BGC Group, Inc. (BGC)·Q4 2024 Earnings Summary

Executive Summary

• Record fourth-quarter revenue of $572.3M (+10.8% YoY) and strong non-GAAP profitability: pre-tax Adjusted Earnings $129.5M (+16.9% YoY), post-tax Adjusted EPS $0.25 (+19% YoY), Adjusted EBITDA $192.0M (+26.7% YoY) .
• Broad-based strength led by ECS (+28% YoY), FX (+21% YoY), and Rates (+8.8% YoY); Fenics revenues rose 8.6% to $142.1M, with Growth Platforms up 20.2% despite sale of Capitalab .
• Q1 2025 guidance: revenue $610–$660M and pre-tax Adjusted Earnings $145–$161M (midpoints imply ~10% revenue and ~13% earnings growth YoY); guidance was reaffirmed on Mar 26, 2025 .
• Catalysts: FMX Futures progressing toward U.S. Treasury futures launch around end of Q1 2025 with >10 FCMs targeted; FMX UST market share topped 30% in Q4; leadership transition as Howard Lutnick confirmed as U.S. Secretary of Commerce (expects divestiture within 90 days of confirmation, not via open market) .

What Went Well and What Went Wrong

What Went Well

• ECS strength and inorganic expansion: Q4 ECS revenue +28% YoY to $134.1M, aided by strong energy complex/power/environmental demand and Sage Energy Partners acquisition; management expects OTC Global Holdings to contribute ~$400M annual revenue at ~15% margin initially, accretive from day one .
• Electronic and data momentum: Fenics revenues +8.6% to $142.1M; Fenics Growth Platforms +20.2% (FMX, PortfolioMatch, Lucera). FMX UST ADV >$52B with >30% share; FMX FX ADV >$11B (+~80% YoY); Lucera revenue +>33% .
• Profitability leverage: Post-tax Adjusted EPS $0.25 (+19% YoY); Adjusted EBITDA $192.0M (+26.7% YoY). CFO highlighted compensation growth tied to commissionable revenue, while non-comp expenses for Adjusted Earnings declined slightly (-0.3%) .

Management quotes:

• “BGC delivered record fourth quarter and full year revenues, growing by 11 and 12 percent, respectively.” — Sean Windeatt .
• “FMX UST generated average daily volume of over $52 billion... over 30 percent market share for the fourth quarter.” — Sean Windeatt .
• “We expect [Sage + OTC]... contribute more than $450 million of annual revenues, be instantly accretive and make BGC the largest ECS broker in the world.” — Sean Windeatt .

What Went Wrong

• Equity and credit softness: Equities -3.5% YoY to $56.3M on lower Asian equity derivatives; Credit -4.9% to $62.4M on lower CDS/emerging market volumes (partially offset by record PortfolioMatch) .
• GAAP expense intensity: GAAP comp and benefits +16.3% YoY; equity-based comp $121.2M (+55.2% YoY). GAAP total expenses +16.7% YoY; GAAP pre-tax income declined to $27.2M from $31.9M (-14.8%) .
• Interest/other revenue line down: “Interest and dividend income, Fees from related parties and Other revenues” -6.9% YoY to $23.7M due to lower interest income vs prior year .

Analyst concern signals:

• Stock-based comp treatment: management reiterated its use for retention and growth; indicated overall stock-based comp has “come down a little bit,” but no change in approach planned .
• Initial OTC margin profile: ~15% margin expectation, below core BGC margins initially; economies of scale expected over time .

Financial Results

Segment and revenue mix:

KPIs (Fenics / FMX / Platform metrics):

Expense snapshot:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Our strong revenue growth was driven by our ECS, Rates, and Foreign Exchange businesses, which continue to outperform the market.” — Sean Windeatt .
• “FMX Futures Exchange continues to connect the world's largest FCMs... expects to have more than 10 FCMs connected before the launch of U.S. Treasury futures around the end of the first quarter 2025.” — Sean Windeatt .
• “Compensation and employee benefits... increased... primarily due to higher commissionable revenues... Non-compensation expenses under GAAP were flat and for Adjusted Earnings decreased by 0.3%.” — Jason Hauf .
• “We expect [Q1 2025] total revenues of $610–$660M... pretax adjusted earnings $145–$161M... midpoints represent ~10% revenue and 13% earnings growth.” — Sean Windeatt .

Q&A Highlights

• Leadership transition and divestiture structure: Management expects Howard Lutnick to divest holdings within 90 days of Senate confirmation; no open-market sales; no change to corporate structure expected .
• Sage impact: Sage contributed between 1–2 percentage points to Q4’s ~11.7% YoY revenue growth and expected similar contribution in Q1 2025 .
• Margin drivers: Operating leverage from revenue growth, plug-and-play acquisitions, and increased electronic mix driving margins; small acquisitions integrate quickly; larger deals like OTC scale over time .
• FMX timeline: Year 1 bank connectivity (target >10 FCMs by end of Q1 2025), Year 2 client connectivity and volumes, Year 3 full-on competition; on track/ahead versus UST launch precedent .
• Stock-based comp: Retention and growth tool; overall level has come down slightly; no change in approach planned .

Estimates Context

• S&P Global consensus for Q4 2024 and forward quarters was unavailable at time of request due to data access limits, so we cannot quantify beats/misses versus Street estimates. Consensus references would normally be sourced from S&P Global; however, no values are provided here due to unavailability.
• Directionally, BGC’s actual Q4 revenues ($572.3M) fell within and above the midpoint of its prior Q4 guidance ($545–$595M), and pre-tax Adjusted Earnings ($129.5M) likewise exceeded the midpoint of prior guidance ($122–$138M), suggesting execution ahead of internal targets rather than an estimates-based assessment .

Key Takeaways for Investors

• ECS is a key growth engine, with strength in energy/power/environmental and inorganic expansion (Sage closed; OTC near closing), positioning BGC as the largest ECS broker; expect near-term accretion with margin scale-up over time .
• Electronic platforms (FMX, PortfolioMatch, Lucera) are driving durable revenue and higher margins; FMX UST share sustained at >30% and FX ADV accelerating, supporting earnings leverage .
• Profitability momentum persisted: post-tax Adjusted EPS $0.25 (+19% YoY) and Adjusted EBITDA $192.0M (+26.7% YoY) in Q4, with Q1 2025 guidance implying continued double-digit growth .
• Expense discipline: Adjusted non-comp expenses declined slightly YoY in Q4; GAAP comp growth reflects commission mix and equity-based comp dynamics; monitor equity comp trajectory and GAAP-to-non-GAAP deltas .
• Leadership transition appears well-managed: Co-CEOs emphasize continuity; divestiture of former CEO’s holdings expected without open-market sales; low risk of governance disruption per remarks .
• Near-term trading implications: Positive momentum in electronic franchises and Q1 guidance reaffirmation; watch for FMX Futures UST launch timing and FCM connectivity milestones around quarter-end .
• Medium-term thesis: Scaling ECS (including OTC) plus electronic/data growth should expand earnings power and reduce cyclicality; track margin uplift from integration and electronic mix over 2025–2026 .

Notes:

• All figures are as reported in BGC’s Q4 2024 8-K press release and earnings call. Where Street consensus would normally be cited, it was unavailable at time of preparation due to S&P Global access limits; guidance comparisons rely on company-provided ranges .