IBKR - Earnings call transcript Q2 2024 | Interactive Brokers Group, Inc.

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Operator

Hello, and thank you for standing by. Welcome to Interactive Brokers Group Second Quarter 2024 Earnings Call. [Operator Instructions]

I would now like to turn the call over to Nancy Stuebe.

You may begin.

Nancy Stuebe

you. Thank thank call. us and quarter our for earnings XXXX you afternoon, for joining second Good

today Thomas Paul us on available our I Joining on are be the President Milan and will X and Galik, business, Chairman; the and CEO; will Milan's Q&A. and presenting Brody, all CFO. Peterffy, our comments our be Founder

the their As company's are regarding future belief represent the a reminder, company's and today's certain call which, control. may nature, by include outside not of forward-looking statements, which are events,

actual in We differ, the is you Our release. financial materially, possibly may to press results condition these and from what disclaimers refer ask indicated in our statements. forward-looking that

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

results. to markets, positive declined as began Europe, such played divergent quarter, Canada, quarter rose crosscurrents geopolitical markets, this China to world market Reserve XX central all benchmark and The other central Europe started seen maintain Switzerland, bank beginning central rates other to and chose move stock U.S. after the S&P out. XXX rates as as and first on the Japan, basis while while quarter countries, this markets ways front points. like Federal in bank developed in strong Canada, differences banks previously This with cut quarter Further Australia, were

to their changed, particularly but the investment increasingly to of more investors popularity global in home in not is some that U.S. investing interest however, The that securities, portion portfolios broad a their want who allocate the has and from remains markets, portfolio significant global One investors ongoing international securities overseas fact trend of secular with access.

first futures volumes, actively contract quarter last on industry-record X% up investors less down the options using down in trading interest rate though were a futures the XX% the for had to Similar year, rates direction than industry primarily on the of blistering though options, last versus were interest of quarter. they CME volumes year, Product-wise, first quarter. in against ahead industry,

front, were for drivers of the contributing stocks, all of Magnificent in gains equities, quarters volumes, X U.S. again industry of main the up market responsible though fraction In that. X Apple, the a the performance, this last quarter. and, year, On nearly were X% of equities Seven the with NVIDIA U.S. versus quarter S&P's and once down just

not were all again prior backdrop, changes, in and buying we see and for holding as the their down As clients quarter volumes like them investors our new are active as in quarters, the year flat result. looking to on a remain Against product make both volumes up equities recent Industry to selling our and this to categories. positions names. all

this quarter individual, platform, of by institutional kinds clients both and the the year. of added quarter The investors product across to of towards all accounts stock We our countries up and account first to mean and XXXX of investing trend We days added behind new type all quarter, in continuing only XXX,XXX first this continues as geographies. numbers. the more across we our strong show saw global growth

that the New markets. record money accounts a as $XXX.X to billion, accounts, in credit client their which volumes balances our work in meant helped to raise more our cash show even clients those our put

$X.X lower to anticipation have Our this billion, markets month. of total $XXX up on shy client was in we ended XX% client the assets, equity up with year Rising trillion and clients to taking rates a more of led which was just feel exceeding equity figure comfortable over last risk.

income, quarter, leverage and loans, to on our positions, all which strong a this financial $XX our translated exposure more increased of which took our revenue, positions, which margin record assertive reached interest margin results. increasing billion more on took their they into bolster So fee both and

revenue net on our record our income quarter reached an and a of was spike reported XX% margin record, XXXX, our pretax revenues. stock pretax the mean and of margin XX%. We expenses, first a meaning pretax also to maintained only as reached reached focus the with do income interest of adjusted second Commission total net profit industry-leading

In X not particularly, individuals mentioned and, far U.S. with segments, was terms and investors again what access and our and account front, proprietary numbers worldwide earlier, introducing wanting our behind. looked of traders in equity fastest to the client growing the markets. on to seen international Europe how business the I similar once fastest Of of with growth brokers client Asia, accounts client grew

client growth was equity brokers brokers was by Commission interest advisers traders proprietary again the individuals. funds, grew income the side, by fastest followed once growth and led financial introducing net followed and On our hedge while by individuals. for fastest,

