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Interactive Brokers (IBKR) Q1 Earnings Beat on Higher Revenues
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Interactive Brokers Group’s (IBKR - Free Report) first-quarter 2024 adjusted earnings per share of $1.64 beat the Zacks Consensus Estimate by a penny. Also, the bottom line reflects a rise of 21.5% from the prior-year quarter.
Results were primarily aided by an increase in revenues. The company recorded growth in customer accounts during the quarter, which, along with a rise in daily average revenue trades (DARTs), was another tailwind. However, higher expenses hurt the results to some extent.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $175 million or $1.61 per share, up from $148 million or $1.42 per share in the prior-year quarter. Our estimate for net income was $169 million.
Interactive Brokers reported comprehensive income available to common shareholders of $149 million or $1.37 per share compared with $153 million or $1.47 per share in the prior-year quarter.
Revenues Improve, Expenses Rise
Total GAAP net revenues were $1.20 billion, up 13.9% year over year. The top line surpassed the Zacks Consensus Estimate of $1.19 billion. Adjusted net revenues were $1.22 billion, up 19.8%.
Total non-interest expenses increased 14.2% year over year to $337 million. The rise was due to an increase in all cost components. Our estimate for non-interest expenses was pegged at $311.1 million.
Income before income taxes was $866 million, increasing 13.8% from the prior-year quarter.
The adjusted pre-tax profit margin was 72%, up from 71% a year ago.
In the reported quarter, total customer DARTs increased 14% year over year to 2.35 million. Our estimate for total customer DARTs was 2.13 million.
Customer accounts grew 25% from the year-ago quarter to 2,746,000. We projected customer accounts of 2,759,000.
Capital Position Strong
As of Mar 31, 2024, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $63.3 billion compared with $68 billion as of Dec 31, 2023.
As of Mar 31, 2024, total assets were $132.2 billion compared with $128.4 billion as of Dec 31, 2023. Total equity was $14.7 billion, up from $14.1 billion as of Mar 31, 2023.
Dividend Hike
Concurrently, the company’s board of directors announced a quarterly cash dividend of 25 cents per share, representing a hike of 150% from the prior payout. The dividend will be paid out on Jun 14 to shareholders of record as of May 31.
Our View
Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. The consolidation of operations in the European Union is expected to bolster the company’s operational efficiency.
Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise
Earnings Release Dates of Other Investment Brokers
LPL Financial (LPLA - Free Report) is slated to announce first-quarter 2024 numbers on Apr 30.
Over the past 30 days, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved 1% lower to $3.77, implying a 16% decline from the prior-year reported number.
Tradeweb Markets (TW - Free Report) is slated to announce quarterly numbers on Apr 25.
Over the past 30 days, the Zacks Consensus Estimate for TW’s quarterly earnings has moved 4.4% higher to 71 cents, indicating a 31.5% rise from the prior-year reported number.
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Interactive Brokers (IBKR) Q1 Earnings Beat on Higher Revenues
Interactive Brokers Group’s (IBKR - Free Report) first-quarter 2024 adjusted earnings per share of $1.64 beat the Zacks Consensus Estimate by a penny. Also, the bottom line reflects a rise of 21.5% from the prior-year quarter.
Results were primarily aided by an increase in revenues. The company recorded growth in customer accounts during the quarter, which, along with a rise in daily average revenue trades (DARTs), was another tailwind. However, higher expenses hurt the results to some extent.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $175 million or $1.61 per share, up from $148 million or $1.42 per share in the prior-year quarter. Our estimate for net income was $169 million.
Interactive Brokers reported comprehensive income available to common shareholders of $149 million or $1.37 per share compared with $153 million or $1.47 per share in the prior-year quarter.
Revenues Improve, Expenses Rise
Total GAAP net revenues were $1.20 billion, up 13.9% year over year. The top line surpassed the Zacks Consensus Estimate of $1.19 billion. Adjusted net revenues were $1.22 billion, up 19.8%.
Total non-interest expenses increased 14.2% year over year to $337 million. The rise was due to an increase in all cost components. Our estimate for non-interest expenses was pegged at $311.1 million.
Income before income taxes was $866 million, increasing 13.8% from the prior-year quarter.
The adjusted pre-tax profit margin was 72%, up from 71% a year ago.
In the reported quarter, total customer DARTs increased 14% year over year to 2.35 million. Our estimate for total customer DARTs was 2.13 million.
Customer accounts grew 25% from the year-ago quarter to 2,746,000. We projected customer accounts of 2,759,000.
Capital Position Strong
As of Mar 31, 2024, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $63.3 billion compared with $68 billion as of Dec 31, 2023.
As of Mar 31, 2024, total assets were $132.2 billion compared with $128.4 billion as of Dec 31, 2023. Total equity was $14.7 billion, up from $14.1 billion as of Mar 31, 2023.
Dividend Hike
Concurrently, the company’s board of directors announced a quarterly cash dividend of 25 cents per share, representing a hike of 150% from the prior payout. The dividend will be paid out on Jun 14 to shareholders of record as of May 31.
Our View
Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. The consolidation of operations in the European Union is expected to bolster the company’s operational efficiency.
Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise
Interactive Brokers Group, Inc. price-consensus-eps-surprise-chart | Interactive Brokers Group, Inc. Quote
Currently, Interactive Brokers sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings Release Dates of Other Investment Brokers
LPL Financial (LPLA - Free Report) is slated to announce first-quarter 2024 numbers on Apr 30.
Over the past 30 days, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved 1% lower to $3.77, implying a 16% decline from the prior-year reported number.
Tradeweb Markets (TW - Free Report) is slated to announce quarterly numbers on Apr 25.
Over the past 30 days, the Zacks Consensus Estimate for TW’s quarterly earnings has moved 4.4% higher to 71 cents, indicating a 31.5% rise from the prior-year reported number.