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What changed in Interactive Brokers Group, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Interactive Brokers Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+450 added−424 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-27)

Top changes in Interactive Brokers Group, Inc.'s 2025 10-K

450 paragraphs added · 424 removed · 367 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

109 edited+36 added−23 removed88 unchanged
Biggest changeOur systems are designed to detect trading venue malfunctions and quickly take corrective actions by re - routing pending orders when possible. Our company is technology - focused, and our management team is hands - on and technology - savvy. Most members of the management team participate in algorithm design and supervise the creation of detailed specifications for new applications.
Biggest changeFault tolerance, or the ability to maintain system performance despite trading venue malfunctions or hardware failures, is crucial to ensuring best possible executions for our customers. Our systems are designed to detect trading venue malfunctions and quickly take corrective action by rerouting pending orders when possible. Our company is technology-focused, and our management team is both hands-on and technology savvy.
Since our inception, we have been transforming the electronic brokerage business through automation and innovation, with software development, product improvement, expansion of products and geographies, and management focus dedicated to this mission. We believe these are significant differentiators that set us apart from our competitors. We experience competition in hiring and retaining qualified employees.
Since our inception, we have been transforming the brokerage business through automation and innovation, with software development, product improvement, expansion of products and geographies, and management focus dedicated to this mission. We believe these are significant differentiators that set us apart from our competitors. We experience competition in hiring and retaining qualified employees.
In addition, customers can use the Allocation Order Tool to project, preview and allocate trades to take advantage of potential capital losses for all or some of an advisor’s invested customers. Rebalance Tool – The Rebalance Tool lets advisors automatically rebalance all their accounts, a single sub-account or a user-defined Account Group, which includes a subset of accounts, by redistributing percentages of positions in their sub-portfolio(s) that make up the current net liquidation value. Commentary Generator – Our AI-powered Commentary Generator helps U.S.-based financial advisors streamline workflow and improve efficiency by creating customer-specific performance reports and summarizing the latest and ticker-specific news from select providers. ‎ 8 Table of Contents Tax Loss Harvesting – Our Tax Loss Harvest tool helps advisors to potentially reduce their customers’ tax liabilities by harvesting losses across multiple assets for multiple customers at the same time. ESG Impact Profile – The ESG Impact Profile helps advisors understand customer preferences for socially responsible and impact investing.
In addition, customers can use the Allocation Order Tool to project, preview and allocate trades to take advantage of potential capital losses for all or some of an advisor’s invested customers. • Rebalance Tool – The Rebalance Tool lets advisors automatically rebalance all their accounts, a single sub-account or a user-defined Account Group, which includes a subset of accounts, by redistributing percentages of positions in their sub-portfolio(s) that make up the current net liquidation value. • Commentary Generator – Our AI-powered Commentary Generator helps U.S.-based financial advisors streamline workflow and improve efficiency by creating customer-specific performance reports and summarizing the latest and ticker-specific news from select providers. • Tax Loss Harvesting – Our Tax Loss Harvest tool helps advisors to potentially reduce their customers’ tax liabilities by harvesting losses across multiple assets for multiple customers at the same time. • ESG Impact Profile – The ESG Impact Profile helps advisors understand customer preferences for socially responsible and impact investing.
Broker-dealer customers can also select from among our modular functionalities, such as order routing, trade reporting or clearing, on specific products or exchanges where they may not have up - to - date technology to offer to their customers a complete global range of services and products. Streamlined Client Service Program – The Streamlined Client Service Program offers a new level of service for brokers and advisors who want to handle tasks for their customers, with a simplified process for approving funding requests and signing agreements.
Broker-dealer customers can also select from among our modular functionalities, such as order routing, trade reporting or clearing, on specific products or exchanges where they may not have up-to-date technology to offer to their customers a complete global range of services and products. • Streamlined Client Service Program – The Streamlined Client Service Program offers a higher level of service for brokers and advisors who want to handle tasks for their customers, with a simplified process for approving funding requests and signing agreements.
(“IBC”) is subject to the Canadian Investment Regulatory Organization (“CIRO”) risk adjusted capital requirement; Interactive Brokers (U.K.) Limited (“IBUK”) is subject to the United Kingdom’s (“U.K.”) Financial Conduct Authority (“FCA”) financial resources requirement; Interactive Brokers Ireland Limited (“IBIE”) is subject to the Central Bank of Ireland (“CBI”) financial resources requirement; IBKR Financial Services AG (“IBKRFS”) is subject to the Swiss Financial Market Supervisory Authority (“FINMA”) eligible equity requirement; Interactive Brokers (India) Private Limited (“ IBI”) is subject to the National Stock Exchange of India net capital requirements; Interactive Brokers Hong Kong Limited (“IBHK”) is subject to the Hong Kong Securities and Futures Commission (“SFC”) financial resource requirement; Interactive Brokers Securities Japan, Inc.
(“IBC”) is subject to the Canadian Investment Regulatory Organization (“CIRO”) risk adjusted capital requirement; Interactive Brokers (U.K.) Limited (“IBUK”) is subject to the United Kingdom’s (“U.K.”) Financial Conduct Authority (“FCA”) financial resources requirement; Interactive Brokers Ireland Limited (“IBIE”) is subject to the Central Bank of Ireland (“CBI”) financial resources requirement; IBKR Financial Services AG (“IBKRFS”) is subject to the Swiss Financial Market Supervisory Authority (“FINMA”) eligible equity requirement; Interactive Brokers (India) Private Limited (“IBI”) is subject to the National Stock Exchange of India net capital requirements; Interactive Brokers Hong Kong Limited (“IBHK”) is subject to the Hong Kong Securities and Futures Commission (“SFC”) financial resource requirement; Interactive Brokers Securities Japan, Inc.
Our customers obtain competitive bids and offers with low, transparent commissions and no hidden mark-ups. Cryptocurrency – Customers of Interactive Brokers LLC, including both individuals and advisors, can trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) through Paxos Trust Company or Zero Hash LLC, which execute, clear and custody the cryptocurrencies, alongside other asset classes on a single unified platform.
Our customers obtain competitive bids and offers with low, transparent commissions and no hidden mark-ups. • Cryptocurrency – Customers of Interactive Brokers LLC, including both individuals and advisors, can trade Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH) and more 2 through Paxos Trust Company or Zero Hash LLC, which execute, clear and custody the cryptocurrencies, alongside other asset classes on a single unified platform.
The speed of communicating with exchanges and market centers is maximized through continuous software and network engineering maintenance, thereby allowing us to achieve real - time controls over market exposure. Customers Our customers primarily fall into two groups based on services provided, both of which take advantage of our low commissions as well as our best price execution.
The speed of communicating with exchanges and market centers is maximized through continuous software and network engineering maintenance, thereby allowing us to achieve real-time controls over market exposure. C ustomers Our customers primarily fall into two groups based on services provided, both of which take advantage of our low commissions as well as our best price execution.
The desk sources 6 Table of Contents liquidity, brings SPX market color from the exchange trading pit, offers price discovery services, and helps customers calibrate and execute complex algorithmic trading strategies. Automated Currency Conversions – Customers can execute trades in any of our supported currencies, even if they do not have the corresponding cash balance in that currency, and can elect us to automatically perform the necessary forex transaction to settle the trade. Recurring Investments – Customers can use our Recurring Investments tool to setup and execute a predetermined investment strategy by automatically investing funds on a recurring schedule.
The desk sources liquidity, brings SPX market color from the exchange trading pit, offers price discovery services, and helps customers calibrate and execute complex algorithmic trading strategies. • Automated Currency Conversions – Customers can execute trades in any of our supported currencies, even if they do not have the corresponding cash balance in that currency, and can elect us to automatically perform the necessary forex transaction to settle the trade. • Recurring Investments – Customers can use our Recurring Investments tool to setup and execute a predetermined investment strategy by automatically investing funds on a recurring schedule.
We offer our products and services through a global communications network that is designed to provide secure, reliable and timely access to the most current market information. We provide our customers with a variety of means to connect to our brokerage systems, including cross connects, dedicated point - to - point data circuits, extranets, virtual private networks and the Internet.
We offer our products and services through a global communications network designed to provide secure, reliable and timely access to the most current market information. We provide our customers with a variety of means to connect to our brokerage systems, including cross connects, dedicated point-to-point data circuits, extranets, virtual private networks and the Internet.
With fractional shares, there is no minimum for European shares and customers can invest in U.S. shares with as little as $1.00. This functionality allows customers to experiment with trading and investing without committing substantial sums of money and learn about building and rebalancing diversified portfolios. U.S. Spot Gold – Customers can trade U.S.
With fractional shares, there is no minimum for European shares and customers can invest in U.S. shares with as little as $1.00. This functionality allows customers to experiment with trading and investing without committing substantial sums of money and learn about building and rebalancing diversified portfolios. • Precious Metals • U.S. Spot Gold – Customers can trade U.S.
The ever-growing complexity of multiple market centers has provided us with opportunities to build and continuously adapt our order routing software to secure excellent execution prices. Since the launching of our electronic brokerage business in 1993, we have grown to approximately 3.3 million institutional and individual brokerage customers.
The ever-growing complexity of multiple market centers has provided us with opportunities to build and continuously adapt our order routing software to secure excellent execution prices. Since the launching of our electronic brokerage business in 1993, we have grown to approximately 4.4 million institutional and individual brokerage customers.
Specifically, our customers receive electronic access worldwide via our Trader Workstation SM (real - time Java - based trading platform), our Next Gen IBKR Desktop, our proprietary Application Programming Interface (“API”), our IBKR Mobile app, our Client Portal-based Quick Trade feature or industry standard Financial Information Exchange (“FIX”) connectivity.
Specifically, our customers receive electronic access worldwide via our Trader Workstation SM (real-time Java-based trading platform), our next-generation IBKR Desktop, our proprietary Application Programming Interface (“API”), our IBKR Mobile app, our Client Portal-based Quick Trade feature or industry standard Financial Information Exchange (“FIX”) connectivity.
In addition, we are fully or partially self - cleared in Canada, the United Kingdom, Switzerland, France, Germany, Belgium, Austria, the Netherlands, Spain, Norway, Sweden, India, Hong Kong, Japan and Australia. Additionally, we are members of ForecastEx, a CFTC- registered Designated Contract Market and Derivatives Clearing Organization.
Globally, we are fully or partially self-cleared in Canada, the United Kingdom, Switzerland, France, Germany, Belgium, Austria, the Netherlands, Spain, Norway, Sweden, India, Hong Kong, Japan and Australia. Additionally, we are members of ForecastEx, a CFTC-registered Designated Contract Market and Derivatives Clearing Organization.
In addition, our website includes information concerning purchases and sales of our equity securities by our executive officers and directors, as well as disclosure relating to certain non - GAAP financial measures, if any, (as defined in Regulation G) promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that we may make public orally, telephonically, by webcast, by broadcast or by similar means from time to time.
In addition, our website includes information concerning purchases and sales of our equity securities by our executive officers and directors, as well as disclosure relating to certain non-GAAP financial measures, if any, (as defined in Regulation G) promulgated under the 2 Table of Contents Securities Act of 1933, as amended (the “Securities Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that we may make public orally, telephonically, by webcast, by broadcast or by similar means from time to time.
We provide our customers with what we believe to be one of the most effective and efficient electronic brokerage platforms in the industry. We are able to provide our customers with high - speed trade execution at low commission rates, in large part because of our proprietary technology.
We provide our customers with what we believe to be one of the most effective and efficient automated brokerage platforms in the industry. We are able to provide our customers with high-speed trade execution at low commission rates, in large part because of our proprietary technology.
This new platform provides a clean, intuitive experience, making it easy for traders of all levels to navigate.
This platform provides a clean, intuitive experience, making it easy for traders of all levels to navigate.
Our core software technology is developed internally, and we do not generally rely on outside vendors for software development or maintenance. To achieve optimal performance from our systems and in response to changing market conditions, we continuously rewrite and upgrade our software.
Our core software technology is developed internally, and we do not generally rely on outside vendors for software development or maintenance. To achieve optimal performance from our systems and in response to changing market conditions, we continuously upgrade and improve our software.
The Net Capital Rule requires that at least a minimum part of a broker - dealer’s assets be maintained in a relatively liquid form. 15 Table of Contents If these net capital rules are changed or expanded, or if there is an unusually large charge against our net capital, our operations that require the intensive use of capital would be limited.
The Net Capital Rule requires that at least a minimum part of a broker-dealer’s assets be maintained in a relatively liquid form. If these net capital rules are changed or expanded, or if there is an unusually large charge against our net capital, our operations that require the intensive use of capital would be limited.
When away from their main workstations, customers can conveniently access their accounts through our IBKR Mobile platforms. Securities Financing Services – We offer a suite of automated Stock Borrow and Lending tools, including our depth of availability, transparent rates, global reach and dedicated service representatives.
When away from their main workstations, customers can conveniently access their accounts through our IBKR Mobile platforms. 6 Table of Contents • Securities Financing Services – We offer a suite of automated Stock Borrow and Lending tools, including our depth of availability, transparent rates, global reach and dedicated service representatives.
Our fully automated IB SmartRouting SM system searches for the best possible combination of prices available at the time a customer order is placed and immediately seeks to execute that order electronically or send it where the order has the highest possibility of execution at the best price.
Our fully automated IB SmartRouting SM system searches for the best possible combination of prices available at the time a customer order is placed and immediately seeks to execute the order electronically or send it where the order has the highest probability of execution at the best price.
IBKR Lite SM was designed to meet the needs of investors who are seeking a simple, commission-free way to trade U.S. exchange-listed stocks and ETFs and do not wish to consider our efforts to obtain greater price improvement through our IB SmartRouting SM system . IBKR Universal Account SM – From a single point of entry in their IBKR Universal 1 Account SM , our customers are able to transact in 28 currencies, across multiple classes of tradable, primarily exchange - listed products traded on more than 160 electronic exchanges and market centers in 36 countries around the world seamlessly.
IBKR Lite SM was designed to meet the needs of investors who are seeking a simple, commission-free way to trade U.S. exchange-listed stocks and ETFs and do not wish to consider our efforts to obtain greater price improvement through our IB SmartRouting SM system. • IBKR Universal Account SM – From a single point of entry in their IBKR Universal 1 Account SM , our customers are able to transact in 29 currencies, across multiple classes of tradable, primarily exchange-listed products traded on more than 170 electronic exchanges and market centers in 40 countries around the world seamlessly.
We are a clearing member of OCC (formerly known as the Options Clearing Corporation), The Depository Trust and Clearing Corporation, the Chicago Mercantile Exchange Clearing House, and ICE Clear U.S.
We are a clearing member of OCC (formerly known as the Options Clearing Corporation), The Depository Trust and Clearing Corporation, the Chicago Mercantile Exchange Clearing House, ICE Clear U.S., CBOE Clear U.S. and Nodal Clear.
The Securities Lending Dashboard complements IBKR’s Securities Loan and Borrow system, which is a fully electronic and actionable self-service utility that lets customers search for availability of shortable securities from within IBKR trading platforms at no cost. ‎ 7 Table of Contents Interactive Analytics SM and IB Option Analytics SM – We offer our customers state - of - the - art tools, which include a customizable trading platform, advanced analytic tools and over 100 sophisticated order types and algorithms.
The Securities Lending Dashboard complements IBKR’s Securities Loan and Borrow system, which is a fully automated and actionable self-service utility that lets customers search for availability of shortable securities from within IBKR trading platforms at no cost. • Interactive Analytics SM and IB Option Analytics SM – We offer our customers state-of-the-art tools, which include a customizable trading platform, advanced analytic tools and over 100 sophisticated order types and algorithms.
(“IBSJ”) is subject to the Japanese Financial Services Agency (“FSA”) capital requirements; Interactive Brokers Singapore Pte. Ltd. (“ IBSG”) is subject to the Monetary Authority of Singapore (“MAS”) capital requirements; and Interactive Brokers Australia Pty Limited (“IBA”) is subject to the Australian Securities Exchange (“ASX”) liquid capital requirement.
(“IBSJ”) is subject to the Japanese Financial Services Agency (“FSA”) capital requirements; Interactive Brokers Singapore Pte. Ltd. (“IBSG”) is subject to the Monetary Authority of Singapore (“MAS”) capital requirements; and Interactive Brokers Australia Pty Limited (“IBA”) is subject to the Australian Securities Exchange (“ASX”) liquid capital requirement.
Our customers can trade on more than 160 electronic exchanges and market centers in 36 countries around the world. These exchanges and market centers are all partially or fully electronic, meaning that customers can buy or sell a product traded on that exchange via an electronic link from their computer or mobile device through our system to the exchange.
Our customers can trade on more than 170 electronic exchanges and market centers in 40 countries around the world. These exchanges and market centers are all partially or fully electronic, meaning that customers can buy or sell a product traded on that exchange via an electronic link from their computer or mobile device through our system to the exchange.
In addition, an Independent Service Auditor annually examines our brokerage operations system and the suitability of the design and operating effectiveness of the related controls (System and Organizational Controls 1 Report). 12 Table of Contents We have automated the full cycle of controls surrounding our businesses.
In addition, an Independent Service Auditor annually examines our brokerage operations system and the suitability of the design and operating effectiveness of the related controls (System and Organizational Controls 1 Report). We have automated the full cycle of controls surrounding our businesses.
IBG, Inc. is a holding company whose primary asset is the ownership of approximately 25.8% of the membership interests of IBG LLC, the current holding company for our businesses. IBG, Inc. is the sole managing member of IBG LLC. When we use the terms “we,” “us,” “our,” and “IBKR,” we mean IBG, Inc. and its subsidiaries (including IBG LLC).
IBG, Inc. is a holding company whose primary asset is the ownership of approximately 26.3% of the membership interests of IBG LLC, the current holding company for our businesses. IBG, Inc. is the sole managing member of IBG LLC. When we use the terms “we,” “us,” “our,” and “IBKR,” we mean IBG, Inc. and its subsidiaries (including IBG LLC).
Interactive Advisors also offers our customers Smart Beta Portfolios which combine the benefits of actively managed fund stock selection techniques with passive ETFs low-cost automation to provide broad market exposure and potentially higher returns, as well as Socially Responsible Investing. ‎ 9 Table of Contents Technology Overview Our proprietary technology is the key to our success.
Interactive Advisors also offers our customers Smart Beta Portfolios which combine the benefits of actively managed fund stock selection techniques with passive ETFs low-cost automation to provide broad market exposure and potentially higher returns, as well as Socially Responsible Investing. T echnology Overview Our proprietary technology is the key to our success.
IBKR ForecastTrader SM allows customers to trade their opinion on a specific question with a “yes” or “no” outcome while earning an interest-like incentive coupon based on the daily closing price of each contract. Fractional Trading – Fractional Trading allows customers to buy and sell any eligible U.S., Canadian, or European stocks (or ETFs, where available), using either a specified cash amount or fractional shares, which are stock units that amount to less than one full share.
IBKR ForecastTrader SM allows customers to trade their opinion on a specific question with a “yes” or “no” outcome nearly 24 hours a day, Sunday through Friday, while earning an interest-like incentive coupon based on the daily closing price of each contract. • Fractional Trading – Fractional Trading allows customers to buy and sell any eligible U.S., Canadian, or European stocks (or ETFs, where available), using either a specified cash amount or fractional shares, which are stock units that amount to less than one full share.
The remaining approximately 74.2% of IBG LLC membership interests are held by IBG Holdings LLC (“Holdings”), a holding company that is owned directly and indirectly by our founder and Chairman, Mr. Thomas Peterffy and his affiliates, management and other employees of IBG LLC, and certain other members.
The remaining approximately 73.7% of IBG LLC membership interests are held by IBG Holdings LLC (“Holdings”), a holding company that is owned directly and indirectly by our founder and Chairman, Mr. Thomas Peterffy and his affiliates, management and other employees of IBG LLC, and certain other members.
The IBG LLC membership interests held by Holdings will be subject to purchase by us over time in connection with offerings by us of shares of our common stock. The table below presents the amount of IBG LLC membership interests held by IBG, Inc. and Holdings as of December 31, 2024. IBG, Inc.
The IBG LLC membership interests held by Holdings will be subject to purchase by us over time in connection with offerings by us of shares of our common stock. 3 Table of Contents The table below presents the amount of IBG LLC membership interests held by IBG, Inc. and Holdings as of December 31, 2025. IBG, Inc.
As of December 31, 2024, aggregate excess regulatory capital for all of the operating subsidiaries was $12.4 billion. IB LLC is subject to the Uniform Net Capital Rule (Rule 15c3 - 1) under the Exchange Act and to the CFTC’s minimum financial requirements (Regulation 1.17) under the Commodities Exchange Act. Additionally, Interactive Brokers Canada Inc.
