10-Q 1 ibkr-20220331x10q.htm 10-Q ibkr-20220331x10q
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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 March 31, 2022

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 May 6, 2022, there were 98,262,340 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 MARCH 31, 2022

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)

March 31,

December 31,

(in millions, except share amounts)

2022

2021

Assets

Cash and cash equivalents

$

2,667 

$

2,395 

Cash - segregated for regulatory purposes

24,581 

22,888 

Securities - segregated for regulatory purposes

24,350 

15,121 

Securities borrowed

4,445 

3,912 

Securities purchased under agreements to resell

6,268 

4,380 

Financial instruments owned, at fair value

Financial instruments owned

491 

559 

Financial instruments owned and pledged as collateral

86 

114 

Total financial instruments owned, at fair value

577 

673 

Receivables

Customers, less allowance for credit losses of $9 and $8 as of March 31, 2022 and December 31, 2021

48,306 

54,935 

Brokers, dealers, and clearing organizations

2,188 

3,771 

Interest

118 

127 

Total receivables

50,612 

58,833 

Other assets

923 

911 

Total assets

$

114,423 

$

109,113 

Liabilities and equity

Short-term borrowings

$

11 

$

27 

Securities loaned

11,379 

11,769 

Securities sold under agreements to repurchase

300 

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

190 

182 

Payables

Customers

91,097 

85,634 

Brokers, dealers, and clearing organizations

230 

557 

Affiliate

222 

222 

Accounts payable, accrued expenses and other liabilities

504 

492 

Interest

8 

8 

Total payables

92,061 

86,913 

Total liabilities

103,941 

98,891 

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 - 98,409,572 and 98,359,572 shares, Outstanding – 98,247,247 and 98,204,658 shares as of March 31, 2022 and December 31, 2021

1 

1 

Class B – Authorized, Issued and Outstanding – 100 shares as of March 31, 2022 and December 31, 2021

Additional paid-in capital

1,449 

1,442 

Retained earnings

1,017 

953 

Accumulated other comprehensive income, net of income taxes of $0 and $0 as of March 31, 2022 and December 31, 2021

(6)

4 

Treasury stock, at cost, 162,325 and 154,914 shares as of March 31, 2022 and December 31, 2021

(5)

(5)

Total stockholders’ equity

2,456 

2,395 

Noncontrolling interests

8,026 

7,827 

Total equity

10,482 

10,222 

Total liabilities and equity

$

114,423 

$

109,113 

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 March 31,

(in millions, except share or per share amounts)

2022

2021

Revenues

Commissions

$

349

$

412

Other fees and services

53

56

Other income (loss)

(39)

120

Total non-interest income

363

588

Interest income

332

390

Interest expense

(50)

(85)

Total net interest income

282

305

Total net revenues

645

893

Non-interest expenses

Execution, clearing and distribution fees

71

68

Employee compensation and benefits

111

97

Occupancy, depreciation and amortization

22

20

Communications

8

8

General and administrative

38

59

Customer bad debt

1

2

Total non-interest expenses

251

254

Income before income taxes

394

639

Income tax expense

28

53

Net income

366

586

Less net income attributable to noncontrolling interests

293

479

Net income available for common stockholders

$

73

$

107

Earnings per share

Basic

$

0.74

$

1.18

Diluted

$

0.74

$

1.16

Weighted average common shares outstanding

Basic

98,226,147

90,789,321

Diluted

99,224,776

91,766,142

Comprehensive income

Net income available for common stockholders

$

73

$

107

Other comprehensive income

Cumulative translation adjustment, before income taxes

(10)

(17)

Income taxes related to items of other comprehensive income

Other comprehensive income (loss), net of tax

(10)

(17)

Comprehensive income available for common stockholders

$

63

$

90

Comprehensive income attributable to noncontrolling interests

Net income attributable to noncontrolling interests

$

293

$

479

Other comprehensive income - cumulative translation adjustment

(31)

(59)

Comprehensive income attributable to noncontrolling interests

$

262

$

420

See accompanying notes to the condensed consolidated financial statements.

Interactive Brokers Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)

Three Months Ended March 31,

(in millions)

2022

2021

Cash flows from operating activities

Net income

$

366 

$

586 

Adjustments to reconcile net income to net cash from operating activities

Deferred income taxes

2 

15 

Depreciation and amortization

15 

13 

Amortization of right-of-use assets

6 

5 

Employee stock plan compensation

21 

17 

Unrealized gain on other investments, net

(108)

Bad debt expense

1 

2 

Shares distributed to customers under IBKR Promotions

3 

2 

Change in operating assets and liabilities

Securities - segregated for regulatory purposes

(9,229)

2,752 

Securities borrowed

(533)

(752)

Securities purchased under agreements to resell

(1,888)

(900)

Financial instruments owned, at fair value

96 

(4)

Receivables from customers

6,628 

(3,314)

Other receivables

1,592 

(2,126)

Other assets

(20)

(6)

Securities loaned

(390)

2,029 

Securities sold under agreement to repurchase

300 

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

8 

38 

Payable to customers

5,463 

5,322 

Other payables

(316)

163 

Net cash provided by operating activities

2,125 

3,734 

Cash flows from investing activities

Purchases of other investments

(1)

Distributions received and proceeds from sales of other investments

5 

1 

Purchase of property, equipment and intangible assets

(19)

(21)

Net cash used in investing activities

(14)

(21)

Cash flows from financing activities

Short-term borrowings, net

(16)

(10)

Dividends paid to stockholders

(9)

(9)

Distributions from IBG LLC to noncontrolling interests

(80)

(86)

Issuances of senior notes

602 

Redemptions of senior notes

(498)

Net cash used in financing activities

(105)

(1)

Effect of exchange rate changes on cash, cash equivalents and restricted cash

(41)

(76)

Net increase in cash, cash equivalents and restricted cash

1,965 

3,636 

Cash, cash equivalents and restricted cash at beginning of period

25,283 

20,195 

Cash, cash equivalents and restricted cash at end of period

$

27,248 

$

23,831 

Cash, cash equivalents and restricted cash

Cash and cash equivalents

2,667 

2,627 

Cash segregated for regulatory purposes

24,581 

21,204 

Cash, cash equivalents and restricted cash at end of period

$

27,248 

$

23,831 

Supplemental disclosures of cash flow information

Cash paid for interest

$

50 

$

79 

Cash paid for taxes, net

$

16 

$

24 

Cash paid for amounts included in lease liabilities

$

8 

$

6 

Non-cash financing activities

Adjustments to additional paid-in capital for changes in proportionate ownership in IBG LLC

$

1 

$

1 

Adjustments to noncontrolling interests for changes in proportionate ownership in IBG LLC

$

(1)

$

(1)

See accompanying notes to the condensed consolidated financial statements.

Interactive Brokers Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Equity

Three Months Ended March 31, 2022

(Unaudited)

Class A Common Stock

Accumulated

Additional

Other

Total

Non-

Issued

Par

Paid-In

Treasury

Retained

Comprehensive

Stockholders'

controlling