TD Ameritrade Sees Revenue Growth in Q3, Despite Trading Slump

The total number of trades placed during the quarter fell from Q2 of fiscal 2019.

TD Ameritrade Holding Corporation, the parent company of the Omaha-based online brokerage, has published its financial results for the third quarter of its fiscal 2019 year, ending June 30, 2019, revealing an uptick in net revenues on a year-on-year comparison.

TD Ameritrade, which operates an electronic trading platform, posted net revenues of $1.5 billion during the third quarter of fiscal 2019. This is higher by 8 percent than the $1.4 billion net revenue recorded in the same quarter in the 2018 fiscal year.

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Although revenues as a whole are up, transaction-based revenues, which are dependent on commissions and transaction fees, was lower on both a yearly and quarter-on-quarter comparison.

Specifically, in Q3 of fiscal 2019, transaction-based revenues were $477 million. This is down by 2.05 percent from $487 million achieved in the second quarter of fiscal 2019 and lower by 2.65 percent year-on-year.

Total operating expenses for the quarter were $771 million. When weighing this against the previous quarter, it is higher by 3.4 percent. On an annual comparison, operating expenses in Q3 of fiscal 2019 have risen by 2.7 percent.

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Breaking down TD Ameritrade transaction-based revenue metrics

Taking a closer look at transaction-based revenue metrics, the total trades placed during the quarter was 51.9 million. This is less than the 52.5 million trades made in the previous quarter, but it is still up on an annual comparison by 3.4 percent.

The average client trades per day was approximately 825,000 in the quarter, which represents a growth of five percent year-over-year.

The average commissions per trade were $6.92 in the third quarter, which has fallen from the average commissions per trade of $7.01 reported in the second quarter of fiscal 2019. It’s also down from the $7.40 value achieved in Q3 of fiscal 2018.

The number of funded accounts at the beginning of the period was 11,763,000. During the quarter this number rose by one percent to reach 11,876,000 accounts. Client assets also grew by one percent from $1.297 trillion at the beginning of the period to $1.307 trillion by the end of the quarter.

Tim Hockey, CEO of TD Ameritrade
Tim Hockey, President and CEO, TD Ameritrade

Commenting on the results, Tim Hockey, president and chief executive officer, TD Ameritrade said: “Our business fundamentals are solid and we’re pleased with our year-to-date performance that reflects the strength and diversity of our business model.”

“Client satisfaction scores are on the rise as our focused efforts to transform the client experience are gaining momentum. At TD Ameritrade, the client is at the center of everything we do, and we’re well positioned to deliver an easy, personal and enlightening experience for them in any macroeconomic environment.”

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