Interactive Brokers Group, Inc.

Previous wording

Interactive Brokers Group, Inc. (the “Company” or “IBG, Inc.”) is a holding company whose primary asset is its ownership of approximately 26.5% of the membership interests of IBG LLC. The remaining approximately 73.5% 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, 2026.

Current wording

Interactive Brokers Group, Inc. (the “Company” or “IBG, Inc.”) is a holding company whose primary asset is its ownership of approximately 26.6% of the membership interests of IBG LLC. The remaining approximately 73.4% 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, 2026.

Previous wording

We are an automated global 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, clearing and settling trades in stocks, options, futures, forex, bonds, mutual funds, ETFs and precious metals on more than 170 electronic exchanges and market centers in 40 countries and territories and 29 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 prediction markets, which are event-based contracts traded on ForecastEx, a CFTC-registered exchange and clearinghouse we established, and on other platforms.

Current wording

We are an automated global 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, clearing and settling trades in stocks, options, futures, forex, bonds, mutual funds, ETFs and precious metals on more than 175 electronic exchanges and market centers in 40 countries and territories and 29 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 prediction markets, which are event-based contracts traded on ForecastEx, a CFTC-registered exchange and clearinghouse we established, and on other platforms.

Previous wording

Our customer base is diverse with respect to geography and type. Currently, our customers reside in over 200 countries and territories. We serve individuals, as well as institutional accounts such as hedge funds, financial advisors, proprietary trading firms and introducing brokers. Specialized products and services that we have developed successfully attract institutional accounts. For example, we offer prime brokerage services, including financing and securities lending, to hedge funds; our model portfolio technology and automated share allocation and rebalancing tools are particularly attractive to financial advisors; and our trading platform, global access and low pricing attract introducing brokers.

Current wording

Our customer base is diverse with respect to geography and type. Currently, our customers reside in over 200 countries and territories. We serve individuals, as well as institutional accounts such as hedge funds, financial advisors, proprietary trading firms and introducing brokers. We have developed specialized products and services for institutional accounts. For example, we offer prime brokerage services, including financing and securities lending, to hedge funds; our model portfolio technology and automated share allocation and rebalancing tools, which are particularly attractive to financial advisors; and our trading platform, global access and low pricing for introducing brokers.

Previous wording

During the quarter ended June 30, 2026 (“current quarter”), most global equity markets advanced, with several major indices reaching new all-time highs, supported by strong technology earnings and heightened investor interest in artificial intelligence (“AI”)-driven themes, despite persistent uncertainties related to ongoing geopolitical conflicts and inflationary pressures. In the Americas, U.S. equity markets rose, with the S&P 500© index increasing 14.9%, compared to the prior quarter, to a new high. Most European markets also rose, while the Asia-Pacific region saw gains in China, Australia, and Japan while Hong Kong fell.

Current wording

During the quarter ended September 30, 2026 (“current quarter”), a number of prominent markets advanced, led by the U.S., while others, particularly in Asia, declined. Several major market indices reached new all-time highs, supported by continued strength in technology earnings and sustained investor interest in artificial intelligence (“AI”)-driven themes, overcoming persistent uncertainties related to ongoing geopolitical conflicts and inflationary pressures. In the Americas, U.S. equity markets rose, with the S&P 500© index increasing 2.0% compared to the prior quarter and reaching a new all-time high. European markets overall declined slightly compared to the prior quarter. The Asia-Pacific region was mixed, with gains in Hong Kong and Australia and declines in Japan and China.

Previous wording

Inflationary pressures persisted throughout the quarter, contributing to continued uncertainty regarding monetary policy across several major economies. Most central banks opted to hold policy interest rates steady, adopting a cautious, wait-and-see approach, though rates were raised in several currencies. Ongoing geopolitical conflicts, higher energy prices, and trade policy uncertainty weighed on the likelihood of near-term rate cuts, and expectations for additional monetary easing diminished. Despite this ambiguous environment, retail investor participation remained elevated, with continued engagement in equity, futures and options markets.

