Quarter 1
Q1 2026 Earnings Call — April 21, 2026
Analyst Patrick Molley (Piper Sandler): Good afternoon. Thanks for taking the question. So last week, the SEC eliminated the pattern day trader rule. It seems like it could be a pretty significant structural change for the industry, and it will make more active day trading available to far more retail investors. So I was just curious, you know, how you're thinking about the strategic opportunity here, if you think that there's – you know, any, you know, avenue for increased account growth because of this and how you're just thinking about the overall opportunity to attract some of these smaller wallet retail investors. Thanks.
Executive Name (Title): Well, we welcome the change. The regulators are basically replacing an outdated concept of counting trades and an arbitrary equity threshold for account size with a risk-based system, real-time intraday margin requirements. The expectation is that it will broaden the retail access, increase the trading frequency and engagement, and also liquidity in the markets. The rule will probably speed up the outcomes. The disciplined participants who have experienced some well-tried trading methodology will probably end up growing their accounts faster, whereas those that trade in a more haphazard fashion will probably realize their losses faster.
Okay, so you're viewing this as an opportunity for IBKL, I guess, any color on, you know, the strategic opportunity here?
Executive Name (Title): It is an opportunity in the sense that the majority of our accounts are individual accounts. Many of these individual accounts are smaller accounts, and they will be able to trade frequently. So in that sense, it is an opportunity.
Okay. All right, thanks. And then maybe just if you could help us break down the account growth that you saw in the first quarter. It seems like it's a pretty two-sided thing. market for the business. You know, on one hand, you have the war and you have an energy market volatility that I think is bringing people to the market and wanting to trade. And then on the other hand, I think that there's some concern about what this could mean, you know, for the rest of the year and whether it could create some frictions, I guess, in terms of new account formation, particularly internationally. So any thoughts on just the current environment and, you know, just account growth through the storm here as we enter into the, you know, the back half of the year? Thanks.
Executive Name (Title): No, I don't think we need to expect anything different from what we have seen in the past. What tends to happen is that the equity market prices are increasing. More and more of the public wants to participate on the run-up, and we see strong account openings, whereas as the volatility increases, that may discourage newcomers from joining the markets, but that gets offset by an increase in the darts, increase in the trading. So, as I said, the increased volatility is something that we have seen before for different reasons. I would expect things to continue the way we have seen over the past several years.
Okay. Appreciate it, Moran. That's it for me.
Analyst James Yarrow (Goldman Sachs): Good afternoon, and thanks for taking the question. I wanted to return to a topic discussed on last quarter's call on your focus on accelerating marketing spend to support account growth. Is there any way you could provide a bit more detail on what marketing spend trends might have looked like either historically or perhaps both historically and today, and maybe if you could just provide a little bit more color on how you would think about scaling marketing going forward.
Executive Name (Title): Well, we are hell-bent on trying to increase our marketing spend, but we are also very strict about getting the required minimum return on every additional marketing dollar. So as a result, while we keep trying to increase the spend, it is going very slowly. So what we are really doing is we're trying to find additional marketing assets that are going to hopefully give us more opportunity to spend more.
Thanks, Thomas. That's very clear. As my follow-up, there has been discussion among U.S. brokers and banks recently around potential AI-enabled cash optimization tools, which I think the idea is that they could ensure that customers receive yields on their deposits that are closer to Fed funds. I'm curious if you have any views on these sorts of tools, and I guess is there any consideration – that this could affect your pricing on deposits.
Executive Name (Title): So we're not happy about these tools because we have always been paying close to market rates, and if these tools force other brokers to do the same, then we're going to have more competition. But I don't think they will do that. I mean, it is somewhat ironic that we hear these noises about using AI in the area of cash optimization from the banks, banks that have been paying very, very little on the uninvested cash. And if you think about it, there isn't that much that AI needs to do here. It's really the brokers or the banks' decision of how much of the interest income they want the client to enjoy versus how much of it they want to keep to themselves. We have historically been on the forefront of the industry. Our costs have been low, and that has helped us maximize the outcome for our clients.
Thanks a lot, Thomas, very clear. Thank you.
Analyst Ben (Barclays): Hi, good evening, and thank you for taking the question. Maybe to start following up on Patrick's second question, I'm just curious. I remember a year ago the markets were selling off quite a bit in April, and you gave us an update on your margin balances, which tend to follow the S&P. It seems like we're seeing the opposite this month where the end of March, since then the markets are up fairly meaningfully. I'm just curious if you can give any more of a detailed update. What are margin balances looking like intra-month? Are we seeing this sort of, you know, S&P growth supported, you know, reacceleration of account growth? I'm particularly curious on the margins because that seemed to be such an interesting topic last year, and I would think, you know, you'd see a bit of a rebound, but just curious any details you could share there.