WorldTrader our potential of were announced There HSBC June. of stages. in Interactive introducing healthy. dozen Speaking other various about at brokers, pleased offering opportunities, of are by publicly powered a pipeline of clients their remains several them, HSBC couple Brokers that We

have friends to with testing us. make optimal the the and that figure out way is everything are sure stage. accounts, in interface where so-called and in Others started for waters while working, the are to the onboarding stage test family prospect them Some others they

to dependent some this of can introducing all for mentioned we a offer wants. take and to ways than on time on quicker variety and what the as repeating, we others, broker our As come broker an bears since platform,

this we of in while area, growth do. something timing continue is So predicting the it not to can we expect

trading performance has summary tool and analysis our been serve and better European added brokers liquidity securities we Korean Swedish platform. The see screen for the have We several and by types. executing more Trader and offering new overnight planner enhanced in plans. Advisor a had we FAs In derivatives PortfolioAnalyst introducing financial IBKR government derivatives premier for and lending individuals to connecting are quarter, launched We client understand a web Eurex, targeted launched retirement IBKR needs. clients' a ATS allocation with costs. Each trading Portal execution find liquidity made U.S. yet met well on order many crypto that our Workstation needs save venues, our a different trades by CBOE ATS, quarter. added We specialized our more terms Financial our product streamlined U.K. in for trading on recurring with order as We long-term types their providers on online client professional different including that our our Canada. available orders tool. portfolio clients, strengthened providers as advisers product remains new a adding for new Further, in helping them we of introductions, corporate and and busy bonds. investment stocks,

set can that based introduced also on We mobile conditional an order platform, to a cancel much-requested a or initiate our on variety of orders feature be triggers.

trade different cash foreign Auto FX wishing the a clients manually With a security performing for conversion. handle to We their default securities is for in can currency with accounts currency Auto order a without now accounts. FX, automatically. clients from the FX setting place an transaction

the not traders. and IBKR's broker active we're cost-conscious offers advantages significant for implementation Although feature, this only offering

in if up our while clients basis a means every other charge not competitors. First, charge This trade FX balance. by results a to brokers compared does trade only second, do. daily client percent full makes to charge that times currency we IBKR trade And reduce points significantly we conversion can that a X multiple a their on because who negative costs only

have own that Our we this they Service, a and last service High specialized has interfacing which particular us to commented from quarter, person Brokerage gotten benefiting point Touch have good their time attention and with Prime an their issues. having Clients announced to off also appreciate start. easier

to other easier. We're make Touch prime one considering our our this said, brokerage even service compelling. disregard from As pitches other of improvements brokers new clients prime offering the makes more High decision to

have I many work look the up. is of continuing the are develop, which for introduce. to beyond, planned we test and we the and rest on XXXX Much lined forward to eager projects

healthy come share with are pipeline business and eager fruition. as of and have initiatives new a they to new to these you We

the turn Brody. to over call Paul I that, Paul? With will

Paul Brody

you, and call. for everyone, Thanks to Nancy, welcome, Thank the joining.

We're record million, revenue we of with as rose era quarter, results pretax first quarter Commissions second income. our of pleased X our the to that Starting quarter produced and second XXXX. year's on the only reaching $XXX release. revenues with last this items net pandemic versus again financial Page of

This quarter, a base setting we our growing from quarterly new futures higher reaching trading saw and with customers volumes volumes of ever. options record their second-highest volume active

higher year-over-year our and qualified other a makes borrowing to to portfolio the funds, quarter despite and through market a These recent A these results. their money segregated few the and attractive environment cuts banks in provided interest on their rate our reached by in passes record tailwinds more also on XX significant benchmark million led points of basis all on hikes paid major and Interactive brokers to offset which most were interest above a Brokers balances. to customers quarterly cash in first Net only others. modestly margin on fund. the loans, increase them margin a competitive the and basis rates rate increases us cash compared $XXX of to higher higher risk taste and on partially yields pronounced with currencies income

of the the services risk quarter. driven million, in generated $XX by up XX% the Other fees from and prior positioning year, on customers

of X increase earnings from principal earnings. report currency from $XX As for our noncore the was of for our gains sweep income an diversification these was excluded flow risk our order primary other quarter. strategy items, the excluded programs includes income items on and are transactions. Other payments release, on many fees Page as and adjusted our and FDIC in in losses fees highlights in gain well. investments, million factor exposure the Note with our a that Without contributions these we financial exchange-mandated