Current wording

Inflationary pressures persisted throughout the quarter, contributing to uncertainty regarding monetary policy across several major economies. Many central banks raised policy interest rates to manage inflation. Expectations for future monetary tightening increased as inflation stemming from ongoing geopolitical conflicts and higher energy prices persisted. Despite rising rates, retail investor participation remained elevated, with continued engagement in the equity, futures and options markets.

Previous wording

Global trading volumes. Worldwide, equity trading volumes at most major venues increased during the current quarter compared to the prior-year quarter. In the U.S., according to industry data, average daily volume increased by 10% in listed cash equities and 27% in exchange-listed equity-based options, while futures were flat, compared to the prior-year quarter. Options trading volumes continue to benefit from the growing popularity of shorter-dated contracts. In futures markets, volumes decreased in interest rates, energy and foreign exchange products and increased in equity indices, metals and agriculture products as market participants sought to manage exposure to ongoing economic and geopolitical uncertainties.

Current wording

Global trading volumes. Worldwide, equity trading volumes at most major venues were mixed during the current quarter. In the U.S., according to industry data, average daily volume in listed cash equities decreased by 4%, while exchange-listed equity-based options increased by 15% and futures volumes by 17%, compared to the prior-year quarter. Options trading volumes continue to benefit from the growing popularity of shorter-dated contracts. In futures markets, volumes increased across all major product categories, including equity indices, interest rates, energy, agriculture, foreign exchange and metals as market participants sought to manage exposure to ongoing economic and geopolitical uncertainties.

Previous wording

Volatility. U.S. market volatility, as measured by the average Chicago Board Options Exchange Volatility Index (‘‘VIX®’’), decreased by 22% from an average of 23.7 in the prior-year quarter to 18.3 in the current quarter. In general, higher volatility typically enhances our performance because it often correlates positively with customer trading activity across product types. However, the current quarter’s strong volumes, particularly in equities and options, indicate that volatility is only one of several factors influencing market participation.

Current wording

Volatility. U.S. market volatility, as measured by the average Chicago Board Options Exchange Volatility Index (‘‘VIX®’’), increased marginally from an average of 16.0 in the prior-year quarter to 16.1 in the current quarter. In general, higher volatility typically enhances our performance because it often correlates positively with customer trading activity across product types.

Previous wording

Interest Rates. The U.S. Federal Reserve has kept the benchmark federal funds rate unchanged during the first half of 2026, after cutting it three times in the second half of 2025 by a total of 75 basis points, maintaining a target range of 3.50% to 3.75%, the lowest level since late 2022. During the current quarter, the U.S. Treasury yield curve inversion from the short to medium-term flattened before exhibiting a more consistent upward profile toward longer-term rates. Outside the U.S., benchmark interest rate policies were mixed across countries and territories with developed financial markets, with rates remaining unchanged in the U.K., Canada and Hong Kong, and rising in Europe, Japan and Australia, where those central banks adjusted monetary policy in response to inflationary pressures.

Current wording

Interest Rates. On September 16, 2026, the U.S. Federal Reserve raised the benchmark federal funds rate for the first time since August 2023, by 25 basis points, to a target range of 3.75% to 4.00%. Early in the current quarter, the U.S. Treasury yield curve inversion from the short- to medium-term flattened, before exhibiting a more consistent upward profile toward longer-term rates later in the quarter. Outside the U.S., benchmark interest rate policies were mixed across developed financial markets, with rates remaining unchanged in the U.K. and Canada, and moving higher in Europe, Japan, Hong Kong and Australia.

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. A relatively flat near-term yield curve and uncertainty over future U.S. Federal Reserve rate policy have led us to maintain a short duration portfolio, substantially all of which contained maturities of less than three months as of June 30, 2026, 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

Higher U.S. benchmark rates increase the interest we earn on our segregated cash, the majority of which is invested in short-term U.S. government securities and related instruments. A relatively flat near-term yield curve and uncertainty over future U.S. Federal Reserve rate policy have led us to maintain a short duration portfolio, substantially all of which contained maturities of less than three months as of September 30, 2026, to more closely match our asset and liability maturities on our interest-sensitive assets. Further, our margin balances are tied to benchmark rates, so higher rates also increase 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.

