Interactive Brokers (IBKR) Misses Q3 EPS by 2c, Revenues Beat

Interactive Brokers (NASDAQ: IBKR) reported Q3 EPS of $0.53, $0.02 worse than the analyst estimate of $0.55. Revenue for the quarter came in at $518 million versus the consensus estimate of $511.51 million.

• Reported diluted earnings per share of $0.58 for the quarter ended September 30, 2020 compared to $0.45 for the same period in 2019
• Adjusted diluted earnings per share of $0.53 for this quarter compared to $0.57 for the year-ago quarter.
• Net revenues were $548 million and income before income taxes was $334 million this quarter, compared to net revenues of $466 million and income before income taxes of $281 million for the same period in 2019.
• Adjusted net revenues were $518 million and adjusted income before income taxes was $304 million this quarter, compared to adjusted net revenues of $525 million and adjusted income before income taxes of $340 million for the same period in 2019.

Financial Highlights

• Commission revenue showed strong growth, increasing $92 million, or 49%, from the year-ago quarter on higher customer trading volumes within an active trading environment worldwide.
• Net interest income decreased $96 million, or 33%, from the year-ago quarter as the average Federal Funds effective rate decreased to 0.09% from 2.19% in the year-ago quarter.
• Other income increased $76 million from the year-ago quarter. This increase was mainly comprised of (1) $74 million related to our currency diversification strategy, which gained $27 million this quarter compared to a loss of $47 million in the same period in 2019; and (2) $19 million related to our strategic investment in Up Fintech Holding Limited (“Tiger Brokers”), which swung to a $6 million mark-to-market gain this quarter from a $13 million mark-to-market loss in the same period in 2019; partially offset by (3) a $13 million impairment loss on our investment in OneChicago Exchange recognized in this quarter.
• 61% pretax profit margin for this quarter, up from 60% in the year-ago quarter. 59% adjusted pretax profit margin for this quarter, down from 65% in the year-ago quarter.
• Total equity of $8.5 billion.

For earnings history and earnings-related data on Interactive Brokers (IBKR) click here.

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