and million and were over futures, and impact year-ago that the Turning to does from higher predominantly May increase so quarter, up fee on profitability. rate The in which distribution clearing and carry Execution, our SEC pass-through options regulatory the fees. not began $X fee $XXX to a the XX% customers volumes expenses. quarter, higher a SEC million in XX costs it on is

million from second revenues, nontransaction-based have not As market profit a $XX transactional XX%. in XX% quarter commission of predominantly a of data clearing excluding component. costs, for margin by and this percent costs direct a gross fees, of and calculate We commission distribution do which revenue clearing were the execution, execution

or -- XX% $XXX quarter million expense developed in-house We Compensation expense revenues The over went net in and from of on focused by compensation as year. was our for our compensation the into in increase quarter. down the client-facing in the roles. benefits compliance last year's the discipline reflected included a as software ratio remain XX%, operational of increases offset staff the expense development benefits adjusted slowing a system, we year-over-year staff and in to decrease prior mode full increase X% compliance with to

was Our headcount June XX at X,XXX.

were expenses $XX Without down partly the was expenses. year-ago year's quarter. on last million, advertising million, unusual $XX or legal higher primarily legal on XX% from reserve, up and G&A G&A

XX% margin million. company's as was adjusted. XX% its was Income rate $XX Our the quarter the of for effective XX.X%, usual slightly $XX company's million $XX million adjusted of range. reflect and below pretax public the and Public taxes company's sum tax reported as operating the

Moving to our on release. the Page of sheet balance X

quarter at both with by quarter XX% year end new driven the the higher and ended assets to total growth prior than existing lending billion customers. margin $XXX Our

believe customer record rates that cash. New hold competitive growth our with account place drive credit our an to we attractive strong customers and balances, interest financial idle their helped provide and standing also

a equity and We by our sheet towards us the supporting growth firm strength in XX% continue balance long-term win profitability year. business to new our existing demonstrating in and geared prospective partners. clients Healthy our maintain business have over We prior debt. to drove increase no helping

X, volume In contract reflecting our rose gravitating across and higher-quality XX%, did in the our clients for pink to contract volumes the volumes volume with prior generally stock Stock second options in highest growth, over sheet other a XX% by our IBKR. new and and lower trading tandem our reached operating data in volumes larger, on share customer rose stocks with Futures rose share industry. Pages well-above relatively by XX% industry they increased markets. largest year quarter, ever, and names very X in high as record low-priced

and interest our contract the -- year commission $XXX stocks prior order see and up income X that higher by stocks product while for sizes XX% you million last options, were specific smaller DARTs year, margin in we by but numbers. fees income our the contracts or interest commission GAAP higher. size to the from as per customers interest and computation, net mix and trades margin commissions shows Commission X, commissionable characteristic. Page lower GAAP down traded were per was prior day, million more have can Page that or due we other average different believe is the $XX strong in X.X our quarter, income net million futures. year total options. in Total of was XX% up Volume income, On of especially $X.XX classified customer for In considered futures aggregate the interest. from average was interest some other for net classes, include $XXX and all on cleared a million followed but purposes is appropriately and net order NIM and

in by strength segregated on cash expense margin and interest customer income Our partially reflects net higher interest, loan offset cash balances. interest

a banks both cut including modest rose balances their rates, recently, Others, X% interest and in and margin a a point income a rose Canada. despite benchmark quarter Reserve, segregated rates XX% basis rate decrease rise few in while increase XX over steady. its cash balances. on benchmark the including by loan made to central held average in last. Europe rates had cuts the XX% year, this interest Reflecting our Only interest Federal average Switzerland X%

XX duration remained at average U.S. The our treasury portfolio of about days.

