AddedRisk Factors
•There are emerging legal and regulatory risks related to prediction markets that could harm our business.
The 10-K against last year's
108 changes: 12 added, 5 removed, 87 reworded, 4 quiet changes
10-K 0001381197-26-000062 (2026-02-27) vs 10-K 0001381197-25-000036 (2025-02-27)
The redline
The paragraph that changed most in each section
Marked against last year's 10-K:
cut words struck through, new words highlighted and underlined.
Accounting Policies 183 words changed in this paragraph; it is 46% similar to last year's version.
The Company accounts for income taxes in accordance with FASB ASC Topic 740, “Income Taxes” (“ASC Topic 740”). The Company’s income tax expense, deferred tax assets and liabilities, and reserves for unrecognized tax benefits are based on enacted tax laws (see Note 11) and reflect management’s best assessment of estimated future taxes to be paid. The Company is subject to income taxes in the U.S. and numerous foreign jurisdictions. Determining income tax expense requires significant judgment and estimates. Deferred income tax assets and liabilities arise from temporary differences between the tax and financial statement recognition of underlying assets and liabilities. In evaluating the ability to recover deferred tax assets within the jurisdictions from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. In projecting future taxable income, historical results are adjusted for changes in accounting policies and incorporate assumptions including the amount of future state, federal and foreign pre-tax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax-planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, three years of cumulative operating income (loss) are considered. 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.
Source: Item 8, Note 2 – Significant Accounting Policies, 10-K 0001381197-26-000062 vs Item 8, Note 2 – Significant Accounting Policies, 10-K 0001381197-25-000036
MD&A 154 words changed in this paragraph; it is 45% similar to last year's version.
Execution, clearing and distribution fees, for the current year, increased $61 decreased $27 million, or 16%, 6%, compared to the prior year, to $447 $420 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 $41 million decrease in exchange fees due to greater capture of liquidity rebates from certain exchanges. 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. SEC and CAT fees, as with other regulatory fees, are passed through to customers. As a percentage of total net revenues, execution, clearing and distribution fees were 9% 7% for both the current year and 9% for the prior year.
Source: Item 7, 10-K 0001381197-26-000062 vs Item 7, 10-K 0001381197-25-000036
Risk Factors 94 words changed in this paragraph; it is 61% similar to last year's version.
As a holding company for our interest in IBG LLC, we will be dependent upon the ability of IBG LLC to generate earnings and cash flows and distribute them to us so that we may pay any dividends to our stockholders. 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. From the second quarter of 2011 through the first quarter of 2024, we declared and paid a quarterly cash dividend of $0.10 per share. Starting in the second quarter of 2024, we increased the quarterly cash dividend from $0.10 per share to $0.25 per share. Although not required, we currently intend to pay quarterly dividends of $0.25 per share to our common stockholders for the foreseeable future.
Source: Item 1A, 10-K 0001381197-26-000062 vs Item 1A, 10-K 0001381197-25-000036
Legal Proceedings 10 words changed in this paragraph; it is 97% similar to last year's version.
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. 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 cybersecurity, forecast contracts and other topics of recent regulatory interest. 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 We expect to pay significant and increasing regulatory fines on various topics on an ongoing basis, as other regulated financial services businesses do. 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.
Source: Item 3, 10-K 0001381197-26-000062 vs Item 3, 10-K 0001381197-25-000036
Every change, by type
Sentences and paragraphs added, removed or reworded
Sentences and paragraphs of IBKR's Risk Factors and MD&A, 10-K 2026-02-27 against 10-K 2025-02-27. Each links to the text at sec.gov.
Quiet changes are sentences kept from last year with one to four words changed, at least one of them a hedge, a modal or a qualifier (may, could, will, not, significant, material…). A year or date rolling forward is not counted.
