GAAP DILUTED EPS OF $0.72, ADJUSTED1 EPS OF
$0.84
GAAP NET REVENUES OF $656 MILLION, ADJUSTED
NET REVENUES OF $717 MILLION
Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated
global electronic broker, announced results for the quarter ended
June 30, 2022.
Reported diluted earnings per share were $0.72 for the current
quarter and $0.84 as adjusted. For the year-ago quarter, reported
diluted earnings per share were $1.00 and $0.82 as adjusted.
Reported net revenues were $656 million for the current quarter
and $717 million as adjusted. For the year-ago quarter, reported
net revenues were $754 million and $650 million as adjusted.
Reported income before income taxes was $392 million for the
current quarter and $453 million as adjusted. For the year-ago
quarter, reported income before income taxes was $541 million and
$437 million as adjusted.
Financial Highlights
(All comparisons are to the year-ago quarter.)
- Commission revenue increased 5% to $322 million on higher
customer options and futures trading volume tempered by lower stock
volume.
- Net interest income increased 27% to $348 million on higher
benchmark interest rates and customer balances, partially offset by
a decline in securities lending activity.
- Other income decreased $175 million to a loss of $57 million.
This decrease was mainly comprised of the non-recurrence of a $113
million gain related to our strategic investment in Up Fintech
Holding Limited (“Tiger Brokers”), $44 million related to our
currency diversification strategy, and $7 million related to our
U.S. government securities portfolio.
- Reported pretax profit margin was 60% for the current quarter
and 63% as adjusted. For the year-ago quarter, reported pretax
margin was 72% and 67% as adjusted.
- Total equity of $10.6 billion.
The Interactive Brokers Group, Inc. Board of Directors declared
a quarterly cash dividend of $0.10 per share. This dividend is
payable on September 14, 2022, to shareholders of record as of
September 1, 2022.
Business Highlights
(All comparisons are to the year-ago quarter.)
- Customer accounts increased 36% to 1.92 million.
- Customer equity decreased 19% to $294.8 billion, including
approximately 3% due to an omnibus broker that is now using a trust
company for custody.
- Total DARTs2 decreased 6% to 2.17 million.
- Cleared DARTs decreased 7% to 1.93 million.
- Customer credits increased 13% to $92.5 billion.
- Customer margin loans decreased 13% to $42.6 billion.
Effects of Foreign Currency Diversification
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 decreased our comprehensive earnings by
$158 million, as the U.S. dollar value of the GLOBAL decreased by
approximately 1.46%. The effects of the currency diversification
strategy are reported as components of (1) Other Income (loss of
$53 million) and (2) Other Comprehensive Income (loss of $105
million).
Conference Call Information:
Interactive Brokers Group, Inc. will hold a conference call with
investors today, July 19, 2022, 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 at
https://register.vevent.com/register/BI118f80f52cdc4c4bac02487cd4edacd0
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 service 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. For the fifth consecutive
year, Barron’s ranked Interactive Brokers #1 with 5 out of 5 stars
in its March 25, 2022, Best Online Brokers Review.
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.
1 See the reconciliation of non-GAAP financial measures starting on
page 9.
2 Daily average revenue trades (DARTs) are
based on customer orders.