Previous wording

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. Any rate cuts are passed through to our customers, so we maintain a 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.

Current wording

As an offset, higher rates also increase our interest expense. For example, we pay interest to customers on their qualified U.S. dollar cash balances when the federal funds effective rate is above 0.50%, which it has been since May 2022. Any rate hikes are passed through to our customers, so we maintain a 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.

Previous wording

Net interest income on margin lending rose compared to the prior-year quarter. This increase was due to the growth in margin loan balances in the current active market environment, despite the decline in the average federal funds effective rate to 3.63% in the current quarter from 4.33% in the prior-year quarter.

Current wording

Net interest income on margin lending rose compared to the prior-year quarter. This increase was due to the growth in margin loan balances in the current active market environment, despite the decline in the average federal funds effective rate to 3.67% in the current quarter from 4.30% in the prior-year quarter.

Previous wording

Higher average balances contributed to a 23% rise in net interest income over the prior-year quarter. Net interest margin declined from 2.07% in the prior-year quarter to 1.93% in the current quarter primarily due to lower interest rates.

Current wording

Higher average balances contributed to a 19% rise in net interest income over the prior-year quarter. Net interest margin declined to 1.99% from 2.16% in the prior-year quarter primarily due to lower interest rates.

Previous wording

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 quarter, the value of the GLOBAL, as measured in U.S. dollars, decreased 0.21% compared to its value at March 31, 2026, which had a negative impact on our comprehensive earnings for the current year. 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 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 0.08% compared to its value at June 30, 2026, 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 $0.69 for the current quarter, compared to diluted earnings per share of $0.51 for the prior-year quarter. Adjusted diluted earnings per share were $0.69 for the current quarter and $0.51 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 $0.69 for the current quarter, compared to diluted earnings per share of $0.59 for the prior-year quarter. Adjusted diluted earnings per share were $0.67 for the current quarter and $0.57 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 $1.90 billion and income before income taxes was $1.46 billion, compared to net revenues of $1.48 billion and income before income taxes of $1.10 billion in the prior-year quarter. Adjusted net revenues were $1.88 billion and adjusted income before income taxes was $1.44 billion, compared to adjusted net revenues of $1.48 billion and adjusted income before income taxes of $1.10 billion in the prior-year quarter.

Current wording

For the current quarter, our net revenues were $1.91 billion and income before income taxes was $1.50 billion, compared to net revenues of $1.66 billion and income before income taxes of $1.31 billion in the prior-year quarter. Adjusted net revenues were $1.87 billion and adjusted income before income taxes was $1.45 billion, compared to adjusted net revenues of $1.61 billion and adjusted income before income taxes of $1.27 billion in the prior-year quarter.

Previous wording

Net interest income increased 23% to $1.06 billion on higher average customer margin loans and customer credit balances.

Current wording

Net interest income increased 19% to $1.15 billion primarily on higher average customer margin loans and customer credit balances.

Previous wording

Other fees and services increased 40% to $87 million, led by increases of $9 million in payments for order flow from exchange-mandated programs, $8 million in risk exposure fees, and $3 million in market data fees.

Current wording

Other fees and services increased 33% to $88 million, led by increases of $11 million in risk exposure fees, $3 million in payments for order flow from exchange-mandated programs, and $3 million in market data fees.

Previous wording

Execution, clearing and distribution fees increased 22% to $142 million, driven by a $19 million increase in regulatory fees, as the SEC Section 31 transaction fee rate increased on April 4, 2026; partially offset by greater capture of liquidity rebates from certain exchanges due to higher trading volumes in stocks and options.

Current wording

Execution, clearing and distribution fees increased 46% to $134 million, mainly driven by a $30 million increase in regulatory fees due to a higher SEC Section 31 transaction fee rate.

Previous wording

Pretax profit margin was 77% for the current quarter compared to 75% in the prior-year quarter. Adjusted pretax profit margin for the current quarter was 77% compared to 75% in the prior-year quarter.

