Bgc Group, Inc. · NASDAQ:BGC
Bgc — BGC Partners — Q2 2022 Earnings Presentation
32 slides from Bgc's earnings presentation, 2022
Slide 1: BGC Partners, Inc. Earnings Presentation 2Q 2022
BGC PARTNERS, INC. NASDAQ: BGCP E A R N I N G S P R E S E N TAT I O N 2 Q 2 0 2 2
Slide 2: Disclaimer
DISCLAIMER 2 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: Highlights of Consolidated Results: 2Q 2022
HIGHLIGHTS OF CONSOLIDATED RESULTS: 2Q 2022 3 REVENUE: Highlights of Consolidated Results 2Q 2022 2Q 2021 Change Constant Currency $436M Change (USD millions, except per share data) Revenues (excluding Insurance)1 $435.8 $458.0 (4.9)% (0.5)% 25% Revenues 435.8 512.5 (15.0)% (11.1)% Fenics Markets GA
Slide 4: Revenue Overview
REVENUE OVERVIEW 4 BGC’S REVENUE IS WELL DIVERSIFIED ACROSS GEOGRAPHIES AND ASSET CLASSES REVENUE BY ASSET CLASS GLOBAL OFFICE LOCATIONS & REVENUE AMERICAS EMEA APAC Rates Data, Software & 2Q 2022 2Q 2022 2Q 2022 Post-trade and Other1 Revenue: Revenue: Revenue: 31% $149M $223M $64M 9% 2Q Edinburgh C
Slide 5: Fenics Transformation Strategy
FENICS TRANSFORMATION STRATEGY 5 FENICS’ OPERATING STRATEGY FOCUSES ON: 1 2 CONVERTING VOICE / HYBRID BUSINESS INTO HIGHER-MARGIN TECHNOLOGY CONTINUING TO GROW AND SCALE BGC’S FENICS GROWTH PLATFORMS DRIVEN FENICS REVENUE FENICS AS A % OF OVERALL REVENUE1: 25% 24% Fenics Growth Platforms RATES 2Q 20
Slide 6: Fenics Overview
FENICS OVERVIEW 6 BUSINESS OVERVIEW FENICS REVENUE REVENUES: Percentage of Total Revenue1 $110M 24% 25% FX +13% yr/yr 22% Rates 24% $110M 17% 37% $97M $12M $11M 14% 14% 2Q $110M Credit 16% $97M $86M 2% 21% Equities 2Q21 2Q22 FY18 FY19 FY20 FY21 TTM 2Q22 2Q22 Data, Software & Fenics Markets Fenics Gr
Slide 7: FMX
FMX 7 FMX OVERVIEW LCH CLEARING AGREEMENT Cross margining FMX U.S. Rates Futures with LCH U.S. Rates collateral will provide powerful capital efficiencies IRS Initial Margin at Major CCPs3 JPX • Second largest CLOB Platform • Leveraging state-of-art Fenics UST 4% technology & connectivity • Tightest
Slide 8: Fenics UST
FENICS UST 8 UST TRADING VOLUME1 UST CLOB MARKET SHARE2 2Q 2022 Quarterly Average Dealerweb3 (ADV yr/yr change) (incl. former Nasdaq FI) 20% 20% 9% CME Dealerweb3 Primary Primary 19% 19% Fenics UST BrokerTec Dealerweb (incl. former Nasdaq FI) Dealer4 17% 17% 23% 22% 14% Fenics UST 19% 12% 10% Jun 22
Slide 9: Lucera
LUCERA 9 INFRASTRUCTURE & CONNECTIVITY OFFERING WITH HIGHLY RECURRING, COMPOUNDING SUBSCRIPTION REVENUE MODEL REVENUE LUMEMarkets Connect LUMEMARKETS 67% 2Q22 2Q22 Revenue Low latency aggregator, providing a single access point across Revenue Split 33% +25% multiple fragmented marketplaces and exc
Slide 10: Fenics Market Data
FENICS MARKET DATA 10 LEVERAGING BGC’S GLOBAL CAPITAL MARKETS ECOSYSTEM TO DEVELOP HIGHLY VALUABLE MARKET DATA PRODUCTS MARKET OPPORTUNITY Record global consumption of financial market data in 2021 totalling $36B1 Recurring, compounding subscription-based model Signed over 60 new contracts in 2Q
Slide 11: Cryptocurrency Initiatives