Executive Name (Title): So, our margin loans are precisely at the end of the quarter, $86.6 billion, but that's part of our, every month's end, we release our margin balances. So if anybody cares to look at that, they could see what's happening.
All right, fair enough. And then maybe just a higher-level topic on prediction markets. Just curious, any updates you can share in terms of, you know, any updates you can share in terms of conversations with institutions that may be interested in onboarding to ForecastX, you know, any progress there? Thank you.
Executive Name (Title): ForecastX is receiving more and more inquiries from people who have sworn months ago that they will never enter the financial markets, and now more and more of them are curious and are considering becoming members, yes. So I think this is going to be a huge thing, as I have said before, and it's going to be, you know, a lot of prediction trading.
All right. I think we're taking questions. Thank you.
Analyst Brennan Hawken (BMO Capital Markets): Hi. Thanks for answering my question. You touched on the non-U.S. dollar sensitivity to rates with a third of those balances there. Is it possible to get a currency breakdown for those balances and maybe which of those currencies are growing the fastest?
Executive Name (Title): Yeah, we don't really get into it at that granular level, Brennan. You know, we make that differentiation between USD and non-USD because, of course, the bulk is in USD, but we want to make sure that, in your mind, there's a differentiation when you see the benchmark rates change. What can you expect?
Okay. Thanks, Paul. And then, is it still fair to assume you framed the changes in rates as a drop in those policy rates, but are the upside and downside scenarios symmetrical, or do they differ if rates are moving up?
Executive Name (Title): They're roughly symmetrical. There are some low-rate non-US dollar currencies, as we saw when rates here went near zero. There's a little bit of asymmetry when you go from positive to negative territory, but it's fairly minor. So, other than that, they are pretty symmetrical.
Great. Thanks for taking my question.
Analyst Chris Allen (KBW): Yeah, afternoon, everyone. I just want to ask about crypto. You continue to build out capabilities there. You announced the transfer capabilities in crypto. I know it's just been a few weeks, but I'm wondering if you've seen any clients proactively transfer positions to IBKR since you offered that capability.
Executive Name (Title): We indeed have. We released it only a couple of weeks ago. We do see amounts coming in. It's mostly United States, but internationally we see that as well. And the other thing that we announced not long ago was launching our European offering. We have done that in cooperation with our partner, ZeroHash. We have so far been under soft release. We have issued a press release about it. We have sent an email notification to existing clients. We have not yet been marketing it externally.
Got it. And maybe just following up on that, anything else you think you need to offer right now to increase or accelerate your digital asset penetration, or you think you're kind of already there with your product solutions offering? I know you've got coins and things along those lines.
Executive Name (Title): There are a couple of things we still need to do. We are not covering all the geographies. We are working on that in Singapore, for example. And the other thing that we need to work on is the staking. As you know, some of the cryptocurrencies use the proof-of-stake concept, which allows the holders of those currencies to earn very significant interest income. And our partner, ZeroHash, is working on that capability. And as soon as they have it, we're going to integrate it into our offering.
Great. Thanks.
Analyst Karim Sif (Bank of America): Hi. Good afternoon, everyone, and thank you very much for taking my question. Just one question, actually, on the crypto business. If you could talk a little bit more about that agreement or partnership that you've had with Coinbase Derivatives, you know, maybe around like, you know, the client demand there and how we should kind of like, you know, think about the potential revenue opportunity and any of the, you know, the economics that you could share with us. Thank you.
Executive Name (Title): So the agreement that we have with them is very simple. The Coinbase Derivatives Exchange lists a number of cryptocurrency futures. Most of them are different in terms of size from what the large exchanges offer. They're significantly smaller contracts, so they are geared towards retail traders. There is one particular instrument type that is interesting to the traders. Those are the so-called perpetual futures. That was the main reason why we have decided to integrate that offering into ours. The perpetual cryptocurrency futures, they command very, very significant volumes, and that is why we joined the exchange and now offering it to our clients. Our clients trade it. It's not a very large number of accounts yet, but the ones that are trading it are trading it in big numbers.
Got it. Thank you very much for taking my question.
Executive Name (Title): Thank you, and ladies and gentlemen, this concludes our Q&A session, and I will pass it back to Nancy Stubbe for closing comments. Thank you, everyone, for participating today.
As a reminder, this call will be available for replay on our website, and we will also be posting a clean version of our transcript on the site tomorrow.
Thank you again, and we will talk to you next quarter end. And this concludes our conference. Thank you for participating, and you may now disconnect.
Quarter 2
Q4 2025 Earnings Call — January 20, 2026
Brennan Hawkin (BMO Capital Markets): Hi. Thanks for taking my question. I was curious about the poll on the customer credit balances. It seemed as though the decline in the amount paid, the yield, didn't come down quite as much as we were looking for. Some color around some of those dynamics and what might have caused the lower rates not to flow through and whether or not there might just be some more on the come here in the next quarter or two?
