Interactive Brokers’ Revenue Leaps by 70% in Q3 2022

Interactive Brokers reported net revenue of $790 million for the three months between July and September, which is a 70% year-on-year increase. The adjusted figure increased from $650 million to $ 847 million.

The company’s total earnings were pulled down by interest income, which leaped 73% to $473 million. The primary reason for this was the rise in benchmark interest rates and customer credit balances. In contrast, revenue generated from commission increased a mere 3% to $320 million.

Losses from other revenue sources were also significantly reduced, falling to $48 million from $170 million. It is an improvement from the previous loss of $171 million that was associated with the Brokers’ investment into Tiger Brokers-operator UP Fintech.

After two-quarters of decline, the revenue for the next quarter jumped. In the Q2 and Q2 of 2022, the broker’s revenue declined by 28% and 13%, respectively.

The electronic broker’s pre-tax income increased by 123% to $523 million, while the adjusted figure rose 38% to $580 million. The profit margins improved to 66%, adjusting to 68%.

For the quarter, diluted earnings were $0.97. However, the adjusted figure is $1.08, a 125% yearly rise. Additionally, this marks a 38% quarterly increase respectively.

Customer Metrics

The critical customer metrics for the broker showed some improvement and some decline. The number of customer accounts increased by 31% to 2.01 million, but total DARTs (days trading activity) decreased by 15% to 1.92 million. Likewise, there were 1.71 million cleared DARTs which is a 15% decrease.

In addition, customer equity dropped by 19% to $287.1 billion, while customer credits rose by 10% to $94.7 billion. For the period, customer margin loans were at $40.5 billion–a decrease of 19% from the previous quarter.