The full word list
adverse, adversely, all, although, anticipate, anticipates, any, approximately, believe, believes, can, cannot, certain, could, expect, expects, generally, however, if, intend, intends, largely, likely, many, material, materially, may, might, most, must, never, no, not, possible, primarily, probable, should, significant, significantly, some, substantial, substantially, unlikely, will, wouldAddedRisk Factors
There are emerging legal and regulatory risks related to prediction markets that could harm our business.
AddedRisk Factors
ForecastEx is a CFTC-registered Designated Contract Market ("DCM") and Derivatives Clearing Organization ("DCO") that lists event contacts (referred to as "Forecast Contracts"). Eligible customers of certain of our broker-dealer subsidiaries have access to Forecast Contracts through ForecastEx.
AddedRisk Factors
The legal and regulatory framework for prediction markets is uncertain and continues to evolve. The outcome of currently ongoing and potential future regulatory matters, enforcement actions and litigation, as well as new laws or regulations, changes in the interpretation of existing laws or regulations, or more rigorous enforcement in this space could prevent ForecastEx from listing, and our broker-dealer subsidiaries from offering, some or all types of Forecast Contracts in the future, including in jurisdictions outside of the U.S.
AddedRisk Factors
In addition, there is heightened scrutiny of certain types of contracts (including contracts relating to sports and elections), and there is a risk of litigation and law enforcement activity from state gaming and regulatory authorities, as well as litigation from a range of other plaintiffs.
AddedRisk Factors
3 See https://www.interactivebrokers.com/lib/cstools/faq/#/content/182856890 for more information on the availability of cryptocurrencies for trading through our platform.
RemovedRisk Factors
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Show the other 37
RewordedRisk Factors
In the U.S., we are subject to rules including but not limited to the Gramm-Leach-Bliley Act of 1999 and Section 5(c) of the Federal Trade Commission Act; 1999; internationally, we are subject to applicable data privacy laws and regulations including but not limited to, the EU General Data Protection Regulation (“GDPR”) of (“GDPR”), 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. U.K.
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We are a holding company company, and our primary assets are our approximately 25.8% 26.3% equity interest in IBG LLC and our controlling interest and related rights as the sole managing member of IBG LLC and, 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. LLC.
RewordedRisk Factors
These tax laws, regulations laws and regulations, as well as the treaties between jurisdictions, are complex, and the manner they apply to us is sometimes open to interpretations, therefore significant judgments are required in determining our provision for income taxes, deferred tax assets and liabilities balances, and other tax liabilities. interpretations.
RewordedRisk Factors
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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.
RewordedRisk Factors
RewordedRisk Factors
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. $2.2 billion, with the portion attributable to the IPO having been substantially amortized as of December 31, 2025.
RewordedRisk Factors
RewordedRisk Factors
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), Litecoin (LTC), Bitcoin Cash (BCH) Solana (SOL), Ripple (XRP), Dogecoin (DOGE) and potentially several other cryptocurrencies, cryptocurrencies3, (collectively, "Cryptocurrency Assets") via CSPs.
Quiet changesRisk Factors
The tax savings that we would actually realize as a result of this increase in tax basis likely would 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.
Quiet changesRisk Factors
Our broker-dealer and certain other subsidiaries are subject to regulations in the U.S. and abroad covering all aspects of their business.
Quiet changesRisk Factors
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.
AddedMD&A
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
AddedMD&A
During 2025, global equity markets extended their multi-year advances, with several major indices reaching record levels and many recording double-digit gains. The S&P 500 Index returned 16.4% for the year, though it was outperformed by a number of international markets, including Canada, the United Kingdom, Europe, Hong Kong, Japan, and China.
AddedMD&A
Within the U.S., market performance became somewhat more diversified compared to the prior year. The group of large-cap technology stocks commonly referred to as the “Magnificent Seven” accounted for approximately 35% of the S&P 500’s total return in 2025, compared to approximately 50% in 2024. More broadly, companies associated with AI, including these large-cap technology firms, contributed more than half of the index’s overall return. Increased investor interest in AI-related companies also coincided with a partial recovery in the initial public offering market, particularly among technology-focused issuers.
