Company Announcements

GAAP Diluted EPS of $0.74, Adjusted1 EPS of $0.82

GAAP Net Revenues of $645 Million, Adjusted Net Revenues of $692 Million

GREENWICH, Conn.--(BUSINESS WIRE)--Apr. 19, 2022-- Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated global electronic broker, announced results for the quarter ended March 31, 2022.

Reported diluted earnings per share were $0.74 for the current quarter and $0.82 as adjusted. For the year-ago quarter, reported diluted earnings per share were $1.16 and $0.98 as adjusted.

Reported net revenues were $645 million for the current quarter and $692 million as adjusted. For the year-ago quarter, reported net revenues were $893 million and $796 million as adjusted.

Reported income before income taxes was $394 million for the current quarter and $441 million as adjusted. For the year-ago quarter, reported income before income taxes was $639 million and $542 million as adjusted.

Financial Highlights

(All comparisons are to the year-ago quarter.)

  • Commission revenue decreased 15% to $349 million on customer stock volume that dropped from an unusually active trading period last year, but was aided by higher customer options and futures trading volumes.
  • Net interest income decreased 8% to $282 million on a decline in securities lending activity, partially offset by gains on margin lending and segregated cash balances.
  • Other income decreased $159 million to a loss of $39 million. This decrease was mainly comprised of the non-recurrence of a $99 million gain related to our strategic investment in Up Fintech Holding Limited (“Tiger Brokers”), $29 million related to our U.S. government securities portfolio, and $16 million related to our currency diversification strategy.
  • Reported pretax profit margin was 61% for the current quarter and 64% as adjusted. For the year-ago quarter, reported pretax margin was 72% and 68% as adjusted.
  • Total equity of $10.5 billion.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.10 per share. This dividend is payable on June 14, 2022, to shareholders of record as of June 1, 2022.

Business Highlights

(All comparisons are to the year-ago quarter.)

  • Customer accounts increased 36% to 1.81 million.
  • Customer equity grew 8% to $355.9 billion.
  • Total DARTs2 decreased 24% to 2.52 million.
  • Cleared DARTs decreased 25% to 2.23 million.
  • Customer credits increased 9% to $92.5 billion.
  • Customer margin loans increased 14% to $48.2 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 $59 million, as the U.S. dollar value of the GLOBAL decreased by approximately 0.56%. The effects of the currency diversification strategy are reported as components of (1) Other Income (loss of $18 million) and (2) Other Comprehensive Income (loss of $41 million).

Conference Call Information:

Interactive Brokers Group, Inc. will hold a conference call with investors today, April 19, 2022, at 4:30 p.m. ET to discuss its quarterly results. Investors who would like to listen to the conference call live should dial 877-324-1965 (U.S. domestic) and 631-291-4512 (international). The number should be dialed approximately ten minutes prior to the start of the conference call. Ask for the “Interactive Brokers 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
Ended March 31,

2022

 

2021

(in millions, except share and per share data)
   
Revenues:  
Commissions $

349

  $

412

Other fees and services

53

 

56

Other income (loss)

(39)

 

120

Total non-interest income

363

 

588

   
Interest income

332

 

390

Interest expense

(50)

 

(85)

Total net interest income

282

 

305

Total net revenues

645

 

893

   
Non-interest expenses:  
Execution, clearing and distribution fees

71

 

68

Employee compensation and benefits

111

 

97

Occupancy, depreciation and amortization

22

 

20

Communications

8

 

8

General and administrative

38

 

59

Customer bad debt

1

 

2

Total non-interest expenses

251

 

254

   
Income before income taxes

394

 

639

Income tax expense

28

 

53

Net income

366

 

586

Net income attributable to noncontrolling interests

293

 

479

Net income available for common stockholders $

73

  $

107

   
Earnings per share:  
Basic $

0.74

  $

1.18

Diluted $

0.74

  $

1.16

   
Weighted average common shares outstanding:  
Basic

98,226,147

 

90,789,321

Diluted

99,224,776

 

91,766,142

   
INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

   
Three Months
Ended March 31,

2022

 

2021

(in millions, except share and per share data)
   
Comprehensive income:  
Net income available for common stockholders $

73

  $

107

Other comprehensive income:  
Cumulative translation adjustment, before income taxes

(10)

 

(17)

Income taxes related to items of other comprehensive income

-

 

-

Other comprehensive loss, net of tax

(10)