As of December 31, 2025, aggregate excess regulatory capital for all of the operating subsidiaries was $14.1 billion. IB LLC is subject to the Uniform Net Capital Rule (Rule 15c3-1) under the Exchange Act and to the CFTC’s minimum financial requirements (Regulation 1.17) under the Commodities Exchange Act. Additionally, Interactive Brokers Canada Inc.
PortfolioAnalyst ® includes Retirement Planning and Budgeting tools, and provides U.S.-based advisors with an AI Commentary Generator designed to help advisors with customer portfolio performance reporting, market updates and ticker-specific news. IB Risk Navigator SM – We offer to all customers our real - time market risk management platform that unifies exposure across multiple asset classes around the globe.
PortfolioAnalyst ® includes Allocation Goals, Retirement Planning, Tax Planning and Budgeting tools, and provides U.S.-based advisors with an AI Commentary Generator designed to help advisors with customer portfolio performance reporting, market updates and ticker-specific news. 7 Table of Contents • IB Risk Navigator SM – We offer to all customers our real-time market risk management platform that unifies exposure across multiple asset classes around the globe.
We offer our customers access to all tradable classes of primarily exchange - listed products, including stocks, options, futures, forex, bonds, mutual funds, ETFs, precious metals, cryptocurrencies, and forecast contracts traded on more than 160 electronic exchanges and market centers in 36 countries and in 28 currencies around the world.
We offer our customers access to all tradable classes of primarily exchange-listed products, including stocks, options, futures, forex, bonds, mutual funds, ETFs, precious metals, cryptocurrencies, and forecast contracts traded on more than 170 electronic exchanges and market centers in 40 countries and in 29 currencies around the world.
The table below summarizes capital, capital requirements and excess regulatory capital as of December 31, 2024.
The table below summarizes capital, capital requirements and excess regulatory capital as of December 31, 2025.
In addition, U.S. customers can use our Mobile Check Deposit to directly deposit checks drawn on a U.S. bank. Insured Bank Deposit Sweep Program – Our Insured Bank Deposit Sweep Program provides eligible customers with up to $2,500,000 of Federal Deposit Insurance Corporation (“FDIC”) insurance on their eligible cash balances in addition to the existing $250,000 Securities Investor Protection Corporation (“SIPC”) coverage for total coverage of $2,750,000.
In addition, U.S. customers can use our Mobile Check Deposit to directly deposit checks drawn on a U.S. bank. • Insured Bank Deposit Sweep Program – Our Insured Bank Deposit Sweep Program provides eligible customers with up to $5,000,000 of Federal Deposit Insurance Corporation (“FDIC”) insurance on their eligible cash balances ($10,000,000 for joint accounts) in addition to the existing $250,000 Securities Investor Protection Corporation (“SIPC”) coverage for total coverage of $5,250,000 ($10,250,000 for joint accounts).
Cash balances above $2,750,000 remain subject to safeguarding under the SEC's Customer Protection Rule 15c3-3. Investors’ Marketplace SM – The Investors’ Marketplace SM is an electronic marketplace that brings together individual investors, financial advisors, money managers, fund managers, research analysts, technology providers, business developers and administrators, allowing them to interact to form connections and conduct business. Mutual Fund Marketplace – The Mutual Fund Marketplace offers our customers access to more than 43,000 mutual funds worldwide, including more than 18,000 no-transaction-fee funds from more than 600 fund families . Bond Marketplace – The Bond Marketplace allows customers to search for the best yields from a vast universe of over one million bonds from issuers in the Americas, Europe and Asia/Pacific.
Cash balances above $5,250,000 ($10,250,000 for joint accounts) remain subject to safeguarding under the SEC's Customer Protection Rule 15c3-3. • Investors’ Marketplace SM – The Investors’ Marketplace SM is an electronic marketplace that brings together individual investors, financial advisors, money managers, fund managers, research analysts, technology providers, business developers and administrators, allowing them to interact to form connections and conduct business. • Mutual Fund Marketplace – The Mutual Fund Marketplace offers our customers access to more than 50,000 mutual funds worldwide, including more than 20,000 no-transaction-fee funds from more than 500 fund families . • Bond Marketplace – The Bond Marketplace allows customers to search for the best yields from a vast universe of over one million bonds from issuers in the Americas, Europe and Asia/Pacific.
We specialize in routing orders and executing and processing trades in stocks, options, futures, foreign exchange instruments (“forex”), bonds, mutual funds, ETFs, precious metals, and forecast contracts on more than 160 electronic exchanges and market centers in 36 countries and 28 currencies around the world.
We specialize in routing orders and executing and processing trades in stocks, options, futures, foreign exchange instruments (“forex”), bonds, mutual funds, ETFs, precious metals, and forecast contracts on more than 170 electronic exchanges and market centers in 40 countries and 29 currencies around the world.
For example, for U.S. options, IB SmartRouting SM can represent each leg of a spread order independently, if needed, and in that event enters each leg at the best possible venue. IB SmartRouting Autorecovery SM re - routes a customer’s U.S. options order in the case of an exchange malfunction, and we absorb the risk of double executions.
For example, for U.S. options, IB SmartRouting SM can represent each leg of a spread order independently, if needed, and, in that event, enters each leg as an individual order at the best possible venue. IB SmartRouting Autorecovery SM reroutes a customer’s U.S. options order in the case of an exchange malfunction, while we absorb any risk of double executions.
Our software development costs are relatively low because the employees who oversee the development of the software are often the same employees who design the application, evaluate its performance, and participate along with our quality assurance professionals in our robust quality assurance testing procedures.
Our software development costs are relatively low, because the employees who oversee the development of the software are often the same employees who design the application, evaluate its performance, and guide our quality assurance professionals in executing robust quality assurance testing procedures.
Sustainability Our sustainability initiatives are driven by the strategies led by our Board and are implemented throughout the Company. We expanded our Sustainability Report, focusing on the guidelines of the Task Force on Climate-Related Financial Disclosures (“TCFD”), which outlines our approach to climate related risk under governance, strategy, risk management and metrics.
Sustainability Our sustainability initiatives are driven by the strategies led by our Board and are implemented throughout the Company. In 2025, we expanded our Sustainability Report, consistent with the Task Force on Climate-Related Financial Disclosures (“TCFD”), which outlines our approach to climate related risk under governance, strategy, risk management and metrics.
While many brokerages, including some online brokerages, rely on employees performing manual procedures to execute many day - to - day functions, we employ proprietary technology to automate, or otherwise facilitate, many of the following functions: account opening and funding; smart order routing resulting in industry-leading execution quality; seamless trading across all types of securities, futures and currencies around the world from one account; diverse order types, algorithms and analytical tools offered to customers; securities lending and short stock availability; delivery of customer information, such as confirmations, customizable real - time account statements, audit trails and regulatory trade reporting; compliance; customer service; and risk management through automated real - time credit management of all new orders and margin monitoring. ‎ 10 Table of Contents Research and Development One of our core strengths is our expertise in the rapid development and deployment of automated technology for the financial markets.
While many brokerages rely on employees performing manual procedures to execute many day-to-day functions, we employ proprietary technology to automate, or otherwise facilitate, many of the following functions: • account opening and funding; • smart order routing, resulting in industry-leading execution quality; • seamless trading across all types of securities, futures and currencies around the world from one account; • diverse order types, algorithms and analytical tools offered to customers; • securities lending and short stock availability; • delivery of customer information, such as confirmations, customizable real-time account statements, audit trails and regulatory trade reporting; • compliance; • customer service; and • risk management through automated real-time credit management of all new orders and margin monitoring.
ITEM 1. BU SINESS Overview Interactive Brokers Group, Inc. (“IBG, Inc.” or the “Company”) is an automated global electronic broker. We custody and service accounts for hedge and mutual funds, exchange-traded funds (“ETFs”), registered investment advisors, proprietary trading groups, introducing brokers and individual investors.
ITEM 1. B USINESS O verview Interactive Brokers Group, Inc. (“IBG, Inc.” or the “Company”) is an automated global broker. We custody and service accounts for hedge and mutual funds, exchange-traded funds (“ETFs”), registered investment advisors, proprietary trading groups, introducing brokers and individual investors.
Abroad, we conduct our business through offices located in Canada, the United Kingdom, Ireland, Switzerland, Hungary, India, China (Hong Kong and Shanghai), Japan, Singapore and Australia . As of December 31, 2024, we had 2,998 employees worldwide.
Abroad, we conduct our business through offices located in Canada, the United Kingdom, Ireland, Switzerland, Hungary, Dubai, India, China (Hong Kong and Shanghai), Japan, Singapore and Australia. As of December 31, 2025, we had 3,182 employees worldwide.
Since our inception, we have focused on developing proprietary software to automate broker - dealer functions. We have been a pioneer in developing and applying technology as a financial intermediary to increase liquidity and transparency in the capital markets in which we operate.
Thomas Peterffy, on the floor of the American Stock Exchange in 1977. Since our inception, we have focused on developing proprietary software to automate broker-dealer functions. We have been a pioneer in developing and applying technology as a financial intermediary to increase liquidity and transparency in the capital markets in which we operate.
We also compete on non-monetary forms of compensation, providing what we believe to be a robust set of benefits to our employees. ‎ 14 Table of Contents Regulation Our securities and derivatives businesses are extensively regulated by U.S. federal and state regulators, foreign regulatory agencies, and numerous exchanges and self - regulatory organizations of which our subsidiaries are members.
We also compete on non-monetary forms of compensation, providing what we believe to be a robust set of benefits to our employees. R egulation Our financial services businesses are extensively regulated by U.S. federal and state regulators, foreign regulatory agencies, and numerous exchanges and self-regulatory organizations of which our subsidiaries are members.
In addition, IB SmartRouting SM checks each new order to see if it could be executed against any of its pending orders in our automated trading system (“ATS”).
In addition, IB SmartRouting SM checks each new order to see if it could be executed against any existing orders resting in our automated Alternative Trading System (“ATS”).
Equity Index futures and options, U.S. Treasurys, global corporate bonds, European government bonds, and United Kingdom (“U.K.”) gilts nearly 24 hours a day, five days a week, enabling them to react immediately to market-moving news and conveniently trade at almost any time. It also provides customers in Asia with access to the U.S. Equity markets during their trading day.
Equity Index futures and options, U.S. Treasurys, global corporate bonds, European government bonds, U.K. gilts, and Korean Stock Exchange (KSE) futures and options nearly 24 hours a day, five days a week, enabling them to react immediately to market-moving news and conveniently trade at almost any time. It also provides customers in Asia with access to the U.S.
Unlike other smart routers, IB SmartRouting SM never relinquishes control of the order, and constantly searches for the best price. It continuously evaluates fast - changing market conditions and dynamically re - routes all or parts of the order seeking to achieve optimal execution.
Unlike other smart routers, IB SmartRouting SM never relinquishes control of the order, and constantly consumes data in search of the best price. It continuously evaluates fast-changing market conditions and dynamically reroutes all or parts of the order seeking to achieve optimal execution.
Our Investor Relations Department can be contacted at Interactive Brokers Group, Inc., Two Pickwick Plaza, Greenwich, Connecticut 06830, Attn: Investor Relations, e - mail: investor - relations@interactivebrokers.com. ‎ 2 Table of Contents Our Organizational Structure and Overview of Recapitalization Transactions The graphic below illustrates our current ownership structure and reflects current ownership percentages.
Our Investor Relations Department can be contacted at Interactive Brokers Group, Inc., Two Pickwick Plaza, Greenwich, Connecticut 06830, Attn: Investor Relations, e-mail: investor-relations@interactivebrokers.com. O ur Organizational Structure and Overview of Recapitalization Transactions The graphic below illustrates our current ownership structure and reflects current ownership percentages. The graphic below does not display the subsidiaries of IBG LLC.
U.S. broker - dealers and futures commission merchants are subject to laws, rules and regulations that cover all aspects of the securities and derivatives business, including: sales methods; “know your customer” requirements; anti-money laundering requirements; trade practices; use and safekeeping of customers’ funds and securities; capital structure; risk management; record - keeping; financing of customers’ purchases; and conduct of directors, officers and employees.
U.S. broker-dealers and futures commission merchants are subject to laws, rules and regulations that cover all aspects of the securities and derivatives business, including: • sales methods; • “know your customer” requirements; • anti-money laundering requirements; • trade practices; • use and safekeeping of customers’ funds and securities; • capital structure; • risk management; • record-keeping; • financing of customers’ purchases; and • conduct of directors, officers and employees. 15 Table of Contents In addition, the businesses that we may conduct are limited by our arrangements with and our oversight by regulators.
Staff members in the Compliance department and in other departments are also registered with FINRA, NFA or other regulatory organizations. Communications The SEC, FINRA and CFTC have stringent rules and regulations requiring broker-dealers to preserve all written communications related to the Company’s business.
Similar roles are undertaken by staff in certain non-U.S. locations as well. Staff members in the Compliance department and in other departments are also registered with FINRA, NFA or other regulatory organizations. Communications The SEC, FINRA and CFTC have stringent rules and regulations requiring broker-dealers to preserve all written communications related to the Company’s business.
Universal Account SM refers to the consolidation of these accounts for display purposes only, enabling customers the ability to use a single platform to conduct trading activity and view consolidated activity and position information for all products and services offered. ‎ 5 Table of Contents Forecast and Event Contracts – IBKR ForecastTrader SM is our web-based platform for trading forecast contracts from ForecastEx LLC (“ForecastEx”), a CFTC-registered exchange and our wholly-owned subsidiary, as well as event contracts on select CME futures markets.
Universal Account SM refers to the consolidation of these accounts for display purposes only, enabling customers the ability to use a single platform to conduct trading activity and view consolidated activity and position information for all products and services offered. 2 See https://www.interactivebrokers.com/lib/cstools/faq/#/content/182856890 for more information on the availability of cryptocurrencies for trading through our platform. 5 Table of Contents • Forecast and Event Contracts – IBKR ForecastTrader SM is our web-based platform for trading forecast contracts from ForecastEx LLC (“ForecastEx”), a registered exchange with the Commodity Futures Trading Commission (“CFTC”) and our wholly-owned subsidiary, as well as event contracts on select CME futures markets.
From 2011 through 2024, the Company issued 40,444,445 shares of common stock (with a fair value of $2.0 billion) to Holdings in exchange for an equivalent number of shares of member interests in IBG LLC. Nature of Operations As an electronic broker, we execute, clear and settle trades globally for both institutional and individual customers.
From 2011 through 2025, the Company issued 165,613,780 shares of common stock (with a fair value of $2.2 billion) to Holdings in exchange for an equivalent number of shares of member interests in IBG LLC. N ature of Operations As an automated broker, we execute, clear and settle trades globally for both institutional and individual customers.
The involvement of our developers in each of these processes enables us to add features and further refine our software rapidly. Our internally - developed, fully integrated trading and risk management systems are unique and transact across all product classes.
The involvement of our developers in each of these processes enables us to add features and further refine our software rapidly. Our internally-developed, fully integrated trading and risk management systems are unique and transact across all product classes. These systems have the flexibility to assimilate new trading venues and new product classes without compromising transaction speed or fault tolerance.
The graphic below does not display the subsidiaries of IBG LLC. Our primary assets are our ownership of approximately 25.8% of the membership interests of IBG LLC, the current holding company for our businesses, and our controlling interest and related contractual rights as the sole managing member of IBG LLC.
Our primary assets are our ownership of approximately 26.3% of the membership interests of IBG LLC, the current holding company for our businesses, and our controlling interest and related contractual rights as the sole managing member of IBG LLC.
Our customers are mainly comprised of individuals, trading desk professionals, electronic retail brokers, hedge funds, mutual funds, financial advisors, proprietary trading firms, and introducing brokers and banks that require global access. No single customer represented more than 2% of our commissions in 2024. Human Capital As of December 31, 2024, we had 2,998 employees across 28 locations globally.
Our customers are mainly comprised of individuals, trading desk professionals, retail brokers, hedge funds, mutual funds, financial advisors, proprietary trading firms, and introducing brokers and banks that require global access. No single customer represented more than 2% of our commissions in 2025. H uman Capital As of December 31, 2025, we had 3,182 employees in 24 cities across 16 countries.
Our market making software generates and disseminates to the exchanges and market centers, in which we still operate, continuous bid and offer quotes on tradable, exchange - listed products.
At the exchanges and market centers where our market making business continues to operate, our software generates and disseminates continuous bid and offer quotes on tradable, exchange-listed products.
Over four decades of developing our automated trading platforms and automating many middle- and back-office functions have allowed us to become one of the lowest cost providers of broker - dealer services and to significantly increase the volume of trades we handle.
Nearly five decades of developing our automated trading platforms and automating many middle- and back-office functions have allowed us to become one of the lowest cost providers of broker-dealer services and to significantly increase the volume of trades we handle. On August 28, 2025, we joined the S&P 500 Index.
Cleared customers, the large majority of our customers, use our trade execution and clearing services, low financing rates, high interest paid (when benchmark rates are sufficiently above zero) and, under our IBKR Lite SM offering, commission-free trades. Non-cleared customers use our trade execution services while choosing to clear with another prime broker or a custodian bank.
Cleared customers, the large majority of our customers, use our trade execution and clearing services, low financing rates, high interest paid (when benchmark rates are sufficiently above zero) and, under our IBKR Lite SM offering, commission-free trades.
Spot Gold position. No Transaction Fee Program for Exchange - Traded Funds – We offer a no transaction fee program for ETFs that reimburses IBKR Pro SM customers and eligible non-U.S. customers for commissions paid on ETF shares held for at least 30 days. Overnight Trading Hours – Customers can trade over 10,000 U.S. stocks and ETFs, U.S.
Spot Gold position. • London Unallocated Gold/Silver – Customers in Europe and the United Kingdom (“U.K.”) can gain exposure to gold and silver through our unallocated metals contracts. • No Transaction Fee Program for Exchange - Traded Funds – We offer a no transaction fee program for ETFs that reimburses IBKR Pro SM customers and eligible non-U.S. customers for commissions paid on ETF shares held for at least 30 days. • Overnight Trading Hours – Customers can trade over 10,000 U.S. stocks and ETFs, U.S.
As required by the USA Patriot Act and other rules, we have established comprehensive AML and customer identification procedures, and designated AML Compliance Officers for each electronic brokerage subsidiary; and we provide formal AML training to our AML, customer facing, and other relevant employees, and conduct regular independent audits of our AML programs.
Significant criminal and civil penalties can be imposed for violations of the USA Patriot Act, and significant fines and regulatory penalties can also be imposed for violations of other governmental and self-regulatory organization AML rules. 17 Table of Contents As required by the USA Patriot Act and other rules, we have established comprehensive AML and customer identification procedures, and designated AML Compliance Officers for each brokerage subsidiary; and we provide formal AML training to our AML, customer facing, and other relevant employees, and conduct regular independent audits of our AML programs.
Over the past four decades, we have developed an integrated trading system and communications network and have positioned our company as an efficient conduit for the global flow of risk capital across asset and product classes on electronic marketplaces around the world, permitting us to have one of the lowest cost structures in the industry.
Over the past four decades, we have developed an integrated trading system and communications network, positioning our company as an efficient, high quality, and low-cost conduit for the global flow of risk capital across assets and product classes on electronic marketplaces.
Holdings Total Ownership % 25.8% 74.2% 100.0% Membership interests 108,931,614 313,643,354 422,574,968 3 Table of Contents Purchases of IBG LLC membership interests, held by Holdings, by the Company are governed by the exchange agreement among us, IBG LLC, Holdings and the historical members of IBG LLC, (the “Exchange Agreement”), a copy of which was filed as an exhibit to our Quarterly Report on Form 10 - Q for the quarter ended September 30, 2009 and filed with the SEC on November 9, 2009.
Holdings Total Ownership % 26.3% 73.7% 100.0% Membership interests 445,612,825 1,250,737,416 1,696,350,241 Purchases of IBG LLC membership interests, held by Holdings, by the Company are governed by the exchange agreement among us, IBG LLC, Holdings and the historical members of IBG LLC, (the “Exchange Agreement”), a copy of which was filed as an exhibit to our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 and filed with the SEC on November 9, 2009.
The core of our risk management philosophy is the utilization of our fully integrated computer systems to perform critical risk - management activities on a real - time basis. Our integrated risk management seeks to ensure that each customer’s positions are continuously credit checked and brought into compliance if equity falls short of margin requirements, curtailing bad debt losses.
Our integrated risk management seeks to ensure that each customer’s positions are continuously credit checked and brought into compliance if equity falls short of margin requirements, curtailing bad debt losses.
The contents of our Sustainability Report are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC. Our Sustainability Report can be found on our website.
The contents of our Sustainability Report are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC. Our Sustainability Report can be found on our website. C ompetition The market for brokerage services is rapidly evolving and highly competitive, and we expect it to remain so.
