10-Q 1 ibkr-20220930x10q.htm 10-Q ibkr-20220930x10q
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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, 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 November 3, 2022, there were 102,872,100 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, 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)

September 30,

December 31,

(in millions, except share amounts)

2022

2021

Assets

Cash and cash equivalents

$

3,184 

$

2,395 

Cash - segregated for regulatory purposes

25,432 

22,888 

Securities - segregated for regulatory purposes

31,301 

15,121 

Securities borrowed

3,908 

3,912 

Securities purchased under agreements to resell

4,860 

4,380 

Financial instruments owned, at fair value

Financial instruments owned

1,036 

559 

Financial instruments owned and pledged as collateral

57 

114 

Total financial instruments owned, at fair value

1,093 

673 

Receivables

Customers, less allowance for credit losses of $10 and $8 as of September 30, 2022 and December 31, 2021

40,424 

54,935 

Brokers, dealers, and clearing organizations

3,321 

3,771 

Interest

224 

127 

Total receivables

43,969 

58,833 

Other assets

936 

911 

Total assets

$

114,683 

$

109,113 

Liabilities and equity

Short-term borrowings

$

35 

$

27 

Securities loaned

9,490 

11,769 

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

411 

182 

Payables

Customers

92,594 

85,634 

Brokers, dealers, and clearing organizations

380 

557 

Affiliate

220 

222 

Accounts payable, accrued expenses and other liabilities

554 

492 

Interest

99 

8 

Total payables

93,847 

86,913 

Total liabilities

103,783 

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 – 103,003,052 and 98,359,572 shares, Outstanding – 102,865,696 and 98,204,658 shares as of September 30, 2022 and December 31, 2021

1 

1 

Class B – Authorized, Issued and Outstanding – 100 shares as of September 30, 2022 and December 31, 2021

Additional paid-in capital

1,572 

1,442 

Retained earnings

1,168 

953 

Accumulated other comprehensive income, net of income taxes of $0 and $0 as of September 30, 2022 and December 31, 2021

(60)

4 

Treasury stock, at cost, 137,356 and 154,914 shares as of September 30, 2022 and December 31, 2021

(4)

(5)

Total stockholders’ equity

2,677 

2,395 

Noncontrolling interests

8,223 

7,827 

Total equity

10,900 

10,222 

Total liabilities and equity

$

114,683 

$

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 September 30,

Nine Months Ended September 30,

(in millions, except share or per share amounts)

2022

2021

2022

2021

Revenues

Commissions

$

320

$

311

$

991

$

1,030

Other fees and services

45

49

141

160

Other income (loss)

(48)

(170)

(144)

68

Total non-interest income

317

190

988

1,258

Interest income

783

325

1,575

1,022

Interest expense

(310)

(51)

(472)

(169)

Total net interest income

473

274

1,103

853

Total net revenues

790

464

2,091

2,111

Non-interest expenses

Execution, clearing and distribution fees

86

61

234

183

Employee compensation and benefits

112

98

335

291

Occupancy, depreciation and amortization

23

19

68

58

Communications

8

8

25

24

General and administrative

37

44

117

138

Customer bad debt

1

3

3

Total non-interest expenses

267

230

782

697

Income before income taxes

523

234

1,309

1,414

Income tax expense

40

28

100

116

Net income

483

206

1,209

1,298

Less net income attributable to noncontrolling interests

384

164

965

1,057

Net income available for common stockholders

$

99

$

42

$

244

$

241

Earnings per share

Basic

$

0.98

$

0.44

$

2.45

$

2.60

Diluted

$

0.97

$

0.43

$

2.43

$

2.58

Weighted average common shares outstanding

Basic

101,818,667

96,229,958

99,646,091

92,814,767

Diluted

102,555,482

96,989,968

100,505,075

93,671,689

Comprehensive income

Net income available for common stockholders

$

99

$

42

$

244

$

241

Other comprehensive income

Cumulative translation adjustment, before income taxes

(30)

(9)

(64)

(21)

Income taxes related to items of other comprehensive income

Other comprehensive income (loss), net of tax

(30)

(9)

(64)

(21)

Comprehensive income available for common stockholders

$

69

$

33

$

180

$

220

Comprehensive income attributable to noncontrolling interests

Net income attributable to noncontrolling interests

$

384

$

164

$

965

$

1,057

Other comprehensive income - cumulative translation adjustment

(93)

(31)

(205)

(74)

Comprehensive income attributable to noncontrolling interests

$

291

$

133

$

760

$

983

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)

2022

2021

Cash flows from operating activities

Net income

$

1,209 

$

1,298 

Adjustments to reconcile net income to net cash from operating activities

Deferred income taxes

8 

18 

Depreciation and amortization

43 

37 

Amortization of right-of-use assets

19 

17 

Employee stock plan compensation

64 

51 

Unrealized (gain) loss on other investments, net

13 

(45)

Gain on remeasurement of Tax Receivable Agreement liability

(1)

Bad debt expense

3 

3 

Impairment loss

1 

Shares distributed to customers under IBKR Promotions

7 

6 

Change in operating assets and liabilities

Securities - segregated for regulatory purposes

(16,180)

13,421 

Securities borrowed

4 

1,145 

Securities purchased under agreements to resell