Interactive Brokers Group, Inc.
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 5, 2025
IBKR$75.82+4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-06.
0001381197-25-000103
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001381197-25-000158
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 220 previous paragraphs and 220 current paragraphs.
140 unchanged; 72 reworded; 7 added; 7 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 14 previous and 14 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
The market continued to recover from concerns earlier this year about the potential imposition of global tariffs, with the S&P 500 up 34% by quarter end from its April lows. This quarter, the market again saw the dominance of a small number of technology stocks (the so-called ‘‘Magnificent 7’’), with those names driving more than half of the S&P 500’s return in the current quarter. More broadly, artificial intelligence (AI)-related stocks, including these seven, accounted for nearly three-quarters of the index’s return, underscoring AI’s prominent role as an investment theme. Demand for AI companies also helped spark a rebound in the initial public offering (IPO) market, as investors sought out more opportunities in new technology and AI firms.
Current report
Net interest income increased 21% to $967 million on stronger securities lending activity and higher average customer margin loans and customer credit balances.
Current report
Execution, clearing and distribution fees expenses decreased 21% to $92 million, driven by lower regulatory fees, as the SEC Section 31 transaction fee rate was reduced to zero on May 14, 2025, and greater capture of liquidity rebates from certain exchanges due to higher trading volumes in stocks and options.
Current report
General and administrative expenses decreased 59% to $62 million, driven primarily by the non-recurrences of $88 million related to legal and regulatory matters and of $12 million related to the consolidation of our European subsidiaries; partially offset by an increase of $10 million in advertising expenses.
Current report
Other income, for the current quarter, increased $29 million, or 52% compared to the prior-year quarter, to $85 million. This increase was mainly due to $42 million related to our investing activities, partially offset by a $21 million lower gain related to our currency diversification strategy, which gained $4 million in the current quarter compared to a gain of $25 million in the prior-year quarter.
Current report
Customer bad debt expense, for the current quarter, decreased $9 million, compared to the prior-year quarter, driven by a net recovery of $2 million in the current quarter and the non-recurrence of customer losses during short periods of extreme market volatility in the prior-year quarter.
Current report
Customer bad debt expense, for the current nine-month period, decreased $14 million, compared to the prior-year nine-month period, to less than $1 million, mainly driven by the non-recurrence of customer losses during short periods of extreme market volatility in the prior-year nine-month period.
Removed paragraphs (7)
Previous report
Early in the current quarter, the concern over the potential imposition of tariffs globally led to a sharp decline, with the S&P 500 falling over 11% from the end of the first quarter to April 8. Following that precipitous fall, the markets rebounded, with the S&P 500 closing the current quarter up 11% from the first quarter, and up 24% from April lows, and other equities markets were also up significantly. The dominance of a small number of technology stocks (the so-called ‘‘Magnificent 7’’), which had driven much of the market’s growth in the previous year, waned as investors broadened their interests to include more technology companies, particularly those that may be beneficiaries of the global embrace of artificial intelligence.
Previous report
Net interest income increased 9% to $860 million on higher average customer credit balances and securities lending activity. Net interest income includes a $26 million one-time credit related to recovery of taxes withheld at source.
Previous report
Execution, clearing and distribution fees expenses increased 1% to $116 million, driven by a new FINRA Consolidated Audit Trail (“CAT”) fee initiated during the fourth quarter of 2024 and higher customer trading volumes in stocks, options and futures, mostly offset by greater capture of liquidity rebates from certain exchanges.
Previous report
General and administrative expenses increased 17% to $61 million, driven primarily by an increase of $8 million in advertising expenses.
Previous report
Customer bad debt expense, for the current quarter, decreased $1 million, compared to the prior-year quarter, to $1 million.
Previous report
Other income, for the current six-month period, increased $125 million, compared to the prior-year six-month period, to a gain $107 million. This increase was mainly due to (1) the non-recurrence of a loss of $48 million on positions taken over as a customer accommodation due to a technical issue at the New York Stock Exchange that occurred on the morning of June 3, 2024; (2)$37 million related our currency diversification strategy, which gained $15 million in the current six-month period compared to a loss of $22 million in the prior-year six-month period; (3) $18 million related to our strategic investment in Up Fintech Holding Limited (“Tiger Brokers”), which gained $16 million in the current six-month period compared to a loss of $2 million in the prior-year six-month period; and (4) $13 million related to our principal trading and investing activities.
Previous report
Customer bad debt expense, for the current six-month period, decreased $5 million, compared to the prior-year six-month period, to $2 million.
