Interactive Brokers (IBKR) Q3 2026 earnings review
Interactive Brokers adds accounts fast, but each client trades less
Interactive Brokers keeps signing up customers at a fast pace, but the customers it already has traded less this quarter. Revenue rose 16%, and most of the gain came from interest on customer loans and deposits. Commissions grew only about 6% by our math, once a regulatory fee the broker passes through to customers is set aside. The board raised the quarterly dividend to 15 cents.
| Net revenue | $1.91B +16% from a year ago |
|---|---|
| Profit per share, excluding one-offs | $0.67 +18% from a year ago |
| Customer accounts | 5.58M +35% from a year ago |
| Quarterly dividend | Raised to $0.15 from $0.0875, +71% |
⚖️ Verdict: ⚪ Neutral
The story is unchanged, because the quarter's two big moves cancelled out. Account growth sped up and the interest margin rose for a second quarter, but trades per account fell 14% from a year ago, the largest drop in five quarters. The good news is a 71% dividend raise; the caution is that the company has never bought back a share and its capital keeps piling up.
The question now is whether the trading slowdown reflects a quiet summer market or a customer base that arrived mainly to hold cash. If the market, trades per account recover with volatility; if the mix, commissions keep trailing account growth. The next two monthly brokerage reports will tell.
🐂 Bull Case
Account Growth Sped Up Again
Interactive Brokers earns money from two things: the trades its customers place and the interest it collects on their cash and loans. Both start with the number of customer accounts, so account growth is the figure the whole business rests on. The broker ended September with 5.58 million accounts, the fastest yearly growth of the past five quarters by our math.
- Accounts: 5.58 million, up 35% from a year ago
- New accounts in the quarter: 391,000, against 431,000 in the spring quarter and 261,000 a year ago
- Customer equity, the value of everything clients hold: $965 billion, up 27%
- Customer cash balances: $186 billion, up 20%
This matters because new accounts bring deposits and loans before they bring trades, so interest income tends to follow account growth with a lag. The one blemish is that the newer customers trade less than the older ones, and a bear card below covers that.
What to watch: the October monthly brokerage report in early November, and whether quarterly account additions stay near 400,000. A figure below 300,000 would mean the acceleration of the past year has ended.
Margin Loans Now Drive Interest Income
Net interest income is what the broker earns on customer cash and margin loans minus what it pays on customer deposits, and it is now 60% of revenue. It grew 19% to $1.15 billion, "primarily on higher average customer margin loans and customer credit balances", the company said.
- Interest from margin loans: $1.11 billion, up 36% from a year ago, on average loans up 47%
- Interest from segregated customer cash, net: $815 million, up 4%
- Margin loans at quarter end: $105 billion, down 3% from June but up 36% from a year ago
The shift matters because loans earn more than cash does, but they also carry the credit risk the standing bear case worries about. That risk got no new evidence this quarter: customer bad debt was a $1 million recovery after a $10 million charge in the spring, and the loan book shrank a little from its June record.
What to watch: the margin-loan balance in the monthly reports. A balance that keeps falling from the June peak while accounts grow would mean clients are reducing risk, which slows the interest line before it shows up in bad debt.
Positives This Quarter Didn't Test
Several drivers in the standing bull case live in management's call remarks and the quarterly filing, neither of which is among the materials here. The release gives no reading on them, so each stands as it did, and the list below names the number that would move it.
- Prediction markets, where the broker routes event contracts to its own ForecastEx venue and to CME and Kalshi: a volume or revenue figure, missing for three quarters.
- IBKR Connector, which lets clients place orders through AI chat tools with a human approving each order: any usage figure.
- Overnight trading, which reached 10.9 million trades in the spring quarter: the new quarterly count.
- Introducing brokers, the outside firms that bring their customers onto the platform: the number of integrations going live.
- The national trust bank charter, which the company said in July it planned to have running by year-end: a confirmation or a new date.
🐻 Bear Case
Each Customer Traded Far Less This Quarter
The release leads with commissions up 12% on 18% more daily trades. That is true, but the broker has 35% more accounts than a year ago, so each account placed fewer trades. Annualised daily trades per account fell to 168 from 207 in the spring, the lowest reading in the five quarters we can see.
- Trades per account, annualised: 168, down 14% from a year ago and 19% from the spring quarter
- Customer stock share volume: down 24%; options down 1%; futures up 13%
- Commission per order: $2.59, down 4%
- Commissions excluding the $30 million regulatory-fee increase: up about 6% by our math, against accounts up 35%
Part of the commission growth is not growth at all, because a regulatory transaction fee that was zero a year ago came back in April at a higher rate. The company collects it from customers and pays it on, so commissions and clearing costs rise by the same amount and profit does not move.
This matters because the standing case assumed new accounts trade about as much as old ones, and until this quarter the dilution was small. Either the summer market was quiet, or the accounts arriving through introducing brokers hold cash and trade little. The release does not say which.
What to watch: annualised trades per account in the monthly brokerage reports. If it stays near 170 while accounts keep growing, the customer mix has changed and commissions will keep trailing account growth.
