Industry Overview - The investment bank industry has thrived in 2025 due to increased client activities, a rebound in underwriting and advisory businesses, and significant AI applications enhancing long-term efficiency [1] - The Zacks-defined Financial – Investment Bank Industry ranks in the top 4% of the Zacks Industry Rank, with a 41.5% return over the past year and a year-to-date return of 21.4% [2] Company Performance Goldman Sachs Group Inc. (GS) - Goldman Sachs has experienced solid growth in its Global Banking & Markets division, focusing on core investment banking and trading through restructuring and acquisitions [6][7] - The company maintained its leading position in M&A activities in Q2 2025, with investment banking revenues rebounding after a slowdown in 2022-2023 [7][8] - For 2025, the Zacks Consensus Estimate projects revenues of $56.87 billion (up 6.3% YoY) and earnings per share of $45.63 (up 12.6% YoY) [11] JPMorgan Chase & Co. (JPM) - JPMorgan's business expansion, loan demand, and high interest rates are expected to drive net interest income (NII) growth, projected to have a CAGR of 2.9% by 2027 [13] - The Zacks Consensus Estimate for 2025 shows revenues of $117.19 billion (down 0.2% YoY) and earnings per share of $19.50 (down 1.3% YoY) [15] Citigroup Inc. (C) - Citigroup is witnessing an increase in NII, supported by business transformation initiatives and a strong liquidity position [17] - The Zacks Consensus Estimate for 2025 indicates revenues of $84.51 billion (up 4.2% YoY) and earnings per share of $7.58 (up 27.4% YoY) [19] Evercore Inc. (EVR) - Evercore has seen revenue growth from its Investment Management and Investment Banking & Equities segments, with ongoing efforts to expand its advisory client base [22] - The Zacks Consensus Estimate for 2025 shows revenues of $3.48 billion (up 15.9% YoY) and earnings per share of $12.41 (up 31.7% YoY) [24] Interactive Brokers Group Inc. (IBKR) - Interactive Brokers is enhancing its global presence and product suite, with initiatives expected to support revenue growth [26][27] - The Zacks Consensus Estimate for 2025 indicates revenues of $5.68 billion (up 8.8% YoY) and earnings per share of $1.96 (up 11.4% YoY) [28]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Interactive Brokers Group, Inc. (IBKR) - IBKR currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [3] Performance Metrics - Over the past week, IBKR shares increased by 3.62%, outperforming the Zacks Financial - Investment Bank industry, which rose by 1.52% [5] - In a longer timeframe, IBKR's shares have risen by 7.56% over the past month, compared to the industry's 3.25% [5] - Over the last quarter, IBKR shares increased by 23.68%, and over the past year, they gained 112.61%, significantly outperforming the S&P 500, which rose by 10.12% and 19.99% respectively [6] Trading Volume - The average 20-day trading volume for IBKR is 5,354,713 shares, indicating a bullish sign when combined with rising stock prices [7] Earnings Outlook - In the past two months, four earnings estimates for IBKR have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.76 to $1.96 [9] - For the next fiscal year, four estimates have also moved upwards without any downward revisions [9] Conclusion - Considering the positive performance metrics and earnings outlook, IBKR is positioned as a 1 (Strong Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Core Viewpoint - Interactive Brokers announced the launch of its IBKR Lite pricing plan in Singapore, which offers commission-free trading on U.S. markets, leading to a significant decline in its stock price as investors reacted negatively to the news [1][2][6] Group 1: Company Announcement - The IBKR Lite pricing plan was launched in Singapore, featuring no commissions for trades on U.S. markets [2] - The company emphasized that IBKR Lite is free from hidden fees, providing true cost transparency without commissions, platform fees, or minimums [4] Group 2: Market Context - Singapore, despite being a small country, is considered relatively wealthy in its region, making it an attractive market for Interactive Brokers to offer online trading in U.S. securities [5] - The brokerage industry is experiencing a shift away from commission-based revenue streams, prompting companies to adapt their business strategies [6]

Key Takeaways Interactive Brokers (IBKR) launches its IBKR Lite plan in Singapore, offering investors in the country a commission-free way to trade U.S. stocks and ETFs around the clock. This is another step taken by the brokerage firm to expand its product suite and the reach of its services globally. This zero-commission trading plan in Singapore complements Interactive Brokers' existing IBKR Pro pricing plan. Clients will be allowed to switch between the Lite and Pro plans at any time, depending on their ...

