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DATE

Thu, Oct. 15, 2026

CALL PARTICIPANTS

• Director of Investor Relations - Nancy Enslein Stuebe
• Founder and Chairman - Thomas Pechy Peterffy
• President and CEO - Milan Galik
• CFO - Paul Jonathan Brody

TAKEAWAYS

• GAAP Diluted EPS -- $0.69, rising 17% year over year driven by higher interest and commission revenues.
• Reported Net Revenues -- $1.91 billion, growing 16% year over year.
• Pretax Margin -- 78%, marking the eighth consecutive quarter that margins have remained above 70%.
• Customer Accounts -- 5.58 million, increasing 35% year over year reflecting expansion in all global regions and customer segments.
• Customer Margin Loans -- $105.2 billion, rising 36% year over year as clients moved toward a more risk-on investment posture.
• Net Interest Income -- $1.15 billion, growing 19% year over year primarily from higher average margin loans and credit balances.
• Commission Revenue -- $602 million, rising 12% year over year due to an 18% increase in daily average revenue trades (DARTs).
• Customer Equity -- $964.7 billion, an increase of 27% compared to the prior-year quarter.
• Total Customer DARTs -- 4.27 million, growing 18% year over year.
• Stock Share Volume -- 90.2 billion shares, declining 24% year over year as clients shifted toward larger, higher-quality equities.
• Dividend -- $0.60 per year, an increase from $0.35 per share to align with management's target yield of 0.5% to 1% of market value.
• Overnight Trading Volume -- 10 million trades, increasing from 3.5 million trades in the third quarter of 2025.
• Interest Rate Sensitivity -- $83 million, representing the estimated annual net interest income impact of a 25-basis point change in the Fed funds rate.
• Non-U.S. Rate Sensitivity -- $35 million, representing the estimated annual net interest income impact of a 25-basis point change in relevant non-U.S. benchmark rates.
• Tax-Aware RIA Assets -- $300 million, reflecting initial adoption of the company's new long-short strategy offering for registered investment advisers.
• Total Equity -- $23.3 billion, growing 19% year over year supported by consistent profit growth.
• Commission per Cleared Order -- $2.59, declining 4% year over year due to smaller average order sizes across product types.
• Execution and Clearing Costs -- $134 million, rising 46% year over year primarily due to $30 million in reinitiated SEC regulatory fees.
• Advertising Spend -- Increased digital customer acquisition costs were the primary driver of the rise in general and administrative expenses to $78 million.
• Customer Credit Balances -- $186.2 billion, an increase of 20% year over year.
• Autonomous AI Trading -- Launched for eligible clients in several countries, allowing users to connect AI agents to trade global instruments independently.
• Japan Business Expansion -- Management introduced margin lending, securities lending, and the IBKR Plus program for Japanese clients this quarter.
• Net Interest Margin -- 1.99%, a decrease from 2.16% in the prior-year quarter as interest paid on customer cash balances expanded.
• Futures Contract Volume -- 59.1 million contracts, growing 13% year over year.
• Other Fees and Services -- $88 million, rising 33% year over year driven by higher risk exposure fees and market data fees.

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RISKS

• Galik acknowledged a "moderation in client activity in terms of trading" during the quarter, which contributed to a decline in stock share volumes.
• Galik stated that management found "The Japan is culturally very different, very homogeneous" and that "it is difficult to do business in Japan," potentially slowing the company's expansion in that market.

SUMMARY

Interactive Brokers Group, Inc. (IBKR -3.88%) reported record pretax income and sustained margins as its global platform attracted 5.58 million customer accounts. Management attributed the performance to higher interest income from margin lending and record commission levels, even as trading activity moderated in certain segments. The company significantly increased its annual dividend to $0.60 per share and expanded its product suite with the launch of autonomous AI trading and tax-aware strategies for registered investment advisers. The company stated that its automation-focused business model remains geared toward scaling global multiasset offerings while minimizing client costs.

