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Interactive Brokers (IBKR) Q2 Earnings Miss, Revenues Rise Y/Y

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Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2021 adjusted earnings per share of 82 cents lagged the Zacks Consensus Estimate of 83 cents. However, the bottom line reflects growth of 43.9% from the prior-year quarter.

The company recorded a rise in revenues and lower expenses in the quarter. Also, an increase in daily average revenue trades (DARTs) was witnessed. Capital ratios remained strong.

After considering non-recurring items, net income available to common shareholders (GAAP basis) was $92 million or $1.00 per share, up from $32 million or 40 cents per share in the prior-year quarter.

Interactive Brokers reported comprehensive income available to common shareholders of $97 million or $1.05 per share in the reported quarter compared with $36 million or 46 cents recorded in the prior-year quarter.

Revenues Improve, Expenses Decline

Total GAAP net revenues were $754 million, up 39.9% year over year. The top line beat the Zacks Consensus Estimate of $655.6 million. Adjusted net revenues were $650 million, up 24.3%.

Total non-interest expenses declined 32.8% year over year to $213 million. The decline was due to a fall in execution, clearing and distribution fees, customer bad debt, and general and administrative costs.

Income before income taxes was $541 million, increasing significantly from $222 million recorded in the prior-year quarter.

Adjusted pre-tax profit margin was 67%, up from 59% a year ago.

In the reported quarter, total customer DARTs increased 32% year over year to 2.30 million. Total cleared DARTs jumped from 1.56 million to 2.08 million.

Additionally, customer accounts grew 61.4% from the year-ago quarter to 1,414,000.

Capital Position Strong

As of Jun 30, 2021, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $41 billion compared with $48 billion as of Dec 31, 2020.

As of Jun 30, 2021, total assets were $104.3 billion compared with $95.7 billion as of Dec 31, 2020. Total equity was $9.9 billion, up from $9 billion as of Dec 31, 2020.

Our Viewpoint

Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to aid financials. Also, its efficient capital deployment activities indicate strong liquidity and capital position.

Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise

 

Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise

Interactive Brokers Group, Inc. price-consensus-eps-surprise-chart | Interactive Brokers Group, Inc. Quote

Currently, Interactive Brokers carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance and Upcoming Releases of Other Companies

Charles Schwab’s (SCHW - Free Report) second-quarter 2021 adjusted earnings of 70 cents per share beat the Zacks Consensus Estimate by a penny. The bottom line grew 30% from the prior-year quarter.

Raymond James (RJF - Free Report) and LPL Financial (LPLA - Free Report) are slated to release results for the June-end quarter on Jul 28 and Jul 29, respectively.