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Performance Overview - Interactive Brokers has shown exceptional stock performance compared to the S&P 500 index fund over various time periods, with a 61.56% return over the past 3 years and a 38.38% return over the past 5 years [2] - An investment of $1,000 in Interactive Brokers five years ago would have grown to $5,075 as of August 7 [2] Future Outlook - The future performance of Interactive Brokers appears promising due to its high profit margins, indicating efficient operations and a significant level of automation [4] - However, the stock is currently perceived as somewhat overvalued, with a forward-looking price-to-earnings (P/E) ratio of 33, significantly above its five-year average of 20, and a price-to-sales ratio of 2.95, compared to a five-year average of 1.85 [5] Investment Strategy - It is advisable to monitor Interactive Brokers stock for potential price corrections or to consider gradual investments over time with smaller amounts [6]

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Core Insights - Interactive Brokers Group, Inc. (IBKR) has expanded its Forecast Contracts to Europe, driven by increasing global demand for predictive risk management tools [1][9] - The company has launched various products, including cryptocurrency trading and the IBKR GlobalTrader platform, enhancing its service offerings [4][5][6] - IBKR's revenues are expected to improve due to technological advancements and higher client acquisitions, with a compound annual growth rate of 21.8% in total net revenues from 2019 to 2024 [7][21] Product Expansion - Forecast Contracts, which are based on specific events occurring by a certain time, were initially launched in the U.S. and Hong Kong and later expanded to Canada and Europe [2][3] - IBKR has added new cryptocurrencies to its offerings, increasing the total to 11, and introduced innovative tools like the Impact Dashboard for sustainable investing [4][5] - The company has also extended trading hours to nearly 24 hours a day, allowing real-time trading across global releases [3] Competitive Landscape - IBKR's close competitor, Robinhood Markets, Inc. (HOOD), has also diversified its offerings, launching various products to meet investor demands [10] - TradeWeb Markets Inc. (TW), another peer, has introduced electronic portfolio trading for European government bonds, enhancing its market share [11] Financial Performance - IBKR shares have gained 45.5% year-to-date, outperforming the industry and the S&P 500 Index [12][9] - The company's stock is trading at a trailing 12-month price-to-tangible book (P/TBV) ratio of 1.53, which is below the industry's 2.87, indicating it may be undervalued [21][17] Earnings Outlook - Analysts have revised upward the earnings estimates for IBKR, reflecting year-over-year growth rates of 11.4% for 2025 and 6.1% for 2026 [16][21] - The upward revisions in earnings estimates suggest optimism regarding IBKR's growth potential, presenting a compelling buying opportunity for value investors [21][22]

PART I FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for Q2 2025 present the company's financial position, performance, and cash flows, alongside key accounting and regulatory disclosures [Condensed Consolidated Statements of Financial Condition](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) This section provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2025, and December 31, 2024 Condensed Consolidated Statements of Financial Condition (in millions) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total assets** | **$181,475** | **$150,142** | | Cash and cash equivalents | $4,688 | $3,633 | | Cash - segregated for regulatory purposes | $45,057 | $36,600 | | Receivables from Customers | $65,346 | $64,432 | | **Total liabilities** | **$162,957** | **$133,545** | | Payables to Customers | $138,417 | $115,343 | | **Total equity** | **$18,518** | **$16,597** | | Stockholders' equity | $4,825 | $4,280 | | Noncontrolling interests | $13,693 | $12,317 | [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This statement details the company's revenues, expenses, and net income for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income (in millions, except per share amounts) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total net revenues** | **$1,480** | **$1,230** | **$2,907** | **$2,433** | | Commissions | $516 | $406 | $1,030 | $785 | | Total net interest income | $860 | $792 | $1,630 | $1,539 | | **Income before income taxes** | **$1,104** | **$880** | **$2,159** | **$1,746** | | **Net income** | **$1,006** | **$809** | **$1,970** | **$1,604** | | Net income available for common stockholders | $224 | $179 | $437 | $354 | | **Diluted Earnings per share** | **$0.51** | **$0.41** | **$0.99** | **$0.82** | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines the company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Cash Flows (in millions) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$9,723** | **$3,304** | | Net cash used in investing activities | ($68) | ($27) | | Net cash used in financing activities | ($556) | ($470) | | Effect of exchange rate changes on cash | $413 | ($112) | | **Net increase in cash, cash equivalents and restricted cash** | **$9,512** | **$2,695** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the accounting policies, significant transactions, and other disclosures supporting the financial statements - The company is an automated global electronic broker with **3,087 employees worldwide** as of June 