• Galik indicated the company is using its programming expertise to automate registered investment adviser onboarding and expects "more early next year" to join the platform's tax-aware strategy providers.
• Management reported that internal AI adoption is accelerating, with tools being rolled out to client service teams that can "retrieve data across multiple internal systems" and analyze multipart requests.
• Peterffy noted that recent digital advertising efforts have been "mixed," resulting in a "smaller number" of "higher value customers."
• Galik stated that the company is currently "working on integrating with Polymarket" to expand its prediction market offerings.
• The company reported that overnight trading has become a critical channel for international investors, with trade volume nearly tripling year over year to 10 million trades.
• Galik stated that the company intends to capture market share as competitors impose minimum asset thresholds on smaller registered investment advisers, noting "We are 1 of the obvious choices, if not the obvious choice."

INDUSTRY GLOSSARY

• B3: Brasil Bolsa Balcão, the primary financial exchange in Brazil.
• DARTs: Daily Average Revenue Trades, a metric measuring the average number of revenue-generating trades per day.
• GLOBAL: A basket of 10 major currencies used by Interactive Brokers to hold its equity and manage currency risk.
• MCP: Model Context Protocol, an open standard that allows AI applications to connect with data sources and tools.
• PASCI: A phishing-resistant second-factor authentication method recently introduced for the company's Japanese clients.
• RIA: Registered Investment Adviser, a firm that advises clients on securities and has a fiduciary duty.

Full Conference Call Transcript

Operator: Hello, and welcome to the Interactive Brokers Group Third Quarter 2026 Earnings Call. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press *11 again. I would now like to turn the conference over to Nancy Enslein Stuebe, Director of Investor Relations. You may begin.

Nancy Enslein Stuebe: Thank you. Afternoon, and thank you for joining us for our third quarter 2026 earnings call. Joining us today are Thomas Pechy Peterffy, our Founder and Chairman Milan Galik, our President and CEO and Paul Jonathan Brody, our CFO. I will be presenting Milan's comments on the business, and all 3 will be available at our Q and A. As a reminder, today's call may include forward looking statements which represent the company's belief regarding future events which by their nature are not certain and are outside of the company's control. Our actual results and financial condition may differ possibly materially from what is indicated in these forward looking statements.

We ask that you refer to the disclaimers in our press release You should also review a description of risk factors contained in our financial reports filed with the SEC.

Milan Galik: The S&P 500 was up 2% this quarter after rising nearly 15% last quarter. Maintaining its resilience even as interest rates moved higher. Due to enthusiasm for both large technology companies and artificial intelligence. However, this performance masked a somewhat narrow market breadth as large technology names represented the majority of the S&P 500's gain quarter. The 10 largest US technology stocks now represent nearly 40% of the total value of the index, which has become more concentrated over the course of the year. The most actively traded names on our platform this quarter continued to be global technology names.

Their growth and business traction appeal to investors around the world want to have the ability to invest directly and gain ownership in them, and convert their currency inexpensively into USD to do so. Investors hold these stocks across accounts, in hedge funds, in their personal accounts, and in their retirement accounts. The flexibility with which they can do so regardless of account type is a major reason for the success of our platform. As can be seen in our over 30% account growth, strong interest continues in opening and funding accounts. We are seeing growth from both institutional and individual investors and in all regions.

Pretax profit was a record, and our 78% pretax margin marked the eighth consecutive quarter with margins above 70%. In recognition of this, and as a sign of confidence in the strength of our business model, its growth potential, and of our capital base. We revisited how we allocate our capital, and decided to increase the amount of dividend we pay to $0.60 a year. We introduced multiple new products and initiatives this quarter. We added access to multiple new exchanges.

The Bucharest Stock Exchange, 1 of the top performing markets over the past decade, the Texas Stock Exchange, where we are already seeing average daily volume of about 2.5 million shares, a new options exchange that aims to improve liquidity for larger, particularly institutional, options orders. In Brazil, we launched trading of B3 futures on financial indexes cryptocurrencies, and commodities. Expanding our Latin America access. We began a limited rollout of cryptocurrency staking giving our clients a means to earn a return on their coins. In Japan, we now can offer several new ways for clients to enhance their returns, starting with margin lending.

