BGC(BGC) - 2025 Q2 - Quarterly Report

FORM 10-Q Filing Information Registrant Information This section provides key identification details for BGC Group, Inc. as a registrant filing a Quarterly Report on Form 10-Q for the period ended June 30, 2025, including its incorporation state, address, and stock exchange listing - BGC Group, Inc. is filing a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2] - As of August 8, 2025, the registrant had 364,862,092 shares of Class A common stock and 109,452,953 shares of Class B common stock outstanding[4] Condensed Consolidated Statements of Financial Condition (in thousands) | Title of each class | Symbol(s) | Name of each exchange on which registered | | :------------------ | :-------- | :---------------------------------------- | | Class A Common Stock, $0.01 par value | BGC | The Nasdaq Stock Market, LLC | Table of Contents Glossary of Terms, Abbreviations and Acronyms Special Note on Forward-Looking Information Where You Can Find More Information PART I—FINANCIAL INFORMATION ITEM 1. Financial Statements (unaudited) This section presents the unaudited condensed consolidated financial statements of BGC Group, Inc. for the periods ended June 30, 2025, and December 31, 2024, including statements of financial condition, operations, comprehensive income (loss), cash flows, and changes in equity, along with detailed notes Condensed Consolidated Statements of Financial Condition The Condensed Consolidated Statements of Financial Condition show a significant increase in total assets and liabilities for BGC Group, Inc. from December 31, 2024, to June 30, 2025, primarily driven by acquisitions and operational changes - Total assets increased by $1.30 billion (36.2%) from December 31, 2024, to June 30, 2025, primarily due to the acquisition of OTC Global and increases in receivables and cash[30][443] - Total liabilities increased by $1.27 billion (50.6%) over the same period, largely driven by increased notes payable and other borrowings[30] Condensed Consolidated Statements of Financial Condition (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------ | :------------------ | | Assets | | | | Cash and cash equivalents | $827,844 | $711,584 | | Financial instruments owned, at fair value | $139,470 | $186,197 | | Receivables from broker-dealers, clearing organizations, customers and related broker-dealers | $951,387 | $365,490 | | Accrued commissions and other receivables, net | $526,742 | $324,213 | | Loans, forgivable loans and other receivables from employees and partners, net | $468,259 | $360,060 | | Goodwill | $625,648 | $540,290 | | Other intangible assets, net | $445,771 | $240,910 | | Total assets | $4,892,042 | $3,591,967 | | Liabilities | | | | Accrued compensation | $309,565 | $227,869 | | Payables to broker-dealers, clearing organizations, customers and related broker-dealers | $777,209 | $225,377 | | Notes payable and other borrowings | $1,917,835 | $1,337,540 | | Total liabilities | $3,783,359 | $2,512,728 | | Equity | | | | Total stockholders' equity | $930,462 | $898,507 | | Total equity | $1,108,683 | $1,079,239 | Condensed Consolidated Statements of Operations BGC Group, Inc. reported substantial revenue and net income growth for both the three and six months ended June 30, 2025, compared to the prior year periods, driven by increased commissions and principal transactions, partially offset by higher expenses - Total revenues increased by 42.3% for the three months and 28.2% for the six months ended June 30, 2025, compared to the prior year periods[32][382][385] - Consolidated net income increased by 51.2% for the three months and 27.2% for the six months ended June 30, 2025, compared to the prior year periods[32] Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total revenues | $784,004 | $550,761 | $1,448,244 | $1,129,375 | | Total expenses | $711,686 | $500,155 | $1,298,208 | $1,048,223 | | Consolidated net income (loss) | $56,215 | $37,175 | $109,644 | $86,216 | | Net income (loss) available to common stockholders | $57,545 | $37,828 | $112,709 | $87,038 | | Basic earnings (loss) per share | $0.11 | $0.08 | $0.22 | $0.17 | | Fully diluted earnings (loss) per share | $0.11 | $0.08 | $0.22 | $0.17 | Condensed Consolidated Statements of Comprehensive Income (Loss) The Condensed Consolidated Statements of Comprehensive Income (Loss) show an increase in comprehensive income for both the three and six months ended June 30, 2025, primarily driven by consolidated net income and positive foreign currency translation adjustments - Foreign currency translation adjustments shifted from a loss of $6.7 million in Q2 2024 to a gain of $13.0 million in Q2 2025, significantly contributing to comprehensive income[33] Condensed Consolidated Statements of Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Consolidated net income (loss) | $56,215 | $37,175 | $109,644 | $86,216 | | Foreign currency translation adjustments | $13,009 | $(6,678) | $19,332 | $(11,507) | | Comprehensive income (loss) | $69,224 | $30,497 | $128,976 | $74,709 | | Comprehensive income (loss) attributable to common stockholders | $70,170 | $31,190 | $131,487 | $75,712 | Condensed Consolidated Statements of Cash Flows The Condensed Consolidated Statements of Cash Flows show a significant increase in net cash provided by operating activities for the six months ended June 30, 2025, compared to the prior year, while investing activities used more cash due to acquisitions, and financing activities provided more cash from debt issuances - Net cash provided by operating activities improved significantly from a use of $24.9 million in H1 2024 to a provision of $72.1 million in H1 2025[36] - Payments for acquisitions, net of cash acquired, totaled $263.4 million in H1 2025, compared to none in H1 2024, contributing to increased cash used in investing activities[38] - Issuance of long-term debt, net of deferred issuance costs, significantly increased cash from financing activities to $1.20 billion in H1 2025, up from $770.0 million in H1 2024[38] Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash provided by (used in) operating activities | $72,078 | $(24,858) | | Net cash provided by (used in) investing activities | $(293,588) | $(216,437) | | Net cash provided by (used in) financing activities | $323,297 | $158,966 | | Net increase (decrease) in Cash and cash equivalents, and Cash segregated under regulatory requirements | $108,806 | $(86,751) | | Cash and cash equivalents, and Cash segregated under regulatory requirements at end of period | $842,079 | $586,145 | Condensed Consolidated Statements of Changes in Equity The Condensed Consolidated Statements of Changes in Equity reflect an increase in total equity for BGC Group, Inc. for the six months ended June 30, 2025, driven by consolidated net income and equity-based compensation, despite significant share repurchases and dividend payments - Total equity increased by $29.4 million from January 1, 2025, to June 30, 2025, reaching $1.11 billion[41] - The company repurchased 18,572,136 shares of Class A common stock for $171.6 million during the six months ended June 30, 2025[41] - Dividends declared per share of common stock were $0.04 for the six months ended June 30, 2025, up from $0.03 in the prior year[41] Condensed Consolidated Statements of Changes in Equity (in thousands, except share amounts) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------ | :----------------------------- | :----------------------------- | | Balance, January 1 | $1,079,239 | $898,156 | | Consolidated net income (loss) | $109,644 | $86,216 | | Equity-based compensation | $86,791 | $85,549 | | Dividends to common stockholders | $(19,564) | $(14,683) | | Repurchase of Class A common stock | $(171,635) | $(148,090) | | Balance, June 30 | $1,108,683 | $1,041,870 | Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering critical accounting policies, acquisitions, related party transactions, debt, equity, and regulatory requirements, offering context to the financial performance and position Note 1. Organization and Basis of Presentation BGC Group, Inc. is a global marketplace, data, and financial technology company specializing in brokerage and trade execution across ECS and financial markets. The company completed a Corporate Conversion on July 1, 2023, simplifying its organizational structure from an Umbrella Partnership C-Corporation to a Full C-Corporation, with BGC Group becoming the public holding company. Recent changes in the Board of Directors and executive officers include the appointment of Co-Chief Executive Officers following Mr. Howard W. Lutnick's departure - BGC is a leading global marketplace, data, and financial technology company across the ECS and financial markets, specializing in brokerage and trade execution[50] - On July 1, 2023, BGC Partners completed a Corporate Conversion to a Full C-Corporation, making BGC Group the public holding company and successor to BGC Partners[53] - On February 18, 2025, Mr. Howard W. Lutnick stepped down as Chairman and CEO, and John J. Abularrage, JP Aubin, and Sean A. Windeatt were appointed as Co-Chief Executive Officers[60] Note 2. Limited Partnership Interests in BGC Holdings and Newmark Holdings This note details the historical structure of limited partnership