Core Viewpoint - Analyst recommendations play a significant role in influencing stock prices, but their reliability is questionable due to potential biases from brokerage firms [1][5][9]. Group 1: Analyst Recommendations - Interactive Brokers Group, Inc. (IBKR) has an average brokerage recommendation (ABR) of 1.22, indicating a consensus between Strong Buy and Buy, with 88.9% of recommendations being Strong Buy from nine brokerage firms [2][12]. - Despite the positive ABR, relying solely on this information for investment decisions may not be prudent, as studies show limited success in brokerage recommendations guiding investors effectively [4][9]. Group 2: Vested Interests and Bias - Brokerage firms often exhibit a strong positive bias in their analysts' ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [5][9]. - This misalignment of interests can mislead investors, making it essential to validate brokerage recommendations with independent research [6][9]. Group 3: Zacks Rank as an Alternative - Zacks Rank, a proprietary stock rating tool, categorizes stocks from Strong Buy to Strong Sell and is based on earnings estimate revisions, which are strongly correlated with near-term stock price movements [7][10]. - The Zacks Rank is timely and reflects current business trends, unlike the ABR, which may not be up-to-date [11]. Group 4: Earnings Estimates for IBKR - The Zacks Consensus Estimate for Interactive Brokers has increased by 3.3% over the past month to $7.39, indicating growing optimism among analysts regarding the company's earnings prospects [12]. - The recent change in consensus estimates, along with other factors, has resulted in a Zacks Rank 1 (Strong Buy) for Interactive Brokers, suggesting a potential for stock price appreciation [13].

Core Insights - Artificial intelligence (AI) is a significant driver of stock market returns, with Nvidia leading in graphics processors for data centers critical for AI development [1] - Interactive Brokers (IBKR) has achieved remarkable market performance, with a 142% stock gain over the past year, surpassing many AI stocks [2][3] Company Performance - Interactive Brokers added a record 775,000 new client accounts in 2024, bringing total client accounts to 3.34 million [4] - Client equity increased by 33% to $568.2 billion in Q4 2024, directly impacting revenue through transaction commissions [5] - Stock trading volume rose by 65% year-over-year in Q4, with options volume increasing by 32%, indicating high investor activity [6] Revenue Generation - Interactive Brokers generated a record $5.1 billion in total revenue in 2024, a 19.4% increase from 2023, with over $2 billion from commissions (31.7% growth) and $3.1 billion from interest revenue (up 12.6%) [9] - Commission revenue is growing faster than interest revenue, which is influenced by monetary policy changes [10][8] Market Conditions - The U.S. Federal Reserve raised interest rates to combat inflation, benefiting Interactive's interest revenue, but a new cutting cycle may lead to declining interest revenue [11][12] - Lower interest rates could boost stock market activity, potentially offsetting lost interest revenue with increased commission revenue [15] Stock Valuation - Interactive Brokers' stock is trading at a P/E ratio of 31.6 based on trailing 12-month EPS of $6.93, which is higher than the S&P 500's P/E ratio of 25.2 [13][14] - Despite potential headwinds from lower interest rates, the company is expected to continue generating positive returns for long-term investors [16][17]

Earnings and Revenue Performance - The company reported fourth-quarter earnings per share (EPS) of $1.99, exceeding analysts' estimates [1] - Revenue increased by 22% year-over-year to $1.39 billion, surpassing expectations [1] - Commissions revenue rose 37% to $477 million, driven by strong trading activity [2] - Other fees and services revenue grew 47% to $81 million [2][3] Trading Volume and Customer Metrics - Trading volume in stocks surged 65%, while options trading volume increased by 32% [2][3] - Customer accounts grew 30% to 3.34 million [2] - Customer equity expanded 33% to $568.2 billion [2] Stock Performance - The company's shares reached an all-time high, surging nearly 7% to $205.83, after touching a record $209.40 [2] - Shares have more than doubled in the past year [2]

Core Insights - Interactive Brokers Group (IBKR) shares reached an all-time high following the release of better-than-expected fourth-quarter results driven by strong market gains and increased consumer trading volume [1][3] - The company reported earnings per share (EPS) of $1.99 and a revenue increase of 22% year-over-year to $1.39 billion, both surpassing analysts' expectations [1][2] Financial Performance - Commissions revenue rose by 37% to $477 million, with stock trading volume increasing by 65% and options trading volume up by 32% [2][3] - Other fees and services revenue grew by 47% to $81 million [2][3] - Customer accounts increased by 30% to 3.34 million, while customer equity grew by 33% to $568.2 billion [2] Stock Performance - IBKR shares surged nearly 7% to $205.83, reaching a record high of $209.40 earlier in the day [2] - The stock has more than doubled in value over the past year [2]

