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Interactive Brokers (IBKR) Q2 Earnings & Revenues Lag Estimates
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Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2023 adjusted earnings per share of $1.32 missed the Zacks Consensus Estimate of $1.41. However, the bottom line reflects a rise of 57.1% from the prior-year quarter.
Results were adversely impacted by an increase in expenses. A fall in daily average revenue trades (DARTs) was another headwind. However, an improvement in revenues aided the stock. Also, the company had a strong capital position.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $125 million or $1.20 per share, up from $72 million or 72 cents per share in the prior-year quarter. Our estimate for net income was $138.2 million.
Interactive Brokers reported comprehensive income available to common shareholders of $132 million or $1.27 per share compared with $48 million or 47 cents in the prior-year quarter.
Revenues Improve, Expenses Rise
Total GAAP net revenues were $1 billion, up 52.4% year over year. The top line missed the Zacks Consensus Estimate of $1.05 billion. Adjusted net revenues were $1.06 billion, up 48.4% year over year.
Total non-interest expenses increased 31.8% year over year to $348 million. The rise was due to an increase in almost all cost components, except for customer bad debt expenses. Our estimate for expenses was $335.9 million.
Income before income taxes was $652 million, increasing 66.3% from the prior-year quarter.
The adjusted pre-tax profit margin was 67%, up from 63% a year ago.
In the reported quarter, total customer DARTs declined 14.2% year over year to 1.87 million. Total cleared DARTs decreased from 1.93 million to 1.67 million.
Customer accounts grew 19.1% from the year-ago quarter to 2,290,000.
Capital Position Strong
As of Jun 30, 2023, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $62.9 billion compared with $60.4 billion as of Dec 31, 2022.
As of Jun 30, 2023, total assets were $120.6 billion compared with $115.1 billion as of Dec 31, 2022. Total equity was $12.7 billion, up from $11.6 billion as of Dec 31, 2022.
Our Viewpoint
Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. Also, its efficient capital deployment activities indicate strong liquidity and capital positions. However, increasing expenses will likely hamper the bottom line to an extent in the near term.
Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise
Raymond James Financial (RJF - Free Report) is scheduled to report its third-quarter fiscal 2023 results on Jul 26.
Over the past seven days, the Zacks Consensus Estimate for RJF’s quarterly earnings has moved marginally down to $2.07 per share. The estimate indicates a 28.6% increase from the prior-year quarter.
Evercore (EVR - Free Report) is slated to release its second-quarter 2023 numbers on Jul 26.
Over the past seven days, the Zacks Consensus Estimate for EVR’s quarterly earnings has decreased 11% to $1.37 per share. The figure implies a 44.3% decrease from the prior-year quarter.
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Interactive Brokers (IBKR) Q2 Earnings & Revenues Lag Estimates
Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2023 adjusted earnings per share of $1.32 missed the Zacks Consensus Estimate of $1.41. However, the bottom line reflects a rise of 57.1% from the prior-year quarter.
Results were adversely impacted by an increase in expenses. A fall in daily average revenue trades (DARTs) was another headwind. However, an improvement in revenues aided the stock. Also, the company had a strong capital position.
After considering non-recurring items, net income available to common shareholders (GAAP basis) was $125 million or $1.20 per share, up from $72 million or 72 cents per share in the prior-year quarter. Our estimate for net income was $138.2 million.
Interactive Brokers reported comprehensive income available to common shareholders of $132 million or $1.27 per share compared with $48 million or 47 cents in the prior-year quarter.
Revenues Improve, Expenses Rise
Total GAAP net revenues were $1 billion, up 52.4% year over year. The top line missed the Zacks Consensus Estimate of $1.05 billion. Adjusted net revenues were $1.06 billion, up 48.4% year over year.
Total non-interest expenses increased 31.8% year over year to $348 million. The rise was due to an increase in almost all cost components, except for customer bad debt expenses. Our estimate for expenses was $335.9 million.
Income before income taxes was $652 million, increasing 66.3% from the prior-year quarter.
The adjusted pre-tax profit margin was 67%, up from 63% a year ago.
In the reported quarter, total customer DARTs declined 14.2% year over year to 1.87 million. Total cleared DARTs decreased from 1.93 million to 1.67 million.
Customer accounts grew 19.1% from the year-ago quarter to 2,290,000.
Capital Position Strong
As of Jun 30, 2023, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $62.9 billion compared with $60.4 billion as of Dec 31, 2022.
As of Jun 30, 2023, total assets were $120.6 billion compared with $115.1 billion as of Dec 31, 2022. Total equity was $12.7 billion, up from $11.6 billion as of Dec 31, 2022.
Our Viewpoint
Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. Also, its efficient capital deployment activities indicate strong liquidity and capital positions. However, increasing expenses will likely hamper the bottom line to an extent in the near term.
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 #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Firms
Raymond James Financial (RJF - Free Report) is scheduled to report its third-quarter fiscal 2023 results on Jul 26.
Over the past seven days, the Zacks Consensus Estimate for RJF’s quarterly earnings has moved marginally down to $2.07 per share. The estimate indicates a 28.6% increase from the prior-year quarter.
Evercore (EVR - Free Report) is slated to release its second-quarter 2023 numbers on Jul 26.
Over the past seven days, the Zacks Consensus Estimate for EVR’s quarterly earnings has decreased 11% to $1.37 per share. The figure implies a 44.3% decrease from the prior-year quarter.