Although our remaining market making activities are completely automated, the trading process and risk exposures are monitored by a team of individuals who, in real - time, observe various risk parameters of our consolidated positions.
Although our remaining market making activities are completely automated, the trading process and risk exposures are monitored by a team of individuals who, in real-time, observe various risk parameters of our consolidated positions. 12 Table of Contents Operational Risk and Controls We manage the operational risk inherent in our business and limit potential exposure to operational incidents by maintaining robust and comprehensive controls.
The full list of available tasks includes authorization to update or change account information, account settings, trading permissions, tax forms, banking and transfer instructions; authorization to vote shares and make elections regarding positions; authorization for special programs and alternative investments; and request to send electronic notices, confirmations, account statements and certain communications only to the broker or advisor.
The full list of available tasks includes authorization to update or change account information, account settings, trading permissions, tax forms, banking and transfer instructions; authorization to vote shares and make elections regarding positions; authorization for special programs and alternative investments; and request to send electronic notices, confirmations, account statements and certain communications only to the broker or advisor. 9 Table of Contents For customers looking for online advisory services, we offer: • Interactive Advisors – Interactive Advisors evaluates and recruits registered financial advisors, analyzes their investment track records, and groups them by their risk profile.
We calculate margin requirements for each of our customers on a real - time basis across all product classes (stocks, options, futures, forex, bonds, mutual funds, ETFs and other financial instruments) and across all currencies.
We calculate margin requirements for each of our customers on a real-time basis across all product classes (stocks, options, futures, forex, bonds, mutual funds, ETFs and other financial instruments) and across all currencies. Recognizing that our customers generally are experienced investors, we expect our customers to manage their positions proactively, and we provide tools to facilitate our customers’ position management.
We currently service approximately 3.34 million cleared customer accounts and have customers residing in over 200 countries and territories around the world. Our target customer is one who requires the latest in trading technology and worldwide access, and who expects low overall transaction and financing costs and market rate interest on uninvested cash balances.
Our target customer is one who requires the latest in trading technology and worldwide access, and who expects low overall transaction and financing costs and market rate interest on uninvested cash balances.
It gives customers access to every resource they need to view, trade and manage their account all with a single login. IBKR GlobalTrader – The IBKR GlobalTrader is a streamlined mobile trading app to trade stocks, EFTs, options and cryptocurrencies worldwide.
It gives customers access to every resource they need to view, trade and manage their account all with a single login. • IBKR GlobalTrader – IBKR GlobalTrader is a streamlined mobile app designed for investors who want an easy yet powerful way to trade around the world.
Customers can adjust inputs, such as monthly contribution amount, goal target date, or the cost or outflow associated with the goal, to estimate the likelihood of achieving a goal. AI News Summaries – Customers outside the U.S. have access to AI News Summaries that use generative AI to quickly summarize the key points of news published by select providers, saving time and allowing them to react rapidly to changing market conditions. Sustainable Investing Tools IMPACT by Interactive Brokers SM – IMPACT by Interactive Brokers SM (“IMPACT App”) is a unique, simple and intuitive mobile app that helps customers easily align their investment portfolio with their values.
Customers can adjust inputs, such as monthly contribution amount, goal target date, or the cost or outflow associated with the goal, to estimate the likelihood of achieving a goal. • AI News Summaries – Customers have access to AI News Summaries that use generative AI to quickly summarize the key points of news published by select providers, saving time and allowing them to react rapidly to changing market conditions. • Ask IBKR – Ask IBKR is an innovative AI-powered tool that lets customers interact with their portfolios using plain English.
ETFs around the clock, plus cryptocurrencies like Bitcoin, Bitcoin Cash, Ethereum and Litecoin, all from their mobile device. IBKR APIs – For our more sophisticated customers, IBKR APIs allows them to build custom trading applications and automate any part of the trading process to their specifications.
Customers can also trade select U.S. stocks and ETFs around the clock. • IBKR APIs – For our more sophisticated customers, IBKR APIs allows them to build custom trading applications and automate any part of the trading process to their specifications.
The TWS Mosaic interface provides intuitive out-of-the-box usability with quick and easy access to comprehensive trading, order management, chart, watchlist and portfolio tools all in a single, customizable workspace. IBKR Mobile – The IBKR Mobile app provides experienced traders powerful trading tools and the same market-moving information as our desktop TWS trading platform.
The TWS Mosaic interface provides intuitive out-of-the-box usability with quick and easy access to comprehensive trading, order management, chart, watchlist and portfolio tools all in a single, customizable workspace. • IBKR Desktop – The IBKR Desktop trading platform was built from the ground up using leading edge technology and a fresh user interface design.
Risk Management Activities Our risk management policies are developed and implemented by our Steering Committee, which is chaired by our Chief Executive Officer and comprised of senior executives of our various operating subsidiaries.
R isk Management Activities Our risk management policies are developed and implemented by our Steering Committee, which is chaired by our Chief Executive Officer and comprised of senior executives of our various operating subsidiaries. The core of our risk management philosophy is the utilization of our fully integrated computer systems to perform critical risk-management activities on a real-time basis.
IB SmartRouting SM IB SmartRouting SM searches for the best destination price in view of the displayed prices, sizes and accumulated statistical information about the behavior of market centers at the time an order is placed, then immediately seeks to execute that order electronically.
Our integrated software tracks other important activities, such as dividend distributions, corporate actions, options exercises, securities lending, margining, risk management, and funds receipt and disbursement. 11 Table of Contents IB SmartRouting SM At the time an order is placed, IB SmartRouting SM searches for the best destination price in view of the displayed prices, sizes and accumulated statistical information about the behavior of market centers, then immediately seeks to execute that order electronically.
We also procured renewable power sources for all our offices through the purchase of renewable energy certificates. We use third-party providers for data centers. Globally, where possible, our data centers use renewable power provided directly through the landlord or via renewable energy certificates.
We use third-party providers for data centers. Globally, where possible, our data centers use renewable power provided directly through the landlord or via renewable energy certificates. Annually, we assess current and best practices when reviewing our efficiency measures.
Efficiency and speed in performing prescribed functions are always crucial requirements for our systems . As a result, our systems can assimilate market data, disseminate market prices to customers and update risk management information in real time, across tradable products in all available product classes and across multiple geographies.
As a result, our systems assimilate market data, disseminate market prices to customers and update risk management information in real time, across tradable products and classes around the globe.
Under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA Patriot Act”), broker - dealers are subject to even more stringent requirements.
Under the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “USA Patriot Act”), broker-dealers are subject to even more stringent requirements. Likewise, the SEC, CFTC, foreign regulators, and the various exchanges and self-regulatory organizations, of which our operating subsidiaries are members, have passed numerous AML and customer due diligence rules.
For over four decades, we have built and continuously refined our automated and integrated, real - time systems for world - wide trading, risk management, clearing and cash management, among others. We have also assembled a proprietary connectivity network between us and exchanges and market centers around the world.
For the past four decades, we have built and continuously refined our automated and integrated, real-time systems for trading, risk management, clearing and cash management, among others. We have also assembled a proprietary connectivity network between our infrastructure and the global financial ecosystem. Efficiency and speed in performing key prescribed functions are always crucial requirements for our systems.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Related to Laws, Regulations and Litigation Our future efforts to sell shares or raise additional capital may be delayed or prohibited by regulations. Regulatory and legal uncertainties could harm our business. We are subject to risks relating to litigation and potential securities laws liability. Heightened regulatory and legislative requirements and changes in the U.S. and globally have increased our compliance, regulatory and other risks and costs . We may incur additional tax expense or become subject to additional tax liabilities . ‎ 20 Table of Contents Risks Related to Our Intellectual Property, Technology, Cybersecurity and Data Privacy We may not be able to protect our intellectual property rights or may be prevented from using intellectual property necessary for our business. Our reliance on our computer software could cause us great financial harm in the event of any disruption or corruption of our computer software.
Biggest changeRisks Related to Laws, Regulations and Litigation • Our future efforts to sell shares or raise additional capital may be delayed or prohibited by regulations. • Regulatory and legal uncertainties could harm our business. • We are subject to risks relating to litigation and potential securities laws liability. • Heightened regulatory and legislative requirements and changes in the U.S. and globally have increased our compliance, regulatory and other risks and costs. • There are emerging legal and regulatory risks related to prediction markets that could harm our business. • We may incur additional tax expense or become subject to additional tax liabilities.
We are subject to numerous data privacy rules, including federal, state, local and international laws, as well as industry standards and regulations, and contractual obligations relating to data privacy and the collection, protection, use, retention, security, disclosure, transfer, and other processing of personal and other data.
We are subject to numerous data privacy rules, including federal, state, local and international laws, as well as industry standards and regulations, and contractual obligations relating to data privacy and the collection, protection, use, retention, security, disclosure, transfer, and other processing of personal data.
The agreement the customer signs with IB LLC before the customer is permitted to access the CSP’s services through IB LLC’s platform provides that: [Customer] acknowledges and agrees that [IB LLC] is not responsible for any trading or other losses (including, without limitation, losses due to theft, fraud, cybersecurity breach, loss of control of private keys, or any other loss arising from trading, transferring, or holding digital assets with [the CSP]) resulting directly or indirectly from or in connection with [Customer’s] relationship with [the CSP] and/or [Customer’s] trading or holding of digital assets, including activity or holdings in the [CSP] Account.
The agreement the customer signs with IB LLC before the customer is permitted to access the CSP’s services through IB LLC’s platform provides that: [Customer] acknowledges and agrees that [IB LLC] is not responsible for any trading or other losses (including, without limitation, losses due to theft, fraud, cybersecurity breach, loss of control of private keys, or any other loss arising from trading, transferring, or holding digital assets with [the CSP]) resulting directly or indirectly from or in connection with [Customer’s] relationship with [the CSP] and/or [Customer’s] trading, transferring, or holding of digital assets, including activity or holdings in the [CSP] Account.
Risks Related to Our Business Macroeconomic, geopolitical and other challenges and uncertainties could have a negative impact on our business. Our business could be harmed by a systemic market event. Damage to our reputation could harm our business . The impact of a public health emergency may have a material adverse impact on our business and results of operations. Our future success will depend on our response to the demand for new services, products and technologies. The loss of our key employees would materially adversely affect our business. We may not pay dividends on our common stock at any time in the foreseeable future. Our direct market access clearing and non - clearing brokerage operations face intense competition. We are subject to potential losses as a result of our clearing and execution activities. We are exposed to risks associated with our international operations. We are subject to counterparty risk whereby defaults by parties with whom we do business can have an adverse effect on our business, financial condition and results of operations. 19 Table of Contents Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company. Because our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict. We may incur material trading losses from our market making activities. Reduced spreads in securities pricing, levels of trading activity and trading through market makers could harm our business. We may incur losses in our market making activities in the event of failures of our proprietary pricing model. The valuation of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period. We are exposed to losses due to lack of perfect information. Rules governing designated market makers may require us to make unprofitable trades or prevent us from making profitable trades. Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks.
Risks Related to Our Business • Macroeconomic, geopolitical and other challenges and uncertainties could have a negative impact on our business. • Our business could be harmed by a systemic market event. • Damage to our reputation could harm our business. • The impact of a public health emergency may have a material adverse impact on our business and results of operations. • Our future success will depend on our response to the demand for new services, products and technologies. • The loss of our key employees would materially adversely affect our business. • We may not always pay dividends on our common stock. • Our direct market access clearing and non - clearing brokerage operations face intense competition. • We are subject to potential losses as a result of our clearing and execution activities. • We are exposed to risks associated with our international operations. • We are subject to counterparty risk whereby defaults by parties with whom we do business can have an adverse effect on our business, financial condition and results of operations. • Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company. • Because our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict. • We may incur material trading losses from our market making activities. • Reduced spreads in securities pricing, levels of trading activity and trading through market makers could harm our business. • We may incur losses in our market making activities in the event of failures of our proprietary pricing model. • The valuation of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period. • We are exposed to losses due to lack of perfect information. • Rules governing designated market makers may require us to make unprofitable trades or prevent us from making profitable trades. 19 Table of Contents • Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks.
If our systems fail to perform, we could experience unanticipated disruptions in operations, slower response times or decreased customer service and customer satisfaction. Our ability to facilitate transactions successfully and provide high quality customer service also depends on the efficient and uninterrupted operation of our computer and communications hardware and software systems.
If our systems fail to perform, we could experience unanticipated disruptions in operations, slower response times or decreased levels of customer service and customer satisfaction. Our ability to facilitate transactions successfully and provide high quality customer service also depends on the efficient and uninterrupted operation of our computer and communications hardware and software systems.
We have agreed to pay 85% of these tax savings, if any, to Holdings as they are realized as additional consideration for the IBG LLC interests that we acquire, with the balance to be retained by us.
We have agreed to pay 85% of these tax savings, if any, to Holdings as they are realized as additional consideration for the IBG LLC interests that we acquire, with the balance retained by us.
Rules regarding data privacy and security worldwide are continuously evolving and developing, increasing in complexity and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.
Rules regarding data privacy worldwide are continuously evolving and developing, increasing in complexity and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.
New laws, amendments to or reinterpretations of existing laws, regulations, standards, and other obligations might require us to incur additional costs and change how we use, collect, store, transfer or otherwise process certain types of personal data, to implement new processes to comply with those laws and our customers’ exercise of their rights thereunder.
New laws, amendments to or reinterpretations of existing laws, regulations, standards, and other obligations, if applicable, might require us to incur additional costs and change how we use, collect, store, transfer or otherwise process certain types of personal data, to implement new processes to comply with those applicable laws and our customers’ exercise of their rights thereunder.
Any future acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company. Although our growth strategy has not focused historically on acquisitions, we may in the future engage in evaluations of potential acquisitions and new businesses.
Any futu re acquisitions may result in significant transaction expenses, integration and consolidation risks and risks associated with entering new markets, and we may be unable to profitably operate our consolidated company. Although our growth strategy has not focused historically on acquisitions, we may in the future engage in evaluations of potential acquisitions and new businesses.
Firms in financial service industries have been subject to an increasingly regulated environment over recent years, and penalties and fines sought by regulatory authorities have increased accordingly. Our broker - dealer subsidiaries are subject to regulations in the U.S. and abroad covering all aspects of their business.
Firms in financial service industries have been subject to an increasingly regulated environment over recent years, and penalties and fines sought by regulatory authorities have increased accordingly. Our broker-dealer and certain other subsidiaries are subject to regulations in the U.S. and abroad covering all aspects of their business.
Risks Related to Our Business Macroeconomic, geopolitical and other challenges and uncertainties could have a negative impact on our business. We are affected by domestic and international macroeconomic and political conditions, as well as, the level of interest rates, inflation, and by fiscal and monetary policy.
Risks Related to Our Business Macroec onomic, geopolitical and other challenges and uncertainties could have a negative impact on our business. We are affected by domestic and international macroeconomic and political conditions, as well as, the level of interest rates, inflation, and by fiscal and monetary policy.
The varying compliance requirements of these different regulatory jurisdictions, which are often unclear, may limit our ability to continue existing international operations and further expand internationally. We are subject to risks relating to litigation and potential securities laws liability.
The varying compliance requirements of these different regulatory jurisdictions, which are often unclear, may limit our ability to continue existing international operations and further expand internationally. We ar e subject to risks relating to litigation and potential securities laws liability.
The tax savings that we would actually realize as a result of this increase in tax basis likely would be significantly less than this amount multiplied by our effective tax rate due to a number of factors, including, for example, the allocation of a portion of the increase in tax basis to foreign or non - depreciable fixed assets, the impact of the increase in the tax basis on our ability to use foreign tax credits and the rules relating to the amortization of intangible assets.
The tax savings that we actually realize as a result of this increase in tax basis could be significantly less than this amount multiplied by our effective tax rate due to a number of factors, including, for example, the allocation of a portion of the increase in tax basis to foreign or non-depreciable fixed assets, the impact of the increase in the tax basis on our ability to use foreign tax credits and the rules relating to the amortization of intangible assets.
In connection with our IPO, we purchased interests in IBG LLC from Holdings for cash. In connection with redemptions of Holdings membership interests, we acquired additional interests in IBG LLC by issuing shares of Class A common stock in exchange for an equivalent number of shares of member interests in IBG LLC (the “Redemptions”).
In connection with our IPO, we purchased interests in IBG LLC from Holdings for cash. Subsequently, in connection with redemptions of Holdings membership interests, we purchased additional interests in IBG LLC by issuing shares of Class A common stock in exchange for an equivalent number of shares of member interests in IBG LLC (the “Redemptions”).
We cannot assure you that we will be able to compete effectively or efficiently with current or future competitors. These increasing levels of competition in the online trading industry could significantly harm this aspect of our business. ‎ 25 Table of Contents We are subject to potential losses as a result of our clearing and execution activities.
We cannot assure you that we will be able to compete effectively or efficiently with current or future competitors. These increasing levels of competition in the online trading industry could significantly harm this aspect of our business. We are subject to potential losses as a result of our clearing and execution activities.
Many clearing houses of which we are members also have the authority to assess their members for additional funds if the clearing fund is depleted. A large clearing member default could result in a substantial cost to us if we are required to pay such assessments. We are exposed to risks associated with our international operations.
Many clearing houses of which we are members also have the authority to assess their members for additional funds if the clearing fund is depleted. A large clearing member default could result in a substantial cost to us if we are required to pay such assessments. 24 Table of Contents We are exposed to risks associated with our international operations.
Reduced spreads in securities pricing, levels of trading activity and trading through market makers could harm our business. Computer - generated buy/sell programs and other technological advances and regulatory changes in the marketplace may continue to tighten spreads on securities transactions. Tighter spreads and increased competition could make our remaining market making activities less profitable.
Reduc ed spreads in securities pricing, levels of trading activity and trading through market makers could harm our business. Computer-generated buy/sell programs and other technological advances and regulatory changes in the marketplace may continue to tighten spreads on securities transactions. Tighter spreads and increased competition could make our remaining market making activities less profitable.
Risks Related t o Cryptocurrency We rely on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services. A data breach at the CSP may result in irreversible losses, which would adversely affect our customers and our business. We may encounter technical issues which would result in disruption or interruption of our customers’ access to their CSP accounts. Changes in laws and regulations regarding cryptocurrency may negatively impact our ability to enable our customers to buy, hold and sell cryptocurrencies in the future and may adversely affect our business. ‎ 21 Table of Contents Risks Related to Our Company Structure Future sales of our common stock in the public market could lower our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.
Risks Related to Cryptocurrency • We rely on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services. • A data breach at a CSP may result in irreversible losses, which would adversely affect our customers and our business. • We may encounter technical issues which would result in disruption or interruption of our customers’ access to their CSP accounts. • Changes in laws and regulations regarding cryptocurrency may negatively impact our ability to enable our customers to buy, hold and sell cryptocurrencies in the future and may adversely affect our business. 20 Table of Contents Risks Related to Our Company Structure Future sale s of our common stock in the public market could lower our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute your ownership in us.
The initial purchase and the Redemptions did, and the subsequent purchases may, result in increases in the tax basis of the tangible and intangible assets of IBG LLC and its subsidiaries that otherwise would not have been available.
The initial purchase and the Redemptions did, and future purchases may, result in increases in the tax basis of the tangible and intangible assets of IBG LLC and its subsidiaries that otherwise would not have been available.
To the extent (if any) that we have excess cash, any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and will depend on, among other things, our results of operations, financial conditions, cash requirement, contractual restrictions and other factors that our Board of Directors may deem relevant.
To the extent (if any) that we have excess cash, any decision to declare and pay dividends in the future will be made at the discretion of our Board of Directors and 23 Table of Contents will depend on, among other things, our results of operations, financial conditions, cash requirement, contractual restrictions and other factors that our Board of Directors may deem relevant.
Business - Risk Management Activities" for more information. Risks Related to Laws, Regulations and Litigation Our future efforts to sell shares or raise additional capital may be delayed or prohibited by regulations. As certain of our subsidiaries are members of FINRA, we are subject to certain regulations regarding changes in control of our ownership.
Business - Risk Management Activities" for more information. Risks Related to Laws, Regulations and Litigation Our f uture efforts to sell shares or raise additional capital may be delayed or prohibited by regulations. As certain of our subsidiaries are members of FINRA, we are subject to certain regulations regarding changes in control of our ownership.
In addition, we do not carry business interruption insurance to compensate for losses that could occur to the extent not required. Any system failure that causes an interruption in our service or decreases the responsiveness of our service could impair our reputation, damage our brand name and materially adversely affect our business, financial condition and results of operations.
In addition, we do not carry business interruption insurance to compensate for losses that could occur to the extent not required. Any system failure that causes an interruption or degradation of our service could impair our reputation, damage our brand name and materially adversely affect our business, financial condition and results of operations.
