Interactive Brokers Group Announces 1Q10 Results

http://www.businesswire.com/news/home/20100422006786/en

Reports Income before Taxes of $65 Million on $211 Million in Net Revenues,
Earnings Per Share of $0.09
GREENWICH, Conn.--(Business Wire)--
Interactive Brokers Group, Inc. (NASDAQ GS: IBKR) an automated global electronic
market maker and broker, today reported diluted earnings per share of $0.09 for
the quarter ended March 31, 2010, compared to diluted earnings per share of
$0.30 for the same period in 2009.

Net revenues were $211 million and income before income taxes was $65 million
for this quarter, compared to net revenues of $296 million and income before
income taxes of $167 million for the same period in 2009.

Business Highlights

* 31% pre-tax profit margin for this quarter.
* $4.9 billion in equity.
* 21% increase in customer accounts and 74% increase in customer equity from the
year-ago quarter.
* Electronic Brokerage pre-tax income grew 42% from the year-ago quarter.
* Cleared DARTs were 328,000 for this quarter.
* 51% Electronic Brokerage pre-tax profit margin for this quarter.
* 7% Market Making pre-tax profit margin for this quarter.

"The past quarter was characterized by shrinking volatilities in the equity
markets, which continued to impact our market-making results; while our global
brokerage business is proceeding to grow along a very high trajectory that
remains unparalleled in the industry," said Thomas Peterffy, our CEO.

Segment Overview

Electronic Brokerage

Electronic Brokerage segment income before income taxes grew 42% in the quarter
ended March 31, 2010 compared to the same period in 2009. This increase is
attributable to higher commissions and higher net interest earned on customer
balances. Commissions and execution fees grew by 9% and net interest income
increased 98% from the same quarter last year. Customer accounts grew 21% to
140,000 and customer equity grew 74% to $16.7 billion. Cleared DARTs* were
roughly even with the year-ago quarter at 328,000. Pre-tax profit margin
increased from 42% to 51% for the quarter ended March 31, 2010 from the same
period in 2009.

Market Making

Market Making segment income before income taxes was $5.5 million in the quarter
ended March 31, 2010, an increase from the prior quarter but a decrease of 95%
from the same period last year. Pre-tax profit margin was 7% in this quarter,
down from 65% in the same period last year. Low actual volatility, relatively
high implied volatility and narrow bid/offer spreads contributed to the decrease
in market making profits this quarter. Market Making options contract volume
decreased 13% compared to the same period last year, but increased 6% from the
prior quarter.

* Daily average revenue trades (DARTs) are based on customer orders.

Conference Call Information:

Interactive Brokers Group will hold a conference call with investors today,
April 22, 2010, at 4:30 p.m. ET to discuss its quarterly results. Investors who
would like to listen to the conference call live should dial 877-324-1965 (U.S.
domestic) and 631-291-4512 (international). The number should be dialed
approximately ten minutes prior to the start of the conference call. Ask for the
"Interactive Brokers Conference Call."

PLEASE NOTE: This is half an hour earlier than our fourth quarter call.
The conference call will also be accessible simultaneously, and through replays,
as an audio webcast through the Investor Relations section of the Interactive
Brokers web site, www.interactivebrokers.com/ir.

About Interactive Brokers Group, Inc.:

Interactive Brokers Group, Inc., together with its subsidiaries, is an automated
global electronic market maker and broker specializing in routing orders and
executing and processing trades in securities, futures and foreign exchange
instruments on more than 80 electronic exchanges and trading venues around the
world. As a market maker, we provide liquidity at these marketplaces and, as a
broker, we provide professional traders and investors with electronic access to
stocks, options, futures, forex, bonds and mutual funds from a single IB
Universal AccountSM. Employing proprietary software on a global communications
network, Interactive Brokers Group continuously integrates its software with a
growing number of exchanges and trading venues into one automatically
functioning, computerized platform that requires minimal human intervention.

