Interactive Brokers Group, Inc.

During 2025, global equity markets extended their multi-year advances, with several major indices reaching record levels and many recording double-digit gains. The S&P 500 Index returned 16.4% for the year, though it was outperformed by a number of international markets, including Canada, the United Kingdom, Europe, Hong Kong, Japan, and China.

Within the U.S., market performance became somewhat more diversified compared to the prior year. The group of large-cap technology stocks commonly referred to as the “Magnificent Seven” accounted for approximately 35% of the S&P 500’s total return in 2025, compared to approximately 50% in 2024. More broadly, companies associated with AI, including these large-cap technology firms, contributed more than half of the index’s overall return. Increased investor interest in AI-related companies also coincided with a partial recovery in the initial public offering market, particularly among technology-focused issuers.

Inflationary pressures moderated during 2025, contributing to monetary policy easing across several major economies. Central banks reduced policy interest rates, which supported financial market activity and economic conditions, despite ongoing geopolitical developments and trade policy uncertainty. Lower interest rates, along with expectations of additional monetary easing, were associated with higher market indices and increased trading. Retail investor participation remained elevated with continued engagement, particularly in equity and options markets.

The following is a summary of the key economic drivers that affect our business and how they compared to the prior year:

Global trading volumes. Worldwide, equities volumes at most major trading venues increased in the current year, while major market indices reached all-time highs in the U.S., Canada, Europe, U.K., Germany, Japan, and Australia. In the U.S., according to industry data, average daily volume in listed cash equities increased by 45%, exchange-listed equity-based options by 25%, and futures by 6%, compared to 2024. Options trading volumes have risen with the growing popularity of shorter-dated options contracts. In futures markets, volumes increased across most product segments, particularly in metals, energy, equity index, agriculture and interest rate products, as investors sought to mitigate their exposure to ongoing economic and geopolitical uncertainties.

These factors led to strong results across our major product types. Our customer equities, options, foreign exchange, and futures volumes were up 38%, 26%, 15%, and 12%, respectively, compared to the prior year.

Note that while U.S. options, futures and cash equities volumes are readily comparable measures, they reflect most but not all of the global volumes that generate our commission revenue. See ‘‘Trading Volumes and Customer Statistics’’ below in this Item 7 for additional details regarding our trade volumes, contract and share volumes, and customer statistics.

Volatility. U.S. market volatility, as measured by the average Chicago Board Options Exchange Volatility Index (‘‘VIX®’’), increased by 22%, from an average of 15.6 in 2024 to 18.9 in the current year, the highest annual level seen since 2022. In general, higher volatility typically enhances our performance because it often correlates positively with customer trading activity across product types.

Interest Rates. During 2025, the U.S. Federal Reserve cut the benchmark federal funds rate by a total of 75 basis points, with 25 basis point reductions at its September, October, and December meetings. This resulted in a target range of 3.50% to 3.75% at year end, the lowest level since late 2022. Over the course of the year, the U.S. Treasury yield curve moved toward normalization but remained partially inverted at year end, with short- to intermediate-term yields flat to inverted, while longer-term yields exceeded shorter-term rates. In most countries with developed financial markets, benchmark interest rates also declined during 2025 as inflationary pressures eased and central banks adjusted monetary policy accordingly.

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. Higher short-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 December 31, 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.

As an offset, lower rates also reduce our interest expense. For example, in U.S. dollars we pay interest to customers on their qualified cash balances when the federal funds effective rate is above 0.50%, which it has been since May 2022. At this benchmark rate level, we are able to earn our full 0.50% spread. We believe the attractive rates we pay on customer cash are among the highest in the industry and are another important feature that draws customers to our platform.

Net interest income on margin loan balances rose compared to the prior year. This increase was due to the growth in margin loan balances in the current active market environment despite the average federal funds effective rate declining to 4.21% in the current year from 5.14% in the prior year.

Higher average balances contributed to a 13% rise in net interest income over the prior year. Net interest margin declined from 2.35% in the prior year to 2.08% in the current year primarily due to lower interest rates.

Currency fluctuations. As a global 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 year, the value of the GLOBAL, as measured in U.S. dollars, increased 2.05% compared to its value at December 31, 2024, which had a positive impact on our comprehensive earnings for the current year. A discussion of our approach for managing foreign currency exposure is contained in Part II, Item 7A of this Annual Report on Form 10-K entitled ‘‘Quantitative and Qualitative Disclosures about Market Risk.”