Reworded paragraphs (72)
Previous wording
Interactive Brokers Group, Inc. (the “Company” or “IBG, Inc.”) is a holding company whose primary asset is its ownership of approximately 26.0% of the membership interests of IBG LLC. The remaining approximately 74.0% of IBG LLC membership interests are held by IBG Holdings LLC (“Holdings”), a holding company that is owned by our founder and Chairman, Mr. Thomas Peterffy and his affiliates, management and other employees of IBG LLC, and certain other members. The table below shows the amount of IBG LLC membership interests held by IBG, Inc. and Holdings as of June 30, 2025.
Current wording
Interactive Brokers Group, Inc. (the “Company” or “IBG, Inc.”) is a holding company whose primary asset is its ownership of approximately 26.3% of the membership interests of IBG LLC. The remaining approximately 73.7% of IBG LLC membership interests are held by IBG Holdings LLC (“Holdings”), a holding company that is owned by our founder and Chairman, Mr. Thomas Peterffy and his affiliates, management and other employees of IBG LLC, and certain other members. The table below shows the amount of IBG LLC membership interests held by IBG, Inc. and Holdings as of September 30, 2025.
Previous wording
We are an automated global electronic broker. We custody and service accounts for hedge and mutual funds, exchange-traded funds (“ETFs”), registered investment advisors, proprietary trading groups, introducing brokers and individual investors. We specialize in routing orders and executing and processing trades in stocks, options, futures, forex, bonds, mutual funds, ETFs and precious metals on more than 160 electronic exchanges and market centers in 37 countries and 28 currencies around the world. In addition, our customers can use our trading platform to trade certain cryptocurrencies through third-party cryptocurrency service providers that execute, clear and custody the cryptocurrencies. We also offer trading in forecast contracts, which are event-based contracts traded on ForecastEx LLC, a CFTC-registered exchange and clearinghouse we established.
Current wording
We are an automated global electronic broker. We custody and service accounts for hedge and mutual funds, exchange-traded funds (“ETFs”), registered investment advisors, proprietary trading groups, introducing brokers and individual investors. We specialize in routing orders and executing and processing trades in stocks, options, futures, forex, bonds, mutual funds, ETFs and precious metals on more than 160 electronic exchanges and market centers in 37 countries and 28 currencies around the world. In addition, our customers can use our trading platform to trade certain cryptocurrencies through third-party cryptocurrency service providers that execute, clear and custody the cryptocurrencies. We also offer trading in forecast contracts, which are event-based contracts traded on ForecastEx LLC, a CFTC-registered exchange and clearinghouse weestablished.
Previous wording
As an electronic broker, we execute, clear and settle trades globally for both institutional and individual customers. Powered by our proprietary technology, our systems provide our customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically in these markets at a low cost, in multiple products and currencies from a single trading account. Our overnight trading facilities, available for an array of instruments, support our customers who trade across time zones. The ever-growing complexity of multiple market centers across diverse geographies provides us with ongoing opportunities to build and continuously adapt our order routing software to secure excellent execution prices.
Current wording
As an electronic broker, we execute, clear and settle trades globally for both institutional and individual customers. Powered by our proprietary technology, our systems provide our customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically at a low cost, in multiple products and currencies from a single trading account. Our overnight trading facilities, available for an array of instruments, support our customers who trade across time zones. The ever-growing complexity of multiple market centers across diverse geographies provides us with ongoing opportunities to build and continuously adapt our order routing software to secure excellent execution prices.
Previous wording
Since our inception in 1977, we have focused on developing proprietary software to automate broker-dealer functions. The proliferation of electronic exchanges and market centers has allowed us to integrate our software with an increasing number of trading venues – as well as with market data sources, securities lending platforms and regulatory reporting facilities – creating one automatically functioning, computerized platform that requires minimal human intervention.
Current wording
Since our inception in 1977, we have focused on developing proprietary software to automate broker-dealer functions. The proliferation of electronic exchanges and market centers has allowed us to integrate our software with an increasing number of trading venues – as well as with market data sources, securities lending platforms and regulatory reporting facilities – creating one automated platform that requires minimal human intervention.
Previous wording
During the quarter ended June 30, 2025 (“current quarter”), world equities markets rose after a brief decline early in the quarter, with major equity indices in the U.S. and Japan rising double digits; markets in Canada, Germany and Australia rising in the high single digits; and markets in the United Kingdom (“U.K.”) and China rising in the low to mid-single digits. Several central banks continued to cut their policy interest rates this quarter, including those in Europe, Switzerland, the U.K., and Australia, while in the U.S., Canada and Hong Kong rates were unchanged.
