Interactive Brokers Earnings: Record 2024 Results, and 2025 Should Be Similar

Narrow-moat-rated Interactive Brokers reported record results for 2024, and we expect 2025 to be similar. For the fourth quarter, the company reported net income to common shareholders of $217 million, or $1.99 per diluted share, on $1.39 billion of net revenue. Net income before attribution to noncontrolling interests was $969 million. Net revenue increased 22% from the previous year but only 1.6% sequentially. Compared with the third quarter of 2024, a 10% increase in trading revenue to $477 million helped to offset a decline in other income and net interest income that was relatively flat at $807 million compared with $802 million in the third quarter and $792 million in the second quarter. Net interest income has been about flat the previous three quarters despite customer equity increasing 14% to $568 billion and the balance sheet increasing 10% to $151 billion compared with the second quarter, because net interest margin has compressed to 2.23% from 2.42%. We don’t anticipate making a material change in our $140 fair value estimate. We assess the shares as currently overvalued.