significantly rather our yields U.S. of a With earn liabilities. us relatively to accept on the we maturities. inverted, have yields maintain continuing short-term curve maximizing focusing dollar been between and what allows tight This lower than longer strategy we the higher yield match maturity to by be assets

for main Securities not quarters lending as X net been interest as prior has reasons. strong in

demand people the on past overall soundly put fewer industry, extremely the in to shorts over up are market the means when shorting U.S., An well upward. stocks in throughout market has trend strong First, the for fallen. XX% year, so overall looking is stock

the industry-wide, names Second, the there market weakness and volatility overall of to fewer are relevant activity. securities merger acquisition due is to significantly drivers but IPOs, market a because hard-to-borrow sharply, rising not static including fewer some only and also lending, low in

of rates higher interest versus on noted on periods we what from classified calls, cash. as securities Finally, earn year previous average is as more interest prior lending segregated means

in were estimate securities then on paid from that million million the To segregated the been overall reclassified interest of our securities be would credit more about total net business, accurately related million earned for included we reflect effect $XXX versus additional cash securities first and under income revenue additional the on no $XXX it borrowed loaned, to lending revenue quarter all the interest from our interest so This earn paid year-ago NIM. quarter the if in and we $XXX customer would balances on lending quarter and have and cash have collateral our on business XXXX. would

in year both growth. higher their from balances in on versus currencies to cash last the many Interest and interest pay rose account new customers higher accounts, rates on we the balances, customer credit our on

As total interest billion. about billion of Together assets, most in versus quarter $XX.X significant consists in the on dollar rates past, we've of $XX.X interest-earning balances, equity, customer driver were $XX.X were Fully rate-sensitive firm high new currently balances is this noted approximately customers. pay we X.XX% quarter. rate-sensitive the billion fully year-ago cash, with unqualified which balances customer of the a U.S.

our rates. for of Now changes estimate impact in the of

funds reduction fed Given effect XXXX, to interest be decrease the interest-earning our of a for Note that growth a at estimate balances would effective and basis that rate funds $XX starting of income. impact. rate this XX with rate Any in and point date. is annual cuts net market expectations in sheet we June million the of in X.XX% balance as this in XX fed estimate sometime our point reduce benchmark the assets

our is U.S. XX% customer dollars. of About in balances cash not

effect currencies. rates by point non-USD decrease annual estimate the net a into all balances rate decrease interest of $XXX firm takes rates $XX each So X% decrease We reduce exclude a our customer income in estimates those change by would million. benchmark U.S. basis of account the in in full all for million benchmarks. decreases rate net benchmark XX and annual the This income interest equity. level, relevant At high those would sensitive,

customers quarter business. financially In our posted net strong margin, our and another conclusion, value our and reflecting grow while in the to customer ability we to revenues base proposition on core pretax continued scaling deliver

effective, minimizing while charge. be strategy much as the what and possible, of offer we we continues brokerage business improving to what Our business automating expanding as continuously

questions. open up will line And the now we for with that,

Operator

of Our Instructions] line first question Operator the Budish. comes from Ben

Benjamin Budish

I the bit account year-to-date growth unpack if could a wondering you more. was little

gave terms book a little you to color do still bit segments. customer faster-growing on over of maybe into what the in It bringing ample like customers? looks back some sort about You How of new while average sort like But sounds can the customer they're markets. compare individuals, the deploying talk of the cash the of like? they

curious if are 'XX. little year about a size, and average activity progress just then, kind maybe and about your fund the over on talk what So and the levels what of your the into expectations you talk the rest the bit of are hedge like side, there similarly could

Milan Galik

quarter. They assets to the usually accounts it's take that while to we on in that So bring. new intended the they a get each bring all little

a by But the the what while interest by is net went XX%, entire XX% XX%, by us give that takes by and fact up XX%, for commissions to the income DARTs idea impact. it some XX%. little by can So see assets you the accounts new

by is year-over-year XXX up S&P the XX%. at is look XX%, you up if So Q-o-Q

you brought. how cash how look So that idea some together, much these much as at numbers they all to if will give you assets,

Benjamin Budish

a could And follow-up. if helpful. I That's ask

made, something think rate-sensitive of you there, balances billion you but little meant rate-sensitive the Paul, $XX total Could billion. clarify you were cash, comment X? a the you I about what Just a fully between mentioned $XX.X over difference

Paul Brody

The rate-sensitive equity. rest is firm

So then to makes up which amount sensitive our equity is the of billion of is a certain and it $XX interest rates rest. plus,

Operator

Instructions] of America. Siegenthaler of comes [Operator question Craig of line Our next from the Bank

Craig Siegenthaler

congrats launch the in first on UAE. the And HSBC

of had this just specific me launch. you is question offering there. launched a cash in to client clients cross-sell white-labeled being so number start there's and equity region, offering, a are accounts smaller the day it longer client of I existing the inflow X? is with on existing let product When an ramp a with a HSB replacing large large Or with So mechanical on a process?

