Interactive Brokers Group, Inc. (NASDAQ:IBKR) Q3 2017 Earnings Conference Call Transcript

Oct 17, 2017 • 04:30 pm ET


Interactive Brokers Group, Inc. (NASDAQ:IBKR) Q3 2017 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Interactive Brokers Group Third Quarter Financial Results Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded.

I would now like to introduce your host for today's conference, Ms. Nancy Stuebe. Ms. Stuebe, you may begin.

Nancy Stuebe

Thank you, operator, and welcome, everyone, to our third quarter earnings call. Our earnings were released today after the market close and are also available on our website.

Our speakers today are Thomas Peterffy, our Chairman and CEO; and Paul Brody, our group CFO. They will start the call with some prepared remarks about the quarter, and then we'll take your questions.

(Forward-Looking Cautionary Statements)

I'd now like to turn the call over to Thomas Peterffy. Thomas?

Thomas Peterffy

Good afternoon, everyone, and thank you for joining us to review our 2017 third quarter performance. As usual, this quarter will mark several milestones for Interactive Brokers. First, number of accounts, customer equity, average equity per account and margin loans outstanding all hit new records. Our customer equity is now $116 billion, up 40% from a year ago. Our customer accounts are also up significantly at 457,000, up 23%. Furthermore, these metrics continue to grow at an accelerating rate.

As we grow larger, more people hear about Interactive Brokers and look into what we offer. They hear that we do not sell our orders and about the quality of our executions; they see our low commission rates, our high interest payments and our best-in-class technology.

After they sign on as clients, we then benefit from positive word of mouth as they use our platforms and tell their fellow investors about us. On the new product front, in August, we introduced a debit card that is linked to your account, a product we had been asked for frequently. In one single Interactive Brokers account, you can now borrow, earn, save and invest, completely managing your finances without leaving the platform.

If you choose to borrow on your Interactive Brokers debit card, you borrow at our margin rates of no more than 2.66% to as low as 1.41%. As it has just been introduced, the debit program has much growing to do.

Now that we have introduced the card in the United States, we will expand to Europe and Canada in the next 6 months and to Asia after that. Stay tuned for additional benefits we will offer to our cardholders in the next phases of our rollout as we work to make the IB debit card even more compelling.

We also introduced our new order management system, fully integrated with our Trader Workstation, which offers order management, trading and research as well as risk management, reporting and back-office tools, again --all from a single platform. Our customers now do not have to use multiple expensive vendors and systems for their investment management needs. Our OMS will be able to handle everything at low cost to them. Our OMS is available at $100 of commissions per month per