IBKR - Earnings call transcript Q4 2019 | Interactive Brokers Group, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Interactive Brokers Group Fourth Quarter and Full-Year Financial Results Conference Call. At this time all participants are in listen only mode. [Operator Instructions] As a reminder, today's program may be recorded.

And I'd now like to introduce your host for today's program, Nancy Stuebe, Director of Investor Relations. Please go ahead.

Nancy Stuebe

you call. us thank XXXX our and conference earnings afternoon for for joining year-end Good Thomas on the again, but comments. Once is asked the will me Q&A, handle to present rest his the of call, and

is financial a materially the the belief in nature that company's actual represents indicated are control, As statements, certain from and by and events, company's today's or press include regarding the call statements. forward-looking condition reminder, release. forward-looking are possibly which We which refer not you future what disclaimers may their differ may our outside in these results of ask to

You should the in with SEC. contained also factors review description risk financial filed of our reports a

XX% were to XXXX. $XXX that ended of up XX%. margin double XXX,XXX, over Brokers numbers with Interactive again up the billion, Accounts and year was equity brokerage XX%, pre-tax record with client

side, On our our record, while tying the rose billion. balance billion, is $X.X sheet to $XX previous over equity margin total loans now

in fell $XXX Despite down our clients zero revenues lower Importantly, of fourth was quarter, non-core were believed rose $XXX to quarter the as decrease the in adjusted commission. XX%, how in big XX%. treasury much times to items million lead up events our and average rates Commission volatility, which effect where X% has three revenue, XX%. our that marks to and translation for a this lower were despite people expected portfolio net million, lowering year, be interest a currency rates, to of usual likely introduction revenue interest such our a the trade volatility, Federal on Reserve income net which is interest

clients will their offer execution, Interactive IBKR loan return to we ways ranging low rates, our introduced based our to and zero from frequency rates size, let trade we platform in Lite, Brokers, high currently price X.XX% margin extremely we technology to in we or and X.XX%, September, are now route offers for where with commission use which orders low margin IBKR payment. that clients but best There commissions and our two full you for can capabilities X.XX% traders and Pro know them at on

to a So about whom of well since to of have months is price have on about aware switched customers, execution a to far, of Pro, three and stay have with introduction Lite not we seen in client chosen tend X,XXX than Lite benefits switch we Because Pro, performance more have sophisticated X,XXX base the Lite. on to best XX% from our from we to Pro chosen that the IBKR they less business. have of impact the orders, major and

shown executed are has executions again their better $X.XX than lowering meaning We who very costs. customers, the our cheaper pleased industry information Pro at firm, U.S. stock once We Brokers IHS advantage. round That trading performance and per major orders experienced savings execution IBKR translates analyzed to by that for Markit third-party Interactive better, average. lot

to shares. We price, XXX intentions. not Instead, improvement our data. best venues customers' technology often the For practice founding buying orders. do of which traders price their for achieved selling the We we reveal not do want through and our through as never this searched selling available hidden superior many Pro over our IBKR market is or and all calculation, pick include our orders we choose for

who generating trade any a for specific benefit from itself This we superior about tend accumulated at most accordingly our but constantly software price more is of likelihood to venue. any pays executions. and and for the stock information customers loyal specific maintain, expensive to better refresh the During in search, statistical develop often, finding it

record margin Because a and our levels brokerage, are regulations, program Brokers different electronic segment to we broker XX% earned countries, Americas. can and and and company. pre-tax profits, an cash. come close on of international billion offering pre-tax our comes $X.X than margin. Interactive this requirements state-of-the-art of XX% primarily we low now outside interest is More and always other the for customer rates is automated achieved rates, technology, business other who There XXXX Brokerage accounts no currencies, high in profitability, Our been a of and the in has achieved the from while

country our in growth U.S., while the just by X.X% was Over X% grew accounts the in and everywhere over else. that last year, China, XX%, XX%

