Shares of Interactive Brokers Group IBKR rose 3.5% in after-market hours on better-than-expected quarterly results. Its fourth-quarter 2024 adjusted earnings per share of $2.03 beat the Zacks Consensus Estimate of $1.86. The bottom line indicates a jump of 33.6% from the prior-year quarter’s reported actuals.

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Results were primarily aided by an increase in revenues. The company recorded growth in customer accounts in the quarter, which, along with a rise in daily average revenue trades (DARTs), was another tailwind. However, higher expenses hurt the results to some extent.

After considering non-recurring items, net income available to common shareholders (GAAP basis) was $217 million or $1.99 per share, up from $160 million or $1.48 in the prior-year quarter. Our estimate for net income was $199.6 million.

Interactive Brokers reported comprehensive income available to common shareholders of $153 million or $1.41 per share compared with $197 million or $1.83 in the prior-year quarter.

For 2024, adjusted earnings per share was $7.03, which surpassed the Zacks Consensus Estimate of $6.99. Moreover, the bottom line indicates a rise of 22.3% from the previous year. Net income available to common shareholders (GAAP) was $755 million or $6.93 per share compared with $600 million or $5.67 in 2023. Our estimate for 2024 net income was $737.6 million.

IBKR’s Revenues Improve, Expenses Rise

Total GAAP net revenues for the quarter were $1.39 billion, up 21.8% year over year. The Zacks Consensus Estimate for the top line was $1.38 billion. Adjusted net revenues were $1.42 billion, up 23.9% on a year-over-year basis.

For 2024, total GAAP net revenues were $5.19 billion, up 19.5% year over year. The Zacks Consensus Estimate for the top line was $5.21 billion. Adjusted net revenues were $5.26 billion, up 20.4% from the previous year-end.
 
Total non-interest expenses increased 7.4% year over year to $347 million. This rise was primarily due to execution, clearing and distribution fees costs, employee compensation and benefits charges, and General and administrative expenses. Our estimate for non-interest expenses was pegged at $318.7 million.

Income before income taxes was $1.04 billion, increasing 27.5% from the prior-year quarter.

The adjusted pre-tax profit margin was 76%, up from 72% a year ago.

In the reported quarter, total customer DARTs increased 61.2% year over year to 3.12 million. Our estimate for the metric was 2.48 million.
 
Customer accounts grew 30.2% from the year-ago quarter to 3,337,000. Our prediction for customer accounts was 3,066,000.

Strong Capital Position of Interactive Brokers

As of Dec. 31, 2024, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $68.1 billion compared with $68 billion as of Dec. 31, 2023.

As of Dec. 31, 2024, total assets were $150.5 billion compared with $128.4 billion as of Dec. 31, 2023. Total equity was $16.6 billion, up from $14.1 billion as of Dec. 31, 2023.

Our View on IBKR

Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. Relatively higher interest rates will likely aid revenue growth in the near term. However, rising expenses and high exposure to geopolitical risks through overseas are headwinds.

Currently, Interactive Brokers has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Investment Brokers

LPL Financial LPLA is slated to announce fourth-quarter and full-year 2024 numbers on Jan. 30.

In the past week, the Zacks Consensus Estimate for LPL Financial’s quarterly earnings has moved marginally upward to $3.90 per share, implying an 11.1% rise from the prior-year reported number.

Tradeweb Markets TW is also slated to announce fourth quarter and full-year 2024 numbers on Feb. 6.

In the past week, the Zacks Consensus Estimate for TW’s quarterly earnings has moved 1.3% downward to 74 cents per share, indicating a 15.6% rise from the prior-year reported number.

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Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report

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