Milan Galik

-- onboarding I if be XX,XXX that was migration August, sorry, should are Pershing. We're for well. The talking The on everything is their from approximately around the accounts. happening we mute. answer existing sometime business goes to in going UAE The be

of The know, new HSBC countries platform. onboarding immediate banking in presence not other Interactive HSBC, is clients significant those they going a lot in their as accounts. that do us, vision to Brokers' banking offer inflow to be countries of is to with power result you has and

are So greenfield these businesses.

and So migration going XX,XXX gradually going gradually. up existing countries Other then from up UAE coming X. from

Craig Siegenthaler

relationship? account dozen of win. to as you includes expect onboarding a and currently regions that total Nancy first I family. Just the regions, of that are does of curious win the percentage HSBC Does batch represent? the through these testing package that topic. this was a you couple friends or Or expect there's to dozen couple that regions on this couple my same follow-up total that is counts what referenced that dozen

Milan Galik

and prospects, It's I explained a the Others the and in some dozen maybe various couple Nancy little about are win prospects in of tests, prospects. friends stages. of a all she how already expect talking doing are this was introducing our they So most more have probably handful, broker and tests. are stage. would the connectivity to employee accounts us than opened --

we winning We to to be methodology used They're that conversations. disclosed? successful an it that going the we in going not have materialize, Maybe to onboard have them. they about So of going be this progress X funnel, fully been or them. in ones Are are will. is conversations count will the to those that normally one most already X but typically very serious disclosed well. The way or them Is omnibus? be

Operator

next Yaro Our comes question Sachs. line Instructions] [Operator of with Goldman the James from

James Yaro

on enhanced touch I for just wanted to offerings hedge funds. the

Global funds readings how Maybe initiatives in Outsourced the you you it touch I far? from your hedge Tradings. the so April, on could Touch think announced early have High rate just growth gone, Prime accelerated those that. and Has with

other a to ramifications these should Touch to mix you be or And any when of then we from your they would High Or And talk enhancements brokerage tech-enabled offerings? both? your be would of offering, those margin? more prime think about sort about

Milan Galik

received. the was very well enhancement So

feedback We good. point have wide service. cross of hedge within to. to onboarded they this a approximately hedge various get that through our enjoy talk having experts funds single onto XX -- funds person is point exactly really can contact. XX They The this The enhanced access organization

do experience. they really like the So

see see any not in We one. expect and did cannot change numbers, we the to

that why with reason we recall they $XXX funds, the may likelihood become the us. that they when this in threshold, hedge what did that be the primes to to increase million the likelihood was wanted to seems stay interested will the number -- the increase magical the the large as them, You cross we

So that time was. hopeful I'm tell it bet. will a whether this was good

to not order from capital of that in funds enhancements, the about Obviously, the As we are at we -- It's so talking introduction. take funds. is maybe There to orders continue desk. the orders to sit with order hedge hedge discussions We the night. and further desk the middle global still their the the is they execute do have desks the discussions online.

current program demand is That requests to introduction the to state. improvements make there a online are us capital long had time. for for or is There have We our own it.

James Yaro

just That's very, as Maybe other funds. follow-up a clear. to hedge Great. one related Okay. very

securities lending at has soft. leverage net brokerage for very up other remained retail-skewed prime brokers substantially, you certain think largest I fairly the banks but and is

short-selling look Is light large when on whereas increased hedge shorts? why view maybe for perhaps dichotomy? is Has one, that prime brokerage you adding at there on your a if that to And retail is do clients? perhaps are hedge activity views funds don't a business, those it short-selling been fund your maybe you there activity business? have Just any just

Milan Galik

Paul Well, some the share interest leverage. he on why amount I increased is larger They platform you. Maybe is at tell us, that personally down. increase color income reason do can net the borrow from with I that has billion that the not look funds What the this money up our and of hedge broken is and balances can you quarter. to partially $XX -- this obviously, the the

Operator

[Operator Instructions] Fannon Our from line with Dan next comes the Jefferies. question of

Daniel Fannon

of ago? with a Just the the year on that guess would that I dozen to, that question another say, couple a how introducing brokers compare cited. was backlog

it generally, you're you business? with up to against? are win other who Or are just internal there then Is typically And competing offerings? this peers that going

