Solid Trading Activity Likely to Drive Interactive Brokers' Q4 Earnings

Interactive Brokers Group IBKR is slated to report fourth-quarter and full-year 2025 results on Jan. 20, after market close.

The company’s third-quarter 2025 earnings surpassed the Zacks Consensus Estimate. Results were primarily aided by an increase in revenues, growth in customer accounts and a rise in Daily Average Revenue Trades (DARTs). Also, lower expenses acted as a tailwind.

In the to-be-reported quarter, IBKR is expected to have witnessed decent top and bottom-line growth. This can be attributed to continued substantial market volatility and heightened client activity. The Zacks Consensus Estimate for revenues of $1.49 billion suggests 4.3% year-over-year growth.

Further, over the past week, the consensus estimate for earnings for the fourth quarter has been revised 6.1% north to 52 cents per share. This estimated figure indicates a 2% rise from the prior-year quarter.

Estimate Revision Trend
 

Interactive Brokers has a decent earnings surprise history. The company’s earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, with the average beat being 7.98%.

Earnings Surprise History
 

Interactive Brokers’ Key Q4 Estimates

Client activity and market volatility were solid in the fourth quarter. This was largely driven by the longest U.S. government shutdown in history, a dip in consumer sentiment, easing monetary policy and a dominant AI-theme. This, along with robust DART numbers in all three months of the quarter on a year-over-year basis, is expected to have supported Interactive Brokers’ commission revenues. The Zacks Consensus Estimate for commission revenues is pegged at $536 million, indicating a year-over-year rise of 12.6%. 

The consensus estimate for other fees and services of $72.9 million implies a 10% fall. 

The Federal Reserve lowered interest rates twice in the quarter to 3.5-3.75%. While this is likely to have hurt IBKR’s net interest income (NII), a solid lending scenario and stabilizing funding/deposit costs are expected to have offered the much-needed support. The consensus estimate for NII is pegged at $821.6 million, implying a 1.8% increase from the prior-year quarter.

On the cost front, total operating expenses are likely to have been elevated as IBKR invests in key areas to enhance platform capabilities, drive product innovation, improve customer support, and build upon regulatory and compliance functions.

What Our Quantitative Model Predicts for IBKR

Per our quantitative model, it cannot be conclusively predicted whether Interactive Brokers will be able to beat earnings estimates this time. This is because it does not have the right combination of the two key ingredients — a  positive Earnings ESP and a Zacks Rank #3 (Hold) or better.

Earnings ESP: Interactive Brokers has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

IBKR’s Price Performance

In the fourth quarter, Interactive Brokers' price performance was disappointing. The stock underperformed the industry and its close peers — Charles Schwab SCHW and Tradeweb TW.

4Q25 Price Performance
 

Schwab is slated to announce fourth-quarter and full-year results on Jan. 21, before market open. Over the past seven days, the Zacks Consensus Estimate for Schwab’s quarterly earnings has been revised 1.5% upward to $1.36 per share. This implies 34.7% jump from the prior-year quarter.

Tradeweb is set to announce fourth-quarter and full-year results on Feb. 5, before market open. Over the past seven days, the Zacks Consensus Estimate for Tradeweb’s quarterly earnings has remained unchanged at 84 cents per share. This implies a 10.5% increase from the prior-year quarter.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research