Robinhood's (IBKR.US) Q4 revenue and profit exceeded expectations as customer trading volume and brokerage income surged.

Interactive Brokers (IBKR.US), the global electronic brokerage, reported its fourth-quarter earnings after the market closed on January 21. The data showed that the company's revenue was US$1.387bn, topping analysts' average estimate of US$1.29bn, and its adjusted EPS was US$2.03, topping analysts' estimate of US$1.73 by US$0.30.

Following the announcement, the company's shares rose 3.32% as of the time of writing in after-hours trading on Tuesday.

Driven by increased client trading volumes, brokerage revenue grew 37% year-on-year to US$477mn. Client option and stock trading volumes surged 32% and 65%, respectively, while futures trading volumes declined 3%.

Net interest income grew 11% to US$807mn, driven by higher average client margin loans and client credit balances. The company's client accounts grew 30% year-on-year to 3.34mn, while client equity assets grew 33% to US$568.2bn. Client margin loans grew 45% to US$64.2bn. Daily average revenue trades (DARTs) totaled 3.12mn, up 61% year-on-year, reflecting increased trading activity and profitability.

Other expenses and services revenue increased by US$26mn, or 47%, to US$81mn in Q4, mainly driven by a US$14mn increase in exposure fees and a US$4mn increase in order flow payments for exchange mandated projects.

Execution, clearing, and distribution expenses grew 15% to US$115mn, mainly due to higher SEC fees, the new FINRA CAT fees in the quarter, and increased client option and stock trading volumes.

The company's board of directors declared a quarterly cash dividend of US$0.25 per share, payable on March 14, 2025.

The company's adjusted pre-tax margin improved to 76%, up from 72% in the same period last year.