To the extent we need funds to pay such taxes, or for any other purpose, and IBG LLC is unable to provide such funds, it could have a material adverse effect on our business, financial condition and results of operations. 22 Table of Contents We are required to pay Holdings for the benefit relating to additional tax depreciation or amortization deductions we claim as a result of the tax basis step - up our subsidiaries received in connection with our initial public offering (“IPO”) and certain subsequent redemptions of Holdings membership interests.
To the extent we need funds to pay such taxes, or for any other purpose, and IBG LLC is unable to provide such funds, it could have a material adverse effect on our business, financial condition and results of operations. 21 Table of Contents We are req uired to pay Holdings for the benefit relating to additional tax depreciation or amortization deductions we claim as a result of the tax basis step-up our subsidiaries received in connection with our initial public offering (“IPO”) and certain subsequent redemptions of Holdings membership interests.
Adverse developments could impair our reputation and materially adversely affect our business, financial condition and results of operations. The impact of a public health emergency may have a material adverse impact on our business and results of operations.
Adverse developments could impair our reputation and materially adversely affect our business, financial condition and results of operations. The impa ct of a public health emergency may have a material adverse impact on our business and results of operations.
We may incur losses in our market making activities in the event of failures of our proprietary pricing model. Our market making activities are substantially dependent on the accuracy of our proprietary pricing mathematical model, which continuously evaluates and monitors the risks inherent in our portfolio, assimilates market data and reevaluates our outstanding quotes many times per second.
We may i ncur losses in our market making activities in the event of failures of our proprietary pricing model. Our market making activities are substantially dependent on the accuracy of our proprietary pricing mathematical model, which continuously evaluates and monitors the risks inherent in our portfolio, assimilates market data and reevaluates our outstanding quotes many times per second.
A disruption in our partnership with a CSP or in the Exchange Services provided by a CSP could have adverse effects on our customers’ confidence in our cryptocurrency offering through CSPs and on our business. A data breach at the CSPs may result in irreversible losses, which would adversely affect our customers and our business.
A disruption in our partnership with a CSP or in the Exchange Services provided by a CSP could have adverse effects on our customers’ confidence in our cryptocurrency offering through CSPs and on our business. A data b reach at a CSPs may result in irreversible losses, which would adversely affect our customers and our business.
Any such litigation, whether successful or unsuccessful, could result in substantial costs and the diversion of resources and the attention of management, any of which could negatively affect our business. Our reliance on our computer software could cause us great financial harm in the event of any disruption or corruption of our computer software.
Any such litigation, whether successful or unsuccessful, could result in substantial costs and the diversion of resources and the attention of management, any of which could negatively affect our business. 28 Table of Contents Our reliance on our computer software could cause us great financial harm in the event of any disruption or corruption of our computer software.
Rules governing designated market makers may require us to make unprofitable trades or prevent us from making profitable trades. Designated market makers are granted certain rights and have certain obligations to “make a market” in a particular security. They agree to specific obligations to maintain a fair and orderly market.
Rules go verning designated market makers may require us to make unprofitable trades or prevent us from making profitable trades. Designated market makers are granted certain rights and have certain obligations to “make a market” in a particular security. They agree to specific obligations to maintain a fair and orderly market.
Because our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict. Our revenues are dependent on the level of trading activity on securities and derivatives exchanges in the U.S. and abroad and on the general level of interest rates.
Becaus e our revenues and profitability depend on trading volume and interest rate levels, they are prone to significant fluctuations and are difficult to predict. Our revenues are dependent on the level of trading activity on securities and derivatives exchanges in the U.S. and abroad and on the general level of interest rates.
Any of these events, particularly if they (individually or in the aggregate) result in a loss of confidence in our company or electronic brokerage firms in general, could have a material adverse effect on our business, financial condition and results of operations. ‎ 31 Table of Contents We are subject to stringent and complex data privacy rules.
Any of these events, particularly if they (individually or in the aggregate) result in a loss of confidence in our company or brokerage firms in general, could have a material adverse effect on our business, financial condition and results of operations. We are subject to stringent and complex data privacy rules.
Changes in laws and regulations regarding cryptocurrency may negatively impact our ability to enable our customers to buy, hold and sell cryptocurrencies in the future and may adversely affect our business. Regulation of the cryptocurrency industry continues to evolve and is subject to change.
Chang es in laws and regulations regarding cryptocurrency may negatively impact our ability to enable our customers to buy, hold and sell cryptocurrencies in the future and may adversely affect our business. Regulation of the cryptocurrency industry continues to evolve and is subject to change.
Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may cause the market price of our common stock to decline. Control by Mr.
Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may cause the market price of our common stock to decline. Cont rol by Mr.
We cannot assure you that we will be successful in developing, introducing or marketing new services, products and technologies. In addition, we may experience difficulties that could delay or prevent the successful development, introduction or marketing of these services and products, and our new service and product enhancements may not achieve market acceptance.
We cannot guarantee that we will always be successful in developing, introducing or marketing new services, products and technologies. In addition, we may experience difficulties that could delay or prevent the successful development, introduction or marketing of these services and products, and our new service and product enhancements may not achieve market acceptance.
Assuming no anti - dilution adjustments based on combinations or divisions of our common stock, the offerings referred to above could result in the issuance by us of up to an additional approximately 313.6 million shares of common stock. It is possible, however, that such shares could be issued in one or a few large transactions.
Assuming no anti-dilution adjustments based on combinations or divisions of our common stock, the offerings referred to above could result in the issuance by us of up to an additional approximately 1,250.7 million shares of common stock. It is possible, however, that such shares could be issued in one or a few large transactions.
The size and occurrence of these offerings may be affected by market conditions. We may also issue additional shares of common stock or convertible debt securities to finance future acquisitions or business combinations. We currently have approximately 108.9 million outstanding shares of common stock.
The size and occurrence of these offerings may be affected by market conditions. We may also issue additional shares of common stock or convertible debt securities to finance future acquisitions or business combinations. We currently have approximately 445.4 million outstanding shares of common stock.
We may not have the financial resources necessary to consummate any acquisitions in the future or 26 Table of Contents the ability to obtain the necessary funds on satisfactory terms. Any future acquisitions may result in significant transaction expenses and risks associated with entering new markets in addition to integration and consolidation risks.
We may not have the financial resources necessary to consummate any acquisitions in the future or the ability to obtain the necessary funds on satisfactory terms. Any future acquisitions may result in significant transaction expenses and risks associated with entering new markets in addition to integration and consolidation risks.
The tax basis increase of $31.2 billion assumes that (a) all remaining IBG LLC membership interests held by Holdings are purchased by us in one or more taxable transactions and (b) such purchases in the future are made at prices that reflect the closing share price as of December 31, 2024.
The tax basis increase of $44.6 billion assumes that (a) all remaining IBG LLC membership interests held by Holdings are purchased by us in one or more taxable transactions and (b) such purchases in the future are made at prices that reflect the closing share price as of December 31, 2025.
During 2024, approximately 31% of our net revenues were generated by our operating subsidiaries outside the U.S. We are exposed to risks and uncertainties inherent in doing business in international markets, particularly in the heavily regulated brokerage industry.
During 2025, approximately 30% of our net revenues were generated by our operating subsidiaries outside the U.S. We are exposed to risks and uncertainties inherent in doing business in international markets, particularly in the heavily regulated brokerage industry.
ITEM 1A. RISK FACTORS We face a variety of risks that are substantial and inherent in our businesses, including market, liquidity, credit, operational, legal and regulatory.
ITEM 1A. R ISK FACTORS We face a variety of risks that are substantial and inherent in our businesses, including market, liquidity, credit, operational, legal and regulatory.
If these rules are made more stringent, our trading revenues and profits as a designated market maker could be adversely affected. Our risk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks.
If these rules are made more stringent, our trading revenues and profits as a designated market maker could be adversely affected. 26 Table of Contents Our ri sk management policies and procedures may not be fully effective in mitigating our risk exposure in all market environments or against all types of risks.
As a result of these regulations, our future efforts to sell shares or raise additional capital may be delayed or prohibited. We may be subject to similar restrictions in other jurisdictions in which we operate. ‎ 28 Table of Contents Regulatory and legal uncertainties could harm our business. The securities and derivatives businesses are heavily regulated.
As a result of these regulations, our future efforts to sell shares or raise additional capital may be delayed or prohibited. We may be subject to similar restrictions in other jurisdictions in which we operate. Reg ulatory and legal uncertainties could harm our business. The securities and derivatives businesses are heavily regulated.
The valuation of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period.
The valua tion of the financial instruments we hold may result in large and occasionally anomalous swings in the value of our positions and in our earnings in any period.
As a result, period to period comparisons of our revenues and operating results may not be meaningful, and future revenues and profitability may be subject to significant fluctuations or declines. We may incur material trading losses from our market making activities.
As a result, period to period comparisons of our revenues and operating results may not be meaningful, and future revenues and profitability may be subject to significant fluctuations or declines. 25 Table of Contents We ma y incur material trading losses from our market making activities.
Based on facts and assumptions as of December 31, 2024, including that subsequent purchases of IBG LLC interests will occur in fully taxable transactions, the potential tax basis increase resulting from the historical and future purchases of the IBG LLC interests held by Holdings could be as much as $31.2 billion.
Based on facts and assumptions as of December 31, 2025, including that future purchases of IBG LLC interests will occur in fully taxable transactions, the potential tax basis increase resulting from the historical and future purchases of the IBG LLC interests held by Holdings could be as much as $44.6 billion.
Thomas Peterffy, our founder and Chairman, and his affiliates beneficially own approximately 91.4% of the economic interests and all of the voting interests in Holdings , which owns all of our Class B common stock, representing approximately 74.2% of the combined voting power of all classes of our voting stock. As a result, Mr.
Thomas Peterffy, our founder and Chairman, and his affiliates beneficially own approximately 91.6% of the economic interests and all of the voting interests in Holdings, which owns all of our Class B common stock, representing approximately 73.7% of the combined voting power of all classes of our voting stock. As a result, Mr.
These increases in tax basis will result in increased deductions in computing our taxable income and resulting tax savings for us generally over the 15-year period which commenced with the initial purchase and subsequent purchases, respectively.
These increases in tax basis result in increased deductions in computing our taxable income, resulting in tax savings for us generally over the 15-year period commencing with the initial purchase and subsequent purchases.
Such increase will be approximately equal to the amount by which our stock price at the time of the purchase exceeds the income tax basis of the assets of IBG LLC underlying the IBG LLC interests acquired by us.
Such increase is approximately equal to the amount by which our stock price at the time of the purchase exceeds the inside tax basis of the assets of IBG LLC underlying the IBG LLC interests acquired by us.
These risks could have a material adverse effect on our business, financial condition and results of operations. ‎ 23 Table of Contents Our business could be harmed by a systemic market event. Some market participants could be overleveraged.
These risks could have a material adverse effect on our business, financial condition and results of operations. Our bu siness could be harmed by a systemic market event. Some market participants could be overleveraged.
These new tax law changes bring significant risks and uncertainties. Any unfavorable resolution of these and other uncertainties may have a significant adverse impact on our effective tax rate and results of operations.
Any unfavorable resolution of these and other uncertainties may have a significant adverse impact on our effective tax rate and results of operations.
We do not have fully redundant systems, and our formal business continuity plan does not include restoration of all services. We currently have limited separate backup facilities dedicated to our non - U.S. operations. It is our intention to provide for and progressively deploy backup facilities for all facilities and infrastructure globally over time.
We do not have fully redundant systems, and our formal business continuity plan does not include restoration of all services. It is our intention to provide for and progressively deploy backup facilities for all facilities and infrastructure globally over time.
Any failure on our part to anticipate or respond adequately to technological advancements, customer requirements or changing industry standards, or any significant delays in the development, introduction or availability of new services, products or enhancements could have a material adverse effect on our business, financial condition and results of operations. 24 Table of Contents The loss of our key employees would materially adversely affect our business.
Any failure on our part to anticipate or respond adequately to technological advancements, customer requirements or changing industry standards, or any significant delays in the development, introduction or availability of new services, products or enhancements could have a material adverse effect on our business, financial condition and results of operations.
The loss of such key personnel could have a material adverse effect on our business. Growth in our business is dependent, to a large degree, on our ability to retain and attract such employees. We may not pay dividends on our common stock at any time in the foreseeable future.
The loss of such key personnel could have a material adverse effect on our business. Growth in our business is dependent, to a large degree, on our ability to retain and attract such employees. We ma y not always pay dividends on our common stock.
Quite often, we trade with others who have different information than we do, and as a result, we may accumulate unfavorable positions preceding large price movements in companies. Should the frequency or magnitude of these events increase, our losses will likely increase correspondingly.
As market makers, we provide liquidity by buying from sellers and selling to buyers. Quite often, we trade with others who have different information than we do, and as a result, we may accumulate unfavorable positions preceding large price movements in companies. Should the frequency or magnitude of these events increase, our losses will likely increase correspondingly.
Competitors who advance in this space may be able to offer superior products and services and may materially adversely affect our business, financial condition and results of operations. We do not have fully redundant systems. System failures could harm our business .
Maintaining technological competitiveness may require significantly larger investments in development resources, infrastructure and talent. Competitors who advance in this space may be able to offer superior products and services and may materially adversely affect our business, financial condition and results of operations. We do not have fully redundant systems. System failures could harm our business.
We have entered into agreements with third-party CSPs, which provide (i) cryptocurrency exchange platforms and services whereby investors can buy and sell certain cryptocurrencies and (ii) custody services for certain cryptocurrencies (collectively, the “Exchange Services”), enabling some of our customers to trade and custody Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH) and potentially other cryptocurrencies, (collectively, "Cryptocurrency Assets") via CSPs.
We have entered into agreements with third-party CSPs, which provide (i) cryptocurrency exchange platforms and services whereby investors can buy and sell certain cryptocurrencies and (ii) custody services for certain cryptocurrencies (collectively, the “Exchange Services”), enabling some of our customers to trade and custody cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Ripple (XRP), Dogecoin (DOGE) and several other cryptocurrencies 3 , (collectively, "Cryptocurrency Assets") via CSPs.
Failure of third - party systems on which we rely could adversely affect our business. We rely on certain third - party computer systems or third - party service providers, including clearing systems, exchange systems, banking systems, cryptocurrency systems, Internet services, third-party identity verification services, co-location facilities, communications facilities and other facilities.
Failu re of third-party systems on which we rely could adversely affect our business. We rely on certain third-party computer systems or third-party service providers, including but not limited to clearing systems, exchange systems, banking systems, digital asset service providers, Internet services, third-party identity verification services, co-location facilities, communications facilities and other facilities.
In the U.S., we are subject to rules including the Gramm-Leach-Bliley Act of 1999 and Section 5(c) of the Federal Trade Commission Act; internationally, we are subject to the General Data Protection Regulation (“GDPR”) of the EU and the U.K., the Personal Information Protection Law of the People’s Republic of China, and other applicable data privacy rules and regulations.
In the U.S., we are subject to rules including but not limited to the Gramm-Leach-Bliley Act of 1999; internationally, we are subject to applicable data privacy laws and regulations including but not limited to, the EU General Data Protection Regulation (“GDPR”), the U.K. GDPR, and the Personal Information Protection Law of the People’s Republic of China.
As a result of the IPO and the Redemptions by Holdings, the increase in the tax basis attributable to our interest in IBG LLC is $2.1 billion.
As a result of the IPO and the Redemptions by Holdings, the increase in the tax basis attributable to our interest in IBG LLC is $2.2 billion, with the portion attributable to the IPO having been substantially amortized as of December 31, 2025.
Our ability to provide services to consumers and increase the scope and quality of such services is limited by and dependent upon the speed and reliability of our customers’ unrestricted access to the Internet, which is beyond our control.
Inte rnet-related issues may reduce or slow the growth in the use of our services in the future. Our ability to provide services to consumers and increase the scope and quality of such services is limited by and dependent upon the speed and reliability of our customers’ unrestricted access to the Internet, which is beyond our control.
An adverse resolution of any future lawsuits or claims against us could result in a negative perception of the Company and have a material adverse effect on our business, financial condition and results of operations. See “Legal Proceedings and Regulatory Matters” in Part I Item 3 of this Annual Report on Form 10 K.
An adverse resolution of any future lawsuits or claims against us could result in a negative perception of the Company and have a material adverse effect on our business, financial condition and results of operations.
Customers of IBUK sign an agreement containing a substantially identical provision prior to being permitted to access the CSP’s services through IBUK’s platform. Eligible customers of IBHK can enroll to trade and hold Cryptocurrency Assets through a relationship IBHK has established with a CSP, which is an SFC-licensed digital asset exchange and custodian.
Customers of IBUK sign an agreement containing a substantially identical provision prior to being permitted to access the CSP’s services through IBUK’s platform. 3 See https://www.interactivebrokers.com/lib/cstools/faq/#/content/182856890 for more information on the availability of cryptocurrencies for trading through our platform. 31 Table of Contents Eligible customers of IBHK can enroll to trade and hold Cryptocurrency Assets through a relationship IBHK has established with a CSP, which is an SFC-licensed digital asset exchange and custodian.
Damage to our reputation could harm our business. Maintaining our reputation is critical to attracting and maintaining customers, investors, and employees. If we fail to address, or appear to fail to address, issues that may give rise to reputational risk, we could significantly harm our business.
If we fail to address, or appear to fail to address, issues that may give rise to reputational risk, we could significantly harm our business.
Accordingly, we incur income taxes on our proportionate share of the net taxable income of IBG LLC, and also incur expenses related to our operations. We intend to cause IBG LLC to distribute cash to its members in amounts at least equal to that necessary to cover their tax liabilities, if any, with respect to the earnings of IBG LLC.
We intend to cause IBG LLC to distribute cash to its members in amounts at least equal to that necessary to cover their tax liabilities, if any, with respect to the earnings of IBG LLC.
Although we have been at the forefront of many of these developments in the past, we may not be able to keep up with these rapid changes in the future, develop new technology, realize a return on amounts invested in developing new technologies or remain competitive in the future. ‎ 30 Table of Contents New developments in the field of Artificial Intelligence (“AI”) could enable competitors to offer new products or services never before seen in the marketplace.
Although we have been at the forefront of many of these developments historically, we may not be able to continue to keep up with rapid changes in the future, develop new technology, realize a return on amounts invested in developing new technologies or remain competitive in the future.
Unless otherwise provided under applicable Rules, [Customer] hereby agree[s] not to bring any action against [IBHK] on any claim arising from a loss occurring at the [CSP], in the absence of circumstances addressed under (a) or (b) above, so long as [IBHK] makes commercially reasonable efforts to assert a claim for recovery against the [CSP]. 33 Table of Contents The CSPs’ failure to safeguard the Cryptocurrency Assets may result in losses to our customers which could have adverse effects on our customers’ confidence in our cryptocurrency offering through CSPs and on our business.
Unless otherwise provided under applicable Rules, [Customer] hereby agree[s] not to bring any action against [IBHK] on any claim arising from a loss occurring at the [CSP], in the absence of circumstances addressed under (a) or (b) above, so long as [IBHK] makes commercially reasonable efforts to assert a claim for recovery against the [CSP].
Any interruption in these third - party services, or deterioration in their performance, could be disruptive to our business. If our arrangement with any third party is terminated, we may not be able to find an alternative source of systems support on a timely basis or on commercially reasonable terms.
If our arrangement with any third party is terminated, we may not be able to find an alternative source of systems support on a timely basis or on commercially reasonable terms. This could have a material adverse effect on our business, financial condition and results of operations.
Domestic and foreign stock exchanges, other self - regulatory organizations and state and foreign securities commissions can censure, fine, issue cease - and - desist orders, suspend or expel a broker - dealer or any of its officers or employees.
In addition, changes in current laws or regulations or in governmental policies could adversely affect our business, financial condition and results of operations. Domestic and foreign stock exchanges, other self-regulatory organizations and state and foreign securities commissions can censure, fine, issue cease-and-desist orders, suspend or expel a broker-dealer or any of its officers or employees.
Our net interest income and profitability could be negatively affected by lower benchmark interest rates caused by central banks lowering target benchmark rates in an attempt to buffer their economies from a public health emergency .
These measures may negatively impact businesses, market participants, our counterparties and customers, and the global economy and could continue for a prolonged period of time. Our net interest income and profitability could be negatively affected by lower benchmark interest rates caused by central banks lowering target benchmark rates in an attempt to buffer their economies from a public health emergency.
We continue our efforts to safeguard the data entrusted to us in accordance with applicable laws and our data protection policies, including taking steps to reduce the potential for the improper use or disclosure of personal data; and continue to monitor regulations related to data privacy on both a domestic and international level to assess requirements and impacts on our business operations.
These efforts include taking steps to reduce the potential for the improper use or disclosure of personal data and continuing to monitor both domestic and international regulations related to data privacy to assess requirements and impacts on our business operations.