30, 2025[18](index=18&type=chunk) - A **four-for-one forward stock split** was executed, effective for shareholders of record on June 16, 2025 All prior period share and per-share amounts have been retroactively adjusted to reflect this split[24](index=24&type=chunk) - As of June 30, 2025, IBG, Inc. owns approximately **26.0% of IBG LLC**, with the remaining **74.0% held by IBG Holdings LLC**[95](index=95&type=chunk) - The company settled with the Office of Foreign Assets Control (OFAC) for **$11.8 million** on July 15, 2025, regarding sanctions compliance issues dating back to 2016[207](index=207&type=chunk) - The company operates as a single reportable segment, electronic brokerage, and provides a breakdown of revenues by geography, with the U.S. accounting for **$1,006 million** and International for **$474 million** in net revenues for Q2 2025[212](index=212&type=chunk)[221](index=221&type=chunk) - As of June 30, 2025, the aggregate excess regulatory capital for all operating subsidiaries was **$13.3 billion**, with all entities in compliance with their respective requirements[223](index=223&type=chunk)[227](index=227&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, attributing strong Q2 2025 results to favorable market conditions, increased revenues, and a highly liquid balance sheet [Business Environment and Financial Overview](index=43&type=section&id=Business%20Environment%20and%20Financial%20Overview) This section provides an overview of the market conditions and key financial highlights that influenced the company's performance in Q2 2025 - The business environment in Q2 2025 was marked by **rising world equity markets**, **increased trading volumes**, and **higher volatility** Several central banks, including those in Europe and the U.K., cut policy rates, while the U.S. Federal Reserve held rates steady[241](index=241&type=chunk)[248](index=248&type=chunk) Key Market Drivers (Q2 2025 vs Q2 2024) | Metric | Change | Note | | :--- | :--- | :--- | | U.S. Listed Cash Equities Volume | +57% | Industry data | | U.S. Exchange-Listed Options Volume | +24% | Industry data | | U.S. Futures Volume | +16% | Industry data | | VIX® Average | +69% | From 14.0 to 23.7 | Q2 2025 Financial Highlights (vs. Q2 2024) | Metric | Q2 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | | Commission Revenue | $516 million | +27% | | Net Interest Income | $860 million | +9% | | Pretax Profit Margin | 75% | from 72% | | Adjusted Pretax Profit Margin | 75% | from 73% | | Diluted EPS | $0.51 | from $0.41 | | Adjusted Diluted EPS | $0.51 | from $0.44 | [Trading Volumes and Customer Statistics](index=47&type=section&id=Trading%20Volumes%20and%20Customer%20Statistics) This section presents key metrics related to customer accounts, equity, daily average revenue trades (DARTs), and trading volumes across various products Customer Statistics (Year over Year) | Metric | 2Q2025 | 2Q2024 | % Change | | :--- | :--- | :--- | :--- | | Total Accounts (in thousands) | 3,866 | 2,924 | 32% | | Customer Equity (in billions) | $664.6 | $497.2 | 34% | | Total Customer DARTs (in thousands) | 3,552 | 2,386 | 49% | | Commission per Cleared Commissionable Order | $2.65 | $3.01 | (12%) | Customer Contract and Share Volumes (Year over Year) | Product | 2Q2025 Volume | % Change vs 2Q2024 | | :--- | :--- | :--- | | Options (contracts) | 382,195 thousand | 24% | | Futures (contracts) | 63,918 thousand | 18% | | Stocks (shares) | 95,276,485 thousand | 31% | [Results of Operations](index=49&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's net revenues, commissions, net interest income, and non-interest expenses for the reported periods - For Q2 2025, Net Revenues increased **20%** to **$1,480 million**, driven by higher commissions and net interest income[271](index=271&type=chunk)[273](index=273&type=chunk) - Commissions for Q2 2025 increased **27%** to **$516 million** due to a **49%** rise in DARTs, though average commission per order decreased **12%** to **$2.65**[278](index=278&type=chunk)[292](index=292&type=chunk) - Net Interest Income for Q2 2025 increased **9%** to **$860 million**, benefiting from higher customer balances and securities lending, despite lower benchmark rates, with NIM decreasing from **2.42%** to **2.07%** - Non-Interest Expenses for Q2 2025 increased **7%** to **$376 million**, primarily due to a **12%** rise in employee compensation - For the Six Months 2025, Net Revenues increased **19%** to **$2,907 million**[310](index=310&type=chunk) - Commissions for the Six Months 2025 increased **31%** to **$1,030 million**, driven by a **43%** increase in DARTs[311](index=311&type=chunk) - Net Interest Income for the Six Months 2025 increased **6%** to **$1,630 million**[314](index=314&type=chunk) - Non-Interest Expenses for the Six Months 2025 increased **9%** to **$748 million**[330](index=330&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's balance sheet liquidity, equity growth, and cash flow from operating activities - The company maintains a highly liquid balance sheet with total assets of **$181.5 billion** as of June 30, 2025, of which **99.2%** are considered liquid[350](index=350&type=chunk) - Consolidated equity increased **22%** year-over-year to **$18.5 billion** as of June 30, 2025, primarily from comprehensive income[355](index=355&type=chunk) - For the six months ended June 30, 2025, net cash from operating activities was **$9.7 billion**, largely reflecting an increase in customer credit balances[359](index=359&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=67&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company