On July 21, Interactive Brokers Group (NASDAQ:IBKR) reported results for the quarter ended June 30, with earnings of $0.69 per diluted share, up from $0.51 a year earlier. Net revenues rose to $1.90 billion from $1.48 billion. That is a big leap for a business that was already highly profitable, and the pretax margin still edged up to 77%. Here is what drove it, what could bite, and how the market is pricing the stock.
Interactive Brokers (IBKR) Turns Every Revenue Dollar Into 77 Cents of Pretax Profit
More Clients, Fatter Balances
The engine starts with people. Customer accounts grew 34% to 5.19 million, and customer equity rose 40% to $930.3 billion. Because equity outran the account count, the average customer is also bringing more money, not just more logins. Bigger balances feed both trading and borrowing.
Those balances then show up…
