Interactive Brokers Group, Inc. (NASDAQ:IBKR) Q2 2019 Earnings Conference Call - Final Transcript

Jul 16, 2019 • 04:30 pm ET


Interactive Brokers Group, Inc. (NASDAQ:IBKR) Q2 2019 Earnings Conference Call - Final Transcript


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Good day, ladies and gentlemen, and welcome to the Interactive Brokers Group Second Quarter Financial Results Conference Call. [Operator Instructions] I would now like to introduce your host for today's conference, Ms. Nancy Stuebe, Director of Investor Relations. Ma'am, you may begin.

Nancy Stuebe

Good afternoon, everyone. Thank you for joining us to review our 2019 second quarter performance. Thomas is on the call, but asked me to present his comments on the business. He will handle the Q&A. As a reminder, today's call may include forward-looking statements which represent the Company's belief regarding future events, which by their nature are not certain and are outside of the Company's control. Our actual results and financial condition may differ, possibly materially, from what is indicated in these forward looking statements.

We ask that you refer to the disclaimers in our press release. You should also review a description of risk factors contained in our financial reports filed with the SEC. Our business continues to grow and we again achieved new records in our electronic broker. Our total accounts grew by 19% or more than 100,000 net new accounts from last year, while our client equity grew by more than $18 billion or 14% over the course of the year.

Though the average VIX volatility index this quarter was slightly below 2018, our DARTs grew by 4%, since having more accounts and more clients on our platform leads to more trades. We continue to focus on growing our customer base in all client segments. This generates more activity from new customers coming onto our platform and takes advantage of all of our accounts trading more during periods of higher volatility.

Our brokerage business continues to be strong, brokerage revenues adjusted for Treasury marks were up 6% versus last year and our pre-tax margin was 63%. I will highlight some of the expanded range of offerings announced this quarter. We constantly seek to improve our platform and to bring it to more potential clients.

First, we added several new market centers this quarter, including the Moscow Exchange, and our clients now have the capability to invest seamlessly in securities and other products on over 125 market centers in 31 countries.

As of May 6th, our customers began trading CME Group Micro E-mini Futures. The CME has called this the most successful product launch in their history. And we were ready the first day these futures were available to trade.

This quarter also saw the introduction of our Stock Yield Enhancement Program in Canada, Interactive Brokers Canada clients can now lend fully paid Canadian shares of stock to earn additional yield. By enrolling easily online they can earn extra interest by lending shares to borrowers. We are the first broker to offer this program in Canada.

Our bond desk added a direct connection to trade with institutional, which can be accessed on our Trader Workstation. Interactive Brokers currently supports high yield on emerging market bonds. And we anticipate adding other fixed income asset classes later this year.