Interactive Brokers Group (NASDAQ:IBKR) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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Access the full call at https://edge.media-server.com/mmc/p/sqxktfic/
Summary
Interactive Brokers Group reported record net revenues and strong financial metrics, including a pre-tax profit margin of 77% and a 19% increase in commission revenues.
The company has been incorporating AI tools to enhance client experiences and operational efficiencies, with initiatives like Investment Themes and Connections tools, Ask IBKR tool improvements, and AI-powered client service chatbots.
The future outlook remains positive with continued growth in new accounts, particularly internationally, and strategic investments in marketing and AI integration, despite geopolitical and market volatility.
Operational highlights include a record $169 billion in client uninvested cash balances, a 38% increase in client equity to $789 billion, and a 20% rise in futures contract volumes.
Management expressed confidence in the business model and growth potential, raising the dividend by 35 cents annually, and highlighted the elimination of the SEC’s pattern day trader rule as a potential growth opportunity.
Full Transcript
OPERATOR
Thank you for standing by. Welcome to the Interactive Brokers Group first quarter 2026 earnings call. At this time, all participants are in a listen only mode. After the 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. You will then hear a message advising. Your hand is raised to withdraw your questions. Please press star 11 again. Please be advised that today’s conference is being recorded Now. It is my pleasure to hand the conference over to the Director of Investor Relations, Nancy Stubby. Please proceed, Nancy.
Nancy Stubby (Director of Investor Relations)
Thank you. Good afternoon and thank you for joining us for our first quarter 2026 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&A. As a reminder, today’s call may include forward looking statements 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 first quarter, markets began with a strong January supported by solid equity performance, optimism around corporate earnings, expanding market breadth and resilience. Despite geopolitical risks, however, that momentum did not persist. Most global market indices declined in February and fell further in March, broadly mirroring the kind of price movement we saw in the first quarter of 2025. The S&P 500 ended the quarter down 5%. Notably, each of the Magnificent Seven technology stocks declined by more than the broader market, resulting in relative outperformance by the rest of the index. Despite this backdrop, we continue to see strong interest from both institutional and individual investors globally in opening and funding accounts. Client engagement remained healthy, trading activity increased and clients gradually took on more risk since last year’s tariff driven market decline as reflected in higher darts and increased risk exposure fees over the past several quarters. We continue to set records across key metrics including net revenue, total accounts and account adds. Growth in new accounts has driven higher clients uninvested cash balances which increased 35% year over year to a record $169 billion. Client equity rose 38% to $789 billion and was up 1% sequentially despite the 5% decline in the market. As continued account funding offset market performance across products, stocks, options and futures all deliver double digit year over year growth. Of note, futures contract volumes increased 20% to a quarterly record, driven by higher volatility and increased demand for hedging. Turning to our strategic initiatives, we have been incorporating AI across the organization. We had introduced Investment Themes and Connections tools, which use AI to streamline research and visualize relationships among trends, companies and securities to give our clients actionable investment ideas. This quarter, we expanded international company coverage and integrated themes into market screeners, watch lists and news summaries. We continued enhancing our Ask IBKR tool, which enables clients to query their portfolios for insights such as sector exposure, performance, tax lots, corporate actions and fundamentals. It now provides more direct and relevant responses. We also expanded the number of news sources we are authorized to summarize using AI within client service. Our AI powered chatbot continues to improve, successfully addressing a growing share of client inquiries in multiple languages. We continue to increase its accuracy and coverage while enabling our reps to focus on more complex issues. We are also applying AI to further automate processes across areas like onboarding, compliance and other operational areas. Expanding the use of AI remains a priority across the firm, both to enhance the client experience and to improve internal efficiency. While we have made meaningful progress, we see significant opportunities to extend it further. Our efforts translated into strong financial performance. Quarterly commission revenue and total net revenues both reached record levels at the same time. We remained disciplined on expenses. Our pre tax profit margin was 77%, maintaining our position as an industry leader and marking the sixth consecutive quarter with margins above 70%. In recognition of this, and as a sign of confidence in the strength of our business model, its growth potential and of our capital base, we revisited our allocation of capital and decided to increase the amount of dividend we paid 35 cents a year. Turning to our customer segments, our introducing broker pipeline remains exceptionally strong. We continue to maintain a robust pool of prospects while onboarding a substantial number of new introducing brokers and supporting the growth of existing ones. For larger introducing brokers, we offer customized solutions and have made it easier for them to launch with a wide range of configurable features. Many international brokers require specialized functionality to address their local investment, tax and regulatory requirements. We have user interface enhancements in development that we look forward to discussing in future quarters. Within our hedge fund segment, our hitouch prime brokerage offering continues to gain traction and we are particularly encouraged by referrals to new clients from existing clients. We’ve also received positive feedback on our ability to handle complex requirements and several clients have launched additional strategies on our platform. We had a productive quarter for new product introductions in cryptocurrency. We expanded our offering to clients in the EEA, significantly broadening our footprint. We also introduced crypto transfer capabilities, allowing clients to consolidate external holdings into their IBKR linked accounts. In addition, we launched access to the Coinbase Derivatives Exchange, providing trading in nano sized crypto contracts and perpetual style futures. Our prediction markets have been live and trading 24/7 in anticipation of increased interest ahead of the 2026 US midterm elections, we introduced Election Board, a discovery and trading tool that helps clients browse and trade political event contracts. You may also seen our client outperformance advertising campaign. As we shared previously, in 2025, the average account across each of our client segments outperformed the S&P on a net basis after fees and commissions. Our average individual account returned 19.2% versus 17.9% for the S&P, while our average hedge fund account returned 28.9%. The campaign began with digital channels and has since expanded into print and television globally. These outperformance results reflect our low cost offering and high interest paid on client cash, the strength of our platform and our focus on best execution. This focus means that we seek to maximize client outcomes by routing orders directly to the venues offering the best price rather than selling order flow to third parties. We continue to see growth in overnight trading, which is increasingly important for our global customer base. Overnight trading volumes nearly tripled year over year in the first quarter, increasing to 8.1 million trades from 2.8 million and up from 6.2 million in the fourth quarter. We remained highly active across all areas of the business with multiple initiatives underway across platforms and client segments. We look forward to sharing further updates in the coming quarters. With that, I will turn the call over to Paul Brody.
Paul Brody (Chief Financial Officer)
thank you Nancy and good afternoon. Thanks everyone for joining the call. We will start with our revenue items on page three of the release. We are pleased with our financial results this quarter as we again produced record net revenues and strong results in our key operating Metrics. Commissions rose 19% versus last year’s first quarter, reaching over $600 million. For the first time, we w robust trading volumes from our growing base of active customers across stocks, options and futures. Net interest income rose 17% year on year to 904 million, driven by higher balances and partially offset by lower benchmark interest rates. We w strength from margin borrowing and from our segregated cash portfolio, partially offset by interest we paid …
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