Interactive Brokers Ends Q1 2022 with 28% Revenue Drop

by Arnab Shome
  • The first quarter of the year turned out to be sluggish for the broker.
  • The board approved a $0.10 per share dividend.
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Interactive Brokers (Nasdaq: IBKR), an American electronic trading venue, released its financials for the first quarter of 2021, reporting a significant decline in its revenue and income.

According to the official numbers, the broker generated net revenue of $645 million between January and March, which is a year-over-year decline of almost 28 percent. On adjusted bases, this figure came in at $692 million, compared to $796 million a year before.

Additionally, the broker has detailed that its commission-based revenue declined by 15 percent to $349 million. The drop in this figure resulted from an “unusually active trading period last year, but was aided by higher customer options and futures trading volumes.”

Decline in Income

The company reported a pre-tax income of $394 million for the quarter, with the adjusted figure at $441 million. These numbers dropped from $639 million and $542 million, respectively, from the figure of the same quarter a year before.

In addition, the net interest income of the broker decreased by 8 percent to $282 million, primarily due to a drop in securities lending activity but was offset by gains on margin lending and segregated cash balances. But, the other income dropped by $159 million to a loss of $39 million.

Overall, Interactive Brokers ended the quarter with diluted earnings of $0.74 per share, compared to last year’s $1.16. The adjusted figure came in at $0.82 per share, which was down from $0.98 in Q1 of 2021. Moreover, it will pay a quarterly cash dividend of $0.10 per share.

The pre-tax profit margin of the broker declined to 61 percent from the previous year’s 72 percent. The adjusted profit margins for Q1 of 2022 and 2021 were 64 percent and 68 percent, respectively.

On the customer metrics front, the number of accounts with the broker jumped by 36 percent to 1.81 million. Furthermore, customer equity grew by 8 percent to $355.9 billion. However, there was a decline in DARTs by 24 percent to 2.52 million.

Interactive Brokers (Nasdaq: IBKR), an American electronic trading venue, released its financials for the first quarter of 2021, reporting a significant decline in its revenue and income.

According to the official numbers, the broker generated net revenue of $645 million between January and March, which is a year-over-year decline of almost 28 percent. On adjusted bases, this figure came in at $692 million, compared to $796 million a year before.

Additionally, the broker has detailed that its commission-based revenue declined by 15 percent to $349 million. The drop in this figure resulted from an “unusually active trading period last year, but was aided by higher customer options and futures trading volumes.”

Decline in Income

The company reported a pre-tax income of $394 million for the quarter, with the adjusted figure at $441 million. These numbers dropped from $639 million and $542 million, respectively, from the figure of the same quarter a year before.

In addition, the net interest income of the broker decreased by 8 percent to $282 million, primarily due to a drop in securities lending activity but was offset by gains on margin lending and segregated cash balances. But, the other income dropped by $159 million to a loss of $39 million.

Overall, Interactive Brokers ended the quarter with diluted earnings of $0.74 per share, compared to last year’s $1.16. The adjusted figure came in at $0.82 per share, which was down from $0.98 in Q1 of 2021. Moreover, it will pay a quarterly cash dividend of $0.10 per share.

The pre-tax profit margin of the broker declined to 61 percent from the previous year’s 72 percent. The adjusted profit margins for Q1 of 2022 and 2021 were 64 percent and 68 percent, respectively.

On the customer metrics front, the number of accounts with the broker jumped by 36 percent to 1.81 million. Furthermore, customer equity grew by 8 percent to $355.9 billion. However, there was a decline in DARTs by 24 percent to 2.52 million.

About the Author: Arnab Shome
Arnab Shome
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About the Author: Arnab Shome
Arnab is an electronics engineer-turned-financial editor. He entered the industry covering the cryptocurrency market for Finance Magnates and later expanded his reach to forex as well. He is passionate about the changing regulatory landscape on financial markets and keenly follows the disruptions in the industry with new-age technologies.
  • 6229 Articles
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