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Interactive Brokers Group Announces 3Q2021 Results

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Diluted Earnings Per Share of $0.43, Adjusted Diluted Earnings Per Share1 of $0.78.

Pretax Income of $234 Million on $464 Million in Net Revenues.

Adjusted Pretax Income of $420 Million on $650 Million in Adjusted Net Revenues1.

Declares Quarterly Dividend of $0.10 Per Share.

GREENWICH, Conn., October 19, 2021--(BUSINESS WIRE)--Interactive Brokers Group, Inc. (Nasdaq: IBKR), an automated global electronic broker, reported diluted earnings per share of $0.43 for the quarter ended September 30, 2021 compared to $0.58 for the same period in 2020, and adjusted diluted earnings per share of $0.78 for this quarter compared to $0.53 for the year-ago quarter.

Net revenues were $464 million and income before income taxes was $234 million for this quarter, compared to net revenues of $548 million and income before income taxes of $334 million for the same period in 2020. Adjusted net revenues were $650 million and adjusted income before income taxes was $420 million for this quarter, compared to adjusted net revenues of $518 million and adjusted income before income taxes of $304 million for the same period in 2020.

Financial Highlights

  • Commission revenue increased $32 million, or 11%, from the year-ago quarter on higher customer stock and options trading volumes.

  • Net interest income increased $79 million, or 41%, from the year-ago quarter on higher margin loan balances and strong securities lending activity.

  • Other income decreased $199 million from the year-ago quarter. This decrease was mainly comprised of (1) $191 million related to our strategic investment in Up Fintech Holding Limited ("Tiger Brokers"), which decreased to a $185 million mark-to-market loss this quarter from a $6 million mark-to-market gain in the same period in 2020; and (2) $30 million related to our currency diversification strategy, which lost $3 million this quarter compared to a gain of $27 million in the same period in 2020; partially offset by (3) the non-recurrence of a $13 million impairment loss on our investment in OneChicago Exchange recognized in the year-ago quarter.

  • 50% pretax profit margin for this quarter, down from 61% in the year-ago quarter. 65% adjusted pretax profit margin for this quarter, up from 59% in the year-ago quarter.

  • Total equity of $10.0 billion.

The Interactive Brokers Group, Inc. Board of Directors declared a quarterly cash dividend of $0.10 per share. This dividend is payable on December 14, 2021 to shareholders of record as of December 1, 2021.

Business Highlights

  • Customer accounts increased 57% from the year-ago quarter to 1.54 million.

  • Customer equity grew 52% from the year-ago quarter to $353.8 billion.

  • Total DARTs2 increased 24% from the year-ago quarter to 2.26 million.

  • Cleared DARTs increased 24% from the year-ago quarter to 2.02 million.

  • Customer credits increased 22% from the year-ago quarter to $86.2 billion.

  • Customer margin loans increased 67% from the year-ago quarter to $50.2 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 decreased our comprehensive earnings by $43 million, as the U.S. dollar value of the GLOBAL decreased by approximately 0.41%. The effects of the currency diversification strategy are reported as components of (1) Other Income (loss of $3 million) and (2) Other Comprehensive Income (loss of $40 million).

Conference Call Information:

Interactive Brokers Group, Inc. will hold a conference call with investors today, October 19, 2021, at 4:30 p.m. ET to discuss its quarterly results. Investors who would like to listen to the conference call live should dial 877-324-1965 (U.S. domestic) and 631-291-4512 (international). The number should be dialed approximately ten minutes prior to the start of the conference call. Ask for the "Interactive Brokers 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 135 markets in numerous countries and currencies, from a single IBKR Integrated Investment Account 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. Barron’s ranked Interactive Brokers #1 with 5 out of 5 stars in its February 26, 2021, Best Online Broker 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.

______________________

1 See the reconciliation of non-GAAP financial measures starting on page 9.

2 Daily average revenue trades (DARTs) are based on customer orders.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months

Nine Months

Ended September 30,

Ended September 30,

2021

2020

2021

2020

(in millions, except share and per share data)

Revenues:

Commissions

$

311

$

279

$

1,030

$

824

Other fees and services

49

45

160

123

Other income (loss)

(170)

29

68

25

Total non-interest income

190

353

1,258

972

Interest income

325

240

1,022

853

Interest expense

(51)

(45)

(169)

(206)

Total net interest income

274

195

853

647

Total net revenues

464

548

2,111

1,619

Non-interest expenses:

Execution, clearing and distribution fees

61

74

183

227

Employee compensation and benefits

98

77

291

239

Occupancy, depreciation and amortization

19

17

58

51

Communications

8

6

24

19

General and administrative

44

37

138

206

Customer bad debt

-

3

3

13

Total non-interest expenses

230

214

697

755

Income before income taxes

234

334

1,414

864

Income tax expense

28

32

116

65

Net income

206

302

1,298

799

Net income attributable to noncontrolling interests

164

256

1,057

675

Net income available for common stockholders

$

42

$

46

$

241

$

124

Earnings per share:

Basic

$

0.44

$

0.59

$

2.60

$

1.60

Diluted

$

0.43

$

0.58

$

2.58

$

1.58

Weighted average common shares outstanding:

