Interactive Brokers Group, Inc. (IBKR)·Q3 2025 Earnings Summary

Executive Summary

• Record quarter: Net revenues rose 21% YoY to $1.655B (adjusted $1.610B); adjusted diluted EPS $0.57 vs $0.40 YoY; pre-tax margin reached 79% (as reported and adjusted) .
• Beats vs S&P Global consensus: Revenue $1.655B vs $1.522B estimate (+8.7%); Primary EPS (adjusted) $0.57 vs $0.54 estimate (+6%); strength driven by record NII ($967M) and commissions ($537M) on robust options/equity volumes and larger balances (securities lending standout) . Values retrieved from S&P Global*.
• Operating momentum: Customer accounts +32% YoY to 4.13M; customer equity +40% to $757.5B; DARTs +34%; margin loans +39%; customer credits +33% to $154.8B .
• Near-term catalysts: Elevated securities lending “specials,” margin loan balances at all‑time highs, continued product expansion (Connections, investment themes, crypto/stablecoin funding pipeline with Zero Hash’s MiCAR license in EU) .

What Went Well and What Went Wrong

• What Went Well

  • Record financials: Net revenues and pre-tax income hit records; commissions up 23% YoY to $537M; NII up 21% YoY to $967M despite lower benchmark rates .
  • Volume and client growth: Options contracts set a new record; equity volumes +67% YoY; DARTs +34% YoY; total accounts surpassed 4.1M; client equity >$750B .
  • Securities lending tailwinds: Higher short activity, larger lendable inventory, and more IPO/M&A activity drove a sharp increase; management estimated total securities lending-related net revenue would be ~$314M if cash collateral effects were reclassified (vs $156M YoY) .
  • Quote: “We again produced record net revenues and pre-tax income…options volume rose 27% and set a new quarterly volume record, and equity volumes were up 67% from last year.”

• What Went Wrong

  • Futures softness and risk-fee decline: Futures volumes -7% YoY; Other fees and services -8% YoY to $66M due to $12M lower risk exposure fees (partially offset by higher FDIC sweep and market data fees) .
  • Commission per order down: Commission per cleared commissionable order $2.70 vs $2.83 YoY (-5%), reflecting elimination of SEC Section 31 fees and higher exchange rebates (pass-throughs) .
  • Rate sensitivity remains a headwind if cuts accelerate: A 25 bps Fed cut implies ~$77M annual NII reduction; a broad 1% cut across benchmarks implies ~$417M annual NII reduction (partly mitigated by balance growth) .

Financial Results

Revenue composition (Quarterly)

KPIs

Versus S&P Global consensus (Q3 2025)*

Drivers/why: NII grew on higher segregated cash and margin balances and stronger securities lending; lower benchmark rates reduced interest paid on customer cash; commissions rose on record options and robust equity volumes; elimination of SEC fees and higher exchange rebates lowered both commissions and execution costs (pass-through) .

Guidance Changes

Note: Management does not issue formal P&L guidance; CFO reiterated expense discipline and no detailed forward expense targets .

Earnings Call Themes & Trends

Management Commentary

• “We again produced record net revenues and pre-tax income…options volume rose 27% and set a new quarterly volume record, and equity volumes were up 67% from last year.” – Paul Brody, CFO
• “Our margin balances are at their all-time high…High margin numbers, we like them a lot.” – Milan Galik, CEO
• “We have not seen any deceleration [in account growth]…we expect that to continue.” – Thomas Peterffy, Founder & Chairman
• “We are focusing on election contracts and economic indicators…Taking that global…Introducing brokers can…carry sports contracts provided that the states will let us do that.” – Thomas Peterffy on forecast contracts
• “Stablecoin deposits end of October; crypto asset transfers by the end of the year; staking maybe the beginning of next year” – Milan Galik (dependent on Zero Hash integration) .

Q&A Highlights

• Securities lending “specials” and drivers: Revenue benefits from higher short activity, IPOs/M&A, and a larger, global inventory; systems built to optimize when specials arise .
• AI and trading velocity: No direct attribution measurability, but expectation that better tools speed decisions and could raise volumes over time .
• Rate sensitivity mix: Non-USD balances influence sensitivity; some currencies near zero create nonlinear effects; overall sensitivity rose vs Q2 .
• Margin loans: Up ~20% QoQ; risk appetite increased with momentum markets; leverage concentrated more in stock than short cheap options (lower exposure fees) .
• China client onboarding: Mainland restrictions tightened, still adding clients with non-mainland residency; not material to totals .
• Crypto roadmap: Stablecoin funding, asset transfers, staking staged through year-end/early 2026; leveraging Zero Hash (now MiCAR‑authorized in EU) .

Estimates Context

• Q3 2025 results beat on revenue and adjusted EPS: Revenue $1.655B vs $1.523B est (+8.7%); Primary EPS $0.57 vs $0.537 est (+6.1%); 9 EPS ests, 5 revenue ests*.
• Prior quarters also above estimates: Q2 2025 revenue $1.533B actual vs $1.395B est; Primary EPS $0.51 vs $0.469 est*.
• Implications: Street likely raises outer‑quarter NII assumptions modestly given higher balance base and stronger securities lending, while marking higher rate‑cut sensitivity; OpEx discipline supports higher pre‑tax margin durability*.
  Values retrieved from S&P Global.*

Key Takeaways for Investors

• Core engine firing on all cylinders: Record NII and commissions with 79% pre-tax margin underscore an advantaged model that scales with balances and volumes .
• Balance-led resilience to rate cuts: Despite YoY rate declines, NII hit a record on larger balances and stronger lending; rising sensitivity is noted but mitigated by growth .
• Trading leverage: Options and equities volumes continue to outpace industry; overnight trading capacity and smart routing/rebate capture enhance client economics and stickiness .
• Securities lending optionality: Specials/IPO/M&A cycles add upside convexity; broader inventory enables higher throughput when opportunities arise .
• Structural growth in clients/cash: Accounts, equity, credits, and margin loans continue to set highs—supporting durable NII and commission trajectories .
• Product expansion as catalyst: “Connections,” “investment themes,” crypto funding/transfers/staking, and EU enablement via Zero Hash MiCAR authorization widen the funnel (especially in Europe) .
• Near-term trading setup: Positive revisions bias from beat/quality mix; watch macro rate path and specials cadence; no formal guidance, but dividend maintained at $0.08 and operating discipline intact .

Other Relevant Press Releases (Q3 2025 window and proximate)

• Sweden ISK launch (9/30): Tax-advantaged account supports European growth strategy .
• PortfolioAnalyst Tax Planner (10/9): Enhanced tax planning/lot selection tools (China release) .
• Zero Hash MiCAR authorization (11/2): EU license enables embedded crypto/stablecoin services for partners incl. IBKR—supports European crypto expansion roadmap .

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Appendix: Additional detail from the quarter

• Market backdrop: S&P 500 +8% in Q3 with steady monthly gains; clients “bought dips,” contributing to activity .
• SEC Section 31 fee to zero (May 14) reduced reported commissions and execution costs (pass-through), while smart order routing captured higher rebates .

Notes:

• “Primary EPS” refers to adjusted diluted EPS used in consensus. IBKR-reported adjusted diluted EPS for Q3 2025 was $0.57 .
• All consensus/estimate figures marked with an asterisk (*) are Values retrieved from S&P Global.