Interactive Brokers posted impressive financial results for the second quarter of 2024, highlighting growth in earnings and revenues. For the quarter ended June 30, 2024, the brokerage giant reported a diluted earnings per share (EPS) of $1.65, a 37% increase compared to $1.20 in the same period last year.

Reflecting Strong Growth

On an adjusted basis, the EPS was $1.76, up 33% YoY from $1.32. The company reported net revenue of $1,230 million (23% YoY increase), with adjusted net revenues reaching $1,290 million (21% YoY increase), compared to the previous year's $1,000 million and $1,064 million, respectively.

Income before income taxes was $880 million, with an adjusted figure of $940 million, showing a substantial rise from the year-ago figures of $652 million and $716 million, respectively. The company's strong performance was reportedly driven by higher customer trading volumes and increased net interest income.

Commission revenue jumped by 26% to $406 million, reflecting higher customer trading volumes across options, stocks, and futures, which increased by 35%, 26%, and 10%, respectively. Net interest income also experienced a 14% increase, reaching $792 million, reportedly driven by higher benchmark interest rates, customer margin loans, and customer credit balances.

Other fees and services rose by $21 million, or 45%, to $68 million, primarily due to increases in risk exposure fees and payments for order flow from exchange-mandated programs. However, execution, clearing, and distribution fees expenses also rose by 24% to $115 million, attributed to higher trading volumes and an increase in the SEC fee rate during the quarter.

Pretax Profit Margins

Interactive Brokers reported a pretax profit margin of 72% and an adjusted margin of 73% for the current quarter, compared to 65% and 67%, respectively, in the same quarter last year. The company's total equity stood at $15.2 billion.

Following the strong quarter, IB's Board of Directors has declared a quarterly cash dividend of $0.25 per share, payable on September 13, 2024, to shareholders of record as of August 30, 2024. The company also reported a 28% increase in customer accounts, reaching 2.92 million, and a 36% increase in customer equity, totaling $497.2 billion.

Total daily average revenue trades rose by 28% to 2.39 million. However, during the quarter, Interactive Brokers recognized a loss of approximately $48 million due to a technical issue at the New York Stock Exchange on June 3, 2024.