Current wording

Pretax profit margin was 78% for the current quarter compared to 79% in the prior-year quarter. Adjusted pretax profit margin for the current quarter was 78% compared to 79% in the prior-year quarter.

Previous wording

Total equity as of June 30, 2026, was $22.3 billion.

Current wording

Total equity as of September 30, 2026, was $23.3 billion.

Previous wording

In connection with our currency diversification strategy, as of June 30, 2026, 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 $36 million (compared to an increase of $301 million in the prior-year quarter), as the U.S. dollar value of the GLOBAL decreased by approximately 0.21% compared to its value as of March 31, 2026. The effects of our currency diversification strategy are reported as (1) a component of “Other income” (gain of $21 million) in the condensed consolidated statements of comprehensive income and (2) other comprehensive income (“OCI”) (loss of $57 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.

Current wording

In connection with our currency diversification strategy, as of September 30, 2026, approximately 24% 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 $4 million (compared to an decrease of $33 million in the prior-year quarter), as the U.S. dollar value of the GLOBAL decreased by approximately 0.08% compared to its value as of June 30, 2026. The effects of our currency diversification strategy are reported as (1) a component of “Other income” (gain of $40 million) in the condensed consolidated statements of comprehensive income and (2) other comprehensive income (“OCI”) (loss of $44 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

New legislation or modifications to existing regulations and rules could occur in the future. Scrutiny in the use of artificial intelligence ("AI") and information security by regulatory and legislative authorities has increased.

Current wording

New legislation or modifications to existing regulations and rules could occur in the future. Scrutiny of the use of AI and information security by regulatory and legislative authorities has increased.

Previous wording

Total net revenues, for the current quarter, increased $416 million, or 28%, compared to the prior-year quarter, to $1.90 billion. The increase in net revenues was due to higher net interest income, commissions, other income, and other fees and services.

Current wording

Total net revenues, for the current quarter, increased $259 million, or 16%, compared to the prior-year quarter, to $1.91 billion. The increase in net revenues was due to higher net interest income, commissions, and other fees and services; partially offset by lower other income.

Previous wording

Commissions, for the current quarter, increased $157 million, or 30%, compared to the prior-year quarter, to $673 million, driven by higher customer trading volumes in options, stocks and futures. Total customer options contract, stock share and futures contract volumes increased 17%, 14% and 2%, respectively. Total DARTs for the current quarter increased 36% to 4.8 million, compared to 3.6 million for the prior-year quarter. Average commission per commissionable order for cleared customers decreased slightly to $2.64 for the current quarter compared to $2.65 for the prior-year quarter, primarily due to smaller order sizes in foreign exchange and greater capture of liquidity rebates. As pass-throughs, the liquidity rebates affect both our commission revenues and our execution costs.

Current wording

Commissions, for the current quarter, increased $65 million, or 12%, compared to the prior-year quarter, to $602 million, on higher trade volume and higher regulatory fees, which are passed through to customers. Total futures contract volumes increased 13%, while stock share volume and options contract volumes decreased 24% and 1%, respectively. Total DARTs for the current quarter increased 18% to 4.3 million, compared to 3.6 million for the prior-year quarter. Average commission per commissionable order for cleared customers decreased 4% to $2.59 for the current quarter compared to $2.70 for the prior-year quarter, primarily due to smaller order sizes across all products.

Previous wording

Other fees and services, for the current quarter, increased $25 million, or 40%, compared to the prior-year quarter, to $87 million, driven by a $9 million increase in payments for order flow from exchange-mandated programs driven by higher customer trading volume, an $8 million increase in risk exposure fees, a $3 million increase in market data fees due to our growing customer base, and a $1 million increase in FDIC sweep fees on higher customer balances.

Current wording

Other fees and services, for the current quarter, increased $22 million, or 33%, compared to the prior-year quarter, to $88 million, driven by an $11 million increase in risk exposure fees in a more risk-on environment, a $3 million increase in payments for order flow from exchange-mandated programs driven by strong options volumes, and a $3 million increase in market data fees due to our growing customer base.

