Interactive Brokers Group, Inc. (NASDAQ:IBKR) Q4 2022 Earnings Conference Call January 17, 2023 4:30 PM ET
Company Participants
Nancy Stuebe - Director of Investor Relations
Paul Brody - CFO
Thomas Peterffy - Chairman
Milan Galik - President, CEO & Director
Conference Call Participants
Richard Repetto - Piper Sandler
Craig Siegenthaler - Bank of America Merrill Lynch
Benjamin Budish - Barclays
Daniel Fannon - Jefferies
Kyle Voigt - KBW
Chris Allen - Citi
Macrae Sykes - GAMCO
Transcript Provided by the Company Later
Operator
Thank you for standing by, and welcome to the Interactive Brokers Group Fourth Quarter 2022 Earnings Call. [Operator Instructions] I would now like to hand the conference over to Director of Investor Relations, Nancy Stuebe. Please go ahead.
Nancy Stuebe
Thank you. Good afternoon, happy new year, and thank you for joining us for our fourth quarter 2022 earnings call. Thomas is on the call, and 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 disclaimers in our press release. You should also review a description of risk factors contained in our financial reports filed with the SEC.
The good news about 2022 can be seen in our numbers. We now have over 2 million customers around the world. We earned $3 billion in net revenues for the first time. In the fourth quarter, our pretax margin reached 71% – by far the highest in the industry.
After two years of unprecedented investor interest in the markets overall, we now see some retrenchment and more localized engagement in particular product segments, like futures and options, rather than across the board. Rising inflation and interest rates – as well as geopolitical uncertainty in places around the globe – helped commodity, interest rate and stock index futures become more popular, while options were increasingly used to manage risk. Equity markets grew weaker as inflation and the impact of central bank policies took hold.
After years of persistent deficit spending, with zero [and negative] interest rate policies around the world, I believe inflation is going to stay with us. It is likely to stay above 4%, and the Federal Reserve will keep rates at this level or higher, and eventually will have to give up on getting inflation down to its current 2% target. We believe that the target will be raised.