IBKR Tanks on Q1 Earnings Miss, Announces Dividend Hike & Stock Split

Shares of Interactive Brokers Group IBKR plunged 9.9% in after-market hours on lower-than-expected quarterly results. Its first-quarter 2025 adjusted earnings per share of $1.88 lagged the Zacks Consensus Estimate of $1.92. However, the bottom line indicates a rise of 14.6% from the prior-year quarter.

Concurrently, IBKR announced a forward stock split and an increase in quarterly dividends.

Results were adversely impacted by higher expenses. On the other hand, an increase in revenues and growth in customer accounts and a rise in daily average revenue trades (DARTs) acted as tailwinds.

After considering non-recurring items, net income available to common shareholders (GAAP basis) was $213 million or $1.94 per share, up from $175 million or $1.61 in the prior-year quarter. Our estimate for net income was $204.7 million.

Interactive Brokers reported comprehensive income available to common shareholders of $241 million or $2.19 per share compared with $149 million or $1.37 in the prior-year quarter.

IBKR’s Revenues Up, Expenses Rise

Total GAAP net revenues for the quarter were $1.43 billion, up 18.6% year over year. Adjusted net revenues were $1.4 billion, up 14.8%. The Zacks Consensus Estimate for the top line was $1.43 billion. 

Total non-interest expenses increased 10.4% year over year to $372 million. This rise was primarily due to execution, clearing and distribution fees costs, employee compensation and benefits charges, and general and administrative expenses. Our estimate for non-interest expenses was pegged at $409.5 million.

Income before income taxes was $1.06 billion, up 21.8%.

The adjusted pre-tax profit margin was 73%, up from 72% a year ago.

In the reported quarter, total customer DARTs jumped 49.7% year over year to 3.52 million. Our estimate for the metric was 3.44 million.
 
Customer accounts grew 31.7% from the year-ago quarter to 3,616,000. Our prediction for customer accounts was 3,836,000.

Strong Capital Position of Interactive Brokers

As of March 31, 2025, cash and cash equivalents (including cash and securities set aside for regulatory purposes) totaled $72.1 billion compared with $68.1 billion as of Dec. 31, 2024.

As of March 31, 2025, total assets were $157.7 billion compared with $150.1 billion as of Dec. 31, 2024. Total equity was $17.5 billion, up from $16.6 billion as of Dec. 31, 2024.

IBKR’s Stock Split & Dividend Hike Announcements

Interactive Brokers declared a quarterly cash dividend of 32 cents per share, representing a 28% jump from the prior payout. The dividend will be paid out on June 13 to shareholders of record as of May 30.

Further, IBKR announced a four-for-one forward split of its common stock. Each record holder of common stock, as of market close on June 16, will receive three additional shares of common stock. This will be distributed after the close of market on June 17. The company expects the trading to commence on a split-adjusted basis at market open on June 18, 2025.

Our View on IBKR

Interactive Brokers' efforts to develop proprietary software and an increase in emerging market customers are expected to keep aiding financials. Relatively higher interest rates will likely aid revenue growth in the near term. However, rising expenses and high exposure to geopolitical risks through overseas are headwinds.
 

Interactive Brokers Group, Inc. Price, Consensus and EPS Surprise

Interactive Brokers Group, Inc. price-consensus-eps-surprise-chart | Interactive Brokers Group, Inc. Quote

Currently, Interactive Brokers has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of IBKR’s Peers

Here are some of the IBKR’s peers that are yet to come out with quarterly numbers. (Find the latest earnings estimates and surprises on Zacks Earnings Calendar.)

Robinhood Markets HOOD is slated to announce first-quarter 2025 numbers on April 30.

In the past week, the Zacks Consensus Estimate for Robinhood’s quarterly earnings has moved 2.9% lower to 34 cents, implying an 88.9% jump from the prior-year reported number.

Tradeweb Markets TW is also slated to announce quarterly numbers on April 30.

In the past week, the Zacks Consensus Estimate for TW’s quarterly earnings has remained unchanged at 85 cents, indicating a 19.7% rise from the prior-year reported number.

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