 

(17)

Comprehensive income available for common stockholders $

63

  $

90

   
Comprehensive earnings per share:  
Basic $

0.65

  $

0.99

Diluted $

0.64

  $

0.98

   
Weighted average common shares outstanding:  
Basic

98,226,147

 

90,789,321

Diluted

99,224,776

 

91,766,142

   
   
Comprehensive income attributable to noncontrolling interests:  
Net income attributable to noncontrolling interests $

293

  $

479

Other comprehensive income - cumulative translation adjustment

(31)

 

(59)

Comprehensive income attributable to noncontrolling interests $

262

  $

420

     

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

     
  March 31,
2022
  December 31,
2021
  (in millions)
     
Assets    
Cash and cash equivalents   $

2,667

  $

2,395

Cash - segregated for regulatory purposes  

24,581

 

22,888

Securities - segregated for regulatory purposes  

24,350

 

15,121

Securities borrowed  

4,445

 

3,912

Securities purchased under agreements to resell  

6,268

 

4,380

Financial instruments owned, at fair value  

577

 

673

Receivables from customers, net of allowance for credit losses  

48,306

 

54,935

Receivables from brokers, dealers and clearing organizations  

2,188

 

3,771

Other assets  

1,041

 

1,038

Total assets   $

114,423

  $

109,113

     
Liabilities and equity    
     
Liabilities    
Short-term borrowings   $

11

  $

27

Securities loaned  

11,379

 

11,769

Securities sold under agreements to repurchase  

300

 

-

Financial instruments sold but not yet purchased, at fair value  

190

 

182

Other payables:    
Customers  

91,097

 

85,634

Brokers, dealers and clearing organizations  

230

 

557

Other payables  

734

 

722

 

92,061

 

86,913

Total liabilities  

103,941

 

98,891

     
Equity    
Stockholders' equity  

2,456

 

2,395

Noncontrolling interests  

8,026

 

7,827

Total equity  

10,482

 

10,222

Total liabilities and equity   $

114,423

  $

109,113

     
     
March 31, 2022 December 31, 2021
Ownership of IBG LLC Membership Interests Interests   % Interests   %
     
IBG, Inc.

98,280,127

 

23.5%

98,230,127

 

23.5%

Noncontrolling interests (IBG Holdings LLC)

319,880,492

 

76.5%

319,880,492

 

76.5%

Total IBG LLC membership interests

418,160,619

 

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

 

1Q2021

273,985

24,079

8,418

306,482

5,024

1Q2022

212,818

(22

%)

20,671

(14

%)

9,225

10

%

242,714

(21

%)

3,915

 

4Q2021

207,457

19,961

8,001

235,419

3,707

1Q2022

212,818

3

%

20,671

4

%

9,225

15

%

242,714

3

%

3,915

 

 

 

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

%

 

1Q2021

231,797

40,868

308,934,824

1Q2022

245,343

6

%

53,570

31

%

97,406,991

(68

%)

 

4Q2021

244,349

41,997

117,410,095

1Q2022

245,343

0

%

53,570

28

%

97,406,991

(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

%

 

1Q2021

221,898

40,361

306,165,385

1Q2022

234,790

6

%

52,728

31

%

95,990,985

(69

%)

 

4Q2021

235,400

41,318

116,546,652

1Q2022

234,790

(0

%)

52,728

28

%

95,990,985

(18

%)

 

CLEARED CUSTOMERS

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

%

 

1Q2021

202,583

40,019

301,675,030

1Q2022

212,628

5

%

52,264

31

%

92,860,481

(69

%)

 

4Q2021

213,143

41,096

113,441,967

1Q2022

212,628

(0

%)

52,264

27

%

92,860,481

(18

%)

 

 

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

%)

 

1Q2021

9,899

507

2,769,439

1Q2022

10,553

7

%

842

66

%

1,416,006

(49

%)

 

4Q2021

8,949

679

863,443

1Q2022

10,553

18

%

842

24

%

1,416,006

64

%

 

1 Includes options on futures.
CUSTOMER STATISTICS
 
Year over Year

1Q2022

1Q2021

% Change
Total Accounts (in thousands)

1,809

1,325

36

%

Customer Equity (in billions)1 $

355.9

$

330.6

8

%

 
Cleared DARTs (in thousands)

2,234

2,964

(25

%)

Total Customer DARTs (in thousands)

