The popular online trading platform Interactive Brokers Group Inc. has presented a report of its financial dealings for Q4 of 2022. The records, which covered the company's dealings precisely from October 1st to December 31st, 2022, indicated the company's largest-ever profit quarter.
Details of Interactive's Q4 2022 Financial Records
According to the report, the company earned $1.31 per share at the end of the quarter. The adjusted value of $1.30 per share exceeds the market forecast of $1.16 in the Zacks Consensus Estimate. The broker reported $976 million in net revenues, while the adjusted amount was $958 million.
The report further revealed that despite a fall in margin loan balances, the trading company's commission revenue rose by 3% and its net interest income by 92% to hit $331 million and $565 million, respectively. This growth was attributed to increasing benchmark interest rates and consumer spending.
The reports also revealed that its "other income" also grew by $107 million, bringing the company a profit of $37 million. This profit was primarily from Interactive's strategic investment in Up Fintech Holding Limited (Tiger Brokers), with a gross income of $58 million.
Interactive also made some $6 million profit from the remeasurement of its Tax Receivable Agreement liability. An extra $34 million was generated from the broker's currency diversification. The Broker reported that its pre-tax income rose by 85% to $689 million, while adjusted income came in at $671 million.
As opposed to $338 million in the last quarter of 2021, the broker ended the quarter with a net income of $633 million. The broker has exceeded consensus EPS forecasts twice in the previous four quarters.
The Downside of Interactive's Q4 2022 Financial Records
The platform had 2.09 million consumer accounts at the end of Q4 2022, a 25% increase over Q4 2021. However, customer equity fell to an 18% reduction of $306.7 billion. Customer credits rose by 9% to $95.2 billion, while customer margin loans declined by 29% to $38.9 billion.
Additionally, the number of daily average revenue trades (DARTs) declined by 22% to 1.89 million, while the number of cleared DARTs decreased by 22% and stood at 1.69 million.
Forecast of Interactive's 2023 Financial Records
The broker's increased profit and revenue highlight the benefits of the Federal Reserve's aggressive rate hikes from last year. As a result, the Fed will probably maintain high rates in 2023, which might be advantageous for businesses like Interactive Brokers on a long-term basis and boost its customer ratings
Interactive Brokers Group, Inc. surpassed the market expectation in the previous year and made an impressive 6.7% added shares this year. Hence, the broker's potential to maintain its current price movement in light of previously revealed figures and projected future profits will mostly depend on its management's decision.