We can also offer our fully paid securities lending program as well as IBKR Plus our proprietary offering that enables Japanese clients to earn interest on the eligible non Japanese yen cash balances in their brokerage accounts. For prediction markets, we introduced trading in short duration event contracts, with hourly and 15-minute expirations in crypto, metals, and energy. These give clients a way to gain intraday exposure to price outcomes and have increased platform engagement by our clients. Our AI connector remains 1 of the fastest adopted features we have ever introduced.

This quarter, we added Perplexity as an official partner and expanded connectivity to support any AI tool that uses the model context protocol or MCP, including the coding and desktop assistance preferred by many of our active clients. We also enhance the connector with account level P&L, alert management, and watch lists, and expanded its trading capabilities to include 2-leg option strategies. We also launched autonomous AI trading, which allows eligible clients to connect the AI agent of their choice to their IBKR account and authorize it to trade autonomously. It works with any compatible MCP client or AI platform.

Clients can create and fund a dedicated partition for autonomous AI trading within their existing account in a single session without opening a new account. The rollout is underway. With autonomous AI trading now available to eligible clients in several countries with additional countries to follow. Clients can trade global stocks and options using a variety of order types and trading sessions. Including day, overnight, and overnight plus day. Turning to some of our customer segments. For registered investment advisers, we now offer tax aware long short strategies to their customers.

Given that our platform is designed for active, sophisticated clients and that we have a long standing prime brokerage offering, Tax-aware accounts that use margin, short selling, and securities lending are a good fit for us. We are seeing increased interest in our offering, particularly as other brokers impose limits on these strategies. We have 3 tax-aware strategy providers onboarded now, with additional ones coming by year end and more early next year. Offering RIAs a broad range of options. Have been able to utilize our extensive programming expertise to customize the offering for different clients. Based on their needs. Introducing broker pipeline once again was strong. Similar to what we saw last quarter.

A growing substantial pool of prospects and the continued growth of a number of new introducing brokers as well as the growth of existing ones. This quarter, Dowell Investment and Securities a publicly traded South Korean brokerage firm, launched a global securities trading platform, powered by IBKR's technology and trading infrastructure. AI continues to be adopted internally. We are implementing and rolling out AI assisted tools to our client service team that can retrieve data across multiple internal systems, begin analysis of a simple or multipart request, and present findings to the representative. Helping our team serve clients faster and more efficiently. New account onboarding, compliance, and surveillance are all incorporating AI and machine learning to help us scale.

As we ramp up the flow of new clients and global exchanges. Finally, despite somewhat slower overall trading activity versus the second quarter, our overnight trading volumes continue to rise increasingly showing how important it is for international investors who want to trade during their waking hours in active liquid markets. Overnight trading rose from 3.5 million trades in the third quarter last year to over 10 million trades this year. We have much planned for the quarters ahead, and look forward to sharing further updates in the coming quarters.

Nancy Enslein Stuebe: With that, I will turn the call over to Paul Jonathan Brody. Paul?

Paul Jonathan Brody: Thank you, Nancy, and thanks, everyone, for joining the call today. We will start with our revenue items on page 3 of the release. We are pleased once again with our financial results this quarter. As we again produced near record adjusted net revenues and record pretax income. Commissions rose 12% versus last year's third quarter to $602 million the third consecutive quarter our commission revenue has exceeded $600 million Net interest income rose 19% year-on-year, to over $1.1 billion driven primarily by higher balances. Robust growth in margin borrowing reflected an investing environment that grew more risk on as the quarter progressed. Our segregated cash portfolio grew with new accounts.

Though as our clients put more funds to work in the market during the quarter, interest on segregated cash was about even with the prior quarter. The interest we paid on our customers' cash balances which offsets the interest revenue somewhat, also expanded with the cap growth. Other fees and services generated $88 million, up 33% primarily driven by higher risk exposure fees in a more risk on environment than last year. Higher market data fees, and strong options volumes, which led to higher payments from options exchange mandated order flow programs. Other income includes gains and losses on our investments, our currency diversification strategy and principal transactions.