Current wording
During the quarter ended September 30, 2025 (“current quarter”), world equities markets continued their strong performance, with major equity indices rising in most regions. The U.S. market rose 8%, and Europe, the U.K. and Australia recorded single-digit gains, while Germany declined slightly. Markets in Canada, Japan, Hong Kong and China saw double-digit gains this quarter. Several central banks continued to cut their policy interest rates this quarter, including those in the U.S., the U.K., Canada, Australia and Hong Kong. Meanwhile, Japan, Europe and Switzerland kept rates unchanged.
Previous wording
The following is a summary of the key economic drivers that affect our business and how they compared to the prior-year quarter:
Current wording
The following summarizes the key economic drivers that affect our business and how they compared to the prior-year quarter:
Previous wording
Global trading volumes. Worldwide, equities volumes at most major trading venues rose in the current quarter as most major market indices increased, compared to the prior-year quarter. In the U.S., according to industry data, average daily volume in listed cash equities volume increased by 57%, in exchange-listed equity-based options by 24%, and in futures by 16%, compared to the prior-year quarter. Options trading volumes continue to rise with the growing popularity of shorter-dated options contracts. In futures markets, volumes increased across all product segments, particularly in energy, interest rate, and equity indexes, as many investors sought to mitigate their exposure to ongoing economic and geopolitical uncertainties. Metals, agriculture and foreign exchange futures products also increased.
Current wording
Global trading volumes. Worldwide, equities volumes at most major trading venues rose in the current quarter as most major market indices rose, compared to the prior-year quarter. In the U.S., according to industry data, average daily volume in listed cash equities volume increased by 53% and in exchange-listed equity-based options by 25%, while futures volumes declined by 10%, compared to the prior-year quarter. Options trading volumes continue to rise with the growing popularity of shorter-dated options contracts. In futures markets, volumes decreased across most product segments, particularly in interest rate, equity index, foreign exchange and energy, as diminished geopolitical and economic uncertainty reduced hedging activity in those areas.
Previous wording
These factors led to strong results across our major product types. Our customers’ equities, foreign exchange, options, and futures volumes were up 31%, 57%, 24%, and 18%, respectively. compared to the prior-year quarter.
Current wording
Various market cross-currents led to mixed results across our major product types. While our customers’ equities and options volumes were up 67% and 27%, respectively, futures and foreign exchange volumes were down 7% and 6%, respectively, compared to the prior-year quarter.
Previous wording
Volatility. U.S. market volatility, as measured by the average Chicago Board Options Exchange Volatility Index (“VIX®”), increased by 69%, from an average of 14.0 in the prior-year quarter to 23.7 in the current quarter. While average volatility levels remained below the levels reached in 2020 and again in 2022, they rose in the current quarter to their highest level in over two years as the world geopolitical and economic outlook grew more uncertain.
Current wording
Volatility. U.S. market volatility, as measured by the average Chicago Board Options Exchange Volatility Index (“VIX®”), declined by 6%, from an average of 17.1 in the prior-year quarter to 16.0 in the current quarter, and remained below the elevated levels reached in 2020 and 2022. The less volatile environment reflected steady economic activity, increased confidence in the Federal Reserve’s easing trajectory, and reduced uncertainty surrounding global trade tariff policies.
Previous wording
Interest Rates. The U.S. Federal Reserve maintained the benchmark federal funds rate during the current quarter, after cutting it three times in the second half of 2024 (in September, November and December), by a cumulative 100 basis points. The U.S. Treasury yield curve remained inverted in the medium term. As noted above, in several countries with developed financial markets, benchmark interest rates declined during the current quarter as central banks’ inclination to encourage growth overcame apprehensions about inflation, despite increasing concern on the uncertainty of U.S. tariff policy.
Current wording
Interest Rates. During the current quarter, the U.S. Federal Reserve cut the benchmark federal funds rate for the first time this year, lowering it by 25 basis points to a range of 4.00% to 4.25%. The U.S. Treasury yield curve remained inverted through the medium term, though less so than in prior quarters. As noted above, in several countries with developed financial markets, benchmark interest rates declined during the current quarter as central banks were inclined to focus more on growth than inflation.
Previous wording
Lower U.S. benchmark rates reduce the interest we earn on our segregated cash, the majority of which is invested in short-term U.S. government securities and related instruments. Lower medium-term rates, and uncertainty over future U.S. Federal Reserve rate policy, have led us to maintain a short duration portfolio, substantially all of which matured within three months at June 30, 2025, to more closely match our asset and liability maturities on our interest-sensitive assets. Further, our margin balances are tied to benchmark rates, so lower rates also limit the interest we earn on margin lending to our customers. We continue to offer among the lowest rates in the industry on margin lending, and we believe our low rates are an important feature that attracts customers to our platform.
