Interactive Brokers Group Q 2026 Earnings Call Transcript

Interactive Brokers Group (NASDAQ:IBKR) reported quarterly financial results on Tuesday. The transcript from the company's quarterly earnings call has been provided below.This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.Access the full call at https://edge.media-server.com/mmc/p/kn4fsnv7/Full TranscriptOPERATORThank you for standing by and welcome to Interactive Brokers Group fourth quarter 2025 earnings conference call. At this time all participants are in a listen only mode. After the speaker presentation there will be a question and answer session. To ask a question during the session you will need to press Star 11 on your telephone to remove yourself from the queue. You may press Star-11 again. I would now like to hand the call over to Nancy Stube, Director of Investor Relations. Please go ahead.Nancy StubeThank you. Good afternoon and thank you for joining us for our fourth quarter 2025 earnings call. Joining us today are Thomas Petterfy, our Founder and Chairman, Milan Gallick, our President and CEO and Paul Brody, our CFO. I will be presenting Milan's comments on the business and all three will be available at our Q and A. As a reminder, today's call may include forward looking statements which which represent the company's belief regarding future events which by their nature are not certain and are outside of the company's control. Our actual results and financial condition may differ possibly materially from what is indicated in these forward looking statements. We ask that you refer to the disclaimers in our press release. You should also review a description of risk factors contained in our financial reports filed with the SEC. In the fourth quarter, we continue to demonstrate the power and leverage of our diversified, fully automated global platform which serves the full spectrum of investors from those new to the markets buying their first fractional share of a magnificent seven stock in a cash account through sophisticated traders benefiting from low cost and geographical reach to professionals using our APIs and algorithms to execute advanced quantitative strategies in portfolio margin accounts. Many clients start gradually and evolve into active, sophisticated traders and our platforms are designed to support that entire journey, supporting their growth with us along the way. At every stage. We continue to see strong international interest in the global SECurities markets on a SECular basis as people around the world seek higher returns on their assets as interest rates decline and as other financial institutions pay them less. In 2025 we added more than 1 million net new accounts, an annual record for the firm. Client equity rose 37% to $780 billion, an increase of more than $200 billion year over year and the first time we've ended a year with over three quarters of a trillion dollars in client assets. Cyclically, rising markets and expectations for lower interest rates drive increased client engagement. Clients traded actively, grew more comfortable taking on risk, increased their market exposure and made greater use of leverage through margin loans. They also expanded beyond equities into other asset classes, including options and futures. Client centric focus, by which we mean delivering global market access at extremely competitive pricing on state of the art platforms is best reflected in one simple measure our clients' performance. In 2025 the S&P 500 rose 17.9%. By comparison, our clients' outperformed Individual investors here were up on average 19.2% or 130 basis points above the S&P 500. Financial advisors were up 20.57% on average or 267 basis points above the market. Hedge fund clients were up 28.91% on average, a full 11 percentage points ahead of the S&P. This performance is the direct result of our focus on empowering clients through low trade and margin pricing and less drag from costs, superior trade execution, advanced order types and algorithms, the advantage of attractive interest rates on cash and short proceeds, as well as the many advantages of our platforms from AI and research tools to comprehensive educational offerings. It is why clients come to us. No gimmicks, no games, just the best prices and the most comprehensive platforms. It is why the best informed investors choose interactive brokers. That client focus combined with strong global demand for investing translated into exceptional financial results. Quarterly adjusted pretax income reached a record level of more than 1 billion for the fifth consecutive quarter despite lower interest rates for the full year we generated more than $6 billion in net revenues for the first time. We continually invest in improving our platform from front to back end and supported by a global team of programmers who deliver new functionality, ongoing enhancements and client driven improvements while also meeting the diverse regulatory requirements across the many market centers and currencies we support this year. Sorry. Throughout 2025 we introduced a wide range of new products and enhancements worldwide guided by deep engagement with and a strong understanding of the needs of our diverse client base. This year we expanded market access to Brazil, Taiwan, the UAE and Slovenia with additional countries planned for 2026. We continue to add to our ever growing list of country specific tax advantaged funds. We offer traditional and Roth IRAs in the US as well as Canadian RRSPs and TFSAs, UK ISAs, French peas and Hungarian TBSZs. This year we added Swedish ISKs, Japan's NESAs and Canadian FHSAs. We now have several billion dollars of client assets in these accounts and are able to support individual investors at all stages of their investment journey. From a funding perspective, clients can now fund their accounts using stablecoin, making cross border account funding easier and available. 