Cautionary Note Regarding Forward-Looking Statements:

The foregoing information contains certain forward-looking statements that
reflect the company's current views with respect to certain current and future
events and financial performance. These forward-looking statements are and will
be, as the case may be, subject to many risks, uncertainties and factors
relating to the company's operations and business environment which may cause
the company's actual results to be materially different from any future results,
expressed or implied, in these forward-looking statements. Any forward-looking
statements in this release are based upon information available to the company
on the date of this release. The company does not undertake to publicly update
or revise its forward-looking statements even if experience or future changes
make it clear that any statements expressed or implied therein will not be
realized. Additional information on risk factors that could potentially affect
the company's financial results may be found in the company's filings with the
Securities and Exchange Commission.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA

TRADE VOLUMES:
(in 000's, except %)
Brokerage
Market Brokerage Non Avg. Trades
Making % Cleared % Cleared % Total % per U.S.
Period Trades Change Trades Change Trades Change Trades Change Trading Day
2005 54,044 34,800 7,380 96,224 382
2006 66,043 22% 51,238 47% 12,828 74% 130,109 35% 518
2007 99,086 50% 72,931 42% 16,638 30% 188,655 45% 752
2008 101,672 3% 120,195 65% 16,966 2% 238,833 27% 944
2009 93,550 -8% 127,338 6% 13,636 -20% 234,524 -2% 934

1Q2009 24,753 31,797 2,829 59,379 973
1Q2010 19,613 -21% 30,967 -3% 4,760 68% 55,340 -7% 907

CONTRACT AND SHARE VOLUMES:
(in 000's, except %)

TOTAL
Options % Futures* % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2005 409,794 44,560 21,925,120
2006 563,623 38 % 62,419 40 % 34,493,410 57 %
2007 673,144 19 % 83,134 33 % 47,324,798 37 %
2008 757,732 13 % 108,984 31 % 55,845,428 18 %
2009 643,380 -15 % 82,345 -24 % 75,449,891 35 %

1Q2009 164,382 21,905 15,453,272
1Q2010 159,802 -3 % 21,716 -1 % 19,906,810 29 %

MARKET MAKING
Options % Futures* % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2005 308,613 11,551 15,625,801
2006 371,929 21 % 14,818 28 % 21,180,377 36 %
2007 447,905 20 % 14,520 -2 % 24,558,314 16 %
2008 ** 514,629 15 % 21,544 48 % 26,008,433 6 %
2009 ** 428,810 -17 % 15,122 -30 % 26,205,229 1 %

1Q2009 ** 118,176 3,981 6,990,407
1Q2010 ** 103,056 -13 % 3,072 -23 % 5,014,107 -28 %

BROKERAGE TOTAL
Options % Futures* % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2005 101,181 33,009 6,299,319
2006 191,694 89 % 47,601 44 % 13,313,033 111 %
2007 225,239 17 % 68,614 44 % 22,766,484 71 %
2008 243,103 8 % 87,440 27 % 29,836,995 31 %
2009 214,570 -12 % 67,223 -23 % 49,244,662 65 %

1Q2009 46,206 17,924 8,462,865
1Q2010 56,746 23 % 18,644 4 % 14,892,703 76 %

* Includes options on futures

** In Brazil, an equity option contract typically represents 1 share of the
underlying stock; however, the typical minimum trading quantity is 100
contracts. To make a fair comparison to volume at other exchanges, we have
adopted a policy of reporting Brazilian equity options contracts divided by
their trading quantity of 100.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

OPERATING DATA, CONTINUED

BROKERAGE CLEARED
Options % Futures* % Stocks %
Period (contracts) Change (contracts) Change (shares) Change
2005 23,456 30,646 5,690,308
2006 32,384 38 % 45,351 48 % 12,492,870 120 %
2007 51,586 59 % 66,278 46 % 20,353,584 63 %
2008 77,207 50 % 85,599 29 % 26,334,752 29 %
2009 93,868 22 % 66,241 -23 % 46,627,344 77 %

1Q2009 20,475 17,739 7,833,682
1Q2010 23,309 14 % 18,315 3 % 14,046,381 79 %

* Includes options on futures

BROKERAGE STATISTICS
(in 000's, except % and where noted)
1Q2010 1Q2009 % Change
Total Accounts 140 116 21 %
Customer Equity (in billions) * $ 16.7 $ 9.6 74 %