AddedMD&A
Inflationary pressures moderated during 2025, contributing to monetary policy easing across several major economies. Central banks reduced policy interest rates, which supported financial market activity and economic conditions, despite ongoing geopolitical developments and trade policy uncertainty. Lower interest rates, along with expectations of additional monetary easing, were associated with higher market indices and increased trading. Retail investor participation remained elevated with continued engagement, particularly in equity and options markets.
AddedMD&A
(2)Net interest income on "Segregated cash and securities, net" for the twelve months ended December 31, 2025, excludes approximately $26 million of interest income, recorded in the consolidated statements of comprehensive income, related to taxes withheld at source in prior periods which were determined to be fully refundable.
AddedMD&A
(1)Represents the net gains or losses from the Company’s common stock (IBKR shares) held in treasury related to shares withheld from employees to satisfy their tax withholding obligations related to the annual vesting of shares from the amended 2007 Stock Incentive Plan and shares held for distribution to eligible customers participating in one or more promotions.
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RewordedMD&A
Year-Ended December 31, 2025 2024 2023 2022 Adjusted net revenues (in millions) Net revenues - GAAP $ 6,205 $ 5,185 $ 4,340 $ 3,067 Non-GAAP adjustments Currency diversification strategy, net 4 15 80 100 Mark-to-market on investments (56) 48 (46) 52 Remeasurement of TRA liability 3 9 (7) (6) Total non-GAAP adjustments (49) 72 27 146 Adjusted net revenues $ 6,156 $ 5,257 $ 4,367 $ 3,213 Adjusted income before income taxes (in millions) Income before income taxes - GAAP $ 4,771 $ 3,695 $ 3,069 $ 1,998 Non-GAAP adjustments Currency diversification strategy, net 4 15 80 100 Mark-to-market on investments (56) 48 (46) 52 Remeasurement of TRA liability 3 9 (7) (6) Bad debt expense - - 5 - Total non-GAAP adjustments (49) 72 32 146 Adjusted income before income taxes $ 4,722 $ 3,767 $ 3,101 $ 2,144 Adjusted pre-tax profit margin 77% 72% 71% 67% Adjusted net income available for common stockholders (in millions) Net income available for common stockholders - GAAP $ 984 $ 755 $ 600 $ 380 Non-GAAP adjustments Currency diversification strategy, net 1 4 20 24 Mark-to-market on investments (15) 12 (12) 13 Remeasurement of TRA liability 3 9 (7) (6) Bad debt expense - - 1 - Income tax effect of above adjustments 1 3 (4) (2) (7) Remeasurement of deferred income taxes (3) (11) 7 7 Total non-GAAP adjustments 2 (11) 11 8 30 Adjusted net income available for common stockholders 2 $ 973 $ 766 $ 608 $ 410 Adjusted diluted EPS (in dollars, except share amounts) Diluted EPS - GAAP $ 6.93 2.22 $ 5.67 1.73 $ 3.75 1.42 Non-GAAP adjustments Currency diversification strategy, net 0.04 0.19 0.24 0.00 0.01 0.05 Mark-to-market on investments 0.11 (0.11) 0.12 (0.03) 0.03 (0.03) Remeasurement of TRA liability 0.08 (0.07) (0.06) 0.01 0.02 (0.02) Bad debt expense 0.00 0.01 0.00 0.00 Income tax effect of above adjustments 1 (0.03) 0.01 (0.01) (0.07) (0.00) Remeasurement of deferred income taxes (0.10) 0.07 0.07 (0.01) (0.02) 0.02 Total non-GAAP adjustments 0.10 0.08 0.30 2 (0.02) 0.03 0.02 Adjusted diluted EPS 2 $ 7.03 2.19 $ 5.75 1.76 $ 4.05 1.44 Diluted weighted average common shares outstanding 109,002,938 105,846,877 101,299,609 443,859,546 436,011,752 423,387,508
RewordedMD&A