CRYPTOCURRENCY INITIATIVES 11 COMPREHENSIVE MULTI-CHANNEL DIGITAL ASSET PLATFORM POWERED BY MULTI-BILLION DOLLAR INFRASTRUCTURE & STATE-OF-THE-ART FENICS TRADING TECHNOLOGY Execution • Connected to 30 of the deepest • Planned launch of crypto exchange in late cryptocurrency liquidity pools with a 4Q
Slide 12: Outlook: 3Q 2022
OUTLOOK: 3Q 2022 12 Guidance Actual 12 Metric (USD million) 3Q22 3Q21 Revenues (excl. Insurance) $395 - $445 $422.1 Revenues (excl. Insurance) $412 - $462 Constant Currency basis Revenues $473.7 Pre-tax Adjusted Earnings $73 - $93 $79.1 Metric (%) FY 2022 FY 2021 Adjusted Earnings Tax Rate 8 - 10% 6
Slide 13: GAAP Financial Results
BGC PARTNERS, INC. GAAP FINANCIAL RESULTS
Slide 14: Condensed Consolidated Statements of Financial Condition
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION 14 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) June 30, December 31, 2022 2021 Assets Cash and cash equivalents $ 496,489 $ 553,598 Cash segregated under regulatory requirements 12,652 13,201 Securities ow
Slide 15: Condensed Consolidated Statements of Operations
BGC PARTNERS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 15 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended June 30, S ix Months Ended June 30, Revenues: 2022 2021 2022 2021 Commissions $ 309,542 $ 389,768 $ 666,206 $ 824,988 Principal transactions 88,169
Slide 16: Appendix
MN BGC PARTNERS, INC. + bgc (5 SF! Fenics
Slide 17: Front Office Headcount & Productivity
FRONT OFFICE HEADCOUNT & PRODUCTIVITY 17 FRONT OFFICE HEADCOUNT AND PRODUCTIVITY (Productivity in USD 000s)1 PRODUCTIVITY STATS Period–end Front Office Headcount $834 $825 TTM Front Office Productivity $811 $791 $820 TTM 2Q 2022: $766 $756 $834k +9% $749 $750 $770 $735 PRODUCTIVITY GROWTH YR/YR 2,38
Slide 18: BGC's Fully Diluted Share Count Summary as of 6/30/2022
BGC’S FULLY DILUTED SHARE COUNT SUMMARY AS OF 6/30/2022 18 18 BGC Partners, Inc. Fully Diluted Share Count Summary Fully-diluted Shares PUBLIC OWNERSHIP OF FULLY DILUTED SHARE COUNT Ownership (%) (as of June 30, 2022) (millions) Public 302.2 60% Class A owned by Public 302.2 60% 60% 54% 54% Employee
Slide 19: Strongly Capitalized; Investment Grade Credit Profile
STRONGLY CAPITALIZED; INVESTMENT GRADE CREDIT PROFILE 19 BGC Partners, Inc. As of 6/30/2022 19RATING INVESTMENT GRADE CREDIT Cash and Cash Equivalents $496,489 Investment Grade Credit Rated: Securities Owned 39,150 Marketable Securities 293 • Fitch: BBB- (Outlook: Stable) Repurchase Agreements (90
Slide 20: Fenics Ecosystem
FENICS ECOSYSTEM 20 MULTIPLE TRADING PROTOCOLS ACROSS A COMPREHENSIVE SET OF FINANCIAL INSTRUMENTS DATA, SOFTWARE & RATES CREDIT FX EQUITIES POST-TRADE KEY PRODUCTS: KEY PRODUCTS: KEY PRODUCTS: KEY PRODUCTS: • Interest Rate Derivatives • Investment Grade Bonds (IG) • FX Spot • LatAm Equities • EGBs
Slide 21: BGC Revenue Correlation & Industry Volumes
BGC REVENUE CORRELATION & INDUSTRY VOLUMES 21 2Q22 vs. 2Q21 BGC Asset Class 1 Industry Metric Correlation Industry Metric (Revenue) Volume Change vs. Eurex Interest Rate Derivatives (Total Contracts Traded) 0.75 29% Rates vs. Primary Dealer U.S. Government Securities Trading Volume (ADV) 0.75 3% vs.