Management: Yeah, sure. So obviously it's, you know, the net interest income and the major segments there being segregated cash and margin loans and the customer credit balances. They all operate a little bit differently. So for said cash, when the rates come down, even though we have a relatively short duration, there is a little bit of tail out there. And we retain somewhat higher rates while we pay lower rates on our credit balances during that period because they are based on the overnight rates. The rest of the balance changes. Our very strong performance in the margin lending balances vastly overcame the drop in the general benchmark rates.
Brennan Hawkin (BMO Capital Markets): Got it. So we got basically a repricing lag on some of the asset side. That makes sense. And for my follow-up, I believe the comment period for your bank charter application ended today. Could you maybe update us on that process, what you've heard back from the regulators, and what kind of impact we should expect if the bank charter is approved and you go forward with a bank?
Management: So we have been in contact with the OCC for a while. The way this process works is you are in contact with them, you talk to them, you present the business plan. They point out what they do not like or what you would like to receive more information on. Once you get through this stage, they give you the go-ahead to officially file the application, which we did. And they acknowledge that. Then there is a several months long time period that they have to actually approve your request. There are others applying for the National Trust Chartered Bank. I do not know exactly where we are in the queue, but my expectation would be to be operational by the end of this year. Now, exactly what that means for us is, as a broker dealer, the regulations do not permit us to custody assets of mutual funds and exchange-traded funds. A trust charter bank will allow us to do that. That is the rationale behind our application.
Brennan Hawkin (BMO Capital Markets): Okay. Thank you for taking my questions.
Patrick Moley (Piper Sandler): Yes, good afternoon, and thanks for taking the question. I had one on prediction markets. There's been a lot of speculation recently about whether regulators or the U.S. courts will allow prediction market platforms to continue offering sports contracts. So I was just hoping to get an update from you on how you maybe see this all playing out between the platforms and the sports books. And then with ForecastX launching NFL contracts in the fourth quarter, just wondering, you know, what you would need to see from regulators or the courts that would make you comfortable offering contracts like that to IBKR customers, or if this is an aspect of prediction markets that you just think is, you know, will never make sense to commingle with your existing customer base. Thanks.
Management: So, I don't know if you're aware that Massachusetts just came out with a ruling against Koshy. So, the judge ruled against Koshy. And that probably means that Kalshi will no longer take customers from Massachusetts. But this is certainly not the final word. So your guess is as good as ours as to what will happen here. And so luckily, we, interactive brokers, do not rely on sports. We do believe that these contracts will have enormous applicability to many, many things about the future, and they'll be very, very successful, and it doesn't really have to depend on sports.
Patrick Moley (Piper Sandler): Okay, great. And then just as a follow-up, you're sitting on a healthy pile of excess cash. Any updated thoughts on the appetite for M&A and capital return priorities? And then on M&A specifically, I know in the past you've said that with traditional brokerage models, it's been difficult to make the deal math work with your pricing model. But in an emerging asset class like prediction markets, I'm just wondering if M&A could make sense here for you. Thanks.
Management: Anything is possible, but we're not going to buy a firm that is doing sports betting. And there is nothing else out there at the moment, right? It's not only that. We have our own platform, ForecastX. It's growing nicely. Mid-December of last year, we have rolled out ForecastX on 24-7 trading schedule. We added liquidity providers. ForecastX now lists over 10,000 different instruments, and the trading volumes have increased significantly. So no reason for us to look for an acquisition in this space.
Patrick Moley (Piper Sandler): All right. Thanks so much for the answer. That's it for me.
James Yarrow (Goldman Sachs): Thanks for taking the question. So you touched a little bit on the OCC issue. National Trust Bank Charter. I was hoping you might be able to touch a little bit on the aspirations for a European banking license, and if so, where you are in the process of looking to get one of those.
Management: We have not started the process. Having a bank license in Europe would come with some benefits. It is not urgent for us to have one. We will eventually have a license in Europe. The most likely place for us to acquire it would be in Ireland, where our broker operations are already regulated by a banking regulator with whom we have very good relationships.
James Yarrow (Goldman Sachs): Okay, excellent. I just wanted to ask a follow-up on prediction markets. I was hoping, Thomas, you might be able to just update us on the institutional adoption of prediction markets so far, how you plan to cater to this client set specifically versus on the retail side, and over what period, in your view, institutional prediction markets fully develop?
Management: So our most frequently traded contracts are temperature contracts. We are currently working on tying up these temperature contracts with the electricity contracts and the natural gas contracts. And as you know, it is basically the utilities that have to every day make a judgment about the next day's use of electricity. So we are working on approaching those, and I think that sometime in the course of the year, you will see them onboarding.