in place is future. more we where ourselves everywhere growing So, a see else

the enthusiastically they achieve our customers and This onboard they others. likely will will clients growth. to existing more recommend bring helps of we platform sign us The do customers recommendation to who us the a people up now, more as to faster we more our give more the the the customers and weeks new experience, in come following months. As us of new by more clients, our majority customers, the successful to

year, that growth of our Now, will over and of our half is XX% XX% strongest up posted equity, XXXX, a the our I for account well-diversified five client over segments. Individual make up and XX% client had and This last in year. our of customers growth client the go annual customer lucrative of equity accounts, segment commissions. XX%

for particularly helped securities expected significantly internationally. in to be increase see strong declined commissions lower growth account the were The pleased in customers’ stock we our and X% markets year. performance, worldwide fourth with would account the as volatility, So, quarter

our a XX% posted year, XX% brokers of grew decline Smaller to total. are commissions slight to and continue equity their overall difficult ones growth of justify own brokers find the Introducing is saw and and past our want. technology account as of of to international and accounts. over as while it Client X%, XX% of total, customers both their our X% and offer mid-sized access well global are maintaining the building and XX%

low on to costs. come capitalize brand they white our our and So, state-of-the-art us to technology

increase and costs grow services brokers to commitment us. the more only agencies pressures to time the increase, encouraging required and their countries competitive financial oversight over As in to industry, various of come as compliance

week our ability China had hear fund. of will it not roughly fast of who and to X,XXX and any able people account are to of the that China, believe not then We to until in XX% this any change suddenly have there extremely an near we to change are open a in them end do reason Mainland We year, about try with significantly. fund. us, slowed account the We last in growth future. only have yet the accounts seen Up

XX. as of our X% of accounts, Hedge equity, of of and X% December funds client X% constitute our our commissions

year, can hedge this volatility, fund market accounts a multi-trillion area. limit funds despite fund in dollar industry trading XX% of client in fund opportunities. lower growth room outflows. large equity. Growth For to to Hedge X% experiencing market, and commissions we and achieved XX%, global grow overall tremendous saw Hedge declined the the remain have due again to in we which continue hedge

Proprietary trading of XX% and firms commissions. our our are client of and our of accounts XX% X% equity,

here the traders our demonstrate grew the while their XX% growth accounts and in value in that continues year, and already this the segment, X%. for and For in to commissions Despite XX% sophisticated group well-penetrated fell appeal larger shows being accounts. platform their client equity,

by customer this group the accounts, client of They factors XX%, are Accounts XX% drive financial by XX% for our to Finally, will we grew year. X%, declined advisors. of XX% while equity in XX% our continue this and equity, of have commissions business. Two commissions. our

businesses their Compliance assistance you own RIAs up Group, want provides from compliance existing existing Greenwich open who and which and continues to Our registration an clearing away or RIAs new for to firm. sign move

rates interest the services and all environment fees and availability an RIAs high the on where cash looking Going contributes independent, to they rates, keep of low independent commission, become earn Greenwich advisors means paid segment. Compliance's are in to this more can growth in all our financing of

advisors a our clients sprout performance compete Second, heard We subject and we with with firm, with to to all fees CRM, their among seem market hidden many access. transparent consolidation competing do advisors, that reporting, want welcome who of no have in-house always to be portfolio free up. free competitors, them for or global not pricing, clearing the from

a is to customer There to that improve and lot XXXX forward looking in experience. we're the enhance

newly-launched fully clients XX,XXX a up full bond well bonds commissions as universe first and transparent corporate offer securities. on We securities, of XX,XXX U.S. with over mark will X.X our Bond on low our where municipal Scanner, enjoy CDs, see prices. bonds, as can no You government million

inventory, search You available our or other can of against those brokers. compare yields

you offer the or want. help you that yield ratings also We filters can select

at X.X access all ups. pass we always, the corporate offers this, with charge points highest and lowest venues bond, mark and we the a bids on will electronic to XX only For as through we no available basis

will future we also new improvements me say to who We with not Brokers Interactive new soon same all told and plans. categories new experience the our team, more any product offer, platform, about our was to markets, have

over will I go Brody, turn our who will Paul that, through numbers the for With quarter. the call the CFO, to