interests in BGC Holdings and Newmark Holdings, including Founding/Working Partner Units (FPUs), Limited Partnership Units (LPUs), and Cantor Units. The Corporate Conversion on July 1, 2023, terminated BGC Holdings LPUs, converting them into BGC Group equity awards, while Newmark Holdings LPUs held by BGC employees remain unaffected - Prior to the Corporate Conversion, BGC Partners operated through BGC Holdings, which had various limited partnership interests (FPUs, LPUs, Cantor Units)[75] - The Corporate Conversion on July 1, 2023, resulted in the termination of BGC Holdings limited partnership agreement, converting all BGC Holdings units into BGC Group equity awards[59][77][79] - Newmark Holdings LPUs held by BGC employees were not impacted by the Corporate Conversion and continue to receive quarterly allocations of net income as compensation expense[79][80] Note 3. Summary of Significant Accounting Policies This note outlines the Company's significant accounting policies, with no major changes during the six months ended June 30, 2025, except for updates to Commissions revenue recognition due to the OTC Global acquisition, particularly for shipping brokerage fees which are recognized upon delivery - No significant changes were made to the Company's accounting policies during the six months ended June 30, 2025[86] - Commissions revenues from securities and commodities are recognized at a point in time on the trade-date basis[87] - Shipping brokerage commissions are considered variable consideration and recognized upon delivery of the underlying commodity[88] Note 4. Acquisitions BGC Group completed one acquisition during the six months ended June 30, 2025: OTC Global, an energy and commodities brokerage firm, for $325.0 million. This acquisition significantly expanded the company's ECS business and is expected to generate synergies, with preliminary goodwill recorded at $88.7 million - On April 1, 2025, BGC Group acquired OTC Global, an energy and commodities brokerage firm, for $325.0 million[91] - The acquisition was funded by cash on hand, borrowings from the Revolving Credit Agreement, and debt issuances, aiming to expand and diversify the global ECS business[92] OTC Global Acquisition Financial Impact (in thousands) | Metric | Amount | | :------------------------------------------------ | :------- | | Total purchase price consideration transferred | $309,283 | | Goodwill recognized | $88,675 | | Finite-lived intangible assets acquired | $219,400 | | Revenues included (April 1 - June 30, 2025) | $118,301 | | Consolidated net income included (April 1 - June 30, 2025) | $11,967 | Note 5. Divestitures BGC Group reported no divestitures or sales of investments during both the three and six months ended June 30, 2025, and 2024 - The Company had no divestitures or sale of investments during both the six months ended June 30, 2025 and 2024[105] Note 6. Earnings Per Share BGC Group, Inc. reported basic and fully diluted earnings per share of $0.11 for the three months and $0.22 for the six months ended June 30, 2025, showing an increase from the prior year periods. Potentially dilutive securities, primarily RSUs and restricted stock awards, were excluded if their effect was anti-dilutive - Approximately 15.5 million and 15.9 million potentially dilutive securities were excluded from fully diluted EPS for the three and six months ended June 30, 2025, respectively, due to their anti-dilutive effect[108] - Contingent shares and non-participating equity awards totaling 54.2 million as of June 30, 2025, were excluded from diluted EPS as issuance conditions had not been met[109] Basic and Fully Diluted EPS (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic earnings (loss) per share | $0.11 | $0.08 | $0.22 | $0.17 | | Fully diluted earnings (loss) per share | $0.11 | $0.08 | $0.22 | $0.17 | | Basic weighted-average shares outstanding | 480,138 | 475,272 | 479,655 | 472,895 | | Fully diluted weighted-average shares outstanding | 484,636 | 480,861 | 485,090 | 479,417 | Note 7. Stock Transactions and Unit Redemptions BGC Group's Class A common stock outstanding decreased due to significant treasury stock repurchases, including a large sale from Mr. Howard W. Lutnick, partially offset by issuances for equity awards and acquisitions. The company's share repurchase authorization remains at $400.0 million, with $178.4 million remaining as of June 30, 2025 - The Company repurchased 17.2 million shares of Class A common stock for $158.6 million in Q2 2025, including 16.1 million shares from Mr. Howard W. Lutnick[117] - As of June 30, 2025, $178.4 million remained under the $400.0 million Share Repurchase