Interactive Brokers Q3 2023: Robust & Solid Performance

Interactive Brokers (Nasdaq: IBKR) has concluded the q3 of 2023 on a high note, with impressive financial results and notable developments. The brokerage firm reported a robust net revenue of $1.145 billion for the third quarter, marking a substantial 45 percent increase compared to the same period last year. This quarter also witnessed a quarter-over-quarter growth of 14.5 percent, with an adjusted net revenue figure of approximately $1.139 billion.

In the financial report released post-market hours on Tuesday, Interactive Brokers announced diluted earnings per share (EPS) of $1.56 and $1.55 on an adjusted basis. These figures represent a significant improvement from the previous year’s values of $0.97 and $1.08, respectively.

The pre-tax income for the quarter stood at $840 million, with an adjusted figure of $834 million, surpassing the prior year’s numbers of $523 million and $580 million. The broker also demonstrated a remarkable profit margin of 73 percent, both on reported and adjusted terms, marking an improvement from 66 percent and 68 percent during the same period in the previous year.

Interactive Brokers Q3 2023

Despite these impressive results, Interactive Brokers experienced an unexpected 4.4 percent drop in its stock value during after-hours trading. This drop occurred even though the company’s reported revenue and earnings exceeded street estimates. According to analysts’ consensus forecasts, the expected per-share earnings were $1.51 on revenue of $1.11 billion.

Interactive Brokers is a prominent electronic brokerage firm in the United States, operating globally through its various subsidiaries. The company offers an extensive range of trading services, including stocks, forex, options, futures, CFDs, mutual funds, bonds, and cryptocurrencies.

The broker’s commission revenue recorded a 4 percent increase, reaching $333 million. This growth was primarily driven by an 18 percent surge in options contracts trading volume, although the volume of futures and stocks saw a slight decrease of 1 percent and 22 percent, respectively. Additionally, the net interest income increased by an impressive 55 percent, amounting to $733 million, benefiting from higher interest rates and customer credit balances. The company’s other income also saw a boost of $75 million, resulting in a net gain of $27 million, primarily attributable to a $37 million gain from its investment in Tiger Brokers.

Interactive Brokers achieved $98 million in fees from execution, clearing, and distribution, marking a 14 percent increase in these areas.

Moreover, the broker demonstrated significant growth in customer-related metrics during the last quarter. The number of accounts increased by 21 percent to 2.43 million, while equity improved by 29 percent, reaching $369.8 billion. However, the total DARTs (Daily Average Revenue Trades) showed a marginal 1 percent decrease, totaling 1.91 million.

Interactive Brokers’ strong financial performance and expansion of customer accounts reflect the company’s continued success in the competitive brokerage industry. Despite the unexpected stock price drop, the future outlook remains promising for the well-established firm.

Also, check the Broker Reviews.