Paul Brody

joining Nancy. for Thank Thanks you, the call. everyone

As it that full-year to factors drove we'll those quarter and then main usual, fourth up numbers I'll review and the our results, the open and questions.

quarter, non-GAAP our currency mark-to-market of release, our items. non-core impact strategy, and including Beginning diversification will in global the with report treasury on we this portfolio, measures material other earnings our

presentation some We found be core the end in this calls income be which time. consider effects will our no reflected quarterly brokerage in effects, the for measures, stated Tables longer straightforward headline our these items, to can describing in have release. these think are our of been outside illuminate comprehensive performance at similarly effects Also, currency non-core numbers. a new manner. of we earnings earnings which We our

found the still of be the can statement they However, presentation. at end income

Along of individuals, revenues on We client lower Total operating world cash gains all to growth and strong XXXXXX, grew rates, pre-tax to contributes interest in XX% net accounts to interest customer and income net particularly volatility income equity markets by despite segments year-over-year. traders, equity and balances. are and growth client built brokers. growth account introducing around Turning saw driven market with data, solid proprietary rising up growth the XX%. in

trading year versus the multi-year led rose to average volumes and volatility a by strong when VIX, is last volatility to of lower market commissions XX.X. high measured the Lower lighter quarter

This in to fell down XX%, to an quarter, the average contributing decline XX, commission. VIX XX%

overall in dollar volumes. However, versus which stock XXXX, of led with growth well. These to not volumes all three U.S., benchmark income on in our rose volatility out rate, despite fourth categories. And Lower decline line fell balance. were and down quarter interest interest XX% cash customer in of were lower in primarily volumes net futures, XX% industry options, the as FX U.S.

of against in our all-time DARTs Measured the fourth quarter the fell total our XX%. XXXX, quarter high for

Full-year to for security the Results stocks by options. the commission's per slightly. and operational higher larger declined trade average fell while and momentum and driven trade average our net and customer lower reported business. leverage on full-year interest $X.XX, core cash by and volumes, X% XX% volatility X% income However, commission balances strong of only our reflected brokerage DART sizes continued grew

Lower echoing volumes seeing product industry categories overall volume in were most trend.

full-year, the and never the ago fourth X.XX% the and the DART quarter Net DARTs declined fell course margin to NIM in the consistently of For year in of shows volatility as total that average commission from widened table period. X% for the fell X%, year interest over reached ties XXXX. our X.XX%

all NIM the For Reserve XXXX, lending year. including rates up higher the XXXX. balances drove lowered our The rates rate increase. and reversing last lower also benchmark of three from year U.S. times interest course securities of Despite X.XX%, nearly FDIC over Federal segregated hikes in suites this business was the cash the X.XX%

our In for gain the the year we environment, the in treasury we the loss a of falling recorded During including fourth million on quarter. short U.S. kept a rate mark-to-market $X duration relatively the year, $X million modest portfolio.

year-ago rate and not these fully lending so of dollars. changes Segregate balances As rules in temporary, due rates and credit and securities strong plan net customer to that interest interest to one consider market to of not the our reporting. are our require Higher are primarily higher but U.S. hold income balance. XX% these rose securities securities about as to the as unlike always, more banks, cash income cash to This we mark us we customer changes. items net interest U.S., non-core. is correlated to XX% are our losses were financial be U.S. brokers in non-GAAP generates maturity, these balances interest to over quarter, mixed, gains gap income. Changes Outside

table. customers $XXX,XXX continues FDIC income. and Suite Our interest Insured to $X.X and This income but to income is the higher in Deposit FDIC account the up offers contribute much $X.X factors reported as balances Bank of in lower in NIM the including the Program interest billion our coverage. for reached this to to combination addition quarter insurance a interest of year-ago high declined rate. in statement, of benchmark with to revenue on XX% well loan in as program Note on year, million due rates interest net cash grow reported lower other Margin income than is the that

