thinkorswim Group Inc. Reports Second Quarter Financial Results

Company Delivers Record Revenues of $97 Million and Record Earnings of $0.27
Per Diluted Share

NEW YORK, July 31 /PRNewswire-FirstCall/ -- thinkorswim Group Inc.
(Nasdaq: SWIM), a leading provider of online brokerage and investor education
services, today announced financial results and select operating metrics for
the second quarter ended June 30, 2008. Strong growth in the Company's
brokerage services segment, combined with more efficient customer acquisition
strategies, generated this quarter's record performance.
Consolidated financial results for the quarter:
-- Revenues of $97.0 million, 50 percent of which were brokerage-based
-- Pre-tax income of $27.4 million, 28 percent of revenues
-- Net income of $18.6 million, or $0.27 per diluted share
-- Non-GAAP Sales Transaction Volume ("STV") of $82.5 million, 59 percent
of which were brokerage-based
-- Non-GAAP Adjusted EBITDA (before certain items) of $22.0 million, or 27
percent of STV
-- Customer acquisition cost per new funded account of $490

"Record second quarter revenue of $97 million and net income of $18.6
million, or $0.27 per diluted share, resulted from our customers continuing
preference for thinkorswim's financial trading technology and cross-market
transaction capabilities to execute derivative-based trading strategies in
fast moving, volatile markets. Record quarterly retail DARTs increased by 16
percent from the first quarter to 52,500, while average commissions per trade
increased to $8.88 from $8.55 in the first quarter. New account openings of
26,825 remained at record levels throughout the quarter, raising customer
assets to $3.1 billion from a total of 78,075 funded and 175,800 open
accounts," said Lee K. Barba, Chairman and CEO of thinkorswim Group Inc.
Operating Highlights (quarterly year-over-year comparisons):
-- New accounts opened of 26,825. Total accounts of 175,800, an increase
of 112 percent
-- New funded accounts of 12,350, an increase of 27 percent
-- Funded accounts of 78,075 at quarter-end, an increase of 100 percent
-- Average retail trades per day of approximately 52,500, an increase of
151 percent
-- Annualized brokerage revenue per funded account of $2,300
-- Record client assets of $3.11 billion, including $1.74 billion in
client cash and money market funds
-- Education graduates of 11,510, an increase of 5 percent

"Management made intra-quarter marketing, scheduling and customer
acquisition adjustments to achieve a $490 cost per funded account, which is
expected to realize $2,300 of annualized revenue per account. We believe that
the education levels and derivative-based trading activity of the customers
acquired through these strategies provide the strongest growth model in the
online brokerage industry."
"We anticipate the balance of 2008 to continue to outperform first quarter
results and earlier forecasts. As a result, the Company reactivated its stock
buyback program which allows for the repurchase of up to five million shares
over the next two years," concluded Mr. Barba.
The Company will hold a conference call to discuss the financial results
at 4:30 p.m. Eastern Time today. The call is being webcast by Thomson CCBN and
will be available through our Web site at www.thinkorswim.com under Investor
Relations.
About thinkorswim Group Inc. (NASDAQ: SWIM)
thinkorswim Group Inc. (www.thinkorswim.com) offers market-leading online
brokerage, investor education and related financial products and services for
self-directed investors and active traders. thinkorswim, Inc., our
award-winning online brokerage division, provides a suite of trading platforms
serving self-directed and institutional traders and money managers.
thinkorswim platforms have easy-to-use interfaces, sophisticated analytical
and research tools, and fast and efficient order execution for even the most
complex trading strategies. thinkorswim customers trade a broad range of
products including stock and stock options, index options, futures and futures
options, forex, mutual funds and fixed income. Investools' Education Group, a
subsidiary of thinkorswim Group Inc., offers a full range of investor
education products and services that provide lifelong learning in a variety of
interactive delivery formats. Investools' graduates can then apply what
they've learned by trading with thinkorswim's online brokerage platforms.
Safe Harbor
This press release may contain forward-looking statements. Such
forward-looking statements may be identified by words such as "believe,"
"intend," "expect," "may," "could," "would," "will," "should," "plan," or
similar statements. All forward-looking statements are based largely on
current expectations, beliefs and assumptions concerning future events that
are subject to substantial risks and uncertainties. These risks and
uncertainties include, but are not limited to: general changes in economic
conditions and changes in conditions affecting the financial services industry
specifically, regulatory developments that affect the way we market or sell
our products and services, our inability to protect our proprietary
technology, our ability to sell existing products and services in both new and
existing markets, and other factors which are more fully described in
thinkorswim Group Inc.'s filings with the Securities and Exchange Commission.
Should one or more of these risks or uncertainties materialize, actual results
may vary in material aspects from those currently anticipated. The
forward-looking statements made in this press release relate only to events as
of the date of this release. We undertake no ongoing obligation to update
these statements.
Investor Contacts:
Ida Kane, SVP and CFO
801.816.6918
ida.kane@thinkorswim.com Media Contact:

