Interactive Brokers Reports Strong Q2, 2018 Financial Results

Interactive BrokersThe US-based electronic brokerage firm, Interactive Brokers Group Inc. (NASDAQ GS: IBKR) has reported record financial results in the second quarter of 2018. The results surpassed Wall-Street expectations with figures indicating continuing growth and momentum of the company. 

During the quarter, the brokerage house posted net revenues of $445 million, compared to $387 million in the same period a year ago, an increase of around 15 per cent. Income before income tax was recorded at $271 million this quarter against $204 million in the same period in 2017, up by almost 25 per cent. 

The results were positively impacted by strong growth in net interest income which increased by $70 million or 45 per cent, $25 million or 16 per cent increase in commissions from the year-ago quarter. The diluted EPS on net income for the quarter was reported at $0.58 compared to $0.32 for the same period in 2017. On comprehensive income, diluted EPS was recorded at $0.39 for the quarter, compared to $0.41 for the same period in 2017. The group recorded positive results despite a loss of $21 million on currency diversification strategy, against the gain of $29 million in the same period in 2017. 

The company ended the quarter with $134.7 billion in customer equity, an increase of 29 per cent from the same time last year. The number of client accounts also grew to an all-time high level with more than 542,000 accounts, an increase of 27 per cent Y-o-Y. Other financial metrics of the brokerage group include 61 per cent pretax profit margin, for the quarter which was 53 per cent in the second quarter of 2017. Electronic Brokerage pretax profit margin was recorded at 64 per cent, up from 50 per cent. 

The shares of the brokerage house gained almost 5 per cent in the full day of trading including regular market hours and in after-market trading. 

The record results helped Interactive Broker to top against its close rival Charles Schwab, an online brokerage house. Interactive Brokers aims to be one of the world’s largest brokerage house and is investing heavily in developing its technology and compliance departments. The company believes that the strong momentum to continue through the year as the US Federal Reserve interest rate hike in June will continue to benefit net interest income in the quarters to come.