Interactive Brokers posted $1.90 billion in revenue for the second quarter, surpassing Wall Street expectations of $1.80 billion, alongside adjusted earnings per share of $0.69 versus an anticipated $0.64. The brokerage’s shares gained approximately 4% during after-hours trading following the announcement.
Strong Trading Activity Drives Higher Profits
Commission revenue increased 30% year-on-year to $673 million, reflecting growth in customer trading volumes, with options rising 17% and stocks 14%. Net interest income also grew 23% to $1.06 billion, exceeding FactSet's consensus of $994 million. Pretax profit margin improved to 77%, up 200 basis points from the previous year. Customer margin loans surged 67% to $108.5 billion while customer credits expanded 27% to $182.4 billion.
Expanding Client Base and Product Offerings
The number of customer accounts jumped 34% to 5.19 million, and customer equity swelled 40% to $930.3 billion. Daily average revenue trades (DARTs), a key indicator of client activity, increased 36% to 4.82 million orders generating commissions. Interactive Brokers is broadening its services through integration of crypto trading and was the first venue for Cboe’s new prediction markets introduced in June. The company declared a quarterly dividend of $0.0875 per share, payable September 14.
This earnings update follows a strong reporting week for brokerages, including Charles Schwab’s record quarter. Higher retail trading engagement has been noted since the removal of the pattern day trader rule in June, contributing to sector momentum.
This article is for informational purposes only and does not constitute financial advice.