Current wording
Lower U.S. benchmark rates reduce the interest rate we earn on our segregated cash, the majority of which is invested in short-term U.S. government securities and related instruments. Lower medium-term rates, and uncertainty over future U.S. Federal Reserve rate policy, have led us to maintain a short duration portfolio, all of which matured within three months at September 30, 2025, to more closely match our asset and liability maturities on our interest-sensitive assets. Further, our margin balances are tied to benchmark rates, so lower rates also limit the interest we earn on margin lending to our customers. Higher balances can mitigate the impact of rate reductions. We continue to offer among the lowest rates in the industry on margin lending, and we believe our low rates are an important feature that attracts customers to our platform.
Previous wording
Net interest income on margin loan balances declined 6% compared to the prior-year quarter. This decline was due to the 100 basis point decline in the U.S. federal funds rate and to rate cuts in other countries, despite a 16% increase in margin loan balances in the current active market environment. This was more than offset by the increase in interest on segregated cash and securities, and on stronger securities lending.
Current wording
Net interest income on margin loan balances increased 4% compared to the prior-year quarter, despite a 96 basis point decline in the U.S. federal funds rate and rate cuts in other countries. The net interest income increase reflected a 30% increase in margin loan balances and a 33% increase in segregated cash and securities balances driven by our growing customer base. Additionally, interest on securities lending increased due to higher activity during the quarter.
Previous wording
Higher average balances contributed to a 7% rise in net interest income over the prior-year quarter, while our net interest margin declined from 2.42% in the prior-year quarter to 2.07% in the current quarter, predominantly from global interest rate cuts. Seethe “Results of Operations – Interest Income and Interest Expense” section below in this Item 2 for additional details.
Current wording
These factors contributed to a 21% rise in net interest income over the prior-year quarter, while our net interest margin declined from 2.37% in the prior-year quarter to 2.16% in the current quarter, predominantly from global interest rate cuts. See the “Results of Operations – Interest Income and Interest Expense” section below in this Item 2 for additional details.
Previous wording
Currency fluctuations. As a global electronic broker trading on exchanges around the world in multiple currencies, we are exposed to foreign currency risk. We actively manage this exposure by keeping our equity in proportion to a defined basket of 10 currencies we call the ‘‘GLOBAL’’ to diversify our risk and to align our hedging strategy with the currencies that we use in our business. Because we report our financial results in U.S. dollars, the change in the value of the GLOBAL versus the U.S. dollar affects our earnings. During the current quarter, the value of the GLOBAL, as measured in U.S. dollars, increased 1.62% compared to its value at March 31, 2025, which had a positive impact on our comprehensive earnings for the current quarter. A discussion of our approach for managing foreign currency exposure is contained in Part I, Item 3 of this Quarterly Report on Form 10-Q entitled ‘‘Quantitative and Qualitative Disclosures about Market Risk.’’
Current wording
Currency fluctuations. As a global electronic broker trading on exchanges around the world in multiple currencies, we are exposed to foreign currency risk. We actively manage this exposure by keeping our equity in proportion to a defined basket of 10 currencies we call the ‘‘GLOBAL’’ to diversify our risk and to align our hedging strategy with the currencies that we use in our business. Because we report our financial results in U.S. dollars, the change in the value of the GLOBAL versus the U.S. dollar affects our earnings. During the current quarter, the value of the GLOBAL, as measured in U.S. dollars, decreased 0.25% compared to its value at June 30, 2025, which had a negative impact on our comprehensive earnings for the current quarter. A discussion of our approach for managing foreign currency exposure is contained in Part I, Item 3 of this Quarterly Report on Form 10-Q entitled ‘‘Quantitative and Qualitative Disclosures about Market Risk.’’
Previous wording
Diluted earnings per share were $0.51 for the current quarter, compared to diluted earnings per share of $0.41 for the prior-year quarter. Adjusted diluted earnings per share were $0.51 for the current quarter and $0.44 for the prior-year quarter. The calculation of diluted earnings per share is detailed in Note 4 – “Equity and Earnings per Share” to the unaudited condensed consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
Diluted earnings per share were $0.59 for the current quarter, compared to diluted earnings per share of $0.42 for the prior-year quarter. Adjusted diluted earnings per share were $0.57 for the current quarter and $0.40 for the prior-year quarter. The calculation of diluted earnings per share is detailed in Note 4 – “Equity and Earnings per Share” to the unaudited condensed consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q.
Previous wording
For the current quarter, our net revenues were $1,480 million and income before income taxes was $1,104 million, compared to net revenues of $1,230 million and income before income taxes of $880 million in the prior-year quarter. Adjusted net revenues were $1,480 million and adjusted income before income taxes was $1,104 million, compared to adjusted net revenues of $1,290 million and adjusted income before income taxes of $940 million in the prior-year quarter.
