stockrowLatest quarter
Interactive Brokers reported Q3 revenue of $1.9 billion, up from $1.7 billion a year earlier. On the consensus basis, revenue was $1.9 billion against an estimate of $1.8 billion. Adjusted earnings per share matched the $0.67 consensus. Diluted earnings per share rose to $0.69 from $0.59.
The company’s filing attributed the revenue increase to higher net interest income, commissions and other fees, partly offset by lower other income. Net interest income was $1.2 billion, as higher average customer margin loans and credit balances more than offset lower benchmark rates. Commission revenue was $602.0 million; the filing said higher trading activity and regulatory fees passed through to customers contributed to the increase.
The filing said futures trading volumes rose, while stock and options volumes fell. It attributed higher non-interest expenses to costs including execution, clearing and distribution fees. Interactive Brokers’ operating margin was 78.1%, compared with 79.2% a year earlier.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $1.9 billion | $1.7 billion | 15.6% |
| Diluted EPS | $0.69 | $0.59 | 16.9% |
| Gross margin | 93.0% | 94.4% | −1.4 percentage points |
| Operating margin | 78.1% | 79.2% | −1.0 percentage point |
| Free cash flow | $6.2 billion | $7.1 billion | −13.0% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $0.67 | $0.67 | In line |
| Revenue | $1.9 billion | $1.8 billion | Beat by 1.85% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
The available earnings call commentary is from Q2, preceding the Q3 results. On that call, CFO Paul Brody attributed commission growth to trading by a growing customer base across stocks, options and futures. He said margin borrowing reflected a risk-on environment and new accounts contributed to growth in the segregated cash portfolio.
Brody said higher balances lifted net interest income, partly offset by interest paid on customer cash. He also said the company had extended the duration of its investment portfolio somewhat while maintaining a close maturity match between assets and liabilities. Regulatory fees had raised both commission revenue and execution costs because they were largely passed through to customers, he said. The reported and adjusted pretax margins were the same for Q2, according to Brody.
Asked about securities lending, Brody said revenue depended both on customer balances and on the availability of particular hard-to-borrow stocks. He said the company’s fully paid lending program shares lending earnings with customers, while its systems and teams are built to take advantage of lending opportunities.
CEO Milan Galik said the company wanted to expand customers’ access to prediction markets and the liquidity available to them, including to attract institutions. He said Interactive Brokers remained focused on event contracts that could affect clients’ portfolios.
Galik also discussed customer use of AI chatbots connected to brokerage accounts. He said clients could access account data and submit trading instructions, but had to approve an instruction before it became an executable order. Galik said the company planned to offer fully autonomous trading in the future, with safeguards and a test of clients’ understanding of its benefits and dangers.
Guidance
On the earlier Q2 call, CFO Paul Brody estimated that an increase in the federal funds rate would lift annual net interest income, while a reduction would lower it. He based those estimates on balances at the end of Q2.