Interactive Brokers Group, Inc. [IBKR] Filings

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

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)

(203) 618-5800

(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.

Table of Contents

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)
	Condensed Consolidated Statements of Financial Condition	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Statements of Cash Flows	4
	Condensed Consolidated Statements of Changes in Equity	5
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	62
ITEM 4.	Controls and Procedures	66
PART II.	OTHER INFORMATION
ITEM 1.	Legal Proceedings	67
ITEM 1A.	Risk Factors	67
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
ITEM 3.	Defaults upon Senior Securities	68
ITEM 5.	Other Information	68
ITEM 6.	Exhibits	69
	Signature

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.

‎

Table of Contents

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.

Table of Contents

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)

Interactive Brokers Group, Inc. [IBKR] Filings
10-Q	[2021-11-09]
10-Q	[2021-08-09]
10-Q	[2021-05-10]
10-K	[2021-03-01]
10-Q	[2020-11-09]
10-Q	[2020-08-07]
10-Q	[2020-05-11]
10-K	[2020-02-28]
10-Q	[2019-11-12]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-02-28]
10-Q	[2018-11-07]
10-Q	[2018-08-08]
10-Q	[2018-05-09]
10-K	[2018-03-01]
10-Q	[2017-11-08]
10-Q	[2017-08-08]
10-Q	[2017-05-09]
10-K	[2017-02-28]
10-Q	[2016-11-09]
10-Q	[2016-08-09]
10-Q	[2016-05-10]
10-K	[2016-02-29]
10-Q	[2015-11-09]
10-Q	[2015-08-10]
10-Q	[2015-05-11]
10-K	[2015-03-02]
10-Q	[2014-11-10]
10-Q	[2014-08-11]
10-Q	[2014-05-12]
10-K	[2014-03-03]
10-Q	[2013-11-08]
10-Q	[2013-08-09]
10-Q	[2013-05-10]
10-K	[2013-03-08]
10-Q	[2012-11-09]
10-Q	[2012-08-31]
10-Q	[2012-05-15]
10-K	[2012-02-29]