Note that many of these noncore items are excluded in our adjusted earnings. Without these excluded items, other income was $28 million for the quarter. Turning to expenses. Execution, clearing and distribution costs were $134 million in the quarter, up $42 million or 40% over the year ago quarter. Primarily from the reinitiation of SEC regulatory fees. These fees were zero in last year's third quarter and $30 million this quarter this quarter. Because they are largely passed through these fees increase both our commission revenue and execution costs and do not impact profits. Execution and clearing costs were 17% of commission revenue, in the third quarter for a gross transactional profit margin of 83%.

We calculate this by excluding from execution, clearing and distribution, $28 million of non transaction based costs predominantly market data fees, which do not have a direct commission revenue component. Compensation and benefits expense was $167 million for the quarter. For a ratio of compensation expense to adjusted net revenues of 9% similar to last year. Our headcount at September 30 was 3.29 thousand. G&A expenses were $78 million up from the year ago quarter, with continued expansion of advertising the predominant factor. Our pretax margin was 78% for the quarter as reported and as adjusted. Income taxes of $148 million reflects the sum of the public company's $60 million and the operating company's $88 million.

This quarter, the public company's effective tax rate was 16%, within its usual range. Moving to our balance sheet on Page 5 of the release. The consistent strength of our business and our healthy balance sheet support our raising the dividend from $0.35 to $0.60 per year returning capital to shareholders while still maintaining an ample capital base, for the current business and future opportunities. Our total assets were 21% higher than the prior year, at $243 billion, with growth driven by higher margin lending and segregated cash and securities balances. New account growth also helped drive our record customer credit balances. Continue to have no long term debt.

Profit growth drove our firm equity up 19% to $23.3 billion We maintain a balance sheet geared towards supporting growth in our existing business and helping us win new business by demonstrating our strength to prospective clients and partners while also considering overall capital allocation. Turning to the operating data Customer activity was strongest in futures contracts, up 13% over the prior year. With more muted activity in options and stocks. Options volumes were down slightly Stock share volumes were down 24% versus last year, primarily driven by low priced stocks where share volume is high relative to notional value. Generally, clients gravitated to larger, higher quality names where returns far exceeded the rise in most major market indices.

On page 7, you can see the total customer DARTs, were 4.3 million trades per day in the quarter, up 18% from the prior year. Commission per cleared commissionable order of $2.59, was down 4% from last year on smaller order sizes across product types. Turning to net interest margin, Page 8. Shows the NIM numbers. Total GAAP net interest income was just over $1.1 billion for the quarter, up 19% on the year ago quarter, And our NII table net interest income was $1.2 billion, also up 19%. We include for NIM purposes certain income that is more appropriately considered interest, but that for GAAP purposes is classified as other fees and services or as other income.

Our NII reflects strong annual increases in balances, along with a mixed bag of policy rate changes across central banks worldwide. Several central banks raised rates in September providing a minor tailwind to net interest income in the third quarter and further benefit going forward. Together, these factors drove a rise in interest income on margin loans, and customer segregated cash, partially offset by higher interest expense on customer cash balances. Year on year, the average US Fed funds rate fell 63 basis points or by 15%. Despite this decline, our margin loan interest was up 36%, and our segregated cash interest was up 4% both bolstered by higher balances.

The average duration of our investment portfolio remained at less than 30 days. Because of the timing of the Fed rate hike Fed rate hikes in mid September. Most of their impact will be realized in the fourth quarter. The US dollar yield curve is generally positive in the short to medium term. And we have responded by pushing our duration out of bid. While still maintaining a relatively tight maturity match between our assets and liabilities. Reported securities lending net interest trailed last year's unusually strong result, though both quarters had a few very popular hard to borrow names. However, an all encompassing view of securities lending paints a different picture.

A portion of what we earn from securities lending is classified as interest earned on segregated cash. We estimate that if the additional interest earned and paid on cash were included under securities borrowed and loaned, then total net revenue related to securities lending, would have been $426 million this quarter, up 36% over the prior year quarter. Fully rate sensitive customer balances ended the current quarter at $27.8 billion versus $25 billion in the year ago quarter. Now for our estimates of the impact of changes in rates, given some uncertainty over the direction of US interest rates and the divergent actions of central banks around the world, we look at potential effects of rate moves in either direction.

