INTERACTIVE BROKERS GROUP ANNOUNCES 2Q2024 RESULTS Form 8 K

INTERACTIVE BROKERS GROUP ANNOUNCES 2Q2024 RESULTS

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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

GREENWICH, CT, July 16, 2024 - 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.

1

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 athttps://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.

For Interactive Brokers Group, Inc. Investors: Nancy Stuebe, [email protected] or Media: Rob Garfield, [email protected].

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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

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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

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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%

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INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA

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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.

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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%

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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%

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			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.

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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.