Current wording
For the current quarter, our net revenues were $1,655 million and income before income taxes was $1,312 million, compared to net revenues of $1,365 million and income before income taxes of $909 million in the prior-year quarter. Adjusted net revenues were $1,610 million and adjusted income before income taxes was $1,267 million, compared to adjusted net revenues of $1,327 million and adjusted income before income taxes of $871 million in the prior-year quarter.
Previous wording
Commission revenue increased 27% to $516 million on higher customer trading volumes. Volume in stocks, options and futures increased 31%, 24% and 18%, respectively.
Current wording
Commission revenue increased 23% to $537 million on higher customer trading volumes. Customer trading volume in stocks and options increased 67% and 27%, respectively, while futures decreased 7%.
Previous wording
Other fees and services decreased 9% to $62 million, led by a decrease of $7 million in risk exposure fees, which was partially offset by a $2 million increase in FDIC sweep fees.
Current wording
Other fees and services decreased 8% to $66 million, led by a decrease of $12 million in risk exposure fees, which was partially offset by a $3 million increase in FDIC sweep fees.
Previous wording
Pretax profit margin was 75% for the current quarter compared to 72% in the prior-year quarter. Adjusted pretax profit margin for the current quarter was 75% compared to 73% in the prior-year quarter.
Current wording
Pretax profit margin was 79% for the current quarter compared to 67% in the prior-year quarter. Adjusted pretax profit margin for the current quarter was 79% compared to 66% in the prior-year quarter.
Previous wording
Total equity as of June 30, 2025 was $18.5 billion.
Current wording
Total equity as of September 30, 2025, was $19.5 billion.
Previous wording
In connection with our currency diversification strategy, as of June 30, 2025, approximately 25% of our equity was denominated in currencies other than the U.S. dollar. In the current quarter, our currency diversification strategy increased our comprehensive earnings by $301 million (compared to a decrease of $30 million in the prior-year quarter), as the U.S. dollar value of the GLOBAL increased by approximately 1.62%, compared to its value as of March 31, 2025. The effects of our currency diversification strategy are reported as (1) a component of “Other income” (loss of $5 million) in the consolidated statements of comprehensive income and (2)other comprehensive income (“OCI”) (gain of $306 million) in the consolidated statements of financial condition and the consolidated statements of comprehensive income. The full effect of the GLOBAL is captured in comprehensive income.
Current wording
In connection with our currency diversification strategy, as of September 30, 2025, approximately 25% of our equity was denominated in currencies other than the U.S. dollar. In the current quarter, our currency diversification strategy decreased our comprehensive earnings by $33 million (compared to an increase of $178 million in the prior-year quarter), as the U.S. dollar value of the GLOBAL decreased by approximately 0.25% compared to its value as of June 30, 2025. The effects of our currency diversification strategy are reported as (1) a component of “Other income” (gain of $4 million) in the condensed consolidated statements of comprehensive income and (2)other comprehensive income (“OCI”) (loss of $37 million) in the condensed consolidated statements of financial condition and the condensed consolidated statements of comprehensive income. The full effect of the GLOBAL is captured in comprehensive income.
Previous wording
Total net revenues, for the current quarter, increased $250 million, or 20%, compared to the prior-year quarter, to $1,480 million. The increase in net revenues was due to higher commissions, other income and net interest income, partially offset by lower other fees and services.
Current wording
Total net revenues, for the current quarter, increased $290 million, or 21%, compared to the prior-year quarter, to $1,655 million. The increase in net revenues was due to higher net interest income, commissions and other income; partially offset by lower other fees and services.
Previous wording
Commissions, for the current quarter, increased $110 million, or 27%, compared to the prior-year quarter, to $516 million, driven by higher customer trading volumes across all product types. Total customer options and futures contract and stock share volumes increased 24%, 18% and 31%, respectively. Total DARTs for the current quarter increased 49% to 3.6 million, compared to 2.4 million for the prior-year quarter. Average commission per commissionable order for cleared customers, for the current quarter, decreased 12% to $2.65, compared to $3.01 for the prior-year quarter, due to smaller average order sizes across all product classes, lower average commissions per contract in options and futures, and greater capture of liquidity rebates passed through to customers.
Current wording
Commissions, for the current quarter, increased $102 million, or 23%, compared to the prior-year quarter, to $537 million, driven by higher customer volume in stocks and options; partially offset by lower customer trading volumes in futures. Total customer stock share and options contract volumes increased 67% and 27%, respectively, while futures contract volume decreased 7%. Total DARTs for the current quarter increased 34% to 3.6 million, compared to 2.7 million for the prior-year quarter. Average commission per commissionable order for cleared customers decreased 5% to $2.70 for the current quarter compared to $2.83 for the prior-year quarter, due to lower average commissions per contract in stocks and options, primarily due to the SEC Section 31 transaction fee rate which was reduced to zero on May 14, 2025, and to greater capture of liquidity rebates, which, as pass-throughs, serve to lower both our commission revenues and our execution costs.