We estimate the effect of a 25-basis point increase or decrease in the benchmark Fed funds rate to be $83 million higher or lower respectively, in annual net interest income. Note that our starting point for this estimate is September 30, with the Fed funds effective rate at 3.88%. And balances as of that date. Any growth in our balance sheet and interest earning assets would increase these impacts. About 30% of our customer interest sensitive balances is not in U. S. Dollars. So estimates of The U. S. Rate change exclude those currencies. We estimate the effect of a 25-basis point increase or decrease in all the relevant non USD benchmark rates.

Would increase or decrease annual net interest income, respectively, by $35 million. In conclusion, this was another financially strong quarter, reflecting our continued ability to grow our customer base and deliver on our core value proposition to customers, while simultaneously scaling the business. Our business strategy continues to be effective automating as much of the brokerage business as possible, continuously improving while expanding through new product introductions what we offer while minimizing what we charge. And with that, we would like to open up the line for questions.

Operator: Thank you. Ladies and gentlemen, as a reminder to ask a question, please press *11 on your telephone, then wait for your name to be announced. To withdraw your question, please press *11 again. Our first question comes from the line of Patrick Moley with Piper Sandler. Your line is open.

Patrick Moley: Yes. Good afternoon. Thanks for taking the question. So I had 1 on the dividend pretty big step up to $0.15? Could you just walk us through the Board's thinking around sizing that and whether this signals any sort of new payout framework, whether it is a target ratio or a certain level of excess capital that you think is appropriate. Thanks.

Thomas Pechy Peterffy: We have generally been following the guideline of paying dividends between 0.5% and 1% of the market value, and we have fallen somewhat behind. So we are trying to catch up here. And we are going to continue to follow that guideline of the paying between 0.5% and 1% of the market value. Nope.

Patrick Moley: Okay. Great. And then just as a follow-up, Paul, you called out advertising as the predominant driver of the G&A increase. And I know September, it is only been about a month where you joined the xCash tags program. And you are offering a $100 funding credit there. So could you maybe just give us an early read on what that channel is producing And should we read the ad spend step up in the x partnership as maybe a signal that you guys are leaning more into the digital customer acquisition strategy. Thanks.

Thomas Pechy Peterffy: Yes. We are. That is a correct assumption. And that is exactly what we are trying to spend more money on but, you know, it will take some time to get it correctly. Lined up.

Patrick Moley: Great. Any sort of early read you can give us on how successful it is been? Or what or what the customer accounts that are coming over look like?

Thomas Pechy Peterffy: it is been mixed. So while the customers we have been getting lately are higher value customers. We are getting smaller number of them.

Patrick Moley: Great. Very good. Thank you.

Operator: Thank you. Our next question comes from the line of James Yaro with Goldman Sachs. Your line is open.

James Yaro: I wanted to touch on across your key geographies where you believe Interactive Brokers has the greatest, account market share gain opportunity? And as a corollary, where you believe IBKR is still underpenetrated?

Milan Galik: Well, I would not single out 1 particular geography. We believe that we have plenty of room to grow in both established and new markets. See, 1 of our strengths is that we operate as a single global platform that is highly automated, and can be easily adapted to local regulations and needs without having to build a separate business in each country. So that is a huge plus. Now the opportunities are not necessarily the same everywhere. In some markets, we see more interest from individual investors, in others from institutions or intermediaries. But that is the advantage of our model.

We can serve different types of clients across different markets and we can expand without significantly increasing our cost.

James Yaro: Great. Thank you. I hope that you might be able to speak to the scale of your TaxAware long short product for RIAs thus far. Perhaps in terms of assets? But. And then more broadly, just your aspirations for this product, from here.

Milan Galik: Well, in terms of assets by the end of the quarter, it was approximately $300 million. We have only recently started really attracting this client segment. We have very high hopes We work with 3 or 4 different providers, including AQR, a very well-known name in the space, and we are looking to add more Well, we are seeing RIAs signing up, although the process is moving more slowly than we would like. This product we believe we are particularly well positioned for. These strategies require margin financing, short selling, securities lending, all of which we have been doing a very good job at for many, many years.