The growing themselves. lending the towards the opportunities the as rising of needs customers year our of margin present end support ability to reflects larger

income lending was Securities XX% as stock securities. the up advantage prior-year for and was short rate the interest XX% quarter, value up of high from end. satisfy hard continued took Customer this year to we to opportunities for borrow demand XX%

built instruments. isolate which Therefore, separate U.S. the for for would $XX rate, of rate impact or increase been into falling be new lower lower higher from result in follows. at run to next in four unanticipated $XX respectively decrease rate the is of expectations segregated as these or our as we instruments rate to interest cash a the typically cut. the XX million impact yearly in in we We income yields invest. have the changes is to of basis estimate quarters higher Our for hikes reinvested or net would of expect an the the are following rise million this basis Market a of attempt $XX and rates, and the our of hike increase rate impact prices rate million the point at the XX cuts point already earnings baked therefore next our immediately of into or calculation, that rate unexpected in rate

net gains fourth for both to income commissions and to trade lower due Turning period full-year the to the Brokerage produced volumes. Electronic declined segments, interest while quarter

with in as occupancy execution, million in volumes. reserve. million net levels X% XX% and revenues pre-tax line a quarter, $XXX million compensation well for For up increased pre-tax $XX were the categories as the clearing compliance $XXX down and brokerage to $XXX margin. expense including distribution million In fell higher X% modestly Fixed income XX% and expenses X%, trade fourth were was up legal expense contribution of to

of Customer $X period reflecting bad gain debt expense was quarter million prior recoveries this debt. bad a of

the a items, pre-tax a to options with adjusted was consisted X% Canada. For the income record making expenses operations have XX%. X% full-year, customer billion pre-tax activities non-core up for rose a in up in XX% margin Market revenues we Fixed to of also markets two making market the rose billion facilitation net now down and million to brokerage $X.XX X% outside record up $X.XX we reaching as will three for U.S. wound retain $XXX pre-tax margin.

keeping the income trading quarter, the the for which are absorbed if activities net year, income. million. $XX such should were revenues And and have were pre-tax are we minimal margin net in are was rest activities $XX largely For net impact of were the they related making revenue Expenses $X revenues and interest million pre-tax and on Market later offset income from million million $X gains $XX brokerage. million. was was by

the our reflects best strategy. effects segment of call equity international to basket Corporate of of reflect carry currency XX proportion We our The our business. scope Global a currencies in the we the diversification

an to $X.XX comprehensive and total income million currency be share $X.XX in reported incurred our million overall most $XX $XX and reported as $X.XX of in OCI. As earnings in quarter, increase million other included is strategy of from We $XX estimate other which as this gain the currencies income. with against we comprehensive per U.S. weakened the earnings major Dollar from is effects other

$X.XX The and overall as OCI. earnings $XX which with loss our the comprehensive For million, from is as loss in the effects from a included is of was $XX gain currency year currency was a of year, $XX income strategy share OCI. $X.XX of the per reported decrease reported million million loss other in and gain total earnings $X.XX for as

$XXX $XX up in all of million interest were items, strategy currency million options, for non-core look for futures net quarter than Commission items includes XX% volumes and product overall at larger over year. categories, fourth on reflected for DART brokerage received over last which revenues $XX income we cleared include our Brokers. modestly to quarter year-ago net and loss on $X average strategy, trade in revenues of income currency on revenue adjusted Treasury net in a marks, smaller sizes the the the declined quarter statement, up million were fees GLOBAL produced a gain our Taking million the million $XXX last million X% year. ForEx, X% was and Non-core other the X% a XX%. average decline investment in our income and lower Tiger mix in and commission stocks and the per income higher $X.XX Other $XXX

