10-Q 1 ibkr-20210930x10q.htm 10-Q ibkr-20210930x10q
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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, 2021

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 5, 2021, there were 98,173,054 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, 2021

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)

2021

2020

Assets

Cash and cash equivalents

$

2,838 

$

4,292 

Cash - segregated for regulatory purposes

23,125 

15,903 

Securities - segregated for regulatory purposes

14,400 

27,821 

Securities borrowed

3,811 

4,956 

Securities purchased under agreements to resell

6,108 

792 

Financial instruments owned, at fair value

Financial instruments owned

582 

544 

Financial instruments owned and pledged as collateral

77 

86 

Total financial instruments owned, at fair value

659 

630 

Receivables

Customers, less allowance for credit losses of $9 and $17 as of September 30, 2021 and December 31, 2020

50,503 

39,333 

Brokers, dealers and clearing organizations

4,038 

1,254 

Interest

113 

104 

Total receivables

54,654 

40,691 

Other assets

687 

594 

Total assets

$

106,282 

$

95,679 

Liabilities and equity

Short-term borrowings

$

28 

$

118 

Securities loaned

10,535 

9,838 

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

233 

153 

Payables

Customers

84,087 

75,882 

Brokers, dealers and clearing organizations

781 

182 

Affiliate

240 

199 

Accounts payable, accrued expenses and other liabilities

357 

298 

Interest

10 

6 

Total payables

85,475 

76,567 

Total liabilities

96,271 

86,676 

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 - 98,305,396 and 90,909,889 shares, Outstanding – 98,162,756 and 90,773,105 shares as of September 30, 2021 and December 31, 2020

1 

1 

Class B – Authorized, Issued and Outstanding – 100 shares as of September 30, 2021 and December 31, 2020

Additional paid-in capital

1,433 

1,244 

Retained earnings

896 

683 

Accumulated other comprehensive income, net of income taxes of $0 and $0 as of September 30, 2021 and December 31, 2020

5 

26 

Treasury stock, at cost, 142,640 and 136,784 shares as of September 30, 2021 and December 31, 2020

(4)

(3)

Total stockholders’ equity

2,331 

1,951 

Noncontrolling interests

7,680 

7,052 

Total equity

10,011 

9,003 

Total liabilities and equity

$

106,282 

$

95,679 

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)

2021

2020

2021

2020

Revenues

Commissions

$

311

$

279

$

1,030

$

824

Other fees and services

49

45

160

123

Other income (loss)

(170)

29

68

25

Total non-interest income

190

353

1,258

972

Interest income

325

240

1,022

853

Interest expense

(51)

(45)

(169)

(206)

Total net interest income

274

195

853

647

Total net revenues

464

548

2,111

1,619

Non-interest expenses

Execution, clearing and distribution fees

61

74

183

227

Employee compensation and benefits

98

77

291

239

Occupancy, depreciation and amortization

19

17

58

51

Communications

8

6

24

19

General and administrative

44

37

138

206

Customer bad debt

3

3

13

Total non-interest expenses

230

214

697

755

Income before income taxes

234

334

1,414

864

Income tax expense

28

32

116

65

Net income

206

302

1,298

799

Less net income attributable to noncontrolling interests

164

256

1,057

675

Net income available for common stockholders

$

42

$

46

$

241

$

124

Earnings per share

Basic

$

0.44

$

0.59

$

2.60

$

1.60

Diluted

$

0.43

$

0.58

$

2.58

$

1.58

Weighted average common shares outstanding

Basic

96,229,958

78,509,625

92,814,767

77,543,008

Diluted

96,989,968

79,120,548

93,671,689

78,243,699

Comprehensive income

Net income available for common stockholders

$

42

$

46

$

241

$

124

Other comprehensive income

Cumulative translation adjustment, before income taxes

(9)

8

(21)

5

Income taxes related to items of other comprehensive income

Other comprehensive income (loss), net of tax

(9)

8

(21)

5

Comprehensive income available for common stockholders

$

33

$

54

$

220

$

129

Comprehensive income attributable to noncontrolling interests

Net income attributable to noncontrolling interests

$

164

$

256

$

1,057

$

675

Other comprehensive income - cumulative translation adjustment

(31)

37

(74)

24

Comprehensive income attributable to noncontrolling interests

$

133

$

293

$

983

$

699

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)

2021

2020

Cash flows from operating activities

Net income

$

1,298 

$

799 

Adjustments to reconcile net income to net cash from operating activities

Deferred income taxes

18 

12 

Depreciation and amortization

37 

31 

Amortization of right-of-use assets

17 

14 

Employee stock plan compensation

51 

46 

Unrealized gain on other investments, net

(45)

(8)

Gain on remeasurement of Tax Receivable Agreement liability

(1)

Bad debt expense

3 

13 

Impairment loss

13 

Shares distributed to customers under IBKR Promotions

6 

Change in operating assets and liabilities

Securities - segregated for regulatory purposes

13,421 

(11,492)

Securities borrowed

1,145 

(79)

Securities purchased under agreements to resell

(5,316)

1,710 

Financial instruments owned, at fair value

(20)

1,456 

Receivables from customers

(11,173)

948 

Other receivables

(2,793)

(1,801)

Other assets

(19)