Basic

96,229,958

78,509,625

92,814,767

77,543,008

Diluted

96,989,968

79,120,548

93,671,689

78,243,699

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

Three Months

Nine Months

Ended September 30,

Ended September 30,

2021

2020

2021

2020

(in millions, except share and per share data)

Comprehensive income:

Net income available for common stockholders

$

42

$

46

$

241

$

124

Other comprehensive income:

Cumulative translation adjustment, before income taxes

(9)

8

(21)

5

Income taxes related to items of other comprehensive income

-

-

-

-

Other comprehensive income (loss), net of tax

(9)

8

(21)

5

Comprehensive income available for common stockholders

$

33

$

54

$

220

$

129

Comprehensive earnings per share:

Basic

$

0.34

$

0.69

$

2.37

$

1.67

Diluted

$

0.34

$

0.69

$

2.35

$

1.65

Weighted average common shares outstanding:

Basic

96,229,958

78,509,625

92,814,767

77,543,008

Diluted

96,989,968

79,120,548

93,671,689

78,243,699

Comprehensive income attributable to noncontrolling interests:

Net income attributable to noncontrolling interests

$

164

$

256

$

1,057

$

675

Other comprehensive income - cumulative translation adjustment

(31)

37

(74)

24

Comprehensive income attributable to noncontrolling interests

$

133

$

293

$

983

$

699

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(UNAUDITED)

September 30,
2021

December 31,
2020

(in millions)

Assets

Cash and cash equivalents

$

2,838

$

4,292

Cash - segregated for regulatory purposes

23,125

15,903

Securities - segregated for regulatory purposes

14,400

27,821

Securities borrowed

3,811

4,956

Securities purchased under agreements to resell

6,108

792

Financial instruments owned, at fair value

659

630

Receivables from customers, net of allowance for credit losses

50,503

39,333

Receivables from brokers, dealers and clearing organizations

4,038

1,254

Other assets

800

698

Total assets

$

106,282

$

95,679

Liabilities and equity

Liabilities

Short-term borrowings

$

28

$

118

Securities loaned

10,535

9,838

Financial instruments sold but not yet purchased, at fair value

233

153

Other payables:

Customers

84,087

75,882

Brokers, dealers and clearing organizations

781

182

Other payables

607

503

85,475

76,567

Total liabilities

96,271

86,676

Equity

Stockholders' equity

2,331

1,951

Noncontrolling interests

7,680

7,052

Total equity

10,011

9,003

Total liabilities and equity

$

106,282

$

95,679

September 30,
2021

December 31,
2020

Ownership of IBG LLC Membership Interests

Interests

%

Interests

%

IBG, Inc.

98,175,951

23.5%

90,780,444

21.8%

Noncontrolling interests (IBG Holdings LLC)

319,880,492

76.5%

325,960,034

78.2%

Total IBG LLC membership interests

418,056,443

100.0%

416,740,478

100.0%

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA

TRADE VOLUMES:

(in 000's, except %)

Cleared

Non-Cleared

Avg. Trades

Customer

%

Customer

%

Principal

%

Total

%

per U.S.

Period

Trades

Change

Trades

Change

Trades

Change

Trades

Change

Trading Day

2018

328,099

21,880

18,663

368,642

1,478

2019

302,289

(8%)

26,346

20%

17,136

(8%)

345,771

(6%)

1,380

2020

620,405

105%

56,834

116%

27,039

58%

704,278

104%

2,795

3Q2020

160,015

14,701

7,453

182,169

2,846

3Q2021

193,218

21%

18,106

23%

8,228

10%

219,552

21%

3,431

2Q2021

196,659

16,130

7,975

220,764

3,504

3Q2021

193,218

(2%)

18,106

12%

8,228

3%

219,552

(1%)

3,431

CONTRACT AND SHARE VOLUMES:

(in 000's, except %)

TOTAL

Options

%

Futures1

%

Stocks

%

Period

(contracts)

Change

(contracts)

Change

(shares)

Change

2018

408,406

151,762

210,257,186

2019

390,739

(4%)

128,770

(15%)

176,752,967

(16%)

2020

624,035

60%

167,078

30%

338,513,068

92%

3Q2020

163,972

39,186

87,514,614

3Q2021

214,988

31%

36,940

(6%)

172,828,874

97%

2Q2021

196,715

35,061

172,099,915

3Q2021

214,988

9%

36,940

5%

172,828,874

0%

ALL CUSTOMERS

Options

%

Futures1

%

Stocks

%

Period

(contracts)

Change

(contracts)

Change

(shares)

Change

2018

358,852

148,485

198,909,375

2019

349,287

(3%)

126,363

(15%)

167,826,490

(16%)

2020

584,195

67%

164,555

30%

331,263,604

97%

3Q2020

153,612

38,685

85,893,357

3Q2021

205,797

34%

36,473

(6%)

172,082,316

100%

2Q2021

189,073

34,635

171,417,373

3Q2021

205,797

9%

36,473

5%

172,082,316

0%

CLEARED CUSTOMERS

Options

%

Futures1

%

Stocks

%

Period

(contracts)

Change

(contracts)

Change

(shares)

Change

2018

313,795

146,806

194,012,882

2019

302,068

125,225

(15%)

163,030,500

(16%)

2020

518,965

72%

163,101

30%