Milan Galik

pretty The same the size. looks pipeline much

the it same think I ago, was roughly number. a year As

well, whom -- we with, our are our competing unique. is unique to As offering very

world terms the cover to access in we know, you countries. in of various As the exchanges

So -- the especially in are brokers some the we are States. especially firms broker that. regional like compete United Those in competitors. markets, the can they fact with. Europe. our access to offer the like we markets, They to or competitors are Asia That's overseas, that that and prospects those introducing introducing There local to space, them

Daniel Fannon

business we of But had and view fed the terms talked we going rates margin some forward? declining in the run margin get we've accounts, utilization pro base being Thomas client of context about Okay. interest overshot do then this if in the given your like performing things of hold growth in of is growth quarters here maybe market, we of the in does account growth helpful. That's cuts still and And in balances, have couple do trading. ago, year Or your that currently? -- growth how A maybe

Milan Galik

expected this will happen. by the What I is tell points at income interest It's that lowers can rates as difficult point, basis XX the our million. tell widely by annual interest to will fed if is decrease you what $XX net

to how still lower there interest season. spur So in We East wars We're have be be new X There to and Trump exactly what that's going a the increase there that about can, lot to the but ticket of out a inflation. exactly uncertainty to economic election, are in is which Even what to election uncertainty. is lot wins unclear if chatter Europe. obviously, a that going tariffs, to is the is impact The turn, administration. is going to impact. going in the play is the is growth, be going of mean. Middle it's as have because There a increased or rates, that going

winners. on there trading hedges want as a put positions in wants usually out of customers there. risky lot So results uncertainty Uncertainty or higher their to out is volatility and volumes they to do or sell

reason activity down. good tell that it's I trading to will dramatically believe not do slow a the really So but to see difficult

Operator

comes of next KBW. line [Operator question with Kyle Instructions] the Voigt Our from

Kyle Voigt

know First launch some approval one subsequent there were press I received just be the delayed. on that think last ForecastEx. CFTC month, I saying but around may

and just speak forecast about of contracts more the us. for any on wondering, then the And and the broadly maybe a see you opportunity size for bit there? Just launch update timing opportunity

Milan Galik

swaps. there yes, delay. work a a is bookkeeping So That is to is that of granted work there CFTC realized that slight We license booking with to little the ForecastEx. need that we the has more do, do to that bit

So do. there to that is need work more a we bit

of to middle We are August. the launch hoping in

to indicators, want can big and on that over back a that is security events, affect years climate today, to events themselves to growing in really started may is to the area we events our brand believe of happen more As ago, that, are that a on similar customers it hopeful when or And the general, become, thing XX new. performance it really, we hedge to industry. of -- we in witnessed your portfolio and what going going the against, Remember opportunity, economic something was in Betting that area. equity popular it time, options. is very

Kyle Voigt

one had follow-up for just I then And Great. Paul.

that Just new about to provided today. securities disclosures clear be lending the super you

been the So the globally the would a $XXX methodology applied hypothetically, how we benchmark quarter, million X% into entirety the from lending second to sec would retroactively have would sec that revenue? the rate shifted is to bucket you if instead formulaically, cash that worked, lending reported have wanted revenues security that of would $XX correct? have Is [indiscernible] million? of Or just just have I pricing

Paul Brody

borrow high securities and which is Yes. if then complicated rates we are more the for collateral, used a stock benchmark, question. collateral But we a the hard-to-borrow X assume stock. rate the as right? reinvest It's to very environment, Likewise, cash when little, low a cash X, collateral lending of to slightly if all then fee, in a trading almost you just earns that for general becomes take cash to collateral the stock, low in lend very interest the and were have itself

in to much we this are that one right? to collateral. securities sides simplest plus, it's equation lend So why presentation make difference. rates were the is have of now the offer The more decided stock. X% didn't reasons all example X, that of lending, But it being see helpful the We any a we rates take customer the to related when near cash the because difference make didn't are

now, interest of could cash Up related margin been when and like one But our we to in it -- securities. more And X.X%. segregated at up it's in Now that, net think lending. securities reinvest obviously, plays that percent presentation, until being have -- shows and XX a we as it, role. X

management it. here perspective. so way is to we're that from just different talking And a all at reclassifying a look about It's

Operator

Piper Patrick Sandler. [Operator Moley comes of the from question Instructions] with Our line next

Patrick Moley

Yes.

