INTERACTIVE BROKERS GROUP ANNOUNCES 3Q2024 RESULTS Form 8 K

INTERACTIVE BROKERS GROUP ANNOUNCES 3Q2024 RESULTS

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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

GREENWICH, CT, October 15, 2024 - 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.

¹ See the reconciliation of non-GAAP financial measures starting on page 9.

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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 athttps://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.

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

² Daily average revenue trades (DARTs) are based on customer orders.

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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

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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

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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%

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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			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.

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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%

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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%

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			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.

10

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.