We have low financing costs, access to a large pool of lendable securities, and the automation to handle these strategies efficiently at scale. And on top of that, other brokers are placing restrictions which creates additional opportunity for us. So we are very focused on this business. And we think that it has considerable room to grow for us.

Operator: Thank you. Please stand by for our next question. As a reminder, ladies and gentlemen, we ask you to please limit yourself to 1 question and 1 follow-up. Our next question comes from the line of Daniel Fannon with Jefferies. Your line is open.

Daniel Fannon: Thanks. Good afternoon. You have seen some moderation in client activity in terms of trading. Curious at a high level if you see anything at a customer or geographic region where you anticipate you know, maybe some--a continued slowdown or anything underneath that is a little. That would be concerning in terms of, you know, looking ahead into. Around growth or anything else?

Milan Galik: Nothing really concerning. As you know, the training activity is not always the same. In the previous quarter, we probably benefited from some activity that was related to the IPO There were some IPOs that were supposed to come online this quarter. They have been delayed. The. We expect the volatility to somewhat increase as we approach the midterm elections. As the volatility increases, our traders and clients tend to trade more. So no concerns whatsoever.

Daniel Fannon: Great. that is helpful and then you did. You highlighted a few product, rollouts within Japan, around margin and you mentioned another 1. Curious just about the uptake and how to think about the potential contribution from those changes.

Milan Galik: Our current aim is to migrate the accounts that we have accumulated on behalf of the Japanese residents in our US affiliate to Japanese affiliate. So that is what we are focusing on. That is what we have been in discussions with the regulators about But at the same time, we have put very significant effort into offering margin in Japan in a regulatory compliant way. We have very recently finished the rollout of the so called PASCI, which is another type of second factor authentication method, which is supposed to be resistant to phishing attacks.

And, right now, we are focusing on making the client account onboarding faster making the KYC verifications fully digital, to the extent that it is possible. So there is still some amount of work left in Japan, but then we believe that we will have everything we need to significantly compete. Now, the headwind that we will be facing is that it is difficult to do business in Japan. That is what we have learned over the last couple of years that we have put some significant effort into that country. The Japan is culturally very different, very homogeneous, Hopefully, the younger investors will be looking more favorably towards foreign brokers like ours. So we remain optimistic.

Operator: Thank you. Please stand by for our next question. Our next question comes from the line of Benjamin Budish with Barclays. Your line is open.

Benjamin Budish: Maybe a follow-up on the earlier question on the tax-aware strategy. And maybe you could talk a bit more about the current state of your RIA business. I am curious can you maybe remind us what types of RIAs are on the platform today? What types are you sort of attracting that may have not been to Interactive Brokers? Do you think there are opportunities to sort of consolidate a little bit of market share? For RIAs that may be using multiple custodians?

And then just your kind of broader thoughts on this as a kind of an RIA specific strategy or strategy with appeal to that channel versus something that, you know, has appeal to your more kind of higher net worth and active trader, customers?

Milan Galik: So the tax aware products, they are mainly carried by the financial advisers. These products are suitable for bigger accounts, Those are the types of accounts that the financial advisers carry. As I said, very high hopes for the segment for the various reasons I mentioned. Aside from focusing on the tax-aware portfolios, we are putting some work into making the onboarding of the RIAs easier and smoother. Not just those that are interested in these products. So there are some programming projects currently in progress. And we are also looking into significantly enhancing our integrations with the multicastodial platforms.

With the hope that the financial advisers that are already custodying with some of our competitors will be more open to bring some of their business to our platform.

Benjamin Budish: Got it. that is very helpful. Thank you. Maybe just a separate follow-up on some new trading product opportunities. I think there was not as much discussion, at least this call, on things like binary options and single stock futures and I think Cboe just very recently got approval for the single stock KPIs. So just maybe curious your thoughts on some of these newer products. Any expectations for what uptake may look like would be helpful. Thank you.

