TD Ameritrade’s (AMTD) net revenue comprises transaction-based, asset-based, and other revenue. The company’s transaction-based revenue, which consists of commissions and transaction fees, amounted to $440 million in fiscal 1Q18. According to the company, its transaction revenue surpassed estimates thanks to favorable momentum in trading volumes.
TD Ameritrade’s commission rates stood at $7.54 per trade—within expectations. Trades executed through mobile made up 22% of its total trades, while derivatives comprised 33%.
TD Ameritrade’s total asset-based revenue, which comprises net interest revenue, bank deposit account fees, and investment product fees, stood at $790 million in fiscal 1Q18 and made up 63% of the company’s net revenue.
Between fiscal 1Q17 and fiscal 1Q18, TD Ameritrade’s investment product fees rose substantially, from $94 million to $133 million. The company’s net interest revenue rose from $151 million to $276 million, and its other revenue rose from $14 million to $27 million. Whereas TD Ameritrade has an LTM (last-12-month) free cash flow yield of 1.1%, peers (XLF) CBOE Global Markets (CBOE), Raymond James Financial (RJF), and Financial Engines (FNGN) have LTM yields of 1.3%, 2.9%, and 2.3%, respectively.