Bgc Group, Inc. · NASDAQ:BGC
Bgc — Q1 2024 Earnings Presentation
36 slides from Bgc's earnings presentation, 2024
Slide 1: BGC Group, Inc. Earnings Presentation Q1 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 1 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: Investment Highlights
3 INVESTMENT HIGHLIGHTS HIGHER PROFITABILITY & STRONG REVENUE GROWTH COMPLETED FMX TRANSACTION EXPANDING MARGINS Record quarterly revenue of $578.6 Announced 10 global investment Profitability improved across all GAAP million, up 8.6% yr/yr in Q1 2024 banks & market making firms and Adjusted E
Slide 4: Q1 2024 Performance
4 Q1 2024 PERFORMANCE Highlights of Consolidated Results BUSINESS HIGHLIGHTS Q1 2024 Q1 2023 Change (USD millions, except per share data) Revenue: Strong, broad-based growth Revenues $578.6 $532.9 8.6% Record quarterly revenue of $578.6mm 8.6% yr/yr growth GAAP income (loss) from operations befo
Slide 5: Revenue by Asset Class
5 REVENUE BY ASSET CLASS Revenue By Asset Class Q1 2024 Q1 2023 Change DIVERSIFIED BUSINESS MODEL ACROSS (USD millions) SECONDARDY TRADING MARKETS Rates $175.1 $164.7 6.3% DATA, NETWORK Energy, Commodities, and Shipping1 118.5 89.7 32.1% & POST-TRADE2 AND OTHER3 Foreign Exchange 84.0 80.2 4.8% 9% EQ
Slide 6: Global & Diversified Business Model
6 GLOBAL & DIVERSIFIED BUSINESS MODEL HISTORIC REVENUE BY ASSET CLASS (Percentage of Total Revenues) DIVERSIFICATION $2.0bn DATA, NETWORK & POST-TRADE AND OTHER REVENUES 10% DRIVING GROWTH 11% EQUITIES $1.5bn 14% CREDIT Energy, Commodities, and Shipping has grown from BGC’s $1.0bn 6% 10% FOREIGN EXC
Slide 7: Revenue by Geography & Currency
7 REVENUE BY GEOGRAPHY & CURRENCY Q1 2024 GLOBAL REVENUE REVENUE BY CURRENCY (USD Equivalent1) AMERICAS EMEA APAC Q1 2024 $200mm $305mm $74mm +6% yr/yr +12% yr/yr +3% yr/yr $356mm (34.6% of total) (52.7% of total) (12.7% of total) 61.4% $115mm 19.8% $38mm 6.6% $71mm OTHER 12.2% TOTAL $579mm 1. GBP t
Slide 8: Front Office Productivity Continues to Grow
8 FRONT OFFICE PRODUCTIVITY CONTINUES TO GROW FRONT OFFICE HEADCOUNT AND PRODUCTIVITY Period–end Front Office Headcount $962 LTM Front Office Productivity (in USD 000s)1 $935 Record LTM front office $881 $962k productivity, 9% growth yr/yr $847 $825 $791 $754 $755 $735 Increased use of technology 2,
Slide 9: Strong Earnings Growth
9 STRONG EARNINGS GROWTH PRE-TAX ADJUSTED EARNINGS POST-TAX ADJUSTED EARNINGS & ADJUSTED EPS Pre-tax Adjusted Earnings Post-tax Adjusted Earnings Adjusted EPS $0.25 $0.23 $135mm $0.21 $0.18 $0.18 $123mm $125mm $116mm $114mm $113mm $111mm $103mm $101mm $99mm Q1 2020 Q1 2021 Q1 2022 Q1 2023 Q1 2024 Q1
Slide 10: Fenics Performance
10 FENICS PERFORMANCE +6% FENICS REVENUE GROWTH $149mm $140mm $22mm $17mm $149mm 26% Q1 2024 Revenue 25% $123mm $127mm $531mm +6% 17% $449mm Growth yr/yr Q1 2023 Q1 2024 13% 14% Fenics Markets Fenics Growth Platforms $319mm $261mm FENICS REVENUE BY ASSET CLASS $209mm Data, Network & Post-trade and O
Slide 11: Partners Join BGC in the Formation of FMX
11 PARTNERS JOIN BGC IN THE FORMATION OF FMX STRATEGIC PARTNERS OWNERSHIP AND VALUATION REPRESENTING 10 OF THE WORLD’S GREATEST INVESTMENT BANKS AND MARKET MAKING FIRMS Equity $667mm Post-Money Partners INVESTMENT BANKS Valuation $172mm 26% Ownership (%) Pre-Money $495mm Valuation 74% $172mm Investm
Slide 12: The Only Competitor to the CME
12 THE ONLY COMPETITOR TO THE CME FMX UST FMX FX Fully-connected, state-of-the-art FX platform now supercharged for World’s fastest growing U.S. Treasury platform with 28% market share1 growth with the support of our partners Indexed U.S. Government 320 FMX UST Indexed Spot FX 300 Securities ADV Gro
Slide 13: Fenics UST is Now FMX UST
