IBG, Inc.(US:IBKR)2025-08-06 20:11PART I FINANCIAL INFORMATION Financial Statements (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 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 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 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 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, 202518 - 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 split24 - As of June 30, 2025, IBG, Inc. owns approximately 26.0% of IBG LLC, with the remaining 74.0% held by IBG Holdings LLC95 - 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 2016207 - 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 2025212221 - 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 requirements223227 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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 steady241248 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 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 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 income271273 - Commissions for Q2 2025 increased 27% to $516 million due to a 49% rise in DARTs, though average commission per order decreased 12% to $2.65278292 - 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 million310 - Commissions for the Six Months 2025 increased 31% to $1,030 million, driven by a 43% increase in DARTs311 - Net Interest Income for the Six Months 2025 increased 6% to $1,630 million314 - Non-Interest Expenses for the Six Months 2025 increased 9% to $748 million330 Liquidity and Capital Resources 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 liquid350 - Consolidated equity increased 22% year-over-year to $18.5 billion as of June 30, 2025, primarily from comprehensive income355 - For the six months ended June 30, 2025, net cash from operating activities was $9.7 billion, largely reflecting an increase in customer credit balances359 Quantitative and Qualitative Disclosures about Market Risk 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. dollar386387 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 positions399401 Controls and Procedures 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 respects408 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are likely to materially affect, internal controls409 PART II OTHER INFORMATION Legal Proceedings 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 matters411 Risk Factors 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 filing412 Unregistered Sales of Equity Securities and Use of Proceeds 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 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 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