$X.XX net year. $X X% were million Treasury Treasury $X.XX on and $X strategy, the up prior-year marks gain on for investments For billion $X full-year were billion items revenues primary and $XX the the net net million million a from the GLOBAL last a the including full-year, adjusted million from marks. currency Non-core X% include In XXXX loss over XXXX, revenues our and up loss over gain gain Brokers. our Tiger million on items $XX non-core the other were

year, quarter partially legal compensation were with costs including expenses. the expenses clearing X% G&A debt fees execution, bad the increases from support distribution Non-interest and reflect expenses, and business growth brokerage lower for continued reserved higher last compliance offset by for and up $XXX million of and and

we compensation as we've customer previously higher the by year-end, G&A XX% debt on million in and continued non-interest from in well the At year, been full-year, in client quarter. disclosed our And up stood operations bad hiring development. aggressively our build-up last headcount primarily to as the event For first India. higher of areas expenses $XXX were XX% client services, end, the have at total this most have to up driven assistance we expenses X,XXX

$XXX on up margin adjusted income an up quarter, $XXX basis, For pre-tax over and the X% representing fourth XX%. of adjusted income million pre-tax also last year, an X% was pre-tax was million

billion pre-tax for $X.XX adjusted down For XX%. margin of was was $X.XX X% income and full-year, up non-core billion the X% for a pre-tax items

even earnings Diluted for and were per items $X.XX both non-core prior-year. the adjusted share $X.XX quarter the with for

per $X.XX earnings items diluted our year year, last fourth understand year. includes the currency and versus the interest, last Comprehensive public help were share, for split as For for $X.XX were share are which for earnings all XXXX $X.XX versus follows. $X.XX they year. earnings the non-core for per quarter adjusted diluted share last $X.XX earnings, the $X.XX, versus and effects diluted quarter was To XXXX, were taxes the and numbers better non-controlling investors $X.XX between shareholders per

the income is remaining non-GAAP of available our $XX on for But is the our we it see million, mostly or operating $XXX then is stockholders income not million million, XX.X% income of taxes our deduct income with common a public After for our you The deduct company public reported the reported remaining million least foreign company's by $X to company this million is $XX on we $XXX statement. attributable income interest. of paid million on net income $XX income before that is which available XX.X% statement. Starting at reported as shareholders. non-controlling taxes taxes measure, million statement from for $XXX

million of operating of $X income million $XX statement million the company. expense of this consists $XX paid our by tax income on The taxes line plus

opportunities, $X.XX brokerage deploying capitalized are billion are low balance remains equity regulatory in as grow, liquid well sheet capital as customer business and advantage in with demonstrate order as we of it a in capital leverage the our to financing, balance Our sheet. continues hold our we support excess additional for depth well from as with and strength equity, to such consolidated take highly of standpoint

although at December margin an year increase average year. billion, for debt debits carry $XX We margin debit peaked XX at off of from no continue to X% were XX% long-term last the and

fund balances due in customers expect to margin taking attracting who more success in on to swings in continue are lending our institutional We opportunistic hedge leverage.

of yields activity end at year facilitation was million the our and satisfy equity making in to opportunities. leverage are and of December Out the capital market we As brokerage, the take customer of in increasingly XX, when on demonstrates, billion corporate. willingness well-positioned $X.XX activities $XXX billion, present XXXX customers' market held $X.XX to in remainder consolidated

Now, can I'll to turn the take call over the moderator, and back we questions.

Operator

comes Sandler. question Rich Repetto from Certainly. Piper of [Operator Instructions] Our line from first the

Your question, please?

