Interactive Brokers Sees Impressive YoY Growth for Second Quarter of 2018

Interactive Brokers, an electronic brokerage firm, released its financial results for the second quarter of 2018 this Thursday. The firm saw admirable year-on-year growth in the quarter, with a substantial increase in interest income.

In the second quarter of 2017, Interactive Brokers reported total revenues of $438 million. This year that figure grew by 26.2 percent, to $553 million.

Unfortunately for the firm, interest expenses, at $108 million, were also much higher in the second quarter of this year. Having said this, after those expenses were paid, the firm still saw impressive year-on-year growth of just 14.9 percent in its total revenue.

The bulk of revenue growth came from an increase in interest income. In last year’s second quarter, the firm reported total revenue of $206 million from interest income. This year that figure grew by a whopping 61 percent, to $333 million.

Revenue from trading commissions also increased on last year’s second quarter. Thursday’s report indicates that the firm made $185 million in revenue from commission fees. That was a 15.6 percent increase on last year’s $160 million.

With greater revenue comes greater profit

Today’s report also shows that Interactive Brokers was able to shrink its expenses in the second quarter of this year. In the second quarter of 2017, the firm reported expenses of $183 million. For the same period this year, the firm spent $174 million on expenses - an approximately five percent decrease.

That reduction, combined with an increase in revenues, meant the firm was able to report solid year-on-year growth in its pre-tax net income. Indeed, pre-tax net income in the second quarter of this year grew to $271 million, a 32.8 percent increase on last year’s $204 million.

All of this meant the firm was able to walk away with a post-tax net income of $258 million in Q2 of 2018. That was a very respectable 37.9 percent increase on last year’s second quarter post-tax income of $187 million.