Interactive Brokers (IBKR.US) Q3 revenue increased by 16% year-on-year, announces over 70% increase in quarterly dividend

Zhitong Finance APP reports that on Thursday, Interactive Brokers (IBKR.US) released its Q3 2026 financial results. Driven by increases in net interest income and commission income, the company’s net revenue for the quarter grew by 16% year-over-year, with adjusted earnings per share rising about 18% year-over-year. At the same time, the company announced a more than 70% increase in its quarterly dividend.

According to the financial report, Interactive Brokers’ third-quarter net revenue was $1.914 billion, up 15.6% from $1.655 billion during the same period last year; adjusted net revenue excluding special items was $1.872 billion, up 16.3% from $1.610 billion a year earlier.

In the third quarter, Interactive Brokers’ pre-tax profit reached $1.496 billion, up 14% from $1.312 billion a year ago; net profit attributable to common shareholders was $314 million, a 19.4% increase from $263 million in the same period last year; diluted earnings per share was $0.69, higher than $0.59 last year.

On a Non-GAAP basis, third-quarter adjusted pre-tax earnings were $1.454 billion, an increase of 14.8% year-over-year; adjusted net profit attributable to common shareholders was $305 million, up 20.6% year-over-year; adjusted earnings per share were $0.67, higher than $0.57 a year ago, an increase of 17.5% year-over-year.

In terms of profitability, the company’s pre-tax profit margin for the third quarter was 78%, down 1 percentage point from 79% last year, both on a GAAP and adjusted basis.

Net interest income up 19% year-over-year as client margin loan balances expand

Looking at the revenue breakdown, net interest income remains Interactive Brokers’ main revenue source. In the third quarter, net interest income was $1.154 billion, up 19% from $967 million last year, mainly driven by increases in clients’ average margin loan balances and lending balances.

The report shows that clients’ average margin loan balances in the third quarter were approximately $104 billion, up about 47% from $70.8 billion a year ago; average client lending balances were around $176.6 billion, up about 25% from $141.8 billion a year earlier.

However, due to changes in yields, the company’s net interest margin narrowed to 1.99% in Q3 from 2.16% last year.

In commissions, Interactive Brokers’ third-quarter commission income was $602 million, an increase of 12% from $537 million a year ago. The company said this was mainly due to an 18% year-over-year increase in daily average revenue trades (DARTs) and higher regulatory fees passed on to clients.

On trading volumes, third-quarter client futures trading volumes increased 13% year-over-year, stock trading volumes declined 24% year-over-year, and options trading volumes fell 1% year-over-year.

In addition, other fees and service income for the quarter was $88 million, a 33% year-over-year increase, primarily driven by growth in exposure fees, payment for order flow revenues under exchange-mandated programs, and higher market data fees.

Meanwhile, execution, clearing, and distribution expenses grew 46% year-over-year to $134 million, mainly due to the rise in the SEC Section 31 transaction fee rate, which resulted in an approximately $30 million increase in regulatory fees.

Accounts grow 35% year-over-year; client assets approach $1 trillion

In operating data, Interactive Brokers’ total client accounts reached 5.576 million in Q3, an increase of 35% from 4.127 million during the same period last year and up 8% from 5.185 million in Q2.

By the end of the third quarter, the company’s client assets totaled $964.7 billion, up 27% year-over-year and about 4% from the second quarter, moving closer to the $1 trillion milestone.

Client daily average revenue trades reached 4.273 million, up 18% from the previous year, but down 11% from 4.824 million in Q2. Client margin loan balances were $105.2 billion, up 36% year-over-year; client lending balances were $186.2 billion, up 20% year-over-year.

It is worth noting that despite continuous expansion in client accounts, individual account trading activity has declined. The annualized average daily revenue trades per clearing client account in the third quarter was 168, down from 195 last year, a 14% decline year-over-year.

Additionally, the average commission per cleared client order eligible for commission dropped from $2.70 last year to $2.59, a decrease of 4%.

Quarterly dividend raised by over 70%

Alongside the earnings report, Interactive Brokers’ board of directors announced an increase in the quarterly cash dividend from $0.0875 to $0.15 per share, an increase of roughly 71.4%. The company stated that the new quarterly dividend will be paid on December 14, 2026, with a record date of December 1.

On the balance sheet, as of the end of September, Interactive Brokers’ total assets reached $243.235 billion, up from $203.240 billion at year-end 2025; total equity was $23.251 billion, up from $20.472 billion at year-end 2025.

In addition, other income for the third quarter fell 18% year-over-year to $70 million, mainly due to a $50 million decrease in income from investment activities. However, gains from currency diversification strategies increased by $36 million, partially offsetting the decline.

According to disclosures, Interactive Brokers uses a GLOBAL currency basket comprised of 10 major currencies to measure its net asset value. In the third quarter, the currency diversification strategy reduced the company’s comprehensive income by $4 million.