Rich Repetto

good I missed said you the some and Thomas, I on I just of right to Nancy. to from just Pro came and call, back Yes, of the said Lite -- moved I behind Pro, guess beginning trying the the evening, part X,XXX That's Lite. what's the IBKR thought numbers, those X,XXX and numbers Paul, and XX% back. explanation get. guess? I is customers, last and you movement, understand what the didn't I'm going

Thomas Peterffy

So, let generalize me -- so them. it little the is from numbers to difficult very that are

the gave I you So, last as numbers of night.

accounts. As last X,XXX had Lite business the we close at night, of of

approximately Lite. So, from have accounts accounts, so and were X,XXX Pro, of X,XXX rest the new Roughly, XX% applicants. new of switched are or

So, it still very is tell. to early

generalize we commissions concerned, very because our Pro it's you to far before, between pay roughly profitability as Lite even, difficult the and commissions as the said more and trade on know, the are have less you trade. As the think that as next we profitability you but is is tiered

in the order for Pro a receive trading would payment as what infrequently on smaller So, than accounts their we commissions result, flow. pay more

the payment we trading less On commission flow. for what more accounts hand, order in other frequently than the pay receive

In and than receive than on Pro addition, the accounts less cash they the Pro margin, interest more accounts, Lite pay the accounts. X% interest X%

Lite and more a it's be difference. all-in-all, we'll accounts, as able more pretty discern accumulate even to maybe So, we

Rich Repetto

it sort that I talk of question guess, on can stands impact is, where of the what about Okay. you and bank license, I Thanks, guess an another Thomas. commercial have? will sort

Thomas Peterffy

the impact, going So very it very we feel as impact gradually, that gradual. far start the as is up be and question-and-answer will to phase,

FDIC loans, enter we're and and slowly insured it deposits up into non-purpose take very and some will build going secured to we deposits, carefully. we'll time First,

Rich Repetto

from like I guess last you have advantage Thomas, else there but we And growth days, -- color it high coming introducing in same more know can the it you in through grown little seeing the bit predominantly question, brokers is this a when is on the did wherever way is you else growth wherever a where growing these and like was the are technology talk, fast, in Asia advantage, just you region?

Thomas Peterffy

financial actually outside are So, the of individuals, individual Asia, Americas. inside of of we Americas. in picked been faster growth course bit there the and XX% more competition States has [Indicsernible] little brokers there, -- our has are have of mean and up I around growth, outside outside of United highest are outside the growing of advisors yes, hedge less Americas, funds and funds than are also and hedge outside few Europe a growth very because

Rich Repetto

Okay. much, Thank you Thomas. very

Operator

Thank you.

Our of next the KBW. question Kyle Voigt comes from line from

please? question, Your

Kyle Voigt

evening. good Hi,

is from that China, the in are First growing China I question just that to X% year-over-year clarify, on China. noted you Mainland, accounts wanted just is and…? specifically,

Thomas Peterffy

Yes.

Kyle Voigt

Okay. were that's of actually think like And to moved is part so… it that disclosed second of be question being a previously rate, accounts sounds X% opened so just to to funding the funded, that were I attempted you rate, the related then, X% XX%, up funding

Thomas Peterffy

question the applications that have versus accounts that been Sorry, is account -- at look start you so that's applications that whether -- must complete. X%

fund. successfully XX% account completed applications So, roughly

nothing… Now,

Kyle Voigt

Okay.

those… no been there's change in So,

Thomas Peterffy

to fund. never inability [Multiple and application to speakers] the that's with finish, got but do nothing account

Kyle Voigt

Understood.

funding of in change been over, say, no quarters? So, couple rate that the let's there's past

Thomas Peterffy

mean over roughly and fluctuates been week-to-week six that's right. there mean, big equal. I months, I the No, last from hasn't no, either months-to-months, a way but it change

Kyle Voigt

Understood.