We may encounter technical issues which would result in disruption or interruption of our customers’ access to their CSP accounts. Both we and the CSPs rely on computer software, hardware and telecommunications infrastructure and networking to provide the respective services to our customers with respect to trading and custody of the Cryptocurrency Assets.
Both we and the CSPs rely on computer software, hardware and telecommunications infrastructure and networking to provide the respective services to our customers with respect to trading and custody of the Cryptocurrency Assets.
Though we take steps to mitigate the various cyber threats and devote resources to protecting our systems and networks, we may be unable to anticipate all types of attacks or to implement adequate preventative measures against all eventualities. Our cybersecurity measures may not detect or prevent all attempts to compromise our systems.
Though we take significant steps to mitigate the various cyber threats and devote resources to protecting our systems and networks, we may be unable to anticipate all types of attacks or to implement adequate preventative measures against all eventualities. Regulatory requirements relating to cybersecurity governance, incident response and disclosure may continue to evolve, which could increase compliance efforts and costs.
If prices of derivatives and their underlying securities close out of alignment, there may be large and occasionally anomalous swings in the value of our positions daily and, accordingly, in our earnings in any period.
If prices of derivatives and their underlying securities close out of alignment, there may be large and occasionally anomalous swings in the value of our positions daily and, accordingly, in our earnings in any period. This is especially true on the last business day of each calendar quarter. We are exposed to losses due to lack of perfect information.
In addition, there is heightened regulatory scrutiny and expectations in the U.S. and internationally with respect to governance, infrastructure, data, risk management practices and controls.
In addition, there is heightened regulatory scrutiny and expectations in the U.S. and internationally with respect to governance, infrastructure, data, risk management practices and controls. A failure to comply with these requirements and expectations, even if inadvertent, could result in increased regulatory oversight and restrictions, enforcement proceedings, penalties and fines.
We are subject to the tax laws and regulations of the U.S., its states and municipalities, and numerous foreign jurisdictions.
We are subject to the tax laws and regulations of the U.S., its states and municipalities, and numerous foreign jurisdictions. These tax laws and regulations, as well as the treaties between jurisdictions, are complex, and the manner they apply to us is sometimes open to interpretations.
If periods of decreased performance, outages or delays on the Internet occur frequently, growth in the usage of our web-based products could be delayed or decline, which could have a material adverse effect on our business, financial condition and results of operations.
If periods of decreased performance, outages or delays on the Internet occur frequently, growth in the usage of our web-based products could be delayed or decline, which could have a material adverse effect on our business, financial condition and results of operations. 29 Table of Contents We c ould be the target of a cyber-attack or experience a cybersecurity incident that impairs internal systems, degrades services we provide to customers, or results in a data compromise, causing reputational or monetary damages as a consequence.
Furthermore, whereas we expend efforts on evaluating and ensuring adequacy of security measures employed by third-party service providers, we may not be able to exercise full control over them. Failures or deficiencies of such controls could result in adverse impacts to our business, operations, or confidential information, depending on the nature of the services provided.
Our cybersecurity measures may not detect or prevent all attempts to compromise our systems. Furthermore, whereas we expend efforts on evaluating and ensuring adequacy of security measures employed by third-party service providers, we may not be able to exercise full control over them.
In case of sudden, large price movements, such market participants may not be able to meet their obligations to brokers who, in turn, may not be able to meet their obligations to their counterparties. As a result, the financial system or a portion thereof could collapse, and the impact of such an event could be catastrophic to our business.
In case of sudden, large price movements, such market participants may not be able to meet their obligations to brokers who, in turn, may not be able to meet their obligations to their counterparties.
We have no independent means of generating revenues. IBG LLC is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to U.S. federal income tax. Instead, its taxable income is allocated on a pro rata basis to Holdings and us.
As such, we operate and control all of the business and affairs of IBG LLC and are able to consolidate IBG LLC’s financial results into our financial statements. We have no independent means of generating revenues. IBG LLC is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to U.S. federal income tax.
Our business relies on technology and automation, causing us to be potentially vulnerable to various forms of cyber-attacks by external actors or malicious insiders. Any resulting security breaches could expose us to liability to one or more third parties, including our customers, and disrupt our operations.
Any resulting security breaches could expose us to liability to one or more third parties, including our customers, and disrupt our operations.
Any failure or perceived failure by us or our third-party service providers to comply with our privacy policies or any applicable laws, regulations, industry standards, or rules relating to data privacy and security, or any compromise of security that results in the theft, unauthorized access, acquisition, use, disclosure, or misappropriation of personal data, could result in significant fines, criminal penalties, monetary damages, regulatory enforcement actions, litigation and reputational harm, one or all of which could have an adverse effect on our business, financial condition and results of operations. ‎ 32 Table of Contents Risks Related to our Cryptocurrency Offering We rely on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services.
Such events could result in fines, criminal penalties, monetary damages, regulatory enforcement actions, litigation, and reputational harm, which could adversely affect our business, financial condition, and results of operations. 30 Table of Contents Risks Related to our Cryptocurrency Offering We re ly on third-party Cryptocurrency Service Providers (“CSPs”) to provide our customers the ability to access cryptocurrency trading and custody services.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Board of Directors receives periodic updates on cybersecurity matters and the overall state of our cybersecurity program from our CEO (based on consultation with our CISO and other senior members of our Information Security and/or Technology teams). Assessment of Cybersecurity Risk The potential impact of risks from cybersecurity threats to the Company is assessed on an ongoing basis.
Biggest changeOur Board of Directors receives periodic updates on cybersecurity matters and the overall state of our cybersecurity program from our CEO (based on consultation with our EVP of Technology, CISO, and other senior members of our Information Security and Technology teams).
Management and Board Oversight of Cybersecurity Risks The Company’s management, including the Company’s Executive Vice President of Technology and Chief Information Security Officer (“CISO”), are responsible for assessing and managing material risks from cybersecurity threats. Members of Company management possess relevant expertise in various disciplines that are key to effectively managing such risks.
Management and Board Oversight of Cybersecurity Risks The Company’s management, including the Company’s Executive Vice President ("EVP") of Technology and Chief Information Security Officer (“CISO”), are responsible for assessing and managing material risks from cybersecurity threats. Members of Company management possess relevant expertise in various disciplines that are key to effectively managing such risks.
If a cybersecurity incident occurs, incident response procedures are in place to ensure that the occurrence is appropriately reported to the CISO and senior management. Where necessary, business continuity plans are mobilized to minimize disruption to business operations.
If a cybersecurity incident occurs, incident response procedures are in place to ensure that the occurrence is appropriately reported to the CISO and senior management. Where necessary, business continuity plans are invoked to minimize disruption to business operations.
ITEM 1C. CYBERSECURITY We are a global financial services firm, with a longstanding commitment to providing a reliable and secure trading environment for our customers. Technology is at the core of our business, with customers, exchanges, clearing houses, counterparties, and third-party service providers interacting with our systems and applications on an ongoing basis.
ITEM 1C. C YBERSECURITY We are a global financial services firm, with a longstanding commitment to providing a reliable and secure trading environment for our customers. Technology is at the core of our business, with customers, exchanges, clearing houses, counterparties, and third-party service providers interacting with our systems and applications on an ongoing basis.
For additional information about cybersecurity risks, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K. 35 Table of Contents
For additional information about cybersecurity risks, see Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K. 33 Table of Contents
CMC’s membership includes the Chief Executive Officer (“CEO”), the Chief Financial Officer, the Executive Vice President of Technology, the CISO, and other senior leaders.
CMC’s membership includes the Chief Executive Officer (“CEO”), the Chief Financial Officer, the EVP of Technology, the CISO, and other senior leaders.
As a consequence, we are subject to significant cybersecurity risks. Moreover, such risks have been increasing over time, due to the growing sophistication of cyber threat actors, geo-political instability, and advances in technology, such as AI, which are known to have been misused in cyber-attacks.
As a consequence, we are subject to significant cybersecurity risks. Moreover, such risks continue to evolve as a result of the growing sophistication of cyber threat actors, geo-political instability, and advances in technology, such as AI, which may be misused in cyber-attacks.
Added
Assessment of Cybersecurity Risk The potential impact of risks from cybersecurity threats to the Company is assessed on an ongoing basis.

Item 2. Properties

Properties — owned and leased real estate

3 edited+0 added−0 removed0 unchanged
Biggest changeLocation Space (sq. feet) Principal Usage North America Greenwich, CT 163,510 Headquarters Chicago, IL 100,871 Office space and data center New York, NY 16,940 Office space Other (11 locations) 39,328 Office space and data center Europe Zug, Switzerland 36,635 Office space Budapest, Hungary 32,829 Office space Dublin, Ireland 17,982 Office space and data center London, United Kingdom 17,457 Office space Tallinn, Estonia 12,731 Office space Other (4 locations) 2,769 Office space and data center Asia - Pacific Mumbai, India 81,553 Office space and data center Hong Kong 26,020 Office space and data center Other (9 locations) 19,836 Office space and data center ‎ 36 Table of Contents
Biggest changeLocation Space (sq. feet) Principal Usage North America Greenwich, CT 163,510 Headquarters Chicago, IL 163,106 Office space and data center New York, NY 22,916 Office space Other (11 locations) 37,252 Office space and data center Europe Zug, Switzerland 36,635 Office space Budapest, Hungary 29,073 Office space Dublin, Ireland 17,982 Office space and data center London, United Kingdom 17,457 Office space Tallinn, Estonia 12,731 Office space Other (4 locations) 2,762 Office space and data center Asia - Pacific Mumbai, India 198,423 Office space and data center Hong Kong 26,020 Office space and data center Other (9 locations) 18,186 Office space and data center 34 Table of Contents
ITEM 2. PROPE RTIES Our headquarters are located in Greenwich, Connecticut. We lease office and data center facilities in 34 cities throughout the world where we conduct our operations as set forth below. We believe our present facilities, together with our current options to extend lease terms, are adequate for our current needs.
ITEM 2. P ROPERTIES Our headquarters are located in Greenwich, Connecticut. We lease office and data center facilities in 34 cities throughout the world where we conduct our operations as set forth below. We believe our present facilities, together with our current options to extend lease terms, are adequate for our current needs.
The table below presents certain information with respect to our leased facilities as of December 31, 2024.
The table below presents certain information with respect to our leased facilities as of December 31, 2025.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

8 edited+0 added−2 removed3 unchanged
Biggest changeIn the current era of heightened regulatory scrutiny of financial institutions, we have incurred increased compliance costs, along with the industry as a whole. Increased regulation also creates increased barriers to entry.
Biggest changeDue to heightened regulatory scrutiny of financial institutions, we have incurred increased compliance costs, along with the industry as a whole. Increased regulation also creates increased barriers to entry. We have built and continue to build human and automated infrastructure in light of increasing regulatory scrutiny, which provides us with a possible advantage over potential newcomers to the business.
We are generally the subject of regulatory inquiries regarding subjects including, but not limited to: audit trail reporting, trade reporting, best execution and order execution procedures, display of market data, short sales, margin lending, exchange fees charged to customers, anti - money laundering or potentially manipulative trading by customers, sanctions compliance, procedures for accounts managed by independent financial advisors or referred by third parties, technology development practices, registration, record-keeping, business continuity planning, cybersecurity and other topics of recent regulatory interest.
We are generally the subject of regulatory inquiries regarding subjects including, but not limited to: audit trail reporting, trade reporting, best execution and order execution procedures, display of market data, short sales, margin lending, exchange fees charged to customers, anti-money laundering or potentially manipulative trading by customers, sanctions compliance, procedures for accounts managed by independent financial advisors or referred by third parties, technology development practices, registration, record-keeping, business continuity planning, cybersecurity, forecast contracts and other topics of recent regulatory interest.
Most of our companies are regulated under some or all of the following: state securities laws, U.S. and foreign securities, commodities and financial services laws and the rules of the more than 160 exchanges, market centers and self - regulatory organizations of which one or more of our companies may be members.
Most of our companies are regulated under some or all of the following: state securities laws, U.S. and foreign securities, commodities and financial services laws and the rules of the more than 170 exchanges, market centers and self-regulatory organizations of which one or more of our companies may be members.
ITEM 3. LEGAL PROCEEDINGS AND REGULATORY MATTERS The securities and commodities industry is highly regulated and many aspects of our business involve substantial risk of liability. In past years, there has been an increasing incidence of litigation involving the brokerage industry, including class action suits that generally seek substantial damages, including in some cases punitive damages.
ITEM 3. L EGAL PROCEEDINGS AND REGULATORY MATTERS The securities and commodities industry is highly regulated and many aspects of our business involve substantial risk of liability. In past years, there has been an increasing incidence of litigation involving the brokerage industry, including class action suits that generally seek substantial damages, including in some cases punitive damages.
The Company has procedures for evaluating whether potential regulatory fines are probable, estimable and material and for updating its contingency reserves and disclosures accordingly. In the current climate, we expect to pay significant and increasing regulatory fines on various topics on an ongoing basis, as other regulated financial services businesses do.
The Company has procedures for evaluating whether potential regulatory fines are probable, estimable and material and for updating its contingency reserves and disclosures accordingly. We expect to pay significant regulatory fines on various topics on an ongoing basis, as other regulated financial services businesses do.
For more information regarding pending and threatened legal actions and proceedings see Note 14 - “Commitments, Contingencies, and Guarantees” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
For more information regarding pending and threatened legal actions and proceedings see Note 14 - “Commitments, Contingencies, and Guarantees” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. Pending Regulatory Inquiries Our businesses are heavily regulated by state, federal and foreign regulatory agencies as well as numerous exchanges and self-regulatory organizations.
The amount of any fines, and when and if they will be incurred, typically is impossible to predict given the nature of the regulatory process. ‎
The amount of any fines, and when and if they will be incurred, typically is impossible to predict given the nature of the regulatory process. ‎ITEM 4. M INE SAFETY DISCLOSURES Not applicable. 35 Table of Contents PART II
The great majority of these inquiries do not lead to fines or any further action against us.
We receive many regulatory inquiries each year in addition to being subject to frequent regulatory examinations. The great majority of these inquiries do not lead to fines or any further action against us.
Removed
Pending Regulatory Inquiries Our businesses are heavily regulated by state, federal and foreign regulatory agencies as well as numerous exchanges and self - regulatory organizations.
Removed
We have built and continue to build human and automated infrastructure in light of increasing regulatory scrutiny, which provides us with a possible advantage over potential newcomers to the business. We receive many regulatory inquiries each year in addition to being subject to frequent regulatory examinations.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

13 edited+2 added−2 removed2 unchanged
Biggest changeAs a consequence of redemption transactions in accordance with the Exchange Agreement, distribution of shares to customers under one or more promotions, and distribution of shares to employees pursuant to the Company’s amended 2007 Stock Incentive Plan , IBG, Inc.’s interest in IBG LLC has increased to approximately 25.8%, with Holdings owning the remaining 74.2% as of December 31 , 2024.
Biggest changeAs a consequence of redemption transactions in accordance with the Exchange Agreement, distribution of shares to customers under one or more promotions, and distribution of shares to employees pursuant to the Company’s amended 2007 Stock Incentive Plan, IBG, Inc.’s interest in IBG LLC has increased to approximately 26.3%, with Holdings owning the remaining 73.7% as of December 31, 2025.
Dividends and Other Restrictions We currently intend to pay quarterly dividends of $0.25 per share to our common stockholders for the foreseeable future. For more information regarding dividends see Note 4 – “Equity and Earnings per Share” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
Dividends and Other Restrictions We currently intend to pay quarterly dividends of $0.08 per share to our common stockholders for the foreseeable future. For more information regarding dividends see Note 4 – “Equity and Earnings per Share” to the consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K.
The comparison assumes $100 was invested on December 31, 2019 in our common stock and each of the foregoing indices and assumes reinvestment of dividends before consideration of income taxes. ___________________________ The Nasdaq Financial - 100 Index includes 100 of the largest domestic and international financial securities listed on The Nasdaq Stock Market based on market capitalization.
The comparison assumes $100 was invested on December 31, 2020 in our common stock and each of the foregoing indices and assumes reinvestment of dividends before consideration of income taxes. • The Nasdaq Financial - 100 Index includes 100 of the largest domestic and international financial securities listed on The Nasdaq Stock Market based on market capitalization.
Securities Authorized for Issuance under Equity Compensation Plans The table below presents information about shares of common stock available for future awards under all the Company’s equity compensation plans as of December 31, 2024 . The Company has not made grants of common stock outside of its equity compensation plans.
Securities Authorized for Issuance under Equity Compensation Plans The table below presents information about shares of common stock available for future awards under all the Company’s equity compensation plans as of December 31, 2025. The Company has not made grants of common stock outside of its equity compensation plans.
The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock markets, the New York Stock Exchange and Nasdaq. The stock performance depicted in the graph above is not to be relied upon as indicative of future performance.
The stocks included in the S&P 500 are those of large publicly held companies that trade on either of the two largest American stock markets, the New York Stock Exchange and Nasdaq. 36 Table of Contents The stock performance depicted in the graph above is not to be relied upon as indicative of future performance.
ITEM 5. MA RKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Interactive Brokers Group Inc.’s Class A common stock trades under the symbol “IBKR” on Nasdaq. There is no public trading market for our Class B common stock, which is held by Holdings.
ITEM 5. M ARKET FOR REGISTRANT’S COMMON EQUITY; RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information for Common Stock Interactive Brokers Group Inc.’s Class A common stock trades under the symbol “IBKR” on Nasdaq. There is no public trading market for our Class B common stock, which is held by Holdings.
The redemptions also resulted in an increase in the Holdings interest held by Mr. Thomas Peterffy and his affiliates from approximately 84.6% at the IPO to approximately 91.4% as of December 31 , 2024.
The redemptions also resulted in an increase in the Holdings interest held by Mr. Thomas Peterffy and his affiliates from approximately 84.6% at the IPO to approximately 91.6% as of December 31, 2025.
They include companies classified according to the Industry Classification Benchmark as Financials, which are included within the Nasdaq Bank, Nasdaq Insurance, and Nasdaq Other Finance Indexes. ‎ 38 Table of Contents The S&P 500 Index includes 500 large cap common stocks actively traded in the U.S.
They include companies classified according to the Industry Classification Benchmark as Financials, which are included within the Nasdaq Bank, Nasdaq Insurance, and Nasdaq Other Finance Indexes. • The S&P 500 Index includes 500 large cap common stocks actively traded in the U.S.
Number of securities to be Number of securities issued upon exercise of Weighted-average exercise remaining available for outstanding options, price of outstanding options future awards under warrants and rights warrants and rights equity compensation plans (1) Equity compensation plans approved by security holders N/A N/A 9,420,112 Total — — 9,420,112 ___________________________ (1) Amount represents restricted stock units available for future issuance of grants under the Company’s amended 2007 Stock Incentive Plan (the “Plan”).
Number of securities to be Number of securities issued upon exercise of Weighted-average exercise remaining available for outstanding options, price of outstanding options future awards under warrants and rights warrants and rights equity compensation plans (1) Equity compensation plans approved by security holders N/A N/A 35,930,685 Total — — 35,930,685 (1) Amount represents restricted stock units available for future issuance of grants under the Company’s amended 2007 Stock Incentive Plan (the “Plan”).
Stockholder Return Performance Graph The graph below compares cumulative total stockholder return on our common stock, the S&P 500 Index and the Nasdaq Financial - 100 Index from December 31, 2019 to December 31, 2024.
Stockholder Return Performance Graph The graph below compares cumulative total stockholder return on our common stock, the S&P 500 Index and the Nasdaq Financial-100 Index from December 31, 2020 to December 31, 2025.
On April 20, 2023, the Company’s stockholders approved an additional 10,000,000 shares to be distributed under the Plan. This increased the total number of shares available to be distributed under the Plan to 40,000,000 shares, from 30,000,000 shares.
On April 20, 2023, the Company’s stockholders approved an additional 40,000,000 shares to be distributed under the Plan. This increased the total number of shares available to be distributed under the Plan to 160,000,000 shares, from 120,000,000 shares.
Holders of Record As of February 19, 2025, there were 39 holders of record, which does not reflect those shares held beneficially or those shares held in “street” name. Accordingly, the number of beneficial owners of our common stock exceeds this number.
Holders of Record As of February 18, 2026, there were 59 holders of record, which does not reflect those shares held beneficially or those shares held in “street” name. Accordingly, the number of beneficial owners of our common stock exceeds this number.
On July 25, 2024, the Company filed a Prospectus Supplement on Form 424B5 (File Number 333-273451) with the SEC to issue 333,000 shares of common stock (with a fair value of $39 million) in exchange for an equivalent number of shares of member interests in IBG LLC, in accordance with the Exchange Agreement.
