Bgc Group, Inc. · NASDAQ:BGC
Bgc — Q3 2024 Earnings Presentation
36 slides from Bgc's earnings presentation, Oct 31, 2024
Slide 1: BGC Group, Inc. Earnings Presentation Q3 2024
BGC GROUP, INC. NASDAQ: BGC E A R N I N G S P R E S E N TAT I O N Q 3 2 0 2 4
Slide 2: Disclaimer
2 DISCLAIMER DISCUSSION OF FORWARD-LOOKING STATEMENTS ABOUT BGC Statements in this document regarding BGC that are not historical facts are “forward-looking statements” that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statem
Slide 3: Q3 2024 Performance
Q3 2024 PERFORMANCE Highlights of Consolidated Results BUSINESS HIGHLIGHTS Q3 2024 Q3 2023 Change (USD millions) Revenues $561.1 $482.7 16.2% $561mm GAAP income from operations before income taxes 19.7 23.9 (17.4)% Q3 Record Revenue +16.2% yr/yr GAAP net income for fully diluted shares 14.2 16.0 (11
Slide 4: Revenue by Asset Class
REVENUE BY ASSET CLASS Revenue By Asset Class 11% (USD millions) Q3 2024 Q3 2023 Change DATA, NETWORK & POST-TRADE AND Rates $174.3 $145.7 19.6% OTHER2 31% ECS1 112.9 93.1 21.3% 10% RATES EQUITIES Foreign Exchange 92.1 79.8 15.4% $561mm Credit 68.0 63.7 6.7% 12% Equities 53.3 52.7 1.3% CREDIT Q3 202
Slide 5: Revenue by Geography
REVENUE BY GEOGRAPHY Revenue By Geography Q3 2024 Q3 2023 Change (USD millions) Americas $204.8 $172.0 19.0% EMEA 280.9 241.0 16.5% Asia Pacific 75.4 69.6 8.3% 37% AMERICAS $561mm Total Revenue $561.1 $482.7 16.2% 50% Revenue By Currency EMEA Q3 2024 Q3 2024 (USD millions equivalent)1 USD $347.0 EUR
Slide 6: Global & Diversified Business Model
GLOBAL & DIVERSIFIED BUSINESS MODEL HISTORIC REVENUE BY ASSET CLASS (Percentage of Total Revenues) $2.0bn 10% $2.2bn DATA, NETWORK & POST-TRADE AND OTHER REVENUES Record BGC LTM revenues 10% EQUITIES 13% $1.5bn CREDIT STRONG GROWTH & 16% DIVERSIFICATION 6% $1.0bn 10% FOREIGN EXCHANGE 21% 20% 21% ECS
Slide 7: Front Office Productivity
FRONT OFFICE PRODUCTIVITY FRONT OFFICE HEADCOUNT AND PRODUCTIVITY Period–end Front Office Headcount $1,001 LTM Front Office Productivity (in USD 000s)1 $962 >$1 million $935 $881 $847 $825 Record LTM front office productivity, $791 7% growth yr/yr $755 $735 2,351 2,238 2,148 2,046 2,014 2,036 2,119
Slide 8: Consistent Earnings Growth
8 CONSISTENT EARNINGS GROWTH PRE-TAX ADJUSTED EARNINGS POST-TAX ADJUSTED EARNINGS & ADJUSTED EPS Pre-tax Adjusted Earnings Post-tax Adjusted Earnings Pre-tax Adjusted Earnings Margin Adjusted EPS $0.26 22.6% 21.1% 19.9% $0.19 $127mm $127mm 16.7% $0.16 $0.14 15.0% $102mm $0.11 $94mm $83mm $79mm $78mm
Slide 9: Fenics Overview, Revenue by Asset Class and Growth
OVERVIEW FENICS REVENUE BY ASSET CLASS REVENUE GROWTH $142mm Fenics Revenue Q3 2024 Revenue 36% 20% $559mm FOREIGN RATES EXCHANGE +13% $449mm Growth yr/yr $125mm $142mm $142mm $261mm $319mm $25mm $18mm Q3 2024 $209mm $107mm $117mm 23% 19% FY 2016 FY 2018 FY 2020 FY 2022 Q3 2024 DATA, NETWORK LTM & P
Slide 10: FMX Futures and Spot Platforms Record Volume
Exchange for US Interest Rate World’s Fastest Growing Wholesale State-Of-The-Art Spot FX & NDF Futures – The Most Widely Traded Cash US Treasury Platform Platform Futures Contract In The World $52.9bn $9.1bn Launched SOFR futures in September 2024. Record Volume1 Record Volume U.S. Treasury Futures
Slide 11: LCH Clearing Partnership
LCH CLEARING PARTNERSHIP LCH IS A FULLY APPROVED CFTC DERIVATIVES CLEARING ORGANIZATION (“DCO”) AND THE WORLD'S LARGEST CLEARER OF INTEREST RATE SWAPS CLEARED U.S. DOLLAR INTEREST RATE WORLD’S LARGEST HOLDER OF CROSS-MARGIN CAPITAL SAVINGS SWAP MARKET SHARE INTEREST RATE SWAP COLLATERAL UP TO:2 98.1
Slide 12: FMX: Partnered with the Largest Banks & Liquidity Providers
