Interactive Brokers’ Q2 Profit Drops; Loses $74M on Tiger Brokers

Shortly after the close of the US trading session, Interactive Brokers LLC (NASDAQ:IBKR), a global electronic multi-asset broker and market-maker listed on Nasdaq, disclosed its financial results for Q2 2019, revealing that its key metrics were less impressive from a year ago.

The Greenwich, Connecticut-based company said its net revenues for Q2 2019 amounted to $413 million, lower by seven percent compared with $445 million in the same period last year. Income before tax totaled $225 million, down 17 percent year-over-year (from $271 million).

Aside from its core electronic-brokerage business, the IB earnings for the second quarter included a $74 million float loss from its 7.7 percent stake in the Chinese brokerage Tiger Brokers which raised $104 million from its IPO on Nasdaq Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term

Meanwhile, the net revenue was positively impacted by strong growth in net interest income, which jumped 15 percent year-on-year to $34 million. However, the positive figures were partially offset by the negative impact of the company’s currency diversification strategy, which decreased its earnings by $6 million, albeit the figure was mitigated from a $21 million loss in the year-ago quarter.

Customer accounts continue to march higher

Delving further into financial metrics, Interactive Brokers reported diluted earnings per share (EPS) on a comprehensive basis at $0.43 for the quarter ended June 30, 2019, reflecting -25 percent year-over-year drop from a profit of $0.57 per share during Q2 2018.

Business highlights, according to the company’s press release, included a pretax profit margin of 54 percent, which was lower from 61 percent in 2018. During the three month period through June 2019, customer equity grew 14 percent from 2018 to $153.1 billion, while customer debits decreased 11 percent to $25.7 billion.

Finally, customer accounts at Interactive Brokers, which went public a decade ago, increased 19 percent from a year ago to 645,000, while total daily average revenue trades (DARTs) grew four percent year-over-year to 828,000.