Previous wording
Other fees and services, for the current quarter, decreased $6 million, or 9%, compared to the prior-year quarter, to $62 million, driven by a $7 million decrease in risk exposure fees as customers exhibited more cautious risk-taking behavior, partially offset by a $2 million increase in market data fees and a $2 million increase in FDIC sweep fees.
Current wording
Other fees and services, for the current quarter, decreased $6 million, or 8%, compared to the prior-year quarter, to $66 million, driven by a $12 million decrease in risk exposure fees as customers exhibited more cautious risk-taking behavior, partially offset by a $3 million increase in FDIC sweep fees and a $2 million increase in market data fees.
Previous wording
Net interest income (interest income less interest expense), for the current quarter, increased $68 million, or 9%, compared to the prior-year quarter, to $860 million. The increase in net interest income was driven by higher average customer credit balances and securities lending activity, partially offset by lower benchmark interest rates. In the current quarter, net interest income includes a $26 million one-time credit related to recovery of taxes withheld at source.
Current wording
Net interest income (interest income less interest expense), for the current quarter, increased $165 million, or 21%, compared to the prior-year quarter, to $967 million. The increase in net interest income was driven by stronger securities lending activity and higher average customer margin loans and customer credit balances, partially offset by lower benchmark interest rates.
Previous wording
Net interest income on customer balances, for the current quarter, increased $7 million compared to the prior-year quarter, driven by increases of $27.3 billion, $18.6 billion and $8.5 billion in average customer credit balances, segregated cash and securities, and margin loans, respectively. Yields on all three components decreased as rates have declined worldwide. See the “Business Environment” section above in this Item 2 for a further discussion about the change in interest rates in the current quarter.
Current wording
Net interest income on customer balances, for the current quarter, increased $48 million compared to the prior-year quarter, driven by increases of $34.9 billion, $20.1 billion and $16.2 billion in average customer credit balances, segregated cash and securities, and margin loans, respectively. Yields on all three components decreased as rates have declined worldwide. See the “Business Environment” section above in this Item 2 for a further discussion about the change in interest rates in the current quarter.
Previous wording
In the current quarter, average securities borrowed balances increased 19%, to $7.0 billion, and average securities loaned balances increased 26%, to $17.2 billion, compared to the prior-year quarter. Net interest earned from securities lending is affected by the level of demand for securities positions held by our customers that investors are looking to sell short. During the current quarter, net interest earned from securities lending transactions increased $35 million, or 140%, compared to the prior-year quarter, driven by an increase in so-called “hard to borrow” stocks that we were able to capitalize on. However, as noted above, the rise in benchmark interest rates from near zero in 2022 has shifted a portion of the interest reported as generated by lending securities to interest income on segregated cash (see further explanation above). It should be noted that securities lending transactions entered into to support customer activity may produce interest income (expense) that is offset by interest expense (income) related to customer balances.
Current wording
In the current quarter, average securities borrowed balances increased 45%, to $9.0 billion, and average securities loaned balances increased 45%, to $20.7 billion, compared to the prior-year quarter. Net interest earned from securities lending is affected by the level of demand for securities positions held by our customers that investors are looking to sell short. During the current quarter, net interest earned from securities lending transactions increased $117 million, or 731%, compared to the prior-year quarter, driven by a higher level of short sale activity and a significant rise in the notional value of the securities we lent. However, as noted above, the rise in benchmark interest rates from near zero in 2022 has shifted a portion of the interest reported as generated by lending securities to interest income on segregated cash (see further explanation above). It should be noted that securities lending transactions entered into to support customer activity may produce interest income (expense) that is offset by interest expense (income) related to customer balances.
Previous wording
We estimate that if the interest earned and paid on cash collateral related to our securities lending transactions were included under “Securities borrowed and loaned, net” in the table below, the total net interest income related to our securities lending activities would have been $251 million in the current quarter, compared to $194 million in the prior-year quarter. Such additional interest attributed to our securities lending activities would be reclassified from net interest income on “Segregated cash and securities, net” and “Customer credit balances, net” in the table below, so it would have no effect on our overall net interest income or net interest margin.
Current wording
We estimate that if the interest earned and paid on cash collateral related to our securities lending transactions were included under “Securities borrowed and loaned, net” in the table below, the total net interest income related to our securities lending activities would have been $314 million in the current quarter, compared to $156 million in the prior-year quarter. Such additional interest attributed to our securities lending activities would be reclassified from net interest income on “Segregated cash and securities, net” and “Customer credit balances, net” in the table below, so it would have no effect on our overall net interest income or net interest margin.
