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Interactive Brokers Q3 Earnings Increase Y/Y on Higher Revenues
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Interactive Brokers Group’s (IBKR - Free Report) third-quarter 2024 adjusted earnings per share of $1.75 reflects a rise of 12.9% from the prior-year quarter’s actual. The Zacks Consensus Estimate for the metric was $1.78.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results were primarily aided by an increase in revenues. The company recorded growth in customer accounts in 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 $199 million or $1.81 per share, up from $167 million or $1.56 in the prior-year quarter. Our estimate for net income was $185.4 million.
Interactive Brokers reported comprehensive income available to common shareholders of $238 million or $2.18 per share compared with $148 million or $1.38 in the prior-year quarter.
IBKR’s Revenues Improve, Expenses Rise
Total GAAP net revenues were $1.37 billion, up 19.2% year over year. The Zacks Consensus Estimate for the top line was $1.32 billion. Adjusted net revenues were $1.33 billion, up 16.5% on a year-over-year basis.
Total non-interest expenses increased 23.9% year over year to $378 million. The rise was due to an increase in almost all cost components except for communications expenses. Our estimate for non-interest expenses was pegged at $388 million.
Income before income taxes was $987 million, increasing 17.5% from the prior-year quarter.
The adjusted pre-tax profit margin was 72%, down from 73% a year ago.
In the reported quarter, total customer DARTs increased 41.7% year over year to 2.7 million, matching our estimates for the metric.
Customer accounts grew 28.3% from the year-ago quarter to 3,120,000. Our prediction for customer accounts was 3,121,000.
Strong Capital Position of Interactive Brokers
As of Sept. 30, 2024, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $69.9 billion compared with $68 billion as of Dec. 31, 2023.
As of Sept. 30, 2024, total assets were $148.5 billion compared with $128.4 billion as of Dec. 31, 2023. Total equity was $16.1 billion, up from $14.1 billion as of Dec. 31, 2023.
Our View on IBKR
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. However, rising expenses and high exposure to geopolitical risks through overseas are headwinds.
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 third-quarter 2024 numbers on Oct. 30.
In the past 30 days, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved marginally downward to $3.73 per share, implying a marginal decline from the prior-year reported number.
Tradeweb Markets (TW - Free Report) is also slated to announce quarterly numbers on Oct. 30.
In the past 30 days, the Zacks Consensus Estimate for TW’s quarterly earnings has moved 4.1% north to 71 cents per share, indicating a 29.1% rise from the prior-year reported number.
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Interactive Brokers Q3 Earnings Increase Y/Y on Higher Revenues
Interactive Brokers Group’s (IBKR - Free Report) third-quarter 2024 adjusted earnings per share of $1.75 reflects a rise of 12.9% from the prior-year quarter’s actual. The Zacks Consensus Estimate for the metric was $1.78.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Results were primarily aided by an increase in revenues. The company recorded growth in customer accounts in 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 $199 million or $1.81 per share, up from $167 million or $1.56 in the prior-year quarter. Our estimate for net income was $185.4 million.
Interactive Brokers reported comprehensive income available to common shareholders of $238 million or $2.18 per share compared with $148 million or $1.38 in the prior-year quarter.
IBKR’s Revenues Improve, Expenses Rise
Total GAAP net revenues were $1.37 billion, up 19.2% year over year. The Zacks Consensus Estimate for the top line was $1.32 billion. Adjusted net revenues were $1.33 billion, up 16.5% on a year-over-year basis.
Total non-interest expenses increased 23.9% year over year to $378 million. The rise was due to an increase in almost all cost components except for communications expenses. Our estimate for non-interest expenses was pegged at $388 million.
Income before income taxes was $987 million, increasing 17.5% from the prior-year quarter.
The adjusted pre-tax profit margin was 72%, down from 73% a year ago.
In the reported quarter, total customer DARTs increased 41.7% year over year to 2.7 million, matching our estimates for the metric.
Customer accounts grew 28.3% from the year-ago quarter to 3,120,000. Our prediction for customer accounts was 3,121,000.
Strong Capital Position of Interactive Brokers
As of Sept. 30, 2024, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $69.9 billion compared with $68 billion as of Dec. 31, 2023.
As of Sept. 30, 2024, total assets were $148.5 billion compared with $128.4 billion as of Dec. 31, 2023. Total equity was $16.1 billion, up from $14.1 billion as of Dec. 31, 2023.
Our View on IBKR
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. However, rising expenses and high exposure to geopolitical risks through overseas are headwinds.
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 has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Investment Brokers
LPL Financial (LPLA - Free Report) is slated to announce third-quarter 2024 numbers on Oct. 30.
In the past 30 days, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved marginally downward to $3.73 per share, implying a marginal decline from the prior-year reported number.
Tradeweb Markets (TW - Free Report) is also slated to announce quarterly numbers on Oct. 30.
In the past 30 days, the Zacks Consensus Estimate for TW’s quarterly earnings has moved 4.1% north to 71 cents per share, indicating a 29.1% rise from the prior-year reported number.