Core Insights - Interactive Brokers Group (IBKR) reported better-than-expected quarterly results, with adjusted earnings per share of $2.03, surpassing the Zacks Consensus Estimate of $1.86, marking a 33.6% increase from the prior-year quarter [1][3] - The company's total GAAP net revenues for the quarter reached $1.39 billion, up 21.8% year over year, while adjusted net revenues were $1.42 billion, reflecting a 23.9% increase [5][6] Financial Performance - For the fourth quarter of 2024, net income available to common shareholders (GAAP) was $217 million or $1.99 per share, compared to $160 million or $1.48 in the prior-year quarter [3] - For the full year 2024, adjusted earnings per share was $7.03, exceeding the Zacks Consensus Estimate of $6.99, and indicating a 22.3% rise from the previous year [4] Revenue and Expenses - Total GAAP net revenues for 2024 were $5.19 billion, up 19.5% year over year, while adjusted net revenues were $5.26 billion, reflecting a 20.4% increase [5] - Non-interest expenses increased by 7.4% year over year to $347 million, primarily due to execution, clearing, and distribution fees, as well as employee compensation and benefits [6] Customer Metrics - Total customer daily average revenue trades (DARTs) increased by 61.2% year over year to 3.12 million, significantly surpassing estimates [7] - Customer accounts grew by 30.2% from the year-ago quarter to 3,337,000, also exceeding predictions [7] Capital Position - As of December 31, 2024, cash and cash equivalents totaled $68.1 billion, with total assets at $150.5 billion and total equity rising to $16.6 billion [8] Strategic Outlook - The company is expected to benefit from proprietary software development and an increase in emerging market customers, with higher interest rates likely aiding revenue growth in the near term [10]

Core Insights - Interactive Brokers Group, Inc. (IBKR) reported a revenue of $1.42 billion for Q4 2024, marking a 25% year-over-year increase and exceeding the Zacks Consensus Estimate of $1.38 billion by 3.50% [1] - The earnings per share (EPS) for the same quarter was $2.03, up from $1.52 a year ago, representing a surprise of 9.14% against the consensus estimate of $1.86 [1] Financial Performance Metrics - Net Interest Margin was reported at 2.2%, slightly below the average estimate of 2.4% [4] - Total customer accounts reached 3.34 million, surpassing the estimated 3.2 million [4] - Average interest-earning assets amounted to $148.36 billion, exceeding the estimate of $138.37 billion [4] - Total customer Daily Average Revenue Trades (DARTs) were 3.12 million, above the average estimate of 2.8 million [4] - Cleared customers' commission per cleared commissionable order was $2.72, lower than the estimated $2.81 [4] - Customer equity stood at $568.2 billion, exceeding the average estimate of $546.27 billion [4] - Other fees and services generated $81 million, surpassing the estimated $63.07 million [4] - Commissions totaled $477 million, above the average estimate of $456.68 million [4] - Total net interest income was $807 million, slightly below the average estimate of $822.41 million [4] - Interest income reached $1.86 billion, exceeding the average estimate of $1.77 billion [4] Stock Performance - Shares of Interactive Brokers have returned +7% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - In the fourth quarter, Interactive Brokers demonstrated strong financial performance, with significant growth in revenue and net income compared to the previous quarter [5]. Business Line Data and Key Metrics Changes - The company reported an increase in trading volume across its platforms, indicating robust activity in its brokerage services [5]. Market Data and Key Metrics Changes - Interactive Brokers experienced growth in client accounts, reflecting an expanding customer base and increased market participation [5]. Company Strategy and Development Direction and Industry Competition - The management emphasized a focus on enhancing technology and expanding service offerings to maintain a competitive edge in the brokerage industry [5]. Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing favorable market conditions and a strong demand for trading services as key drivers for growth [5]. Other Important Information - The company highlighted ongoing investments in technology to improve trading efficiency and customer experience [5]. Q&A Session Summary Question: What are the expectations for trading volumes in the upcoming quarters? - Management indicated that they anticipate continued strong trading volumes due to market volatility and increased retail participation [5]. Question: How is the company addressing competitive pressures in the industry? - The response highlighted the importance of technological advancements and customer service enhancements as primary strategies to counter competition [5].

Interactive Brokers Group, Inc. (IBKR) came out with quarterly earnings of $2.03 per share, beating the Zacks Consensus Estimate of $1.86 per share. This compares to earnings of $1.52 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 9.14%. A quarter ago, it was expected that this company would post earnings of $1.78 per share when it actually produced earnings of $1.75, delivering a surprise of -1.69%.Over the last four quarter ...