Year-Ended December 31, 2025 2024 2023 2022 (in millions, except share and per share amounts) Revenues Commissions $ 2,149 $ 1,697 $ 1,360 $ 1,322 Other fees and services 291 280 197 184 Other income (loss) 202 60 (11) (107) Total non-interest income 2,642 2,037 1,546 1,399 Interest income 7,782 7,339 6,230 2,686 Interest expense (4,219) (4,191) (3,436) (1,018) Total net interest income 3,563 3,148 2,794 1,668 Total net revenues 6,205 5,185 4,340 3,067 Non-interest expenses Execution, clearing and distribution fees 420 447 386 324 Employee compensation and benefits 626 574 527 454 Occupancy, depreciation and amortization 97 101 99 90 Communications 43 39 41 33 General and administrative 247 314 211 165 Customer bad debt 1 15 7 3 Total non-interest expenses 1,434 1,490 1,271 1,069 Income before income taxes 4,771 3,695 3,069 1,998 Income tax expense 414 288 257 156 Net income 4,357 3,407 2,812 1,842 Less net income attributable to noncontrolling interests 3,373 2,652 2,212 1,462 Net income available for common stockholders $ 984 $ 755 $ 600 $ 380 Earnings per share Basic $ 6.99 2.23 $ 5.72 1.75 $ 3.78 1.43 Diluted $ 6.93 2.22 $ 5.67 1.73 $ 3.75 1.42 Weighted average common shares outstanding Basic 108,112,199 104,965,050 100,460,016 440,931,909 432,448,796 419,860,200 Diluted 109,002,938 105,846,877 101,299,609 443,859,546 436,011,752 423,387,508 Comprehensive income Net income available for common stockholders $ 984 $ 755 $ 600 $ 380 Other comprehensive income Cumulative translation adjustment, before income taxes 101 (53) 30 (26) Income taxes related to items of other comprehensive income - - - Other comprehensive income (loss), net of tax 101 (53) 30 (26) Comprehensive income available for common stockholders $ 1,085 $ 702 $ 630 $ 354 Comprehensive income attributable to noncontrolling interests Net income attributable to noncontrolling interests $ 3,373 $ 2,652 $ 2,212 $ 1,462 Other comprehensive income - cumulative translation adjustment 290 (154) 92 (85) Comprehensive income attributable to noncontrolling interests $ 3,663 $ 2,498 $ 2,304 $ 1,377
RewordedMD&A
Other fees and services, for the current year increased $83 $11 million, or 42%, 4%, compared to the prior year, to $280 $291 million, driven by a $54 $9 million increase in risk exposure FDIC sweep fees as customers exhibited more risk-on behavior, on higher customer balances, an $8 million increase in market data fees due to our growing customer base, and a $14 $6 million increase in payments for order flow from exchange-mandated programs driven by higher customer trading volume, and volume; partially offset by a $9 $20 million increase decrease in FDIC sweep risk exposure fees due to higher customer balances and benchmark interest rates. as customers exhibited more cautious risk-taking behavior.
RewordedMD&A
Average ownership percentage in IBG LLC 26.0% 25.6% 25.0% 24.0% Net income available to IBG, Inc. from operating subsidiaries $ 1,192 $ 915 $737 $463 $ 737 IBG, Inc. stand-alone income (loss) before income taxes (14) (4) (12) 5 4 Elimination of IBG, Inc.'s portion of IBG LLC net (gain) loss on IBKR shares 1 (3) (2) - Income before income taxes 1,185 901 742 467 Income tax expense 201 146 142 87 Net income available to common stockholders $ 984 $ 755 $600 $380 $ 600 Consolidated income tax expense Income tax expense attributable to operating subsidiaries $ 213 $ 142 $115 $69 $ 115 Income tax expense attributable to IBG, Inc. 201 146 142 87 Consolidated income tax expense $ 414 $ 288 $257 $156 $ 257
RewordedMD&A
Year-Ended December 31, 2025 2024 2023 2022 (in millions, except %) Consolidated Consolidated income before income taxes $ 4,771 $ 3,695 $3,069 $1,998 $ 3,069 Exclude IBG, Inc. stand-alone income (income) loss before income taxes and eliminations (18) 4 2 12 5 Add-back IBG LLC net gain (loss) on IBKR shares eliminated in consolidation 1 13 6 (1) Operating subsidiaries income before income taxes $ 4,788 $ 3,713 $3,065 $1,996 $ 3,073 Operating subsidiaries Income before income taxes $ 4,788 $ 3,713 $3,065 $1,996 $ 3,065 Income tax expense 213 142 115 69 Net income available to members $ 4,575 $ 3,571 $2,950 $1,927 $ 2,950 IBG, Inc.