Thomas Peterffy

been months, of last Over a much nine hasn't change. the there

Kyle Voigt

just the trading on of a - gone on in wondering some basis, was daily we July Second just question you those to of share your that I stake, ownership yet, sales selling for could into begin year last expect when why effect hasn't think plan commence? and to set your shares

Thomas Peterffy

soon. ready, very I I haven't just will I’m – be but not

Kyle Voigt

share to price has with or…? the That do

Thomas Peterffy

thing. emotional an It's

Kyle Voigt

Okay. the expenses. one And on is me then, from last just

about full-year, growth XXXX XXXX? the expenses think expense X% to I the we for we're for of in broker just were as think fixed in the up should out looking pace similar wondering XXXX, year-over-year a

Thomas Peterffy

Yes.

Kyle Voigt

Okay. Thank you very much.

Operator

Thank you.

Our Sachs. question Will from the Goldman comes of next Nance with line

Your please? question,

Will Nance

earn a can everyone. there the interest impact saw of I a rates that and kind of net was on a bit Hi, of margin? some wanted the afternoon. in I on Good how quarter, rates the Maybe last start just you know to there any, of and quarter, much lag clarify of lag you guess that I kind of about this we've lending impact rate just around think in SEC where and do if seen? holding in how the fully levels because you cuts bounces NIM the is out, that constant quarter, know, factors all

Thomas Peterffy

ahead. Paul, go

Paul Brody

Yes, sure.

kept we've lag right spoken very well, you're some time. we've So, and what in lag identify about to environment, That time, especially the short. rate decreasing

XX has days. say, less I'd typically than duration been, our So,

far next no similar going gotten what not it able results see going to a yield Feds I -- be what can tell might me curve, comment and to constant on you're do, changes, the we've quarter. the outlook, rate to stays expect, with no basically if you in as the to As probably is and much of that,

Will Nance

what's if there's for relate that can just quick color give That's of in was maybe us I of provide wondering anti-money it. these driving Act, Got just a had they what the one, sense issues disclosure? helpful. Bank to due to just Secrecy practices. responding then, to any from the to or regulators this And think status laundering-related you you've various disclosure inquiries earnings about I a on release kind

Thomas Peterffy

We expect to wind it up this quarter.

Will Nance

Great. questions. All right, thank you taking all my for

Operator

you. Thank

Chris Compass a from Allen from next of Our Point. line comes question

question, Your please?

Chris Allen

outside and growth, seeing growth ago. a specific accelerations bit or give be the on markets Good to I any year are wondering Americas, little maybe of you if where the -- versus you may everyone. a evening, I terms in the wanted granularity follow-up driving China of that and us was

Thomas Peterffy

We don't granularity no to know than information giving is because I get in point there any more competitors. more we are,

Chris Allen

and starting project Goldman pivoting compliance side, end. it And looks then, they're at rebuilding talked like the you an expense on the enough. to come three-year a conference, to Fair and surveillance, about

sustain and fairly Would acceleration Some expense the of you recent expenses? part in was periods. of do other trajectory, of off are likely have that in of assuming a it's the be project, terms as side I'm -- the expense it on falling on part there they large coming the in to or impact projects terms of driving an the

Thomas Peterffy

have unlike other we we go get more So, can by can, as and do always for than developers done. to project. hire companies, We many we we as most not try work them

not -- expenses we development. will will and you doing keep see means more that on growing are that that hope So, more we because the that

where we that's are. So

Chris Allen

Now, just was the $XX missing I'm $X impact quick million just of the other what -- other on one $X within the the on $X for was, government, a piece million wondering million mark-to-market Tiger, it there? the the income, the million,

Paul Brody

And I'm sorry, in other income?

Chris Allen

million… impact $XX mark-to-market the of Yes,

Paul Brody

Right.

Chris Allen

have U.S. -- wondering reconciliation, the that I'm and million I'm Tiger, was? wondering, government, just million you $X was $X $X in million the just other what

Thomas Peterffy

Casually?

