BGC(US:BGC)2025-03-03 21:11Part I Business BGC Group is a global financial technology and brokerage firm focused on electronic trading growth, strategic acquisitions, and platform development - As of December 31, 2024, the company employed 2,161 front-office and technology personnel36 - BGC completed its conversion to a simplified Full C-Corporation structure on July 1, 202345 - Howard W. Lutnick stepped down as Chairman and CEO on February 18, 2025, with John A. Abularrage, JP Aubin, and Sean A. Windeatt appointed as Co-CEOs48 - Major banks invested $171.7 million for a 25.75% minority stake in BGC's FMX platform in April 2024, valuing it at $666.7 million44 Brokerage Product Categories | Category | Product Type | | :--- | :--- | | Rates | Interest Rate Swaps, Interest Rate Options, Listed Rates Products, U.S. Treasuries, European Government Bonds, Other Global Government Bonds, Repurchase Agreements, Money Markets, Agency Fixed Income | | Credit | Corporate Bonds, High Yield Bonds, Emerging Market Bonds, Index CDS, Single Name CDS, Exotic Credit Derivatives, Asset-Backed Securities, Loans, Structured Products | | Foreign Exchange | Foreign Exchange Options, Spot FX, FX Forward, Non-Deliverable Forwards, Precious Metals | | ECS | Environmental/Emission Products, Weather Derivatives, Energy & Petrochemical Consulting, Shipping Brokerage, Power, Liquefied Natural Gas, Natural Gas, Base Metals, Dry Bulk (Coal & Iron Ore), Oil, Soft & Agricultural Products | | Equities | OTC Equity Derivatives, Listed Equity Futures & Options, Delta One Product, Convertibles, Cash Equities | - Top ten customers accounted for approximately 27.1% of total consolidated revenue in 2024, with the largest customer at 4.8%66 - Average revenue per front-office employee increased 6.3% to a record of approximately $1.0 million in 2024136 Risk Factors The company faces diverse risks including market volatility, strategic integration challenges, significant indebtedness, cybersecurity threats, personnel transitions, and extensive regulatory compliance - Economic & Market Risk: Business conditions are influenced by global economic factors, central bank interest rate actions, and financial market trading volumes191197198 - Strategic & Transaction Risk: New initiatives and acquisitions pose integration, cost, and dilution risks, alongside challenges from limited cryptocurrency offerings200209 - Liquidity & Debt Risk: Indebtedness of $1.34 billion as of December 31, 2024, limits capital raising and operational flexibility, exposing the company to interest rate risk and covenant restrictions212220 - Cybersecurity & Technology Risk: Cyber-attacks and system failures risk data breaches, reputational damage, financial losses, and regulatory penalties, with AI introducing new challenges242252 - Personnel Risk: Leadership transition and the loss of key employees or inability to retain talent pose significant business risks255257 - Regulatory & Legal Risk: Extensive financial services regulation leads to high compliance costs, capital requirements, and potential penalties from global authorities270274295 - Corporate Structure & Related Party Risk: Voting control is concentrated with Cantor, and potential conflicts of interest exist with related party transactions337357358 Unresolved Staff Comments The company reports no unresolved staff comments - Not Applicable383 Cybersecurity BGC's global cybersecurity program, overseen by the Audit Committee, includes risk management, incident response, and disaster recovery - The cybersecurity program is managed by the CISO and CIO, with Audit Committee oversight on risks and program status384389 - Risk management includes vulnerability audits, penetration testing, employee training, and industry group participation385 - An incident reporting process classifies risks into four tiers based on impact to guide response and recovery386 - Primary data centers in the U.S. and U.K. have replicated technology in redundant centers, with annual disaster recovery testing390391 Properties BGC Group's principal offices are in New York, with major presence in London and global data centers - The company's principal executive offices are located at 499 Park Avenue, New York, NY392 - The largest office outside New York is in London at Five Churchill Place393 - BGC operates six core data centers across the U.K., New Jersey, Connecticut, Hong Kong, and Singapore74394 Legal Proceedings Legal proceedings information is incorporated by reference from Note 19 and the MD&A section - Details on legal proceedings are provided in Note 19 of the financial statements and Item 7, MD&A395 Mine Safety Disclosures The company reports this item is not applicable - Not Applicable396 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities BGC's Class A common stock trades on Nasdaq, supported by an active share repurchase program and quarterly dividends - A $400.0 million share repurchase program was re-authorized in October 2024, with approximately $350.0 million remaining available at year-end400 Share Repurchases for Q4 2024 | Period | Total Number of Shares Repurchased (thousands) | Weighted Average Price Paid per Share | | :--- | :--- | :--- | | Oct 1 - Oct 31, 2024 | 6,369 | $9.45 | | Nov 1 - Nov 30, 2024 | — | — | | Dec 1 - Dec 31, 2024 | — | — | | Total | 6,369 | $9.45 | - BGC repurchased 36.2 million shares during the full year ended December 31, 2024402 Management's Discussion and Analysis of Financial Condition and Results of Operations BGC's 2024 revenues increased significantly, driven by brokerage growth and Fenics, alongside strategic acquisitions and a strengthened liquidity position Full Year 2024 vs. 2023 Financial Highlights | Metric | FY 2024 (in millions) | FY 2023 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $2,262.8 | $2,025.4 | +11.7% | | Total Brokerage Revenues | $2,038.2 | $1,832.6 | +11.2% | | Income from Operations Before Taxes | $173.1 | $57.7 | +200.0% | | Consolidated