Previous wording
Includes income from financial instruments that has the same characteristics as interest, but is reported in other fees and services and other income in the Company’s condensed consolidated statements of comprehensive income. For the three months ended June 30, 2025 and 2024, $9 million and $7 million were reported in other fees and services, respectively, and $18 million and $6 million were reported in other income, respectively.
Current wording
Includes income from financial instruments that has the same characteristics as interest, but is reported in other fees and services and other income in the Company’s condensed consolidated statements of comprehensive income. For the three months ended September 30, 2025 and 2024, $10 million and $7 million were reported in other fees and services, respectively; and $22 million and $17 million were reported in other income, respectively.
Previous wording
Non-interest expenses, for the current quarter, increased $26 million, or 7%, compared to the prior-year quarter, to $376 million, mainly due to a $17 million increase in employee compensation and benefits, and a $9 million increase in general and administrative expenses. As a percentage of total net revenues, non-interest expenses were 25% for the current quarter and 28% for the prior-year quarter.
Current wording
Non-interest expenses, for the current quarter, decreased $113 million, or 25%, compared to the prior-year quarter, to $343 million, mainly due to a $91 million decrease in general and administrative expenses, a $24 million decrease in execution, clearing and distribution fees, and a $9 million decrease in customer bad debt expense; partially offset by an $11 million increase in employee compensation and benefits. As a percentage of total net revenues, non-interest expenses were 21% for the current quarter and 33% for the prior-year quarter.
Previous wording
Execution, clearing and distribution fees, for the current quarter, increased $1 million, or 1%, compared to the prior-year quarter, to $116 million, mainly driven by a $3 million increase in regulatory fees due to a new FINRA Consolidated Audit Trail (“CAT”) fee initiated in the fourth quarter of 2024, and higher customer trading volumes in stocks, options and futures, mostly offset by greater capture of liquidity rebates due to higher customer trading volumes. CAT fees, as with other regulatory fees, are passed through to customers. As a percentage of total net revenues, execution, clearing and distribution fees were 8% for the current quarter and 9% for the prior-year quarter.
Current wording
Execution, clearing and distribution fees, for the current quarter, decreased $24 million, or 21%, compared to the prior-year quarter, to $92 million, mainly driven by a $17 million decrease in regulatory fees as the SEC Section 31 transaction fee rate was reduced to zero on May 14, 2025, and by greater capture of liquidity rebates from certain exchanges on higher customer trading volumes in stocks and options; partially offset by a new FINRA Consolidated Audit Trail (“CAT”) fee, which was initiated in the fourth quarter of 2024. SEC and CAT fees, as with other regulatory fees, are passed through to customers. As a percentage of total net revenues, execution, clearing and distribution fees were 6% for the current quarter and 8% for the prior-year quarter.
Previous wording
Employee compensation and benefits expenses, for the current quarter, increased $17 million, or 12%, compared to the prior-year quarter, to $163 million associated with a combination of staffing increases, inflation, and a $5 million increase in U.S. Social Security and Medicare, and other social insurance taxes driven by the annual vesting of the Company’s Stock Incentive Plan units at a higher stock price than in the prior year. The average number of employees increased 4% to 3,059 for the current quarter, compared to 2,951 for the prior-year quarter. As we continue to grow, our focus on automation has allowed us to maintain a relatively small staff. As a percentage of total net revenues, employee compensation and benefits expenses were 11%for the current quarter and 12% for the prior-year quarter.
Current wording
Employee compensation and benefits expenses, for the current quarter, increased $11 million, or 8%, compared to the prior-year quarter, to $156 million, associated with a combination of staffing increases and inflation. The average number of employees increased 5% to 3,109 for the current quarter, compared to 2,960 for the prior-year quarter. As we continue to grow, our focus on automation has allowed us to maintain a relatively small staff. As a percentage of total net revenues, employee compensation and benefits expenses were 9%for the current quarter and 11% for the prior-year quarter.
Previous wording
Occupancy, depreciation and amortization expenses, for the current quarter, decreased $1 million, or 4%, compared to the prior-year quarter, to $24 million, mainly due to lower depreciation and amortization expense. As a percentage of total net revenues, occupancy, depreciation and amortization expenses were 2% for both the current quarter and the prior-year quarter.
Current wording
Occupancy, depreciation and amortization expenses, for the current quarter, decreased $2 million, or 8%, compared to the prior-year quarter, to $24 million, mainly due to lower depreciation and amortization expense. As a percentage of total net revenues, occupancy, depreciation and amortization expenses were 1% for the current quarter and 2% for the prior-year quarter.
