Interactive Brokers’ Q2 Metrics Rebound From Dampened First Quarter

Metrics were up across the board from the same quarter 2014, indicating a strong rebound from Q1's slump following Black

Interactive Brokers Group (NASDAQ GS: IBKR), an online broker and market maker, today released strong results for the second quarter (Q2) ending June 30, 2015.

After sedated first quarter results, on the back of the sudden rise in the value of the Swiss franc, Q2 results are significantly more positive. Indeed, the broker reported diluted earnings per share on a comprehensive basis of $0.44 for Q2 2015, compared to diluted earnings per share on a comprehensive basis of $0.29 for the same period in 2014, and rebounding 58.8% from Q1’s $0.24.

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Net revenues were $387 million and income before income taxes was $240 million this quarter, compared to net revenues of $309 million and $174 million before income taxes for the same period in 2014. The poor results of Q1 saw net revenues slip to $172 million.

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The broker’s board of directors also declared a quarterly cash dividend of $0.10 per share, payable on September 14, 2015 to shareholders of record as of September 1, 2015.

Business Highlights for Q2:

  • 65% Electronic Brokerage pretax profit margin for this quarter, up from 59% in the year-ago quarter.
  • 42% Market Making pretax profit margin for this quarter, up from 37% in the year-ago quarter.
  • Customer equity grew 22% from the year-ago quarter to $66.0 billion and customer debits increased by 23% to $19.0 billion.
  • Customer accounts increased 18% from the year-ago quarter to 310 thousand.
  • Total DARTs increased 16% from year-ago quarter to 616 thousand.
  • Brokerage segment equity was $3.3 billion. Total equity was $5.2 billion.

Commenting on its foreign currency diversification strategy, Interactive Brokers reported: “We have determined to base our net worth in GLOBALs, a basket of 16 major currencies in which we hold our equity. In this quarter, our currency diversification strategy increased our comprehensive earnings by $53 million, as the U.S. dollar value of the GLOBAL increased by approximately 1.0%.”

Interactive Brokers shares were up over 45% on the year at the start of the month, with positive trader sentiment towards the firm’s long-term fortunes of market share growth. While in April, the broker entered into a definitive agreement to acquire online investing market place, Covestor.

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