RewordedMD&A
General and administrative expenses, for the current year, increased $103 decreased $67 million, or 49%, 21%, compared to the prior year, to $314 $247 million, primarily due to a $57 the non-recurrences of $82 million increase related to a legal settlement and regulatory matters, a $20 million increase in advertising expenses, and a one-time charge of $12 million related to the consolidation of our European subsidiaries. subsidiaries in the prior year; partially offset by a $35 million increase in advertising expenses.
RewordedMD&A
Net interest income on customer balances, for the current year, increased $497 $174 million, compared to the prior year, driven by a $12.3 increases of $29.6 billion, $16.5 billion increase in average customer margin loans, a $9.8 and $15.1 billion increase in average customer credit balances, margin loans, and an increase in the average federal funds effective rate to 5.14% from 5.02% in the prior year and. segregated cash and securities, respectively.
RewordedMD&A
Payments Due by Year Total 2025-2026 2027-2028 2026-2027 2028-2029 Thereafter (in millions) Payable to Holdings under Tax Receivable Agreement (1) $ 195 $ 28 $ 28 $ 139 217 $28 $33 $156 Operating leases 134 57 38 39 Transition Tax liability (2) 18 18 - - 184 62 49 73 Total contractual cash obligations $ 347 $ 103 $ 66 $ 178 401 $90 $82 $229
RewordedMD&A
Year Ended December 31, 2025 2024 2023 2022 Revenues Commissions 35% 33% 31% 43% Other fees and services 5% 5% 6% 5% Other income (loss) 3% 1% (0%) (3%) Total non-interest income 43% 39% 36% 46% Interest income 125% 142% 144% 88% Interest expense (68%) (81%) (79%) (33%) Total net interest income 57% 61% 64% 54% Total net revenues 100% 100% 100% Non-interest expenses Execution, clearing and distribution fees 7% 9% 9% 11% Employee compensation and benefits 10% 11% 12% 15% Occupancy, depreciation and amortization 2% 2% 3% 2% Communications 1% 1% 1% General and administrative 4% 6% 5% 5% Customer bad debt 0% 0% 0% Total non-interest expenses 23% 29% 29% 35% Income before income taxes 77% 71% 71% 65% Income tax expense 7% 6% 6% 5% Net income 70% 66% 65% 60% Less net income attributable to noncontrolling interests 54% 51% 51% 48% Net income available for common stockholders 16% 15% 14% 12%
RewordedMD&A
RewordedMD&A
Non-interest expenses, for the current year, increased $219 decreased $56 million, or 17%, 4%, compared to the prior year, to $1,490 $1,434 million, mainly due to a $103 $67 million increase decrease in general and administrative expenses; a $61 $27 million increase decrease in execution, clearing and distribution fees; and a $47 $14 million decrease in customer bad debt; partially offset by a $52 million increase in employee compensation and benefits.
RewordedMD&A
Customer bad debt expense, for the current year increased $8 decreased $14 million, or 114%, 93%, compared to the prior year, to $15 million. $1 million, mainly driven by the non-recurrence of customer losses during short periods of extreme market volatility in the prior year.
Quiet changesMD&A
As of December 31, 2024, substantially 2025, all of our U.S. government securities had maturities within three months.