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months
Six Months
Ended June 30,
Ended June 30,
2022
2021
2022
2021
(in millions, except share and per share data)
Revenues: Commissions $
322
$
307
$
671
$
719
Other fees and services
43
55
96
111
Other income (loss)
(57
)
118
(96
)
238
Total non-interest income
308
480
671
1,068
Interest income
460
307
792
697
Interest expense
(112
)
(33
)
(162
)
(118
)
Total net interest income
348
274
630
579
Total net revenues
656
754
1,301
1,647
Non-interest expenses: Execution, clearing and distribution
fees
77
54
148
122
Employee compensation and benefits
112
96
223
193
Occupancy, depreciation and amortization
23
19
45
39
Communications
9
8
17
16
General and administrative
42
35
80
94
Customer bad debt
1
1
2
3
Total non-interest expenses
264
213
515
467
Income before income taxes
392
541
786
1,180
Income tax expense
32
35
60
88
Net income
360
506
726
1,092
Net income attributable to noncontrolling interests
288
414
581
893
Net income available for common stockholders $
72
$
92
$
145
$
199
Earnings per share: Basic $
0.73
$
1.01
$
1.47
$
2.19
Diluted $
0.72
$
1.00
$
1.46
$
2.17
Weighted average common shares outstanding: Basic
98,853,981
91,365,234
98,541,798
91,078,868
Diluted
99,695,489
92,199,169
99,461,867
91,984,246
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
(UNAUDITED)
Three Months
Six Months
Ended June 30,
Ended June 30,
2022
2021
2022
2021
(in millions, except share and per share data)
Comprehensive income: Net income available for common stockholders
$
72
$
92
$
145
$
199
Other comprehensive income: Cumulative translation adjustment,
before income taxes
(24
)
5
(34
)
(12
)
Income taxes related to items of other comprehensive income
-
-
-
-
Other comprehensive income (loss), net of tax
(24
)
5
(34
)
(12
)
Comprehensive income available for common stockholders $
48
$
97
$
111
$
187
Comprehensive earnings per share: Basic $
0.48
$
1.06
$
1.12
$
2.06
Diluted $
0.47
$
1.05
$
1.11
$
2.04
Weighted average common shares outstanding: Basic
98,853,981
91,365,234
98,541,798
91,078,868
Diluted
99,695,489
92,199,169
99,461,867
91,984,246
Comprehensive income attributable to noncontrolling
interests: Net income attributable to noncontrolling interests $
288
$
414
$
581
$
893
Other comprehensive income - cumulative translation adjustment
(81
)
16
(112
)
(43
)
Comprehensive income attributable to noncontrolling interests $
207
$
430
$
469
$
850
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL CONDITION
(UNAUDITED)
June 30,2022 December 31,2021 (in
millions) Assets Cash and cash equivalents $
2,881
$
2,395
Cash - segregated for regulatory purposes
23,536
22,888
Securities - segregated for regulatory purposes
30,709
15,121
Securities borrowed
3,855
3,912
Securities purchased under agreements to resell
6,288
4,380
Financial instruments owned, at fair value
551
673
Receivables from customers, net of allowance for credit losses
42,552
54,935
Receivables from brokers, dealers and clearing organizations
1,939
3,771
Other assets
1,003
1,038
Total assets $
113,314
$
109,113
Liabilities and equity Liabilities
Short-term borrowings $
17
$
27
Securities loaned
10,696
11,769
Financial instruments sold but not yet purchased, at fair value
218
182
Other payables: Customers
90,765
85,634
Brokers, dealers and clearing organizations
308
557
Other payables
708
722
91,781
86,913
Total liabilities
102,712
98,891
Equity Stockholders' equity
2,524
2,395
Noncontrolling interests
8,078
7,827
Total equity
10,602
10,222
Total liabilities and equity $
113,314
$
109,113
June 30,2022 December 31,2021 Ownership of
IBG LLC Membership Interests Interests % Interests % IBG, Inc.
99,601,921
23.7
%
98,230,127
23.5
%
Noncontrolling interests (IBG Holdings LLC)
319,880,492
76.3
%
319,880,492
76.5
%
Total IBG LLC membership interests
419,482,413
100.0
%
418,110,619
100.0
%
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
OPERATING DATA
TRADE VOLUMES: (in 000's, except %)
Cleared Non-Cleared Avg. Trades
Customer % Customer % Principal
% Total % per U.S. Period Trades Change Trades Change Trades Change Trades Change Trading
Day
2019
302,289
26,346
17,136
345,771
1,380
2020
620,405
105%
56,834
116%
27,039
58%
704,278
104%
2,795
2021
871,319
40%
78,276
38%
32,621
21%
982,216
39%
3,905
2Q2021
196,659
16,130
7,975
220,764
3,504
2Q2022
186,791
(5%)
18,274
13%