On July 30, 2025, the Company filed a Prospectus Supplement on Form 424B5 (File Number 333-273451) with the SEC to issue 3,836,000 shares of common stock (with a fair value of $254 million) in exchange for an equivalent number of shares of member interests in IBG LLC, in accordance with the Exchange Agreement.
Removed
Use of Proceeds On July 26, 2023, the Company filed a Prospectus Supplement on Form 424B (File Number 333-273451) with the SEC to re-register up to 630,000 shares of common stock, offering the opportunity for eligible persons to receive awards in the form of an offer to receive such shares by participating in one or more promotions that are designed to attract new customers to the Company’s brokerage platform, increase assets held with the Company’s brokerage business and enhance customer loyalty.
Added
Use of Proceeds The Exchange Agreement, as amended, provides for future redemptions of member interests and for the purchase of member interests in IBG LLC by IBG, Inc. from Holdings, which could result in IBG, Inc. acquiring the remaining member interests in IBG LLC that it does not own.
Removed
The Company has authorized a total of 1,000,000 shares of common stock to be issued under these promotions. From 2019 through 2024, the Company issued 620,000 shares to IBG LLC for distribution to eligible customers of certain of its subsidiaries.
Added
On an annual basis, members of Holdings can request redemption of their interests.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

118 edited+24 added−17 removed50 unchanged
Biggest changeEXECUTED ORDER VOLUMES: (in thousands, except %) Customer % Principal % Total % Period Orders Change Orders Change Orders Change 2020 620,405 27,039 704,278 2021 646,440 4% 27,334 1% 673,774 (4%) 2022 532,064 (18%) 26,966 (1%) 559,030 (17%) 2023 483,015 (9%) 29,712 10% 512,727 (8%) 2024 661,666 37% 63,348 113% 725,014 41% CONTRACT AND SHARE VOLUMES: (in thousands, except %) TOTAL Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2020 624,035 167,078 338,513,068 2021 887,849 42% 154,866 (7%) 771,273,709 128% 2022 908,415 2% 207,138 34% 330,035,586 (57%) 2023 1,020,736 12% 209,034 1% 252,742,847 (23%) 2024 1,344,855 32% 218,327 4% 307,489,711 22% CUSTOMER Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2020 584,195 164,555 331,263,604 2021 852,169 46% 152,787 (7%) 766,211,726 131% 2022 873,914 3% 203,933 33% 325,368,714 (58%) 2023 981,172 12% 206,073 1% 248,588,960 (24%) 2024 1,290,770 32% 214,864 4% 302,040,873 22% PRINCIPAL Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2020 39,840 2,523 7,249,464 2021 35,680 (10%) 2,079 (18%) 5,061,983 (30%) 2022 34,501 (3%) 3,205 54% 4,666,872 (8%) 2023 39,564 15% 2,961 (8%) 4,153,887 (11%) 2024 54,085 37% 3,463 17% 5,448,838 31% ___________________________ (1) Futures contract volume includes options on futures. ‎ 44 Table of Contents CUSTOMER STATISTICS: Year over Year 2024 2023 % Change Total Accounts (in thousands) 3,337 2,562 30% Customer Equity (in billions) 1 $ 568.2 $ 426.0 33% Total Customer DARTs (in thousands) 2 2,641 1,940 36% Cleared Customers Commission per Cleared Commissionable Order 3 $ 2.86 $ 3.14 (9%) Cleared Avg.
Biggest changeEXECUTED ORDER VOLUMES: (in thousands, except %) Customer % Principal % Total % Period Orders Change Orders Change Orders Change 2021 646,440 27,334 673,774 2022 532,064 (18%) 26,966 (1%) 559,030 (17%) 2023 483,015 (9%) 29,712 10% 512,727 (8%) 2024 661,666 37% 63,348 113% 725,014 41% 2025 915,616 38% 121,972 93% 1,037,588 43% CONTRACT AND SHARE VOLUMES: (in thousands, except %) TOTAL Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2021 887,849 154,866 771,273,709 2022 908,415 2% 207,138 34% 330,035,586 (57%) 2023 1,020,736 12% 209,034 1% 252,742,847 (23%) 2024 1,344,855 32% 218,327 4% 307,489,711 22% 2025 1,668,228 24% 241,631 11% 421,707,895 37% CUSTOMER Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2021 852,169 152,787 766,211,726 2022 873,914 3% 203,933 33% 325,368,714 (58%) 2023 981,172 12% 206,073 1% 248,588,960 (24%) 2024 1,290,770 32% 214,864 4% 302,040,873 22% 2025 1,623,384 26% 240,120 12% 417,457,770 38% PRINCIPAL Options % Futures 1 % Stocks % Period (contracts) Change (contracts) Change (shares) Change 2021 35,680 2,079 5,061,983 2022 34,501 (3%) 3,205 54% 4,666,872 (8%) 2023 39,564 15% 2,961 (8%) 4,153,887 (11%) 2024 54,085 37% 3,463 17% 5,448,838 31% 2025 44,844 (17%) 1,511 (56%) 4,250,125 (22%) (1) Futures contract volume includes options on futures.
Capital Expenditures Our capital expenditures are comprised of compensation costs of our software engineering staff for development of software for internal use and expenditures for computer, networking and communications hardware, and leasehold improvements. These expenditure items are reported as property, equipment, and intangible assets.
Our capital expenditures are comprised of compensation costs of our software engineering staff for development of software for internal use and expenditures for computer, networking and communications hardware, and leasehold improvements. These expenditure items are reported as property, equipment, and intangible assets.
The increase in net revenues was due to higher net interest income, commissions, other fees and services, and other income. Commissions We earn commissions from our cleared customers for whom we act as an executing and clearing broker and also from our non - cleared customers for whom we act as an execution - only broker.
The increase in net revenues was due to higher commissions, net interest income, other income, and other fees and services. Commissions We earn commissions from our cleared customers for whom we act as an executing and clearing broker and from our non-cleared customers for whom we act as an execution-only broker.
This item is not recorded in the Company’s consolidated statements of financial condition. Income derived from program deposits is reported in other net interest income in the table above.
This item is not recorded in the consolidated statements of financial condition. Income derived from program deposits is reported in other net interest income in the table above.
Our share of IBG LLC’s net income, excluding Holdings’ noncontrolling interest, for the current year was approximately 25.6%, compared to approximately 25.0% for the prior year.
Our share of IBG LLC’s net income, excluding Holdings’ noncontrolling interest, for the current year was approximately 26.0%, compared to approximately 25.6% for the prior year.
Treasury securities as collateral securing the loans in the customer’s account, which is held in segregated accounts, or at an affiliate acting as collateral agent for the benefit of our customer. ‎ 49 Table of Contents The table below presents net interest income information corresponding to interest-earning assets and interest-bearing liabilities for the periods indicated.
Treasury securities as collateral securing the loans in the customer’s account, which is held in segregated accounts, or at an affiliate acting as collateral agent for the benefit of our customer. 45 Table of Contents The table below presents net interest income information corresponding to interest-earning assets and interest-bearing liabilities for the periods indicated.
See the “Non-GAAP Financial Measures” section below in this Item 7 for additional details. 52 Table of Contents Noncontrolling Interest We are the sole managing member of IBG LLC and, as such, operate and control all of the business and affairs of IBG LLC and its subsidiaries and consolidate IBG LLC’s financial results into our financial statements.
See the “Non-GAAP Financial Measures” section below in this Item 7 for additional details. 48 Table of Contents Noncontrolling Interest We are the sole managing member of IBG LLC and, as such, operate and control all of the business and affairs of IBG LLC and its subsidiaries and consolidate IBG LLC’s financial results into our financial statements.
These non-GAAP financial measures should be considered in addition to, rather than as a substitute for, measures of financial performance prepared in accordance with GAAP 1 . ___________________________ 1 Refers to generally accepted accounting principles in the United States. ‎ 54 Table of Contents The tables below present a reconciliation of consolidated GAAP to non-GAAP financial measures for the periods indicated.
These non-GAAP financial measures should be considered in addition to, rather than as a substitute for, measures of financial performance prepared in accordance with GAAP 1 . 1 Refers to generally accepted accounting principles in the United States. 49 Table of Contents The tables below present a reconciliation of consolidated GAAP to non-GAAP financial measures for the periods indicated.
Scrutiny in the use of artificial intelligence (AI) and information security by regulatory and legislative authorities has increased. The impact of another pandemic or a public health emergency will depend on numerous evolving factors that cannot be accurately predicted, including the duration and spread of the pandemic, governmental regulations in response to the pandemic, and the effectiveness of vaccinations and other medical advancements. We continue to be exposed to the risks and uncertainties of doing business in international markets, particularly in the heavily regulated brokerage industry.
Scrutiny in the use of AI and information security by regulatory and legislative authorities has increased. • The impact of a pandemic or other public health emergency will depend on numerous evolving factors that cannot be accurately predicted, including the duration and spread of the pandemic, governmental regulations in response to the pandemic, and the effectiveness of vaccinations and other medical advancements. • We continue to be exposed to the risks and uncertainties of doing business in international markets, particularly in the heavily regulated brokerage industry.
(2) Interest income and interest expense on customer margin loans and customer credit balances, respectively, are calculated on daily cash balances within each customer’s account on a net basis, which may result in an offset of balances across multiple account segments (e.g., between securities and commodities segments).
(3) Interest income and interest expense on customer margin loans and customer credit balances, respectively, are calculated on daily cash balances within each customer’s account on a net basis, which may result in an offset of balances across multiple account segments (e.g., between securities and commodities segments).
Remeasurement of our TRA liability represents the change in the amount payable to IBG Holdings LLC under the TRA, primarily due to changes in the Company’s effective tax rates, which is related to the remeasurement of the deferred tax assets described below.
Remeasurement of our TRA liability represents the change in the amount payable to Holdings under the TRA, primarily due to changes in the Company’s effective tax rates, which is related to the remeasurement of the deferred tax assets described below.
Year Ended December 31, 2023: For a discussion of changes in cash flows for the year ended December 31, 2023 refer to our Annual Report on Form 10-K filed with the SEC on February 27, 2024.
Year Ended December 31, 2024: For a discussion of changes in cash flows for the year ended December 31, 2024 refer to our Annual Report on Form 10-K filed with the SEC on February 27, 2025.
Deferred income taxes have not been provided for U.S. tax liabilities or for additional foreign taxes on the unremitted earnings of foreign subsidiaries that have been indefinitely reinvested. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations.
Deferred income taxes have not been provided for U.S. tax liabilities or for additional foreign taxes on the unremitted earnings of foreign subsidiaries that have been indefinitely reinvested. 54 Table of Contents The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global operations.
We estimate that if the interest earned and paid on cash collateral related to our securities lending transactions were included under “Securities borrowed and loaned, net” in the table below, the total net interest income related to our securities lending activities would have been $699 million in the current year, compared to $718 million in the prior year.
We estimate that if the interest earned and paid on cash collateral related to our securities lending transactions were included under “Securities borrowed and loaned, net” in the table below, the total net interest income related to our securities lending activities would have been $1,041 million in the current year, compared to $699 million in the prior year.
Accordingly, these transactions result in off - balance sheet risk, as our cost to liquidate such futures contracts may exceed the amounts reported in our consolidated statements of financial condition. Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with U.S.
Accordingly, these transactions result in off-balance sheet risk, as our cost to liquidate such futures contracts may exceed the amounts reported in our consolidated statements of financial condition. C ritical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with U.S.
Federal Reserve rate policy, have led us to maintain a short duration portfolio, substantially all of which matured within three months at December 31, 2024, to more closely match our asset and liability maturities on our interest-sensitive assets.
Federal Reserve rate policy have led us to maintain a short duration portfolio, all of which matured within three months at December 31, 2025, to more closely match our asset and liability maturities on our interest-sensitive assets.
The proliferation of electronic exchanges and market centers has allowed us to integrate our software with an increasing number of trading venues – as well as with market data sources, securities lending platforms and regulatory reporting facilities – creating one automatically functioning, computerized platform that requires minimal human intervention. Our customer base is diverse with respect to geography and type.
The proliferation of electronic exchanges and market centers has allowed us to integrate our software with an increasing number of trading venues – as well as with market data sources, securities lending platforms and regulatory reporting facilities – creating one automated platform that requires minimal human intervention. Our customer base is diverse with respect to geography and type.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the audited consolidated financial statements and the related notes in Part II, Item 8, of this Annual Report on Form 10 - K.
ITEM 7. M ANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the audited consolidated financial statements and the related notes in Part II, Item 8, of this Annual Report on Form 10-K.
See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10 - K for a discussion of other risks that may affect our financial condition and results of operations. ‎ 43 Table of Contents Trading Volumes and Customer Statistics The tables below present historical trading volumes and customer statistics for our business.
See “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K for a discussion of other risks that may affect our financial condition and results of operations. 40 Table of Contents T rading Volumes and Customer Statistics The tables below present historical trading volumes and customer statistics for our business.
We continued to add staff worldwide to support our business expansion. As we continue to grow, our focus on automation has allowed us to maintain a relatively small staff. As a percentage of total net revenues, employee compensation and benefits expenses were 11% for the current year and 12% for the prior year.
We continued to add staff worldwide to support our business expansion. As we continue to grow, our focus on automation has allowed us to maintain a relatively lean staff. As a percentage of total net revenues, employee compensation and benefits expenses were 10% for the current year and 11% for the prior year.
Year Ended December 31, 2022: For a discussion of changes in cash flows for the year ended December 31, 2022 refer to our Annual Report on Form 10-K filed with the SEC on February 24, 2023. Regulatory Capital Requirements As of December 31, 2024, all operating subsidiaries were in compliance with their respective regulatory capital requirements.
Year Ended December 31, 2023: For a discussion of changes in cash flows for the year ended December 31, 2023 refer to our Annual Report on Form 10-K filed with the SEC on February 27, 2024. Regulatory Capital Requirements As of December 31, 2025, all operating subsidiaries were in compliance with their respective regulatory capital requirements.
We pay interest on customer cash balances (in sufficiently positive interest rate currencies); for borrowing and lending securities; on deposits (in negative interest rate currencies) with banks; and on our borrowings. Net interest income (interest income less interest expense), for the current year, increased $354 million, or 13%, compared to the prior year, to $3,148 million.
We pay interest on customer cash balances (in sufficiently positive interest rate currencies); for borrowing and lending securities; on deposits (in negative interest rate currencies) with banks; and on our borrowings. Net interest income (interest income less interest expense), for the current year, increased $415 million, or 13%, compared to the prior year, to $3,563 million.
As a percentage of total net revenues, non-interest expenses were 29% for both the current year and the prior year. Execution, Clearing and Distribution Fees Execution, clearing and distribution fees include the costs of executing and clearing trades, net of liquidity rebates received from various exchanges and market centers, as well as regulatory fees and market data fees.
As a percentage of total net revenues, non-interest expenses were 23% for the current year and 29% for the prior year. 46 Table of Contents Execution, Clearing and Distribution Fees Execution, clearing and distribution fees include the costs of executing and clearing trades, net of liquidity rebates received from various exchanges and market centers, as well as regulatory fees and market data fees.
As a percentage of total net revenues, general and administrative expenses were 6% for the current year and 5% for the prior year. 51 Table of Contents Customer Bad Debt Customer bad debt expense consists primarily of losses incurred by customers in excess of their assets with us, net of amounts recovered by us.
As a percentage of total net revenues, general and administrative expenses were 4% for the current year and 6% for the prior year. Customer Bad Debt Customer bad debt expense consists primarily of losses incurred by customers in excess of their assets with us, net of amounts recovered by us.
A discussion of our approach for managing foreign currency exposure is contained in Part I, Item 7A of this Quarterly Report on Form 10-Q entitled ‘‘Quantitative and Qualitative Disclosures about Market Risk.” Financial Overview We report non-GAAP financial measures, which exclude certain items that may not be indicative of our core operating results and business outlook and are useful in evaluating the operating performance of our business.
A discussion of our approach for managing foreign currency exposure is contained in Part II, Item 7A of this Annual Report on Form 10-K entitled ‘‘Quantitative and Qualitative Disclosures about Market Risk.” F inancial Overview We report non-GAAP financial measures, which exclude certain items that may not be indicative of our core operating results and business outlook and are useful in evaluating the operating performance of our business.
In addition, our customers can use our trading platform to trade certain cryptocurrencies through third-party cryptocurrency service providers that execute, clear and custody the cryptocurrencies. In August 2024, we began offering trading in forecast contracts, which are event-based contracts traded on ForecastEx, a CFTC-registered exchange and clearinghouse we established.
In addition, our customers can use our trading platform to trade certain cryptocurrencies through third-party cryptocurrency service providers that execute, clear and custody the cryptocurrencies. We also offer trading in forecast contracts, which are event-based contracts traded on ForecastEx, a CFTC-registered exchange and clearinghouse we established.
This increase is attributable to total comprehensive income, partially offset by distributions and dividends paid during 2024. Cash Flows The table below presents our cash flows from operating activities, investing activities and financing activities for the periods indicated.
This increase is attributable to total comprehensive income, partially offset by distributions and dividends paid during 2025. 51 Table of Contents Cash Flows The table below presents our cash flows from operating activities, investing activities and financing activities for the periods indicated.
(3) Includes income from financial instruments that has the same characteristics as interest, but is reported in other fees and services and other income in the Company’s consolidated statements of comprehensive income. For the years ended December 31, 2024, 2023, and 2022, $28 million, $19 million and $10 million were reported in other fees and services, respectively.
(4) Includes income from financial instruments that has the same characteristics as interest, but is reported in other fees and services and other income in the Company's consolidated statements of comprehensive income. For the years ended December 31, 2025, 2024, and 2023, $38 million, $28 million and $19 million were reported in other fees and services, respectively.
A discussion of our approach to managing foreign currency exposure is contained in Part II, Item 7A of this Annual Report on Form 10-K entitled “Quantitative and Qualitative Disclosures about Market Risk.” Other income, for the current year, increased $71 million, compared to the prior year, to a gain of $60 million.
A discussion of our approach to managing foreign currency exposure is contained in Part II, Item 7A of this Annual Report on Form 10-K entitled “Quantitative and Qualitative Disclosures about Market Risk.” Other income, for the current year, increased $142 million, or 237%, compared to the prior year, to $202 million.
As an electronic broker, we execute, clear and settle trades globally for both institutional and individual customers. Capitalizing on our proprietary technology, our systems provide our customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically in these markets at a low cost, in multiple products and currencies from a single trading account.
As a broker, we execute, clear and settle trades globally for both institutional and individual customers. Powered by our proprietary technology, our systems provide our customers with the capability to monitor multiple markets around the world simultaneously and to execute trades electronically at a low cost, in multiple products and currencies from a single trading account.
The effects of our currency diversification strategy are reported as (1) a component of “Other Income” (loss of $15 million) in the consolidated statements of comprehensive income and (2) other comprehensive income (“OCI”) (loss of $207 million) in the consolidated statements of financial condition and the consolidated statements of comprehensive income.
The effects of our currency diversification strategy are reported as (1) a component of “Other Income” (loss of $4 million) in the consolidated statements of comprehensive income and (2) other comprehensive income (“OCI”) (gain of $391 million) in the consolidated statements of financial condition and the consolidated statements of comprehensive income.
We specialize in routing orders and executing and processing trades in stocks, options, futures, forex, bonds, mutual funds, ETFs and precious metals on more than 160 electronic exchanges and market centers in 36 countries and 28 currencies around the world.
We specialize in routing orders and executing and processing trades in stocks, options, futures, forex, bonds, mutual funds, ETFs and precious metals on more than 170 electronic exchanges and market centers in 40 countries and 29 currencies around the world.
Adjusted pretax profit margin was 72%, up from 71% in the prior year. In connection with our currency diversification strategy as of December 31, 2024, approximately 23% of our equity was denominated in currencies other than the U.S. dollar.
Adjusted pretax profit margin was 77%, up from 72% in the prior year. In connection with our currency diversification strategy as of December 31, 2025, approximately 25% of our equity was denominated in currencies other than the U.S. dollar.
In the U.S., according to industry data, average daily volume in exchange-listed equity-based options increased by 10%, listed cash equities volume by 10%, and futures by 9%, compared to 2023. Options trading volumes have risen with the growing popularity of shorter-dated options contracts.
In the U.S., according to industry data, average daily volume in listed cash equities increased by 45%, exchange-listed equity-based options by 25%, and futures by 6%, compared to 2024. Options trading volumes have risen with the growing popularity of shorter-dated options contracts.
As of December 31, 2024, liability balances in connection with securities loaned and payables to customers were higher than the monthly average balances during the current year. Short-term borrowing balance was lower than the average monthly balance during the current year.
As of December 31, 2025, liability balances in connection with securities loaned and payables to customers were higher than their average monthly balances during the current year, and short-term borrowings balance was lower than its average monthly balance during the current year.
