IBG, Inc.(IBKR) - 2024 Q4 - Annual Results

Financial & Business Highlights 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] 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] - 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] Consolidated Financial Statements 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 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 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 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 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 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 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] 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 |