8,327
4%
213,392
(3%)
3,442
1Q2022
212,818
20,671
9,225
242,714
3,915
2Q2022
186,791
(12%)
18,274
(12%)
8,327
(10%)
213,392
(12%)
3,442
CONTRACT AND SHARE VOLUMES: (in 000's, except %)
TOTAL Options % Futures1
% Stocks % Period (contracts) Change (contracts) Change (shares) Change
2019
390,739
128,770
176,752,967
2020
624,035
60%
167,078
30%
338,513,068
92%
2021
887,849
42%
154,866
(7%)
771,273,709
128%
2Q2021
196,715
35,061
172,099,915
2Q2022
217,642
11%
51,562
47%
81,137,875
(53%)
1Q2022
245,343
53,570
97,406,991
2Q2022
217,642
(11%)
51,562
(4%)
81,137,875
(17%)
ALL CUSTOMERS
Options % Futures1 % Stocks
%
Period
(contracts) Change (contracts) Change (shares) Change
2019
349,287
126,363
167,826,490
2020
584,195
67%
164,555
30%
331,263,604
97%
2021
852,169
46%
152,787
(7%)
766,211,726
131%
2Q2021
189,073
34,635
171,417,373
2Q2022
209,124
11%
50,707
46%
80,079,410
(53%)
1Q2022
234,790
52,728
95,990,985
2Q2022
209,124
(11%)
50,707
(4%)
80,079,410
(17%)
Options % Futures1 % Stocks
%
Period
(contracts) Change (contracts) Change (shares) Change
2019
302,068
125,225
163,030,500
2020
518,965
72%
163,101
30%
320,376,365
97%
2021
773,284
49%
151,715
(7%)
752,720,070
135%
2Q2021
170,902
34,355
168,601,027
2Q2022
188,617
10%
50,313
46%
77,283,249
(54%)
1Q2022
212,628
52,264
92,860,481
2Q2022
188,617
(11%)
50,313
(4%)
77,283,249
(17%)
1 Includes options on futures
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
OPERATING DATA, CONTINUED
CONTRACT AND SHARE VOLUMES, continued: (in 000's,
except %) PRINCIPAL TRANSACTIONS Options
% Futures1 % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2019
41,452
2,407
8,926,477
2020
39,840
(4%)
2,523
5%
7,249,464
(19%)
2021
35,680
(10%)
2,079
(18%)
5,061,983
(30%)
2Q2021
7,642
426
682,542
2Q2022
8,518
11%
855
101%
1,058,465
55%
1Q2022
10,553
842
1,416,006
2Q2022
8,518
(19%)
855
2%
1,058,465
(25%)
1 Includes options on futures
CUSTOMER STATISTICS
Year over Year
2Q2022
2Q2021
% Change Total Accounts (in thousands)
1,923
1,414
36%
Customer Equity (in billions)1 $
294.8
$
363.5
(19%)
Cleared DARTs (in thousands)
1,927
2,082
(7%)
Total Customer DARTs (in thousands)
2,173
2,304
(6%)
Cleared Customers Commission per Cleared
Commissionable Order2 $
2.74
$
2.38
15%
Cleared Avg. DARTs per Account (Annualized)
259
382
(32%)
Consecutive Quarters
2Q2022
1Q2022
% Change Total Accounts (in thousands)
1,923
1,809
6%
Customer Equity (in billions)1 $
294.8
$
355.9
(17%)
Cleared DARTs (in thousands)
1,927
2,234
(14%)
Total Customer DARTs (in thousands)
2,173
2,522
(14%)
Cleared Customers Commission per Cleared
Commissionable Order2 $
2.74
$
2.57
7%
Cleared Avg. DARTs per Account (Annualized)
259
321
(19%)
(1) Excludes non-Customers. (2) Commissionable Order - a
customer order that generates commissions.
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
NET INTEREST MARGIN
(UNAUDITED)
Three Months Six Months Ended June 30,
Ended June 30,
2022
2021
2022
2021
(in millions) Average interest-earning assets
Segregated cash and securities $
50,508
$
39,671
$
46,898
$
43,199
Customer margin loans
44,764
44,234
45,953
42,099
Securities borrowed
3,775
2,833
3,621
3,971
Other interest-earning assets
9,482
7,411
8,847
6,414
FDIC sweeps1
2,176
2,749
2,198
2,783
$
110,705
$
96,898
$
107,517
$
98,466
Average interest-bearing liabilities Customer credit
balances $
90,048
$
77,676
$
87,222
$
77,782
Securities loaned
10,599
11,068
10,844
11,093
Other interest-bearing liabilities
1
296
7
217
$
100,648
$
89,040
$
98,073
$
89,092
Net interest income Segregated cash and securities,
net $
53
$
(2
)
$
60
$
-
Customer margin loans2
197
128
346
245
Securities borrowed and loaned, net
116
136
226
311
Customer credit balances, net2
(37
)
8
(28
)
17
Other net interest income1/3
22
7
30
16
Net interest income3 $
351
$
277
$
634
$
589
Net interest margin ("NIM")
1.27
%
1.15
%
1.19
%
1.21
%
Annualized yields Segregated cash and securities
0.42
%
-0.02
%
0.26
%
0.00
%
Customer margin loans
1.77
%
1.16
%
1.52
%
1.17
%
Customer credit balances
0.17
%
-0.04
%
0.06
%
-0.04
%
1
Represents the average amount of customer cash swept into
FDIC-insured banks as part of our Insured Bank Deposit Sweep
Program. This item is not recorded in the Company's consolidated
statements of financial condition. Income derived from program
deposits is reported in other net interest income in the table
above.
