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Interactive Brokers (IBKR) Q2 Earnings Beat on Higher Revenues
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Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2024 adjusted earnings per share of $1.76 beat the Zacks Consensus Estimate of $1.69. Also, the bottom line reflects a rise of 33.3% from the prior-year quarter.
Notably, in the reported quarter, IBKR recognized a loss of $48 million on positions taken over as customer accommodation due to a technical issue at the NYSE on Jun 3, 2024.
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, marginally higher expenses hurt the results to some extent.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $179 million or $1.65 per share, up from $125 million or $1.20 per share in the prior-year quarter. Our estimate for net income was $181.4 million.
Interactive Brokers reported comprehensive income available to common shareholders of $177 million or $1.63 per share compared with $132 million or $1.27 per share in the prior-year quarter.
Revenues Improve, Expenses Rise Marginally
Total GAAP net revenues were $1.23 billion, up 23% year over year. The top line missed the Zacks Consensus Estimate of $1.26 billion. Adjusted net revenues were $1.29 billion, up 21.2%.
Total non-interest expenses increased marginally year over year to $350 million. The rise was due to an increase in almost all cost components except for general and administrative costs. Our estimate for non-interest expenses was pegged at $347.7 million.
Income before income taxes was $880 million, increasing 35% from the prior-year quarter.
The adjusted pre-tax profit margin was 73%, up from 67% a year ago.
In the reported quarter, total customer DARTs increased 28% year over year to 2.39 million. Our estimate for total customer DARTs was 2.33 million.
Customer accounts grew 28% from the year-ago quarter to 2,924,000. We projected customer accounts of 2,925,000.
Capital Position Strong
As of Jun 30, 2024, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $63.6 billion compared with $68 billion as of Dec 31, 2023.
As of Jun 30, 2024, total assets were $136.6 billion compared with $128.4 billion as of Dec 31, 2023. Total equity was $15.2 billion, up from $14.1 billion as of Dec 31, 2023.
Our View
Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. Higher interest rates will likely aid revenue growth in the near term.
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 second-quarter 2024 numbers on Jul 25.
Over the past 30 days, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved 1.6% lower to $3.71, implying a 5.8% decline from the prior-year reported number.
Tradeweb Markets (TW - Free Report) is also slated to announce quarterly numbers on Jul 25.
Over the past 30 days, the Zacks Consensus Estimate for TW’s quarterly earnings has moved 1.5% higher to 69 cents, indicating a 32.7% rise from the prior-year reported number.
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Interactive Brokers (IBKR) Q2 Earnings Beat on Higher Revenues
Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2024 adjusted earnings per share of $1.76 beat the Zacks Consensus Estimate of $1.69. Also, the bottom line reflects a rise of 33.3% from the prior-year quarter.
Notably, in the reported quarter, IBKR recognized a loss of $48 million on positions taken over as customer accommodation due to a technical issue at the NYSE on Jun 3, 2024.
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, marginally higher expenses hurt the results to some extent.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $179 million or $1.65 per share, up from $125 million or $1.20 per share in the prior-year quarter. Our estimate for net income was $181.4 million.
Interactive Brokers reported comprehensive income available to common shareholders of $177 million or $1.63 per share compared with $132 million or $1.27 per share in the prior-year quarter.
Revenues Improve, Expenses Rise Marginally
Total GAAP net revenues were $1.23 billion, up 23% year over year. The top line missed the Zacks Consensus Estimate of $1.26 billion. Adjusted net revenues were $1.29 billion, up 21.2%.
Total non-interest expenses increased marginally year over year to $350 million. The rise was due to an increase in almost all cost components except for general and administrative costs. Our estimate for non-interest expenses was pegged at $347.7 million.
Income before income taxes was $880 million, increasing 35% from the prior-year quarter.
The adjusted pre-tax profit margin was 73%, up from 67% a year ago.
In the reported quarter, total customer DARTs increased 28% year over year to 2.39 million. Our estimate for total customer DARTs was 2.33 million.
Customer accounts grew 28% from the year-ago quarter to 2,924,000. We projected customer accounts of 2,925,000.
Capital Position Strong
As of Jun 30, 2024, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $63.6 billion compared with $68 billion as of Dec 31, 2023.
As of Jun 30, 2024, total assets were $136.6 billion compared with $128.4 billion as of Dec 31, 2023. Total equity was $15.2 billion, up from $14.1 billion as of Dec 31, 2023.
Our View
Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. Higher interest rates will likely aid revenue growth in the near term.
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 second-quarter 2024 numbers on Jul 25.
Over the past 30 days, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved 1.6% lower to $3.71, implying a 5.8% decline from the prior-year reported number.
Tradeweb Markets (TW - Free Report) is also slated to announce quarterly numbers on Jul 25.
Over the past 30 days, the Zacks Consensus Estimate for TW’s quarterly earnings has moved 1.5% higher to 69 cents, indicating a 32.7% rise from the prior-year reported number.