Interactive Brokers reported second-quarter revenue of $1.90 billion on Tuesday, topping analyst expectations of $1.80 billion. Adjusted earnings per share came in at $0.69, also above the consensus estimate of $0.64. The stock jumped about 4% in after-hours trading following the release.
Revenue and profit top expectations
The company's pretax profit margin improved to 77%, up from 75% a year earlier. Commission revenue rose 30% year-over-year to $673 million, while net interest income climbed 23% to $1.06 billion — ahead of the $994 million analysts had forecast. The strong net interest income was driven by higher customer margin loans and credit balances.
Customer growth and trading activity surge
Customer margin loans surged 67% to $108.5 billion, and customer credits increased 27% to $182.4 billion. The number of customer accounts grew 34% to 5.19 million, and total customer equity expanded 40% to $930.3 billion. Daily average revenue trades (DARTs) rose 36% to 4.82 million, reflecting a broad increase in retail trading activity.
New products and regulatory changes boost engagement
In June, Interactive Brokers became the first venue for Cboe's new prediction markets products, giving clients access to event-based contracts. The same month, the pattern day trader rule ended, which had previously limited how often retail investors could trade in margin accounts. The removal of that rule likely contributed to the jump in trading volumes and account growth.
The company declared a quarterly dividend of $0.0875 per share, payable on September 14 to shareholders of record as of September 1. With the strong quarter behind it, Interactive Brokers now looks ahead to continued growth in customer accounts and trading activity, though the sustainability of the current interest rate environment remains a key factor for net interest income.