Frank Milano Fran Del Valle
203.682.8343 212.717.5499
frank.milano@icrinc.com frances.delvalle@influencecentral.com

THINKORSWIM GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
June 30, March 31, June 30,
2008 2008 2007

Revenue $ 96,991 $ 90,990 $ 79,744
Costs and expenses
Cost of revenue 34,323 34,500 37,293
Selling expense 14,220 19,117 16,895
General and administrative
expense 20,333 19,264 15,425
Special charges 726 393 838
Total costs and expenses 69,602 73,274 70,451

Income from operations 27,389 17,716 9,293

Other income (expense)
Interest expense, net (264) (4,190) (2,309)
Interest income 272 455 209
Other - 14 7
Other income (expense) 8 (3,721) (2,093)

Net income before income taxes 27,397 13,995 7,200
Income tax provision 8,754 2,468 1,117

Net income $ 18,643 $ 11,527 $ 6,083

Net income per common share:
Basic $ 0.28 $ 0.18 $ 0.09
Diluted $ 0.27 $ 0.17 $ 0.09

Weighted average common
shares outstanding:
Basic 66,043 65,846 65,379
Diluted 68,754 68,860 68,416

Six Months Ended
June 30,
2008 2007

Revenue $ 187,981 $ 134,601
Costs and expenses
Cost of revenue 68,823 69,898
Selling expense 33,337 36,365
General and administrative expense 39,597 37,075
Special charges 1,119 965
Total costs and expenses 142,876 144,303

Income (loss) from operations 45,105 (9,702)

Other income (expense)
Interest expense, net (4,454) (3,777)
Interest income 727 861
Other 14 7
Other expense (3,713) (2,909)

Net income (loss) before income taxes 41,392 (12,611)
Income tax provision 11,222 1,150

Net income (loss) $ 30,170 $ (13,761)

Net income (loss) per common share:
Basic $ 0.46 $ (0.23)
Diluted $ 0.44 $ (0.23)

Weighted average common shares
outstanding:
Basic 65,944 60,368
Diluted 68,807 60,368

THINKORSWIM GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

June 30, December 31,
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $64,536 $61,579
Marketable securities - 1,501
Accounts receivable, net of
allowance ($183 and $198,
respectively) 7,689 11,131
Receivable from clearing brokers 8,269 5,503
Deferred tax asset 15,151 13,496
Other current assets 9,776 9,622
Total current assets 105,421 102,832

Long-term restricted cash 373 389
Goodwill 208,880 208,776
Intangible assets, net of accumulated
amortization ($24,810 and $17,330,
respectively) 125,107 132,587
Software development cost, net of
accumulated amortization ($5,776 and
$3,363, respectively) 26,819 26,939
Furniture and equipment, net of
accumulated depreciation ($10,770 and
$8,726, respectively) 7,064 8,007
Other long-term assets 27,838 29,800

Total assets $501,502 $509,330

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of deferred revenue $107,225 $124,486
Other current liabilities 15,693 17,825
Accounts payable 10,410 8,896
Accrued payroll 7,190 13,278
Accrued tax liabilities 10,312 7,544
Current portion of capitalized
lease obligations 227 212
Current portion of notes payable 17,500 17,500
Total current liabilities 168,557 189,741

Long-term portion of deferred
revenue 28,988 37,384
Long-term portion of capitalized
lease obligations 222 330
Long-term portion of notes payable 81,900 100,000
Deferred tax liabilities 24,441 18,487
Other long-term accrued liabilities 1,264 1,493
Total liabilities 305,372 347,435

Stockholders' equity:
Common stock $0.01 par value
(66,092 and 65,655 shares issued
and outstanding, respectively) 661 656
Additional paid-in capital 335,073 331,006
Accumulated other comprehensive
income 13 20
Accumulated deficit (139,617) (169,787)
Total stockholders' equity 196,130 161,895