James Yarrow (Goldman Sachs): Okay, thank you so much.
Craig Siegenthaler (Bank of America): Good evening, everyone. Hope you're all doing well. My first one is on your expanding crypto offering. How should we think about the appetite for adoption across your base? And I'm especially interested in the individual investors in the direct and the iBroker channel. Do they want crypto trading and do they want it from IBKR?
Management: The revenues are at the moment small relative to the overall company's revenues. Most clients who actively trade cryptocurrencies were already doing so before we entered the space. So we are not yet a major brand in cryptocurrency space. You asked about the iBrokers. The answer is no, they have not been asking for access to crypto. I'm not sure why that is. Our pricing, as we explained over a number of earnings calls, is superior to our competitors in the United States and outside. We added crypto to our offering to round it up, particularly targeting investment advisors and multi-asset clients who wanted limited exposure to the asset. Our offering is competitive and we continue to add capabilities, new geographies, namely Europe is currently the focus. I would expect us to go live with our offering in this quarter. And then I am hopeful that asset transfers, once we support asset transfers, some crypto assets will migrate to our platform and take advantage of our superior pricing.
Craig Siegenthaler (Bank of America): Thanks, Mon. And just for my follow-up, it's one I've asked, I think, two quarters in a row now, but account growth is still very strong, north of 30%. Thomas, any specifics on how long you can keep this up? Because your comments at that May conference are still pressing my mind.
Management: As long as I can live. No, that's my answer. I don't see any reason why our account growth would slow down if we continue at the rate that we've been going. You see, the benefit that we have is our platform is attractive to many people around the world.
Craig Siegenthaler (Bank of America): Okay, I'll stop you. Thanks for taking my questions.
Dan Fannin (Jefferies): Thanks. So just another question on growth, but more just in terms of investment and spend. As you think about all of the initiatives you have entering this year, do you think the level of spend is growing? Is it consistent with the last couple of years, or how should we think about overall expense growth?
Management: The overall expense growth, I think, has been consistent over the past many quarters over the last few years. We have been cautiously adding to our headcount as we needed this past year. It was around 6% growth. Our compensation went up by 10% or so. I would expect for us to see similar growth in the future. Of course, we have a number of AI initiatives in process, and those initiatives may affect the rate at which our expenses will grow in the future.
Dan Fannin (Jefferies): Understood. And then just another one on account growth in terms of you know, the account growth today and where it's been coming from here in the latter part of 25 versus maybe where you think there's a growth going to change or other areas that could grow faster in next year. Just trying to get a sense of what's different in terms of where you're seeing more success or more markets are more mature versus less.
Management: We have been universally doing well. We have been attracting large accounts, small accounts, very active accounts, less active accounts, retail, professional, institutional. They all come to us for the same reason. The technology works. Pricing is fair. Access is global. No need to rely on promotions or incentives.
Dan Fannin (Jefferies): Understood. Okay. Thank you.
Benjamin the Buddhist (Barclays): Hi, good evening, and thank you for taking the question. Maybe tying a couple of these previous questions together, I think, Thomas, in the press you made some comments about the U.S. midterm election to later this year potentially juicing account growth. Can you maybe talk about the, and I think you've mentioned the prepared remarks, the advertising spend is up a little bit, even though I think a lot of your growth comes from word of mouth. Can you maybe talk about your plans to drive more engagement on prediction markets, either through the interactive brokers platform, onboarding more FCMs? How are you thinking about that opportunity coming up later this year to kind of boost account growth even more?
Management: Advertising is certainly a key. We are getting better and better at advertising, and we are also increasing our advertising spending to some extent. So that's what it is.
Benjamin the Buddhist (Barclays): Okay, understood. We will not let our account growth go lower.
Benjamin the Buddhist (Barclays): Love the confidence. Maybe just one more question on prediction markets. You talked earlier about institutional interest. I'm just curious, when we look at some of the institutional products offered at CME and ICE, we tend to see very, very large notional amounts and larger fees per contract, but less relative to the size, you know, to the notional amount of exposure. Just curious, you know, onboarding insurance companies, electric utilities, these sorts of institutions, does that require any change to product design, or do you think it's more a matter of education, making sure the liquidity is there, and then it'll, you know, you'll be able to onboard those kinds of customers? Thank you.
Management: It's not a product design question. It is a matter of selling it.
Benjamin the Buddhist (Barclays): Okay. Thank you very much. Fair enough.
Nancy Stubbe (Closing Remarks): Thank you everyone for participating today.
As a reminder, this call will be available for replay on our website and we will also be posting a clean version of our transcript on the site tomorrow.
Thank you again and we will talk to you next quarter end. This concludes today's conference call. Thank you for participating. You may now disconnect.