Interactive Brokers Reports Drop in Q1 2017 Revenues as Market Making Dwindles

Customer accounts at IB increased 18 percent from the year ago to 406 thousand.

Shortly after the close of U.S. trading session, Interactive Brokers LLC (NASDAQ:IBKR), a global electronic multi-asset broker and market-maker listed on Nasdaq, has disclosed its financial results for Q1 2017, revealing that its metrics failed to live up to the strong performance of the equivalent quarter a year ago.

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During the reported quarter, the US brokerage has reported that its net revenues for Q1 2017 amounted to $374 million, which was lower by -23.5 percent compared with $489 million in the same period last year. In addition, the amount of income before income taxes totalled $213 million, down -36.8 percent year-over-year from $337 million that had been announced in Q1 2016.

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The decrease in net revenues was primarily due to lower trading gains, which decreased 96 percent from the year-ago quarter, as well as commissions and execution fees but the figure was partially offset by higher net interest income which increased $15 million, or 12 percent.

Delving further into financial metrics, Interactive Brokers reported diluted earnings per share (EPS) on a comprehensive basis at $0.34 for the quarter ended March 31, 2017, reflecting a -33.3 percent year-over-year decrease from a profit of $0.51 per share during Q1 2016.

Business highlights, according to the company’s press release, included a pretax profit margin of 59 percent for the Electronic Brokerage division which was down from 68 percent in 2016. It also showed a -275 percent market making pretax loss margin during Q1 2017, down from 34 percent profit margin in the year-ago quarter. During the three months period through March 2017, customer equity grew 38 percent from 2016 to $96.8 billion, while customer debits increased 39 percent to $20.9 billion.

Finally, customer accounts at IB increased 18 percent from the year ago to 406 thousand, while total daily average revenue trades (DARTs) jumped 12 percent year-over-year to 657,000. Relative to last year’s figures, IB reported a climb in brokerage segment equity which totaled $4.3 billion while total equity registered $6.0 billion during Q1 2016.

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