Core Insights - Interactive Brokers Group reported strong fourth-quarter results, exceeding Wall Street expectations in both earnings and revenue [2][6] - The company demonstrated significant growth in trading volumes, particularly in options and stock trading, which contributed to its financial performance [6][7] Financial Performance - Adjusted earnings per share (EPS) for Q4 2024 were $2.03, surpassing the consensus estimate of $1.84 and up 33.6% from $1.52 in Q4 2023 [3][6] - Adjusted revenue reached $1.424 billion, exceeding the anticipated $1.354 billion, marking a 23.9% increase from $1.149 billion in the previous year [3][6] - Net interest income rose to $807 million, a 10.5% increase from $730 million in Q4 2023 [3][7] - The pretax profit margin improved to 76%, up from 72% in the prior year, reflecting a 400 basis point increase [3][7] - Customer accounts grew by 30.5% to 3.34 million, indicating strong client acquisition [3][8] Business Overview - Interactive Brokers operates an electronic brokerage platform, providing technological solutions for traders and investors, facilitating low-cost and high-speed trade executions [4][5] - The firm offers access to over 150 markets and a wide range of tradable products, reinforcing its competitive position in the industry [5] Strategic Focus - The company is enhancing its proprietary technology and expanding global market access, focusing on maintaining low transaction costs and robust risk management systems [5][10] - Future initiatives include the development of new products like ForecastEx and the opening of new offices in markets such as Dubai, aligning with the company's growth strategy [10][11] Market Outlook - Management is optimistic about future growth, anticipating an increase in client accounts and heightened market activity linked to global events [12] - Forward guidance reflects expectations for continued customer growth and global expansion, with ongoing attention to regulatory changes and competitive dynamics [12]