24,7 we doubled the amount of cash eligible for our FDIC sweep program from 2.5 to 5 million for individual accounts and from $5 million to $10 million for joint accounts. In October, we teamed with Carta to introduce our premium charge card globally. The Carta Visa Infinite Card allows eligible clients to link their accounts and and access their cash instantly anywhere in the world with no foreign transaction fees, an especially compelling benefit for our global client base and it comes with premium cardholder benefits. Platform wise Our Global Trader 2.0 mobile platform was launched with a comprehensive UI UX revamp and an all new look and feel. Quick access trading tools accessible via a swipe or long press were added, Watch list management was streamlined and AI News Summaries incorporated. Our leading edge IBKR desktop platform delivered several highly requested enhancements this year including multi monitor support with independent windows for charts, option chains and more, multiple new screener filters, a named strategy selector for clients to quickly access, popular combo strategy types and a new Linux beta installer. Extending IBKR Desktop into the Linux ecosystem and addressing another long standing client request. We introduced Connections, where clients can enter a company's ticker and explore its broader investment ecosystem including options, ETFs that hold the stock, forecast contracts, related economic indicators, competitors and more. This feature is already seeing strong engagement. We have embedded artificial intelligence throughout our organization, benefiting both clients and employees. We launched AI Powered Investment Themes, which allows clients to enter a concept such as nuclear energy or quantum computing and instantly receive a list of actionable investment ideas, significantly streamlining the research process. We also launched AI Generated News summaries receiving FINRA's approval mid year. These summaries deliver timely, relevant news directly tied to clients portfolios, helping them stay more informed across our platforms. We launched the first version of Ask ibkr, an innovative AI powered tool that lets our clients' interact with and ask questions in plain English about their portfolios. Clients can ask about performance and allocation analysis, track their activity and get performance attribution. They can ask to compare their performance versus various benchmarks, find their top dividend payers, calculate their capital gains and losses, and analyze sector exposure. Performance can be analyzed across flexible time frames, one year, one month period to date, et cetera. Staying on top of an active portfolio with rapid access to a wide breadth of data is critical for successful investors. Beyond these highlights, we have delivered a wide range of enhancements and new features. I encourage you to explore our platforms on our website or better yet, request a demo. Seeing our offerings firsthand across a broad range of client types and experience levels is the best way to appreciate what we have accomplished in other areas of our business. To further enhance execution quality, we expanded our network of liquidity providers across bonds, options, overnight trading, international stocks and ETFs and ADRs. And to further support our non US client base, we translate our investor education courses and webcasts into multiple languages, making it easier for clients around the world to get started on investing on our platform. Trading volume during our overnight hours continues to grow rapidly, up 76% from last quarter and more than 130% from the fourth quarter of last year. Providing deep liquid markets that are not constrained by US regular trading hours is critical to meeting the needs of a globally active client base. And finally a note on ForecastX we created this exchange, which is regulated by the Commodity Futures Trading Commission (CFTC), to support trading on consequential predictions with measurable third party verified outcomes. ForecastX traded 286 million pairs this quarter, up from 15 million pairs in the third quarter, and now has four members quoting into the exchange which has over 10,000 listed instruments. Our pipeline of new business, new initiatives and enhancements remains as strong as ever and our platforms resonate with people around the globe. We are not stopping here to rest on our achievements. We have many projects to work on which we will look forward to sharing with you once they become a reality. With that, I will turn the call over to our CFO Paul Brody.Paul BrodyPaul thank you Nancy. Welcome everyone to the Call. We'll start with our revenue items on page three of the release. We are pleased with our financial results this quarter as we produced near record net revenues and pre tax income for the quarter and record results in all the major financial categories for the year. Commission revenues rose to a record $582 million this quarter. For the full year commissions were 2.1 billion, up 27% from last year driven by higher trading volumes across the major product categories. Net interest income ...Full story available on Benzinga.com