Summary
Interactive Brokers Group, Inc. (IBKR) filed an 8-K on July 23, 2009, reporting its financial results for the second quarter ended June 30, 2009. The company reported diluted earnings per share (EPS) of $0.31, a decrease from $0.44 in the same period of the previous year. Net revenues were $332 million, down from $395 million year-over-year, and income before taxes was $192 million, compared to $259 million in Q2 2008. Despite the overall decline in revenue and earnings, the company highlighted resilience in its Electronic Brokerage segment, which saw a 5% increase in income before taxes year-over-year due to an 18% rise in customer accounts and an 11% increase in daily average revenue trades (DARTs). The company's CEO, Thomas Peterffy, emphasized the firm's ability to achieve year-on-year gains in the brokerage segment amidst a challenging market, attributing this success to best execution pricing, low commissions, and advanced money management tools provided to customers. The Market Making segment, however, experienced a 30% decrease in income before taxes compared to the prior year, mainly due to tighter bid/offer spreads on option exchanges, though its pre-tax profit margin remained strong at 65%. Investors should note the significant year-over-year decline in net revenues and EPS, while also recognizing the company's strategic positioning and customer growth in its core brokerage operations.
Key Highlights
- 1Diluted Earnings Per Share (EPS) of $0.31 for Q2 2009, down from $0.44 in Q2 2008.
- 2Net revenues of $332 million and income before taxes of $192 million for Q2 2009, both lower than the prior year's comparable quarter.
- 3Electronic Brokerage segment income before taxes increased 5% year-over-year, driven by an 18% growth in customer accounts and an 11% increase in cleared DARTs.
- 4Market Making segment income before taxes decreased 30% year-over-year due to unfavorable market conditions for option market makers.
- 5Strong pre-tax profit margins maintained: 58% overall, 65% for Market Making, and 51% for Electronic Brokerage.
- 6Customer equity grew by 13% year-over-year to $11.5 billion.
- 7Company highlights its ability to achieve year-on-year gains in the brokerage segment, attributing it to competitive pricing and customer-centric tools.