Milan Galik: So the Cboe announcement, I think it was either yesterday or a couple of days ago. Very exciting, obviously. I think the prediction markets will welcome the addition of these KPIs on single stocks. We do not yet know when the product will go live. I think Cboe may try to go live by the end of this month. We are working on the project. Our aim is to offer them to our clients very interesting product. We are very excited about it.

Operator: Thank you. Please stand by for our next question. Next question comes from the line of Steven Chubak with Wolfe Research. Your line is open.

Steven Chubak: Hi. Good evening, and thanks for taking my questions. So to start, I wanted to inquire about some recent developments at a large brokerage competitor in the RIA space. They recently introduced a minimum asset threshold of $100 million for RIAs on their platform. It goes into effect sometime in the middle of next year. But many people believe that this could bring more small RIAs in motion that certainly plays to your firm's strengths. And was curious if you are hearing this from other RIAs in the industry. Is this driving any uptick in interest in terms of the pipelines?

And how you believe you are positioned to potentially consolidate share as some of your larger competitors maybe deemphasize some of the smaller firms?

Milan Galik: So as you said, this is supposed to happen sometime in the middle of next year. The competitor was Fidelity, I believe, and anybody under $100 million is supposed to find a new home. I completely agree with you. We are 1 of the obvious choices, if not the obvious choice. That is why--that is part of the reason why some of the work that I mentioned earlier is so relevant and so beneficial. So we have 9 months between now and maybe a little more and when this is supposed to happen. So we are going to be working very hard to show a welcoming home To the financial advisers that need to find 1.

Steven Chubak: that is great color. And for my follow-up, wanted to just ask about the since you mentioned a large introducing broker relationship, on the platform, whether you could speak to the pipeline how that compares to what you were seeing in the IB pipeline, whether it was 6 or 12 months ago. Just so we can, check at least how the momentum there is trending.

Milan Galik: I think I would say that it looks pretty much the same as it did last couple of quarters. A lot of integrations in the pipeline or in the progress. Some of them have gone online. The business continues to attract firms looking to expand their offering and grow their business. Here, 1 of our key advantages is that we provide a complete solution from the account opening and front end trading platforms to execution, corporate actions, clearing custody, along with I would say, unmatched global multi asset offering. So that is a very key advantage. Another big advantage is that the investments that we make in our direct brokerage business also benefit our iBroker clients.

As we expand into new markets or classes or add new capabilities, these capabilities become available almost immediately to our iBroker clients as well. So we continue to be extremely well positioned to benefit anyone who wants to become an ibroker.

Operator: Thank you. Our next question comes from the line of Kyle Voigt with Wells Fargo.

Kyle Voigt: Hi. Good evening. You mentioned the rollout of autonomous AI trading. And I wonder what percentage of your customer base do you think will be eligible And then relatedly, do you think that AI tools are going to help people gain more comfort trading new types of instruments? and cause a material step up in trades per account over the long term.

Milan Galik: So we started a very limited rollout of the autonomous trading We had only invited clients who had previously used our human in the loop AI connector. We are planning to expand the eligibility to more clients over the next few weeks. As to the expected activity. So to give you the rough numbers, approximately 3 thousand clients of ours. Were invited. Over the last several days. Obviously, this number is going to greatly increase. As far as the expected activity, we expect as the clients become more comfortable with AI in general, we expect them to become more comfortable with AI making trading decisions. On their behalf.

The good investors will become much more productive because they will be able to consume and process significantly higher amount of information They will be able to follow more companies. They will be able to implement trading strategies more easily. So that. These are the reasons why we expect a higher trading volumes related to AI adoption over time.

Kyle Voigt: Thank you. And then for a follow-up, you are now routing the more venues for prediction markets. How do you feel about the progression and adoption through that channel?

Milan Galik: So we have added Kalshi and CME and along with FOREX.com, we now cover, we now cover 3 different platforms. We are working on integrating with Polymarket The integrations are delivering the results that we were hoping for. We have increased the overall volume Our clients benefit from increased range of products. Deeper liquidity, better execution prices.

Kyle Voigt: Thank you.

Operator: Our next question comes from the line of Brennan Hawken with BMO.

