Interactive Brokers Group Announces 1Q2023 Results

GAAP DILUTED EPS OF $1.42, ADJUSTED¹ EPS OF $1.35

GAAP NET REVENUES OF $1,056 MILLION, ADJUSTED NET REVENUES OF $1,015 MILLION

Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated global electronic broker, announced results for the quarter ended March 31, 2023.

Reported diluted earnings per share were $1.42 for the current quarter and $1.35 as adjusted. For the year-ago quarter, reported diluted earnings per share were $0.74 and $0.82 as adjusted.

Reported net revenues were $1,056 million for the current quarter and $1,015 million as adjusted. For the year-ago quarter, reported net revenues were $645 million and $692 million as adjusted.

Reported income before income taxes was $761 million for the current quarter and $720 million as adjusted. For the year-ago quarter, reported income before income taxes was $394 million and $441 million as adjusted.

Financial Highlights

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

• Commission revenue increased 2% to $357 million on record contract volumes in futures and larger average trade sizes in options and futures, tempered by lower customer stock trading volume.
• Net interest income increased 126% to $637 million on higher benchmark interest rates and customer credit balances.
• Other income increased $58 million to a gain of $19 million. This increase was mainly comprised of $39 million related to our U.S. government securities portfolio, all of which matures within three months, and $19 million related to our currency diversification strategy.
• Reported pretax profit margin was 72% for the current quarter and 71% as adjusted. For the year-ago quarter, reported pretax margin was 61% and 64% as adjusted.
• Total equity of $12.2 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, 2023, to shareholders of record as of June 1, 2023.

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1 See the reconciliation of non-GAAP financial measures starting on page 9.</sup>

Business Highlights

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

• Customer accounts increased 21% to 2.20 million.
• Customer equity decreased 4% to $343.1 billion.
• Total DARTs² decreased 19% to 2.05 million.
• Cleared DARTs decreased 17% to 1.85 million.
• Customer credits increased 4% to $96.6 billion.
• Customer margin loans decreased 18% to $39.4 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 increased our comprehensive earnings by $20 million, as the U.S. dollar value of the GLOBAL increased by approximately 0.17%. The effects of the currency diversification strategy are reported as components of (1) Other Income (gain of $1 million) and (2) Other Comprehensive Income (gain of $19 million).

Conference Call Information:

Interactive Brokers Group, Inc. will hold a conference call with investors today, April 18, 2023, 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/BIc01d49ab32cf4e9899e9034f6068f3f2 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.

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2 Daily average revenue trades (DARTs) are based on customer orders.</sup>

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA, CONTINUED

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

NET INTEREST MARGIN

(UNAUDITED)

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

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.

• 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.
• We define adjusted diluted EPS as adjusted net income available for common stockholders divided by the diluted weighted average number of shares outstanding for the period.

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 investments in equity securities that do not qualify for equity method accounting which are measured at fair value, on our U.S. government and municipal securities portfolio, which are typically held to maturity, and on 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 statutory income tax rates applicable to the Company.

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