13 FENICS UST IS NOW PERFORMANCE HIGHLIGHTS U.S.TREASURY MARKET SHARE1 33% Revenue growth in Q1 2024 25% 26% 28% 23% 21% 28% Record market share1 Q1 2024 18% 20% Estimated client cost savings in Q1 2024 and ~$500 million $39mm since January 20192 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 Dealerweb PLATFORM
Slide 14: Data, Network & Post-Trade
14 DATA, NETWORK & POST-TRADE DATA, NETWORK & POST-TRADE $31mm +14% Provider and generator of data across global financial and commodity markets, supported by Q1 2024 Revenue Growth yr/yr BGC’s deep wholesale liquidity pools DATA 50+ New contracts signed in Q1 2024; an increase of over NETWORK 10% y
Slide 15: Energy, Commodities, & Shipping
15 ENERGY, COMMODITIES, & SHIPPING Energy, Commodities, $118mm REVENUE BY PRODUCT and Shipping +32% Commodities Other Q1 2024 Revenue Growth yr/yr & Metals ENERGY, COMMODITIES, AND SHIPPING HAS GROWN FROM BGC’S SMALLEST ASSET CLASS TO ITS SECOND Shipping LARGEST & Freight Q1 Environmental & Energy T
Slide 16: Q2 2024 Outlook
16 Q2 2024 OUTLOOK OUTLOOK Guidance Actual Metric (USD million) Q2 2024 Q2 2023 Revenues $520 – $570 $493.1 Pre-tax Adjusted Earnings $120 – $130 $105.5 BGC expects to update its quarterly outlook towards the end of June 2024. 16 16
Slide 17: GAAP Financial Results
GAAP FINANCIAL RESULTS
Slide 18: Balance Sheet
18 BALANCE SHEET BGC GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) March 31, December 31, March 31, December 31, 2024 2023 2024 2023 Assets Liabilities, Redeemable Partnership Interest, and Equity Cash and cash equ
Slide 19: Income Statement
19 INCOME STATEMENT BGC GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE DATA) (UNAUDITED) (UNDER GAAP) Three Months Ended Mar 31, Three Months Ended Mar 31, 2024 2023 2024 2023 Revenues: Other income (losses), net: Commissions $ 415,172 $ 377,288 Gains (lo
Slide 20: Appendix
APPENDIX
Slide 21: BGC's Fully Diluted Weighted-Average Share Count Summary
21 BGC’S FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT SUMMARY FULLY DILUTED WEIGHTED-AVERAGE SHARE COUNT FOR ADJUSTED EARNINGS (MILLIONS) Fully Diluted Q1 2024 Fully Diluted Weighted-Average Share Count Summary Weighted- Ownership (%) For Adjusted Earnings Average Shares (millions) 557 PUBLIC 332.3 67
Slide 22: Strongly Capitalized & Investment Grade Credit Profile
22 STRONGLY CAPITALIZED & INVESTMENT GRADE CREDIT PROFILE BGC Group, Inc. (in $’000s) As of 3/31/2024 Cash and cash equivalents $566,791 INVESTMENT GRADE CREDIT RATING Financial instruments owned, at fair value 48,905 Total Liquidity $615,696 Investment Grade Credit Rated: • Fitch: BBB- (Outlook:
Slide 23: BGC Corporate Conversion Early Impact
23 BGC CORPORATE CONVERSION EARLY IMPACT OVERVIEW BGC STOCK TRADING VOLUME1 AVERAGE DAILY VOLUME AVERAGE DOLLAR VALUE TRADED BGC completed its corporate conversion to a Full C-Corporation, changing its name to BGC Group, Inc. and ticker symbol to BGC 3.2mm $22.0mm COST SAVINGS & OPERATIONAL EFFICI
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 • High Yield Bonds (HY) • Asian
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 Q1 2024 VS Q1 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 Mar 31, Three Months Ended Mar 31, 2024
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 Mar 31, 2024 2023 Issuance of common stock and grants of exchangeab
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 Mar 31, Three Months Ended Mar 31, 2024 2023 2024 2023 GAAP
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 Consolidated Results (Continued)
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 Consolidated Results (Continued)
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 Consolidated Results (Continued)
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 Contact
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