BGC - Earnings call transcript Q4 2024

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Operator

Greetings, and welcome to the BGC Group, Inc. Fourth Quarter 2024 Earnings Call. [Operator Instructions]

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jason Chryssicas, Head of Investor Relations. you. Thank

begin. may You

Jason Chryssicas

morning, financial BGC's found results, This full at quarter year XXXX which we everyone. fourth issued and ir.bcgg.com. Hello, can be

the with results quarter otherwise historical provided today's compare Any on specified. of prior the only XXXX year period call fourth

be today's on terms, non-GAAP We details reconciliations our our when definitions for non-GAAP investor include materials referring on basis, EBITDA. adjusted them. our earnings results additional adjusted of on corresponding terms, the complete and and and uses to Please which how, results will these a the refer updated to and of GAAP financial for management and to items any results website why

today The dispositions. material assumes or acquisitions no outlook discussed

are These and/or obligation differ statements risks Our cause call and to on expectations which uncertainties, are results law, without statements to undertake including, actual business. by Except based subject subject our our forward-looking political statements. to required factors. update any we expectations. contains other this could change economic from forward-looking on statements social, and as limitation, to about no Information outlook macroeconomic, various

within discussion For SEC factors the filings information that actual complete cause to risks these from not limited see but on included, factors forward-looking these a disclosures and documents. and risk could differ other forward-looking impact and that statements SEC may results statements, factors of our the to,

call Windeatt, over that, Sean Operating the with of to to turn BGC And I'm happy Officer Chief Group.

Sean Windeatt

Co-Global Brokerage, Abularrage and Financial and With today and year Officer, Aubin; call. full Hauf. Jason. of our me Good quarter John morning, fellow my Jason XXXX Thank to welcome JP Chief fourth our you, and are conference Heads

start and as Lutnick, congratulating by his Commerce. States United CEO, to nomination Howard Secretary Chairman of like I'd the XXst on our

corporate delivering leadership, transformational provided trading strategic and for pioneering of has value of billions Howard decades, transactions. shareholders through dollars electronic For

employees, than broker valuable and into As generating of annual the BGC most more a visionary resilient billion with world's over revenue. X,XXX leader, wholesale $X.X built he

and We to as are new bring serving will dedication role financial acumen confirmation, level of at people upon confident his BGC. American that he he has the same the

fourth and growing year quarter respectively. and delivered BGC revenues, XX% by full quarter and our to year XX%, Turning results. record full fourth

growth volumes our carried ECS, rates 'XX's outperform currently revenue the QX driven which exchange This into is was continue strong outpacing businesses, Our XXXX foreign by market. trading with and record. momentum forward to

the Sage holdings beginning fourth end close quarter. of and the first OTC Energy the At expect we around of closed quarter, to acquisition our the Partners of

make million instantly acquisitions annual contribute these of ECS be expect more accretive will the revenues, largest $XXX broker than We and BGC in world. the

at and fourth detail. asset results our Total by largest million, XX.X% more fourth every record region revenues our to quarter quarter in growth $XXX.X strong across Looking revenues grew classes. reflecting and representing

by $XXX.X XX.X% Brokerage to million. revenues grew

by across rate revenues listed million, U.S. Rates derivatives, increased to X.X% rates interest $XXX.X reflecting treasuries. higher and volumes products

Partners. revenues as Energy and by XX% the the driven environmental strong business, ECS power across by complex, energy as of acquisition to million, our well $XXX.X growth grew leading Sage

emerging Foreign up exchange were options exchange higher by volumes. $XX.X driven to and market revenues XX.X% primarily million, foreign

Match. Credit and CDS volumes, record lower credit million partially revenues to decreased market in volumes offset due X.X% by emerging $XX.X Portfolio by to

and Equities partially U.S. volumes, due revenues by to equity declined offset X.X% derivative primarily Asian million, lower to $XX.X volumes. European higher

of excluding and due post-trade by primarily XX.X% XX% of post data, Revenues subscription-based This Capitalab offset Data post-trade Market impact the $XX.X by to for grew Capitalab Data, in to Fenics year-over-year. fourth was growth more lower driven revenue revenues million. and by by the sale the improved network quarter. revenues and than Lucera, strong network creat-trade across

of to well increase across data volumes. $XXX.X X.X% exchange Fenics. electronic partially was Fenics as reported revenues of and higher revenues higher rates revenues, This quarter, X.X%. $XXX.X Fenics volumes fourth million, credit to by In by an lower as improved market foreign the driven Markets Turning growth million. by offset