manages market risks including equity price, foreign currency, and interest rate fluctuations through proprietary models and active currency management, mitigating margin loan risk with automated systems - The company actively manages its global currency exposure by maintaining its equity in a basket of 10 currencies called 'GLOBALs' As of June 30, 2025, approximately **25%** of the company's equity was denominated in currencies other than the U.S. dollar[386](index=386&type=chunk)[387](index=387&type=chunk) Interest Rate Sensitivity Analysis (as of June 30, 2025) | Scenario | Currency | Annualized Impact on Net Interest Income | | :--- | :--- | :--- | | +0.25% Rate Change | U.S. Dollar | +$73 million | | +0.25% Rate Change | Non-U.S. Dollar | +$38 million | | -0.25% Rate Change | U.S. Dollar | -$73 million | | -0.25% Rate Change | Non-U.S. Dollar | -$8 million | - The company had **$65.3 billion** in margin loans extended to customers as of June 30, 2025 Credit exposure is mitigated by a real-time margining system that automatically liquidates under-margined positions[399](index=399&type=chunk)[401](index=401&type=chunk) [Controls and Procedures](index=71&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025 There were no material changes to the internal control over financial reporting during the quarter - Management concluded that as of the end of the quarter, the company's disclosure controls and procedures were **effective in all material respects**[408](index=408&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are likely to materially affect, internal controls[409](index=409&type=chunk) PART II OTHER INFORMATION [Legal Proceedings](index=72&type=section&id=ITEM%201.%20Legal%20Proceedings) There have been no material changes to legal proceedings since the last Annual Report, except for updates provided in Note 13 of the financial statements, which detail the conclusion of the Trading Technologies matter, an ongoing class action, and a settlement with OFAC - No material changes to legal proceedings are reported, with reference to Note 13 for updates on specific matters[411](index=411&type=chunk) [Risk Factors](index=72&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors have occurred since the last annual report filing[412](index=412&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter, the company repurchased 1,815,372 shares from employees at an average price of $46.40 per share These shares were withheld to satisfy tax obligations related to the vesting of stock incentive plan awards and were subsequently sold in open market transactions Stock Repurchase Activity (Three Months Ended June 30, 2025) | Period | Transaction Type | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | :--- | | May 1 - May 31 | Employee Transactions | 1,815,372 | $46.40 | [Other Information](index=73&type=section&id=ITEM%205.%20Other%20Information) During the second quarter of 2025, Chairman Thomas Peterffy and CFO Paul Brody adopted Rule 10b5-1 trading plans for the sale of company common stock Adoption of Rule 10b5-1 Trading Plans (Q2 2025) | Name | Title | Plan Adoption Date | Aggregate Shares to be Sold | | :--- | :--- | :--- | :--- | | Thomas Peterffy | Chairman of the Board | April 25, 2025 | 6,064,728 | | Paul Brody | Chief Financial Officer | June 9, 2025 | 1,000,000 | [Exhibits](index=74&type=section&id=ITEM%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the company's certificate of incorporation, bylaws, various agreements, and certifications by the CEO and CFO It also includes XBRL data files

Core Insights - Interactive Brokers Group, Inc. (IBKR) shares have increased by 41.8% over the past three months, outperforming the industry growth of 20.3% and the S&P 500 Index's rise of 13.1% [1][8] - The company's stock performance has surpassed key peers such as Charles Schwab (14.8% increase) and Tradeweb Markets (2.2% decline) [1][8] Performance Drivers - Technological Excellence: IBKR's technological superiority allows it to process trades across more than 150 exchanges globally, enhancing its operational efficiency [4] - Revenue Growth: The company has achieved a compound annual growth rate (CAGR) of 21.8% in total net revenues from 2019 to 2024, with continued momentum into the first half of 2025 [5] - Global Expansion: IBKR has launched several initiatives to enhance its global presence, including extended trading hours and new product offerings in various markets [10][11][12] Financial Position - Robust Liquidity: As of June 30, 2025, IBKR had cash and cash equivalents of $49.7 billion, with a consistent history of dividend payments and minimal debt [14] - Earnings Estimates: Analysts have revised upward the earnings estimates for 2025 and 2026, indicating year-over-year growth rates of 9.7% and 6.7%, respectively [21] Challenges - Elevated Expense Base: The company has experienced a CAGR of 13.8% in non-interest expenses over the past five years, primarily due to increased execution and clearing fees [15] - High Reliance on International Revenues: Approximately 37% of IBKR's total net revenues come from international operations, exposing the company to regulatory and economic risks [18] Conclusion - Despite elevated expenses, IBKR's strong technological capabilities and diversified product offerings position it well for long-term growth in a volatile market [20] - The upward revisions in earnings estimates reflect analysts' optimism regarding IBKR's growth potential, making it a favorable investment opportunity [21][25]