Lower Rates Still Cost About $100 Million a Quarter
The broker earns a spread between what customer loans and cash yield and what it pays on customer deposits. That spread per dollar of balances is the net interest margin, and every yield behind it fell from a year ago because benchmark rates fell over the past year.
- Net interest margin: 1.99%, down from 2.16% a year ago but up from 1.93% in the spring and 1.88% in the winter
- Yield on margin loans: 4.25% against 4.60%
- Rate paid on customer credit balances: 2.31% against 2.64%
- Interest-earning balances: $237 billion on average, up 29%
By our math, the lower margin cost about $101 million of interest income in the quarter, compared with last year's margin on today's balances. Balances grew 29% but interest income only 19%, so about a third of the balance growth never reached revenue.
The concern is fading rather than gone. The margin has now risen for two quarters in a row, and management said in July that each quarter-point move in US rates is worth about $81 million of annual interest income. The release gives no new estimate.
What to watch: the net interest margin in the next quarterly filing. A third consecutive rise would mean the shift toward margin loans outweighs lower benchmark rates, and the rate risk would shrink in size.
Capital Keeps Building Faster Than the Payout
Interactive Brokers has never bought back shares, and management has said it keeps capital to show financial strength to institutional clients. Total equity reached $23.3 billion at the end of September, up $2.8 billion since December, while the only cash going to shareholders was a small quarterly dividend.
The board moved this quarter. It raised the quarterly dividend by 71%, to 15 cents a share. The two earlier raises were 28% and 9%, so this one is of a different order, and the company gives no other forward commitment.
By our math the new rate costs about $68 million a quarter, roughly a fifth of the profit that belongs to public shareholders. That is why the concern eases but does not close: the broker still retains most of its earnings, and the pile keeps growing.
What to watch: whether the next quarterly declaration moves again, and whether management addresses a repurchase on the next call. A second raise within a year would mean the payout policy has changed, not just the number.
Risks This Quarter Didn't Answer
Four standing concerns got no new reading from the release. They depend on the call transcript or the quarterly filing, and the list below names what would move each of them.
- Prediction markets: regulation remains unsettled and the broker excludes sports and entertainment contracts; a volume or revenue figure would show what the venue earns.
- Control: the founder-chairman controls 73.4% of the operating company through a holding entity and public shareholders own 26.6%; a succession plan has never been described.
- Currency basket: the strategy of holding equity in ten currencies cost comprehensive earnings $4 million this quarter, a small effect, but it has moved them by hundreds of millions in other quarters.
- Rates outside the dollar: about a third of interest-sensitive balances are in other currencies, management said in July, and the split by currency has never been given.
👓 Other Themes
A Regulatory Fee Returned and Inflated Both Sides
The SEC's Section 31 fee, a per-trade charge on stock sales, was zero from May 2025 and came back in April at a higher rate. The broker collects it from customers and pays it on, so execution, clearing and distribution fees rose 46% to $134 million, "a $30 million increase in regulatory fees" among them. Commissions rose by the same amount; profit did not.
💲 Other KPIs
Profit before tax was 78% of revenue, down from 79% a year ago but up from the spring. The move is in execution and clearing fees, which took 7.0% of revenue against 5.6%, almost all of it the pass-through regulatory charge. Staff costs fell as a share of revenue, so underlying costs still grow slower than revenue.
Other income, mostly gains and losses on the company's own investments and its currency basket, fell 18% to $70 million. Investment results came in $50 million lower, which a larger gain on the currency basket only partly offset. The line swings every quarter and is excluded from adjusted earnings, so it says little about the business.
Net interest from lending out customers' shares, as reported, halved to $65 million from a year ago. The company estimates that including interest on the cash collateral behind those loans, lending earned $427 million, up 36%. Both figures are in the release; the reported one has fallen in each of the last two quarters while the broader estimate rose.
🔮 Guidance
Raised. The board lifted the quarterly dividend to 15 cents a share from 8.75 cents, payable in December. It is the second increase this year and much larger than any before it. The company gives no revenue or profit outlook, so the dividend is its only forward commitment. By our math the new rate equals 22% of this quarter's profit per share, up from 13% at the old rate.
❓ Key Questions
Did new accounts or existing ones cut their trading?
Annualised trades per account fell 14% from a year ago. If the drop sits in new cohorts, commissions will trail account growth for years; if existing clients simply paused, it reverses with volatility.
What do prediction markets earn?
The platform now routes to three venues, yet no volume, contract or revenue figure has appeared for three quarters. One number would show whether the venue is a business or a feature.
Is the trust bank charter still on track for year-end?
The company said in July the charter would be operational by December. The release says nothing, and the first year's capital needs, cost and custodied assets remain unknown.
Does the 71% dividend raise change the stance on buybacks?
Equity grew $2.8 billion this year with no repurchase. A raise this size suggests a new payout policy; management should say whether a repurchase is now on the table.
What is each quarter-point rate move now worth?
Management last sized it at $81 million of annual interest income for US rates and $38 million for other currencies. Balances have grown since, and the split by currency has never been given.