Shares of Interactive Brokers (NASDAQ: IBKR) fell in after-hours trading after the company reported earnings for its second quarter of Fiscal Year 2023. Earnings per share came in at $1.32, which missed analysts’ consensus estimate of $1.40 per share. Sales increased by 52.4% year-over-year, with revenue hitting $1 billion. This missed analysts’ expectations by $60 million.
The second quarter brought a mix of trends for the trading platform. Daily average revenue trades (DARTs) saw a slight increase from Q1, reaching 1.87M compared to the previous quarter’s 1.85M, though this still represented a 14% drop from the previous year. Interestingly, while customer trading volume saw an uptick in options contracts by 9% year-over-year, futures contracts dipped by 3%, and stock share volumes took a significant 28% hit.
On a positive note, net interest income witnessed a solid rise, reaching $694M, a jump from $637M in the first quarter and a hefty increase from the $348M a year earlier. This was reflected in the net interest margin, which climbed to 2.34%, up from 2.24% in Q1 2023 and significantly higher than 1.27% in Q2 2022. However, noninterest expenses also saw an uptick, increasing to $348M from $295M in Q1 and from $264M in the same period last year. Customer accounts grew impressively, seeing a 19% year-over-year rise to 2.29M, but customer margin loans saw a slight 2% decrease to $41.9B. Lastly, commission revenue remained stagnant at $322M compared to a year ago.
Overall, Wall Street has a consensus price target of $110.83 on IBKR stock, implying 28.47% upside potential, as indicated by the graphic above.
