Key Highlights

  • Interactive Brokers reported record Q2 2025 results with a 77% pre-tax profit margin, the seventh consecutive quarter above 70%.
  • Revenue of $1.90 billion and adjusted EPS of $0.69 topped consensus estimates of $1.80 billion and $0.64.
  • Client equity rose 40% year-over-year to $930 billion, and customer accounts grew 34% to 5.19 million.
  • Shares are trading modestly lower despite a wave of price target hikes from Barclays, Goldman Sachs, BMO, Piper Sandler, and Jefferies.

Interactive Brokers (NASDAQ: IBKR) shares are trading modestly lower even as the company reported strong Q2 results after Tuesday's close, with revenue of $1.90 billion and adjusted EPS of $0.69 topping consensus estimates of $1.80 billion and $0.64.

What Happened

The company reported record Q2 2025 results, including record commissions, net interest income, total net revenue, total accounts, account adds, client equity, and client DARTs, with a pre-tax profit margin of 77%, marking the seventh consecutive quarter above 70%.

Client equity rose 40% year-over-year to $930 billion, uninvested client cash balances grew 27% to $182 billion, and new account growth was 34%, with commissions up 30% and net interest income up 23% year-over-year to over $1 billion. Commission revenue rose 30% year-over-year, net interest income climbed 23% to $1.06 billion, customer accounts grew 34% to 5.19 million, and margin loans jumped 67% to $108.5 billion.

Multiple product and platform expansions occurred during the quarter, including Korea market access, European crypto and SPAC IPO offerings, launch of IBKR Connector, an AI chatbot integration with OpenAI, Anthropic, and xAI, preliminary OCC approval for a National Trust Bank charter targeted to be operational by year-end, and the launch of IBKR Prediction Markets integrating ForecastEx, CME, and Kalshi.

Market Reaction

The results prompted a wave of price target hikes from Barclays ($114), Goldman Sachs ($122), BMO ($110), Piper Sandler ($109), and Jefferies ($108).

Despite the bullish analyst reaction and initial after-hours gains, shares pulled back the following day, likely reflecting profit-taking after the stock's strong run into earnings and valuation concerns given IBKR trades near the top of its historical multiple range, even as peers like Charles Schwab and CME also posted strong quarterly results the same week.

Outlook

Management estimates that a 25 basis point increase or decrease in the Fed funds rate would change annual net interest income by $81 million, while a similar move in non-U.S. benchmark rates would impact annual net interest income by $38 million; excess capital stood at approximately $10.3 billion, up about $1 billion from the prior quarter.

Executives highlighted continued strong account growth across all regions and account types, a robust and growing introducing broker pipeline, increased account transfers from Tiger and Futu following Chinese regulatory actions, and plans to expand into additional prediction market contracts, such as hurricane-related contracts, and agentic AI trading capabilities with appropriate guardrails in the future.

Why did Interactive Brokers shares fall despite beating estimates?

The pullback appears to reflect profit-taking after the stock's strong run into earnings and valuation concerns, given IBKR trades near the top of its historical multiple range.

How much did Interactive Brokers' client equity grow?

Client equity rose 40% year-over-year to $930 billion.

What new products did Interactive Brokers launch this quarter?

The company launched IBKR Connector, an AI chatbot integration with OpenAI, Anthropic, and xAI, and IBKR Prediction Markets integrating ForecastEx, CME, and Kalshi, among other expansions.