FMX: PARTNERED WITH THE LARGEST BANKS & LIQUIDITY PROVIDERS INVESTMENT BANKS UNMATCHED CAPITAL SAVINGS FOR ALL CLIENTS (INCL. FCM CUSTOMER ACCOUNTS) FMX Partners represent 7 of the 8 largest FCMs & 7 of the 7 largest FCMs holding cleared swaps funds, that equals 94% of ALL customer cleared swap fund
Slide 13: FMX UST Volume & Market Share
BUSINESS HIGHLIGHTS FMX UST VOLUME & MARKET SHARE UST TRADING VOLUME $52.9bn 27.9% 29.8% 29.4% Q3 2024 Record Volume 25.7% (ADV yr/yr change) 25.3% (Q3 2024 ADV) $53bn 23.4% 40% 21.3% $47bn 20.0% $45bn $41bn +40% $37bn $38bn $34bn 26%2 $30bn FMX UST ADV Growth (Q3 2024 yr/yr) 11% 29.4% 4Q22 1Q23 2Q2
Slide 14: Data, Network & Post-Trade
DATA, NETWORK & POST-TRADE BUSINESS HIGHLIGHTS REVENUE GROWTH BUSINESSES $32.7mm Quarterly Provider and generator of data across global Record Q3 Revenue $33mm financial and commodity markets, supported by (Q3 2024 Revenue) $24mm BGC’s deep wholesale liquidity pools $22mm $17mm +17% Q3 2018 Q3 2020
Slide 15: ECS (Energy, Commodities, & Shipping)
ECS (“ENERGY, COMMODITIES, & SHIPPING”) BUSINESS HIGHLIGHTS REVENUE BREAKDOWN REVENUE GROWTH $112.9mm Commodities & Metals Environmental & Energy Transition Record Q3 Revenue $454mm (Q3 2024 Revenue) Shipping Q3 & Freight 2024 $386mm +21% Oil & Refined Products $292mm Revenue Growth (Q3 2024 yr/yr)
Slide 16: Recent ECS Acquisitions & Announced Agreements
RECENT ECS ACQUISITIONS & ANNOUNCED AGREEMENTS SAGE ENERGY PARTNERS (“SAGE”) ACQUISITION Acquired Sage, an energy and environmental brokerage, in October 2024 >$450mm Combined annual revenue expected from BGC becomes the world’s first “one-stop-shop” for both acquisitions environmental brokerage Pro
Slide 17: Outlook
17 OUTLOOK Q4 2024 OUTLOOK Guidance Actual Yr/Yr % Change Metric (USD million) Q4 2024 Q4 2023 Low Mid High Revenues $545 – $595 $516.8 +5% +10% +15% Pre-tax Adjusted Earnings $122 – $138 $110.8 +10% +17% +25% BGC expects to update its quarterly outlook towards the end of December 2024. FY 2024 OUTL
Slide 18: GAAP Financial Results
GAAP FINANCIAL RESULTS
Slide 19: Balance Sheet
19 BALANCE SHEET BGC GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) September 30, December 31, September 30, December 31, 2024 2023 2024 2023 Assets Liabilities, Redeemable Partnership Interest, and Equity Cash and
Slide 20: Income Statement
20 INCOME STATEMENT BGC GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2024 2023 2024 2023 202
Slide 21: Appendix
APPENDIX
Slide 22: Fully Diluted Weighted-Average Share Count Summary
22 BGC’S FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT SUMMARY FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT FOR ADJUSTED EARNINGS (MILLIONS) Fully Diluted Q3 2024 Fully Diluted Weighted-Average Share Count Summary Weighted- Ownership (%) For Adjusted Earnings Average Shares (millions) 530 PUBLIC 340.4 69
Slide 23: Strongly Capitalized & Investment Grade Credit Profile
23 STRONGLY CAPITALIZED & INVESTMENT GRADE CREDIT PROFILE BGC Group, Inc. (in $’000s) As of 9/30/2024 Cash and cash equivalents $563,467 INVESTMENT GRADE CREDIT RATING Financial instruments owned, at fair value 211,026 Repurchase agreements (1,962) Investment Grade Credit Rated: Total Liquidity $7
Slide 24: Fenics Ecosystem
24 FENICS ECOSYSTEM DATA, NETWORK & RATES CREDIT FOREIGN EXCHANGE EQUITIES POST-TRADE KEY PRODUCTS: KEY PRODUCTS: • FX Spot FENICS MARKET DATA KEY PRODUCTS: (Fenics Markets associated Market Data) • Investment Grade Bonds (IG) • FX Options • Interest Rate Derivatives MARKETS • EGBs • High Yield Bond
Slide 25: BGC Revenue Correlation & Industry Volumes
