Interactive Brokers Group, Inc. (NASDAQ:IBKR) Q2 2023 Earnings Conference Call July 18, 2023 4:30 PM ET
Company Participants
Nancy Stuebe - Director, IR
Paul Brody - CFO
Thomas Peterffy - Chairman
Milan Galik - President, CEO & Director
Conference Call Participants
Benjamin Budish - Barclays
Craig Siegenthaler - Bank of America Merrill Lynch
Daniel Fannon - Jefferies
Patrick Moley - Piper Sandler
Chris Allen - Citi
Kyle Voigt - KBW
Operator
Good day, and thank you for standing by. Welcome to the Interactive Brokers Group Quarter Two 2023 Earnings Call. [Operator Instructions] I would now like to hand the conference over to Nancy Stuebe. Please go ahead.
Nancy Stuebe
Thank you. Good afternoon, and thank you for joining us for our second quarter 2023 earnings conference call. Once again, Thomas is on the call, but asked me to present his comments on the business. Also joining us today are Milan Galik, our CEO, and Paul Brody, our CFO. After prepared remarks, we will have a Q&A.
As a reminder, today’s call may include forward-looking statements, which represent the company’s belief regarding future events, which by their nature, are not certain and are outside of the company’s control. Our actual results and financial condition may differ, possibly materially, from what is indicated in these forward-looking statements. We ask that you refer to the disclaimers in our press release. You should also review a description of risk factors contained in our financial reports filed with the SEC.
Our robust operating metrics once again translated into strong financial results this quarter. In fact, but for a substantial addition to reserves for legal contingencies, we would have posted record adjusted pretax income. Our account growth remained strong at 19%, while our client equity was up 24%. Margin loans have increased over the course of 2023 as investors are feeling more confident in the markets after a down year in 2022. Our net interest income reached a record, as did our total adjusted net revenues, which were over $1 billion this quarter.
On the other hand, trading volumes dropped this quarter and with that dropped our commissions by 10% from the first quarter. Lower commissions prevailed across the board. Option commission decreased the least, then came futures, and stock commissions dropped the most.
I do not expect this situation to reverse. Our clients are most heavily weighted in the magnificent 7, where they luckily have huge unrealized gains that they are not likely to want to realize. As a result, I expect a lot of calls to be written in the coming quarters in these stocks. When the stocks rise further the calls will be repurchased and when they fall, they will lapse.