Total liabilities and
stockholders' equity $501,502 $509,330

THINKORSWIM GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Cash flows from operating
activities:
Net income (loss) $18,643 $6,083 $30,170 $(13,761)
Reconciling adjustments:
Depreciation and
amortization 6,033 6,071 11,941 9,074
Deferred taxes 2,907 691 4,982 724
Stock compensation
expense 2,170 1,767 4,278 11,534
Amortization of
exclusivity rights 302 293 604 586
Contingent shares in
connection with
exclusivity rights and
intellectual property
acquired (299) 498 - 1,326
Amortization of debt
issue costs 186 303 560 451
Decrease in fair value
of interest rate swap,
included in interest
expense (1,680) (566) (232) (566)
Provision for sales
return reserve 416 594 797 588
Provision for lease
termination - 136 - 136
Provision for bad debt
expense - 164 - 264
Loss on sale of assets 3 21 3 21
Loss (gain) on marketable
securities - - (7) 4
Changes in operating assets
and liabilities, net of the
effect of acquired
businesses:
Accounts receivable 446 (5,265) 3,442 (13,047)
Receivable from clearing
brokers (476) (1,414) (2,766) (4,533)
Income tax receivable - 365 - 26
Other assets 154 1,863 (114) 2,587
Accounts payable (596) 2,293 1,378 (4,245)
Deferred revenue (14,452) 4,588 (25,657) 19,302
Accrued payroll 2,258 1,794 (6,088) 676
Other liabilities (2,233) (4,436) (1,458) (2,886)
Accrued tax liabilities 2,917 (13) 2,768 7
Net cash provided by
operating activities 16,699 15,830 24,601 8,268

Cash flows from investing
activities:
Proceeds from the sale or
maturity of marketable
securities - 4,028 1,501 19,341
Proceeds from the sale of
equipment - 25 - 25
Payments for capitalized
software development costs (1,999) (5,738) (3,910) (7,898)
Purchases of furniture and
equipment (467) (1,468) (1,007) (2,243)
Cash held in escrow (73) 15 758 (8,485)
Cash paid in business
acquisitions, net of cash
received 73 139 (758) (149,262)
Net cash used in
investing activities (2,466) (2,999) (3,416) (148,522)

Cash flows from financing
activities:
Payment on capital leases (42) (48) (93) (91)
Payment on note payable (8,100) (2,500) (18,100) (2,500)
Changes in restricted cash 18 (2) 16 (5)
Proceeds from note payable - - - 125,000
Payment of debt issuance costs - (31) - (4,539)
Minimum tax withholding on
restricted stock awards (28) - (430) -
Proceeds from exercise of
stock options 190 368 379 598
Net cash (used in)
provided by financing
activities (7,962) (2,213) (18,228) 118,463

Effect of exchange rates on cash
and cash equivalents 8 - - -

Increase (decrease) in cash and
cash equivalents 6,279 10,618 2,957 (21,791)
Cash and cash equivalents:
Beginning of period 58,257 20,514 61,579 52,923

End of period 64,536 31,132 64,536 31,132

THINKORSWIM GROUP INC. AND SUBSIDIARIES
Financial Summary
(unaudited)

Reconciliation of Non-GAAP Information

The following table provides a breakout of Net Income (Loss) on an
unaudited basis for all periods presented and a reconciliation of GAAP Net
Income (Loss) to non-GAAP Adjusted EBITDA for the periods presented. The
Company believes Adjusted EBITDA is an important measure of operating
performance given the impact of accounting for deferred revenue and certain
other costs.

in (millions) Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2008 2008 2007 2008 2007 *

Net income (loss) $18.6 $11.5 $6.1 $30.2 $(19.3)
Depreciation and
amortization 6.2 6.9 7.2 13.1 11.9
Stock compensation
expense 2.2 2.1 1.8 4.3 11.6
Special charges 0.7 0.4 0.8 1.1 0.9
Interest expense,
net - 3.7 2.1 3.7 2.8
Income tax
provision 8.8 2.5 1.1 11.2 1.1
Other acquisition
related items - - - - 10.5
Net change in deferred
revenue (14.5) (11.2) 5.7 (25.7) 20.4
Adjusted EBITDA ($) 22.0 15.9 24.8 37.9 39.9
Adjusted EBITDA
(as a % of STV) 26.7 % 19.9 % 29.0 % 23.4 % 24.1 %

