributable to noncontrolling interests $ 752 $ 579 $ 2,652 $ 2,212 Other comprehensive income - cumulative translation adjustment (184 ) 111 (154 ) 92 Comprehensive income attributable to noncontrolling interests $ 568 $ 690 $ 2,498 $ 2,304 INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) December 31,2024 December 31,2023 (in millions) Assets Cash and cash equivalents $ 3,633 $ 3,753 Cash - segregated for regulatory purposes 36,600 28,840 Securities - segregated for regulatory purposes 27,846 35,386 Securities borrowed 5,369 5,835 Securities purchased under agreements to resell 6,575 5,504 Financial instruments owned, at fair value 1,924 1,488 Receivables from customers, net of allowance for credit losses 64,432 44,472 Receivables from brokers, dealers and clearing organizations 2,196 1,643 Other assets 1,943 1,502 Total assets $ 150,518 $ 128,423 Liabilities and equity Liabilities Short-term borrowings $ 14 $ 17 Securities loaned 16,248 11,347 Financial instruments sold but not yet purchased, at fair value 293 193 Other payables: Customers 115,343 101,012 Brokers, dealers and clearing organizations 476 590 Other payables 1,547 1,197 117,366 102,799 Total liabilities 133,921 114,356 Equity Stockholders' equity 4,280 3,584 Noncontrolling interests 12,317 10,483 Total equity 16,597 14,067 Total liabilities and equity $ 150,518 $ 128,423 December 31, 2024 December 31, 2023 Ownership of IBG LLC Membership Interests Interests % Interests % IBG, Inc. 108,931,614 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 422,574,968 100.0 % 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 2022 532,064 26,966 559,030 2023 483,015 (9 %) 29,712 10 % 512,727 (8 %) 2024 661,666 37 % 63,348 113 % 725,014 41 % 4Q2023 120,886 7,932 128,818 4Q2024 196,433 62 % 23,220 193 % 219,653 71 % 3Q2024 171,620 17,722 189,342 4Q2024 196,433 14 % 23,220 31 % 219,653 16 % CONTRACT AND SHARE VOLUMES: (in 000's, except %) TOTAL Options % Futures1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2022 908,415 207,138 330,035,586 2023 1,020,736 12 % 209,034 1 % 252,742,847 (23 %) 2024 1,344,855 32 % 218,327 4 % 307,489,711 22 % 4Q2023 279,945 53,883 59,046,908 4Q2024 371,684 33 % 52,285 (3 %) 97,610,745 65 % 3Q2024 344,540 56,825 72,117,769 4Q2024 371,684 8 % 52,285 (8 %) 97,610,745 35 % CUSTOMER Options % Futures1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2022 873,914 203,933 325,368,714 2023 981,172 12 % 206,073 1 % 248,588,960 (24 %) 2024 1,290,770 32 % 214,864 4 % 302,040,873 22 % 4Q2023 269,082 52,996 58,112,082 4Q2024 356,255 32 % 51,662 (3 %) 95,910,447 65 % 3Q2024 330,173 56,078 70,751,412 4Q2024 356,255 8 % 51,662 (8 %) 95,910,447 36 % PRINCIPAL Options % Futures1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2022 34,501 3,205 4,666,872 2023 39,564 15 % 2,961 (8 %) 4,153,887 (11 %) 2024 54,085 37 % 3,463 17 % 5,448,838 31 % 4Q2023 10,863 887 934,826 4Q2024 15,429 42 % 623 (30 %) 1,700,298 82 % 3Q2024 14,367 747 1,366,357 4Q2024 15,429 7 % 623 (17 %) 1,700,298 24 % 1 Includes options on futures INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES OPERATING DATA, CONTINUED CUSTOMER STATISTICS Year over Year 4Q2024 4Q2023 % Change Total Accounts (in thousands) 3,337 2,562 30 % Customer Equity (in billions)1 $ 568.2 $ 426.0 33 % Total Customer DARTs (in thousands) 3,118 1,934 61 % Cleared Customers Commission per Cleared Commissionable Order2 $ 2.72 $ 3.19 (15 %) Cleared Avg. DARTs per Account (Annualized) 213 172 24 % Consecutive Quarters 4Q2024 3Q2024 % Change Total Accounts (in thousands) 3,337 3,120 7 % Customer Equity (in billions)1 $ 568.2 $ 541.5 5 % Total Customer DARTs (in thousands) 3,118 2,703 15 % Cleared Customers Commission per Cleared Commissionable Order2 $ 2.72 $ 2.83 (4 %) Cleared Avg. DARTs per Account (Annualized) 213 198 8 % (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 Twelve Months Ended December 31, Ended December 31, 2024 2023 2024 2023 (in millions) Average interest-earning assets Segregated cash and securities $ 65,466 $ 59,482 $ 62,117 $ 59,582 Customer margin loans 60,290 42,769 53,503 41,229 Securities borrowed 6,089 5,185 5,899 5,315 Other interest-earning assets 11,873 10,534 11,180 10,114 FDIC sweeps1 4,643 3,554 4,214 3,003 $ 148,361 $ 121,524 $ 136,913 $ 119,243 Average interest-bearing liabilities Customer credit balances $ 114,274 $ 96,598 $ 105,840 $ 96,081 Securities loaned 15,268 9,922 13,737 9,518 Other interest-bearing liabilities 104 1 26 1 $ 129,646 $ 106,521 $ 119,603 $ 105,600 Net interest income Segregated cash and securities, net $ 747 $ 760 $ 3,024 $ 2,791 Customer margin loans2 792 631 3,012 2,278 Securities borrowed and loaned, net 25 43 92 276 Customer credit balances, net2 (884 ) (866 ) (3,595 ) (3,125 ) Other net interest income1/3 150 171 690 600 Net interest income3 $ 830 $ 739 $ 3,223 $ 2,820 Net interest margin ("NIM") 2.23 % 2.41 % 2.35 % 2.36 % Annualized yields Segregated cash and securities 4.54 % 5.07 % 4.87 % 4.68 % Customer margin loans 5.23 % 5.85 % 5.63 % 5.53 % Customer