Previous wording

Other income, for the current quarter, increased $37 million, or 88% compared to the prior-year quarter, to $79 million. This increase was mainly due to $26 million related to our currency diversification strategy and $11 million related to our investing activities.

Current wording

Other income, for the current quarter, decreased $15 million, or 18%, compared to the prior-year quarter, to $70 million. This decrease was mainly due to $54 million related to our investing activities; partially offset by an increase of $36 million from our currency diversification strategy.

Previous wording

Net interest income (interest income less interest expense), for the current quarter, increased $197 million, or 23%, compared to the prior-year quarter, to $1.06 billion. The increase in net interest income was driven by higher average customer margin loans and customer credit balances, partially offset by lower benchmark interest rates.

Current wording

Net interest income (interest income less interest expense), for the current quarter, increased $187 million, or 19%, compared to the prior-year quarter, to $1.15 billion. The increase in net interest income was driven by 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 $233 million compared to the prior-year quarter, driven by increases of $41.7 billion, $35.7 billion and $19.0 billion in average customer credit balances, margin loans, and segregated cash and securities, 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 $239 million compared to the prior-year quarter, driven by increases of $34.8 billion, $33.2 billion and $13.2 billion in average customer credit balances, margin loans, and segregated cash and securities, 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 27%, to $8.9 billion, and average securities loaned balances increased 93%, to $33.2 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, as reported, decreased $16 million, or 27%, compared to the prior-year quarter. 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 36%, to $12.3 billion, and average securities loaned balances increased 75%, to $36.2 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, as reported, decreased $68 million, or 51%, compared to the prior-year quarter. 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 $343 million in the current quarter, compared to $251 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 $427 million in the current quarter, compared to $314 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

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 above, the total net interest income related to our securities lending activities would have been $343 million for the three months ended June 30, 2026, compared to $251 million for the three months ended June 30, 2025. 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 above, 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 above, the total net interest income related to our securities lending activities would have been $427 million for the three months ended September 30, 2026, compared to $314 million for the three months ended September 30, 2025. 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 above, 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 condensed consolidated statements of comprehensive income. For the three months ended June 30, 2026 and 2025, $11 million and $9 million were reported in "Other fees and services", respectively; and $32 million and $18 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 condensed consolidated statements of comprehensive income. For the three months ended September 30, 2026 and 2025, $11 million and $10 million were reported in "Other fees and services", respectively; and $26 million and $22 million were reported in "Other income", respectively.

Previous wording

Non-interest expenses, for the current quarter, increased $64 million, or 17%, compared to the prior-year quarter, to $440 million, mainly due to a $26 million increase in execution, clearing and distribution fees, a $19 million increase in employee compensation and benefits, a $9 million increase in customer bad debt expense, a $7 million increase in general and administrative expenses, and a $3 million increase in occupancy, depreciation and amortization expenses. As a percentage of total net revenues, non-interest expenses were 23% for the current quarter and 25% for the prior-year quarter.

Current wording

Non-interest expenses, for the current quarter, increased $75 million, or 22%, compared to the prior-year quarter, to $418 million, mainly due to a $42 million increase in execution, clearing and distribution fees; a $16 million increase in general and administrative expenses; an $11 million increase in employee compensation and benefits; a $5 million increase in occupancy, depreciation and amortization expenses; and a $1 million increase in customer bad debt expense. As a percentage of total net revenues, non-interest expenses were 22% for the current quarter and 21% for the prior-year quarter.

Previous wording

Execution, clearing and distribution fees, for the current quarter, increased $26 million, or 22%, compared to the prior-year quarter, to $142 million, mainly driven by a $19 million increase in regulatory fees, for a total of $34 million, from the re-initiation on April 4, 2026 of SEC Section 31 transaction fees, which had been set to zero since May 14, 2025; partially offset by greater capture of liquidity rebates due to higher customer trading volumes in stocks and options. SEC fees, as with other regulatory fees, are passed through to customers. As a percentage of total net revenues, execution, clearing and distribution fees were 7% for the current quarter and 8% for the prior-year quarter.