The following table provides a breakout of Revenue on an unaudited basis
for all periods presented and a reconciliation of non-GAAP Sales Transaction
Volume ("STV") to GAAP Revenue. STV represents sales in a particular period
before the effects of deferred revenue recognition from prior periods and the
deferral of current period sales. The Company believes STV is an important
measure of business volume in the Investor Education segment.

in (000s) Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2008 2008 2007 2008 2007 *
Brokerage Services
Commissions $33,126 $26,258 $16,704 $59,384 $29,584
Interest &
dividends 6,198 7,668 4,988 13,866 9,013
Payment for order
flow 7,869 6,574 3,971 14,443 5,892
Other revenue 1,764 1,966 1,228 3,730 2,752
Total brokerage
services revenue 48,957 42,466 26,891 91,423 47,241

Investor Education
Sales transaction
volume 33,582 37,319 58,592 70,901 118,281
Total sales
transaction volume 82,539 79,785 85,483 162,324 165,522
Change in deferred
revenue 14,452 11,205 (5,739) 25,657 (20,535)
Revenue 96,991 90,990 79,744 187,981 144,987

* The Company's SEC filings for 2007 reflect Investools' merger with
thinkorswim on February 15, 2007. However, for comparative purposes, the six
months ended June 30, 2007 have included results of operations as if the
merger occurred on January 1, 2007 (pro-forma). The Company believes that
given the size of the merger, comparing actual to actual would not be the most
representative way to explain our operating results.
Segment Information
The following table provides information on an unaudited basis concerning
thinkorswim Group Inc.'s operations by reportable segment for the periods
presented. The Company's SEC filings and the table below reflects consolidated
results following Investools' merger with thinkorswim on February 15, 2007 and
stand-alone results for Investools through February 14, 2007.

in (000s) Three Months Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Revenue
Brokerage Services $48,957 $26,891 $91,423 $36,854
Investor Education 48,034 52,853 96,558 97,747
Revenue 96,991 79,744 187,981 134,601

Income (Loss) from Operations
Brokerage Services $23,092 $9,512 $40,715 $12,454
Investor Education 4,297 (219) 4,390 (22,156)
Income (loss) from operations 27,389 9,293 45,105 (9,702)

THINKORSWIM GROUP INC. AND SUBSIDIARIES
Operating Metrics
(unaudited)

Q2-08 Q2-07 $ or # Change % Change

thinkorswim, Inc.
Trading Days 64.0 63.0

New Retail Accounts Opened (1) 26,825 17,700 9,125 52%
New Funded Retail Accounts 12,350 9,725 2,625 27%
Ending Funded Retail Accounts 78,075 39,075 39,000 100%
Retail DARTs (2) 52,500 20,900 31,600 151%
Active Trader DARTs (3) 46,800 27,100 19,700 73%
Total DARTs 99,300 48,000 51,300 107%

Total Trades 6,353,000 3,021,000 3,332,000 110%

Ending Client Assets ($MM) $3,110 $1,780 $1,330 75%
Average Client Equity/Retail
Account $39.8 $44.4 ($4.6) -10%
Retail Commission Per Trade $8.88 $10.16 ($1.28) -13%

Investor Education Group
Total Paid Graduates (4) 11,510 10,990 520 5%
Ending Cumulative Graduates
(5) 365,000 308,000 57,000 19%
Ending Active Subscribers (6) 101,600 94,600 7,000 7%

Upsell Rate (7) 34% 48%
PHD Program 8% 18%
Masters Program 11% 25%
Associates Program 37% 30%
Trading Rooms 44% 27%

(1) Accounts opened are accounts that have initiated the application
process with the intent to fund.
(2) Retail DARTs are trades executed using the retail thinkorswim
platform.
(3) Active Trader DARTs are trades executed using an active trader
platform such as thinkpipes.
(4) Includes students who graduated from both the Foundation Course and
the Currency Trader Course.
(5) Cumulative graduates include graduates and their guest attendees at
workshops.
(6) Active Subscribers include subscribers to Investools Online,
prophet.net, and Investools FX.
(7) This table illustrates the workshop upsell rates during the periods
indicated. Workshop upsell rates are the sales that take place at the
workshops of advanced product sales. Upsell rates do not include sales from
the Company's other sales operations.
SOURCE thinkorswim Group Inc.

Investors, Ida Kane, SVP and CFO, +1-801-816-6918, ida.kane@thinkorswim.com,
or Frank Milano, +1-203-682-8343, frank.milano@icrinc.com; or Media, Fran Del
Valle, +1-212-717-5499, frances.delvalle@influencecentral.com, for thinkorswim
Group Inc.