Authorization[116] Changes in Class A Common Stock Outstanding (in thousands) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :------------------------------------------ | :------------------------------- | :----------------------------- | | Shares outstanding at beginning of period | 378,134 | 374,297 | | Total Share issuances | 5,375 | 12,677 | | Restricted stock forfeitures | (102) | (373) | | Treasury stock repurchases | (17,224) | (20,408) | | Shares outstanding at end of period | 366,193 | 366,193 | Note 8. Financial Instruments Owned, at Fair Value Financial instruments owned by BGC Group, primarily U.S. Treasury bills for liquidity, decreased to $139.5 million as of June 30, 2025, from $186.2 million at December 31, 2024. The company recognized minimal unrealized net gains from mark-to-market adjustments on these instruments - Financial instruments owned, at fair value, primarily U.S. Treasury bills, decreased to $139.5 million as of June 30, 2025, from $186.2 million at December 31, 2024[120] - The Company recognized unrealized net gains of $0.1 million for the six months ended June 30, 2025, from mark-to-market adjustments on these instruments[120] Note 9. Collateralized Transactions BGC Group had no Repurchase Agreements or Reverse Repurchase Agreements outstanding as of both June 30, 2025, and December 31, 2024 - The Company had no Repurchase Agreements outstanding as of June 30, 2025, and December 31, 2024[121] - The Company had no Reverse Repurchase Agreements outstanding as of June 30, 2025, and December 31, 2024[123] Note 10. Receivables from and Payables to Broker-Dealers, Clearing Organizations, Customers and Related Broker-Dealers Receivables from broker-dealers, clearing organizations, customers, and related broker-dealers significantly increased to $951.4 million as of June 30, 2025, from $365.5 million at December 31, 2024, primarily due to higher contract values of fails to deliver. Payables also increased substantially to $777.2 million from $225.4 million over the same period - Receivables from broker-dealers, clearing organizations, customers and related broker-dealers increased by 160.3% from December 31, 2024, to June 30, 2025[125] - Payables to broker-dealers, clearing organizations, customers and related broker-dealers increased by 244.7% over the same period[125] Receivables and Payables (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------------------------------------------ | :------------ | :------------------ | | Receivables from broker-dealers, clearing organizations, customers and related broker-dealers | $951,387 | $365,490 | | Contract values of fails to deliver | $775,393 | $213,409 | | Payables to broker-dealers, clearing organizations, customers and related broker-dealers | $777,209 | $225,377 | | Contract values of fails to receive | $747,651 | $201,301 | Note 11. Derivatives BGC Group engages in derivative contracts, primarily FX swaps, forwards, interest rate swaps, and futures, to facilitate client transactions and hedge positions. The notional amounts of these contracts significantly increased from December 31, 2024, to June 30, 2025, reflecting higher derivative activity, with net gains reported in principal transactions - Total notional amounts of derivative contracts increased from $10.11 billion at December 31, 2024, to $62.64 billion at June 30, 2025, primarily driven by interest rate swaps[127] Derivative Contracts Fair Value and Notional Amounts (in thousands) | Derivative Contract | June 30, 2025 Assets | June 30, 2025 Liabilities | June 30, 2025 Notional Amounts | December 31, 2024 Assets | December 31, 2024 Liabilities | December 31, 2024 Notional Amounts | | :------------------ | :------------------- | :---------------------- | :----------------------------- | :----------------------- | :------------------------ | :----------------------------- | | FX swaps | $901 | $1,217 | $1,332,685 | $4,810 | $3,679 | $635,790 | | Forwards | $397 | $216 | $1,280,782 | $409 | $751 | $185,821 | | Interest rate swaps | $18 | $— | $52,266,392 | $— | $— | $534,085 | | Futures | $— | $826 | $7,758,139 | $165 | $— | $8,758,848 | | Total | $1,316 | $2,259 | $62,637,998 | $5,384 | $4,430 | $10,114,544 | Gains on Derivative Contracts (in thousands) | Derivative Contract | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Futures | $5,354 | $2,833 | $9,931 | $6,639 | | Interest rate swaps | $2,994 | $1,832 | $5,376 | $3,928 | | FX swaps | $1,208 | $558 | $2,029 | $1,056 | | FX/commodities options | $141 | $57 | $235 | $104 | | Gains, net | $9,697 | $5,280 | $17,571 | $11,727 | [Note 12. Fair Value of Financial Assets and Liabilities](index