Cleared DARTs 328 330 -1 %
Total Customer DARTs 364 358 2 %

(in $'s, except DART per account)
Commission per DART $ 4.40 $ 3.96 11 %
DART per Avg. Account (Annualized) 604 736 -18 %
Net Revenue per Avg. Account (Annualized) $ 3,590 $ 3,604 0 %

* Excludes non-customers

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

SEGMENT FINANCIAL INFORMATION

(UNAUDITED)

Three Months
Ended March 31,
2010 2009
(in millions)

Market Making Net revenues $ 82.8 $ 182.0
Non-interest expenses 77.3 63.8

Income before income taxes $ 5.5 $ 118.2

Pre-tax profit margin 7 % 65 %

Electronic Brokerage Net revenues $ 127.2 $ 107.4
Non-interest expenses 62.8 61.9

Income before income taxes $ 64.4 $ 45.5

Pre-tax profit margin 51 % 42 %

Corporate* Net revenues $ 0.6 $ 6.9
Non-interest expenses 5.6 3.7

Income before income taxes ($5.0 ) $ 3.2

Total Net revenues $ 210.6 $ 296.3
Non-interest expenses 145.7 129.4

Income before income taxes $ 64.9 $ 166.9

Pre-tax profit margin 31 % 56 %

* Corporate includes corporate related activities as well as inter-segment eliminations.

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months
Ended March 31,
2010 2009
(in millions, except share and per share data)

Revenues:
Trading gains $ 80.6 $ 180.5
Commissions and execution fees 91.7 84.3
Interest income 36.6 26.3
Other income 16.8 21.4

Total revenues 225.7 312.5

Interest expense 15.1 16.2

Total net revenues 210.6 296.3

Non-interest expenses:
Execution and clearing 69.7 61.1
Employee compensation and benefits 50.5 42.8
Occupancy, depreciation and amortization 9.2 9.6
Communications 5.4 5.0
General and administrative 10.9 10.9

Total non-interest expenses 145.7 129.4

Income before income taxes 64.9 166.9

Income tax expense 5.2 11.8

Net income 59.7 155.1

Net income attributable to non-controlling interests 55.8 142.5

Net income available for common shareholders $ 3.9 $ 12.6

Earnings per share:
Basic $ 0.09 $ 0.31
Diluted $ 0.09 $ 0.30

Weighted average common shares outstanding:
Basic 41,216,879 40,536,715
Diluted 41,966,053 41,484,537

INTERACTIVE BROKERS GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

March 31, Decemer 31,
2010 2009
(in millions)
Assets
Cash and cash equivalents $ 850.2 $ 806.6
Cash and securities - segregated for regulatory purposes 6,812.9 6,728.9
Securities purchased under agreements to resell 449.2 413.0
Securities borrowed 6,268.3 5,063.0
Trading assets, at fair value 9,347.7 9,344.0
Receivables from customers, net of allowance 4,429.6 3,239.6
Receivables from brokers, dealers and clearing organizations 685.9 493.1
Other assets 518.4 517.4

Total assets $ 29,362.2 $ 26,605.6

Liabilities and equity

Liabilities
Trading liabilities - financial instruments sold but not yet purchased, at fair value $ 9,627.9 $ 8,763.2
Securities loaned 1,360.7 1,133.7
Short-term borrowings 406.0 320.8
Other payables:
Customers 12,031.2 10,587.7
Brokers, dealers and clearing organizations 286.4 164.5
Other payables 549.2 552.8
12,866.8 11,305.0

Senior notes payable and senior secured credit facility 218.2 205.8

Equity
Stockholders' equity 577.5 574.9
Non-controlling interests 4,305.1 4,302.2
Total equity 4,882.6 4,877.1

Total liabilities and equity $ 29,362.2 $ 26,605.6

For Interactive Brokers Group, Inc.
Media:
Andrew Wilkinson, 203-913-1369
or
Investors:
Deborah Liston, 203-618-4070

Copyright Business Wire 2010