Current wording

Execution, clearing and distribution fees, for the current quarter, increased $42 million, or 46%, compared to the prior-year quarter, to $134 million, mainly driven by a $26 million increase in regulatory fees, largely from the re-initiation on April 4, 2026 of SEC Section 31 transaction fees, which had been set to zero since May 14, 2025; and a $9 million increase in market data fees. SEC fees, as with other regulatory fees, are passed through to customers. As a percentage of total net revenues, execution, clearing and distribution fees were 7% for the current quarter and 6% for the prior-year quarter.

Previous wording

Employee compensation and benefits expenses, for the current quarter, increased $19 million, or 12%, compared to the prior-year quarter, to $182 million, associated with a combination of staffing increases, inflation, and a $4 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 6% to 3,249 for the current quarter, compared to 3,059 for the prior-year quarter. As we continue to grow, our focus on automation has allowed us to increase our staff at a relatively modest pace. As a percentage of total net revenues, employee compensation and benefits expenses were 10% for the current quarter and 11% for the prior-year quarter.

Current wording

Employee compensation and benefits expenses, for the current quarter, increased $11 million, or 7%, compared to the prior-year quarter, to $167 million, associated with a combination of staffing increases and inflation. The average number of employees increased 5% to 3,274 for the current quarter, compared to 3,109 for the prior-year quarter. As we continue to grow, our focus on automation has allowed us to increase our staff at a relatively modest pace. As a percentage of total net revenues, employee compensation and benefits expenses were 9% for both the current quarter and the prior-year quarter.

Previous wording

Occupancy, depreciation and amortization expenses, for the current quarter, increased $3 million, or 13%, compared to the prior-year quarter, to $27 million, mainly due to higher rent expense for new offices and depreciation of computer equipment, as we continue to expand our data centers globally. 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.

Current wording

Occupancy, depreciation and amortization expenses, for the current quarter, increased $5 million, or 21%, compared to the prior-year quarter, to $29 million, mainly due to higher rent expense for new offices and depreciation of computer equipment, as we continue to expand our data centers globally. As a percentage of total net revenues, occupancy, depreciation and amortization expenses were 2% for the current quarter and 1% for the prior-year quarter.

Previous wording

General and administrative expenses, for the current quarter, increased $7 million, or 11%, compared to the prior-year quarter, to $68 million, driven primarily by a $2 million increase in legal reserves and a $1 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, increased $16 million, or 26%, compared to the prior-year quarter, to $78 million, driven primarily by a $9 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.

Previous wording

Income tax expense, for the current quarter, increased $20 million, or 20%, compared to the prior-year quarter, to $118 million, primarily due to (1) higher income before taxes at our operating subsidiaries outside the U.S.; (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 25.9% in the prior-year quarter to 26.4% in the current quarter; partially offset by (4) higher tax deductions driven by the annual vesting of the Company’s Stock Incentive Plan restricted stock units at a higher stock price than in the prior year.

Current wording

Income tax expense, for the current quarter, increased $22 million, or 17%, compared to the prior-year quarter, to $148 million, primarily due to (1) higher income before taxes at our operating subsidiaries outside the U.S.; (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 26.2% in the prior-year quarter to 26.6% in the current quarter; partially offset by (4) higher foreign tax credits.

Previous wording

Income before income taxes, for the current quarter, increased $352 million, or 32%, compared to the prior-year quarter, to $1.46 billion. Pretax profit margin was 77% for the current quarter and 75% for the prior-year quarter.

Current wording

Income before income taxes, for the current quarter, increased $184 million, or 14%, compared to the prior-year quarter, to $1.50 billion. Pretax profit margin was 78% for the current quarter and 79% 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 $1.88 billion, up 27%; adjusted income before income taxes was $1.44 billion, up 31%; and adjusted pre-tax profit margin was 77% for the current quarter compared to 75% 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 $1.87 billion, up 16%; adjusted income before income taxes was $1.45 billion, up 15%; and adjusted pre-tax profit margin was 78% for the current quarter compared to 79% for the prior-year quarter. See the “Non-GAAP Financial Measures” section below in this Item 2 for additional details.