$XX.X FMX, offset revenues by increase, Portfolio quarter. generated primarily a Platforms Lucera, million, the of partially by and driven of Match XX.X% the in Capitalab Growth Fenics fourth sale

by Excluding of impact Platforms would have this Fenics Growth the sale, XX%. grown approximately

last FMX for UST compared XX% year. market quarter fourth volumes billion year the ago. a of from for up daily fourth XX% generated translated the average quarter, XX% over share quarter, This last $XX to up over to XX% and

approximately the its compared year expand FMX to foreign last billion. more FX share record $XX FX FMX continues by global volumes in enormous improved market than to XX% on ADV market. of exchange

continues and of Citi. Exchange end Bank the of Barclays FCMs the more have largest recently America, Treasury FCMs, connected Futures to partners, FMX futures quarter XXXX. world's before of launch connect the XX FMX's first of FMX to U.S. than around the expects onboarding

we SOFR at the following time our experienced FMX launch volumes Treasury point same to Exchange continue grow and share U.S. business. Futures the what market its exceeds in of on

As UST over now market a XX% reminder, FMX holds share.

due network pipeline. critical Match growth to increased that European U.S. and XX% expand trading infrastructure markets, real-time credit to grew business and by more across than provides its volumes. both strong Portfolio its over continues to ADV by the XXX% revenue revenue capital Lucera, Fenics

Jason. to the call like to I'd that, With turn over

Jason Hauf

of revenues Pacific Americas $XXX.X Sean, geographies. and hello, Africa all increased everyone. and X.X%. growth by by Middle East increased increased million, Europe, generated revenues and quarter revenues XX.X%, across XX.X%, reflecting you, revenue by Thank fourth BGC Asia

the GAAP decreased earnings, benefits expenses. to revenues to for and flat GAAP expenses were by adjusted XX.X% earnings and during primarily Turning commissionable under due Compensation and under increased respectively, Noncompensation by X.X%. for and employee period. adjusted higher XX%,

earnings. Moving on to

earnings earnings $XXX XX% earnings share. XX.X% XX.X% to increased Adjusted $XXX.X Post-tax EBITDA to by million. to by And per adjusted a adjusted by was XX.X% $XXX.X grew $X.XX per pretax million. improvement. Our improved million, adjusted share post-tax

XXXX million a during earnings increase X% quarter, the X.X% third to the to of XXX.X compared fully count. XXXX. increase share was fourth quarter share BGC's for average to count compared Turning diluted weighted a quarter and of adjusted the

of was $XXX.X year-end with As XXXX. $XXX.X liquidity our XX, million million December of compared as

Sean to call the to over like outlook. to first back quarter turn I'd our that, With go

Sean Windeatt

the of Thank you, XXXX. quarter Jason. pleased to provide for following guidance the I'm first

We the compared our to $XXX.X revenues total $XXX quarter would and represent of XXXX, as XX% guidance first of growth. in of million between at to midpoint million million generate revenue $XXX expect which approximately the

to $XXX year, would We growth. range be at last represent anticipate pretax million the million guidance adjusted earnings million $XXX.X in versus earnings midpoint to the of which XX% of $XXX

questions. the So with like for call that, operator, open to we'd

Operator

with And from Piper [Operator comes line first the question Patrick Instructions] Sandler. our of Moley

Patrick Moley

Great.

I next Sean, John on want Howard to him if JP as to listening of congratulate and co-CEOs. as the wish is appointments off, luck best So well. his journey want first on And I in, the

Commerce first confirmed way your in expectations him next that question, as BGC directly around transition? planned And can are you there us the detail just by to minute the your like Can well Howard the prepared walk take all shares, sale those remarks of on indirectly leadership through you by through incremental owned is its Cantor? So seems as and owned any of to as Howard's both share of a being executive timeline accounts, on you said it is Secretary. like kind the

Sean Windeatt

No problem. Thanks.

think let's last with piece. So I the deal

days change expect when previously that any he and including comply market we've of his Patrick, So SEC senate structure, we will obviously, that on divesting addition, don't with will divests the all any within standards, required XX confirmation. holdings as And sales don't Ethics expect be holding. be will Committee filings, and remains we corporate his of to have previously Senate said, Howard case. in we public said, open the the There the

And me, tremendously we've and with side X X excited myself, In to been and been year obviously successful. of worked of the sitting and John next you've the side we're who last by terms years, few the managing I think, said, years highly last are us, over day-to-day particularly JP, the hopefully, that's over has the past me business. opposite

huge growth business last we growth value creating Capitalab with last QX. of If in you we XX.X%, even and ECS our year, in did we've in during just did our and of sale think some business shown year, revenue the acquisitions the that shareholder that

as we're carry company. of excited described this very on growth to think business and it as usual, I the we

Patrick Moley

Okay. Great.

revenues So In diving up XX% financials, guidance quarter first growth. the the into of midpoint maybe the XX%. implies were the fourth just quarter year-over-year and

did So reasonable top revenue the in but to maybe first target Sage for contribute growth core still And I Do are in prepared business? of expectations growth little contribute you if secondly, XX% I line percentage you a revenue as the bit of a X-part here. it apologize go, question acquisition the missed as how in targeted in far think that's of expecting growth then a organic points Howard the historically many growth. much And XQ? how for One, kind quarter? that it remarks,

Sean Windeatt

So in you actually, I didn't the didn't mention prepared remarks, it miss anything. definitely so

quarter X be added same to Sage exactly expect the X the I fourth However, of points percentage XXXX. between in would that XX.X% growth of and quarter. And in the first