[Financial & Business Highlights](index=1&type=section&id=Financial%20%26%20Business%20Highlights) Interactive Brokers reported strong Q4 2024 results with significant year-over-year growth in revenues and earnings, driven by increased commission revenue and net interest income, alongside robust growth in customer accounts and trading volumes Q4 2024 Key Financial Results (vs. Q4 2023) | Metric | Q4 2024 (Reported) | Q4 2023 (Reported) | Q4 2024 (Adjusted) | Q4 2023 (Adjusted) | | :--- | :--- | :--- | :--- | :--- | | Diluted EPS | $1.99 | $1.48 | $2.03 | $1.52 | | Net Revenues | $1,387 million | $1,139 million | $1,424 million | $1,149 million | | Income Before Income Taxes | $1,040 million | $816 million | $1,077 million | $831 million | - The Board of Directors declared a quarterly cash dividend of **$0.25 per share**, payable on March 14, 2025[4](index=4&type=chunk) Key Financial Drivers (Q4 2024 vs. Q4 2023) | Item | Change | Amount (Q4 2024) | Driver | | :--- | :--- | :--- | :--- | | Commission Revenue | +37% | $477 million | Higher customer trading volumes in options (+32%) and stocks (+65%) | | Net Interest Income | +11% | $807 million | Higher average customer margin loans and credit balances | | Other Fees and Services | +47% | $81 million | Increases in risk exposure fees and payments for order flow | | Execution, Clearing & Distribution Fees | +15% | $115 million | Higher SEC fee rate, new FINRA CAT fee, and higher trading volumes | | General & Administrative Expenses | +31% | $59 million | $9 million increase in advertising expenses | Key Business Metrics (vs. Q4 2023) | Metric | Value | Change (YoY) | | :--- | :--- | :--- | | Customer Accounts | 3.34 million | +30% | | Customer Equity | $568.2 billion | +33% | | Total DARTs | 3.12 million | +61% | | Customer Margin Loans | $64.2 billion | +45% | | Customer Credits | $119.7 billion | +15% | - The company's currency diversification strategy, which bases its net worth in a basket of 10 major currencies (GLOBALs), decreased comprehensive earnings by **$266 million** due to a **1.63%** decrease in the U.S. dollar value of the GLOBAL[6](index=6&type=chunk) - Other Income included a **$24 million** net gain from the investment in Tiger Brokers, resulting from a **$34 million** realized gain on a partial sale and a **$10 million** unrealized loss[7](index=7&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements reflect significant year-over-year growth in total net revenues and net income for FY2024, alongside an expanded balance sheet with increased assets and equity [Consolidated Statements of Income](index=3&type=section&id=Consolidated%20Statements%20of%20Income) Consolidated Income Statement Highlights (in millions) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Commissions | $477 | $348 | $1,697 | $1,360 | | Total Net Interest Income | $807 | $730 | $3,148 | $2,794 | | **Total Net Revenues** | **$1,387** | **$1,139** | **$5,185** | **$4,340** | | Total Non-interest Expenses | $347 | $323 | $1,490 | $1,271 | | **Income Before Income Taxes** | **$1,040** | **$816** | **$3,695** | **$3,069** | | Net Income | $969 | $739 | $3,407 | $2,812 | | **Net Income Available for Common Stockholders** | **$217** | **$160** | **$755** | **$600** | | **Diluted EPS** | **$1.99** | **$1.48** | **$6.93** | **$5.67** | [Consolidated Statements of Comprehensive Income](index=4&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Consolidated Comprehensive Income Highlights (in millions) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income Available for Common Stockholders | $217 | $160 | $755 | $600 | | Other Comprehensive Income (Loss), net of tax | ($64) | $37 | ($53) | $30 | | **Comprehensive Income Available for Common Stockholders** | **$153** | **$197** | **$702** | **$630** | [Condensed Consolidated Statements of Financial Condition](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Financial%20Condition) Condensed Balance Sheet Highlights (in millions) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $3,633 | $3,753 | | Receivables from customers, net | $64,432 | $44,472 | | **Total Assets** | **$150,518** | **$128,423** | | **Liabilities and Equity** | | | | Payables to Customers | $115,343 | $101,012 | | **Total Liabilities** | **$133,921** | **$114,356** | | **Total Equity** | **$16,597** | **$14,067** | [Operating Data](index=6&type=section&id=Operating%20Data) Operating data for Q4 2024 shows a significant surge in trading activity, with total executed orders increasing 71% year-over-year, driven by strong customer trading volumes and account growth, despite a decrease in average commission per order Executed Order Volumes (in 000's) | Period | Customer Orders | Total Orders | % Change (YoY) | | :--- | :--- | :--- | :--- | | 4Q2023 | 120,886 | 128,818 | - | | 4Q2024 | 196,433 | 219,653 | +71% | | 3Q2024 | 171,620 | 189,342 | - | | 4Q2024 vs 3Q2024 | +14% | +16% | - | Customer Trading Volumes (Q4 2024 vs Q4 2023) | Category | Q4 2024 Volume | % Change (YoY) | | :--- | :--- | :--- | | Options (contracts) | 356,255k | +32% | | Futures (contracts) | 51,662k | -3% | | Stocks (shares) | 95,910,447k | +65% | Customer Statistics (Q4 2024) | Metric | Value | % Change (YoY) | % Change (QoQ) | | :--- | :--- | :--- | :--- | | Total Accounts (thousands) | 3,337 | +30% | +7% | | Customer Equity (billions) | $568.2 | +33% | +5% | | Total Customer DARTs (thousands) | 3,118 | +61% | +15% | | Commission per Cleared Order | $2.72 | -15% | -4% | [Net Interest Margin](index=9&type=section&id=Net%20Interest%20Margin) For Q4 2024, the company's net interest margin (NIM) decreased to 2.23% from 2.41% year-over-year, despite a rise in total net interest income, primarily due to changes in annualized yields on interest-earning assets Net Interest Margin Analysis | Metric | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | Average Interest-Earning Assets | $148,361 M | $121,524 M | | Average Interest-Bearing Liabilities | $129,646 M | $106,521 M | | Net Interest Income | $830 M | $739 M | | **Net Interest Margin (NIM)** | **2.23%** | **2.41%** | Annualized Yields | Category | Q4 2024 | Q4 2023 | | :--- | :--- | :--- | | Segregated cash and securities | 4.54% | 5.07% | | Customer margin loans | 5.23% | 5.85% | | Customer credit balances | 3.08% | 3.56% | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) Non-GAAP financial measures are provided to offer a clearer view of core operating performance by excluding specific items, resulting in adjusted net revenues of **$1,424 million** and adjusted diluted EPS of **$2.03** for Q4 2024 - Management believes non-GAAP measures are important for evaluating operating performance by excluding items not indicative of core results, such as the currency diversification strategy, mark-to-market on investments, and TRA liability remeasurement[31](index=31&type=chunk) Q4 2024 GAAP to Non-GAAP Reconciliation (in millions) | Metric | GAAP | Adjustments | Adjusted (Non-GAAP) | | :--- | :--- | :--- | :--- | | Net Revenues | $1,387 | $37 | $1,424 | | Income Before Income Taxes | $1,040 | $37 | $1,077 | Q4 2024 Diluted EPS Reconciliation | Metric | Amount | | :--- | :--- | | Diluted EPS - GAAP | $1.99 | | Total Non-GAAP Adjustments | $0.04 | | **Adjusted Diluted EPS** | **$2.03** |