For the current year, our net revenues were $5,185 million and income before income taxes was $3,695 million, compared to net revenues of $4,340 million and income before income taxes of $3,069 million in the prior year.
For the current year, our net revenues were $6,205 million and income before income taxes was $4,771 million, compared to net revenues of $5,185 million and income before income taxes of $3,695 million in the prior year.
Specialized products and services that we have developed successfully attract these accounts. For example, we offer prime brokerage services, including financing and securities lending, to hedge funds; our model portfolio technology and automated share allocation and rebalancing tools are particularly attractive to financial advisors; and our trading platform, global access and low pricing attract introducing brokers.
For example, we offer prime brokerage services, including financing and securities lending, to hedge funds; our model portfolio technology and automated share allocation and rebalancing tools are particularly attractive to financial advisors; and our trading platform, global access and low pricing attract introducing brokers.
As an offset, lower rates also reduce our interest expense. For example, in U.S. dollars we pay interest to customers on their qualified cash balances when the federal funds effective rate is above 0.50%, which it has been since May 2022.
As an offset, lower rates also reduce our interest expense. For example, in U.S. dollars we pay interest to customers on their qualified cash balances when the federal funds effective rate is above 0.50%, which it has been since May 2022. At this benchmark rate level, we are able to earn our full 0.50% spread.
Income tax expense, for the current year, increased $31 million, or 12%, compared to the prior year, to $288 million, primarily due to (1) higher income before taxes at our operating subsidiaries outside the U.S. and higher income tax rates in Europe following the adoption of the minimum effective tax rate of 15% on January 1, 2024; (2) higher income before income taxes subject to U.S. income tax at IBG, Inc.; and (3) IBG, Inc.’s higher average ownership percentage of IBG LLC, which rose from 25.0% to 25.6%; partially offset by (4) an $11 million income tax benefit in the current year due to the remeasurement of deferred tax assets related to the step-up in basis arising from the acquisition of interests in IBG LLC, primarily due to changes in the Company’s effective tax rates.
Income tax expense, for the current year, increased $126 million, or 44%, compared to the prior year, to $414 million, primarily due to (1) higher income before taxes at our operating subsidiaries outside the U.S. and higher income tax rates in Europe following the adoption of the minimum effective tax rate of 15% on January 1, 2025; (2) higher income before income taxes subject to U.S. income tax at IBG, Inc.; (3) IBG, Inc.’s higher average ownership percentage of IBG LLC, which rose from 25.6% to 26.0%; and (4) an $8 million lower income tax benefit, compared to the prior year, due to the remeasurement of deferred tax assets related to the step-up in basis arising from the acquisition of interests in IBG LLC, primarily due to changes in the Company’s effective tax rates.
However, as noted above, the rise in benchmark interest rates has shifted a portion of the interest reported as generated by lending securities to interest income on segregated cash (see further explanation above).
However, as noted above, the rise in benchmark interest rates from March 2022 to September 2024 shifted a portion of the interest reported as generated by lending securities to interest income on segregated cash (see further explanation above).
We used net cash of $44 million in our investing activities primarily for purchases of property, equipment, and intangible assets and other investments. Financing Activities Our cash flows from financing activities are comprised of short-term borrowings, capital transactions, and payments made to Holdings under the Tax Receivable Agreement.
We used net cash of $171 million in our investing activities, including strategic investments and property, equipment, and intangible assets. Financing Activities Our cash flows from financing activities are comprised of short-term borrowings, capital transactions, and payments made to Holdings under the Tax Receivable Agreement.
Capital expenditures for property, equipment, and intangible assets were approximately $49 million , $49 million and $69 million for the three years ended December 31, 2024, 2023, and 2022, respectively.
Capital expenditures for property, equipment, and intangible assets were $67 million, $49 million and $49 million for the three years ended December 31, 2025, 2024, and 2023, respectively.
Year Ended December 31, 2024 2023 2022 Revenues Commissions 33% 31% 43% Other fees and services 5% 5% 6% Other income (loss) 1% (0%) (3%) Total non-interest income 39% 36% 46% Interest income 142% 144% 88% Interest expense (81%) (79%) (33%) Total net interest income 61% 64% 54% Total net revenues 100% 100% 100% Non-interest expenses Execution, clearing and distribution fees 9% 9% 11% Employee compensation and benefits 11% 12% 15% Occupancy, depreciation and amortization 2% 2% 3% Communications 1% 1% 1% General and administrative 6% 5% 5% Customer bad debt 0% 0% 0% Total non-interest expenses 29% 29% 35% Income before income taxes 71% 71% 65% Income tax expense 6% 6% 5% Net income 66% 65% 60% Less net income attributable to noncontrolling interests 51% 51% 48% Net income available for common stockholders 15% 14% 12% Year Ended December 31 , 2024 (“current year”) compared to the Year Ended December 31, 2023 (“prior year”) Net Revenues Total net revenues, for the current year, increased $845 million, or 19%, compared to the prior year, to $5,185 million.
Year Ended December 31, 2025 2024 2023 Revenues Commissions 35% 33% 31% Other fees and services 5% 5% 5% Other income (loss) 3% 1% (0%) Total non-interest income 43% 39% 36% Interest income 125% 142% 144% Interest expense (68%) (81%) (79%) Total net interest income 57% 61% 64% Total net revenues 100% 100% 100% Non-interest expenses Execution, clearing and distribution fees 7% 9% 9% Employee compensation and benefits 10% 11% 12% Occupancy, depreciation and amortization 2% 2% 2% Communications 1% 1% 1% General and administrative 4% 6% 5% Customer bad debt 0% 0% 0% Total non-interest expenses 23% 29% 29% Income before income taxes 77% 71% 71% Income tax expense 7% 6% 6% Net income 70% 66% 65% Less net income attributable to noncontrolling interests 54% 51% 51% Net income available for common stockholders 16% 15% 14% Year Ended December 31, 2025 (“current year”) compared to the Year Ended December 31, 2024 (“prior year”) Net Revenues Total net revenues, for the current year, increased $1,020 million, or 20%, compared to the prior year, to $6,205 million.
Historically, our consolidated equity has consisted primarily of accumulated retained earnings, which to date have been sufficient to fund our operations and growth. Our consolidated equity increased 17% to $16.6 billion as of December 31, 2024, from $14.1 billion as of December 31, 2023.
Historically, our consolidated equity has consisted primarily of accumulated retained earnings, which to date have been sufficient to fund our operations and growth. Our consolidated equity increased 23% to $20.5 billion as of December 31, 2025, from $16.6 billion as of December 31, 2024.
Tax Cuts and Jobs Act on December 22, 2017, we recognized a liability for the one-time transition tax on deemed repatriation of earnings of some of our foreign subsidiaries for the year ended December 31, 2017.
Tax Cuts and Jobs Act on December 22, 2017, we recognized a liability for the one-time transition tax on deemed repatriation of earnings of some of our foreign subsidiaries for the year ended December 31, 2017, which was paid over eight years ending in 2025.
Our customer options, equities, and futures volumes were up 32%, 22%, and 4%, respectively, while foreign exchange volumes declined 9%, compared to the prior year. 40 Table of Contents Note that while U.S. options, futures and cash equities volumes are readily comparable measures, they reflect most but not all of the global volumes that generate our commission revenue.
Our customer equities, options, foreign exchange, and futures volumes were up 38%, 26%, 15%, and 12%, respectively, compared to the prior year. Note that while U.S. options, futures and cash equities volumes are readily comparable measures, they reflect most but not all of the global volumes that generate our commission revenue.
The full effect of the GLOBAL is captured in comprehensive income. ‎ 42 Table of Contents Certain Trends and Uncertainties We believe that our current operations may be favorably or unfavorably impacted by the following trends and uncertainties that may affect our financial condition and results of operations: Retail participation in the equity markets has fluctuated in the past due to investor sentiment, market conditions and a variety of other factors.
C ertain Trends and Uncertainties We believe that our current operations may be favorably or unfavorably impacted by the following trends and uncertainties that may affect our financial condition and results of operations: • Retail participation in the equity markets has fluctuated in the past due to investor sentiment, market conditions and a variety of other factors.
In response to changing economic conditions, we believe we have the flexibility to modify our capital expenditures by adjusting them (either upward or downward) to match our actual performance.
In response to changing economic conditions, we believe we have the flexibility to modify our capital expenditures by adjusting them (either upward or downward) to match our actual performance. If we pursue any additional strategic acquisitions, we may incur additional capital expenditures.
Total DARTs for cleared and execution-only customers, for the current year, increased 36% to 2.6 million, compared to 1.9 million for the prior year.
Total DARTs for cleared and execution-only customers, for the current year, increased 40% to 3.7 million, compared to 2.6 million for the prior year.
Short-term borrowings from banks are part of our daily cash management in support of operating activities. Capital transactions consist primarily of quarterly dividends paid to common stockholders and related distributions paid to Holdings. We used net cash of $833 million in our financing activities, primarily for dividends paid to common stockholders and proportionate distributions to noncontrolling interests.
Short-term borrowings from banks are part of our daily cash management in support of operating activities. Capital transactions consist primarily of quarterly dividends paid to common stockholders and related distributions paid to Holdings.
The impact of changes in interest rates is further described in Part II, Item 7A of this Annual Report on Form 10-K entitled “Quantitative and Qualitative Disclosures about Market Risk.” Strategic Investments and Acquisitions We regularly evaluate potential strategic investments and acquisitions. We hold strategic investments in certain electronic trading exchanges, including BOX Options Exchange, LLC.
The impact of changes in interest rates is further described in Part II, Item 7A of this Annual Report on Form 10-K entitled “Quantitative and Qualitative Disclosures about Market Risk.” 53 Table of Contents Strategic Investments and Acquisitions We regularly evaluate potential strategic investments and acquisitions.
During the current year, the value of the GLOBAL, as measured in U.S. dollars, decreased 1.45% compared to its value at December 31, 2023, which had a negative impact on our comprehensive earnings for the current year.
During the current year, the value of the GLOBAL, as measured in U.S. dollars, increased 2.05% compared to its value at December 31, 2024, which had a positive impact on our comprehensive earnings for the current year.
As of December 31, 2024, we held approximately 25.8% ownership interest in IBG LLC. Holdings holds approximately 74.2% ownership interest in IBG LLC. We reflect Holdings’ ownership as a noncontrolling interest in our consolidated statements of financial condition, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows.
As of December 31, 2025, we held approximately 26.3% ownership interest in IBG LLC and Holdings held approximately 73.7% ownership interest in IBG LLC. We reflect Holdings’ ownership as a noncontrolling interest in our consolidated statements of financial condition, consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows.
Year-Ended December 31, 2024 2023 2022 (in millions) Net cash provided by operating activities $ 8,724 $ 4,544 $ 3,968 Net cash used in investing activities (44) (52) (67) Net cash used in financing activities (833) (624) (470) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (207) 122 (111) Increase in cash, cash equivalents, and restricted cash $ 7,640 $ 3,990 $ 3,320 56 Table of Contents Our cash, cash equivalents, and restricted cash (i.e., cash and cash equivalents that are subject to withdrawal or usage restrictions) increased by $7,640 million to $40.2 billion for the year ended December31, 2024.
Year-Ended December 31, 2025 2024 2023 (in millions) Net cash provided by operating activities $ 15,811 $ 8,724 $ 4,544 Net cash used in investing activities (171) (44) (52) Net cash used in financing activities (969) (833) (624) Effect of exchange rate changes on cash, cash equivalents, and restricted cash 391 (207) 122 Increase in cash, cash equivalents, and restricted cash $ 15,062 $ 7,640 $ 3,990 Our cash, cash equivalents, and restricted cash (i.e., cash and cash equivalents that are subject to withdrawal or usage restrictions) increased by $15.1 billion to $55.3 billion for the year ended December 31, 2025.
We custody and service accounts for hedge and mutual funds, ETFs, registered investment advisors, proprietary trading groups, introducing brokers and individual investors.
B usiness Overview We are an automated global broker. We custody and service accounts for hedge and mutual funds, ETFs, registered investment advisors, proprietary trading groups, introducing brokers and individual investors.
As of December 31, 2024, there were no definitive agreements with respect to any material acquisition. 58 Table of Contents Certain Information Concerning Off - Balance - Sheet Arrangements We may be exposed to a risk of loss not reflected in our consolidated financial statements for futures products, which represent our obligations to settle at contracted prices, and which may require us to repurchase or sell in the market at prevailing prices.
Certain Information Concerning Off-Balance-Sheet Arrangements We may be exposed to a risk of loss not reflected in our consolidated financial statements for futures products, which represent our obligations to settle at contracted prices, and which may require us to repurchase or sell in the market at prevailing prices.
Mark-to-market on investments represents the net mark-to-market gains (losses) on investments in equity securities that do not qualify for equity method accounting, which are measured at fair value; on our U.S. government and municipal securities portfolios, which are typically held to maturity; and on certain other investments, including equity securities taken over by the Company as a customer accommodation following unusual market events or technical issues.
Mark-to-market on investments represents the net mark-to-market gains (losses) on investments in equity securities that do not qualify for equity method accounting, which are measured at fair value; on our U.S. government and municipal securities portfolios, which are typically held to maturity; and on certain other investments, including equity securities taken over by the Company from customers as a customer accommodation due to a technical issue at the New York Stock Exchange on the morning of June 3, 2024, as previously disclosed.
Finally, the Company’s policies with respect to currencies with near zero or negative interest rates impact the overall yields on segregated cash and customer credit balances as effective interest rates in those currencies move above or below zero.
Finally, the Company’s policies with respect to currencies with near zero or negative interest rates impact the overall yields on segregated cash and customer credit balances as effective interest rates in those currencies move above or below zero. We earn income on securities loaned and borrowed to support customer long and short stock holdings in margin accounts.
See the “Non-GAAP Financial Measures” section below in this Item 7 for additional details. Diluted earnings per share were $6.93 for the year ended December 31, 2024 (“current year”), compared to $5.67 for the year ended December 31, 2023 (“prior year”). Adjusted diluted earnings per share were $7.03 for the current year, compared to $5.75 for the prior year.
See the “Non-GAAP Financial Measures” section below in this Item 7 for additional details. Diluted earnings per share were $2.22 for the year ended December 31, 2025 (“current year”), compared to $1.73 for the year ended December 31, 2024 (“prior year”). Adjusted diluted earnings per share were $2.19 for the current year, compared to $1.76 for the prior year.
Inflation may also be a contributing factor to general uncertainty in the markets in the foreseeable future. Statements about future inflation are subject to the risk that actual inflation and its effects may differ, possibly materially, due to, among other things, changes in economic growth, impact of supply chain disruptions, unemployment and consumer demand. Investments in U.S.
Statements about future inflation are subject to the risk that actual inflation and its effects may differ, possibly materially, due to, among other things, changes in economic growth, impact of supply chain disruptions, unemployment and consumer demand. Investments in U.S. Government Securities We invest in U.S. government securities to satisfy U.S. regulatory requirements.
A tax position that meets this standard is measured at the largest amount of benefit that will more likely than not be realized on settlement. ‎ 59 Table of Contents Accounting Pronouncements Issued but Not Yet Adopted For additional information regarding FASB Accounting Standards Updates (“ASU”s) that have been issued but not yet adopted and that may impact the Company, refer to Note 2 – “Significant Accounting Policies” to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on form 10-K. ‎ 60 Table of Contents
Accounting Pronouncements Issued but Not Yet Adopted For additional information regarding FASB Accounting Standards Updates (“ASU”s) that have been issued but not yet adopted and that may impact the Company, refer to Note 2 – “Significant Accounting Policies” to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on form 10-K. 55 Table of Contents
The increase in net interest income was driven by higher customer margin loans and customer credit balances, and higher benchmark interest rates.
The increase in net interest income was driven by higher average customer margin loans and customer credit balances, and stronger securities lending activity, partially offset by lower benchmark interest rates.
Comparing our operating results for the current year to the prior year using non-GAAP financial measures, adjusted net revenues were $5,257 million, up 20%; adjusted income before income taxes was $3,767 million, up 21%; and adjusted pre-tax profit margin was 72% for the current year and 71% for the prior year.
Comparing our operating results for the current year to the prior year using non-GAAP financial measures, adjusted net revenues were $6,156 million, up 17%; adjusted income before income taxes was $4,722 million, up 25%; and adjusted pre-tax profit margin was 77% for the current year and 72% for the prior year.
For additional information regarding our regulatory capital requirements see Note 16 – “Regulatory Requirements” to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10 - K.
For additional information regarding our regulatory capital requirements see Note 16 – “Regulatory Requirements” to the audited consolidated financial statements in Part II, Item 8 of this Annual Report on Form 10-K. 52 Table of Contents Capital Expenditures We expect capital expenditures to remain primarily focused on technology infrastructure, system capacity, cybersecurity, and regulatory requirements.
Commissions for the current year increased $337 million, or 25%, compared to the prior year, to $1,697 million, driven by higher customer trading volumes in options, stocks and futures. Total customer options and futures contract and stock share volumes increased 32%, 4% and 22%, respectively, from the prior year.
Commissions for the current year increased $452 million, or 27%, compared to the prior year, to $2,149 million, driven by higher customer trading volumes in stocks, options and futures. Total customer stock share and options and futures contract volumes increased 38%, 26% and 12%, respectively, from the prior year.
Year-Ended December 31, 2024 2023 2022 (in millions) Average interest-earning assets Segregated cash and securities $ 62,117 $ 59,582 $ 51,644 Customer margin loans 53,503 41,229 43,402 Securities borrowed 5,899 5,315 3,961 Other interest-earning assets 11,180 10,114 9,000 FDIC sweeps 1,3 4,214 3,003 2,229 $ 136,913 $ 119,242 $ 110,235 Average interest-bearing liabilities Customer credit balances $ 105,840 $ 96,081 $ 90,172 Securities loaned 13,737 9,518 10,095 Other interest-bearing liabilities 26 1 4 $ 119,603 $ 105,600 $ 100,271 Net Interest income Segregated cash and securities, net $ 3,024 $ 2,791 $ 742 Customer margin loans 2 3,012 2,278 1,083 Securities borrowed and loaned, net 92 276 413 Customer credit balances, net 2 (3,595) (3,125) (763) Other net interest income 1,3 690 600 207 Net interest income 3 $ 3,223 $ 2,820 $ 1,682 Net interest margin ("NIM") 2.35% 2.36% 1.53% Annualized Yields Segregated cash and securities 4.87% 4.68% 1.44% Customer margin loans 5.63% 5.53% 2.50% Customer credit balances 3.40% 3.25% 0.85% ___________________________ (1) Represents the average amount of customer cash swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program.
Year-Ended December 31, 2025 2024 2023 (in millions) Average interest-earning assets Segregated cash and securities $ 77,217 $ 62,117 $ 59,582 Customer margin loans 69,978 53,503 41,229 Securities borrowed 7,792 5,899 5,315 Other interest-earning assets 15,167 11,180 10,114 FDIC sweeps 1,4 5,555 4,214 3,003 $ 175,709 $ 136,913 $ 119,242 Average interest-bearing liabilities Customer credit balances $ 135,487 $ 105,840 $ 96,081 Securities loaned 19,469 13,737 9,518 Other interest-bearing liabilities 170 26 1 $ 155,126 $ 119,603 $ 105,600 Net Interest income Segregated cash and securities, net 2 $ 2,930 $ 3,024 $ 2,791 Customer margin loans 3 3,230 3,012 2,278 Securities borrowed and loaned, net 287 92 276 Customer credit balances, net 3 (3,545) (3,595) (3,125) Other net interest income 1,4 759 690 600 Net interest income 4 $ 3,661 $ 3,223 $ 2,820 Net interest margin ("NIM") 2.08% 2.35% 2.36% Annualized Yields Segregated cash and securities 3.79% 4.87% 4.68% Customer margin loans 4.62% 5.63% 5.53% Customer credit balances 2.62% 3.40% 3.25% (1) Represents the average amount of customer cash swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program.
A significant number of other countries have either already or are expected to implement similar legislation with varying effective dates. We record tax liabilities in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 740 and adjust these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available.
We record tax liabilities in accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 740 and adjust these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available.
In most countries with developed financial markets, benchmark interest rates also declined over the course of the year as central banks’ concerns over inflation abated. Lower U.S. benchmark rates reduce the interest we earn on our segregated cash, the majority of which is invested in short-term U.S. government securities and related instruments. Higher short-term rates, and uncertainty over future U.S.
Lower U.S. benchmark rates reduce the interest we earn on our segregated cash, the majority of which is invested in short-term U.S. government securities and related instruments. Higher short-term rates and uncertainty over future U.S.
