Interactive Brokers Group, Inc. Quarterly Report for Q1 Ended Mar 31, 2014

Summary

Interactive Brokers Group, Inc. (IBKR) reported strong financial results for the first quarter of 2014, with net revenues increasing by 64% year-over-year to $354.9 million. This growth was primarily driven by a significant surge in trading gains, up 571% to $127.5 million, fueled by increased market volatility and a favorable currency translation effect. The company also saw a 14% increase in commissions and execution fees and a 24% rise in net interest income, indicating robust activity across both its electronic brokerage and market-making segments. Diluted earnings per share (EPS) on a comprehensive basis significantly improved to $0.35, compared to $0.06 in the prior year's quarter. On a non-comprehensive basis (excluding currency translation effects), diluted EPS was $0.34, a substantial increase from $0.14 in Q1 2013. The company maintained a strong pretax margin of 61%, up from 38% in the prior year, highlighting operational efficiency and the benefits of its automated platform. Customer equity grew by 38% to $49.0 billion, and margin balances reached a record $14.4 billion, supporting higher net interest income. The company ended the quarter with $3.26 billion in aggregate excess regulatory capital.

Key Highlights

• 1Net revenues surged 64% year-over-year to $354.9 million, driven by higher trading gains and commissions.
• 2Trading gains increased dramatically by 571% to $127.5 million, benefiting from increased market volatility and favorable currency translation.
• 3Diluted EPS improved significantly to $0.35 (comprehensive) and $0.34 (non-comprehensive), up from $0.06 and $0.14 respectively in Q1 2013.
• 4Electronic brokerage segment income before taxes increased 21% to $134.3 million, with commissions up 14% and customer equity up 38%.
• 5Market making segment income before taxes swung from a loss of $29.0 million in Q1 2013 to a profit of $88.1 million in Q1 2014.
• 6Customer equity grew by 38% to $49.0 billion, and record margin balances reached $14.4 billion.
• 7The company maintained substantial excess regulatory capital of $3.26 billion.

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