BGC(US:BGC)2025-11-06 16:00Financial Data and Key Metrics Changes - BGC Group reported record third quarter revenues of $737 million, a 31% increase from $561 million a year ago [4] - Adjusted earnings grew by 22.4% to $155.1 million, with post-tax adjusted earnings increasing by 11.5% to $141.1 million, resulting in post-tax adjusted earnings per share of $0.29 [11] - Adjusted EBITDA increased by 10.7% to $167.6 million [11] - The company’s liquidity was $924.7 million as of September 30, compared to $897.8 million at year-end 2024 [11] Business Line Data and Key Metrics Changes - ECS revenues grew by 114% to $241.6 million, driven by OTC and strong organic growth [6] - Rates revenues increased by 12.1% to $195.3 million, reflecting higher volumes across major interest rate products [6] - Foreign exchange revenues rose by 15.9% to $106.7 million, primarily due to growth in emerging market currencies [6] - Credit revenues increased by 1.6% to $69.1 million, while equities revenues grew by 13.2% to $60.4 million [6] - Data, network, and post-trade revenues grew by 11.9% to $34.3 million, excluding Capital Lab [7] Market Data and Key Metrics Changes - EMEA revenues increased by 37.4%, Americas revenues by 28.1%, and Asia-Pacific revenues by 17.4% [10] - FMX UST generated record third quarter average daily volume of $59.4 billion, up more than 12% year-over-year, with market share reaching a record 37% [8] - SOFR Futures saw both average daily volume and open interest increase more than threefold compared to the previous quarter [8] Company Strategy and Development Direction - The company is focused on enhancing profitability and margins through a $25 million cost reduction program, expected to be completed by year-end [5] - BGC Group aims to continue growing its market share in various asset classes and geographies, leveraging its global platform [4] - The company is prioritizing the growth of SOFR ADV and open interest, with expectations for similar adoption in US Treasury Futures offerings in 2026 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong growth despite a mixed macro environment, highlighting the strength and scale of its global platform [4] - The outlook for the fourth quarter of 2025 anticipates revenues between $720 million and $770 million, representing approximately 30% growth at the midpoint [13] - Pre-tax adjusted earnings are expected to be in the range of $152.5 million to $167.5 million, indicating approximately 24% earnings growth at the midpoint [14] Other Important Information - The company’s fully diluted weighted average share count for adjusted earnings was 494.2 million shares, a slight decrease compared to the previous year [11] - BGC Group's board reapproved a share repurchase authorization for up to $400 million [11] Q&A Session Summary Question: What allowed BGC to outperform some industry proxies despite a slowdown in on-exchange volumes? - Management attributed the strong performance to targeted growth within the ECS sector and the hiring of around 150 new brokers, which helped gain market share [17] Question: Can you elaborate on the strong growth in FMX and expectations for FCM onboardings? - Management noted that FMX is in its second year, with significant growth in SOFR futures and onboarding of 11 FCMs, indicating a positive trajectory for future growth [19][20] Question: What contributed to the strong share growth in FMX cash markets? - The growth was attributed to the hard work over several years and further adoption by FMX partners, positioning it as a viable alternative to existing market leaders [25] Question: How does the energy segment leverage higher adoption of cloud and AI? - Management indicated that while direct revenue impact may be limited, there is involvement in energy procurement for data centers, benefiting from relationships established through Newmark [27] Question: What is the outlook for electronic credit revenues? - Management expressed confidence in the growth potential of electronic credit, highlighting the launch of new electronic protocols and the shift towards more electronic markets [29][30]