In the current year, our currency diversification strategy decreased our comprehensive earnings by $222 million (compared to an increase of $42 million in the prior year), as the U.S. dollar value of the GLOBAL decreased by approximately 1.45%, compared to its value as of December 31, 2023.
In the current year, our currency diversification strategy increased our comprehensive earnings by $387 million (compared to a decrease of $222 million in the prior year), as the U.S. dollar value of the GLOBAL increased by approximately 2.05%, compared to its value as of December 31, 2024.
Generally, as benchmark interest rates rise, while the overall revenue generated from a securities lending transaction may not change, the portion derived from interest earned on the cash collateral, which is classified as net interest income on “Segregated cash and securities, net” increases, while the portion classified as “Securities borrowed and loaned, net” decreases.
Generally, as benchmark interest rates rise, while the overall revenue generated from a securities lending transaction may not change, the portion derived from interest earned on the cash collateral, which is classified as net interest income on “Segregated cash and securities, net” increases, while the portion classified as “Securities borrowed and loaned, net” decreases. 44 Table of Contents In the current year, average securities borrowed balances increased 32%, to $7.8 billion, and average securities loaned balances increased 42%, to $19.5 billion, compared to the prior year.
Our actual results may differ materially from those anticipated in these forward - looking statements as a result of certain factors, including those set forth under the heading “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10 - K. Business Overview We are an automated global electronic broker.
In addition to historical information, the following discussion also contains forward-looking statements that include risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under the heading “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.
Depreciation and amortization expenses result from the depreciation of fixed assets, such as computing and communications hardware, as well as amortization of leasehold improvements and capitalized in - house software development.
Occupancy, Depreciation and Amortization Occupancy expenses consist primarily of rental payments on office and data center leases and related occupancy costs, such as utilities. Depreciation and amortization expenses result from the depreciation of fixed assets, such as computing and communications hardware, as well as amortization of leasehold improvements and capitalized in-house software development.
Net interest income on margin loan balances rose compared to the prior year. This increase was due to the average federal funds effective rate increasing to 5.14% in the current year from 5.02% in the prior year, and the growth in margin loan balances in the current active market environment.
This increase was due to the growth in margin loan balances in the current active market environment despite the average federal funds effective rate declining to 4.21% in the current year from 5.14% in the prior year. Higher average balances contributed to a 13% rise in net interest income over the prior year.
These non-GAAP financial measures include adjusted net revenues, adjusted income before income taxes, adjusted net income available for common stockholders, and adjusted diluted earnings per share (“EPS”). We believe that these non-GAAP financial measures are important measures of our financial performance because they exclude certain items that may not be indicative of our core operating results and business outlook.
We believe that these non-GAAP financial measures are important measures of our financial performance because they exclude certain items that may not be indicative of our core operating results and business outlook.
It should be noted that securities lending transactions entered into to support customer activity may produce interest income (expense) that is offset by interest expense (income) related to customer balances.
It should be noted that securities lending transactions entered into to support customer activity may produce interest income (expense) that is offset by interest expense (income) related to customer balances. With benchmark rates falling during 2025, the opposite shift occurred, from interest income on segregated cash to securities lending income.
Communications expenses, for the current year, decreased $2 million, or 5%, compared to the prior year, to $39 million. As a percentage of total net revenues, communications expenses were 1% for both the current year and the prior year.
Occupancy, depreciation and amortization expenses, for the current year, decreased $4 million, or 4%, compared to the prior year, to $97 million, mainly due to lower depreciation and amortization expense. As a percentage of total net revenues, occupancy, depreciation and amortization expenses were 2% for both the current year and the prior year.
Execution, clearing and distribution fees, for the current year, increased $61 million, or 16%, compared to the prior year, to $447 million, primarily driven by (1) a $55 million increase in regulatory fees due to an increase in the SEC fee rate effective May 22, 2024, a new FINRA Consolidated Audit Trail (“CAT”) fee initiated in October 2024, and higher customer trading volumes ; and (2) a $20 million increase in clearing and depository fees due to higher customer trading volumes ; partially offset by (3) a $19 million decrease in exchange fees due to greater capture of liquidity rebates from certain exchanges.
Execution, clearing and distribution fees, for the current year, decreased $27 million, or 6%, compared to the prior year, to $420 million, primarily driven by (1) a $41 million decrease in exchange fees due to greater capture of liquidity rebates from certain exchanges on higher customer trading volumes in stocks and options; and (2) a $9 million net decrease in regulatory fees as the SEC Section 31 transaction fee rate was reduced to zero on May 14, 2025, partially offset by a new FINRA Consolidated Audit Trail (“CAT”) fee, which was initiated in the fourth quarter of 2024; partially offset by (3) a $20 million increase in clearing fees due higher customer trading volumes in stocks and options.
As of December 31, 2024, total assets were $150.1 billion of which approximately $148.9 billion, or 99.2%, were considered liquid. Decisions on the allocation of capital are based upon, among other things, prudent risk management guidelines, potential liquidity and cash flow needs for current and future business activities, regulatory capital requirements, and projected profitability.
Decisions on the allocation of capital are based upon, among other things, prudent risk management guidelines, potential liquidity and cash flow needs for current and future business activities, regulatory capital requirements, and projected profitability.
Employee compensation and benefits expenses, for the current year, increased $47 million, or 9%, compared to the prior year, to $574 million, associated with a combination of staffing increases and inflation. The average number of employees increased 2% to 2,960 for the current year, compared to 2,892 for the prior year.
Employee compensation and benefits expenses, for the current year, increased $52 million, or 9%, compared to the prior year, to $626 million, associated with a combination of staffing increases and inflation, and an increase in U.S.
Payments Due by Year Total 2025-2026 2027-2028 Thereafter (in millions) Payable to Holdings under Tax Receivable Agreement (1) $ 195 $ 28 $ 28 $ 139 Operating leases 134 57 38 39 Transition Tax liability (2) 18 18 - - Total contractual cash obligations $ 347 $ 103 $ 66 $ 178 ___________________________ (1) As of December 31, 2024, contractual amounts owed under the Tax Receivable Agreement of $195 million have been recorded in payable to affiliate in the consolidated financial statements, representing management’s best estimate of the amounts currently expected to be owed under the Tax Receivable Agreement.
Payments Due by Year Total 2026-2027 2028-2029 Thereafter (in millions) Payable to Holdings under Tax Receivable Agreement (1) $ 217 $ 28 $ 33 $ 156 Operating leases 184 62 49 73 Total contractual cash obligations $ 401 $ 90 $ 82 $ 229 (1) As of December 31, 2025, contractual amounts owed under the Tax Receivable Agreement of $217 million have been reported in payables to affiliate in the consolidated financial statements, representing management’s best estimate of the amounts currently expected to be owed under the Tax Receivable Agreement.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

23 edited+2 added−2 removed45 unchanged
Biggest changeUSD 0.72 1.0000 0.720 75.5% $ 10,619 1.0000 0.720 76.6% $ 12,714 1.1% EUR 0.09 1.1037 0.099 10.4% 1,465 1.0353 0.093 9.9% 1,645 -0.5% JPY 3.91 0.0071 0.028 2.9% 409 0.0064 0.025 2.6% 439 -0.3% GBP 0.02 1.2731 0.025 2.7% 376 1.2513 0.025 2.7% 442 0.0% CHF 0.02 1.1881 0.024 2.5% 350 1.1019 0.022 2.3% 389 -0.1% CNH 0.13 0.1404 0.018 1.9% 269 0.1363 0.018 1.9% 313 0.0% INR 1.10 0.0120 0.013 1.4% 195 0.0117 0.013 1.4% 227 0.0% CAD 0.02 0.7549 0.011 1.2% 167 0.6953 0.010 1.1% 184 -0.1% AUD 0.02 0.6811 0.010 1.1% 151 0.6188 0.009 1.0% 164 -0.1% HKD 0.04 0.1281 0.004 0.5% 66 0.1287 0.005 0.5% 80 0.0% 0.954 100.0% $ 14,067 0.940 100.0% $ 16,597 0.0% Interest Rate Risk We had no variable - rate debt outstanding as of December 31, 2024.
Biggest changeUSD 0.72 1.0000 0.720 76.6% $ 12,714 1.0000 0.720 75.1% $ 15,367 -1.5% EUR 0.09 1.0353 0.093 9.9% 1,645 1.1746 0.106 11.0% 2,256 1.1% JPY 3.91 0.0064 0.025 2.6% 439 0.0064 0.025 2.6% 533 0.0% GBP 0.02 1.2513 0.025 2.7% 442 1.3474 0.027 2.8% 575 0.1% CHF 0.02 1.1019 0.022 2.3% 389 1.2615 0.025 2.6% 539 0.3% CNH 0.13 0.1363 0.018 1.9% 313 0.1433 0.019 1.9% 398 0.1% INR 1.10 0.0117 0.013 1.4% 227 0.0111 0.012 1.3% 261 -0.1% CAD 0.02 0.6953 0.010 1.1% 184 0.7286 0.011 1.1% 233 0.0% AUD 0.02 0.6188 0.009 1.0% 164 0.6673 0.010 1.0% 214 0.1% HKD 0.04 0.1287 0.005 0.5% 80 0.1285 0.004 0.5% 96 0.0% 0.940 100.0% $ 16,597 0.959 100.0% $ 20,472 0.0% Interest Rate Risk We had no variable-rate debt outstanding as of December 31, 2025.
In a normal rate environment, we typically invest a portion of these funds in U.S. government securities with maturities of up to two years, although given the current interest rate environment, at this time substantially all such investments mature within three months.
In a normal rate environment, we typically invest a portion of these funds in U.S. government securities with maturities of up to two years, although given the current interest rate environment, at this time all such investments mature within three months.
If such securities were sold prior to maturity, the loss would be realized and the proceeds reinvested at prevailing higher interest rates. ‎ 62 Table of Contents We also face the potential for reduced net interest income from customer deposits and margin loans if benchmark rates were to fall.
If such securities were sold prior to maturity, the loss would be realized and the proceeds reinvested at prevailing higher interest rates. 57 Table of Contents We also face the potential for reduced net interest income from customer deposits and margin loans if benchmark rates were to fall.
The full effect of the GLOBAL is captured in the consolidated statements of comprehensive income. The table below presents a comparison of the U.S. dollar equivalent of the GLOBAL for the periods indicated. As of 12/31/2023 As of 12/31/2024 GLOBAL in % of Net Equity GLOBAL in % of Net Equity CHANGE in Currency Composition FX Rate USD Equiv. Comp.
The full effect of the GLOBAL is captured in the consolidated statements of comprehensive income. The table below presents a comparison of the U.S. dollar equivalent of the GLOBAL for the periods indicated. As of 12/31/2024 As of 12/31/2025 GLOBAL in % of Net Equity GLOBAL in % of Net Equity CHANGE in Currency Composition FX Rate USD Equiv. Comp.
(3) The Non-Trading – Fixed Income, Other category contains primarily U.S. government securities held in segregated safekeeping accounts for the exclusive benefit of our brokerage customers, on which the risk is measured using a stress test analysis. 65 Table of Contents
(3) The Non-Trading – Fixed Income, Other category contains primarily U.S. government securities held in segregated safekeeping accounts for the exclusive benefit of our brokerage customers, on which the risk is measured using a stress test analysis. 59 Table of Contents
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to various market risks. Our exposures to market risks arise from assumptions built into our pricing models, equity price risk, foreign currency exchange rate fluctuations related to our international operations, changes in interest rates and risks relating to the extension of margin credit to our customers.
ITEM 7A. Q UANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to various market risks. Our exposures to market risks arise from assumptions built into our pricing models, equity price risk, foreign currency exchange rate fluctuations related to our international operations, changes in interest rates and risks relating to the extension of margin credit to our customers.
A 0.25% increase in all the relevant non-U.S. dollar benchmark rates would increase our net interest income by approximately $24 million on an annualized basis. Our interest rate sensitivity estimate contains separate assumptions for U.S. dollar rates from other currencies’ rates and it isolates the effects of a rate increase on reinvestments.
A 0.25% increase in all the relevant non-U.S. dollar benchmark rates would increase our net interest income by $30 million on an annualized basis. Our interest rate sensitivity estimate contains separate assumptions for U.S. dollar rates from other currencies’ rates and it isolates the effects of a rate increase on reinvestments.
However, historically, we 61 Table of Contents have taken the approach of not hedging our consolidated foreign currency exposures to the U.S. dollar, based on the notion that the cost of constantly hedging over the years would amount to more than the random impact of rate changes on our non - U.S. dollar balances.
However, historically, we have taken the approach of not hedging our consolidated foreign currency exposures to the U.S. dollar, based on the notion that the cost of constantly hedging over the years would amount to more than the random impact of rate changes on our non-U.S. dollar balances.
Based on customer balances and investments outstanding as of December 31, 2024, and assuming reinvestment of maturing instruments in instruments of short-term duration, an increase of 0.25% over current U.S. dollar interest rate levels would increase our net interest income by approximately $64 million on an annualized basis, assuming the full effect of reinvestment at higher rates.
Based on customer balances and investments outstanding as of December 31, 2025, and assuming reinvestment of maturing instruments in instruments of short-term duration, an increase of 0.25% over current U.S. dollar interest rate levels would increase our net interest income by $77 million on an annualized basis, assuming the full effect of reinvestment at higher rates.
Based on customer balances and investments outstanding as of December 31, 2024, and assuming reinvestment of maturing instruments in instruments of short-term duration, a decrease in U.S. dollar interest rates of 0.25% would decrease our net interest income by approximately $64 million on an annualized basis, assuming the full effect of reinvestment at lower rates.
Based on customer balances and investments outstanding as of December 31, 2025, and assuming reinvestment of maturing instruments in instruments of short-term duration, a decrease in U.S. dollar interest rates of 0.25% would decrease our net interest income by $77 million on an annualized basis, assuming the full effect of reinvestment at lower rates.
A 0.25% decrease in all the relevant non-U.S. dollar benchmark rates would decrease our net interest income by approximately $22 million on an annualized basis.
A 0.25% decrease in all the relevant non-U.S. dollar benchmark rates would decrease our net interest income by $31 million on an annualized basis.
For U.S. government securities, the stress test is configured to calculate the change in value of each fixed income security in the portfolio over one day in three scenarios each of which represents a parallel shift of the U.S. Treasury yield curve.
For U.S. government securities, the stress test is configured to calculate the change in value of each fixed income security in the portfolio over one day in three scenarios each of which represents a parallel shift of the U.S. Treasury yield curve. The scenarios are shifts of +/−50 basis points.
Our risk management systems incorporate cash forex to hedge our currency exposure at little or no cost. Currency spot positions entered into as part of our currency diversification strategy are held by the parent holding company, IBG LLC. The U.S. dollar value of the GLOBAL decreased 1.45% as of December 31, 2024 compared to December 31, 2023.
Our risk management systems incorporate cash forex to hedge our currency exposure at little or no cost. Currency spot positions entered into as part of our currency diversification strategy are held by the parent holding company, IBG LLC. The U.S. dollar value of the GLOBAL increased 2.05% as of December 31, 2025 compared to December 31, 2024.
As of December 31, 2024, approximately 23% of our equity was denominated in currencies other than the U.S. dollar.
As of December 31, 2025, approximately 25% of our equity was denominated in currencies other than the U.S. dollar.
(2) Equities and currencies held for market making purposes are combined because these products are part of an integrated, hedged market making portfolio, on which the risk is measured using VaR.
The average and high VaR amounts are based on the four quarter ending calculations performed in 2025. (2) Equities and currencies held for market making purposes are combined because these products are part of an integrated, hedged market making portfolio, on which the risk is measured using VaR.
Our one - day VaR is defined as the unrealized loss in portfolio value that, based on historically observed market risk factors, would have been exceeded with a frequency of one percent, based on a calculation with a confidence interval of 99%. Our VaR model generally takes into account exposures to equity and commodity price risk and foreign exchange rates.
Our one-day VaR is defined as the unrealized loss in portfolio value that, based on historically observed market risk factors, would have been exceeded with a frequency of one percent, based on a calculation with a confidence interval of 99%.
As of December 31, 2024, we had $64.4 billion in margin loans extended to our customers.
As of December 31, 2025, we had $90.5 billion in margin loans extended to our customers.
Although our remaining market making activities are completely automated, the trading process and our risk are monitored by a team of individuals who, in real time, observe various risk parameters of our consolidated positions.
Although our remaining market making activities are completely automated, the trading process and our risk are monitored by a team of individuals who, in real time, observe various risk parameters of our consolidated positions. Our assets and liabilities are marked-to-market daily for financial reporting purposes and re-valued continuously throughout the trading day for risk management and asset/liability management purposes.
GAAP purposes, at the end of each accounting period, each non-U.S. subsidiary’s equity is translated at the then prevailing exchange rate into U.S. dollars and the resulting translation gain or loss is reported as OCI in our consolidated statements of financial condition and consolidated statements of comprehensive income.
GAAP purposes, at the end of each accounting period, each non-U.S. subsidiary’s equity is translated at the then prevailing exchange rate into U.S. dollars and the resulting translation gain or loss is reported as OCI in our consolidated statements of financial condition and consolidated statements of comprehensive income. 56 Table of Contents By periodically converting currency balances into functional currency, we substantially reduce the foreign currency exposures for each of these non-U.S. subsidiaries, which minimizes the impact of exchange rate changes to its income statement.
The scenarios are shifts of +/−50 basis points. ‎ 64 Table of Contents VaR and Stress Test Measures At December 31, At December 31, Average High Market Risk Category 2024 2023 2024 2024 (in millions) Trading (1) Equities and Currencies (2) $ 8 $ 10 $ 9 $ 9 Trading Total $ 8 $ 10 $ 9 $ 9 Non-Trading (1) Equities and Currencies $ 28 $ 28 $ 30 $ 34 Fixed Income, Other (3) 2 3 2 3 Non-Trading Total $ 30 $ 31 $ 32 $ 37 ___________________________ (1) The product categories displayed in the table as “Trading” reflect activities undertaken in the Company's market making activities. ‎ The “Non-trading” category reflects investment activities and foreign currency exposures of the Company's non-market making subsidiaries (i.e., its brokerage subsidiaries and information technology subsidiaries).
VaR and Stress Test Measures At December 31, At December 31, Average High Market Risk Category 2025 2024 2025 2025 (in millions) Trading (1) Equities and Currencies (2) $ 10 $ 8 $ 9 $ 10 Trading Total $ 10 $ 8 $ 9 $ 10 Non-Trading (1) Equities and Currencies $ 35 $ 28 $ 31 $ 36 Fixed Income, Other (3) 0 2 1 1 Non-Trading Total $ 35 $ 30 $ 32 $ 37 (1) The product categories displayed in the table as “Trading” reflect activities undertaken in the Company's market making activities.
Our Market Risk Committee continually monitors and evaluates our risk management policies, including the implementation of policies and procedures to enhance the detection and prevention of potential events to mitigate margin loan losses. ‎ 63 Table of Contents Value - at - Risk We estimate VaR using a historical approach, which uses the historical daily price returns of underlying assets as well as estimates of the end of day implied volatility for options.
Value-at-Risk We estimate VaR using a historical approach, which uses the historical daily price returns of underlying assets as well as estimates of the end of day implied volatility for options.
We use VaR as one of a range of risk management tools. Among their benefits, VaR models permit the estimation of a portfolio’s aggregate market risk exposure, incorporating a range of varied market risks and portfolio assets. One key element of the VaR model is that it reflects risk reduction due to portfolio diversification or hedging activities.
Our VaR model generally takes into account exposures to equity and commodity price risk and foreign exchange rates. 58 Table of Contents We use VaR as one of a range of risk management tools. Among their benefits, VaR models permit the estimation of a portfolio’s aggregate market risk exposure, incorporating a range of varied market risks and portfolio assets.
This category also includes corporate activities in foreign exchange designed to achieve the Company's currency diversification strategy. The average and high VaR amounts are based on the four quarter ending calculations performed in 2024.
The “Non-trading” category reflects investment activities, customer facilitation activities, and foreign currency exposures of the Company's non-market making subsidiaries (i.e., its brokerage subsidiaries and information technology subsidiaries). This category also includes corporate activities in foreign exchange designed to achieve the Company's currency diversification strategy.
Removed
Our assets and liabilities are marked - to - market daily for financial reporting purposes and re - valued continuously throughout the trading day for risk management and asset/liability management purposes.
Added
Our Market Risk Committee continually monitors and evaluates our risk management policies, including the implementation of policies and procedures to enhance the detection and prevention of potential events to mitigate margin loan losses.
Removed
By periodically converting currency balances into functional currency, we substantially reduce the foreign currency exposures for each of these non-U.S. subsidiaries, which minimizes the impact of exchange rate changes to its income statement.
Added
One key element of the VaR model is that it reflects risk reduction due to portfolio diversification or hedging activities.

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