Previous wording
Communications expenses, for the current quarter, increased $1 million, or 10%, compared to the prior-year quarter, to $11 million. As a percentage of total net revenues, communications expenses were 1% for both the current quarter and the prior-year quarter.
Current wording
Communications expenses, for the current quarter, increased $2 million, or 22%, compared to the prior-year quarter, to $11 million. As a percentage of total net revenues, communications expenses were 1% for both the current quarter and the prior-year quarter.
Previous wording
General and administrative expenses, for the current quarter, increased $9 million, or 17%, compared to the prior-year quarter, to $61 million, primarily due toan $8 million increase in advertising expenses. As a percentage of total net revenues, general and administrative expenses were 4% for both the current quarter and the prior-year quarter.
Current wording
General and administrative expenses, for the current quarter, decreased $91 million, or 59%, compared to the prior-year quarter, to $62 million, driven primarily by the non-recurrencesof $88 million related to a legal settlement and of $12 million related to the consolidation of our European subsidiaries; partially offset by a $10 million increase in advertising expenses. As a percentage of total net revenues, general and administrative expenses were 4% for the current quarter and 11% for the prior-year quarter.
Previous wording
Income tax expense, for the current quarter, increased $27 million, or 38%, compared to the prior-year quarter, to $98 million, primarily due to (1) higher income before taxes at our operating subsidiaries outside the U.S. and a higher income tax rate in a foreign jurisdiction following the adoption of the minimum effective tax rate of 15% on January 1, 2025; (2) higher income before income taxes subject to U.S. income tax at IBG, Inc.; and (3) IBG, Inc.’s higher average ownership percentage of IBG LLC, which rose from 25.6% in the prior-year quarter to 25.9% in the current quarter.
Current wording
Income tax expense, for the current quarter, increased $51 million, or 68%, compared to the prior-year quarter, to $126 million, primarily due to (1) higher income before taxes at our operating subsidiaries outside the U.S. and a higher income tax rate in a foreign jurisdiction following the adoption of the minimum effective tax rate of 15% on January 1, 2025; (2) higher income before income taxes subject to U.S. income tax at IBG, Inc.; and (3) IBG, Inc.’s higher average ownership percentage of IBG LLC, which rose from 25.7% in the prior-year quarter to 26.2% in the current quarter.
Previous wording
Represents the net gains or losses from the Company’s common stock (IBKR shares) held in treasury related to shares withheld from employees to satisfy their tax withholding obligations related to the annual vesting of shares from the amended 2007 Stock Incentive Plan and shares held for distribution to eligible customers participating in one or more promotions.
Current wording
Represents the net gains or losses from the Company’s common stock (IBKR shares) held in treasury for distribution to eligible customers participating in one or more promotions.
Previous wording
Income before income taxes, for the current quarter, increased $224 million, or 25%, compared to the prior-year quarter, to $1,104 million. Pretax profit margin was 75% for the current quarter and 72% for the prior-year quarter.
Current wording
Income before income taxes, for the current quarter, increased $403 million, or 44%, compared to the prior-year quarter, to $1,312 million. Pretax profit margin was 79% for the current quarter and 67% for the prior-year quarter.
Previous wording
Comparing our operating results for the current quarter to the prior-year quarter using non-GAAP financial measures, adjusted net revenues were $1,480 million, up 15%; adjusted income before income taxes was $1,104 million, up 17%; and adjusted pre-tax profit margin was 75% for the current quarter compared to 73% for the prior-year quarter. See the “Non-GAAP Financial Measures” section below in this Item 2 for additional details.
Current wording
Comparing our operating results for the current quarter to the prior-year quarter using non-GAAP financial measures, adjusted net revenues were $1,610 million, up 21%; adjusted income before income taxes was $1,267 million, up 45%; and adjusted pre-tax profit margin was 79% for the current quarter compared to 66% for the prior-year quarter. See the “Non-GAAP Financial Measures” section below in this Item 2 for additional details.
Previous wording
Six Months Ended June 30, 2025 (“current six-month period”) compared to the Six Months Ended June 30, 2024 (“prior-year six-month period”)
Current wording
Nine Months Ended September 30, 2025 (“current nine-month period”) compared to the Nine Months Ended September 30, 2024 (“prior-year nine-month period”)
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Current report — wording carried from elsewhere
Finally, the Company’s policies with respect to currencies with near zero or negative interest rates impact the overall yields on segregated cash and customer credit balances as effective interest rates in those currencies move above or below zero.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Net interest income on “Segregated cash and securities, net” for the six months ended June 30, 2025, excludes $26 million of interest income, recorded in the condensed consolidated statements of comprehensive income, related to taxes withheld at source in prior periods, which during the current quarter were determined to be fully refundable.