I the their traded publicly you just quarter, have in on And spoken and recently about maybe up How Options higher had of growth in business? Can some a being second that out across you're can big the overseas? think So kind here deliberate it about past to for think volumes you overseas. and who has And were have in driver looking do growth expecting peers derivatives volume for geographies, I XX% that one with more you think be you options. where U.S. is your understand, think. year-over-year I Thomas you seeing the spoke speak from? of us what coming efforts the of your over break help advantage growth do there

Milan Galik

to that lot X happening. volume of is Weekly taking that's lot where option, place. the So a day been option, a obviously, where was has expiration of volume

As far as cash-settled options. the X-day the options is index

Eurex and options, shorter-term I exchanges adding We will follow. seen think other have

to States. in So not United in this increase going phenomenon regions, only other is the

but these trading still U.S. volumes Asia dominant. There As that overseas far geographies instruments. Europe, as U.S. is dominates. the our is gravitate investors are option and the obviously Even towards foreign in

and It to is, volumes. of there. technology the regional make to our some and job the But extent, offering the increase the the popular contracts exchanges is

We have the connectivity.

clients. have to the access We the

is the to them are I So we making guess answer how clients. your question. available that would I

what to As are. advantages what about the yes, -- the you asked

active It to results. traders So delivers is professional platform for The platform it. our on is -- very superb. originally attest designed our traders. is active the platform and It

We good mobile have on as web on trader implemented very then platform. as well the screens since the

of all from to the clientele, in of all spectrum -- the way the So platform, entire the we the active beginner. cover, terms trader

We help our that initiate have clients positions. tools

a wizard. have We

very wizard for a long have time. the We had

of For their can to someone what yet are, not who accustomed trading options the is possibilities forecast. enter they

to by by the response different trading client are the NVIDIA could stock this up with the -- this the and then strategies XX%. example, What For and with the sources, I be expect consider date, [indiscernible]. I

increased positioned of take well to we're overseas. So the popularity very trading I advantage options think of

Patrick Moley

All the possibility forward, there of And -- you Can any was that? from looking at is And all That's on there speak quick color. impact then that tax just recovered? great that quarter on the a NYSE just be any rate this any right. follow-up then los. could

Milan Galik

As is, far as the the recovery, unfortunately, answer no.

Unfortunately, have the we rules mishap bust Exchange exchange, those not are contacted When industry place, those written the the to The have that We that can at busted. requested prices. was done. at we in and Stock a York trades purchase the looked is New -- high immediately what be such extremely rates. way be took able we busted

of We XX very can paid also for terms much limitations, under Rule opportunity in be significant The compensation including payment compensation. have the has Rule XX. how pursued ask to also the

looked We other at avenues.

the it to to did very are the the adequate have successful maker, be unlikely lead do an that handling not changes be handled also going here. We because we Berkshire not decided going only events the to lost New here. recovering the belief not we should be specialist proposing future Hathaway, job in What are do -- such how that is our strong have is Stock are we are market in but we York that we Exchange, money to

done, that SEC are need a some And will we on process writing written, we entire And the only industry. modifications the latter it rules concrete to rule be but not benefit website. to would letter of the is and the a when in us, the very post to changes proposing our

the reply Paul, can that tax maybe implications, far As you to as one?

Paul Brody

repeat question taxes? the you the Yes. Could on

Patrick Moley

Yes.

out if that's from implications anything was worth quarter loss Just any this calling forward? tax there the or going

Paul Brody

it Well, and gains see. flows just I into losses.

be nothing about there no would real not it And that were a there's expense, so other items. taxable And as is. it notable general

there quarter, like apply tax things maybe tax credit, to some are that not quarter, current the Every like items that. directly

overall So primarily That in minor fluctuations these our tax go. what effective is and causes rate. come

Operator

Sykes next [Operator comes Instructions] Our with Macrae GAMCO. from line the question of