Patrick Moley

pretax guidance, there. of a the pretty expansion And Okay. then margin nice first adjusted on earnings the the implies quarter

that? just what's levers the curious, can of maybe you have just driving about So you If some -- can there? you talk

Sean Windeatt

cost we grow, gearing think revenue. base a our with as have of does not grow line I right? Look, when does growing, perfect, not last year, is seen pretty, is the over When Yes. decent course, you've that, revenue a in

so continues XXXX way gearing that in [ And XXXX. threat and great ] our has to been

play you're and into through the comes implied Now results you therefore, seeing Also guidance our number in flow higher and acquisitions, a to they the exactly as electronic, we line. as plug bottom and know, fact dropping in of that its the QX margins platform. XXXX. our XXXX that's when and economies done of business with hence, in we've small our generate that you with of movement We which what scale, do see these them, into

Patrick Moley

to you're year the in getting was Okay. kind first Great. at about share there, the on previously concerted expecting like FMX. getting Treasury lot and X one make progress U.S. onboarded, being year and when expectations then It year sounds you quarter. you're really or still a taking there. market futures making about out then effort all laid connected, maybe kind would X the customer clients X just FCMs Howard And be a the of launch of about

to [ we're first the in but it is involving -- that we are is the around probably still terms the you say maybe the in expecting before of to be end Or already strikes -- use? goal? launch, it is quarter? of first still that it going I mean, And of when still So the quarter? we could kind the ] timeline end Is the of here, quarter, second the you are

Sean Windeatt

we we that expect have We X we question No QX end of expected the we absolutely And connectivity. problem. currently did. have XX the do We've we remain X Look, so part to said We said the FCMs, first right. FCMs, to is which to which year and absolutely X. on said, opened, going about when we we have 'XX, track. by would of you're said we

even added and Bank of our I I partners, pointed just think last as time out our prepared said that in America, And Barclays FMX since even we last work. Citi my call. we it remarks,

So very happy the no change progress. all and at with

we to we're did to the we if ahead today pointed out look we think of treasuries, I sort of compared when launching we're have where you we -- that we were. where progress

client competition. Year bank X connectivity X right, So happy. about is very, that and connectivity. full increasing quite deepening year on volumes. very is X, And Year

described you think it right. I exactly

Patrick Moley

then models. -- for just And the our of little of Okay. bit a sake

of acquisitions OTC energy end said the of the With first add close it the were the at in $XXX the deck, million. X the going quarter, to acquisition

think core I relative you call, given bat In the the lower around business. be or revenues. said BGC's maybe think I mentioned, $XXX is off seems by Sage million bit or like that my you lower growth a the it margins OTC were -- to annual contribution they'd estimation, little a bit last little

And a build that XX% annual safe it at give XX% of is from margins? would million to us you I to kind there to can mean, $XXX revenues any color of help be So in great. kind OTC with

Sean Windeatt

definitely is Yes, sure, your good. sure. the By math way, I think pretty

expect $XXX OTC, acquisition our I OTC margin. for current good. large be I'd And than to around I margin suggested, a sounds think million like lower with the as

I think think it highly I about where economies you're XX% those a is as X. the will to to from very pointed day So beginning. I seen around the get us we last the from even to perfectly that well, did, the it thinking beginning, call past on us at the just the bit in is what you've takes as out. larger longer accretive good little think be out, level But earnings acquisitions at with And

very excited. So

Patrick Moley

question. Okay. Great. last And then one

are on lot the comp. more FMX treatment the business eyes last or the from launch the that so, and trends stock. got a solid year and you've the I more attention -- investors over seeing your question there's With usage stock, a you the One of guys to on stock-based get a lot relates lot that in

bring GAAP So with I with your any future there going just was clarity adjusting that line investors change earnings to most hoping to in appropriate as plans number adjusted of management, forward, for you why the you the And then stock-based add there figure? maybe and is present could EPS are to maybe way some in it? comp think the try out

Sean Windeatt

Okay.

have paying way in the it stock-based think is reason successful key you the years, a past has be we it's at And think I that and change. over been feel think no producers good retention. both think company, personnel proved there'll a tremendous retention and I be growth. as to we significant and comp, seen We our for for

how What it We down growing incredibly level for company. of have the we'll outpace though, come bit. believe we continue and continue do you seen, stock-based has longevity retention it's and industry, year our always overall the something But staff that to comp little last continue that's And the the over that. to monitor. to a our is is we important of

Operator

There further back for Therefore, remarks. would floor questions turn time. this no like over the closing to I Mr. are at Windeatt to

Sean Windeatt

forward Just next you much. us with all talking look to say, for on today much thank you updates. to very Thanks joining quarter to and the more call very

Operator

lines conclude Thank and your this And ladies at disconnect you you conference, this for and time. today's may participation. gentlemen, does your

BGC (BGC) 14 Feb 252024 Q4 Earnings call transcript