Paul Brody

that data of many categories, like category income other other the exposure up market it's the category. remainder across the fees, and in so as makes and And different income Well, spread a forth. of

Chris Allen

the month. after I Thanks. to follow-up got

Operator

Thank you.

Wells line Our Chris next of from from question comes Harris Fargo. the

Your question, please?

Chris Harris

Thanks, guys.

has potential the customers Schwab firms. some of merger the So, create those to for disruptions Ameritrade the

do mentioned of that for could had how might two that like you an advisor is companies you guys conversations advisors you businesses, potential mean average opportunity, And advisor that consider? destination disruption and think be big a might what those an Interactive? the I your about increased consider platform could think with financial their for advisor think guys some do Ameritrade potential and combining average Schwab it having some for

Thomas Peterffy

merger concerned great Well, Many less generally the and entities They registered many less so most than they innovation. believe technology hope to to that able on technology. the investment better of competition advisors. they'll among are use about most worry -- the continue about Schwab's, TD's platform we that TD's be and will entities the is

We kind. internally-employed I Schwab of worried think RIAs has will basically that's case, we really the is them. hear. one two RIA but Some the with inquiries don't are who what that's get most of that compete

the platform are they worried back. Schwab over to "No, on and and be go about don't say, for I not having Some reason went go to people who used whatever want back, to to Ameritrade

the will the now that show And So, Ameritrade Fidelity, I RIAs of looking got." as big? a us they and fall substitute. of larger Schwab that other out, are me one is many know. use you to both them don't and and type How what

Chris Harris

to I'm have about they? there? Okay. there And what in I'm not, how part stock really about wondering And of If handful Are business? should Thank of driving stocks follow-up, business. That's all part one a helpful. strong curious of so, results if quarter that think we you. that you then, the another just don't them. for of sustainability just are mention are your And that lending, your

Thomas Peterffy

the There in more are are others. demand that a handful than always

we're we them. yes, lot, entire enough That So, is the that automated what have lucky to think matters important but is have I a most process.

for, much how much our for. stock really we much people who inventory borrow can how we to clients of and So, how are it have, our presentation automated lend see our

interesting So, market, see they a online, us basically that customers. constantly and brings online borrow

grow future. it expect to we yes, the in So,

Chris Harris

you. Thank great. Okay,

Operator

Instructions] you. from Gabelli. Thank Mac question Our line comes [Operator the next from Sykes

Your question, please?

Mac Sykes

Good evening, everyone.

Just new that kind of for platform? you're nuances -- about to things you what China talk clients geography just of is they're the of could just from some back little product to seeing those in that are demand your a bit, accounts, accessing terms in circle there funding

Thomas Peterffy

question. I I'm I sorry. don't The to don't answer I'm know. unable answer is your know.

Mac Sykes

this kind talked about differentiate of wondering to think with to investor cost trading two if at Okay. respect of sort around was understanding commission as platforms? the And true zero kind of all I kind advertising you've and yourselves adjusted those you've the of and trading, of I your new environment education then, of

Thomas Peterffy

I seen both one Well, and for don't you. and experience is you yourself decide we're our that, us know to if you've basically sides come look, better ad, what for which saying can

Mac Sykes

Okay. Thank you.

Thomas Peterffy

that again, is that may execution know, out it the XXX%, rates a -- it's commission not are We differently. you work different believers great more on that Pro mean charge, the but than better I is we by

Mac Sykes

you. Thank

Operator

for conclude to today's program. remarks. program Nancy would session Stuebe question-and-answer to hand this And you. Thank back does the any of the further I like

Nancy Stuebe

today. everyone you Thank participating for

be on replay this call will Web site. our As a available for reminder,

quarter tomorrow. you posting also be Thank we will our transcript you on next We will again, version of clean end. site a our and to talk

Operator

in program. does for gentlemen ladies today's the This conference. you, your participation Thank and conclude

You disconnect. may now Good day.

Interactive Brokers (IBKR) 21 Jan 202019 Q4 Earnings call transcript