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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 10-Q

_________________________________

(Mark One)

þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to         

Commission File Number: 001-33440

INTERACTIVE BROKERS GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)

30-0390693
(I.R.S. Employer
Identification No.)

One Pickwick Plaza

Greenwich, Connecticut 06830

(Address of principal executive office)

(203618-5800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ

Accelerated filer o

Non-accelerated filer o

Smaller reporting company o

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Title of each class

Trading Symbol

Name of the exchange on which registered

Common Stock, par value $.01 per share

  IBKR  

  The Nasdaq Global Select Market

As of November 4, 2023, there were 107,015,336 shares of the issuer’s Class A common stock, par value $0.01 per share, outstanding and 100 shares of the issuer’s Class B common stock, par value $0.01 per share, outstanding.

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED September 30, 2023

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

Interactive Brokers Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Financial Condition

(Unaudited)

September 30,

December 31,

(in millions, except share amounts)

2023

2022

Assets

Cash and cash equivalents

$

3,824 

$

3,436 

Cash - segregated for regulatory purposes

26,385 

25,167 

Securities - segregated for regulatory purposes

31,335 

31,781 

Securities borrowed

5,478 

4,749 

Securities purchased under agreements to resell

5,480 

6,029 

Financial instruments owned, at fair value

Financial instruments owned

744 

396 

Financial instruments owned and pledged as collateral

580 

89 

Total financial instruments owned, at fair value

1,324 

485 

Receivables

Customers, less allowance for credit losses of $12 and $10 as of September 30, 2023 and December 31, 2022

43,602 

38,760 

Brokers, dealers, and clearing organizations

1,726 

3,469 

Interest

440 

341 

Total receivables

45,768 

42,570 

Other assets

1,042 

926 

Total assets

$

120,636 

$

115,143 

Liabilities and equity

Short-term borrowings

$

11 

$

18 

Securities loaned

10,482 

8,940 

Financial instruments sold, but not yet purchased, at fair value

198 

146 

Payables

Customers

94,873 

93,195 

Brokers, dealers, and clearing organizations

627 

291 

Affiliate

212 

214 

Accounts payable, accrued expenses and other liabilities

681 

531 

Interest

288 

193 

Total payables

96,681 

94,424 

Total liabilities

107,372 

103,528 

Commitments, contingencies and guarantees (see Note 13)

 

 

Equity

Stockholders’ equity

Common stock, $0.01 par value per share

Class A – Authorized - 1,000,000,000, Issued - 107,125,489 and 103,057,148 shares, Outstanding – 106,992,860 and 102,887,728 shares as of September 30, 2023 and December 31, 2022

1 

1 

Class B – Authorized, Issued and Outstanding – 100 shares as of September 30, 2023 and December 31, 2022

Additional paid-in capital

1,718 

1,581 

Retained earnings

1,703 

1,294 

Accumulated other comprehensive income, net of income taxes of $0 as of September 30, 2023 and December 31, 2022

(29)

(22)

Treasury stock, at cost, 132,629 and 169,420 shares as of September 30, 2023 and December 31, 2022

(3)

(6)

Total stockholders’ equity

3,390 

2,848 

Noncontrolling interests

9,874 

8,767 

Total equity

13,264 

11,615 

Total liabilities and equity

$

120,636 

$

115,143 

See accompanying notes to the condensed consolidated financial statements.


Interactive Brokers Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

(in millions, except share or per share amounts)

2023

2022

2023

2022

Revenues

Commissions

$

333

$

320

$

1,012

$

991

Other fees and services

52

45

142

141

Other income (loss)

27

(48)

(17)

(144)

Total non-interest income

412

317

1,137

988

Interest income

1,643

783

4,535

1,575

Interest expense

(910)

(310)

(2,471)

(472)

Total net interest income

733

473

2,064

1,103

Total net revenues

1,145

790

3,201

2,091

Non-interest expenses

Execution, clearing and distribution fees

98

86

286

234

Employee compensation and benefits

127

112

391

335

Occupancy, depreciation and amortization

25

23

74

68

Communications

10

8

29

25

General and administrative

45

37

166

117

Customer bad debt

1

2

3

Total non-interest expenses

305

267

948

782

Income before income taxes

840

523

2,253

1,309

Income tax expense

68

40

180

100

Net income

772

483

2,073

1,209

Less net income attributable to noncontrolling interests

605

384

1,633

965

Net income available for common stockholders

$

167

$

99

$

440

$

244

Earnings per share

Basic

$

1.57

$

0.98

$

4.22

$

2.45

Diluted

$

1.56

$

0.97

$

4.19

$

2.43

Weighted average common shares outstanding

Basic

106,233,557

101,818,667

104,271,921

99,646,091

Diluted

107,011,427

102,555,482

105,184,572

100,505,075

Comprehensive income

Net income available for common stockholders

$

167

$

99

$

440

$

244

Other comprehensive income

Cumulative translation adjustment, before income taxes

(19)

(30)

(7)

(64)

Income taxes related to items of other comprehensive income

Other comprehensive loss, net of tax

(19)

(30)

(7)

(64)

Comprehensive income available for common stockholders

$

148

$

69

$

433

$

180

Comprehensive income attributable to noncontrolling interests

Net income attributable to noncontrolling interests

$

605

$

384

$

1,633

$

965

Other comprehensive income - cumulative translation adjustment

(57)

(93)

(19)

(205)

Comprehensive income attributable to noncontrolling interests

$

548

$

291

$

1,614

$

760

See accompanying notes to the condensed consolidated financial statements.

Interactive Brokers Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended September 30,

(in millions)

2023

2022

Cash flows from operating activities

Net income

$

2,073 

$

1,209 

Adjustments to reconcile net income to net cash from operating activities

Deferred income taxes

9 

8 

Depreciation and amortization

49 

43 

Amortization of right-of-use assets

20 

19 

Employee stock plan compensation

75 

64 

Unrealized (gains) losses on other investments, net

(21)

13 

Bad debt expense

2 

3 

Impairment loss

1 

Shares distributed to customers under IBKR Promotions

7 

7 

Change in operating assets and liabilities

Securities - segregated for regulatory purposes

446 

(16,180)

Securities borrowed

(729)

4 

Securities purchased under agreements to resell

549 

(480)

Financial instruments owned, at fair value

(870)

(423)

Receivables from customers