Slide 22: Shareholder Value Creation
SHAREHOLDER VALUE CREATION 22 BGC HAS A STRONG HISTORY OF CREATING VALUE FOR SHAREHOLDERS 22 BGC Insurance Working with strategic Brokerage partners to launch a U.S. CRYPTOCURRENCY Interest Rates futures Newmark exchange in 4Q225 OFFERINGS Sold to The Ardonagh Group4 Trayport Successfully completed
Slide 23: Non-GAAP Definitions and Reconciliation Tables
BGC PARTNERS, INC. NON-GAAP DEFINITIONS AND RECONCILIATION TABLES
Slide 24: Reconciliation of GAAP Income to Adjusted Earnings & Post-Tax Adjusted EPS
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 24 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) GAAP income (loss) from operations before income taxes $ Q2 2022 31,448 $ Q2 2021 18,869 24 Pre-tax adj
Slide 25: Reconciliation of GAAP Income to Adjusted Earnings & Post-Tax Adjusted EPS
RECONCILIATION OF GAAP INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES TO ADJUSTED EARNINGS & GAAP FULLY DILUTED EPS TO POST-TAX ADJUSTED EPS 25 (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (1) The components of equity-based compensation and allocations of net income to limited partnership un
Slide 26: Reconciliation of GAAP Net Income to Adjusted EBITDA
RECONCILIATION OF GAAP NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS TO ADJUSTED EBITDA (IN THOUSANDS) 26 (UNAUDITED) Q2 2022 Q2 2021 GAAP net income (loss) available to common stockholders $ 14,762 $ 16,240 Add back: Provision (benefit) for income taxes 15,105 (1,191) Net income (loss) attribu
Slide 27: Fully Diluted Weighted-Average Share Count and Liquidity Analysis
FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT UNDER GAAP AND FOR ADJUSTED EARNINGS & LIQUIDITY ANALYSIS (IN THOUSANDS) 27 (UNAUDITED) 27 FULLY DILUTED WEIGHTED AVERAGE SHARE COUNT LIQUIDITY ANALYSIS Q2 2022 Q2 2021 June 30, 2022 December 31, 2021 Common stock outstanding 375,613 384,902 Cash and cash e
Slide 28: Differences Between Non-GAAP and GAAP Consolidated Results
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 28 NON-GAAP FINANCIAL MEASURES 28 This document contains non-GAAP financial measures that differ from the most directly comparable measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United St
Slide 29: Differences Between Non-GAAP and GAAP Consolidated Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 29 (CONTINUED) CERTAIN OTHER COMPENSATION-RELATED ADJUSTMENTS FOR ADJUSTED EARNINGS 29 BGC also excludes various other GAAP items that management views as not reflective of the Company’s underlying performance in a given period from its calc
Slide 30: Differences Between Non-GAAP and GAAP Consolidated Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 30 (CONTINUED) BGC incurs income tax expenses based on the location, legal structure and jurisdictional taxing authorities of each of its subsidiaries. Certain of the Company’s entities are taxed as U.S. partnerships and are subject to the U
Slide 31: Differences Between Non-GAAP and GAAP Consolidated Results (Continued)
DIFFERENCES BETWEEN NON-GAAP AND GAAP CONSOLIDATED RESULTS 31 (CONTINUED) 31 The Company’s management believes that its Adjusted EBITDA measure is useful in evaluating BGC’s operating performance, because the calculation of this measure generally eliminates the effects of financing and income taxes
Slide 32: Media and Investor Contacts
32 32 Media Contact: Karen Laureano-Rikardsen +1 212-829-4975 Investor Contact: ir.bgcpartners.com Jason Chryssicas twitter.com/bgcpartners +1 212-610-2426 linkedin.com/company/bgc-partners