2,522

3,308

(24

%)

 
Cleared Customers
Commission per Cleared Commissionable Order2 $

2.57

$

2.31

11

%

Cleared Avg. DARTs per Account (Annualized)

323

622

(48

%)

 
Consecutive Quarters

1Q2022

4Q2021

% Change
Total Accounts (in thousands)

1,809

1,676

8

%

Customer Equity (in billions)1 $

355.9

$

373.8

(5

%)

 
Cleared DARTs (in thousands)

2,234

2,162

3

%

Total Customer DARTs (in thousands)

2,522

2,436

4

%

 
Cleared Customers
Commission per Cleared Commissionable Order2 $

2.57

$

2.38

8

%

Cleared Avg. DARTs per Account (Annualized)

323

339

(5

%)

 
(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
Ended March 31,

2022

 

2021

(in millions)
Average interest-earning assets  
Segregated cash and securities $

43,287

  $

46,726

Customer margin loans

47,141

 

39,964

Securities borrowed

3,467

 

5,108

Other interest-earning assets

8,211

 

5,416

FDIC sweeps1

2,219

 

2,817

$

104,325

  $

100,031

   
Average interest-bearing liabilities  
Customer credit balances $

84,394

  $

77,887

Securities loaned

11,089

 

11,117

Other interest-bearing liabilities

12

 

138

$

95,495

  $

89,142

   
Net interest income  
Segregated cash and securities, net $

7

  $

2

Customer margin loans2

149

 

117

Securities borrowed and loaned, net

110

 

175

Customer credit balances, net2

9

 

9

Other net interest income1/3

8

 

9

Net interest income3 $

283

  $

312

   
Net interest margin ("NIM")

1.10%

 

1.26%

   
Annualized yields  
Segregated cash and securities

0.07%

 

0.02%

Customer margin loans

1.28%

 

1.19%

Customer credit balances

-0.04%

 

-0.05%

   

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 months ended March 31, 2022 and 2021, $1 million and $8 million were reported in other fees and services, respectively. For the three months ended March 31, 2022 and 2021, $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
Ended March 31,

2022

 

2021

(in millions)
   
Adjusted net revenues1  
Net revenues - GAAP $

645

  $

893

   
Non-GAAP adjustments  
Currency diversification strategy, net

18

 

2

Mark-to-market on investments2

29

 

(99)

Total non-GAAP adjustments

47

 

(97)

Adjusted net revenues $

692

  $

796

   
Adjusted income before income taxes1  
Income before income taxes - GAAP $

394

  $

639

   
Non-GAAP adjustments  
Currency diversification strategy, net

18

 

2

Mark-to-market on investments2

29

 

(99)

Total non-GAAP adjustments

47

 

(97)

Adjusted income before income taxes $

441

  $

542

   
Adjusted pre-tax profit margin

64%

 

68%

   
   
                 
      Three Months  
      Ended March 31,  
     

2022

 

2021

 
      (in millions)  
Adjusted net income available for common stockholders1              
Net income available for common stockholders - GAAP   $

73

  $

107

 
                 
Non-GAAP adjustments              
  Currency diversification strategy, net    

4

   

0

 
  Mark-to-market on investments2    

7

   

(22)

 
  Income tax effect of above adjustments3    

(2)

   

4

 
Total non-GAAP adjustments    

9

   

(17)

 
Adjusted net income available for common stockholders   $

82

  $

90

 
                 
Note: Amounts may not add due to rounding.              
                 
      Three Months  
      Ended March 31,  
     

2022

 

2021

 
      (in dollars)  
Adjusted diluted EPS1              
Diluted EPS - GAAP   $

0.74

  $

1.16

 
                 
Non-GAAP adjustments              
  Currency diversification strategy, net    

0.04

   

0.00

 
  Mark-to-market on investments2    

0.07

   

(0.24)

 
  Income tax effect of above adjustments3    

(0.02)

   

0.05

 
Total non-GAAP adjustments    

0.09

   

(0.19)

 
Adjusted diluted EPS   $

0.82

  $

0.98

 
                 
Diluted weighted average common shares outstanding    

99,224,776

   

91,766,142

 
                 
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 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.

For Interactive Brokers Group, Inc.
Investors:
Nancy Stuebe, investor-relations@ibkr.com
or
Media: Rob Garfield, media@ibkr.com

Source: Interactive Brokers Group, Inc.