• Total Revenue: $572.3 million, a 10.8% increase year-over-year.
• Brokerage Revenue: $516.1 million, up 11.8%.
• Rates Revenue: $169.6 million, an 8.8% increase.
• ECS Revenue: $134.1 million, up 28%.
• Foreign Exchange Revenue: $93.6 million, a 21.3% increase.
• Credit Revenue: $62.4 million, a 4.9% decrease.
• Equities Revenue: $56.3 million, down 3.5%.
• Data, Network, and Post-Trade Revenue: $32.6 million, a 10.3% increase.
• Fenics Revenue: $142.1 million, up 8.6%.
• Adjusted EBITDA: $192 million, a 26.7% improvement.
• Pretax Adjusted Earnings: $129.5 million, a 16.9% increase.
• Post-Tax Adjusted Earnings: $123.5 million, up 21.9%.
• Post-Tax Adjusted Earnings Per Share: $0.25, a 19% increase.
• Liquidity: $897.8 million as of December 31, 2024.

• Warning! GuruFocus has detected 3 Warning Signs with BGC.

Release Date: February 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• BGC Group Inc (NASDAQ:BGC) delivered record fourth quarter and full year revenues, growing by 11% and 12%, respectively.
• The company's ECS, rates, and foreign exchange businesses outperformed the market, contributing significantly to revenue growth.
• The acquisition of Sage Energy Partners and the expected closure of OTC holdings are projected to add over $450 million in annual revenues.
• Fenics Growth Platforms saw a 20.2% increase in revenues, driven by FMX, Portfolio Match, and Lucera.
• BGC's liquidity improved to $897.8 million as of December 31, 2024, compared to $701.4 million at the end of 2023.

Negative Points

• Credit revenues decreased by 4.9% due to lower CDS and emerging market credit volumes.
• Equities revenues declined by 3.5%, primarily due to lower Asian equity derivative volumes.
• Compensation and employee benefits expenses increased by 16.3% under GAAP, impacting overall profitability.
• The sale of Capitalab led to lower post-trade revenues, affecting the data, network, and post-trade segment.
• The margins for the newly acquired OTC holdings are expected to be lower than BGC's current margins initially.

Q & A Highlights

Q: Can you walk us through the expectations around the timeline of the executive leadership transition and the planned sale of Howard's BGC shares? A: Howard will comply with Senate Ethics Committee standards, including divesting his holdings within 90 days of Senate confirmation. Public SEC filings will be required when he divests his holdings. We don't expect any sales on the open market or changes to the corporate structure. Myself, John, and JP are excited to continue the company's growth, having worked closely over the past three years.

Q: How much did the Sage acquisition contribute to revenue growth in Q4, and what are the expectations for Q1? A: Sage contributed between 1 and 2 percentage points of the 11.7% growth in Q4. We expect a similar contribution in Q1 2025.

Q: What is driving the expansion of the pretax adjusted earnings margin in Q1 guidance? A: Our revenue growth, combined with a stable cost base, results in favorable gearing. Small acquisitions integrate well into our platform, generating economies of scale. Additionally, the shift to electronic business, which has higher margins, contributes to margin expansion.

Q: Can you provide an update on the FMX launch and the timeline for U.S. Treasury futures? A: We remain on track with our timeline. Year one focuses on connectivity, year two on deepening client connectivity and increasing volumes, and year three on full competition. We expect to have 10 FCMs connected by the end of Q1 2025, with the launch of U.S. Treasury futures around that time.

Q: How should we model the revenue and margins for the OTC acquisition? A: OTC is expected to contribute around $400 million in annual revenues. Initially, margins will be lower than our current margins, around 15%, but the acquisition will be highly accretive from day one.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.