Net Income | $123.2 | $38.8 | +217.5% | FY 2024 Brokerage Revenue Growth by Product | Product Category | Revenue Change (YoY) | | :--- | :--- | | ECS | +25.1% | | Rates | +12.2% | | FX | +14.0% | | Credit | +0.9% | | Equities | -5.3% | - Higher-margin Fenics business revenues grew 9.4% to $570.8 million in 2024, with Fenics Growth Platforms revenue up 26.3% to $94.8 million443445 - The company recognized a $39.0 million gain from the sale of its Capitalab post-trade business on December 3, 2024455456 - Strategic acquisitions in the ECS sector included Sage and a definitive agreement for OTC Global, both expected to be immediately accretive450451 - Liquidity increased by $196.3 million to $897.8 million as of December 31, 2024, driven by FMX Equity Partners, senior notes, and Capitalab sale proceeds616 Quantitative and Qualitative Disclosures About Market Risk BGC manages market risks including credit, principal transaction, foreign currency, and interest rate exposures through various controls - Credit Risk: Managed through credit approval, trading limits, and ongoing monitoring to mitigate counterparty non-performance706 - Market Risk: Unmatched principal positions are mitigated by strict limits and hedging; $186.2 million in financial instruments owned at fair value as of December 31, 2024711712 - Foreign Currency Risk: A hypothetical 10% USD strengthening against EUR and GBP would negatively impact 2024 net income by approximately $0.9 million718 - Interest Rate Risk: A hypothetical 1% interest rate increase would reduce 2024 consolidated net earnings by an estimated $1.7 million, mainly due to variable-rate debt720 Financial Statements and Supplementary Data This section presents BGC Group's audited consolidated financial statements for 2022-2024, including an unqualified audit opinion Consolidated Statements of Financial Condition Consolidated Balance Sheet Highlights (as of Dec 31) | (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $711,584 | $655,641 | | Goodwill | $540,290 | $506,344 | | Total Assets | $3,591,967 | $3,175,937 | | Liabilities & Equity | | | | Notes payable and other borrowings | $1,337,540 | $1,183,506 | | Total Liabilities | $2,512,728 | $2,277,781 | | Total Stockholders' Equity | $898,507 | $885,083 | | Total Equity | $1,079,239 | $898,156 | Consolidated Statements of Operations Consolidated Income Statement (Year Ended Dec 31) | (in thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Total revenues | $2,262,818 | $2,025,401 | $1,795,302 | | Total compensation and employee benefits | $1,492,890 | $1,347,981 | $1,104,236 | | Total expenses | $2,182,263 | $1,992,830 | $1,717,115 | | Income from operations before income taxes | $173,143 | $57,709 | $97,451 | | Consolidated net income (loss) | $123,228 | $38,775 | $58,867 | | Net income (loss) available to common stockholders | $126,988 | $36,265 | $48,712 | Earnings Per Share (Year Ended Dec 31) | Per Share Data | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Basic EPS | $0.26 | $0.08 | $0.13 | | Fully Diluted EPS | $0.25 | $0.07 | $0.13 | Consolidated Statements of Cash Flows Consolidated Cash Flow Summary (Year Ended Dec 31) | (in thousands) | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | $315,350 | $405,203 | $224,362 | | Net cash used in investing activities | ($96,994) | ($90,707) | ($53,330) | | Net cash used in financing activities | ($149,018) | ($146,880) | ($233,206) | | Net increase (decrease) in cash | $60,377 | $170,886 | ($64,789) | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes or disagreements with its accountants on financial disclosure - None1132 Controls and Procedures Management concluded that disclosure controls and internal controls over financial reporting were effective as of December 31, 2024 - Management concluded BGC Group's disclosure controls and procedures were effective as of December 31, 20241133 - Internal controls over financial reporting were effective as of December 31, 2024, excluding the immaterial Sage acquisition11351136 - No material changes occurred in internal controls over financial reporting during the year ended December 31, 20241139 Other Information No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during Q4 2024 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended December 31, 20241140 Part III Directors, Executive Officers and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 proxy statement - This section incorporates information by reference from the 2025 Proxy Statement1144 Executive Compensation Executive compensation information is incorporated by reference from the company's 2025 definitive proxy statement - This section incorporates information by reference from the 2025 Proxy Statement1145 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership and equity compensation plan information is incorporated by reference from the 2025 proxy statement - This section incorporates information by reference from the 2025 Proxy Statement1146 Certain Relationships and Related Transactions, and Director Independence Related party transactions and director independence information is incorporated by reference from the 2025 proxy statement - This section incorporates information by reference from the 2025 Proxy Statement1147 Principal Accountant Fees and Services Principal accountant fees and services information is incorporated by reference from the 2025 proxy statement - This section incorporates information by reference from the 2025 Proxy Statement1148 Part IV Exhibits and Financial Statement Schedules This section lists financial statements, schedules, and exhibits filed as part of the Annual Report on Form 10-K - Consolidated financial statements are included in Part II, Item 8 of the report1151 - An Exhibit Index lists all documents filed as part of the report as required by Regulation S-K11521153 Form 10-K Summary The company reports this item is not applicable - Not Applicable1161