Macrae Sykes

there? IBDs, around IBDs, could out I had evolving. are update have it's the know X together. point much to the I And an they TAM cost give globally, on I'll there of and was kind you I about the opportunity many just ask you of Anything IBDs the them you. wondering to how if how kind know questions whether us

dissynergies difference, having bespoke or a up thing any second you such an as with with label then is set these And in new to HSBC, the terms individual as is white operation respect a there the working company with associated relationships, costs of a platform kind operation? of to difference XX,XXX or XX,XXX? one handling just of is terms IBD more in So are the your that's there account with handle economics? there And any between a

Milan Galik

-- there are broker large they to pursuing out are believe I there have offer They opportunity to of companies, So investment there, lot of the very are banks them. clients, and a number services introducing especially that prospects are brokerage prospects.

go to try them alone. it of Some

Some small them, numbers, of succeed.

then that and they Some what turn competitor greater give another to is is for That realize they maybe And we up undertaking help. Interactive the when see. Brokers they than expected.

serve Another that They They thing do a that in we see customer is I a job local they going be from is that believe. specific an service the good there That special is a to to realize of can opportunity running that something country. also in think are and is the continue start service localized large advertising, we clientele. there There offer brokers that clientele -- a to see. that X. just to these, number

that different As and let's whether economics relationship, omnibus XX as it's the some a scalability, a cash by or brokers to an onboard separate single or, account introducing the to up account. like say, We of account they it's margin because account which residents varies. it accounts a to the clientele, means

thousands covering on up to So it's their handful a accounts, accounts individual XX, many of very small number of platform.

that's of sort extreme. So one

that are infrastructure of client, carry individual the account less. The tax of omnibus both economics is with we and not these and obviously to specific deal The we relationships. different. have We extreme other do The AML the accounts have our much end clients. per KYC one

the are power. But us better. On it computing costs little for we relationships where carry individual other the hand, a subaccounts economics clients, the more

extent, take have to deal usually Our and a But hand service and providing best. we're customer with and involved gets the to them setup both, type the AML. open we of to prospect the helping deciding we're suit what KYC would to an

Operator

Our the of from Allen Instructions] with Chris [Operator comes line question next Citi.

Christopher Allen

of a Little bit cleanup question.

million it million. I NII Milan reduction, cuts. $XX but believe, to Paul, rate the was noted on sensitivity Just $XX it's a

all wondering just the correct. includes would $XX So any color million I'm helpful. or ] rates million Maybe be there is global $XX which $XX [ U.S., (sic) just

Paul Brody

Yes. That's exactly Chris. right,

$XX are $XX (sic) (sic) assumption makes an U.S. the the assumption that the that all the million rates So currencies broad only a rates reduced. $XX fed And [ or [ dollar very is in rate. currency ] $XX all ] moves million

Christopher Allen

a quick expenses. on one Just

with You is went staff to noted of the compliance new compliance operational system. decrease full in you kind

or like something efficiencies areas. opportunities much what the that how like But reduce that then would realize incremental generate other to efficiencies forward? are moving wondering into working on Just redeploying other you're investment

Milan Galik

year So to our you'll if didn't see that a look headcount, ago. it you change at compared overall

individual to large are X,XXX as but we're employees. departments, We There at not are the talking changes small numbers.

because extent the in significant additional I adding had We a add accounts. over not any to accounts yet we say, year, without be Ideally, new in the of to number onboard would is the successful, be maximum we would able goal Our possible. able use to technology we and growth quite did were that, last to employees very staff.

But it like won't always be this.

the representatives done. the representatives talking as large times again, the But lower number new cross We we're are countries. a dozens not here. of side. We're customer see wait certain the service talking the we just make customer lower-cost increase in service numbers of several very -- a have if employed in on And monitoring service closely long metrics We customer how are. they the decision to we threshold,

should new the do. the in to way of achieve the goal that's it's easy is. scalability our personnel, but without it The with be advances So AI, it not adding -- to easier

Operator

Nancy and Ladies would like turn the you. questions showing I further queue. no closing Thank gentlemen, call in to remarks. the back for to I'm now over

Nancy Stuebe

participating you, for Thank everyone, today.

As clean a posting call be site we this for our you will we will our Thank and reminder, be replay on you available end. tomorrow. the also website, will transcript again, of on talk to quarter version and next a

Operator

call. for this gentlemen, concludes you your participation. today's and conference Thank Ladies

now disconnect. may You

Interactive Brokers (IBKR) 16 Jul 242024 Q2 Earnings call transcript