Revenue Analysis
Total and Operating Revenue: Over the three-year period, IBKR has shown a consistent increase in both Total Revenue and Operating Revenue. From 2023 to 2024, Total Revenue escalated from $1.747 billion to $2.198 billion, representing growth that signifies an expanding business scope and possibly increased market share.
Gross Profit Margin: The Gross Profit Margin has consistently improved, indicating effective management in generating revenue from its services. The Gross Profit increased from $1.524 billion in 2023 to $1.952 billion in 2024.
Cost Management
Cost of Revenue: Cost of Revenue has increased from $223 million in early 2023 to $246 million by 2024. This rise in cost suggests an increase in operational activity.
Operating Expense: Operating expenses have been managed reasonably well, with a slight increase observed from $69 million in early 2023 to $86 million by 2024.
Total Expenses: Total Expenses have seen a growth from $292 million in early 2023 to $332 million by 2024, which is aligned with the overall growth in revenue and operations.
Profitability Analysis
EBITDA: EBITDA has shown a promising increase from $1.495 billion in early 2023 to $1.905 billion by 2024, suggesting enhanced operational profitability.
Operating Income: Operating income rose from $1.455 billion in early 2023 to $1.866 billion by 2024, demonstrating effective operational and cost management.
Pretax Income: Pretax income increased considerably from $761 million in early 2023 to $866 million by 2024, reflecting strong earnings before tax impacts.
Net Income: Net income available to common stockholders has shown growth, moving from $125 million in early 2023 to $175 million by 2024.
Cash Flow Indicators
Reconciled Depreciation: Reconciled depreciation values have remained fairly stable, showing a modest increase indicating sustained capital expenditure.
Interest Expense: Interest Expenses remained significantly high but stable which reflects consistent financing costs, essential for understanding the firm’s financial structure.
Taxation
Tax Rate: The tax rate has exhibited slight variations but stayed around the 8% mark. This has implications for net income and shareholder returns.
Tax Provision: The tax provision for IBKR has steadily risen, correlating with its increasing pretax income, showcasing higher tax liabilities in line with growth.
Shareholder Metrics
Diluted and Basic EPS: Both the Diluted EPS and Basic EPS have seen increases over the period, indicating stronger profitability per share and potentially enhancing investor appeal.
Average Shares: The number of shares has been fairly consistent, with a slight increase, suggesting no significant dilutive activities such as new stock issuances.
Conclusion
IBKR has demonstrated positive growth across all significant financial metrics from revenue to net income, alongside manageable expenses and reasonable cost growth. However, attention should be paid to the escalation in costs that accompanies revenue growth to ensure long-term sustainability.