25 BGC REVENUE CORRELATION & INDUSTRY VOLUMES BGC’S ASSET CLASS REVENUES ARE GENERALLY CORRELATED TO RELEVANT INDUSTRY SECONDARY MARKET TRADING VOLUMES Q3 2024 VS Q3 2023 Brokerage revenues are driven by secondary market trading volumes in the ASSET CLASS REVENUE TO INDUSTRY VOLUME CORRELATION1 INDU
Slide 26: Shareholder Value Creation
26 SHAREHOLDER VALUE CREATION BGC HAS A STRONG HISTORY OF CREATING VALUE FOR SHAREHOLDERS THROUGH ORGANIC GROWTH, ACQUISITIONS & INVESTMENTS IN TECHNOLOGY 1999 – eSpeed, leading electronic 2023 – Completed UST platform, IPOs conversion to Full C-Corporation5 2004 – Cantor forms BGC Partners, separat
Slide 27: Non-GAAP Definitions and Reconciliation Tables
NON-GAAP DEFINITIONS AND RECONCILIATION TABLES
Slide 28: Reconciliation of GAAP to Adjusted Earnings
28 RECONCILIATION OF GAAP TO ADJUSTED EARNINGS RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) Three Months Ended Three Months Ended September 30, Septemb
Slide 29: Reconciliation of GAAP to Adjusted Earnings Footnotes
29 RECONCILIATION OF GAAP TO ADJUSTED EARNINGS FOOTNOTES FOOTNOTES (1) The components of equity-based compensation and allocations of net income to limited partnership units and FPUs are as follows (in thousands): Three Months Ended September 30, 2024 2023 Issuance of common stock and grants of exch
Slide 30: Other Select Financial Data
30 OTHER SELECT FINANCIAL DATA RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT STOCKHOLDERS TO ADJUSTED EBITDA (IN THOUSANDS) (UNAUDITED) (IN THOUSANDS) (UNAUDITED) Three Months Ended September 30, Three Months Ended 2024 2023 September 30, GAA
Slide 31: Differences Between Non-GAAP and GAAP Consolidated Results
31 DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS NON-GAAP FINANCIAL MEASURES The non-GAAP definitions below include references to certain equity-based compensation instruments, such as restricted stock awards and/or restricted stock units (“RSUs”), that the Company has issued and outsta
Slide 32: Differences Between Non-GAAP and GAAP Consolidated Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 32 (CONTINUED) The amounts of certain quarterly equity-based compensation charges are based upon the Company’s estimate of such expected charges during the annual period, as described further below under “Methodology for Calculating Adjusted
Slide 33: Differences Between Non-GAAP and GAAP Results: Adjusted Earnings Taxes
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 33 (CONTINUED) METHODOLOGY FOR CALCULATING ADJUSTED EARNINGS TAXES Although Adjusted Earnings are calculated on a pre-tax basis, BGC also reports post-tax Adjusted Earnings to fully diluted shareholders. The Company defines post-tax Adjusted
Slide 34: Differences Between Non-GAAP and GAAP Results: Management Rationale
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 34 (CONTINUED) MANAGEMENT RATIONALE FOR USING ADJUSTED EARNINGS BGC’s calculation of Adjusted Earnings excludes the items discussed above because they are either non-cash in nature, because the anticipated benefits from the expenditures are
Slide 35: Differences Between Non-GAAP and GAAP Results: Timing of Outlook
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 35 (CONTINUED) TIMING OF OUTLOOK FOR CERTAIN GAAP AND NON-GAAP ITEMS BGC anticipates providing forward-looking guidance for GAAP revenues and for certain non-GAAP measures from time to time. However, the Company does not anticipate providing
Slide 36: Media and Investor Contacts
36 36 Media Contact: Erica Chase +1 212-610-2419 Investor Contact: ir.bgcg.com Jason Chryssicas twitter.com/bgcgroupinc +1 212-610-2426 linkedin.com/company/bgc_group