Brennan Hawken: I would like to follow-up on the question around dividend. So if you are thinking about a yield basically on market cap, does that mean that we see a drawdown in market cap where the yield gets pushed above the range that you would consider cutting the dividend? Or is that just something you would ride out until the market cap recovers? Like, how would you think about those parameters?

Thomas Pechy Peterffy: I do not think that we will ever cut the dividend, at least not seeing any situation that I can imagine sitting here right now.

Brennan Hawken: Excellent. Thomas, that is very clear. Thank you. And then on the more mundane side, so the yield on margin balance has ticked up pretty nicely versus last quarter. You referenced a mixed bag of policy rate movements. So could you talk about how much that increase in rates came down to base rate changes, versus a mix shift and how sustainable you think that yield pickup is? Thanks.

Paul Jonathan Brody: Well, it is always a combination of those factors. Especially, you know, what currencies it is coming in. And what those central banks are doing. We did see more of a contribution from the non US dollars during this quarter than in prior. You know, But it all feeds in the primary driver was the size of the increase of the balances themselves. Up 47% on the year and another 8% on the quarter.

Operator: Thank you. Ladies and gentlemen, as a reminder to ask a question, please press *11 on your telephone. Our next question comes from the line of Brian Bedell with Deutsche Bank.

Brian Bedell: Great. Thanks. Good afternoon, folks. Thanks very much for taking my questions. Maybe just 1 more on the tax-aware strategy. In terms of the economics of that, is it that we should be thinking of that as simply as you grow margin loans and, lending is used and obviously the credits that support that. Would be the same economics that you are, you know, currently getting on those line items? Or would there be a different set of economics for these strategies for RIAs?

Milan Galik: Those areas. The economics would be similar to the rates that we offer to large balances and large accounts. Today.

Brian Bedell: Okay. Great. Great. And then just on, going back to prediction markets and company KPIs, And as you are connecting to more markets and I obviously, Cboe would be 1 of them as well, I would think. Is there. Are there any plans to change the user interface to accommodate those different, you know, say, company KPIs, or would you just be leveraging the same user interface as you are now?

Milan Galik: that is an interesting question. And I will go a little bit into the weeds. So the prediction market interface that we offer to the. To our clients today is covering the product, the ForecastEx offers, Kalshi offers, CME offers. These are swaps regulated by CFTC The KPI contracts that are going to be offered by Cboe are classified as binary options. The end result is the same in terms of the payout. But they are actually structured as call and put options. That you can both buy and sell. And the calls and puts are not tied together.

The call price and the put price together may be larger or larger than $1, which is which is not possible in the CFTC regulated markets. So we are going to tie them together We are going to present them on the user interface that our prediction market traders are used to. But they will also be available on the regular option screens. Just like the currently available Cboe binary options on indexes are.

Brian Bedell: Interesting. Great. Okay. Thank you.

Operator: Thank you. Our next question comes from the line of Chris Allen with KBW.

Christopher Allen: Good evening, everyone. I wanted to circle back a little bit on the more subdued trading activity in the quarter. Trading activity per account dipped to the lowest level in quite some time. Just wondering if you could provide any color on different customer segments whether it was kind of broad based that all customer segments pulled back or whether it was pullback in certain customer segments more so than others.

Milan Galik: Broad based.

Christopher Allen: Understood. And then maybe just on the announcements around Japan offering margin and the securities paid lending program, there any other countries where there is a similar opportunity to expand your offerings there in terms of a major marketplace?

Milan Galik: There are, but we would rather not discuss them so as not to show the blueprints to some of our competitors that are probably listening to us. As we do the work and as we have products that we can deliver, we will announce those.

Christopher Allen: Understood. Thank you.

Operator: Thank you. Ladies and gentlemen, I am showing no further questions in the queue. I would now like to turn the call back over to Nancy for closing remarks.

Nancy Enslein Stuebe: Thank you, everyone, for participating today. As a reminder, this call will be available for replay on our website and we will be posting a clean version of the transcript on the site tomorrow. Thanks again, and we will talk to you next quarter end.

Operator: That concludes today's call. You may now disconnect. Thank you for your participation.