2
Interest income and interest expense on customer margin loans and
customer credit balances, respectively, are calculated on daily
cash balances within each customer’s account on a net basis, which
may result in an offset of balances across multiple account
segments (e.g., between securities and commodities segments).
3
Includes income from financial instruments that has the same
characteristics as interest, but is reported in other fees and
services and other income in the Company’s consolidated statements
of comprehensive income. For the three and six months ended June
30, 2022 and 2021, $3 million, $4 million, $4 million, and $12
million were reported in other fees and services, respectively. For
the three and six months ended June 30, 2022 and 2021, $0 million,
$0 million, $0 million, and -$1 million were reported in other
income, respectively.
INTERACTIVE BROKERS GROUP, INC. AND
SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
(UNAUDITED)
Three Months Six Months Ended June 30,
Ended June 30,
2022
2021
2022
2021
(in millions) Adjusted net revenues1
Net revenues - GAAP $
656
$
754
$
1,301
$
1,647
Non-GAAP adjustments Currency diversification strategy, net
53
9
71
11
Mark-to-market on investments2
8
(113
)
37
(212
)
Total non-GAAP adjustments
61
(104
)
108
(201
)
Adjusted net revenues $
717
$
650
$
1,409
$
1,446
Adjusted income before income taxes1 Income before
income taxes - GAAP $
392
$
541
$
786
$
1,180
Non-GAAP adjustments Currency diversification strategy, net
53
9
71
11
Mark-to-market on investments2
8
(113
)
37
(212
)
Total non-GAAP adjustments
61
(104
)
108
(201
)
Adjusted income before income taxes $
453
$
437
$
894
$
979
Adjusted pre-tax profit margin
63
%
67
%
63
%
68
%
Three Months Six Months Ended June 30,
Ended June 30,
2022
2021
2022
2021
(in millions) Adjusted net income available for
common stockholders1 Net income available for common
stockholders - GAAP $
72
$
92
$
145
$
199
Non-GAAP adjustments Currency diversification strategy, net
13
2
17
2
Mark-to-market on investments2
2
(25
)
9
(46
)
Income tax effect of above adjustments3
(3
)
6
(5
)
10
Total non-GAAP adjustments
12
(17
)
20
(34
)
Adjusted net income available for common stockholders $
84
$
75
$
165
$
165
Note: Amounts may not add due to rounding.
Three
Months Six Months Ended June 30, Ended June
30,
2022
2021
2022
2021
(in dollars) Adjusted diluted EPS1 Diluted EPS
- GAAP $
0.72
$
1.00
$
1.46
$
2.17
Non-GAAP adjustments Currency diversification strategy, net
0.13
0.02
0.17
0.03
Mark-to-market on investments2
0.02
(0.27
)
0.09
(0.50
)
Income tax effect of above adjustments3
(0.03
)
0.06
(0.05
)
0.11
Total non-GAAP adjustments
0.12
(0.19
)
0.20
(0.37
)
Adjusted diluted EPS $
0.84
$
0.82
$
1.66
$
1.80
Diluted weighted average common shares outstanding
99,695,489
92,199,169
99,461,867
91,984,246
Note: Amounts may not add due to rounding.
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
as defined by SEC Regulation G.
- 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 mark-to-market gains (losses) on
investments.
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 our U.S. government and municipal
securities portfolio, which are typically held to maturity,
investments in equity securities that do not qualify for equity
method accounting which are measured at fair value, and certain
other investments, including equity securities taken over by the
Company from customers related to losses on margin loans.
3 The income tax effect is estimated using the corporate income
tax rates applicable to the Company.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220719005948/en/
For Interactive Brokers Group, Inc. Investors: Nancy Stuebe,
investor-relations@ibkr.com or Media: Rob Garfield,
media@ibkr.com.
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