BGC(US:BGC)2026-02-12 16:02Financial Data and Key Metrics Changes - BGC Group reported record-breaking revenues for both the fourth quarter and full year 2025, with increases of 32% and 30% respectively, approaching $3 billion in total revenues [4] - Adjusted EPS grew by 24% under GAAP and 19% for adjusted earnings, with adjusted EPS rising by 71% to $1.18 per share since 2022 [4][7] - Pre-tax adjusted earnings grew by 24.5% to $161.3 million, representing a pre-tax margin of 21.3% [18] - Post-tax adjusted earnings increased by 21.1% to $149.6 million, resulting in a post-tax adjusted earnings per share of $0.31 [18] Business Line Data and Key Metrics Changes - Total brokerage revenues grew by 34.6% to $694.6 million, with ECS revenues increasing by 92% to $257.5 million, driven by the acquisition of OTC and strong organic growth [9] - Rates revenues increased by 16.4% to $197.4 million, while foreign exchange revenues rose by 9.8% to $102.8 million [10] - Fenics revenues increased by 15.4% to a record $163.9 million, driven by higher electronic volumes across rates products [11] - FMX UST generated record fourth quarter average daily volume of $58.7 billion, increasing market share to a record 39% [12] Market Data and Key Metrics Changes - EMEA revenue increased by 39.2%, Americas revenues increased by 25.7%, and Asia Pacific revenues increased by 24.2% [16] - FMX Futures Exchange saw record volumes in open interest, with ADV and open interest increasing 82% and 97% respectively compared to the previous quarter [12] Company Strategy and Development Direction - The company completed the first phase of its cost reduction program, expected to realize $25 million of annualized savings in 2026 [5][17] - BGC aims to focus on higher growth areas within its portfolio, having sold lower growth businesses to enhance shareholder value [28] - The company is positioned for continued success in 2026, with guidance indicating a revenue growth expectation of approximately 34% for the first quarter [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing strong market share gains and a favorable trading environment [25] - The outlook assumes no material acquisitions or dispositions, with expectations subject to change based on macroeconomic factors [3] - Management highlighted the importance of volatility in driving business growth, particularly in the energy sector [39] Other Important Information - The company anticipates pre-tax adjusted earnings for the first quarter of 2026 to be in the range of $202 million to $222 million, representing over 32% earnings growth [20] - Liquidity as of December 31 was $979.1 million, compared to $897.8 million at year-end 2024 [19] Q&A Session Summary Question: Inquiry about first quarter guidance and organic revenue growth - Management noted that core revenue growth has been consistent, driven by market share gains and a favorable trading environment [25] Question: Discussion on the sale of KACE and future divestitures - Management indicated that the sale was driven by shareholder value considerations and that they remain open to future divestitures if they do not meet growth expectations [28] Question: Inquiry about new client growth in the energy segment - Management confirmed an increase in new players entering the energy market, contributing to growth in the ECS business [34] Question: Question regarding FMX futures revenue recognition and treasury futures - Management stated that changes in fee structures for FMX futures will occur in the summer, and treasury futures will follow the success of SOFR [42][43] Question: Inquiry about additional fixed income products within Lucera - Management indicated that Lucera is expanding into credit markets, which could significantly contribute to future revenue growth [48]