Shares of Interactive Brokers Group Inc. (NASDAQ: IBKR) plunged 9.56% in intraday trading on Wednesday following the release of its first-quarter 2025 earnings report and amid a broader tech sector sell-off. The online brokerage firm's stock decline comes as investors reacted to a lower-than-expected earnings per share (EPS) and concerns about declining margin loan balances.

Interactive Brokers reported adjusted earnings of $1.88 per share for the first quarter, falling short of analysts' expectations of $1.92 per share. Despite the earnings miss, the company posted strong revenue growth, with total revenue rising 18.6% year-over-year to $1.43 billion, slightly above the consensus estimate of $1.41 billion. The mixed results highlight the challenges faced by the company in maintaining profitability amid changing market conditions.

Adding to investor concerns, Interactive Brokers reported a 12% decrease in margin loan balances from the previous quarter. This decline suggests a more cautious approach by clients in the face of recent market volatility and economic uncertainties. The company's CEO, Milan Galik, addressed this issue during the earnings call, stating, "We saw a slight decrease, around 10% to 12% decrease in margin loans, which is something you would expect when there is such a large move downward."

Despite the disappointing earnings figures, Interactive Brokers demonstrated strong growth in several key areas. The company reported a 32% year-over-year increase in total accounts to 3.62 million and a 23% rise in customer equity to $573.5 billion. Additionally, the firm announced a 28% increase in its quarterly dividend to $0.32 per share and a 4-for-1 stock split, effective mid-July.

The sharp decline in Interactive Brokers' stock price also comes amidst a broader tech sector sell-off, triggered by concerns over new export restrictions on AI chips to China. This market-wide pressure has likely exacerbated the negative sentiment surrounding the company's earnings report.

As investors digest this information, they will be closely monitoring Interactive Brokers' ability to navigate the challenging market environment and capitalize on its growing customer base. The company's future performance will likely depend on its capacity to improve profitability while maintaining its strong revenue growth trajectory in an increasingly competitive online brokerage market.