Interactive Brokers adds customers, but ‘we can do better,’ founder says
GREENWICH — Interactive Brokers Group’s customer base burgeoned during the first two years of the COVID-19 pandemic, as retail investors spent more time on their portfolios. Despite a dismal 2022 for many investors, which was marked by the worst year for the benchmark S&P 500 index since 2008, the brokerage’s user base has kept growing during the past few months. In the fourth quarter of 2022, Greenwich-based Interactive Brokers’ number of customer accounts increased 25 percent year over year, to 2.09 million, according to results released Tuesday by the company.
But the market headwinds contributed to a 22 percent drop, to 1.89 million, in the company’s daily average of revenue-producing trades. Those transactions include stocks and contracts for futures and options, with the firm making money from trade commissions.
“Higher inflation and lower equities markets impacted our industry,” Interactive Brokers founder and Chairman Thomas Peterffy said in a statement that was read on an earnings call Tuesday by Nancy Stuebe, the company’s director of investor relations. “Our year-onyear account growth was 25 percent in 2022. While for many companies this would be good news, we want to do better. Our natural account growth, by word of mouth, is 10 to 20 percent. When markets go down, as they are now, that growth is closer to 10 percent. And when the markets go up, that growth is more like 20 percent. Our sales efforts also add another 10 to 20 percent on top of that. So, in the short term, that growth can be very lumpy.”
Interactive Brokers’ results did not affect the company’s stock price Tuesday, with the markets closing for the day around the time that the company released its new numbers. Interactive Brokers’ shares closed Tuesday at $77, nearly flat compared with their closing price last Friday. The price has reached a 52-week high of about $81 and hit a 52week low of around $52.
The company’s quarterly revenues totaled $976 million, up more than 60 percent from the same period in 2021. The firm recorded a quarterly profit of $136 million, compared with $67 million a year ago.
For the year, Interactive Brokers produced revenues of about $3 billion, up 13 percent from 2021. Its annual profit of $380 million compared with a bottom line of $308 million in 2021.
Interactive Brokers ranked as the No. 845 company on the 2022 Fortune list of the largest U.S. companies. Today, it employs a total of 2,820 worldwide, including 617 based at its main offices in the Pickwick Plaza complex in downtown Greenwich.
“We continue to grow, we continue to come up with new things, and we continue to pay to attract new talent,” Peterffy said.