Interactive Brokers beat earnings estimates for the fourth quarter late Tuesday as strong stock markets boosted trading and lending activities. On Wednesday, Interactive Brokers stock flashed a bullish signal as it broke out to a new high.
Interactive Brokers Earnings
For Q4, Interactive Brokers reported EPS of $2.03, a 34% increase year over year, on revenue of $1.387 billion, a 22% gain. Earnings growth accelerated from 13% in the prior quarter.
Analysts were expecting Interactive Brokers earnings of $1.84 per share on revenue of $1.355 billion, FactSet shows.
Commission revenue rose 37% to $477 million on higher customer trading volumes, the company said. Trading volume in options and stocks rose 32% and 65%, respectively. Futures volume fell by 3%.
Net interest income gained 11% to $807 million on higher average margin loans and credit balances.
Customer accounts grew 30% to 3.34 million. Margin loans increased 45% to $64.2 billion. Total DARTs grew 61% to 3.12 million.
DARTs, or daily average revenue trades — a key metric — surged in every month of the final quarter of 2024 after jumping 42% in Q3, the company previously announced.
For 2025, analysts now anticipate Interactive Brokers earnings of $7.43 a share, rising nearly 6% from 2024, FactSet shows. Sales are now seen rising 5% from 2024.
Interactive Brokers Stock Breaks Out
Shares gapped up 8.8% in big volume in Wednesday's stock market trading, making a 52-week high intraday. Interactive Brokers topped a 193.41 buy point from a cup-with-handle base, according to MarketSurge charts.
The relative strength line also made a high as the financial stock broke out, a favorable sign. The RS line, the blue line in the chart shown, measures a stock's performance vs. the S&P 500.
On Tuesday, rival Charles Schwab beat Wall Street estimates on record inflows. Schwab stock dipped near a 83.35 flat-base buy point on Wednesday after jumping 5.9% on Tuesday.
Upstart rival stock and cryptocurrency brokers Robinhood and Coinbase were mixed. The new Donald Trump administration launched a "crypto task force" on Tuesday. The bitcoin price surged on Tuesday, reaching above $107,000, and fell 1.9% on Wednesday.
Robinhood stock edged up a fraction on Wednesday to reach a new high intraday. Coinbase stock reversed 0.6% higher, back above the 50-day moving average.
Interactive Brokers stock flaunts a near-perfect IBD Composite Rating of 98 out of 99. So do Coinbase stock and Robinhood stock.
All three financial stocks can be found on the IBD 50 list of top growth stocks.
More Trading And Lending In Rising Markets
In Q4, Interactive Brokers benefited from the bull market for stocks and cryptocurrencies, paired with volatility. That led to higher trading activity and more margin lending.
Many of Interactive's customers are sophisticated investors and professional traders. While Interactive Brokers stock enjoyed torrid recent growth, it now faces a stiffer challenge from Robinhood, which is starting to go after the market for advanced investors and traders.
Crypto, Bitcoin Rally On Trump Action
Both Robinhood and Coinbase are expected to next report earnings in February. Both extended gains on Tuesday after big rallies last week on crypto enthusiasm and various factors.
The Trump White House moved on Tuesday toward an easing of cryptocurrency regulations, as expected. The SEC announced that acting Chair Mark Uyeda has launched a "crypto task force" to develop "a comprehensive and clear regulatory framework for crypto assets." Under former President Joe Biden, the SEC was seen as unfriendly toward the industry.