credit balances 3.08 % 3.56 % 3.40 % 3.25 % 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 twelve months ended December 31, 2024 and 2023, $8 million, $28 million, $5 million, and $19 million were reported in other fees and services, respectively. For the three and twelve months ended December 31, 2024 and 2023, $15 million, $47 million, $4 million, and $7 million were reported in other income, respectively. INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED) Three Months Twelve Months Ended December 31, Ended December 31, 2024 2023 2024 2023 (in millions) Adjusted net revenues1 Net revenues - GAAP $ 1,387 $ 1,139 $ 5,185 $ 4,340 Non-GAAP adjustments Currency diversification strategy, net 18 9 15 80 Mark-to-market on investments2 10 8 48 (46 ) Remeasurement of TRA liability3 9 (7 ) 9 (7 ) Total non-GAAP adjustments 37 10 72 27 Adjusted net revenues $ 1,424 $ 1,149 $ 5,257 $ 4,367 Adjusted income before income taxes1 Income before income taxes - GAAP $ 1,040 $ 816 $ 3,695 $ 3,069 Non-GAAP adjustments Currency diversification strategy, net 18 9 15 80 Mark-to-market on investments2 10 8 48 (46 ) Remeasurement of TRA liability3 9 (7 ) 9 (7 ) Bad debt expense4 - 5 - 5 Total non-GAAP adjustments 37 15 72 32 Adjusted income before income taxes $ 1,077 $ 831 $ 3,767 $ 3,101 Adjusted pre-tax profit margin 76 % 72 % 72 % 71 % Three Months Twelve Months Ended December 31, Ended December 31, 2024 2023 2024 2023 (in millions) Adjusted net income available for common stockholders1 Net income available for common stockholders - GAAP $ 217 $ 160 $ 755 $ 600 Non-GAAP adjustments Currency diversification strategy, net 5 2 4 20 Mark-to-market on investments2 3 2 12 (12 ) Remeasurement of TRA liability3 9 (7 ) 9 (7 ) Bad debt expense4 - 1 - 1 Income tax effect of above adjustments5 (2 ) (1 ) (4 ) (2 ) Remeasurement of deferred income taxes6 (11 ) 7 (11 ) 7 Total non-GAAP adjustments 5 5 11 8 Adjusted net income available for common stockholders $ 222 $ 164 $ 766 $ 608 Note: Amounts may not add due to rounding. Three Months Twelve Months Ended December 31, Ended December 31, 2024 2023 2024 2023 (in dollars) Adjusted diluted EPS1 Diluted EPS - GAAP $ 1.99 $ 1.48 $ 6.93 $ 5.67 Non-GAAP adjustments Currency diversification strategy, net 0.04 0.02 0.04 0.19 Mark-to-market on investments2 0.02 0.02 0.11 (0.11 ) Remeasurement of TRA liability3 0.08 (0.07 ) 0.08 (0.07 ) Bad debt expense4 0.00 0.01 0.00 0.01 Income tax effect of above adjustments5 (0.02 ) (0.01 ) (0.03 ) (0.01 ) Remeasurement of deferred income taxes6 (0.10 ) 0.07 (0.10 ) 0.07 Total non-GAAP adjustments 0.04 0.04 0.10 0.08 Adjusted diluted EPS $ 2.03 $ 1.52 $ 7.03 $ 5.75 Diluted weighted average common shares outstanding 109,683,522 107,811,190 109,002,938 105,846,877 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, our net mark-to-market gains (losses) on investments2, and the remeasurement of our Tax Receivable Agreement (“TRA”) liability3. We define adjusted income before income taxes as income before income taxes adjusted to remove the effect of our currency diversification strategy, our net mark-to-market gains (losses) on investments, the remeasurement of our TRA liability, and unusual bad debt expense4. 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, our net mark-to-market gains (losses) on investments, the remeasurement of our TRA liability, unusual bad debt expense, and the remeasurement of certain deferred tax assets6. 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, our mark-to-market on investments, the remeasurement of our TRA liability, unusual bad debt expense, and the remeasurement of certain deferred tax assets 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 Remeasurement of our TRA liability represents the change in the amount payable to IBG Holdings LLC under the TRA, primarily due to changes in the Company’s effective tax rates. This is related to the remeasurement of the deferred tax assets described below. For further information refer to Note 4 – Equity and Earnings per Share under Part II, Item 8 – Financial Statements and Supplementary Data of the Company’s Annual Report on Form 10-K filed with the Securities Exchange Commission (“SEC”) on February 27, 2024. 4 Unusual bad debt expense consists of a credit loss on a loan not related to margin lending. 5 The income tax effect is estimated using the statutory income tax rates applicable to the Company. 6 Remeasurement of certain deferred tax assets represents the change in the unamortized balance of deferred tax assets related to the step-up in basis arising from the acquisition of interests in IBG LLC, primarily due to changes in the Company’s effective tax rates. For further information refer to Note 4 – Equity and Earnings per Share under Part II, Item 8 – Financial Statements and Supplementary Data of the Company’s Annual Report on Form 10-K filed with the SEC on February 27, 2024.

Interactive Brokers Group Announces 4Q2024 Results

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