Interactive Brokers’ Q4 2024 Revenue Increased by 22%: Spent $9M on Ads

Interactive Brokers (Nasdaq: IBKR) closed the fourth quarter of 2024, which ended on December 31, with reported revenue of approximately $1.39 billion, a year-over-year increase of 21.7 per cent. The company's reported pre-tax income also grew by 27.4 per cent to $1.04 billion.

Another Strong Quarter

The latest financial report, released yesterday (Tuesday), showed that diluted earnings per share for the quarter were $1.99, compared to $1.48 in the same period the previous year. The profit margin stood at 75 per cent.

On an adjusted basis, revenue and pre-tax income were $1.4 billion and $1.07 billion, respectively, with diluted earnings of $1.52.

Headquartered in Connecticut, Interactive Brokers is a leading online trading platform with a global reach. Its wide range of products includes cash equities, futures, options, and contracts for differences (CFDs) in certain markets.

Meanwhile, the US-headquartered broker is also considering expansion and reportedly bid to acquire Saxo Bank. It has also opened a new office in Dubai, which is now attracting many Western financial services giants.

Benefiting from High Interest Rates

In Q4 2024, the broker reported a 37 per cent increase in commission-based revenue to $477 million, driven by higher customer trading volumes. Trading volume for options and stocks rose by 32 per cent and 65 per cent, respectively, while futures volume dropped by 3 per cent.

Net interest income reached $807 million, an 11 per cent increase. Other fees and services contributed $86 million, up 47 per cent, which included $14 million from risk exposure fees and $4 million from payments for order flow under exchange-mandated programs.

However, expenses related to execution, learning, and distribution fees rose by 15 per cent to $115 million. Additionally, general and administrative costs increased by 31 per cent to $59 million, partly due to a $9 million advertising expense.

Customer metrics showed robust growth, with the number of accounts rising by 30 per cent in the last three months of 2024 to 3.34 million. Customer equity also increased by 33 per cent to $568.2 billion.

The total DARTs (Daily Average Revenue Trades) rose by 61 per cent to 3.12 million, while customer credits grew by 15 per cent to $119.7 billion. The broker further benefited from a 45 per cent increase in customer margin loans, which reached $64.2 billion.