10-QPeriod: Q1 FY2014

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

Filed May 12, 2014For Securities:IBKR

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.

Financial Highlights

28 data points
Beta

Revenue

$369.00M

Net Income

$19.00M

5.1% Net Margin

EPS (Diluted)

$0.09

Total Assets

$38.98B

Cash & Equivalents

$991.00M

Free Cash Flow

-$259.00M

Financial Statements
Beta
Revenue$369.00M
Net Income$19.00M
EPS (Basic)$0.09
EPS (Diluted)$0.09
Shares Outstanding (Basic)218.66M
Shares Outstanding (Diluted)224.17M

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.

Frequently Asked Questions

The primary driver of the substantial 64% increase in net revenues to $354.9 million was a significant surge in trading gains, which rose 571% to $127.5 million. This was attributed to improved market conditions characterized by higher volatility and a favorable currency translation impact, alongside an increase in commissions and execution fees and net interest income.

Diluted earnings per share showed significant improvement. On a comprehensive basis, EPS was $0.35, compared to $0.06 in the first quarter of 2013. On a non-comprehensive basis (excluding currency translation effects), diluted EPS was $0.34, a substantial increase from $0.14 in the prior year's quarter.

Interactive Brokers demonstrated strong financial health and capital strength. Total assets reached $38.98 billion, with approximately 98.9% considered liquid. The company reported substantial excess regulatory capital of $3.26 billion across its operating entities, indicating a robust capital buffer and compliance with regulatory requirements.

The market-making segment saw a remarkable turnaround. It reported an income before income taxes of $88.1 million in the first quarter of 2014, a significant improvement from a loss of $29.0 million in the same period of 2013. This recovery was largely due to increased trading gains driven by higher market volatility and a positive currency translation effect.